- Title:
Annual Results, Interims Timeline & Notice of AGM - Time:
18:32:27 - Date:
13 Nov 2020 - Category:
Results - ID:
3423F
13 November 2020
Windar Photonics plc
("Windar" or the "Company")
Annual Results, Interim Reporting Timeline and Notice of AGM
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, is pleased to announce its final audited results for the year ended 31 December 2019 ("FY19").
Notice of Annual General Meeting
Windar also confirms that its Annual General Meeting ("AGM") will be held at West Hill Corporate Finance Ltd, 85 Gresham Street, London, EC2V 7NQ at 1.00 p.m. on 10 December 2020.
In light of the Coronavirus (COVID-19) pandemic and the restrictions imposed by the UK Government, the Company will convene the AGM with the minimum necessary quorum of two shareholders (which the Company will facilitate), and further shareholders will not be permitted to attend the AGM in person. The Company will include all valid proxy votes (whether submitted electronically or in hard copy form) in its polls at the AGM and the Chair of the meeting will call for a poll on each resolution. The Company accordingly requests that shareholders submit their proxy votes in respect of the resolutions as set out in the Notice of the AGM, electronically or by post in advance, in accordance with the instructions set out in the Notice of the AGM.
Shareholders should submit their votes via proxy as early as possible, and shareholders are requested to appoint the Chair of the meeting as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the AGM in person or cast the shareholder's vote.
Copies of the Annual Report and Accounts for the year ended 31 December 2019 and the Notice of the AGM will be posted to shareholders and are available from the Company's website - www.windarphotonics.com
Interim Results Reporting Timeline
The Company expects to publish its half yearly report for the six months ended 30 June 2020 during the week commencing 16 November 2020.
For further information, please contact:
| Windar Photonics plc Jørgen Korsgaard Jensen, CEO |
Tel: +45 21689476 |
| |
|
| Cenkos Securities plc (Nomad & Broker) Neil McDonald / Pete Lynch |
Tel: 0131 220 6939
|
Notes to Editors:
Windar Photonics is a technology group that develops cost-efficient and innovative Light Detection and Ranging ("LiDAR") optimisation systems for use on electricity generating wind turbines. LiDAR wind sensors in general are designed to remotely measure wind speed and direction.
http://investor.windarphotonics.com
Chairman's Statement
As outlined in the June trading update, 2019 was a difficult year for Windar and the Company generated revenue of €1.2 million, a reduction of 66% compared to 2018 (€3.5 million). This decline is mostly attributable to operations in the retro-fit market whilst, more positively, sales in the OEM market were relatively flat year-on-year. In particular, revenues were impacted in 2019 as a result of delays and postponements of projects into 2020, leading to an increased EBITDA loss of €2.8 million (2018: loss of €0.4 million).
However, the management team is confident that the order book, whilst delayed in delivery, will support the business going forward and there are encouraging signs that the OEM market is now starting to adopt integration of Lidar systems for control purposes, illustrated with the recently obtained OEM orders received in 2020 and ongoing test projects.
The retro-fit market operations were expected to develop through 2019 with the end user projects in the Asian region and the growth outside this region as a result of our distribution agreement with Vestas. Unfortunately, delays and postponements within the Asian region impacted our development and this has been compounded by a slower than anticipated build up in activity through the Vestas distribution agreement.
The Company continues to focus on becoming the world's leading LiDAR group for wind optimisation. Part of this strategy is a continued effort to optimise the product suite, whilst continuing our efforts to maintain cost leadership within the industry. In 2019 we were able to reduce our average production costs by around 15% and we expect to see a continued cost reduction in 2020.
In addition to the continued cost optimisation programme, the Company did enter two major development projects, partly funded by Eurostar, the Energy Technology Development and Demonstration Program. The two projects are focused on further enhancing our WindVision products for which OEMs form the target market. Alongside the involvement of Windar and the Danish Technical University, these projects include several of the major European and Asian wind turbine manufactures.
Whilst we continue to believe that our WindVision™ product offering to the OEM market will contribute substantial growth in the coming years, the Company has evaluated the product offerings to the retro-fit markets with the view of establishing a more streamlined future growth path within these markets. Based on these evaluations, the Company has decided to launch a new service offering - Lidar as a Service ("LaaS") - to the retro-fit markets generating more predictable recurring revenues rather than one-off sales. This will be a cloud-based pay per use service, sold by distributors such as larger wind turbine service companies. For this new business, Windar has developed a new self-contained Lidar unit connected to our central analysing control centre in Copenhagen. The LaaS business unit is expected to generate first revenue in 2020 and initial indications of interest provide the board with confidence that this could provide a step change in Windar's financial performance.
Financial Overview
Revenue during the year declined 66% to €1.2 million (2018: €3.5 million). Gross profit was down 47% (2018: 50%) to €0.5 million (2018: €1.8 million).
Net loss for the year before taxes increased to €3.3 million from €0.9 million, which included depreciation, amortisation and warrant costs of €0.3 million (2018: €0.3 million). Among other reasons, but also due to the Covid-19 situation, the Company has experienced problems collecting outstanding receivables in Asia and due to the ongoing uncertainties, the board has decided that it is prudent to make a 100% provision for these outstanding receivables at the end of 2019 of €0.8 million. However, the board considers this an absolutely worst-case outcome and do expect to recover at least some of these receivables.
The Group held cash balances at the end of the year of €0.8 million (2018: €1.7 million) excluding restricted cash balances of €Nil (2018: €0.5 million).
Trade receivables were €0.1 million (2018: €0.6 million), reflecting the impact of the abovementioned provision.
The Group has capitalised its continued cost of investment in technology during the year. This amounts to €0.5 million in 2019 (2018: €0.4 million) before grants of €0.1 million (2018: €0.1 million).
During the year, the Group raised €1.6 million before expenses through the issue of share capital.
Outlook
After many years of test projects, it has been encouraging that, for the first year ever in our history, in 2020 the OEM market segment has now overtaken orders and revenue streams from the retro-fit market in both units and value. However, following the disappointing results in 2019, the Company has proactively changed the distribution network set-up in Asia in 2020, putting agreements in place that we believe could bring significant additional growth to the future orders and revenue streams.
Despite these encouraging developments, 2020 has also seen continued disruptions and delivery postponements, primarily due to the ongoing Covid-19 situation and the Company has also had difficulties in collecting certain outstanding receivables in Asia. Due to various quarantine rules and traveling restrictions, our installation process for products in the field has been particularly affected. As a consequence, parts of order intakes initially planned for delivery in 2020 are now expected to be delivered in 2021. Despite these challenges we still expect to see revenue in 2020 marginally increase compared to the disappointing result in 2019.
The factors outlined above have meant that the Company's cash flow situation has been negatively impacted and cash management is a critical consideration for the management team and is under active review. The Company was able to continue the production and the assembly line in Copenhagen throughout most of the first half of 2020, notwithstanding the impact of Covid-19. This has resulted in the Company being well positioned to satisfy the revised order delivery schedules but has also resulted in the cash flow position being under stress until payment for these deliveries is received. However, management believe that there are a number of actions available to them in order to manage the cash position even considering the current Covid-19 situation.
The Board is actively considering the alternative financing arrangements available to the Company, both to address the short-term working capital issues as a result of the various factors outlined above and to provide the longer-term liquidity required to allow the Company to adjust to longer order and delivery cycles. To this end, I am pleased to confirm that the company has agreed for a Covid-19 loan of €0.4 million from, Vækstfonden, the Danish Growth Fund and the postponement of repayments totalling €0.15 million due in 2021 in respect of the existing Growth Fund loan until the second part of 2025.
Despite the various challenges the Company is facing, our R&D activities remain an important part of our business and the next generation of both the WindVision™ and WindEye™ products are expected to be released at the end of 2020. Besides many new advanced functionalities, an important feature is to drive the unit costs down by approximately 25% compared to current systems.
Overall, our business strategy for the remainder of 2020 and 2021 is based on additional and substantial cost reduction of our products, reduction of staff and the development of the LaaS business model, which we expect will pave the way for a substantially improved financial performance. We believe that the implementation of this strategy will position the Company to take advantage of opportunities arising in the future. In particular, the establishment of the LaaS recurring revenue model will provide further stability to the financial performance of the business going forward and position the Company to take advantage of opportunities available in the market.
Positively, the total order inflow in 2020 has been encouraging at €2.9 million contractually for delivery in 2020. However, due to the ongoing Covid-19 pandemic, the Board expects only to convert approximately €1.3 million of these orders into realised revenue in 2020 with the remaining €1.6 million of the order back-log to be carried into 2021. The Board believe that this order book and outstanding project and customer pipeline stands the Company in a good position moving forward.
In these challenging times I would like to take the opportunity to thank the management and staff for their efforts in 2019.
BY ORDER OF THE BOARD ON November 13, 2020
Johan Blach Petersen
Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| |
|
|
|
| |
|
Year ended 31 December 2019 |
Year ended 31 December 2018 |
| |
|
€ |
€ |
| |
Note |
|
|
| Revenue from contracts with customers |
4 |
1,177,897 |
3,499,867 |
| Cost of goods sold |
|
(629,560) |
(1,744,571) |
| Gross profit |
|
548,337 |
1,755,296 |
| |
|
|
|
| Administrative expenses |
|
(3,680,990) |
(2,391,798) |
| Impairment loss |
|
- |
(39,182) |
| Other operating income |
|
32,145 |
32,201 |
| Loss from operations |
|
(3,100,508) |
(643,483) |
| |
|
|
|
| Finance expenses |
6 |
(190,889) |
(269,925) |
| Loss before taxation |
|
(3,291,397) |
(913,408) |
| |
|
|
|
| Taxation |
7 |
212,488 |
120,436 |
| Loss for the year attributable to the ordinary equity holders of Windar Photonics Plc |
|
(3,078,909) |
(792,972) |
| |
|
|
|
| Other comprehensive income |
|
|
|
| Items that will or may be reclassified to profit or loss: |
|
|
|
| Exchange gains/(losses) arising on translation of foreign operations |
|
3,085 |
(2,125) |
| Total comprehensive loss for the year attributable to the ordinary equity holders of Windar Photonics Plc |
|
(3,075,824) |
(795,097) |
| |
|
|
|
| Loss per share attributable to the ordinary equity holders of Windar Photonics Plc |
|
|
|
| Basic and diluted, cents per share |
8 |
(6.7) |
(1.8) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
| |
|
|
|
| |
|
31 December 2019 |
31 December 2018 |
| |
|
€ |
€ |
| |
Note |
|
|
| Assets |
|
|
|
| Non-current assets |
|
|
|
| Intangible assets |
10 |
1,192,607 |
982,888 |
| Property, plant & equipment |
11 |
61,800 |
110,788 |
| Deposits |
|
24,980 |
46,285 |
| Total non-current assets |
|
1,279,387 |
1,139,961 |
| |
|
|
|
| Current assets |
|
|
|
| Inventory |
12 |
1,019,564 |
726,999 |
| Trade receivables |
13 |
111,703 |
638,138 |
| Other receivables Tax credit receivables |
13 13 |
84,305 212,428 |
166,264 120,209 |
| Prepayments |
|
44,857 |
83,763 |
| Restricted cash and cash equivalents |
14 |
- |
518,138 |
| Cash and cash equivalents |
14 |
763,024 |
1,721,803 |
| Total current assets |
|
2,235,881 |
3,975,314 |
| |
|
|
|
| Total assets |
|
3,515,268 |
5,115,275 |
| |
|
|
|
| Equity |
|
|
|
| Share capital |
18 |
608,689 |
560,859 |
| Share premium |
18 |
13,692,119 |
12,558,434 |
| Merger reserve |
18 |
2,910,866 |
2,910,866 |
| Foreign currency reserve |
18 |
(18,630) |
(21,715) |
| Retained earnings |
18 |
(16,338,796) |
(13,287,757) |
| Total equity |
|
854,248 |
2,720,687 |
| |
|
|
|
| Non-current liabilities |
|
|
|
| Warranty provisions |
20 |
61,170 |
78,422 |
| Loans |
17 |
5,174 |
1,135,744 |
| Total non-current liabilities |
|
66,344 |
1,214,166 |
| |
|
|
|
| Current liabilities |
|
|
|
| Trade payables |
16 |
1,045,792 |
492,822 |
| Other payables and accruals |
16 |
211,879 |
588,456 |
| Contract liabilities |
16 |
69,954 |
83,169 |
| Invoice discounting |
16 |
1,992 |
10,735 |
| Loans |
16 |
1,265,059 |
5,240 |
| Total current liabilities |
|
2,594,676 |
1,180,422 |
| |
|
|
|
| Total liabilities |
|
2,661,020 |
2,394,588 |
| |
|
|
|
| Total equity and liabilities |
|
3,515,268 |
5,115,275 |
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
| |
|
|
|
| |
|
31 December |
31 December |
| |
|
2019 |
2018 |
| |
|
€ |
€ |
| |
Note |
|
|
| Assets |
|
|
|
| Non-current assets |
|
|
|
| Investments in subsidiaries |
|
519,897 |
10,733,683 |
| Total non-current assets |
|
519,897 |
10,733,683 |
| |
|
|
|
| Current assets |
|
|
|
| Other receivables |
13 |
11,790 |
12,703 |
| Prepayments |
|
26,599 |
23,857 |
| Intragroup receivables |
13 |
43,088 |
974,624 |
| Cash and cash equivalents |
14 |
521,713 |
221,540 |
| Total current assets |
|
603,190 |
1,232,724 |
| |
|
|
|
| Total assets |
|
1,123,087 |
11,966,407 |
| |
|
|
|
| |
|
|
|
| Equity |
|
|
|
| Share capital |
18 |
608,689 |
560,859 |
| Share premium |
18 |
13,692,119 |
12,558,434 |
| Merger reserve |
18 |
658,279 |
658,279 |
| Foreign currency reserve |
18 |
(7,746) |
(7,746) |
| Retained earnings |
18 |
(14,046,739) |
(1,891,110) |
| Total equity |
|
904,602 |
11,878,716 |
| |
|
|
|
| |
|
|
|
| Current liabilities |
|
|
|
| Trade payables |
16 |
198,485 |
67,691 |
| Other payables and accruals |
16 |
20,000 |
20,000 |
| Total liabilities |
|
218,485 |
87,691 |
| |
|
|
|
| Total equity and liabilities |
|
1,123,087 |
11,966,407 |
| |
|
|
|
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019
| |
|
|
|
| |
|
Year ended 31 December 2019 |
Year ended 31 December 2018 |
| |
Notes |
€ |
€ |
| |
|
|
|
| Loss for the period before taxation |
|
(3,291,397) |
(913,408) |
| |
|
|
|
| Adjustments for: |
|
|
|
| Finance expenses |
6 |
190,889 |
269,925 |
| Amortisation |
|
267,317 |
189,557 |
| Depreciation |
|
52,411 |
64,078 |
| Received tax credit |
|
120,186 |
66,095 |
| Foreign exchange losses |
|
3,085 |
(84,759) |
| Share option and warrant costs |
|
27,868 |
26,443 |
| |
|
(2,629,641) |
(382,069) |
| |
|
|
|
| Movements in working capital |
|
|
|
| Changes in inventory |
|
(292,565) |
12,611 |
| Changes in receivables |
|
144,164 |
(285,731) |
| Changes in prepayments |
|
38,905 |
- |
| Changes in deposits |
|
21,305 |
- |
| Changes in trade payables |
|
552,426 |
(552,147) |
| Changes in deferred revenue |
|
(13,214) |
76,453 |
| Changes in warranty provisions |
20 |
(17,252) |
6,218 |
| Changes in other payables and provisions |
|
447,972 |
263,442 |
| Cash flow from operations |
|
(1,747,900) |
(861,223) |
| |
|
|
|
| Investing activities |
|
|
|
| Payments for intangible assets |
10 |
(528,278) |
(415,456) |
| Payments for tangible assets |
11 |
(3,427) |
(68,125) |
| Grants received |
10 |
50,824 |
108,779 |
| Cash flow from investing activities |
|
(480,881) |
(374,802) |
| |
|
|
|
| Financing activities |
|
|
|
| Proceeds from issue of share capital |
|
1,315,342 |
2,500,877 |
| Costs associated with the issue of share capital |
|
(133,827) |
(193,199) |
| Reduction from invoice discounting |
|
(8,743) |
(110,474) |
| (Decrease)/Increase in restricted cash balances |
|
158,138 |
(283,446) |
| Repayment of loans |
|
(5,240) |
(4,579) |
| Interest paid |
|
(55,878) |
(66,537) |
| Cash flow from financing activities |
|
1,269,792 |
1,842,642 |
| |
|
|
|
| Net increase/(decrease) in cash and cash equivalents |
|
(958,989) |
606,617 |
| Exchange differences |
|
210 |
(1,317) |
| Cash and cash equivalents at the beginning of the year |
|
1,721,803 |
1,116,503 |
| |
|
|
|
| Cash and cash equivalents at the end of the year |
14 |
763,024 |
1,721,803 |
| |
|
|
|
COMPANY CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019
| |
|
|
|
| |
Notes |
Year ended 31 December 2019 |
Year ended 31 December 2018 |
| |
|
€ |
€ |
| |
|
|
|
| Loss for the period before taxation |
|
(12,183,497) |
(284,906) |
| |
|
|
|
| Adjustments for: |
|
|
|
| Finance Income |
|
(30,953) |
(18,065) |
| Write down of investment in subsidiary |
|
11,887,213 |
- |
| Share option and warrant costs |
|
27,868 |
26,443 |
| |
|
(299,369) |
(276,528) |
| |
|
|
|
| Movements in working capital |
|
|
|
| Changes in receivables |
|
913 |
(523) |
| Changes in prepayments |
|
(2,743) |
647 |
| Changes in loans to subsidiary entity |
|
962,489 |
(680,259) |
| Changes in trade payables |
|
130,795 |
28,970 |
| Changes in other payables and provisions |
|
- |
- |
| Cash flow from operations |
|
792,085 |
(927,693) |
| |
|
|
|
| Investing activities |
|
|
|
| Additional investment in subsidiary undertaking |
|
(1,673,427) |
(1,339,172) |
| Cash flow from investing activities |
|
(1,673,427) |
(1,339,172) |
| |
|
|
|
| Financing activities |
|
|
|
| Proceeds from issue of share capital |
|
1,315,342 |
2,500,877 |
| Costs associated with the issue of share capital |
|
(133,827) |
(193,199) |
| Cash flow from financing activities |
|
1,181,515 |
2,307,678 |
| |
|
|
|
| Net decrease in cash and cash equivalents |
|
300,173 |
40,813 |
| Cash and cash equivalents at the beginning of the year |
|
221,540 |
180,727 |
| |
|
|
|
| Cash and cash equivalents at the end of the year |
14 |
521,713 |
221,540 |
| |
|
|
|
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019
| |
Share |
Share |
Merger reserve |
Foreign currency reserve |
Accumulated Losses |
Total |
| Group |
€ |
€ |
€ |
€ |
€ |
€ |
| |
|
|
|
|
|
|
| At 1 January 2018 |
530,543 |
10,281,073 |
2,910,866 |
(19,590) |
(12,521,228) |
1,181,664 |
| |
|
|
|
|
|
|
| New shares issued |
30,316 |
2,470,560 |
- |
- |
- |
2,500,876 |
| Costs associated with capital raise |
- |
(193,199) |
- |
- |
- |
(193,199) |
| Share option and warrant costs |
- |
- |
- |
- |
26,443 |
26,443 |
| Transaction with owners |
30,316 |
2,277,361 |
- |
- |
26,443 |
2,334,120 |
| Loss for the year |
- |
- |
- |
- |
(792,972) |
(792,972) |
| Other comprehensive gains |
- |
- |
- |
(2,125) |
- |
(2,125) |
| Total comprehensive loss |
- |
- |
- |
(2,125) |
(792,972) |
(795,097) |
| |
|
|
|
|
|
|
| At 31 December 2018 |
560,859 |
12,558,434 |
2,910,866 |
(21,715) |
(13,287,757) |
2,720,687 |
| |
|
|
|
|
|
|
| New shares issued |
47,830 |
1,267,512 |
- |
- |
- |
1,315,342 |
| Costs associated with capital raise |
- |
(133,827) |
- |
- |
- |
(133,827) |
| Share option and warrant costs |
- |
- |
- |
- |
27,870 |
27,870 |
| Transaction with owners |
47,830 |
1,133,685 |
- |
- |
27,870 |
1,209,385 |
| |
|
|
|
|
|
|
| Loss for the year |
- |
- |
- |
- |
(3,078,909) |
(3,078,909) |
| Other comprehensive gains/(loss) |
- |
- |
- |
3,085 |
- |
3,085 |
| Total comprehensive loss |
- |
- |
- |
3,085 |
(3,078,909) |
(3,075,824) |
| At 31 December 2019 |
608,689 |
13,692,119 |
2,910,866 |
(18,630) |
(16,338,796) |
854,248 |
| |
|
|
|
|
|
|
| Company |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| At 1 January 2018 |
530,543 |
10,281,073 |
658,279 |
(7,746) |
(1,632,648) |
9,829,501 |
| |
|
|
|
|
|
|
| New shares issued |
30,316 |
2,470,560 |
- |
- |
- |
2,500,876 |
| Costs associated with capital raise |
- |
(193,199) |
- |
- |
- |
(193,199) |
| Share option and warrant costs |
- |
- |
- |
- |
26,443 |
26,443 |
| Transaction with owners |
30,316 |
2,277,361 |
- |
- |
26,443 |
2,334,120 |
| Loss for the year |
- |
- |
- |
- |
(284,905) |
(284,905) |
| Total comprehensive loss |
- |
- |
- |
- |
(284,905) |
(284,905) |
| |
|
|
|
|
|
|
| At 31 December 2018 |
560,859 |
12,558,434 |
658,279 |
(7,746) |
(1,891,110) |
11,878,716 |
| |
|
|
|
|
|
|
| New shares issued |
47,830 |
1,267,512 |
- |
- |
- |
1,315,342 |
| Costs associated with capital raise |
- |
(133,827) |
- |
- |
- |
(133,827) |
| Share option and warrant costs |
- |
- |
- |
- |
27,868 |
27,868 |
| Transaction with owners |
47,830 |
1,133,685 |
- |
- |
27,868 |
1,209,383 |
| |
|
|
|
|
|
|
| Loss for the year |
- |
- |
- |
- |
(12,183,497) |
(12,183,497) |
| Total comprehensive loss |
- |
- |
- |
- |
(12,183,497) |
(12,183,497) |
|
At 31 December 2019 |
608,689 |
13,692,119 |
658,279 |
(7,746) |
(14,046,739) |
904,602 |
| |
|
|
|
|
|
|
The consolidated financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is anticipated to continue in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.
Based on the Group's latest trading expectations and associated cash flow forecasts, the directors have considered the cash requirements of the Group. The directors are confident that based on the Group's forecasts and projections, taking account of possible changes in trading performance, the €0.4m Covid loan approved post year end and the post year end share placing which is in progress. it is appropriate to continue to adopt the going concern basis of accounting in preparing these financial statements.
However, Management has noticed non-payments of customer receivables in 2020 primarily from customers in the Asian region due to what Management expect also to be related to the Covid-19 situation and project delays at our customer's end-user level. Combined with the general consequences described above such eventual non-payments illustrates the current uncertainties when projecting a 12 months outlook.
The current cash flow estimate for the coming 12 months does include the following important assumptions:
No cash in-flow from any of receivables written off in the 2019 accounts
Only revenue and payments from customers based upon confirmed written contracts and agreements
Unchanged operation cost base
However, Management highlight the risk that the non-payment by customers can have a severely negative impact both long term but also short term.
In the event, for the reasons stated above the timing of the forecast revenue and customer payments were not to be achieved in the periods expected, the Group may need to seek additional funding to cover those periods where there might be a potential shortfall.
Management has to highlight the very high levels of uncertainties given the various circumstances, which indicates the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
Post year end, Management has actively sought alternative financing arrangements due primarily to the Covid pandemic situation, both to address the potential short-term working capital issues and to provide the longer-term liquidity required to allow the Company to adjust to longer order and delivery cycles. Consequently, the Company has been approved for a Covid-19 loan from the Danish Growth Fund for the amount of €0.4 million and postponements of repayments on the existing Growth Fund loan in 2021 of €0.15 million where repayments will now commence from January 2022. Management has further initiated a process of undertaking a share placing of £0.4m (before expenses) which is subject to shareholder approval and certain events or conditions.
3. Basis of preparation
The consolidated financial statements comprise the consolidated financial information of the Group as at 31 December 2019 and are prepared under the historic cost convention, except for the following:
· share based payments and share option and warrant costs
The principal accounting policies adopted in the preparation of the financial information are set out below.
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRSs") issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").
The acquisition of the subsidiary in 2014 was deemed to be a business combination under common control as the ultimate control before and after the acquisition was the same. As a result, the transaction is outside the scope of IFRS 3 and has been included under the principles of merger accounting by reference to UK GAAP.
| Revenue from contracts with customers:
|
Year ended |
Year ended |
| |
€ |
€ |
| Sale of product and installation |
1,129,255 |
3,492,775 |
| Rendering of services |
48,642 |
7,092 |
| |
|
|
| Revenue |
1,177,897 |
3,499,867 |
| |
Year ended |
Year ended |
| |
€ |
€ |
| WindEye™ |
1,070,231
|
3,272,525 |
| WindVision™
|
59,018 |
220,250 |
| Rendering of services |
48,648 |
7,092 |
| |
|
|
| Revenue |
1,177,897 |
3,499,867 |
Deferred revenue of €69,954 (2018: €83,169) relates to performance obligation under contracts that have not yet been completed and are expected to be met in 2020.
Operation segments are reported as reported to the chief operation decision maker.
The Group has one reportable segment being the sale of LiDAR Wind Measurement and therefore segmental results and assets are disclosed in the consolidated income statement and consolidated statement of financial position.
In 2019, three customers accounted for more than 10 per cent of the revenue each (2018: two customers). The total amount of revenue from these customers amounted to €1,028,380, 88 per cent of the total revenue (2018: €3,145,168 or 90 per cent of the revenue)
Revenue by geographical location of customer:
| |
Year |
Year |
| Europe |
256,501 |
91,891 |
| Americas |
- |
85,437 |
| China |
919,658 |
3,293,434 |
| Asia (excluding China) |
1,738 |
29,105 |
| Revenue |
1,177,897 |
3,499,867 |
The parent company is based in the United Kingdom. The information for the geographical area of non-current assets is presented for the most significant area where the Group has operations being Denmark.
| |
|
As at 31 December 2019 |
As at 31 December 2018 |
| |
|
€ |
€ |
| |
|
|
|
| Denmark |
|
1,270,753 |
1,170,617 |
| |
|
1,270,753 |
1,170,617 |
| |
|
|
|
Non-current assets for this purpose consist of property, plant and equipment and intangible assets.
| |
|
|
||||
| Finance expense |
|
|
||||
| |
Year |
Year |
||||
| Foreign exchange losses |
|
|
(39,124) |
(82,634) |
|
|
| Interest expense on financial liabilities measured at amortised cost |
(151,765) |
(187,291) |
||||
| Finance expense |
(190,889) |
(269,925) |
||||
| |
|
Year ended 31 December 2019 |
Year ended 31 December 2018 |
| |
|
€ |
€ |
| |
The tax credit for the year: |
|
|
(a) |
UK Corporation tax |
- |
- |
| |
Foreign tax credit |
(212,531) |
(120,436) |
| |
Paid tax |
43 |
- |
| |
|
(212,488) |
(120,436) |
| |
|
|
|
| |
Tax reconciliation |
|
|
(b) |
Loss on ordinary activities before tax |
(3,291,397) |
(913,408) |
| |
Loss on ordinary activities at the UK standard rate of corporation tax 19% (2018: 19%) |
(625,365) |
(173,548) |
| |
|
|
|
| |
Effects of: |
|
|
| |
Expenses non-deductible for tax purposes |
3,108 |
14,141 |
| |
Depreciation for the year (less than)/in excess of capital allowances |
- |
(20,386) |
| |
Unrecognised tax losses |
533,772 |
95,367 |
| |
Different tax rates applied in overseas jurisdictions |
(125,599) |
(36,010) |
| |
Exchange rate differences |
1,596 |
- |
| |
Tax credit for the year |
(212,488) |
(120,436) |
| |
|
|
|
| |
|
|
|
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
| |
Year ended |
Year ended |
| |
€ |
€ |
| Loss for the year |
(3,078,909) |
(792,972) |
| |
|
|
| Weighted average number of ordinary shares for the purpose of basic earnings per share |
47,614,917 |
43,002,600 |
| Basic loss and diluted, cents per share |
(6.7) |
(1.8) |
There is no dilutive effect of the warrants (note 18) as the dilution would reduce the loss per share.
No dividends were proposed by the Group during the period under review (2018: €Nil).
| Group |
|
|
Development projects € |
| Cost |
|
|
|
| At 1 January 2018 |
|
|
2,691,069 |
| Additions - internally developed |
|
|
415,456 |
| Grants received |
|
|
(108,779) |
| Exchange differences |
|
|
(8,651) |
| At 31 December 2018 |
|
|
2,989,095 |
| Additions - internally developed |
|
|
528,277 |
| Grants received |
|
|
(50,824) |
| Exchange differences |
|
|
(1,190) |
| At 31 December 2019 |
|
|
3,465,358 |
| Accumulated amortisation |
|
|
|
| At 1 January 2018 |
|
|
1,822,475 |
| Charge for the year |
|
|
189,557 |
| Exchange differences |
|
|
(5,825) |
| At 31 December 2018 |
|
|
2,006,207 |
| Charge for the year |
|
|
267,317 |
| Exchange differences |
|
|
(773) |
| At 31 December 2019 |
|
|
2,272,751 |
| Net carrying value |
|
|
|
| At 1 January 2018 |
|
|
868,594 |
| At 31 December 2018 |
|
|
982,888 |
| At 31 December 2019 |
|
|
1,192,607 |
The company's development projects relate to the development of improved performance and functionality, improved components etc. in the company's products.
Measurement of the development projects are based on realization of the company's business plan and budgets, particularly realization of expected growth in revenue.
| Group |
|
|
Plant and equipment € |
| Cost |
|
|
|
| At 1 January 2018 |
|
|
294,048 |
| Additions |
|
|
68,125 |
| Disposed |
|
|
(143,069) |
| Exchange differences |
|
|
(763) |
| At 31 December 2018 |
|
|
218,341 |
| Additions |
|
|
3,427 |
| Disposed |
|
|
- |
| Exchange differences |
|
|
(79) |
| At 31 December 2019 |
|
|
221,689 |
| Accumulated depreciation |
|
|
|
| At 1 January 2018 |
|
|
186,964 |
| Charge for the year |
|
|
64,078 |
| Disposed |
|
|
(143,069) |
| Exchange differences |
|
|
(420) |
| At 31 December 2018 |
|
|
107,553 |
| Charge for the year |
|
|
52,411 |
| Disposed |
|
|
- |
| Exchange differences |
|
|
(75) |
| At 31 December 2019 |
|
|
159,889 |
| Net carrying value |
|
|
|
| At 1 January 2018 |
|
|
107,084 |
| At 31 December 2018 |
|
|
110,788 |
| At 31 December 2019 |
|
|
61,800 |
| |
Group |
|
| |
As at |
As at |
| |
€ |
€ |
| Raw material |
417,481 |
364,090 |
| Work in progress |
392,374 |
311,420 |
| Finished goods |
209,709 |
51,489 |
| Inventory |
1,019,564 |
726,999 |
| |
|
|
The cost of inventory sold and recognised as an expense during the year was €639,555 (2018: €1,268,040).
|
|
Group |
Company |
||
| |
As at |
As at |
As at |
As at |
| Trade receivables |
623,458 |
685,679 |
- |
- |
| Less; provision for impairment of trade receivables |
(511,755) |
(47,541) |
- |
- |
| Trade receivables - net |
111,703 |
638,138 |
- |
- |
| Receivables from related parties |
- |
- |
43,088 |
974,624 |
| |
|
|
|
|
| Total financial assets other than cash and cash equivalents classified at amortised costs |
111,703 |
638,138 |
43,088 |
974,624 |
| |
|
|
|
|
| |
|
|
|
|
| Tax receivables |
212,428 |
120,209 |
- |
- |
| |
|
|
|
|
| Other receivables |
84,305 |
166,264 |
11,790 |
12,703 |
| Total other receivables |
296,733 |
286,473 |
11,790 |
12,703 |
| Total trade and other receivables |
408,436 |
924,611 |
54,878 |
987,327 |
| |
|
|
|
|
| Classified as follows: |
|
|
|
|
| Current Portion |
408,436 |
924,611 |
54,878 |
987,327 |
| |
|
|
|
|
At the end of 2019 the group had debtors, primarily in China, where in 2020 there were non-payments from these customers. It has not been possible to obtain clarification of the possibility of collection of these receivables before approving the annual report.
Due to the general uncertainties, Management have made the judgement to take a worst case approach and made a full provision with the hope that at least part of the provision can be recovered in the future.
The carrying value of trade and other receivables classified at amortised cost approximates fair value.
|
|
More than |
More than |
More than |
Total |
Gross carrying amount 0 0 127,320 127,320
Loss provision - - (93,694) (93,694)
Net carrying amount 0 0 33,326 33,326
Trade and other receivables represent financial assets and are considered for impairment on an expected credit loss model. These assets have historically had immaterial levels of bad debt and are with credit worthy customers, and as the Group trades with a concentrated number of customers and utilises export credit facilities the Group has reviewed trade receivables on an individual basis. Additionally, the Group continues to trade with the same customers and therefore the future expected credit losses have been considered in line with the past performance of the customers in the recovery of their receivables. The implementation of IFRS 9 has therefore not resulted in a change to the impairment provision in the current or prior year.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. The expected loss rates are based on the Group's historical credit losses experienced over the three year period prior to the period end. The historical loss rates are then adjusted for current and forward-looking information on factors affecting the Group's customers including the area of operations of those debtors and the advancing market for wind power and the Group's products. The assessment of the expected credit risk for the year has not increased, when looking at the factors affecting the risk noted above.
There is no material difference between the net book value and the fair values of trade and other receivables due to their short-term nature.
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
Of the net trade receivables €49,750 (2018: €13,096) was pledged as security for the invoice discounting facility. The Group is committed to underwrite any of the debts transferred and therefore continues to recognise the debts sold within trade receivables until the debtors repay or default. Since the trade receivables continue to be recognised, the business model of the Group is not affected. The proceeds from transferring the debts of are included in other financial liabilities until the debts are collected or the Group makes good any losses incurred by the service provider.
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balances with original maturity less than 90 days:
|
|
|
|
|
|
|
||||
| |
Group |
Company |
|||||||
| |
As at |
As at |
As at |
As at |
|||||
| |
|
|
|
|
|||||
| Cash at bank |
763,024 |
1,721,803 |
521,713 |
221,540 |
|||||
|
|
|
|
|
|
|
||||
The Group has restricted cash balances of €360,000 (2018: € 518,138) but a provision of the full amount is made at the end of the year due to no payment from the customer in 2020. The restricted cash balances relate to transactions entered into between the Group and external financial parties. When EKF has credit approved a customer EKF, issues a non-recourse payment guarantee to an external financial party typically of 80% to 90% of the face value of the transaction. Upon shipment of the products the Group then sells the invoice to the external financial party at face value subject to depositing and pledging a cash amount equal to the difference between the face value of the invoice and the EKF guarantee. When the customer pays typically one year later, the full invoice amount to the financial party, the deposit is paid in full to the Group.
| |
Non-current loans and borrowings |
Current loans and borrowings |
Invoice discounting € |
|
| As at 1 January 2018 |
1,023,809 |
4,579 |
121,208 |
1,149,596 |
| Repayment of loans |
- |
(4,579) |
- |
(4,579) |
| Repayment of Invoice Discounting |
|
|
(110,473) |
(110,473) |
| Accrued interests on non-current loans |
120,754 |
- |
|
120,754 |
| Loans and borrowings classified as non-current in previous period becoming current in this period |
(5,250) |
5,250 |
- |
- |
| Foreign exchange rate differences |
(3,569) |
(10) |
- |
(3,579) |
|
As at 31 December 2018 |
1,135,744 |
5,240 |
10,735 |
1,151,719 |
| Repayment of loans |
- |
(5,240) |
- |
(5,240) |
| Repayment of Invoice Discounting |
- |
- |
(8,743) |
(8,743) |
| Accrued interests on non-current loans |
135,011 |
- |
- |
135,011 |
| Loans and borrowings classified as non-current in previous period becoming current in this period |
(1,265,059) |
1,265,059 |
- |
- |
| Foreign exchange rate differences |
(522) |
- |
- |
(522) |
|
As at 31 December 2019 |
5,174 |
1,265,059 |
1,992 |
1,272,225 |
| |
Group |
Company |
||
| |
As at |
As at |
As at |
As at |
| Invoice discounting |
1,992 |
10,735 |
- |
- |
| Trade payables |
1,045,792 |
492,822 |
198,485 |
67,691 |
| Other payables and accruals |
211,879 |
588,456 |
20,000 |
20,000 |
| Current portion of Nordea loan |
1,265,059 |
5,240 |
- |
- |
| Total financial liabilities, excluding 'non-current' loans and borrowings classified as financial liabilities measured at amortised cost |
2,524,722 |
1,097,253 |
218,485 |
87,691 |
| Deferred revenue |
69,954 |
83,169 |
- |
- |
| Total trade and other payables |
2,594,676 |
1,180,422 |
218,485 |
87,691 |
| |
|
|
|
|
| Classified as follows: |
|
|
|
|
| Current Portion |
2,594,676 |
1,180,422 |
218,485 |
87,691 |
| |
|
|
|
|
The invoice discounting arrangement is secured upon the trade debtors to which the arrangement relates.
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.
The carrying value and fair value of the Group's borrowings are as follows:
| |
Group Carrying and Fair value |
|
| Loans |
As at |
As at |
| Growth Fund |
1,259,499 |
1,124,914 |
| Current portion of Growth Fund |
(1,259,499) |
- |
| Nordea Ejendomme |
10,734 |
16,070 |
| Current portion of Nordea Loan |
(5,560) |
(5,240) |
| Total non-current financial liabilities measured at amortised costs |
5,174 |
1,135,744 |
The Growth Fund borrowing from the Danish public institution, Vækstfonden, initially bore interest at a fixed annual rate of 12 per cent with a full bullet repayment in June 2020. As announced on June 29, 2020 terms for the borrowing was renewed whereafter the interest rate was reduced to 7 percent p.a. and the loan to be repaid in equal quarterly instalments over the period from 1 July, 2021 until 1 July, 2025. The terms have been further amended in October 2020, whereby the instalments in the second half of 2021 have been extended to the second half of 2025 whereafter the quarterly instalments are due on 1 January 2022 until 1 January 2026.
The loan from Nordea Ejendomme is in respect of amounts included in the fitting out of the offices in Denmark. The loan is repayable over the 6 years and matures in November 2021 and carries a fixed interest rate of 6 per cent.
Both loans are denominated in Danish Kroner.
The Company had no borrowings.
| |
|
|
|
|
| |
|
|
|
|
On December 12 2019 the company issued 4,076,348 ordinary shares of 1 pence each for a cash consideration at £0.275 per share. On 12 July 2018 the Company issued 2,700,000 ordinary shares of 1 pence each for cash consideration at £0.82 per share.
| |
Authorised
2019 |
€
2019 |
Authorised
2018 |
€
2018 |
|
| |
|
|
|
|
|
| Shares at beginning of reporting period |
44,508,369 |
560,859 |
41,808,369 |
530,543 |
|
| Issue of share capital |
4,076,348 |
47,830 |
2,700,000 |
30,316 |
|
| Shares at end of reporting period |
48,584,717 |
608,689 |
44,508,369 |
560,859 |
|
On 3 January and 8 January in 2020 the company completed the 12 December, 2019 capital raise by issuing an additional 1,166,363 ordinary shares of 1 pence each for a cash consideration at £0.275 per share.
| |
Number of shares issued and fully paid 2019 |
€ 2019 |
Number of shares issued and fully paid 2018 |
€ 2018 |
| |
|
|
|
|
| Shares at 1 January 2019 |
44,508,369 |
560,859 |
41,808,369 |
530,543 |
| |
|
|
|
|
| Issue of shares for cash |
4,076,348 |
47,830 |
2,700,000 |
30,316 |
| |
|
|
|
|
| Shares at 31 December 2019 |
48,584,717 |
608,689 |
44,508,369 |
560,859 |
195,000 new share options or warrants were granted in 2019. The options were issued at a strike price of £1 a third vesting on each anniversary for the first three years. The options have a 10-year life. The price of the share at the time of issue was £0.24. The risk-free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.
The share options issued in 2017 are valued using the Black-Scholes pricing model and no performance conditions are included in the fair value calculations. The options were issued at a strike price of £1 a third vesting on each anniversary for the first three years whereafter, the options have a 10-year life. The price of the share at the time of issue was £0.88. The risk-free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.
The average share price during the year was 50.00 pence (2018: 88.25 pence). At the year end the Company had the following warrants and options outstanding:
|
|
|
|
Number of warrants and options |
|
|
|
|||||
|
|
At |
|
|
At |
|
|
|
||||
|
|
2018 |
Granted |
Lapsed |
2019 |
(£ pence) |
Exercise date |
|
||||
|
|
|
|
|
|
|
|
|
||||
| Warrants |
1,520,956 |
- |
- |
1,520,956 |
39.07 |
31/12/19 to 31/12/21 |
|
||||
| Options |
362,500 |
195,000 |
- |
557,500 |
100.00 |
16/11/18 to 01/03/32 |
|
||||
|
|
1,883,456 |
- |
- |
1,883,456 |
|
|
|
||||
|
|
|
|
|
|
|
|
|||||
| The weighted average remaining contractual life for the options outstanding as at 31 December 2019 is 10.76 years (2018: 11.01 years). The warrants have a remaining life of two years (2018: 1 years). |
| |
| |
|
|
2019 |
2018 |
| |
|
|
€ |
€ |
| Not later than one year |
|
|
75,967 |
64,485 |
| Later than one year and not later than five years |
|
|
- |
- |
| |
|
|
75,967 |
64,485 |
| |
|
|
|
|
All leasing commitments are in respect of property and cars leased by the Group. The terms of property leases vary from country to country, although they all tend to be tenant repairing with rent reviews every 2 to 5 years. The Company has not entered any leases in 2020 with maturity longer than 6 months.
|
|
|
|
2019 |
2018 |
|
|
|
|
€ |
€
|
| Provision at the beginning of reporting period |
|
|
78,422 |
72,205
|
| Provision charged to the profit and loss account |
|
|
(9,995) |
9,439 |
| Utilised in year |
|
|
(7,240) |
(2,991) |
| Foreign exchange rate movements |
|
|
(196) |
(231) |
|
|
|
|
61,170 |
78,422 |
The Group typically provides a two-year warranty period to customers on products sold. Warranty expenses/(income) charged to the Statement of Comprehensive Income amounted to €(9,995) (2018: €9,439) corresponding to a warranty cost percentage of (0.4)% (2018: 0.2%) relative to the prior two years revenue. However, due to the early business stage of the Group and the uncertainty following this the Group has adopted a policy to accrue a 4% provision based on the prior two years deliveries calculated with the cost of goods sold at the end of the period.
Jørgen Korsgaard Jensen and Johan Blach Petersen are directors and shareholders of Wavetouch Denmark A/S (Wavetouch) and OPDI Technologies A/S (OPDI). Wavetouch has during the year rented office space from Windar Photonics A/S, the amount payable during the year to Windar was €32,145 (2018: €32,196). There were amounts outstanding at the year end to Wavetouch €167,527 (2018: €72,853). At the end of the year there were amounts outstanding to OPDI of € Nil (2018: € 31,426).
Intercompany transactions
| At 31 December 2019 there exist an intercompany loan between Windar Photonics PLC and its subsidiary Windar Photonics A/S. Windar Photonics PLC has a receivable at €43,088 (2018: €974,624). Interest added during 2019 amounts to €35,396 (2018: €28,512). The interest rate for 2019 is Libor 0.5% + 2.5% - equal to 3% p.a. (2018: Libor 0.5% + 2.5% - equal to 3% p.a.). |
Annual Results, Interims Timeline & Notice of AGM18:32:2713 Nov 2020Results3423F