Versarien plc (LON:VRS), the advanced materials engineering firm, has provided the following update on developments at the Company.
As described in the General Meeting statement issued on 4 July 2023, the Company’s cost base has been reduced significantly with unaudited LBITDAE (loss before interest, tax, depreciation, amortisation and exceptional items) now at a much lower run rate than in the first six months of the financial year, with a consequent reduction in cash burn. Despite this reduced cost base, the Company continues to make progress in line with its stated strategy to:
● maintain and strengthen the Group’s scientific teams supported by grant funding applications;
● to use the Group’s internally generated know‐how in the areas of leisure and construction leisure to be a manufacturing light operation as Versarien works with its prospective customers;
● as commercial traction develops, to licence Versarien’s technology, brands and manufacturing know‐how; and
● to divest non‐core activities and Korean assets to reduce the requirement for funding from external sources.
Commercial progress
Recent commercial progress has been made in the Company’s core areas of leisure and construction, together with Gnanomat’s wider areas of interest. This includes:
● Umbro have launched their Autumn/Winter 2023 range with Versarien’s Graphene-Wear™ coatings integrated into Umbro’s Pro Training Elite capsule. Versarien is generating initial revenues for the Graphene-Wear™ ink formulation and royalties for the use of the Company’s trademark in the finished product.
● Versarien has delivered additional Graphene-Wear™ rubber compound to Flux Footwear LLC’s supply chain partners following an order required for shoe production. Versarien is generating initial revenues for the Graphene-Wear™ compound and royalties for the use of the Company’s trademark in the finished product.
● Further Cementene™ trials with key partners, including Banagher Precast Concrete Limited (“Banagher”), are ongoing. This follows the trials undertaken by Banagher as announced on 17 May 2023.
● The Cementene™ admixture certification process is ongoing. Should this certification be received, the Company expects it to facilitate significant commercial opportunities for the deployment of Cementene™ in construction projects.
● As previously announced, Versarien has been shortlisted by the Global Cement and Concrete Association (GCCA) from a global list of applications, for its pioneering Innovandi Open Challenge scheme, to work on developing low-carbon concrete for the world. This process is ongoing.
● The Company is discussing further iterations of the 3D printed concrete headwall, as outlined in the announcement on 6 March 2023, in collaboration with its partners under the Digital Roads of the Future Partnership. In addition, 3D printed concrete structures have been supplied by Versarien for other projects, including for those being undertaken by local authorities.
● The Company is pleased to report it has been selected to attend the Innovate UK Global Business Innovation Programme (GBIP) in Germany which is focusing on sustainable materials for construction. The programme of events will take place in November 2023.
● A statement of work has been received, funded by a UK aviation company, to perform graphene dispersion, mechanical testing and material characterisation of thermoset composites being developed by the customer. This project will take approximately 14 weeks for 2-DTech to complete.
● As announced on 13 September 2023, Gnanomat is the recipient of a €415,000 grant award from ICEX Trade and Investment to enable the company to commercialise and launch a new line of conductive inks. In addition, Gnanomat is working with a large Latin American corporation to develop novel supercapacitors and with a Southeast Asian corporation to advance the electromagnetic interference (EMI) shielding properties of thermoset composites utilising carbon and hybrid nanomaterials. This latter project will be led by Gnanomat and will be performed in collaboration with Versarien subsidiaries 2-DTech and Cambridge Graphene.
Further potential commercial arrangements and opportunities remain in discussion.
Research and Development
The Company’s R&D team has been slimmed down significantly during 2023, due to cost cutting to concentrate on its strategic objectives. The board believes it has retained the key people that can continue the Company’s R&D and commercialisation efforts. In line with the Company’s strategy, it continues to focus on the development opportunities it has, including submitting applications to participate in Innovate UK, Horizon Europe and other grant-funded projects with various consortia comprising leading industry participants.
Financial performance and future funding
Despite the reduced cost base and income being received, the Company’s cash resources continue to be constrained whilst it seeks to sell both its mature businesses and the IP and equipment arising from the acquisition of assets from Hanwha Aerospace in December 2020. Discussions are ongoing with third parties interested in acquiring these assets, but at this juncture there can be no certainty that sales can be satisfactorily concluded. Consequently, the Company expects to continue to require further funding to support its activities, including potentially available grant income and the potential issue of additional equity.
The annual audit for the financial year ending 30 September 2023 is now in the planning stage and, as was the case last year, the key audit matters will include going concern, goodwill impairment and impairment of capitalised development costs. Any impairment charges will be treated as exceptional items consistent with last year’s accounting treatment. Versarien’s audited results for the year ended 30 September 2023 are expected to be announced in January 2024.
