WINDAR PHOTONICS PLC
30 September 2015
Windar Photonics plc
(the "Company" or "Windar Photonics")
Unaudited interim report for the six months ended 30 June 2015
Chairman's Statement
Windar Photonics PLC (AIM:WPHO), the technology group that has developed a cost
efficient and innovative Lidar wind sensor for use on electricity generating
wind turbines announces its unaudited interim results for the six months ended
30 June 2015.
In the period the Group incurred a loss before tax of €1.56 million (six months
ended 30 June 2014: €1.00 million) on revenue of €145,000 (2014: €432,000). The
revenue in the period is lower than expected primarily due to a delay in
developing the Asian market. The loss for the period primarily arose due to
lower revenue than expected and the planned investments in personnel and
increased sales and marketing activities.
The Group's cash position at the end of the period of €2.8 million reflects the
investment in the stock of finished goods in anticipation of a higher level of
sales during the period. As a result, the Directors have taken the decision
not to commence paying down the Growth Fund Loan of €0.8 million. The Group
has the option to not start repaying this loan until full repayment is required
in June 2020.
In June 2015 the Group announced a delay in developing the Asian market due to
installation issues on the initial deployments of its systems in China. These
issues have now been resolved and the Group has further established an in-house
commercial and technical organisation based in Shanghai and Beijing. However,
this delay will have a material effect on sales in the region for 2015.
Currently, the Group has an exclusive distribution agreement in place for the
Chinese market which is dependent on certain sales levels being achieved in
2015. As the Directors expect that the necessary sales level target will not
be achieved, the Directors are considering the Company's options for
capitalising on the high levels of interest from Chinese wind park operators
and Original Equipment Manufacturers (OEMs).
Orders from the rest of the world are likely to be in line with our
expectations for 2015, but some have come in later than planned and as a result
some of these deliveries will now take place in 2016. The Group is pleased to
announce that it has received its first volume order for retrofitting an entire
wind park with our Wind*Eye™ Lidar and our new Turbine Control System from a US
utility company. The contract value is approximately US$ 900,000 with delivery
in 2016. This is an important milestone for the Company.
In the first half of 2015 the technical development programme has performed
well and expanded the Group's product offering. These include:
* The WindTIMIZER™ (previously known as the WindSwitch switchbox)
* The new Turbine Control System for certain turbine models
* The new 4-beam Lidar System for OEM integration
The WindTIMIZER™ enables direct turbine integration for existing wind turbines
fitted with certain wind sensors. The Turbine integration enables us to
optimise the efficiency of existing wind turbines using the Wind*Eye™ Lidar
system and thereby provide an improved Annual Energy Production due to an
optimisation of the yaw alignment of the Wind Turbine.
The new Turbine Control System which operates on the Vestas V47 platform and
the Bonus 1.3MW platform, two widely used platforms, is an alternative turbine
integration platform to the WindTIMIZER™ solution. When retro-fitting not only
the Wind*Eye™ Lidar system but also the Turbine Control System, we are able to
not only optimise the yaw alignment of existing Wind Turbines but also to
improve pitch control to further enhance power optimisation, reduce fatigue
load, reduce maintenance costs and not least increase the life time expectancy
of existing wind turbines. The Group has seen significant market interest for
this solution, as evidenced by the above mentioned first volume order in the
US, and this new product offering means the Company can now demonstrate strong
business cases for retrofitting our solution in smaller wind turbines sizes,
whereas the WindTIMIZER™ solution has been targeting wind turbines of 1.5MW and
above.
The Group recently installed its first 4-beam Lidar System on a 3.6MW Siemens
turbine in Denmark and it has already received other orders for testing the
4-beam Lidar System., The 4-beam Lidar system will be tested at the Danish
Technical University in Denmark to measure and validate actual load
reductions.
Currently the Group has a significant number of trial installations with
utility companies in Asia, Europe and North America which are providing good
results confirming the attractive business case for the installation of the
Wind*Eye™ Lidar system for the utility companies. In addition, the Group has
continued to focus on building interest with the OEM turbine manufacturers both
in relation to the Wind*Eye™ Lidar system and the new 4-beam Lidar System. We
have experienced good levels of interest from several of the leading turbine
manufacturers and several turbine manufactures have now successfully tested our
system and entered the development stage of direct turbine integration.
The Directors believe the delayed build-up in sales will not have a long term
impact, but it will however mean that expected revenue for 2015 will be of the
order of that achieved in 2014. The Directors are confident that the
significant interest shown by current customers, including both utility
companies and OEMs, will enable the Company to increase revenue substantially
in 2016, although given the delays encountered in 2015, not to the levels
previously expected.
The Directors remain confident that the Group has an attractive range of
innovative products with strong market interest which bodes well for future
success.
John Weston
Chairman
For further information:
Windar Photonics plc Martin Rambusch,
CEO +45 2168 9476
Jørgen Korsgaard
Jensen, COO
Sanlam Securities UK Limited David
Worlidge +44 (0)20 7628 2200
(Nomad and Broker)
http://investor.windarphotonics.com
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Six months ended Six months Year ended
30 June 2015 ended 30 31 December 2014
June 2014
(unaudited) (unaudited) (audited)
€ € €
Note
Revenue 145,075 431,574 1,038,673
Cost of Goods Sold (11,548) (302,919) (678,150)
Gross profit 133,527 128,655 360,523
Administrative expenses (1,766,455) (1,037,533) (2,201,401)
Administrative expenses - Cost in (216,637) (668,724)
respect of the Introduction and -
Listing on AIM
Loss from operations (1,849,565) (908,878) (2,509,602)
Finance income 338,435 84,978 84,985
Finance expenses (46,729) (174,632)
(259,554)
Loss before taxation (1,557,859) (998,532) (2,684,171)
Taxation 51,750 35,156
70,312
Loss for the period (1,506,109) (963,376) (2,613,859)
Other comprehensive income
Items that will or maybe reclassified
to profit or loss:
Exchange losses arising on (2,197) (594) (8,440)
translation of foreign operations
Total comprehensive loss for the (1,508,306) (963,970) (2,622,299)
period
Loss per share for loss attributable
to the ordinary equity holders of
Windar Photonics plc
Basic, cents per share 2 (3.95c) (2.99c) (7.85c)
Diluted, cents per share (3.95c) (2.99c) (7.85c)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015
As at As at
As at 30 June 31 December 2014
30 June 2015 2014
(unaudited) (unaudited) (audited)
€ € €
Notes
Assets
Non-current assets
Intangible assets 1,078,900 1,132,554 1,147,510
Property, plant & equipment 130,615 17,387 31,989
Deposits 74,033 10,874 15,161
Total non-current assets 1,283,548 1,160,815 1,194,660
Current assets
Inventory 3 849,702 253,531 248,113
Trade receivables 4 313,124 313,836 493,283
Other receivables 4 605,106 35,569 352,092
Prepayments 26,030 - 13,671
Cash and cash equivalents 2,777,947 171,190 5,548,596
Total current assets 4,571,909 774,126 6,655,755
Total assets 5,855,457 1,934,941 7,850,415
Equity
Share capital 5 487,688 411,245 487,688
Share premium 6,994,646 - 6,994,646
Merger reserve 2,910,866 2,910,866 2,910,866
Foreign currency reserve (13,089) (3,046) (10,892)
Accumulated loss (5,671,833) (2,735,114) (4,282,490)
Total equity 4,708,278 583,951 6,099,818
Non-current liabilities
Growth fund loan 6 677,978 717,064
759,364
Total non-current liabilities 677,978 717,064
759,364
Current liabilities
Trade and other payables 7 253,227 294,051 913,283
Other liabilities 378,961 120,250
134,588
Total current liabilities 387,815 673,012 1,033,533
Total liabilities 1,147,179 1,350,989 1,750,597
Total equity and liabilities 5,855,457 1,934,941 7,850,415
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2015
Year ended
Six months Six months 31 December
ended ended 30 June 2014
30 June 2015 2014
(unaudited) (unaudited) (audited)
Notes € € €
Loss for the period before tax (998,532)
(1,557,859) (2,684,171)
Adjustments for:
Finance income (338,435) (84,978) (84,985)
Finance expenses 46,729 174,632 259,554
Amortisation 164,200 156,446 319,323
Depreciation 52,434 3,933 7,882
Received tax credit - - 118,480
Foreign exchange difference (2,197) 2,453 (7,643)
Warrants expense 116,766 - 103,107
(1,518,362) (746,046) (1,968,453)
Movements in working capital
Changes in inventory (601,589) (106,507) (101,089)
Changes in receivables, prepayments (92,336) (69,636) (666,871)
and deposits
Changes in trade payables (660,056) 128,503 247,960
Changes in other payables 14,338 224,177 465,241
Cash flow used in operations (1,339,643) (569,509) (2,023,212)
Investing activities
Payments for intangible assets (97,992) (32,062) (207,733)
Payments for tangible assets (151,130) (3,895) (22,387)
Cash flow used in investing (249,122) (35,957) (230,120)
activities
Financing activities
Proceeds from issue of share capital - - 7,643,977
Costs associated with the issue of - - (572,889)
share capital
Issue of convertible debt - 737,779 737,779
Costs associated with the issue and - (183,933) (183,933)
conversion of bonds
Non-cash effects on the conversion - 24,768 24,768
of Bonds
Net change in long term borrowing 42,300 38,368 77,454
Finance expenses (46,729) (174,632) (259,554)
Finance income 338,435 84,978 84,985
Cash flow from financing activities 334,006 527,328 7,552,587
Net (decrease)/increase in cash and (2,773,121) (78,138)
cash equivalents 5,299,255
Exchange differences 2,472 (594) (581)
Cash and cash equivalents at the 5,548,596 249,922 249,922
beginning of the period
Cash and cash equivalents at the end 2,777,947 171,190
of the period 5,548,596
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS
ENDED 30 JUNE 2015
Share Share Merger Foreign Accumulated Total
Capital Premium reserve currency Losses
reserve
€ € € € € €
At 1 January 2014 411,245 - 1,551,502 (2,452) 170,430
(1,789,865)
Effects of bonds
conversion in - - 1,359,364 - 18,127 1,377,491
subsidiary
Comprehensive loss
for the period - - - (963,376) (963,376)
Other comprehensive - - - (594) - (594)
loss
At 30 June 2014 411,245 - 2,910,866 (3,046) (2,735,114) 583,951
Issue of shares on 3 - - - - 3
incorporation
New shares issued 75,518 7,476,233 - - - 7,551,751
Costs associated with
capital raise - (572,889) - - - (572,889)
New shares issued in
respect of services 922 91,302 - - - 92,224
rendered
Share option and - - - - 103,107 103,107
warrant costs
Comprehensive loss
for the period - - - - (1,650,483) (1,650,483)
Other comprehensive - - - (7,846) - (7,846)
loss
At 31 December 2014 487,688 6,994,646 2,910,866 (10,892) (4,282,490) 6,099,818
Share option and - - - - 116,766 116,766
warrant costs
Comprehensive loss
for the year - - - - (1,506,109) (1,506,109)
Other comprehensive - - - (2,197) - (2,197)
loss
At 30 June 2015 487,688 6,994,646 2,910,866 (13,089) (5,671,833) 4,708,278
1. BASIS OF PREPARATION
The financial information for the six months ended 30 June 2015 and 30 June
2014 does not constitute the Group's statutory financial statements for those
periods with the meaning of Section 434(3) of the Companies Act 2006 and has
neither been audited or reviewed pursuant to guidance issued by the Auditing
Practices Board. The annual financial statements of Windar Photonics Plc are
prepared in accordance with International Financial Reporting Standards as
endorsed by the European Union ("IFRS"). The principal accounting policies used
in preparing the Interim financial statements are those that the Group expects
to apply in its financial statements for the year ending 31 December 2015 and
are unchanged from those disclosed in the Group's Annual Report for the year
ended 31 December 2014.
The comparative financial information for the year ended 31 December 2014
included within this report does not constitute the full statutory accounts for
that period. The statutory Annual Report and Financial Statements for 2014 have
been filed with the Registrar of Companies. The Independent Auditor's Report on
the Annual Report and Financial Statements for 2014 was unqualified, did not
include references to any matters which the auditors drew attention to by way
of emphasis without qualifying their report and did not contain a statement
under section 498(2)-498(3) of the Companies Act 2006.
After making enquiries, the directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the half-yearly condensed consolidated
financial statements.
This interim report was approved by the directors.
2. Loss per share
The loss and weighted average number of ordinary shares used in the calculation
of basic loss per share are as follows:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014
€ € €
Loss for the period (1,506,109) (963,376) (2,613,859)
Weighted average number of ordinary
shares for the purpose of basic earnings 38,166,377 32,184,002 33,317,654
per share
Basic loss, cents per share (3.95c) (2.99c) (7.85c)
Diluted loss, cents per share
(3.95c) (2.99c) (7.85c)
There is no dilutive effect of the warrants as the dilution would be negative.
3. Inventory
As at As at
As at 30 June 31 December
30 June 2014 2014
2015
€ € €
Raw material 365,226 34,632 10,992
Goods in progress 252,396 - 93,578
Finished goods 232,080 218,899 143,543
Inventory 849,702 253,531 248,113
4. Trade and other receivables
As at As at
As at 30 June 31 December
30 June 2014 2014
2015
€ € €
Trade receivables 313,124 313,836 493,283
Less: provision for impairment of - - -
trade receivables
Trade receivables - net 313,124 313,836 493,283
Tax receivables 122,157 - 70,407
Other receivables 482,949 35,569 281,685
Total other receivables 605,106 35,569 352,092
Total trade and other receivables 918,230 349,405 845,375
5. Share capital
At the date of incorporation, the issued share capital of the Company was £2.00
divided into 2 ordinary shares of £1.00 each in the capital of the Company,
both of which were fully paid or credited as fully paid to their subscribers.
On 29 July 2014, the 2 ordinary shares of £1.00 each (being all the issued
capital in the Company) were subdivided into 200 ordinary shares of 1 pence
each.
Between 29 August 2014 and 12 December 2014 (inclusive), the Company issued
38,166,177 Ordinary Shares as follows:
32,184,002 Ordinary Shares in consideration for the transfer to the Company of
the entire issued share capital in the Windar Photonics A/S pursuant to the
terms of the Share Swap Agreement;
5,910,000 Ordinary Shares in consideration for cash received by the Company;
and
72,175 Ordinary Shares in consideration for the satisfaction of fees payable to
West Hill Capital LLP.
Number of €
shares
On incorporation shares of £1 2 3
29 July 2014 subdivided into shares of 1p 200 3
Issue of shares in respect of transfer of 32,184,002 411,245
shares of Windar Photonics A/S
Issue of shares for cash 5,910,000 75,518
Issue of shares for the satisfaction of fees 72,175 922
Shares at 31 December 2014 and 30 June 2015 38,166,377 487,688
At 31 December 2014 and 30 June 2015 the share capital comprises 38,166,377
shares of 1 pence each.
6. Borrowings
The carrying value and fair value of Group's borrowings are as follows:
Six months Six months Year ended
ended ended 31
30 June 30 June December
2015 2014 2014
€ € €
Growth Fund (including accrued interest) 759,364 677,978 717,064
Total financial assets other than cash 759,364 677,978 717,064
and cash equivalents classified as loans
and receivables
The Growth Fund borrowing from the Danish public institution, Vækstfonden,
bears interest at a rate of 12 per cent. The borrowing is a bullet loan with
maturity in June 2020. The Group may at any point in time either repay the loan
in part or in full or initiate an annuity repayment scheme over four years. If
an annuity repayment scheme is initiated, the interest rate will be reduced to
8 per cent in the repayment period.
7. Trade and other payables
As at As at
As at 30 June 31
30 June 2014 December
2015 2014
€ € €
Trade payables 253,227 294,051 913,283
Other payables 134,588 378,961 120,250
Total financial liabilities classified as
financial liabilities measured at 387,815 673,012 1,033,533
amortised cost
There is no material difference between the net book value and the fair values
of current trade and other payables due to their short term nature.
8. Availability of Interim Report
Copies of the Interim Report will not be sent to shareholders but will be
available from the Company's website www.investor.windarphotonics.com.
WINDAR PHOTONICS : Half-yearly Report
September 30, 2015 at 02:01 am
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