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OTAQ PLC Unaudited Interim Results

Directive transparence : information réglementée

01/08/2023 08:00

OTAQ Plc (OTAQ)
Unaudited Interim Results

01-Aug-2023 / 07:00 GMT/BST


 

 

 

1 August 2023

OTAQ plc

("OTAQ", the "Company" or the “Group”)

 

Unaudited Interim Results

 

OTAQ, the innovative technology company targeting the aquaculture, geotracking and offshore markets, is pleased to announce unaudited interim results for the six months ended 30 June 2023.

 

Financial Highlights:

 

Group

H1 2023

 

£’000

H2 2022

(restated)*

£’000

H1 2022

(restated)*

£’000

Revenue

1,801

1,345

2,708

Gross profit

883

611

1,191

Adjusted EBITDA**

(347)

(473)

454

 

*Figures restated to reflect the change of year end from 31 March to 31 December

**Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation

 

Highlights:

  • Record rental income achieved by Offshore division’s core OceanSense product
  • Two new six figure orders received for shrimp sonar devices from Minnowtech LLC for delivery in H2 FY23
  • Live Plankton Analysis beta live systems now deployed at customer sites in Scotland and Ireland
  • Initial customer contracts signed for Water Quality Monitoring product in Chile following contracts signed in Scotland in 2022
  • Sealfence sales made to Scandinavian countries; regulatory trials ongoing in other territories

 

Post-Period Highlights:

  • Current order profile to support in excess of £4m of Revenue for FY23
  • Significant further orders for shrimp sonar devices which, if achieved in this financial year, will substantially enhance revenue expectations
  • Further Sealfence sales expected in H2
  • Offshore division continuing to benefit from further strengthening market demand

 

Commenting on the results and prospects, Phil Newby, Chief Executive at OTAQ, said:

 

“The Board is satisfied with these results which are in line with our budget for the year. The Group is now delivering on the strategic goals set for OTAQ to realise its full potential, significantly increase shareholder value and return the Group to profitability.

 

“I am confident of achieving at least £4m Revenue in the current year and we have the potential to substantially exceed this based around the order enquiries we are currently receiving. Shareholders will be updated accordingly with developments.”

 

 

Enquiries

 

OTAQ plc

+44 (0)1524 748028

Adam Reynolds, Chairman

Phil Newby, Chief Executive Officer

 

Justine Dowds, Interim Chief Financial Officer

 

 

 

Dowgate Capital Limited – AQSE Corporate Advisor & Broker

+44 (0)20 3903 7715

David Poutney / James Serjeant

 

Russell Cook / Nicholas Chambers

 

 

 

Walbrook PR

+44 (0) 20 7933 8780

Tom Cooper / Nick Rome / Joe Walker

OTAQ@walbrookpr.com

 

+44 (0) 797 122 1972

     

 

About OTAQ

 

OTAQ is a highly innovative technology company targeting the aquaculture, geotracking and offshore markets. It already has a number of established products in its portfolio and is focused on further developing its presence, customer base and cross selling opportunities within core markets both organically and via acquisition.

 

OTAQ’s aquaculture products, which include a sonar device (developed for Minnowtech LLC) to scan shrimp in ponds and water quality monitoring, are focused on maximising welfare and production yields. Additionally, the Company is at the advanced development stage of a potentially game changing live plankton analysis system (LPAS). It also continues to target opportunities in the acoustic deterrent devices market via its Sealfence product, which is used by salmon farmers in multiple large global territories.

 

The Company is also developing high accuracy location trackers for specialist applications. Having already added clients within safety and multiple participant sport/racing applications, the Company is investigating wider market potential - including opportunities in the seafood industry.

 

OTAQ’s offshore product range includes OceanSense subsea leak detection, Eagle IP camera systems, Lander seabed survey devices and subsea electrical connectors and penetrators. It is targeting a number of growth opportunities in new territories and has a strong client base including Expro, Amphenol and National Oilwell Varco. The Company is also focused on the development of new products through this division, with the aim of increased cross-deployment of skills and technologies into the aquaculture arena.

 

 

 

Summary

 

The Group presents its unaudited interim results for the six-month period ended 30 June 2023.

 

Trading

As anticipated, revenue has improved from H2 2022 of £1.3m to £1.8m (H1 2022: £2.7m) with the Offshore division achieving £1.4m (H2 2022: £0.9m, H1 2022: £1.4m) and the Aquaculture division achieving £0.3m (H2 2022: £0.4m, H1 2022: £1.0m). The Company has reported an Adjusted EBITDA* loss of £347k (2022: profit £454k)

 

Offshore

The Offshore division, as expected, has continued to build on the strong performance reported in 2022. The opportunities identified in new international markets through investment in sales resource are now coming to fruition with the OceanSense subsea leak detection system achieving record rental levels in H1 2023. The launch of a deep water OceanSense 4 model has been particularly well received as well as further sales of the Group’s advanced IP subsea camera systems. We are confident that the strong performance of the Offshore division will continue into H2 2023.

 

Aquaculture

Having launched a number of exciting new products for the aquaculture sector in the last 12 months, the challenge is to now build on the early interest shown at launch across the industry. From Minnowtech LLC, a company we continue to hold a 15% investment in, we have received significant orders for the shrimp sonar devices. Two six-figure orders are scheduled for delivery in H2 2023 with the prospect of further orders from Minnowtech in the remainder of 2023.

 

As announced in April, the Group has secured its first trial partners for the Live Plankton Analysis System (LPAS). The LPAS product automatically identifies phytoplankton around marine aquaculture sites that could potentially result in harmful algae blooms adversely impacting on fish health and reducing yields. Through the system’s AI technology, the local analysis software program generates on-site alerts for staff, alerting the presence of specific algae species that are of concern in a particular area, enabling farmers to respond to any threat far quicker than the current manual process. The first beta systems have been deployed in Ireland and in Scotland.

 

The Group’s Water Quality Monitoring System, currently for salmon farmers, provides continuous monitoring and recording of crucial environmental parameters across the entire growing cycle, supplying invaluable visibility and insight to support the maintenance and safeguarding of fish welfare. Contracts or orders have been fulfilled to supply the systems to salmon farms in Chile and in Scotland.

 

As reported previously, revenue from the Group’s historically core product, Sealfence, has reduced significantly since 2022.  However, we are pleased to report that a modest level of Sealfence sales to customers in Scandinavia was achieved in H1 2023, with regulatory trials ongoing in other territories.

 

Geotracking

Trials with OTAQ’s partners serving the rail sector, which commenced in 2022, are continuing as planned with a number of successful field trials now completed.  This is a highly regulated sector and, accordingly, progress can be slow.  However, the Group is hopeful that the first significant orders will be received in H2 2023. 

 

 

Financial Highlights for the six months ended 30 June 2023

The results for H1 2022 and H2 2022, being the six months to June 2022 and six months to December 2022 respectively, are restated for comparative purposes following the Company’s change of accounting reference date from 31 March to 31 December.

 

 

Group

H1 2023

 

£’000

H2 2022

(restated)*

£’000

H1 2022

(restated)*

£’000

Revenue

1,801

1,345

2,708

Gross profit

883

611

1,191

Adjusted EBITDA**

(347)

(473)

454

 

 

 

 

*Figures restated to reflect the change of year end from 31 March to 31 December

**Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation

 

 

H1 2023

 

£’000

H1 2022

(restated)

£’000

Operating loss

(709)

(638)

Amortisation of intangible assets

134

424

Impairment of assets

-

311

Depreciation of right-of-use assets

84

88

Depreciation on property, plant and equipment

144

269

Adjusted EBITDA

(347)

454


 

Adjusted EBITDA was a loss of £0.35m from a profit of £0.45m in 2022. This reduction followed the exit of the Sealfence industry in Scotland and the investment in growing new product lines made in 2023.  

 

Net debt as at 30 June was £0.51m (2022: £1.23m) with cash balances of £0.91m.

 

Outlook

I am pleased that the Group is on track to achieve the Board’s growth target for 2023 with revenue of at least £4.0 million in the current year and a return to EBITDA profitability in the current year within reach if this revenue figure can be improved upon, as anticipated.     

 

The Offshore Division continues to benefit from strengthening market demand and, whilst the timing of new client orders can be difficult to predict, we anticipate significant further orders for shrimp sonar devices, together with further sales of the Sealfence, in the current financial year.  We also expect to see further progress and initial sales from railway customers in the Geotracking Division.

 

Phil Newby

Chief Executive Officer

 

 

The Board confirms that to the best of its knowledge the consolidated half year financial statements for the six months to 30 June 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting amended in accordance with changes in IAS 1 Presentation of Financial Statements, as adopted by the UK 

 

 

 

Unaudited Condensed Consolidated Statement of Comprehensive Income

 

 

Half-year ended

 

Notes

 

30 June 2023

 

30 June 2022

(restated)

 

 

£000

£000

Revenue

1

1,801

2,708

Cost of sales

 

(918)

            (1,517)

Gross profit

1

883

1,191

Administrative expenses

 

(1,592)

(1,829)

Operating loss

 

(709)

(638)

Finance expense

 

(64)

(79)

Exceptional items

2

-

(127)

Loss on ordinary activities before taxation

 

(773)

(844)

Taxation

 

14

250

Loss for the period

 

(759)

(594)

Other comprehensive loss

 

-

-

Total Comprehensive Loss

 

(759)

(594)

 

Attributable to:

 

 

 

The Group

 

(759))

(594)

 

 

 

 

 

As per note 3, Losses Per Share were 0.6p (2022: 1.6p) and Diluted Losses Per Share were 0.6p (2022: 1.6p).

The loss for the period arises from the Group’s continuing operations and is attributable to the equity holders of the parent.

 

There were no other items of comprehensive income for the period (2022: £nil) and therefore the loss for the period is also the total comprehensive loss for the period.

 

The notes form an integral part of these condensed financial statements.

 

Unaudited Condensed Consolidated Balance Sheet

 

Notes

30 June 2023

30 June 2022

31 December 2022

 

 

£000

£000

£000

Assets

 

 

 

 

Non–current assets

 

 

 

 

Plant and equipment

 

710

829

582

Right-of-use assets

 

277

393

364

Unlisted investments

 

511

511

511

Intangible assets

 

3,118

3,153

3,008

 

 

4,616

4,886

4,465

Current assets

 

 

 

 

Inventories

 

1,023

1,126

937

Trade and other receivables

 

1,081

1,212

689

Income tax asset

 

111

166

275

Cash and cash equivalents

 

913

930

2,337

 

 

3,128

3,434

4,238

Total assets

 

7,744

8,320

8,703

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

614

684

503

Deferred payment for acquisition

 

-

236

-

Leases

 

169

173

172

Financial liabilities

5

465

441

447

 

 

1,248

1,534

1,122

Non-current liabilities

 

 

 

 

Deferred tax

 

-

176

-

Leases

 

82

201

181

Financial liabilities

5

817

1,270

1,054

 

 

899

1,647

1,235

Total liabilities

 

2,147

3,181

2,357

 

Net assets

 

 

5,597

 

5,139

 

6,346

 

 

 

 

 

Capital and reserves

 

 

 

 

Share capital

6

1,280

5,662

1,278

Share premium

6

5,842

3,281

5,834

Deferred shares

6

5,286

-

5,286

Share option reserve

 

134

150

134

Merger relief reserve

 

9,154

9,154

9,154

Reverse acquisition reserve 

 

(6,777)

(6,777)

(6,777)

Other reserve

 

400

384

400

Revenue reserve

 

(9,722)

(6,715)

(8,963)

Total equity

 

5,597

5,139

6,346

           
 

Unaudited Condensed Consolidated Statement of Changes in Equity

 

 

Issued Equity capital

Share Premium

Deferred shares

Share option reserve

Merger relief reserve

Reverse acquisition reserve

Other Reserve

Revenue Reserve

Total Equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

At 30 June 2022

5,662

3,281

-

150

9,154

(6,777)

384

(6,715)

5,139

Loss for the period

-

-

-

-

-

-

-

(2,248)

(2,248)

Sub-division and conversion of shares

(5,286)

-

5,286

-

-

-

-

-

-

Issues of shares

902

2,553

-

-

-

-

-

-

3,455

Transfer on expired options

 

 

 

(16)

 

 

16

-

-

 

 

 

 

 

 

 

 

 

 

At 31 December 2022

1,278

5,834

5,286

134

9,154

(6,777)

400

(8,963)

6,346

 

 

 

 

 

 

 

 

 

 

At 1 January 2023

1,278

5,834

5,286

134

9,154

(6,777)

400

(8,963)

6,346

Loss for the period

-

-

-

-

-

-

-

(759)

(759)

Issues of shares

2

8

-

-

-

-

-

-

10

At 30 June 2023

1,280

5,842

5,286

134

9,154

(6,777)

400

(9,722)

5,597

 

 

Unaudited Condensed Consolidated Statement of Cash Flows

 

30 June 2023

30 June 2022

 

£’000

£’000

Cash flows from operating activities

 

 

Operating loss

(709)

(638)

Adjustments for non-cash/non-operating items:

 

 

Depreciation of property, plant and equipment

143

269

Impairment of property, plant and equipment

-

311

Depreciation of right-of-use assets

84

88

Amortisation of intangible assets

134

119

Impairment of intangible assets

-

295

Gain on remeasurement of deferred consideration payable

-

40

Exceptional charges

-

(127)

Share option charge

10

30

 

───────

───────

 

(338)

387

Changes in working capital:

 

 

Increase / (decrease) in inventories

(87)

168

Increase in trade and other receivables

(391)

(190)

Increase / (decrease) in trade and other payables

110

(894)

 

───────

───────

Cash from operations

(706)

(529)

Taxation

177

84

 

───────

───────

Net cash from operating activities

(529)

(445)

 

───────

───────

Cash flows from investing activities

 

 

Purchases of tangible fixed assets

(267)

(10)

Purchases of intangible assets

(243)

(285)

Interest received

10

-

Deferred payment of acquisition

-

(15)

 

───────

───────

Net cash used in investing activities

(500)

(310)

 

───────

───────

Cash flows from financing activities

 

 

Proceeds on issue of shares

-

1408

Expenses of share issues

-

(70)

Repayment of loans

(219)

(189)

Principal element of lease payments

(102)

(60)

Interest paid

(74)

(79)

 

───────

───────

Net cash from financing activities

(395)

1,010

 

───────

───────

Net (decrease) / increase in cash and cash equivalents

(1,424)

255

Cash and cash equivalents at beginning of period

2,337

675

 

───────

───────

Cash and cash equivalents at end of period

913

930

 

═════

═════


Notes to the condensed financial statements

  1. Segmental information

The Group operated as three primary segments, being the rental and sales of aquaculture products (Aquaculture), rentals of underwater measurement and leak detection devices in the Offshore market and the development and manufacture of products for geo-tracking industries (Geotrackers). This is the level at which operating results are reviewed by the chief operating decision maker to make decisions about resources, and for which financial information is available. All revenues have been generated from continuing operations and are from external customers.

 

 

Half-year ended

 

30 June 2023

30 June 2022

 

£000

£000

Analysis of revenue

 

 

Aquaculture equipment rentals, sales and associated charges

319

993

Offshore equipment rentals, sales and associated charges

1,444

1,362

Geotracking

38

353

 

1,801

2,708

 

 

Half-year ended

 

30 June 2023

30 June 2022

 

£000

£000

Analysis of gross profit

 

 

Aquaculture equipment rentals, sales and associated charges

80

386

Offshore equipment rentals, sales and associated charges

818

681

Geotracking

(15)

124

 

883

1,191

 

 

 

  1. Exceptional items

Exceptional items in the prior period of £0.13m include legal and professional costs associated with the January 2022 issue of new shares and restructuring costs.

 

  1. Losses per share

Basic earnings or losses per share are calculated by dividing the loss or profit after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the year. Diluted earnings or losses per share are calculated by adjusting the weighted average number of shares outstanding to assume conversion of all potential dilutive shares, namely share options.

The calculation of earnings or losses per share is based on the following losses and number of shares:

 

Half-year ended

 

30 June 2023

30 June 2022

 

£000

£000

Loss for the period attributable to the owners of the Group

(759)

(557)

Weighted average number of shares:

 

 

  • Basic

127,900,627

37,129,411

  • Diluted

172,278,124

43,012,568

Basic earnings per share (pence)

(0.6)

(1.5)

Diluted earnings per share (pence)

(0.6)

(1.5)

 

  1. Loan repayment

During the period, the Group repaid £0.22m of loans provided under the Coronavirus Business Interruption Loan Scheme.

  1. Share capital and share premium

The called-up and fully paid share capital of the Company is as follows:

 

30 June 2023

 

30 June 2022

 

£000

£000

Allotted, called-up and fully paid: 127,976,373 Ordinary shares of £0.01 each

(2022: 37,746,852 of £0.15 each)

1,280

5,662

 

 

  1. Financial instruments – classification and measurement

Financial assets

Financial assets measured at fair value include the following:

 

 

Half year ended

 

30 June 2023

30 June 2022

 

£’000

£’000

Unlisted equity securities

297

297

Investments made in unlisted equity securities

214

214

 

───────

───────

 

511

511

 

 ═════

 ═════

       
  1. Basis of preparation of half-year report

This condensed consolidated interim financial report for the half-year reporting period ended 30 June 2023 has been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting. The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2022 and any public announcements made by OTAQ PLC during the interim reporting period. This interim financial information has not been reviewed nor audited by the auditors.  The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new amended standards as set out below.

 

New and amended standards adopted by the Group

A number of new or amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

 

Going concern

The Directors have considered going concern and whilst the Company needs to continue to monitor cash flow carefully, the Directors believe that the group has sufficient cash to meet its obligations.

 

Significant estimates and judgements

The Group shall assess at each reporting date whether there is any indication that non-current assets may be impaired. The Directors believe that at the half-year reporting period ended 30 June 2023 no indicators of impairment existed. The Directors continue to monitor regulatory and market developments and their impact on the carrying value of the assets.

 



Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


ISIN: GB00BK6JQ137
Category Code: IR
TIDM: OTAQ
LEI Code: 213800CZGMYB5XTUXJ52
Sequence No.: 261350
EQS News ID: 1692389

 
End of Announcement EQS News Service

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