Pharm 2 Farm Update

RNS Number : 4022I

Remote Monitored Systems PLC

11 December 2020

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

11 December 2020

Remote Monitored Systems plc ("RMS" or the "Company")

Pharm 2 Farm Update

Remote Monitored Systems plc, announces the following updates in respect of its wholly owned subsidiary, Pharm 2 Farm Limited ("P2F").

New viricidal mask Production Line

The Company has received an update from Lemu Group ("Lemu"), the manufacturer of the mask making machine, in respect of the timing for testing and delivering of the new production line.

Factory Acceptance Testing of the machine is due to take place later today, alongside this testing there will also be a batch of masks produced for certification purposes. The mask is being certified to the EN14683 standard.

Following testing, Lemu has indicated that it now intends to carry out work on certain components (principally final finishing and hardening) such that delivery of the machine to P2F's premises in Nottingham, is not now expected until 28th December 2020 at the earliest.

The consequences of this delay, in combination with the holiday period, are that RMS has had to review the P2F commissioning and production schedule in January and February next year with the Company anticipating that a maximum of 1m anti-viral masks will be produced at Nottingham in January and 2m in February 2021.

Thereafter production is expected to build to a maximum capacity of 5m masks per month should the machine perform 24 hours a day, 7 days a week at its anticipated optimum specification.

The Company will provide updates as appropriate including in relation to today's Factory Acceptance Testing process.

Heads of terms with surgical mask manufacturer

As previously announced on 16 November 2020, the Company entered into binding heads of terms with a German surgical mask manufacturer, the Volz Group of Companies ("Volz"). The parties remain in constructive discussions in relation to finalising a number of initiatives and Volz has recently sent a batch of masks produced by them with P2F's anti-viral layer for certification*. Subject to successful certification of these masks the Company anticipates that its next step will be to place an order of 0.5m masks, incorporating P2F's anti-viral layer, for delivery to the UK in January 2021.

* certification is required for the production process and so separate certification processes are required for P2F's and Volz's production. Certification is now expected to be completed in the first week of January in both cases.

Sales and marketing

Whilst P2F remains confident that indicative demand is above P2F's maximum production capabilities, RMS expects sales to be a maximum of 1.5m masks in January and 2m masks in February 2021 reflecting the above production expectations. The Company expects to be in a position to convert this demand into firm orders following certification and installation of the production line.

Corporate Developments

P2F is adding resources across production and sales in order to meet the challenges of establishing new production and developing the sales pipeline. However the cash-flow consequence of the delays set out above, primarily a reduction of sales revenue in the near term, is that P2F's working capital requirements in order to build sales at P2F are now greater than previously anticipated and the board is considering how best to fund this additional requirement. As at 10^th December 2020 the Company had cash of £706.5k and no debt save for trade creditors.

The Company looks forward to providing further updates as it seeks to develop its business in this emerging and exciting business.

- ENDS -

ENQUIRIES :

Remote Monitored Systems plc

John Richardson (Executive Director)  [phone]

Gareth Cave  (MD Pharm2Farm) 

SP Angel Corporate Finance LLP   [phone]

Nominated Adviser and Joint Broker

Stuart Gledhill

Caroline Rowe

Peterhouse Corporate Finance   [phone]

Joint Broker

Lucy Williams

 

END

 

 

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