Unaudited Interim Results

OTAQ Plc (OTAQ) Unaudited Interim Results 30-Sep-2024 / 07:00 GMT/BST 30 September 2024 OTAQ plc ("OTAQ", the "Company" or the “Group”) Unaudited Interim Results OTAQ, the innovative technology company targeting the aquaculture and offshore markets, is pleased to announce unaudited interim results for the six months ended 30 June 2024. Financial Highlights: H1 2024 (unaudited) £’000 H1 2023 (unaudited) £’000 FY 2023 (audited) £’000 Revenue 1,510 1,801 4,407 Gross profit* 890 883 2,197 Adjusted EBITDA** (422) (347) (311) *Depreciation on rental units moved to overhead in 2024 **Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation Highlights: Live Plankton Analysis now commercially launched, and first customer contract signed. Sale of 19 Sealfence units to a new customer. Development of new overseas markets for Offshore products beginning to provide results. Increased shareholding in Minnowtech in exchange for £0.2m of BRS-1 product development services. Post-Period Highlights: Successful fundraise of £1.79m of Convertible Loan Notes, with an additional £1m broker option available until 31/12/24. Repayment in full of the £0.8m outstanding Cbils loan. Shipping of £350k connector order in July to a key client. Minnowtech BRS-1 won the ‘Product most likely to change shrimp production’ at the Global Shrimp Forum in Utrecht in September 2024. Cost reduction exercise implemented to provide annualised cost savings greater than £500k, with over £150k expected to impact in 2024. Commenting on the results and prospects, Phil Newby, Chief Executive at OTAQ, said: “We continue to push into new markets both for our existing product range and for the newly developed products such as LPAS and Minnowtech, in both our connectors and aquaculture businesses. "The identified cost savings will allow the Group to focus on delivering against our key strategic goals, providing the funds to concentrate sales and marketing efforts to maximise the commercial impact of our newly completed developments” Enquiries OTAQ PLC [phone] Adam Reynolds, Non-Executive Chairman Phil Newby, Chief Executive Officer Justine Dowds, Chief Financial Officer Dowgate Capital Limited - AQSE Corporate Advisor & Broker [phone] David Poutney / James Serjeant Nicholas Chambers / Russell Cook Walbrook PR Limited – PR [phone] 07971221972 or 07748325236 Tom Cooper / Nick Rome [e-mail]         About OTAQ OTAQ is a highly innovative technology company targeting the aquaculture 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 developing a potentially game changing live plankton analysis product for finfish and shellfish farmers. It also continues to target opportunities in the acoustic deterrent devices market via its Sealfence product, which is used by salmon farmers, with global opportunities in Chile, Australia, Canada and Norway. 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. 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. Summary The Group presents its unaudited interim results for the six-month period ended 30 June 2024. Trading Revenue has been adversely impacted in the period by the delayed delivery of a key Offshore product from a supplier pushing a significant sale into July, which has resulted in revenue in the first half of £1.5m (H1 2023: £1.8m). The Offshore division achieved revenues of £1.1m (H1 2023 £1.45m) and the Aquaculture division achieved £0.4m (H1 2023: £0.3m). The Company has reported an Adjusted EBITDA loss of £422k (H1 2023 loss £347k). Offshore The Offshore division, as expected, has continued to build on the strong performance reported in 2023. The underwater connectors have performed well, only missing the H1 forecast due to the delayed delivery of a key product from a supplier pushing a significant sale into July. Opportunities for Oceansense rentals have been reduced in H1 due to lower offshore maintenance activity, however we are encouraged by the progress shown in the newly developing overseas markets. Aquaculture The Company’s sonar shrimp system developed for Minnowtech LLC, is now gaining traction in its target markets, and has recently won the ‘Product most likely to change shrimp production’ at the Global Shrimp Forum in Utrecht. Disappointingly however, orders have yet to be placed this year by Minnowtech. The Company has identified further new customer interest in the Company’s established Sealfence solution from salmon farmers in several major salmon production regions, having sold 19 Sealfence units into these core target markets in H124. The Company also confirms that, following more than three years in development, OTAQ has now completed successful trials of its Live Plankton Analysis System (LPAS), and recently launched LPAS at the Aquaculture UK conference. The first customer contract has been signed, and progress with potential users in the southern hemisphere is encouraging. Financial Highlights for the six months ended 30 June 2024 H1 2024) £’000 H1 2023 £’000 FY 2023 £’000 Revenue 1,510 1,801 4,407 Gross profit* 890 883 2,197 Adjusted EBITDA** (422) (347) (311) *Depreciation on rental units moved to overhead in 2024 **Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation H1 2024 £’000 H1 2023 £’000 Operating loss (805) (709) Amortisation of intangible assets 143 134 Depreciation of right-of-use assets 70 84 Depreciation on property, plant and equipment 170 144 Adjusted EBITDA (422) (347) Adjusted EBITDA was a loss of £0.42m from a loss of £0.35m in 2023, the reduction being due to the slippage of a key sale into July 24.   Net debt as at 30 June was £0.77m (2023: £0.51m) with cash balances of £0.18m, which was prior to the receipt of the proceeds from the successful CULS placing in July 2024. Outlook The Offshore Division continues to benefit from strengthening market demand for underwater connectors and penetrators. 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.  Phil Newby Chief Executive Officer The Board confirms that to the best of its knowledge the unaudited consolidated half year financial statements for the six months to 30 June 2024 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 2024 30 June 2023 £000 £000 Revenue 1 1,510 1,801 Cost of sales (621) (918) Gross profit 1 889 883 Administrative expenses (1,695) (1,592) Operating loss (806) (709) Finance expense (64) (64) Exceptional items 2 (14) - Loss on ordinary activities before taxation (884) (773) Taxation 14 Loss for the period (884) (759) Other comprehensive loss - - Total Comprehensive Loss (884) (759) Attributable to: The Group (884) (759) As per note 3, Basic and Diluted Losses Per Share were 0.7p (2023: 0.6p). 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 (2023: £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 As at 30 June 2024 As at 31 December 2023 As at 30 June  2023 £000 £000 £000 Assets Non–current assets Plant and equipment 522 633 710 Right-of-use assets 145 167 277 Unlisted investments 6 709 511 511 Intangible assets 3,548 3,317 3,118 4,924 4,628 4,616 Current assets Inventories 777 810 1,023 Trade and other receivables 532 1,299 1,081 Income tax asset 113 113 111 Cash and cash equivalents 180 316 913 1,602 2,538 3,128 Total assets 6,526 7,166 7,744 Liabilities Current liabilities Trade and other payables 1,061 661 614 Leases 97 134 169 Financial liabilities 4 604 484 465 1,762 1,279 1,248 Non-current liabilities Leases 51 42 82 Financial liabilities 4 313 570 817 364 612 899 Total liabilities 2,126 1,891 2,147 Net assets 4,400 5,275 5,597 Capital and reserves Share capital 5 1,284 1,281 1,280 Share premium 5 5,856 5,850 5,842 Deferred shares 5 5,286 5,286 5,286 Share option reserve 134 134 134 Merger relief reserve 9,154 9,154 9,154 Reverse acquisition reserve  (6,777) (6,777) (6,777) Other reserve 400 400 400 Revenue reserve (10,937) (10,053) (9,722) Total equity 4,400 5,275 5,597               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 2023 1,280 5,842 5,286 134 9,154 (6,777) 400 (9,722) 5,597 Loss for the period - - - - - - - (331) (331) Issues of shares 1 8 - - - - - - 9 At 31 December 2023 1,281 5,850 5,286 134 9,154 (6,777) 400 (10,053) 5,275 At 1 January 2024 1,281 5,850 5,286 134 9,154 (6,777) 400 (10,053) 5,275 Loss for the period - - - - - - - (884) (884) Issues of shares 3 6 - - - - - - 9 At 30 June 2024 1,284 5,856 5,286 134 9,154 (6,777) 400 (10,937) 4,400   Unaudited Condensed Consolidated Statement of Cash Flows 30 June 2024 30 June 2023 £’000 £’000 Cash flows from operating activities Operating loss (806) (709) Adjustments for non-cash/non-operating items: Depreciation of property, plant and equipment 170 143 Depreciation of right-of-use assets 70 84 Amortisation of intangible assets 143 134 Exceptional charges (14) - Share option charge 8 10 ─────── ─────── (429)             (338) Changes in working capital: Increase / (decrease) in inventories 33 (87) Increase in trade and other receivables 745 (391) Increase / (decrease) in trade and other payables 423 110 ─────── ─────── Cash from operations 772 (706) Taxation - 177 ─────── ─────── Net cash from operating activities 772 (529) ─────── ─────── Cash flows from investing activities Purchases of tangible fixed assets (101) (267) Purchases of intangible assets (378) (243) Interest received - 10 Acquisition of unlisted equity securities (198) - ─────── ─────── Net cash used in investing activities (677) (500) ─────── ─────── Cash flows from financing activities Repayment of loans (137) (219) Principal element of lease payments (30) (102) Interest paid (64) (74) ─────── ─────── Net cash from financing activities (231) (395) ─────── ─────── Net (decrease) / increase in cash and cash equivalents (136) (1,424) Cash and cash equivalents at beginning of period 316 2,337 ─────── ─────── Cash and cash equivalents at end of period 180 913 ═════ ═════ Notes to the condensed financial statements   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 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 2024 30 June 2023 £000 £000 Analysis of revenue Aquaculture equipment rentals, sales and associated charges 403 319 Offshore equipment rentals, sales and associated charges 1,103 1,444 Geotracking 4 38 1,510 1,801 Half-year ended 30 June 2024 30 June 2023 £000 £000 Analysis of gross profit Aquaculture equipment rentals, sales and associated charges 294 80 Offshore equipment rentals, sales and associated charges 594 818 Geotracking 1 (15) 889 883 Exceptional items Exceptional items in the period of £0.01m include legal and professional costs associated incurred in the period but which relate to the issue of convertible loan notes in July 2024. 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 2024 30 June 2023 £000 £000 Loss for the period attributable to the owners of the Group (884) (759) Weighted average number of shares: Basic and diluted 128,263,088 127,900,627 Basic and diluted earnings per share (pence) (0.7) (0.6) Loan repayment During the period, the Group repaid £0.24m of loans provided under the Coronavirus Business Interruption Loan Scheme. The loan was fully repaid in July 2024.   Share capital and share premium The called-up and fully paid share capital of the Company is as follows: 30 June 2024 30 June 2023 £000 £000 Allotted, called-up and fully paid: 128,405,917 Ordinary shares of £0.01 each (2023: 127,976,373 of £0.01 each) 1,284 1,280 Financial instruments – classification and measurement Financial assets Financial assets measured at fair value include the following: Half year ended 30 June 2024 30 June 2023 £’000 £’000 Unlisted equity securities 709 511 ─────── ─────── 709 511  ═════  ═════         Basis of preparation of half-year report This condensed consolidated interim financial report for the half-year reporting period ended 30 June 2024 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 2023 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 2024 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, 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.:	349701
EQS News ID:	1997735

End of Announcement	EQS News Service