OTAQ Plc (OTAQ)
Unaudited Interim Results
01-Aug-2023 / 07:00 GMT/BST
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1 August 2023
OTAQ plc
("OTAQ", the "Company" or the "Group")
Unaudited Interim Results
OTAQ, the innovative technology company targeting the aquaculture, geotracking and offshore markets, is pleased to
announce unaudited interim results for the six months ended 30 June 2023.
Financial Highlights:
H1 2023 H2 2022 H1 2022
Group (restated)* (restated)*
GBP'000 GBP'000 GBP'000
Revenue 1,801 1,345 2,708
Gross profit 883 611 1,191
Adjusted EBITDA** (347) (473) 454
*Figures restated to reflect the change of year end from 31
March to 31 December
**Adjusted EBITDA means earnings before income, tax,
depreciation, exceptional costs, impairment, share option charges
and amortisation
Highlights:
-- Record rental income achieved by Offshore division's core
OceanSense product
-- Two new six figure orders received for shrimp sonar devices
from Minnowtech LLC for delivery in H2 FY23
-- Live Plankton Analysis beta live systems now deployed at
customer sites in Scotland and Ireland
-- Initial customer contracts signed for Water Quality
Monitoring product in Chile following contractssigned in Scotland
in 2022
-- Sealfence sales made to Scandinavian countries; regulatory
trials ongoing in other territories
Post-Period Highlights:
-- Current order profile to support in excess of GBP4m of
Revenue for FY23
-- Significant further orders for shrimp sonar devices which, if
achieved in this financial year, willsubstantially enhance revenue
expectations
-- Further Sealfence sales expected in H2
-- Offshore division continuing to benefit from further
strengthening market demand
Commenting on the results and prospects, Phil Newby, Chief
Executive at OTAQ, said:
"The Board is satisfied with these results which are in line
with our budget for the year. The Group is now delivering on the
strategic goals set for OTAQ to realise its full potential,
significantly increase shareholder value and return the Group to
profitability.
"I am confident of achieving at least GBP4m Revenue in the
current year and we have the potential to substantially exceed this
based around the order enquiries we are currently receiving.
Shareholders will be updated accordingly with developments."
Enquiries
OTAQ plc +44 (0)1524 748028
Adam Reynolds, Chairman
Phil Newby, Chief Executive Officer
Justine Dowds, Interim Chief Financial Officer
Dowgate Capital Limited - AQSE Corporate Advisor & Broker +44 (0)20 3903 7715
David Poutney / James Serjeant
Russell Cook / Nicholas Chambers
Walbrook PR +44 (0) 20 7933 8780
Tom Cooper / Nick Rome / Joe Walker OTAQ@walbrookpr.com
+44 (0) 797 122 1972
About OTAQ
OTAQ is a highly innovative technology company targeting the
aquaculture, geotracking and offshore markets. It already has a
number of established products in its portfolio and is focused on
further developing its presence, customer base and cross selling
opportunities within core markets both organically and via
acquisition.
OTAQ's aquaculture products, which include a sonar device
(developed for Minnowtech LLC) to scan shrimp in ponds and water
quality monitoring, are focused on maximising welfare and
production yields. Additionally, the Company is at the advanced
development stage of a potentially game changing live plankton
analysis system (LPAS). It also continues to target opportunities
in the acoustic deterrent devices market via its Sealfence product,
which is used by salmon farmers in multiple large global
territories.
The Company is also developing high accuracy location trackers
for specialist applications. Having already added clients within
safety and multiple participant sport/racing applications, the
Company is investigating wider market potential - including
opportunities in the seafood industry.
OTAQ's offshore product range includes OceanSense subsea leak
detection, Eagle IP camera systems, Lander seabed survey devices
and subsea electrical connectors and penetrators. It is targeting a
number of growth opportunities in new territories and has a strong
client base including Expro, Amphenol and National Oilwell Varco.
The Company is also focused on the development of new products
through this division, with the aim of increased cross-deployment
of skills and technologies into the aquaculture arena.
Summary
The Group presents its unaudited interim results for the
six-month period ended 30 June 2023.
Trading
As anticipated, revenue has improved from H2 2022 of GBP1.3m to
GBP1.8m (H1 2022: GBP2.7m) with the Offshore division achieving
GBP1.4m (H2 2022: GBP0.9m, H1 2022: GBP1.4m) and the Aquaculture
division achieving GBP0.3m (H2 2022: GBP0.4m, H1 2022: GBP1.0m).
The Company has reported an Adjusted EBITDA* loss of GBP347k (2022:
profit GBP454k)
Offshore
The Offshore division, as expected, has continued to build on
the strong performance reported in 2022. The opportunities
identified in new international markets through investment in sales
resource are now coming to fruition with the OceanSense subsea leak
detection system achieving record rental levels in H1 2023. The
launch of a deep water OceanSense 4 model has been particularly
well received as well as further sales of the Group's advanced IP
subsea camera systems. We are confident that the strong performance
of the Offshore division will continue into H2 2023.
Aquaculture
Having launched a number of exciting new products for the
aquaculture sector in the last 12 months, the challenge is to now
build on the early interest shown at launch across the industry.
From Minnowtech LLC, a company we continue to hold a 15% investment
in, we have received significant orders for the shrimp sonar
devices. Two six-figure orders are scheduled for delivery in H2
2023 with the prospect of further orders from Minnowtech in the
remainder of 2023.
As announced in April, the Group has secured its first trial
partners for the Live Plankton Analysis System (LPAS). The LPAS
product automatically identifies phytoplankton around marine
aquaculture sites that could potentially result in harmful algae
blooms adversely impacting on fish health and reducing yields.
Through the system's AI technology, the local analysis software
program generates on-site alerts for staff, alerting the presence
of specific algae species that are of concern in a particular area,
enabling farmers to respond to any threat far quicker than the
current manual process. The first beta systems have been deployed
in Ireland and in Scotland.
The Group's Water Quality Monitoring System, currently for
salmon farmers, provides continuous monitoring and recording of
crucial environmental parameters across the entire growing cycle,
supplying invaluable visibility and insight to support the
maintenance and safeguarding of fish welfare. Contracts or orders
have been fulfilled to supply the systems to salmon farms in Chile
and in Scotland.
As reported previously, revenue from the Group's historically
core product, Sealfence, has reduced significantly since 2022.
However, we are pleased to report that a modest level of Sealfence
sales to customers in Scandinavia was achieved in H1 2023, with
regulatory trials ongoing in other territories.
Geotracking
Trials with OTAQ's partners serving the rail sector, which
commenced in 2022, are continuing as planned with a number of
successful field trials now completed. This is a highly regulated
sector and, accordingly, progress can be slow. However, the Group
is hopeful that the first significant orders will be received in H2
2023.
Financial Highlights for the six months ended 30 June 2023
The results for H1 2022 and H2 2022, being the six months to
June 2022 and six months to December 2022 respectively, are
restated for comparative purposes following the Company's change of
accounting reference date from 31 March to 31 December.
H1 2023 H2 2022 H1 2022
Group (restated)* (restated)*
GBP'000 GBP'000 GBP'000
Revenue 1,801 1,345 2,708
Gross profit 883 611 1,191
Adjusted EBITDA** (347) (473) 454
*Figures restated to reflect the change of year end from 31
March to 31 December
**Adjusted EBITDA means earnings before income, tax,
depreciation, exceptional costs, impairment, share option charges
and amortisation
H1 2023 H1 2022
(restated)
GBP'000 GBP'000
Operating loss (709) (638)
Amortisation of intangible assets 134 424
Impairment of assets - 311
Depreciation of right-of-use assets 84 88
Depreciation on property, plant and equipment 144 269
Adjusted EBITDA (347) 454
Adjusted EBITDA was a loss of GBP0.35m from a profit of GBP0.45m
in 2022. This reduction followed the exit of the Sealfence industry
in Scotland and the investment in growing new product lines made in
2023.
Net debt as at 30 June was GBP0.51m (2022: GBP1.23m) with cash
balances of GBP0.91m.
Outlook
I am pleased that the Group is on track to achieve the Board's
growth target for 2023 with revenue of at least GBP4.0 million in
the current year and a return to EBITDA profitability in the
current year within reach if this revenue figure can be improved
upon, as anticipated.
The Offshore Division continues to benefit from strengthening
market demand and, whilst the timing of new client orders can be
difficult to predict, we anticipate significant further orders for
shrimp sonar devices, together with further sales of the Sealfence,
in the current financial year. We also expect to see further
progress and initial sales from railway customers in the
Geotracking Division.
Phil Newby
Chief Executive Officer
The Board confirms that to the best of its knowledge the
consolidated half year financial statements for the six months to
30 June 2023 have been prepared in accordance with IAS 34 Interim
Financial Reporting amended in accordance with changes in IAS 1
Presentation of Financial Statements, as adopted by the UK
Unaudited Condensed Consolidated Statement of Comprehensive
Income
Half-year ended
Notes 30 June 2023 30 June 2022
(restated)
GBP000 GBP000
Revenue 1 1,801 2,708
Cost of sales (918) (1,517)
Gross profit 1 883 1,191
Administrative expenses (1,592) (1,829)
Operating loss (709) (638)
Finance expense (64) (79)
Exceptional items 2 - (127)
Loss on ordinary activities before taxation (773) (844)
Taxation 14 250
Loss for the period (759) (594)
Other comprehensive loss - -
Total Comprehensive Loss (759) (594)
Attributable to:
The Group (759)) (594)
As per note 3, Losses Per Share were 0.6p (2022: 1.6p) and
Diluted Losses Per Share were 0.6p (2022: 1.6p).
The loss for the period arises from the Group's continuing
operations and is attributable to the equity holders of the
parent.
There were no other items of comprehensive income for the period
(2022: GBPnil) and therefore the loss for the period is also the
total comprehensive loss for the period.
The notes form an integral part of these condensed financial
statements. Unaudited Condensed Consolidated Balance Sheet
Notes 30 June 2023 30 June 2022 31 December 2022
GBP000 GBP000 GBP000
Assets
Non-current assets
Plant and equipment 710 829 582
Right-of-use assets 277 393 364
Unlisted investments 511 511 511
Intangible assets 3,118 3,153 3,008
4,616 4,886 4,465
Current assets
Inventories 1,023 1,126 937
Trade and other receivables 1,081 1,212 689
Income tax asset 111 166 275
Cash and cash equivalents 913 930 2,337
3,128 3,434 4,238
Total assets 7,744 8,320 8,703
Liabilities
Current liabilities
Trade and other payables 614 684 503
Deferred payment for acquisition - 236 -
Leases 169 173 172
Financial liabilities 5 465 441 447
1,248 1,534 1,122
Non-current liabilities
Deferred tax - 176 -
Leases 82 201 181
Financial liabilities 5 817 1,270 1,054
899 1,647 1,235
Total liabilities 2,147 3,181 2,357
Net assets 5,597 5,139 6,346
Capital and reserves
Share capital 6 1,280 5,662 1,278
Share premium 6 5,842 3,281 5,834
Deferred shares 6 5,286 - 5,286
Share option reserve 134 150 134
Merger relief reserve 9,154 9,154 9,154
Reverse acquisition reserve (6,777) (6,777) (6,777)
Other reserve 400 384 400
Revenue reserve (9,722) (6,715) (8,963)
Total equity 5,597 5,139 6,346
Unaudited Condensed Consolidated Statement of Changes in Equity
Issued Share Deferred Share Merger Reverse Other Revenue Total
Equity Premium shares option relief acquisition Reserve Reserve Equity
capital reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 30 June 2022 5,662 3,281 - 150 9,154 (6,777) 384 (6,715) 5,139
Loss for the period - - - - - - - (2,248) (2,248)
Sub-division and (5,286) - 5,286 - - - - - -
conversion of shares
Issues of shares 902 2,553 - - - - - - 3,455
Transfer on expired (16) 16 - -
options
At 31 December 2022 1,278 5,834 5,286 134 9,154 (6,777) 400 (8,963) 6,346
At 1 January 2023 1,278 5,834 5,286 134 9,154 (6,777) 400 (8,963) 6,346
Loss for the period - - - - - - - (759) (759)
Issues of shares 2 8 - - - - - - 10
At 30 June 2023 1,280 5,842 5,286 134 9,154 (6,777) 400 (9,722) 5,597 Unaudited Condensed Consolidated Statement of Cash Flows
30 June 2023 30 June 2022
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (709) (638)
Adjustments for non-cash/non-operating items:
Depreciation of property, plant and equipment 143 269
Impairment of property, plant and equipment - 311
Depreciation of right-of-use assets 84 88
Amortisation of intangible assets 134 119
Impairment of intangible assets - 295
Gain on remeasurement of deferred consideration payable - 40
Exceptional charges - (127)
Share option charge 10 30
(338) 387
Changes in working capital:
Increase / (decrease) in inventories (87) 168
Increase in trade and other receivables (391) (190)
Increase / (decrease) in trade and other payables 110 (894)
Cash from operations (706) (529)
Taxation 177 84
Net cash from operating activities (529) (445)
Cash flows from investing activities
Purchases of tangible fixed assets (267) (10)
Purchases of intangible assets (243) (285)
Interest received 10 -
Deferred payment of acquisition - (15)
Net cash used in investing activities (500) (310)
Cash flows from financing activities
Proceeds on issue of shares - 1408
Expenses of share issues - (70)
Repayment of loans (219) (189)
Principal element of lease payments (102) (60)
Interest paid (74) (79)
Net cash from financing activities (395) 1,010
Net (decrease) / increase in cash and cash equivalents (1,424) 255
Cash and cash equivalents at beginning of period 2,337 675
Cash and cash equivalents at end of period 913 930
????? ????? Notes to the condensed financial statements 1. Segmental information
The Group operated as three primary segments, being the rental
and sales of aquaculture products (Aquaculture), rentals of
underwater measurement and leak detection devices in the Offshore
market and the development and manufacture of products for
geo-tracking industries (Geotrackers). This is the level at which
operating results are reviewed by the chief operating decision
maker to make decisions about resources, and for which financial
information is available. All revenues have been generated from
continuing operations and are from external customers.
Half-year ended
30 June 2023 30 June 2022
GBP000 GBP000
Analysis of revenue
Aquaculture equipment rentals, sales and associated charges 319 993
Offshore equipment rentals, sales and associated charges 1,444 1,362
Geotracking 38 353
1,801 2,708
Half-year ended
30 June 2023 30 June 2022
GBP000 GBP000
Analysis of gross profit
Aquaculture equipment rentals, sales and associated charges 80 386
Offshore equipment rentals, sales and associated charges 818 681
Geotracking (15) 124
883 1,191 2. Exceptional items
Exceptional items in the prior period of GBP0.13m include legal
and professional costs associated with the January 2022 issue of
new shares and restructuring costs. 3. Losses per share
Basic earnings or losses per share are calculated by dividing
the loss or profit after tax attributable to the equity holders of
the Group by the weighted average number of shares in issue during
the year. Diluted earnings or losses per share are calculated by
adjusting the weighted average number of shares outstanding to
assume conversion of all potential dilutive shares, namely share
options.
The calculation of earnings or losses per share is based on the
following losses and number of shares:
Half-year ended
30 June 2023 30 June 2022
GBP000 GBP000
Loss for the period attributable to the owners of the Group (759) (557)
Weighted average number of shares:
-- Basic 127,900,627 37,129,411
-- Diluted 172,278,124 43,012,568
Basic earnings per share (pence) (0.6) (1.5)
Diluted earnings per share (pence) (0.6) (1.5) 4. Loan repayment
During the period, the Group repaid GBP0.22m of loans provided
under the Coronavirus Business Interruption Loan Scheme. 5. Share
capital and share premium
The called-up and fully paid share capital of the Company is as
follows:
30 June 2023
30 June 2022
GBP000 GBP000
Allotted, called-up and fully paid: 127,976,373 Ordinary shares of GBP0.01 each
1,280 5,662
(2022: 37,746,852 of GBP0.15 each) 6. Financial instruments - classification and measurement
Financial assets
Financial assets measured at fair value include the
following:
Half year ended
30 June 2023 30 June 2022
GBP'000 GBP'000
Unlisted equity securities 297 297
Investments made in unlisted equity securities 214 214
511 511
????? ?????
7. Basis of preparation of half-year report
This condensed consolidated interim financial report for the
half-year reporting period ended 30 June 2023 has been prepared in
accordance with Accounting Standard IAS 34 Interim Financial
Reporting. The interim report does not include all the notes of the
type normally included in an annual financial report. Accordingly,
this report is to be read in conjunction with the annual report for
the year ended 31 December 2022 and any public announcements made
by OTAQ PLC during the interim reporting period. This interim
financial information has not been reviewed nor audited by the
auditors. The accounting policies adopted are consistent with those
of the previous financial year and corresponding interim reporting
period, except for the adoption of new amended standards as set out
below.
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the
current reporting period. The Group did not have to change its
accounting policies or make retrospective adjustments as a result
of adopting these standards.
Going concern
The Directors have considered going concern and whilst the
Company needs to continue to monitor cash flow carefully, the
Directors believe that the group has sufficient cash to meet its
obligations.
Significant estimates and judgements
The Group shall assess at each reporting date whether there is
any indication that non-current assets may be impaired. The
Directors believe that at the half-year reporting period ended 30
June 2023 no indicators of impairment existed. The Directors
continue to monitor regulatory and market developments and their
impact on the carrying value of the assets.
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
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ISIN: GB00BK6JQ137
Category Code: IR
TIDM: OTAQ
LEI Code: 213800CZGMYB5XTUXJ52
Sequence No.: 261350
EQS News ID: 1692389
End of Announcement EQS News Service
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