Final Results

RNS Number : 8355W

CyanConnode Holdings PLC

23 August 2022

 

    23 August 2022

CyanConnode Holdings plc

("CyanConnode", "the "Group" or the "Company")

Final Results for the Year Ended 31 March 2022

 

CyanConnode Holdings plc (AIM: CYAN) announces its audited results for the year ended 31 March 2022.

Financial highlights

· Increase of 49% in revenue to £9.6m in2022  from £6.4m in 2021 , the highest annual revenue for the Group to date

· Increase of 61% in gross profit to £5.0m in 2022 from £3.1m in 2021

· Decrease of 62% in operating loss to £1.0m in 2022 from £2.7m in 2021 as the Group moves towards profitability

· Adjusted EBITDA profit of £0.1m in 2022 compared to a loss of £1.9m in 2021

· Increase of 58% in cash position from £1.5m in 2021 to £2.4m in 2022

Operational Highlights

· 612,000 Omnimesh Radio Frequency (RF) Modules shipped against current contracts during the year (FY21: 481,000)

· 152,000 Omnimesh RF Modules ordered for a new customer in northern India

· 31,000 Omnimesh RF Modules for a follow-on order for the MEA (Metropolitan Electricity Authority Smart Grid Project in) Thailand 

· 100,000 Omnimesh RF Modules ordered for a new customer in Africa

· Two oversubscribed placings completed, raising £5.15 million before expenses

· Award of London Stock Exchange Green Economy Mark

· Winner of the Frost and Sullivan Global Smart Metering Technology Innovation Leadership Award

 

Post Year End Highlights

· 1,000,000 Omnimesh RF Modules and associated products ordered from Genus Power Infrastructure Limited (Genus)

· Two orders won from IntelliSmart Infrastructure Pvt Ltd (IntelliSmart) for a total of 300,000 Omnimesh RF Modules and associated products

· New order worth USD 6.7m won from Middle East and North Africa (MENA) for NB-IoT gateways

· Further new order worth USD 2.5m won from MENA for Cellular gateways

· £2.6 million cash received from customers

· Omnimesh integration underway with a further nine meter models

· Revamped Distribution Sector Scheme (RDSS) approved by the Government of India to help Distribution Companies (DISCOMS) to improve their operational efficiencies

· Following an initial delay in the empanelment process, DISCOMS approved to release tenders under the RDSS Scheme in August 2022

John Cronin, Executive Chairman of CyanConnode, commented:

"We've been delighted with the results achieved during the financial year being reported, which showed record revenues being achieved, and a positive adjusted EBITDA. FY22 also saw record numbers of modules being shipped and record cash being collected.

Since the year end we have announced orders for a total of 1.3 million units in India, and orders for new products in a new territory (the MENA region). We're currently integrating with nine new meter types. In India, the new RDSS has been launched and the empanelment process is progressing, allowing more tenders to be released. Momentum in the markets in which we operate continues to grow, and we're looking forward to continued success in the current financial year.  

We'd like to thank all employees for their ongoing hard work and dedication to achieve these record results. We'd also like to thank all shareholders for their continued support and look forward to continuing to deliver successful results."

- Ends -

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

CyanConnode Holdings plc	Tel: [phone]
John Cronin, Executive Chairman	www.cyanconnode.com
Cenkos Securities plc (Nomad and Joint  Broker)                                     Stephen Keys / Charlie Combe Arden Partners plc (Joint Broker) Simon Johnson (Corporate Broking) Ruari McGirr (Corporate Finance)	Tel: [phone] Tel: [phone]

Chairman's Statement

Operational Review

India

The union budget of 2020-21 paved the way for the replacement of 250 million conventional electricity meters with smart meters by 2025. The Revamped Distribution Sector Scheme (RDSS) was announced at the union budget of 2021-22, where in the first phase 100 million smart meters are to be installed by December 2023, with the remainder by March 2025.

The Ministry of Power, Government of India (GOI), also produced a revised Standard Bidding Document (SBD) and a contract agreement that can be directly adopted by utilities for rolling out the smart metering programme. These steps have acted as a catalyst in spurring forward the smart metering program in India and as a result the scale of tenders  has increased significantly.

During the period, CyanConnode won two new orders, the first one was for 151,740 Omnimesh RF Modules for Himachal Pradesh State Electricity Board (HPSEB), marking an entry for CyanConnode into the hilly regions of the country. The majority of the modules were dispatched during the period and deployment is expected to be completed in FY23.

The second order was for 1,000 Omnimesh RF Modules from IntelliSmart for the state of Assam. This was the first order from IntelliSmart, and was a precursor to two larger orders which have been won during FY23 bringing the total orders for this project to 301,000 Omnimesh RF Modules.  IntelliSmart is also the first service provider to use the Design, Build, Finance, Own, Operate, Transfer (DBFOOT) model and it has also installed the first smart prepaid meter in India under the RDSS.

Key highlights for CyanConnode India for the financial year ended March 2022 are set out below:

• CyanConnode India delivered record annual revenue and cash collection.

• >562,000 Omnimesh RF Modules and 3,907 Omnimesh Gateways were supplied.

• >600,000 Omnimesh RF Modules  and 3,752 Omnimesh Gateways were commissioned.

• CyanConnode is now the largest and most experienced supplier of RF smart mesh networks in India.

• Dedicated space for CyanConnode in the Virtual Smart Grid Knowledge Centre (SGKC) facilitated by National Smart Grid Mission and Power Grid Corporation of India, Ltd. SGKC is a Knowledge Centre platform, set up by the Ministry of Power GOI, to demonstrate excellence in Smart Grid (see: http://sgkc.powergrid.in/cyanconnode.php )

• Integration with two further meter manufacturers (Avon Meters and Linkwell) were recommenced, which will result in Omnimesh modules being compatible with the five leading meter manufacturers in India.

• Cyber security certification completed on CyanConnode Head End System (HES) (CERT-IN certified). 

APAC and Middle East North Africa

The smart metering market in the Asia Pacific (APAC) and Middle East North Africa (MENA) region has continued to mature and presents a significant opportunity for CyanConnode.

During the year the Group has continued with the deployment of the order won in 2019 for the Metropolitan Electricity Authority (MEA), a Thai state enterprise under the Ministry of Interior. The initial order was for 33,000 Omnimesh RF Modules and associated products, placed on the Group by its Agent and Partner, The JST Group (JST), and Forth Corporation Public Company Limited (Forth). In March 2020, a further 206,000 Omnimesh licenses were ordered allowing MEA to connect a total of 240,000 meters to the Omnimesh Head End System (HES). All Omnimesh  modules and gateways were delivered during FY21. During FY22 a follow-on order was received for a further 31,000 Omnimesh RF Modules and associated products.

In August 2021, the Group announced an order for 100,000 Omnimesh RF Modules together with Advanced Metering Infrastructure, Services, Omnimesh Head-End Software, Perpetual License and an Annual Maintenance Contract from a new customer for a smart metering deployment in Africa.

Shortly after the financial year end, the Group announced an order for a smart metering deployment in the MENA region. Under the contract CyanConnode will supply 65,000 interoperable smart NB-IoT gateways to Esyasoft Technologies, UAE. The gateways will be deployed by Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC).  The NB-IoT gateways will communicate with and control all existing smart meters for both electricity and water; the gateways will have the capacity to connect up to one million smart meters.

Europe

In April 2019, a follow-on order worth £0.7m was received from HM Power (HMP), for smart metering of district heating and power, which further demonstrates the flexibility of CyanConnode's standards-based Omnimesh products. The order also includes the newly introduced Omnimesh Long-Range RF Module that has a range of up to 12km, which thereby increases the resilience of the RF Smart Mesh Network in rural areas. Delivery of the Omnimesh Long-Range RF Modules commenced in Q4 2019 with 41,000 modules being delivered during the year. 90,000 modules have been delivered to date.

The UK Government requires UK energy suppliers to rollout approximately 53 million smart meters to their customers before the end of 2025.  To date, 21.7 million smart meters have been installed and connected to the digital highway operated by the Data Communications Company (DCC).  CyanConnode has a contract to provide software licenses and support for its Radio Frequency (RF) Smart Mesh Networks, which will be deployed in areas where there is an unreliable or weak cellular signal, and it believes that the deployment of its technology will gain momentum during the latter stages of the rollout.

Fundraisings

At the start of June 2021, the Company completed a heavily oversubscribed placing and subscription, raising £3.15 million before expenses, at a price of 9.5 pence per share. The issue price represented a premium of approximately 2.2% to the closing market price of 9.3 pence per share on the last business day prior to the announcement of the placing and subscription.

In March 2022, CyanConnode completed a further oversubscribed placing and subscription, raising £2 million before expenses at a price of 14 pence per share.

The net proceeds of the Placings and the Subscriptions are being used to strengthen the Company's balance sheet, to increase working capital, to allow the Company to continue to take advantage of its significant growth opportunities and to execute the Company's growing order book and pipeline.

Awards

During the year the Group was the recipient of four awards and classifications, as follows;

· August 2021, CyanConnode was awarded the Green Economy Classification & Mark by the London Stock Exchange. This classification, first introduced in 2019, was created to highlight companies and investment funds listed on all segments of London Stock Exchange's Main Market and AIM that are driving the global green economy. To qualify for the Green Economy Mark, companies and funds must generate 50% or more of their total annual revenues from products and services that contribute to the global green economy.

· September 2021, CyanConnode won the 2021 Frost & Sullivan Global Smart Metering Technology Innovation Leadership Award. Frost & Sullivan was impressed with CyanConnode's innovation in the smart meter industry and recognised that it has grown from a regional European pioneer into a global leader.

· November 2021, CyanConnode won the Cambridge Wireless Best Connector Business'' Award. This award recognises teams or businesses that are deploying wireless technology to improve products, increase operational efficiency or bring other benefits. The award celebrates impactful applications of wireless technology. CyanConnode was recognised for their success in bringing smart metering technologies to market.

· March 2022, CyanConnode won the Megabuyte Fastest Growing Company award.

Outlook

Since the period end, CyanConnode has won five orders, including the largest-ever order from India. They were as follows;

· April 2022, an order for a smart metering deployment in the MENA region. Under this contract CyanConnode will supply 65,000 interoperable smart NB-IoT gateways to Esyasoft Technologies, UAE. The gateways will be deployed by Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC).  The NB-IoT gateways will communicate with and control all existing smart meters for both electricity and water; the gateways will have the capacity to connect up to one million smart meters.

· May 2022, an order for 100,000 Omnimesh RF Modules together with advanced metering infrastructure, standards-based hardware, services, Omnimesh head-end software, perpetual license and an annual maintenance contract, for a smart metering project in Assam. This order was received from IntelliSmart, who were the first service provider to use the DBFOOT model and also installed the first smart prepaid meter in India under the RDSS (Revamped Distribution Sector Scheme).

· June 2022, CyanConnode announced a further order from Intellismart for the same project for 200,000 Omnimesh RF Modules together with advanced metering infrastructure, standards-based hardware, services, Omnimesh head-end software, perpetual license, and annual maintenance contract.

· August 2022, an order was announced for Cellular Gateways to provide smart communications for an Advanced Metering Infrastructure project located in the MENA region. This order, worth USD 2.5 million, was for a new cellular product to be fitted to existing electricity meters.

· August 2022, the Group was delighted to announce that its subsidiary, CyanConnode India  Pvt Ltd, won its largest-ever order.  The Order was for one million Omnimesh Modules, together with Advanced Metering Infrastructure, Standards-Based Hardware, Omnimesh Head-End Software, Perpetual License and a Support and Maintenance Contract.

In addition, CyanConnode's business has continued on its growth path and is currently integrating with a further nine meter models, giving access to a larger number of opportunities.

In India the market has continued to move forward with its plans to implement 250 million smart meters. In August 2022, the Government of India approved the Revamped Distribution Sector Scheme (RDSS) to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs to strengthen supply infrastructure. The scheme has an outlay of Rs 3,03,758 Crore (£30 billion) over 5 years. in addition, following an initial delay in the empanelment process, DISCOMS were approved to release tenders under the RDSS Scheme in August 2022. Eight companies are currently empanelled.

I would once again like to thank all shareholders for their ongoing support during what has been our most successful year to date.  We look forward to further order announcements during this financial year as the Indian smart metering market continues to mature, and to delivering the backlog of orders won in current and previous periods.

John Cronin

Executive Chairman

Financial Review

Despite the year having started during the second wave of the Covid-19 pandemic, with many countries being in lockdown, the Group managed to continue with its deployments and is pleased to have achieved record revenues for the year.

A summary of the key financial results for the year and details relating to its financing position at the yearend are set out in the table below and discussed in this section.

	12 months Mar 2022	12 months Mar 2021	15 months Mar 2020	12 months Dec 2018	12 months Dec 2017
	£000	£000	£000	£000	£000
Revenue	9,562	6,437	2,451	4,465	1,171
R&D expenditure (including staff costs)	1,755	1,791	2,381	2,466	4,148
Operating costs	6,025	5,788	7,600	9,061	11,650
Operating loss	(1,018)	(2,685)	(6,230)	(6,320)	(11,153)
Depreciation and amortisation	616	627	773	472	489
EBITDA	(401)	(2,058)	(5,457)	(5,848)	(10,664)
Stock impairment	62	108	4	578	55
Share based compensation	363	80	267	445	422
Underlying operating loss	(38)	(1,978)	(5,190)	(5,403)	(10,242)
Foreign exchange (gain)/losses	(131)	(15)	267	16	52
Adjusted EBITDA[1]	58	(1,885)	(4,919)	(4,809)	(9,868)
Cash and cash equivalents	2,355	1,489	1,172	4,564	5,394
Average monthly operating cash outflow	(261)	(81)	(245)	(487)	(808)

	Mar 2022 FTE[2]	Mar 2021 FTE	Mar 2020 FTE	Dec 2018 FTE	Dec 2017 FTE
Average	59	47	50	52	44
Year end	60	54	48	61	52

Included within the table above are two alternative performance measures, EBITDA and adjusted EBITDA. These are additional measures which are not required under UK adopted International Accounting Standards. These measures are consistent with those used internally and are considered important to understanding the financial performance and the financial health of the Group.

EBITDA (Loss before Interest, Tax, Depreciation and Amortisation) is a measure of cash generated by operations before changes in working capital. Adjusted EBITDA is a measure of cash generated by operations before changes in working capital and after other items have been adjusted for as set out in the table above. It is used to achieve consistency and comparability between reporting periods.

Notably from the table on the previous page:

• Revenue of £9.6 million was 49% higher than for FY21 (£6.4 million)

• Operating loss for the year to March 2022 was £1.7 million lower than previous year

• EBITDA (loss) for the year to March 2022 was £1.7 million lower than previous year (2021: £2.1 million loss)

• Cash and cash equivalents at the end of FY22 of £2.4 million was £0.9 million higher than the end of FY21

• Share based compensation charges reflect the fair value of share options granted to employees over the vesting period of these options.

Financial items of note during the year other than those set out above were:

· Cash received from customers during FY22 was £8.2 million (2021: £5.3million)

· Trade and other receivables increased by £2.1 million during the year to £7.5 million (including retentions), largely due to the higher revenues recognised during the year

· R&D tax credit of £0.6 million for FY22 at a similar level to FY21

During the year an advance against the R&D tax credit was received. This will be repaid out of the R&D tax credit funds when received from HMRC. In addition, the loan from two directors remained in place at yearend, and letters of credit, invoice discounting and advance payments have been negotiated on recently won contracts to help with working capital requirements. The loan from Peter Tyler for £0.1 million was repaid in April 2022.

Key Performance Indicators (KPIs)

The financial key performance indicators for the Group are as set out in the key financial results table above. FY2022 revenues were 49% up on the previous year FY21 comparatives as a result of major contracts in India which started rolling out during the year. Operating costs for the year increased by 4% compared to FY21, EBITDA (loss) decreased from £2.1 million in FY21 to £0.4 million in FY22 and adjusted EBITDA (loss) decreased from £1.9 million in FY21 to less than £0.1 million in FY22. The Group's average headcount increased by 12. Non-financial KPIs included the number of modules shipped which increased from 481,000 in FY21 to 612,000 in FY22. The Group will be agreeing additional non-financial KPIs to be monitored during FY23.

The Group's long-term strategy is to deliver shareholder returns by generating revenue and moving into profitability. It seeks to do this by focusing its resources on emerging but fast-growing markets where it believes it can reach a market leading position with its technology. Management uses KPIs to track business performance, to understand general trends and to consider whether the Group is meeting its strategic objectives. As it grows, and as highlighted in the previous paragraph, it intends to review these KPIs and adapt them as appropriate, in response to how the business and strategy evolves.

The Group's key focus for the financial year ending March 2022 was to streamline its processes from order to delivery and working to close further orders. A further focus was ensuring collection of cash from customers as Group revenues continued to grow. Avenues continue to be pursued to secure working capital facilities to help ease cash flows and mitigate against any unforeseen delays in deliveries or customer payments.

Going concern

To assess the ability of CyanConnode Holdings plc ("Group") to continue as a going concern, the directors have prepared a business plan and cash flow forecast for the period to 31 March 2024 which, together, represent the directors' best estimate of the future development of the Group. The forecast contains certain assumptions, the most significant of which are the level and timing of sales and the timing of customer payments. The detailed cashflow scenarios include Letters of Credit which have been secured from customers against contracts recently won.

At 31 March 2022 the Group had cash reserves of £2.4 million (FY21: £1.5m) and based on detailed cash flows provided to the Board within the FY23/24 budget, there is sufficient cash to see the Group through to profitability based on its standard operating model. If a more pessimistic scenario were taken and an assumption were taken that no cash is received within the next twelve months from any new orders not currently contracted, and that there were significant delays to receipts from customers, there is a material uncertainty relating to the Group's ability to continue as a going concern. Should the Group experience such downside sensitivities the directors would first continue to look at measures such as cost reduction and working capital facilities as ways to conserve cash within the business. The Company has offers for convertible and secured loans which it could accept should such a requirement arise.

To assist with working capital, two directors extended short-term loans of £400,000 in November 2020. These were still in place at the end of March 2022. £100,000 was repaid to Peter Tyler in April 2022. The Company received an advance of £500,000 secured against its R&D tax credit in December 2021 and an invoice discounting facility secured against Letters of Credit for deliveries of Omnimesh modules in India. The advance against the R&D tax credit will be repaid out of the HMRC receipt which is expected to be received by October 2022.

Notwithstanding the material uncertainties described above which may cast significant doubt on the ability of the Group to continue as a going concern, on the basis of sensitivities applied to the cash flow forecast, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report.

Dividends

The directors do not recommend the payment of a dividend (2021: £nil). The Group has no plans to adopt a dividend policy in the immediate future and all funds generated by the Group will be invested in the further development of the business, as is normal for its industry sector and stage of its development.

Heather Peacock

Chief Financial Officer

CyanConnode Holdings plc

Consolidated income statement

For the year ended 31 March 2022

 

		Note	Year 31 March 2022 £000	Year 31 March 2021 £000
Continuing operations
Revenue			9,562	6,437
Cost of sales			(4,554)	(3,334)
Gross profit			5,008	3,103
Other operating costs			(6,025)	(5,788)
Underlying operating loss			(38)	(1,978)
Amortisation and depreciation			(616)	(627)
Share-based payments			(363)	(80)
Operating loss			(1,017)	(2,685)
Finance income			3	13
Finance expense			(164)	(62)
Loss before tax			(1,178)	(2,734)
Tax credit			307	677
Loss for the year			(871)	(2,057)
Loss per share (pence)
Basic		2	(0.42)	(1.18)
Diluted		2	(0.42)	(1.18)

Consolidated statement of comprehensive income

Derived from continuing operations and attributable to the equity owners of the Company.

For the year ended 31 March 2022	Year 31 March 2022 £000	Year 31 March 2021 £000
Loss for the year	(871)	(2,057)
Exchange differences on translation of foreign operations	76	(25)
Total comprehensive income for the period	(795)	(2,082)

 

 

CyanConnode Holdings plc

Consolidated statement of financial position

As at 31 March 2022

	Note	31 March 2022 £000	31 March 2021 £000
Non-current assets
Intangible assets		4,093	4,266
Goodwill		1,930	1,930
Other financial assets		58	44
Property, plant and equipment		31	36
Right of use asset		153	98
Trade receivables		458	-
Total non-current assets		6,723	6,374
Current assets
Inventories		159	211
Trade and other receivables		6,993	5,355
R&D tax credit receivables		562	577
Cash and cash equivalents		2,355	1,489
Total current assets		10,069	7,632
Total assets		16,792	14,006
Current liabilities
Trade and other payables		(2,364)	(3,969)
Short-term borrowings		(1,867)	(2,118)
Corporation tax liabilities		(193)	-
Lease liabilities		(28)	(98)
Total current liabilities		(4,452)	(6,185)
Net current assets		5,617	1,447
Non-current liabilities
Lease liabilities		(125)	-
Deferred tax liability		(746)	(812)
Other payables		(38)	-
Total non-current liabilities		(909)	(812)
Total liabilities		(5,361)	(6,997)
Net assets		11,431	7,009
Equity
Share capital	3	4,726	3,735
Share premium account		73,883	69,662
Own shares held		(3,611)	(3,253)
Share option reserve		1,068	925
Translation reserve		31	(45)
Retained losses		(64,666)	(64,015)
Total equity being equity attributable to owners of the Company		11,431	7,009

CyanConnode Holdings plc

C onsolidated Statement of Changes in Equity

For the year ended 31 March 2022

	Share Capital £000	Share Premium Account £000	Own Shares Held £000	Share Option Reserve £000	Translation Reserve £000	Retained Losses £000	Total Equity £000
Balance at 31 March 2020	3,656	69,547	(3,253)	2,028	(20)	(63,141)	8,817
Loss for the year	-	-	-	-	-	(2,057)	(2,057)
Other comprehensive income for the year	-	-	-	-	(25)	-	(25)
Total comprehensive income for the year	-	-	-	-	(25)	(2,057)	(2,082)
Issue of share capital	79	115	-	-	-	-	194
Credit to equity for share options	-	-	-	80	-	-	80
Transfer	-	-	-	(1,183)	-	1,183	-
Total transactions with owners	79	115	-	(1,103)	-	1,183	274
Balance at 31 March 2021	3,735	69,662	(3,253)	925	(45)	(64,015)	7,009
Loss for the year	-	-	-	-	-	(871)	(871)
Other comprehensive income for the year	-	-	-	-	76	-	76
Total comprehensive income for the year	-	-	-	-	76	(871)	(795)
Issue of share capital	991	4,221	(358)	-	-	-	4,854
Credit to equity for share options	-	-	-	363	-	-	363
Transfer	-	-	-	(220)	-	220	-
Total transactions with owners	991	4,221	(358)	143	-	220	5,217
Balance at 31 March 2022	4,726	73,883	(3,611)	1,068	31	(64,666)	11,431

CyanConnode Holdings plc

C onsolidated cash flow statement

For the year ended 31 March 2022

	Note	Year 31 March 2022 £000	Year 31 March 2021 £000
Net cash outflow from operating activities	4	(3,134)	(977)
Investing activities
Interest received		3	13
Purchases of property, plant and equipment		(26)	(23)
Purchases of intangible assets		(259)	(129)
(Purchase) / disposal of other financial assets		(14)	49
Net cash outflow from investing activities		(296)	(90)
Financing activities
Interest paid on borrowings		(157)	(51)
Cash inflow from borrowings		500	385
Cash net (outflow) / inflow from debt factoring		(366)	1,333
Cash inflow from Directors' loan		-	400
Loan repayment		(385)	(560)
Capital repayments of lease liabilities		(153)	(176)
Interest paid on lease liabilities		(7)	(11)
Proceeds on issue of shares		5,177	75
Share issue costs		(327)	-
Net cash inflow from financing activities		4,282	1,395
Net increase in cash and cash equivalents		852	328
Effects of exchange rate changes on cash and cash equivalents		14	(11)
Cash and cash equivalents at beginning of the year		1,489	1,172
Cash and cash equivalents at end of the year		2,355	1,489

Analysis of changes in net cash / (debt)

For the year ended 31 March 2022	At 1 April 2021 £000		Cash flow £000	Other non-cash movements £000		Net foreign  exchange difference £000	At 31 March 2022  £000
Cash and cash equivalents	1,489		852	-		14	2,355
Short-term borrowings	(2,118)		251	-		-	(1,867)
Lease liabilities	(98)		160	(215)		-	(153)
	(2,216)		411	(215)		-	(2,020)
Net cash / (debt) at end of year	(727)		1,263	(215)		14	335
For the year ended 31 March 2021	At 1 April 2020 £000	Cash flow £000			Other non-cash movements £000	Net foreign  exchange difference £000	At 31 March 2021  £000
Cash and cash equivalents	1,172	328			-	(11)	1,489
Short-term borrowings	(560)	(1,558)			-	-	(2,118)
Lease liabilities	(274)	187			(11)	-	(98)
	(834)	(1,371)			(11)	-	(2,216)
Net cash / (debt) at end of year	338	(1,043)			(11)	(11)	(727)
Other non-cash movements include interest on  lease liabilities and new leases taken out in the year.

Notes to the Financial Information

For the year ended 31 March 2022

1.  General information

CyanConnode Holdings plc, (Company Registered No. 04554942), is a company limited by shares, incorporated in the United Kingdom under the Companies Act 2006.  The address of the registered office is Merlin Place, Milton Road, Cambridge CB4 0DP.

The final results announcement is based on the financial statements which have been prepared in accordance with UK adopted International Accounting Standards. The financial information has been prepared in accordance with the accounting policies used in the statutory financial statements for the year ended 31 March 2021.

The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 31 March 2021 or 31 March 2022 within the meaning of section 434 of the Companies Act 2006 but is derived from those audited financial statements . The auditor's report on the consolidated financial statements for the years ended 31 March 2021 and the year ended 31 March 2022 is unqualified, does not contain statements under s498(2) or (3) of the Companies Act 2006 but referred to a material uncertainty regarding the Group's ability to continue as a going concern.

Going concern

To assess the ability of CyanConnode Holdings plc ("Group") to continue as a going concern, the directors have prepared a business plan and cash flow forecast for the period to 31 March 2024 which, together, represent the directors' best estimate of the future development of the Group. The forecast contains certain assumptions, the most significant of which are the level and timing of sales and the timing of customer payments. These detailed cashflow scenarios include Letters of Credit which have been secured from customers against contracts recently won.

At 31 March 2022 the Group had cash reserves of £2.4 million (2021: £1.5 million) and based on detailed cash flows provided to the Board within the FY2023/24 budget, there is sufficient cash to see the Group through to profitability based on its standard operating model. If a more pessimistic scenario were taken and an assumption were taken that no cash is received within the next twelve months from any new orders not currently contracted, and that there were significant delays to receipts from customers, there is a material uncertainty relating to the Group's ability to continue as a going concern. Should the Group experience such downside sensitivities the directors would first continue to look at measures such as cost reduction and working capital facilities as ways to conserve cash within the business. The Company has offers of convertible and secured loans which it could accept should such a requirement arise.

To assist with working capital, two directors extended short-term loans of £400,000 in November 2020. These were still in place at the end of March 2022. £100,000 was repaid to Peter Tyler in April 2022. The Company received an advance of £500,000 secured against its R&D tax credit in December 2021 and an invoice discounting facility secured against Letters of Credit for deliveries of Omnimesh modules in India. The advance against the R&D tax credit will be repaid out of the HMRC receipt which is expected to be received by October 2022.

Notwithstanding the material uncertainties described above, which may cast significant doubt on the ability of the Group to continue as a going concern, on the basis of sensitivities applied to the cash flow forecast, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report.

2.  Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

	2022	2021
Loss for the purposes of basic loss per share being net loss attributable to equity holders of the parent (£000)	(871)	(2,057)
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share (excluding own shares held)	205,173,434	174,755,445
Loss per share (pence)	(0.42)	(1.18)

The weighted average number of shares and the loss for the year for the purposes of calculating diluted loss per share are the same as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing the loss per share and would not, therefore, be dilutive under the terms of IAS 33.

3.  Share capital

Issued and fully paid, ordinary shares of 2.0 pence each	No	£000
As at 31 March 2020	182,798,523	3,648
Issue of new shares	3,944,375	79
As at 31 March 2021	186,742,898	3,735
Issue of new shares	49,566,137	991
As at 31 March 2022	236,309,035	4,726

In the year, shares were issued at prevailing market prices as settlement for professional services provided. £4,710 was raised this way during the year (2021: £118,700).

In June 2021 the Company successfully raised funding of £3.15m before expenses through a placing of 33,170,076 ordinary shares. In March 2022 the Company successfully raised further funding of £2m before expenses through a placing of 14,285,718 ordinary shares.

During the year 201,250 shares were issued as a result of the exercise of share options (2021: none). The Company has one class of ordinary share which carries no right to fixed income.

4.  Reconciliation of operating loss to net cash outflow from operating activities

Group		2022 £000	2021 £000
Operating loss for the year:		(1,017)	(2,685)
Adjustments for:
Depreciation of property, plant and equipment		31	30
Amortisation of Intangible assets		432	421
Depreciation on right of use assets		153	176
Foreign exchange		20	(15)
Shares issued in lieu of bonus		5	119
Share-option payment expense		363	80
Operating cash flows before movements in working capital		(13)	(1,874)
Decrease in inventories		52	97
Increase in receivables		(2,054)	(2,463)
(Decrease)/increase in payables		(1,568)	2,468
Cash reduction from operating activities		(3,583)	(1,772)
Income taxes received		449	795
Net cash outflow from operating activities		(3,134)	(977)

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with maturity of three months or less.

5.  Annual Report and Accounts and Notice of Annual General Meeting

The Notice of AGM and Proxy Form and full colour Annual Report and Accounts will be sent to shareholders by 27 August 2022 and made available on the Company's website shortly thereafter. The AGM will be held on 21 September 2022 at 11.00 a.m. at the office of Cenkos Securities plc, 6-8 Tokenhouse Yard, London EC2R 7AS . Further information regarding the AGM will be included in the Notice of the AGM.

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[1] Where Adjusted EBITDA is EBITDA after stock impairment, share-based compensation and foreign exchange losses have been added back

[2] Where FTE is the equivalent number of full-time equivalents

 

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