27th Sep 2007 07:01
Oxford Catalysts Group PLC27 September 2007 27th September 2007 OXFORD CATALYSTS GROUP PLC ("Oxford Catalysts" or "the Company" or "the Group") Interim Results for the Period Ended 30th June 2007 Oxford Catalysts Group PLC, the leading catalyst innovator for clean fuels,announces today its second set of interim results since its successful admissionto trading on AIM in April 2006. Highlights • Revenue in H1 2007 of £87,000, 35% ahead of full year 2006 • First two letters of intent / memoranda of understanding signed - precursors to binding commercial agreements • First revenue generated in the area of biogas conversion • Proventec steam cleaning prototype development successfully concluded • Appointment of two senior commercial executives from leading industry players: BOC / Linde and Grace Davison • £12.8 million in cash and short term deposits at half year end, well within budget; a further £4.0 million raised post balance sheet from major institution, Pioneer Investments Roy Lipski, Chief Executive of Oxford Catalysts, said: "It has been a period of considerable achievement for Oxford Catalysts, with thepace of commercialisation of our technologies accelerating. The number ofcompanies we are engaged with has increased, we continue to have success ingetting our catalysts out for testing by industry, and we have recently signedour first two letters of intent / memoranda of understanding. First halfrevenues, which rose several-fold on the same period last year, reflect thisstrong commercial progress. The Board looks to the immediate and long termfuture with confidence." For further information, please contact: Roy Lipski, CEO, Oxford Catalysts 01235 841 700Jonathan Marren, KBC Peel Hunt (Nomad and Broker) 020 7418 8990Jonathon Brill, Billy Clegg, Financial Dynamics 020 7831 3113 Notes to Editors Oxford Catalysts designs and develops specialty catalysts for the generation ofclean fuels from both conventional fossil fuels and certain renewable sources.The Group has two key platform technologies resulting from almost 20 years ofresearch at the University of Oxford's prestigious Wolfson Catalysis Centre. The first platform is for a novel class of catalysts incorporating metalcarbides, which can match or exceed the benefits of traditional precious metalcatalysts, at a lower cost, for several key processes used in the petroleum andpetrochemical industries. The second relates to a series of unique chemical reactions which can be used togenerate either steam or hydrogen gas, instantaneously, starting from roomtemperature, using a cheap liquid fuel alongside the Group's patented catalysts.Such unprecedented instant steam or hydrogen has exciting potential applicationsin a broad range of markets, from portable power to cleaning anddecontamination. Oxford Catalysts' business model is to license its technology for commercialexploitation. The Group aims to enter into a relatively small number of keyco-development partnerships with leading manufacturers, producers or suppliersin three main application areas: petroleum and petrochemical catalysts; instantsteam for a variety of markets, and; hydrogen production for fuel cells. In April 2006, Oxford Catalysts Group PLC floated on London's AIM market (codingsymbol OCG). Oxford Catalysts operates a wholly owned subsidiary in the UK(Oxford Catalysts Limited). Copies of this interim report will be sent to shareholders and will be availableat the Business Office of the Company, 115e Milton Park, Oxford OX14 4RZ and onthe Company's web site, www.oxfordcatalysts.com. CHAIRMAN'S STATEMENT Dr Pierre Jungels, CBE It is with great pleasure that I make my second interim report as Chairman ofOxford Catalysts Group PLC. The Group has made good progress in the first half of 2007; I am glad to reportthat we continue to experience strong growth in interest from, and engagementwith, potential partners. To date, we have entered into nearly 60 non-disclosure/ material transfer agreements, as well as having signed our first two lettersof intent / memoranda of understanding - precursors to full bindingcommercial agreements. In July, we welcomed Pioneer Investments to our share register, after theplacing of 3,225,807 new ordinary shares of 1p each, which raised £4.0m net ofexpenses for the Company. Pioneer Investments, which has assets under managementof over €232 billion (as at 31 March 2007), is the fund management arm of theUniCredit Group, one of the largest banking and financial services organisationsin Europe. We are grateful for the support and confidence that yet another majorinstitutional investor such as Pioneer Investments has shown in our technologiesand commercialisation progress. The proceeds of the Placing will be used to further strengthen the Company'sposition by accelerating and expanding development in additional areas whichhave emerged since the IPO, including opportunities in Instant Steam and biogasconversion. The growth in our resources also continues with the addition of top industrytalent; I am delighted to welcome our most recent senior commercial recruits,Dave Wardle and Derek Atkinson who have joined us from BOC / Linde and GraceDavison respectively. Outlook Our catalysts have the prospect of becoming an integral element in solutionscurrently being developed to address some of the world's most pressing needs. Weare actively pursuing opportunities to align ourselves with such complementarytechnologies, and to capitalise on the potential for rapid growth which theserepresent. Oxford Catalysts has secured solid foundations from which to grow, includingcutting-edge technologies, a strong balance sheet, superb facilities and aworld-class team. The first half of 2007 has witnessed a substantial increase inrevenue. We are proud of our achievements to date; the Board looks to theimmediate and long term future with confidence. Chief Executive's RePORT Roy Lipski I am very pleased to report the major advances made by the Group during thefirst half of the year. Furthermore, the Oxford Catalysts brand is becomingprogressively established globally in our target markets and within thefinancial community. Media interest in both the trade and national press havegenerated many enquiries which are leading to a number of exciting newcommercial opportunities. Commercialisation The Group's commercialisation program is gaining traction, with the pace ofengagement continuing to accelerate; we now have 59 non-disclosure and / ormaterial transfer agreements in place (year end 2006: 40). Furthermore, OxfordCatalysts recently signed its first two letters of intent / memoranda ofunderstanding. Such agreements are precursors to signing binding commercialcontracts, and further illustrate the great strides made in commercialising theGroup's technologies. There are currently five oil Majors testing, or lining up to test, ourFischer-Tropsch (FT) catalyst. Encouragingly, all of those companies that havetested our catalysts have requested further samples. To complement our work withthese Majors on large-scale applications, we have started discussions withtechnology developers working on small scale FT applications, including secondgeneration biofuels and flare / associated gas capture. At a small scale, theeconomics of Gas-to-liquid conversion become challenging and hence the role ofhighly active and cost-effective catalysts, such as those developed by theGroup, become increasingly important. A key attraction of these opportunities isthat they offer the potential to generate revenues for the Group sooner thanlarge scale applications of FT. I am glad to advise that the steam cleaning prototype development program whichbegan last year with Proventec Plc, a provider of specialist steam cleaningequipment, has been completed successfully. We are currently exploring long termcommercial licensing opportunities for the technology developed. Finally, encouraging developments in business areas that have increased inprominence since the IPO have seen us already earning income from work in biogasconversion, whilst Instant Steam is shaping up to potentially become asignificant source of early revenue for the Group. Technical Development We continue to forge ahead in the development of our technology, with thesuccessful completion of the second technical milestone (of five) in our CarbonTrust sponsored project with a major solid oxide fuel cell company. Themilestone was successfully delivered on time and ahead of the technical targetset. (The reforming technology being developed produces hydrogen for fuel cells,intended primarily for domestic use.) Our latest embodiment of the Instant Steam technology - a trigger spraysystem - was successfully demonstrated and received positive endorsementin both the technical and general press. The trigger spray system is cheap,simple, portable and easy to use. Its potential is vast, as it could be used ina broad range of applications where the hot steam it generates would be utilisedto deliver, and enhance the performance of, other active agents (such asdetergents). I am also glad to report that our technical leadership is increasingly beingrecognised within the international chemical industry, as evidenced by oursuccess in recent awards; the Company was a finalist in the innovation categoryof the annual Chemical Industry Association awards (along with the world's twolargest chemical companies), as well as being finalists in innovation awardsfrom both the American Institute of Chemical Engineers and ICIS ChemicalBusiness magazine. Intellectual Property We continue making sustained progress protecting and enhancing our intellectualproperty. Our second key carbide patent recently received its letter ofallowance in the United States (the final stage before allocation). Furthermore,three new patents were filed during the period, in the name of Oxford Catalysts,covering developments in Instant Steam and Fischer-Tropsch. People & Premises The Oxford Catalysts team continued to grow and strengthen in the first half of2007. David Wardle joined the Group from BOC / Linde as Business DevelopmentDirector, heading commercial activities for our steam and hydrogen businesses.In July, Derek Atkinson began as Business Development Director in charge of theCompany's petroleum and petrochemical catalysts, following 17 years at GraceDavison. 2007 also saw the official opening of our new state-of-the-art laboratory,located at Milton Park, Oxfordshire. The new site not only offers outstandingfacilities, which are helping us to attract top scientists and engineers, butalso provides a very impressive setting to introduce potential clients to OxfordCatalysts. Financials This is the Group's first set of financial statements under the InternationalFinancial Reporting Standards (IFRS). As set out in the notes to the accounts,the introduction of IFRS has had minimal effect on the reporting of underlyingoperating performance of the Group in the period. Revenue in the six months to 30 June 2007 amounted to £87,000; 35% ahead ofrevenue for the full year 2006 and over 550% up on the same time last year.Since the Company has accelerated its growth over the past six months, theadjusted operating result of a pre-tax loss of £433,000, excluding non-cashshare based payment charges and amortisation (see note 4), compares favourablywith the adjusted operating loss of £411,000 at the year end 31 December 2006. The charge in the interim financial statements which arises in respect ofemployee share based payments, under IFRS 2, amounts to £110,000 (30 June 2006:£277,000). Cash resources continue to be tightly managed. Cash reserves and short terminvestments at period-end were £12.8 million, and subsequently rose by £4million following the placing of shares completed in July. Our current spend isin line with expectations, and is forecasted to increase as the Group enters thenext stage of its development. CONSOLIDATED INCOME STATEMENT RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Note 6 months 6 months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 (unaudited) (unaudited) (audited) £'000 (restated) £'000 £'000Revenue 87 13 64Cost of sales (326) (27) (583)Gross profit (239) (14) (519)Share based payments (IFRS2) (110) (277) (558)Depreciation and amortisation (74) - (32)Other administrative expenses (590) (204) (301)Total administrative expenses (774) (481) (891)Operating loss (1,013) (495) (1,410)Interest on bank deposits and similar income 468 113 438Loss on ordinary activities before tax (545) (382) (972)Tax - - -Loss for the period from continuing operations 4 (545) (382) (972)Loss per share from continuing operationsBasic and diluted (pence) 5 (1.46) (1.18) (2.82) All amounts relate to continuing operations. There are no recognised gains orlosses other than the losses shown above. CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2007 Note 30 June 2007 30 June 2006 31 December (unaudited) (unaudited) 2006 £'000 (restated) (audited) £'000 £'000Non-current assetsIntangible assets 194 60 180Property, plant and equipment 630 36 525 824 96 705Current assetsTrade and other receivables 333 83 256Short term investments - cash held on deposits 12,810 - 13,526Cash and cash equivalents 2 14,313 2 13,145 14,396 13,784Total assets 13,969 14,492 14,489Current liabilitiesTrade and other payables (187) (105) (283)Current tax liabilities (38) - (27) (225) (105) (310)Non-current liabilitiesDeferred licence payments (101) - (101)Total liabilities (326) (105) (411)Net assets 13,643 14,387 14,078EquityCalled up share capital 6 373 373 373Share premium account 6 13,897 13,897 13,897Merger reserves 6 369 369 369Retained earnings 6 (996) (252) (561)Total equity 6 13,643 14,387 14,078 The financial statements were approved by the Board of Directors on 26 September2007, and were signed on its behalf by: Paul Barnes FCCAFinance Director26 September 2007 CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Note 6 months 6 months Year ended Ended Ended 31 December 30 June 2007 30 June 2006 2006 (unaudited) (unaudited) (audited) £'000 (restated) £'000 £'000Net cash outflow from operating activities 7 (991) (252) (824)Investing activitiesInterest received 468 113 438Purchases of patents and trademarks (16) (10) (30)Purchases of property, plant and equipment (177) (38) (555)Investments - cash placed on/(taken off) deposit 716 - (13,527)Net cash (used in)/from investing activities 991 65 (13,674)Financing activitiesProceeds on issue of shares - 14,014 14,014Net cash from/(used in) financing activities - 14,014 14,014Net increase/(decrease) in cash and cash equivalents - 13,827 (484)Cash and cash equivalents at the beginning of the 2 486 486periodCash and cash equivalents at the end of the period 2 14,313 2 NOTES TO THE ACCOUNTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 1. PRINCIPAL ACCOUNTING POLICIES Basis of Preparation For the year ending 31 December 2007, the Group will prepare consolidatedfinancial statements under International Financial Reporting Standards ('IFRS')as adopted by the European Commission. These will be those InternationalAccounting Standards, International Financial Reporting Standards and relatedinterpretations (SIC-IFRIC interpretations), subsequent amendments to thosestandards and related interpretations, future standards and relatedinterpretations issued or adopted by the IASB that have been endorsed by theEuropean Commission. This process is ongoing and the Commission has yet toendorse certain standards issued by the IASB. The interim financial report has been prepared using accounting policiesconsistent with IFRS and in accordance with IAS 34 'Interim FinancialReporting', and is the Group's first interim report under IFRS. Accounting Policies The interim report is unaudited and has been prepared on the basis of IFRSaccounting policies. Despite the conversion to IFRS there are no significantdifferences in accounting policies and therefore no adjustments arose onconversion. Segments For management purposes, the Group reports its entire activities as onebusiness. Accordingly, the Directors consider there to be only one reportablesegment, being the design, development and provision of catalysts. 2. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information for the six months ended 30 June 2007 and 30 June 2006has not been audited and does not constitute full financial statements withinthe meaning of Section 240 of the Companies Act 1985. The financial information relating to year ended 31 December 2006 does notconstitute full financial statements within the meaning of Section 240 of theCompanies Act 1985. This information is based on the Group's statutory accountsfor that period, restated for IFRS. The statutory accounts were prepared inaccordance with United Kingdom Generally Accepted Accounting Principles (UKGAAP) and received an unqualified report, and have been filed with the Registrarof Companies. As a result of adjustments in our first year audited accounts the numberspreviously disclosed in the interims financial statements at 30 June 2006 forloss per share and for share premium have been restated in these interimfinancial statements. 3. EXPLANATION OF TRANSITION TO IFRS IFRS 1 - 'First-time adoption of International Financial Reporting Standards'sets out the procedures that the Group must follow as it adopts IFRS for thefirst time as the basis for preparing its consolidated financial statements. TheGroup is required to establish its accounting policies as at 30 June 2007 and,in general, apply these retrospectively to determine the IFRS opening balancesheet at its date of transition, 1 January 2006. The Company had previouslyadopted UK GAAP as its underlying basis of accounting. Following review of UKGAAP standards with those required under IFRS, the Directors consider that thereare no retrospective adjustments or restatement that need to be made to theopening balance sheet at 1 January 2007. 4. RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS 6 months 6 months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Reported operating loss (545) (382) (972)Add back:share based payments (IFRS2) 110 277 558amortisation of other intangibles 2 - 3Adjusted operating loss (433) (105) (411) 5. EARNINGS PER SHARE The calculation of earnings per share is based on the following losses and theweighted average number of shares: 6 months ended 30 June 6 months ended 30 June Year ended 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) Loss Number Pence Loss Number Pence Loss Number Pence £'000 of per £'000 of per £'000 of per shares share shares share shares share '000 '000 '000Adjusted earnings per (433) 37,341 (1.16) (105) 32,387 (0.32) (411) 34,601 (1.19)share*Reconciliation toreported earnings (netof tax at 30%):amortisation of other (2) - (0.00) - - - (3) - (0.00)intangiblesshare based payments (110) - (0.30) (277) - (0.86) (558) - (1.63)(IFRS 2)Basic & diluted earnings (545) 37,341 (1.46) (382) 32,387 (1.18) (972) 34,601 (2.82)per share * Adjusted earnings per share, excluding non-cash share based payments andamortisation of other intangibles, have been included as the Directors considerthat this figure provides a more useful measure of the ongoing business, sinceit is a more accurate reflection of cash utilisation. 6. RECONCILIATION OF MOVEMENT IN TOTAL EQUITY Called up Share Merger Retained Share Premium reserve earnings £'000 capital account £'000 £'000 £'000 £'000 At 1 January 2007 373 13,897 369 (561) 14,078Loss recognised for the period - - - (545) (545)Employee share based payments (IFRS2) - - - 110 110At 30 June 2007 373 13,897 369 (996) 13,643 7. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 6 months 6 months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Operating loss (1,013) (493) (1,410)Depreciation 72 2 29Amortisation - other intangibles 2 1 3Share based payments expense (IFRS2) 110 277 558Operating cash flows before movement in working capital (829) (213) (820)Increase in receivables (77) (33) (204)(Decrease)/increase in payables (85) (6) 200Net cash outflow from operating activities (991) (252) (824) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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