Haydale Graphene Industries plc (LON:HAYD), the global advanced materials group, announced today its unaudited interim results for the six months ended 31 December 2017 (the ‘Period’ or ‘H1FY18’).
Financial Highlights
· 67% increase in total unaudited Group income for the Period to approximately £2.49 million (H1FY17: £1.49 million) delivered via:
o Advanced Materials SBU income of approximately £1.3 million (H1FY17: £0.8 million)
o Resins, Polymers and Composites SBU income of approximately £1.2 million (H1FY17: £0.7 million)
· 85% increase in commercial revenues for the Period to £2.04 million (H1FY17: £1.11 million)
· Continued investment in R&D in the Period of £0.5 million (H1FY17: £0.7 million), including graphene enhanced dispersion capabilities in Ammanford
· Reduced Group loss from operations after tax for the Period of £2.2 million (H1FY17: £2.4 million)
· Investment in expanding processing capacity in the Period of £0.2 million (H1FY17: £0.2 million)
· Completion of a successful placing and offer in October 2017, raising £9.3 million (before expenses) providing the necessary cash resources to deliver on the Group’s sales and growth initiatives; and
· Cash at period end of £8.0 million (30 June 2017: £2.1 million).
Operational Highlights
· Created two Strategic Business Units (‘SBU’) with respective senior management teams to drive sales and realise geographic potential, which has delivered an increase in sales and commercial opportunities as compared to H1FY17.
· Advanced Materials SBU
o 45% increase in Silicon Carbide (‘SiC’) sales to £1.14 million (H1FY17: £0.8 million)
o Successful launch of newly developed SiC hard-edged cutting tool moving us up the value chain
o Temporary ink production facility set up in Taiwan to meet high levels of demand for samples of graphene and speciality inks; and
o UK patent filed for Haydale’s graphene based transparent conductive ink used in proprietary anti-counterfeiting technology known as PATit.
· Resins, Polymers and Composite SBU
o New grant wins of £0.5 million for delivery in the current and next financial year
o Improved dispersion capabilities in Ammanford supplying trial graphene masterbatch for Flowtite A/S and other potential customers for smart composites; and
o Sale of first phase of a novel composite panel making process to Everpower’s (Xiamen) China facility as demonstrator for targeted automotive and aerospace customers.
Post Period End Highlights
Advanced Materials SBU (‘AMAT’)
· Secured new sales orders worth approximately £0.5 million since the end of the Period, including £0.3 million of which is the supply, installation and commissioning of a HT60 functionalisation reactor to Thai quoted petro-chemical processor, IRPC, together with ongoing research contracts to develop new products for IRPC
· Agreement with Japanese based Graphene Platform Corp to supply graphene-based inks for sale into the Asian printed electronics market, a sector dominated by APAC countries, growing at over 20 per cent. per annum and predicted to be over US$12 billion by 2022
· Commercial supply and development agreement signed with Talga Resources Limited for the production, sales and marketing of jointly developed transparent conductive ink products using graphene for industrial applications in Asia, with initial focus on material supply for Haydale’s PATit anti-counterfeiting product; and
· Received follow on orders for evaluation of SiC in the newly identified anti-corrosion powder coating market from US customer.
Resins, Polymers and Composite SBU (‘RPC’)
· Secured new contracts worth approximately £0.7 million since the end of the Period, £0.6 million of which are new grant funded projects for delivery in the current and subsequent financial years on the following:
o evaluating the use of graphene sensors embedded into composites materials which will reduce manufacturing time and allows for in-situ assessment with no degradation of physical properties
o enhanced electrical conductivity against lightning strikes
o use of conductive adhesives to remove lead-based solder from aerospace structures
· £0.1 million of which is follow on order from National Grid to supply inspection covers for gas transition pieces (‘GTP’); and
· Successfully completed a second trial for the Flowtite A/S’ glass reinforced pipe (‘GRP’) systems on 28 February with the expectation of results being available by the end of June 2018.
Commenting on the interim results, Ray Gibbs, CEO of Haydale Graphene Industries plc, said: “In the Period we have successfully commenced commercialisation following the global expansion we achieved last year. We now have an engineering-based advanced materials business operating in the three principal world markets of the US, EU and APAC. Our transition from technically focused research and development to a sales-led operation is gathering momentum, but it is not without its challenges. It requires focus and dedication, with the right people in place and our introduction of dedicated SBUs has been enormously helpful in achieving that focus. I am delighted then to report a 67% increase in total income for this half year and a 85% increase in commercial revenues demonstrating the effect of our focus on sales.
Looking forward, and following our successful fundraising, we have invested in our Taiwanese operation with a newly established, initially temporary, ink production facility. The Taiwanese team have been incredibly busy formulating ink samples to potential customers’ specifications who want to improve the performance of their printed sensors, principally in the US$15 billion self-monitoring blood glucose market. We are hopeful of securing several meaningful orders and supply agreements from this key strategic market and plan to move to a 10,000 sq. ft. facility by the end of this financial year.
With the building blocks now in place, the next six to twelve months should be an exciting time for the Group, which we believe now has the customer engagement, geographic reach, engineering solutions capability and product know how to create material change in the Group’s future revenues.”
