('Haydale', the 'Company', or the 'Group')
Haydale (AIM: HAYD), the global advanced materials group, is pleased to announce its full year results for the year ended 30 June 2022 ("FY22").
Commenting on the results David Banks, Non-executive Chair of Haydale, said:
'The clear priorities remain to commercialise our cutting-edge functionalisation technology. The progress we have made during the year and the opportunities that we are seeing gives us confidence that we are on a steady path to more widespread adoption of our technology and the benefits, both performance and environmental, that it can bring.
The Directors remain mindful that the economic backdrop remains uncertain and that risks that could impinge on our operations persist. However, the solid progress made in our core business during the year continues to reinforce the Directors' belief that, whilst navigating the new industrial landscape will remain challenging and forward momentum is unlikely to be smooth, the Company is moving in the right direction.'
finnCap (Nominated Adviser & Broker)
Julian Blunt/Edward Whiley/George Dollermore - Corporate Finance
Haydale is a global technologies group and service provider that facilitates the integration of graphene and other nanomaterials into the next generation of industrial materials and commercial technologies. With expertise in graphene, other nanomaterials and Silicon Carbide, Haydale is able to deliver improvements in electrical, thermal and mechanical properties, Haydale has been granted patents for its technologies in Europe, USA, Australia, Japan and China and operates from five sites in the UK, USA and the Far East. For more information please visit: www.haydale.com or Twitter: @haydalegraphene
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.
A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
I am pleased to present Haydale Graphene Industries Plc's ("Haydale", the "Group" or the "Company") full year audited results to 30 June 2022 ("FY22").
The Group continued to make positive progress during the year on its journey to delivering sustainable commercial revenues. During H2 FY22 we saw positive sales development, especially within the UK operations, and we anticipate that this momentum will continue into the current financial year.
Commercial revenue for FY22 of £2.90 million (FY21: £2.90 million) remained in line with the prior year which was a robust performance given the exceptional support that we received from our largest customer in FY21. Gross profit marginally reduced to £1.75 million (FY21: £1.98 million) delivering a gross profit margin of 60.0% (FY21: 68.2%) broadly in line with prior year. Other operating income for the year of £0.44 million (FY21: £0.58 million) was lower than the prior year but this reflected the £0.14 million federal support received by our US subsidiary in FY21. Adjusted administrative expenses increased by £0.80 million (16.9%) to £5.52 million (FY21: £4.72 million). Total Administrative Expenses were £7.24 million (FY21: £6.11 million). Loss for the year was £4.81 million (FY22: £3.41 million).
The Group made good progress towards its longer-term goals in the year. The priorities of delivery of commercial revenue, focussed investment in our physical and human capacity and development of our technology remains central to our strategy.
During the year we successfully commissioned the new HDPlas® HT1400 plasma reactor which allows us to manufacture functionalised nanomaterials on an industrial scale. In tandem with bringing that capacity on stream we continued to invest in our technical development and submitted a patent for the use of liquid doping technology which will allow us to extend the scope of the enhancements we can bring to products such as our conductive inks. We looked to further strengthen our teams across all Group sites and invested in sales, marketing, quality and production resource to ensure that we are in a position to scale up our operations safely and effectively.
The principal trading impact on the Group of Covid-19 since early 2020 has been the slowdown in the global aviation sector which has reduced demand for the SiC and the ceramic cutting tools produced by our US facility. In H2 FY22 we saw demand for these products begin to recover, and our finished tools are gaining commercial traction within the North American aerospace and automotive sectors.
I would like to thank the executive management team who continue to drive the difficult transition from an R&D focused organisation to a sustainable commercial operation. I would also like to thank our staff for their continued resilience and flexibility, and it is through their endeavours that we have been able to make the progress that we have in the year.
On 12 September 2022, the Company completed an equity placing and open offer raising £5.51 million (gross) and I would like to welcome our new shareholders and to thank our existing shareholders for their continued support, especially so against the backdrop of a more turbulent economic landscape.
During the year we made significant investments in both our functionalisation capacity and in the wider team that allows us to deliver sustainable revenues for the Company. With the fundamental building blocks in place, the Board remains confident that the Company will be able to take advantage of the commercial traction it is seeing.
The financial year ended 30 June 2022 ("FY22") has seen the Group deliver a resilient performance in the year against a turbulent economic backdrop and the directors are pleased to report that the commercial progress accelerated in the second half of the year within the core graphene and other nano particle operations in the UK. Revenue has been impacted by the slower than anticipated recovery from the pandemic at the Group's US operation and this has weighed on the overall financial performance in the Year.
The Group continues to transform itself from a research and development organisation into a manufacturing business focussed on commercialising its portfolio of technology and securing profitable outcomes. In the latter part of the year the Company successfully commissioned a larger plasma reactor that, when fully optimised, will deliver a significant increase in our functionalisation capacity and provide the means to move production to an industrial level.
The UK division made robust progress towards commercialising its proprietary technology in the year. Total sales (excluding reactor sales of £0.40 million in the prior year) increased by £0.46 million (89%) on FY21. Functionalised product sales (goods) increased by 270% over the prior year and project and other consultancy revenues (services) grew by 19% on a like for like basis.
Product Sales & Consultancy Services
Haydale has been working in the energy, heating and power storage sectors for a number of years. Geopolitical events and closer to home severe weather incidents, when set against the backdrop of the UK Government's net zero carbon strategy, have brought an increased urgency to this work. In January 2022 the Company signed an exclusive supply agreement to manufacture a thermal fluid ("Hi-Therm® ") for High Tech Systems Limited. Haydale is using its patented plasma functionalisation technology to enhance the thermal conductivity and dispersion of boron nitride in ionised water. Controlled environment tests that maintain a constant heating temperature have shown that the thermodynamic properties of Hi-Therm® deliver up to a 30 per cent energy saving compared with energy required to heat untreated water. Initial sales of Hi-Therm® have been ahead of contractual volumes and whilst the product is still in a development stage, we anticipate that it will represent a significant step forward in the commercialisation of thermally efficient nanomaterials in the energy sector.
Haydale has also been working with Cadent and the Energy Innovation Centre to develop graphene ink-based heaters to generate low power hot water in off-grid situations where customers are left without the means to economically heat water for an extended period of time. The most recent example was Storm Arwen which brought widespread disruption to the UK and resulted in over one million customers losing power. Approximately 40,000 customers were without supply for more than three days and nearly 4,000 customers were off supply for over a week. The aim of this commercial 15 month project with Cadent is to develop an operational Graphene ink-based heater prototype that would provide cost effective and timely relief in these situations.
The graphene inks used in this solution are flexible enough to be printed onto multiple substrates such as metals, plastics, fabrics, and glass. The Company is working to develop this technology into underfloor heating which may be able to offer an energy efficient, cost-effective and easy to install system that can be used to supplement domestic heating systems. Whilst still at an early stage, the prototypes are demonstrating considerable promise as part of an array of solutions that may improve the energy efficiency and reduce the CO2 impact of heating commercial and domestic buildings. In addition to this application, we are also working with a caravan and motorhome customer with a variation of this heating ink.
We continue to develop our biomedical sensor inks and, in particular, our work during the year with a leader in the glucose monitoring and diabetes management sector on the refining of a bespoke ink has been productive. Haydale's patented plasma functionalisation process allows for the introduction of new chemical substances to the surface of advance materials enabling biomedical inks to have an improved catalytic and electro chemical response. Our tests show that the additions enhance the downstream accuracy of response to analytes and the speed of result. We have collaborated closely with this customer to ensure that the quality control at our Ammanford site meets the stringent requirements for medical products and we are also looking to commence internal tests to validate the shelf life and longer-term efficacy of the product.
Whilst at a less advanced commercial stage, we have worked with a number of other business and academic parties to explore the wider potential for our sensor inks in the field of medical diagnostics. Of particular note in this area is
our work with the Wales Kidney Research Unit at Cardiff University to develop a urinary electrochemical microRNA sensor for rapid detection of problems with newly transplanted kidneys. The sensor can potentially accelerate issue detection without the need for an invasive biopsy and potentially opens up a wider and exciting opportunity for the monitoring or detection of other diseases. Haydale was pleased to have directly input into the work of one of the award winners at the Kidney Research UK MedTech Competition earlier this year.
In December 2020 we secured our first sale of our functionalised nano-enhanced rubber masterbatch for use in shoes and the Company continues to progress a number of projects within the leisure footwear and industrial workwear market. Whilst these projects have taken longer than anticipated to move out of the feasibility stage, the work done in this area has been utilised in our collaboration with Vittoria Spa, the leading premium cycle tyre manufacturer, and allowed us to move with speed to prove performance enhancements for functionalised rubber in cycle tyres. We were able to demonstrate substantial improvements in the grip, rolling resistance, puncture resistance and durability of their premium tyres and, in July 2022 we announced that we had received our first order for one tonne of functionalised graphene nanomaterial. Haydale will use its new HT1400 plasma reactor in order to meet Vittoria's production requirements.
The four-year agreement with DLYB1 , which commenced in April 2020, allows them to market Haydale's electrically conductive graphene-enhanced masterbatch in China and Taiwan. The initial stages of the contract were reserved for product validation and although our product has met the initial requirements, further modification and development has been requested by DLYB. Whilst the Company is continuing to develop this product line for use with DLYB and other customers, it is focussing on those products that can deliver commercial returns more rapidly and, as such, at this stage we do not anticipate this contract moving to the commercial phase in the foreseeable future.
Haydale formed part of a dedicated supply chain to deliver a range of advanced wearable technology to British athletes, at the Tokyo games in August 2021. The garments benefited from temperature regulated panels and were designed using Haydale's printed functionalised graphene ink. The Company remains in discussion with a customer who can access the wider market but our focus remains on other graphene ink products that demonstrate a closer commercial potential.
In April 2021 Haydale partnered with 401 Tech Bridge, Rhode Island, US, to provide a HT200 Plasma Reactor and advanced materials support for their innovation ecosystem. This was the first sale of a plasma reactor since the year- ended June 2019. As noted in the prior year report, each approach is appraised on its merits with the guiding tenet that reactor sales must be demonstrably in the long-term interests of the Company. To this end, the Company has not made any reactor sales in the year under review.
On-going cooperation with ProMake (renamed Atomi Limited post year end) continues to progress positively in a number of directions including the previously noted SynerG 3D printing filament, biomedical inks and more recently on developing cleaner, smarter concrete formulations. The Public Health England National Microbiology Framework has not progressed at this time, although work is still underway in this arena it has been impacted by changing UK government priorities.
Revenue at our US SiC and blanks manufacturing facility continued to be adversely affected by the lingering impact of the Covid 19 pandemic for much of the year. Reported increases in civilian aviation traffic took time to filter down the aerospace supply chain and it was not until the last quarter of FY22 that we started to see some rebound in demand for our blank tools.
During the year we have looked to drive revenue by expanding our product offering to include certain geometries of finished cutting tools. We have contracted with a third-party company who are taking our blanks and completing the final cut, grind and tool preparation to enable Haydale to sell a finished tool. By taking control of end user sales, we have created a direct dialogue with a number of important aviation customers, and it has also allowed us to extend our sector coverage into the automotive market where we have achieved finished tool sales post year end. We have seen sales of finished tools in both areas post year end and anticipate that, as general demand grows, this will be a key driver for growth within this business unit. We are following a dual distribution strategy to maximise our coverage
1 Dalian YiBang Technology Company Limited ('DLYB')
This is an excerpt of the original content. To continue reading it, access the original document here.
Haydale Graphene Industries plc published this content on 06 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 October 2022 06:21:08 UTC.