TIDMIDA
RNS Number : 2496P
IdaTech PLC
30 September 2011
For immediate release 30 September 2011
IdaTech plc
("IdaTech" or "the Company")
Interim Results for the six months ended 30 June 2011
Intention to cancel trading of shares on AIM
IdaTech plc (AIM: IDA), a global leader in the development and
manufacture of clean and reliable extended run fuel cell products
for off and on grid markets, operationally headquartered in Bend,
Oregon, USA, today announces its Interim Results for the six months
ended 30 June 2011 and intention to cancel trading and admission of
shares on AIM.
Key points:
-- Board recommends that the Company be privatized and the
cancellation of the admission of its shares to trading on AIM
-- Revenue from product sales increased by 26% to US$2.4 million
(2010: US$1.7 million)
-- Operating loss of US$11.0 million, 10% better than the prior
year (2010: US$12.2 million)
-- Successfully launched the ElectraGen(TM) ME family of
products, following the pilot launch at the end of 2010
-- Increased sales of reformer based products compared to
2010
-- Total system sales of 120 units (2010: 150), due to shift in
project timing and slower adoption rate
-- All systems sold made a positive gross contribution
-- Continued development of the liquid petroleum gas fuel cell
system - iGen(TM) LP for off grid markets
-- Successful commercial demonstration of ElectraGen(TM) ME in
off grid application with a major telecommunications company
-- Backlog at the end of the period of US$0.5 million for
delivery in the second half of 2011
-- Additional orders totaling $1.0 million for ElectraGen(TM) ME
systems received since the period end
-- Trials of the iGen(TM) LP in Asia for off grid applications
commenced in September 2011
Commenting on the Interim Results, Hal Koyama, Chief Executive
Officer of IdaTech, said:
"The launch of the ElectraGen(TM) ME suite of products during
the period provides IdaTech with a profitable range of products to
address the critical backup power market. Whilst adoption has been
slower than anticipated, no significant sales opportunities have
been lost. The underlying demand for backup power continues to be
strong.
"Additionally, the substantial opportunity for off grid power
and the demand for it from IdaTech's customers, have stimulated
greater effort with off grid products within the Company. The
development of the iGen(TM) LP continues, with an early customer
trial set to commence later this year
"The Directors of IdaTech have unanimously determined that the
cancellation of trading on AIM would offer greater flexibility in
arranging future financing and entering into strategic partner
relationships than in a public company setting. Additionally,
experience has demonstrated that the trading of shares on AIM
requires management time and cash resources without delivering
significant benefit to the Company. We are looking forward to the
additional opportunities afforded the Company by this structure, if
approved by shareholders.
For further information please contact:
IdaTech plc
Harol Koyama, Chief Executive
Officer +1 541 322 1000
James Cooke, Chief Financial Officer
Numis Securities Limited +44 (0) 20 7260 1000
Michael Meade / Hugh Jonathon
Buchanan Communications +44 (0) 20 7466 5000
Charles Ryland / Catherine Breen
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
The financial information included in this statement covers the
six month period ending on 30 June 2011.
IdaTech's primary focus is on critical power backup and off grid
power markets principally for telecommunication applications. The
Company's activities during the period have continued to centre on
preparing the foundations for commercial mass adoption of IdaTech's
products within these target markets.
Commercial Progress
The new generation ElectraGen(TM) family of products was
launched in the period under review following the pilot launch in
December 2010. These systems incorporate substantial cost and
performance improvements and offer customers a compelling value
proposition against diesel generators whilst yielding positive
margins for IdaTech. The development of iGen(TM) LP continued
during the period, aimed at making the system more robust. This
product, together with the ElectraGen(TM) ME, puts IdaTech in a
unique position to serve both the off and on grid markets. This is
of particular importance given the size of the off grid market.
Sales adoption has been slower than anticipated during the
period. Although no significant sales opportunities have been lost,
customers are taking longer to make their purchasing decisions and
overall network construction plans.
During the six months ended 30 June 2011, IdaTech sold 120
reformer fuel cell systems (2010: 24), which use IdaTech's
proprietary liquid fuel technology. No hydrogen gas fueled systems
were sold in the period (2010: 126). This demonstrates the early
shift towards IdaTech's liquid fuel systems and shows IdaTech is
succeeding in eliminating the hydrogen barrier (the difficulty and
expense of using hydrogen as a fuel) as its products can use a
convenient, readily available and inexpensive liquid fuel rather
than compressed bottled hydrogen gas. Bottled hydrogen gas is
relatively expensive, difficult to store and transport to site and
makes refueling, especially in difficult environments, extremely
challenging.
All systems were gross margin contribution positive, before
allocation of indirect factory expenses.
Financial Review
Revenue
Total revenue increased by 63% to US$3.1 million for the six
months ended 30 June 2011 (2010: US$1.9 million). The increase is
attributable to revenue from product sales of US$0.5 million to
US$2.4 million and an increase in revenue derived from projects of
US$0.6 million to US$0.7 million.
As discussed under Commercial Progress above, the mix of systems
sold in the period was very different from the prior year, and was
weighted towards the higher price reformed systems. The average
selling price increased to US$18,900 from US$11,200 in 2010.
Revenue from development contracts accounted for US$0.6 million
compared with US$0.1 million in 2010. This is due to the completion
of a contract with the US Department of Energy which was deferred
from last year.
Gross Loss
The business recorded a lower gross loss of US$2.0 million in
the period (2010: gross loss of US$2.1 million). The additional
costs of ramping up the factory for ElectraGen(TM) ME production,
the lower sales volume than expected offset the higher positive
gross contribution from the unit sales.
Operating expenses
Research and development costs decreased by US$0.4 million to
US$4.0 million for the period under review, after deducting costs
relating to development projects which are classified as cost of
sales and capitalisation of product development costs. This
decrease was primarily due to the completion of the ElectraGen(TM)
ME development at the end of 2010.
Sales, general and administrative expenses fell by US$0.8
million to US$5.0 million. This was due to lower administration
costs, lower share based payment charges and reduced sales costs
following the temporary closure of the European sales office.
Interest receivable and payable
Interest received is negligible as the Group is financed by debt
from its principal shareholder, the Investec Group. Debt financing
increased by US$12 million to US$72 million in the period,
resulting in an interest charge of US$2.6 million (2010: US$1.5
million). The increase in debt was used to fund operations and
finance the working capital requirement.
Loss for the period before tax
The Group's loss before tax decreased by US$0.1 million to
US$13.6 million for the six months to 30 June 2011. Excluding
interest charges, the operating loss fell by US$1.2 million to
US$11.0 million.
Cash flow
The cash outflow from operations was lower at US$8.8 million
(2009: US$9.1 million) driven by reduced operating overheads.
The net cash used in the six months to 30 June 2011 (excluding
the receipt of funds from the credit line drawdown) increased by
US$ 0.8million to US$12.5 million (2009: US$11.7 million) due
mainly to an increase in inventory levels built up to satisfy
expected demand in the second half of the year.
Future funding and going concern
The Company will require additional funds to reach cash
breakeven. The Board has concluded that IdaTech will find it easier
to raise capital as a private company and that the benefits of
Admission to AIM no longer outweigh the costs. Therefore, the Board
recommends that the Company cancel the admission of its shares to
trading on AIM. The Company has the support from its major
shareholders. A circular to shareholders will be posted in due
course. Shareholders should note that it is not intended that any
offer be made to shareholder in conjunction with the proposed
cancellation of trading on AIM.
Investec Group Investments (UK) Limited, IdaTech's largest
shareholder and only lender has indicated its current intention to
provide further financial support for the Company in an amount of
$10 million. The repayment date for the loan note funding already
provided by Investec together with this further funding required
during the current year, has been extended to 30 October 2012.
In view of the above considerations, the Directors have
concluded that a material uncertainty exists that may cast
significant doubt upon the Group's ability to continue as a going
concern. Nevertheless after making enquiries, and as a result of
this continued financial support, and taking into account
Investec's past support for the Company, its agreement to extend
the loan repayment date and its support for taking the Company
private, the Directors have concluded it is appropriate to continue
to prepare the financial statements on a going concern basis.
The statement of comprehensive income and balance sheet show no
intention or necessity to liquidate or curtail significantly the
operations of the Group. Specifically, the assets of the Group have
been valued and reported on the basis that they will be used for
the purpose for which they were purchased in the ongoing operation
of the business and no liabilities have been included that may
arise on a significant curtailment of the Group's activities.
These interim statements are available on IdaTech's website,
www.idatech.com.
Sir John Jennings Hal Koyama
Chairman Chief Executive Officer
Consolidated income statement for the period 1 January 2011 to
30 June 2011
Unaudited
Six months ended 30
June
2011 2010
US$'000 US$'000
Revenue 3,059.8 1,907.7
Cost of sales (5,100.6) (3,959.1)
Gross (loss) / profit (2,040.8) (2,051.5)
Research and development costs (3,961.4) (4,392.4)
Sales, general and administrative expenses (5,001.7) (5,775.1)
Operating loss (11,003.9) (12,218.9)
Finance income 0.1 0.7
Finance costs (2,620.9) (1,534.3)
Loss for the period before tax (13,624.7) (13,752.4)
Taxation 246.8 246.8
Loss for the period (13,377.9) (13,505.6)
============ ===========
Other Comprehensive Income
Gains / losses recognized directly
in equity
Other - -
Currency translation differences - -
Other comprehensive loss for the year - -
Total comprehensive loss for the year (13,377.9) (13,505.6))
============ ===========
Basic and diluted loss per share (US$) 4 (0.24) (0.27)
All amounts relate to continuing activities.
Unaudited consolidated statement of changes in shareholders'
equity for the period 1 January to 30 June 2011
Share Share Employee Retained Reverse Total Share-
Benefit
Trust
Capital Premium Reserve Earnings Acquisition holders'
Reserve Equity
-------- -------- --------- --------- ------------ -------------
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As of 1
January
2010 1,019.6 58,101.5 (2.089.4) (65,411.8) 9,477.7 1,098.2
Loss for the
period - - - (26,900.7) - (26,900.7)
Other - - - 484.0 484.0
Currency
Translation
differences - - - 6.5 - 6.5
Share based
payments - - - 1,600.0 - 1,600.0
Treasury
shares - - - 73.4 - 73.4
Shares sold
by employee
benefit
trust - - 442.4 - - 442.4
Share based
payments
utilized - - - (200.8) - (200.8)
Shares
issued to
employee
benefit
trust - - - - - -
As at 31
December
2010 1,019.6 58,101.5 (1,647.0) (90,348.8) 9,477.7 (23,397.0)
Loss for the
period - - - (13,377.9) - (13,377.9)
Other - - - - -
Currency
Translation
differences - - - (7.1) - (7.1)
Share based
payments - - - 631.5 - 631.5
Treasury
shares - - - (81.0) - (81.0)
Shares sold
by employee
benefit
trust - - 56.7 - - 56.7
Share based
payments
utilized - - - (68.7) - (68.7)
Shares
issued to
employee
benefit
trust - - - - - -
As at 30
June 2011 1,019.6 58,102.1 (1,590.3) (103,252.0) 9,477.7 (36,243.5)
======== ========= ========== ============ ======== ===========
Reverse acquisition reserve: The reverse acquisition reserve
arose as a result of the share for share exchange undertaken when
IdaTech plc acquired IdaTech UK Limited. This reserve comprises the
excess of the market value of the IdaTech plc shares issued to the
IdaTech UK Limited shareholders over and above the nominal value of
these shares.
Consolidated balance sheet as at 30 June 2011
Unaudited Unaudited
30 June 31 December 30 June
2011 2010 2010
US$'000 US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 1,641.0 1,703.2 1,263.2
Goodwill 18,001.2 18,001.2 18,001.2
Intangible assets 21,987.9 22,350.7 17,955.0
Long term deposits 100.0 100.0 100.0
----------- ----------- ----------
41,730.1 42,155.1 37,319.4
----------- ----------- ----------
Current assets
Inventories 7,045.2 4,956.1 3,520.9
Trade and other receivables 2,947.5 2,381.7 1,754.4
Cash and cash equivalents 639.9 1,140.7 2,054.1
----------- ----------- ----------
10,632.6 8,478.5 7.329.3
----------- ----------- ----------
Total assets 52,362.7 50,633.6 44,648.7
LIABILITIES
Current liabilities
Trade and other payables (11,280.1) (9,062.1) (4,739.4)
Provisions for other liabilities
and charges (396.6) (396.6) (35.3)
Deferred income tax liabilities - - (493.5)
----------- ----------- ----------
(11,676.7) (9,458.7) (5,268.2)
----------- ----------- ----------
Net current assets (1,044.1) (980.2) 2,061.1
=========== =========== ==========
Non-current liabilities
Borrowings (72,000.0) (60,000.0) (45,000.0)
Provisions for other liabilities
and charges (988.8) (384.4) (988.8)
Deferred income tax liabilities (3,940.7) (4,187.5) (3,940.8)
----------- ----------- ----------
(76,929.5) (64,571.9) (49,929.6)
----------- ----------- ----------
Total liabilities (88,606.2) (74,030.6) (55,197.8)
----------- ----------- ----------
Total net assets (36,243.5) (23,397.0) (10,549.1)
=========== =========== ==========
EQUITY
Capital and reserves
Share capital 1,019.6 1,019.6 1,019.6
Share premium 59,139.5 58,101.5 58,102.1
Retained earnings - deficit (105,880.3) (91,995.8) (79,148.5)
Reverse Acquisition reserve 9,477.7 9,477.7 9,477.7
----------- ----------- ----------
Total shareholders' equity (36,243.5) (23,397.0) (10,549.1)
=========== =========== ==========
Consolidated cash flow statement for the six months to 30 June
2011
Unaudited
Six months
Note ended 30 June
2011 2010
---------- ----------
US$'000 US$'000
Cash flows from operating activities
Cash outflows from operations (8,839.3) (9,112.0)
Tax paid - -
Interest paid (2,620.9) (1,530.7)
Net cash outflow from operating
activities (11,460.2) (10,642.7)
---------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (189.2) (357.1)
Purchase of intangible assets (851.5) (703.8)
Interest received .1 .7
Net cash outflow from investing
activities (1,040.6) (1,060.1)
---------- ----------
Cash flows from financing activities
Proceeds of issue of shares (net
of expenses) - -
Proceeds from borrowings 12,000.0 13,000.0
Repayments of borrowings - -
Net cash inflow from financing
activities 12,000.0 13,000.0
---------- ----------
Net decrease in cash and cash equivalents (500.8) 1,054.0
Cash and cash equivalents at beginning
of the period 1,140.7 756.9
Cash and cash equivalents at end
of the period 639.9 2,054.1
========== ==========
Cash flows from operating activities
Loss before tax and interest (11,013.9) (12,218.9)
Adjustments for
Depreciation 193.9 170.6
Amortisation 1,214.6 920.0
Share based payments 631.5 800.0
Inventories (2,096.3) (1,112.9)
Trade and other receivables (565.8) 1,045.9
Trade and other payables 510.4 246.0
Other payables 2,286.3 1,037.3
Foreign exchange movements - -
---------- ----------
Net cash generated utilised by
operating activities (8,839.3) (9,112.0)
========== ==========
NOTES TO THE UNAUDITED FINANCIAL INFORMATION FOR THE SIX MONTHS
ENDED 30 JUNE 2011
1. General information
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is 2
Gresham Street, London, EC2V 7QP. The Company has a listing on the
AIM Market of the London Stock Exchange. The unaudited financial
information for the six months ended 30 June 2011 was approved for
issue on XX September 2011.
These interim financial results do not comprise statutory
accounts within the meaning of section 240 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2010 were
approved by the Board of Directors on 22 March 2011 and delivered
to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain any statement under
Section 237 of the Companies Act 2006 but it contained an emphasis
of matter regarding the future funding requirement of the
business.
2. Basis of preparation
These financial statements for the six months to 30 June 2011
have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with
International Accounting Standard ("IAS") 34," Interim financial
reporting" as adopted by the European Union. The six-monthly
financial information should be read in conjunction with the annual
financial statements for the year ended 31 December 2010, which
have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union.
Investec Group Investments (UK) Limited, IdaTech's largest
shareholder and only lender has indicated its current intention to
provide further financial support for the Company in an amount up
to $10 million. The repayment date for the loan note funding
already provided by Investec together with this further funding
required during the current year, has been extended to 30 October
2012.
In view of the above considerations, the Directors have
concluded that a material uncertainty exists that may cast
significant doubt upon the Group's ability to continue as a going
concern. Nevertheless after making enquiries, and as a result of
this continued financial support, and taking into account
Investec's past support for the Company, its agreement to extend
the loan repayment date and its support for taking the Company
private, the Directors have concluded it is appropriate to continue
to prepare the financial statements on a going concern basis.
The statement of comprehensive income and balance sheet show no
intention or necessity to liquidate or curtail significantly the
operations of the Group. Specifically, the assets of the Group have
been valued and reported on the basis that they will be used for
the purpose for which they were purchased in the ongoing operation
of the business and no liabilities have been included that may
arise on a significant curtailment of the Group's activities.
The Company will require additional funds to reach cash
breakeven and the Board has concluded that IdaTech will find it
easier to raise capital as a private company and that the benefits
of Admission to AIM no longer outweigh the costs. Therefore the
Board recommends that the Company cancel the admission of its
shares to trading on AIM. A circular to shareholders will be posted
in due course.
The income statement and balance sheet show no intention or
necessity to liquidate or curtail significantly the operations of
the Group. Specifically, the assets of the Group have been valued
and reported on the basis that they will be used for the purpose
for which they were purchased in the ongoing operation of the
business and no liabilities have been included that may arise on a
significant curtailment of Group activities.
3. Accounting policies
The accounting policies adopted by the Group are consistent with
those of the annual financial statements for the year ended 31
December 2010, as described in those financial statements.
NOTES TO THE UNAUDITED FINANCIAL INFORMATION FOR THE SIX MONTHS
ENDED 30 JUNE 2011
4. Loss per share
(a) Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the period.
Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2011 2010
Loss attributable
to the equity holders
of the company US$(13,377.9) US$(13,505.6)
Weighted average number
of ordinary shares
in issue 50,452,747 50,452,747
Basic loss per share
(US$ per share) (0.24) (0.27)
=================== ====================
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. For the share
options, a calculation is done to determine the number of shares
that could have been acquired at fair value (determined as the
average annual market share price of the company's shares) based on
the monetary value of the subscription rights attached to
outstanding share options. The number of shares calculated as above
is compared with the number of shares that would have been issued
assuming the exercise of the share options.
The impact of the share options is anti-dilutive. Therefore the
diluted loss per share is the same as the basic loss per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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