Final Results & Annual Report & Accounts for 2023

Sabien Technology Group PLC

02 November 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

The directors take responsibility for this announcement.

2 November 2022

Sabien Technology Group plc

("Sabien" or the "Company" or the "Group")

Final Results and Audited Annual Report and Accounts for the Year to 30 June 2023

(AIM: SNT)

Final Results

The Board of Directors of Sabien is pleased to announce the publication of the audited annual report and accounts for the year to 30 June 2023 (the "Annual Report").

Sabien Technology Group highlights 2023

•          Revenue for the year £1.10m (2022: £0.68m);
•          Management fee from associated party £nil (2022:£0.15m);
•          Loss after tax £0.70m (2022 £0.74m loss);
•          Overseas revenue £0.07m (2022: £0.06m);
•          Deferred revenue carried into 2024 £0.20m (2022: £0.18m);

•          Forward orders carried into 2024 £0.20m (2023: £0.09m);

•          Cash less current borrowings at 30 June 2023 was £0.40m (30 June 2022: £0.44m);

•          Placing and oversubscribed broker option raised £0.6m (gross), in addition £0.1m shareholder loan capitalised.

Highlights since the year end

•              Sales of £0.18m to 30 September 2023 (£0.13m to 30 September 2022).
•              Cash less current borrowings at 30 September 2023 of £0.31m (£0.63m at 30 September 2022).

The Annual Report will be published on the Company's website (https://sabien.com/sabien-technology-investors-2/) in compliance with its articles of association and the electronic communications provisions of the Companies Act 2006.  A copy of the Annual Report can also be accessed through the Financial Reports tab at the link below.

http://www.rns-pdf.londonstockexchange.com/rns/1155S_1-2023-11-1.pdf

Key extracts from the Annual Report can also be viewed below.

Richard Parris, Executive Chairman, commented,

"Sabien's financial results serve as a compelling testament to progress. Revenue rose by an impressive 62% in the year, and has grown by 38% since the end of the period compared to the same period in the prior year.

This growth is propelled by the enduring success of our flagship product, M2G, and the increasing growth of our Cloud Solutions division. With a promising pipeline of deferred and forward orders, we eagerly anticipate further expansion in the current fiscal year. Our strategic initiatives, exemplified by the expansion of our Cloud-enabled gas boiler energy-saving solution into the United States, underscore the compelling long-term prospects of M2G.

In tandem, our collaboration with City Oil Field ("COF") continues towards the deployment of this world-leading technology. Our collaborative approach ensures the construction of robust foundations for the autonomous development of a pivotal business line, all while nurturing a productive working relationship with COF."

Notice of AGM

The Company will hold its Annual General Meeting at 11.00 am on 29 November at the offices of Peterhouse Capital Limited, 80 Cheapside, London, EC2V 6DZ (the "AGM").  The notice of the AGM will be published on the Sabien website and notified shortly to shareholders.

- Ends -

For further information please contact:

For Further Information:

Sabien Technology Group plc

Richard Parris, Executive Chairman                                                                  [phone]

Scott Fulton, Investor Relations                                                                         [phone]

Allenby Capital Limited (Nominated Adviser)

John Depasquale / Nick Harriss /Vivek Bhardwaj                                           [phone]

Peterhouse Capital Limited (Broker)

Duncan Vasey / Lucy Williams                                                                           [phone]

Executive Chairman's Statement

In my perspective, effective management entails drawing wisdom from historical experiences and ensuring that past successes drive the agenda for the future. As of July 2022, Sabien confronted a business landscape marked by uncertainties, with the looming challenge of rising inflation casting a long shadow.

As the year progressed, it became increasingly evident that a significant shift was underway, characterized by higher interest rates and subdued economic growth.

To heed the lessons of history is to embrace the age‑old wisdom that 'it is better to light a candle than to curse the darkness.' Throughout the preceding financial year, Sabien not only fortified the robust foundations established in previous years but also embarked on the creation of new ones, underpinning our future growth. We understand that lower interest rates and a swift return to robust economic growth may remain elusive. Consequently, we have diligently crafted a resilient business platform capable of self‑sustained growth.

During the year ended 30 June 2023, Sabien's Green Aggregation Strategy has focussed primarily on two principal technology led initiatives. M2G, the existing Sabien CO2 mitigation device for commercial boilers, and the City Oil Field Inc. ("COF") plastic to oil technology.

Sabien's financial results for the year ended June 30, 2023, serve as a compelling testament to our progress in these endeavours. Our revenue rose by an impressive 62%, propelled by the enduring success of our flagship product, M2G, and the increasing growth of our Cloud Solutions division. With a promising pipeline of deferred and forward orders, we eagerly anticipate sustained expansion in the current fiscal year. Our strategic initiatives, exemplified by the expansion of our Cloud‑enabled gas boiler energy‑saving solution into the United States, underscore the compelling long‑term prospects of M2G.

In tandem with these developments, our collaboration with COF has continued to evolve, with a significant focus on optimizing the deployment of this world‑leading technology. This collaborative approach ensures the construction of robust foundations for the autonomous development of this pivotal business line, all while nurturing a productive working relationship with COF.

We have shared the development of these initiatives with shareholders and the wider market throughout the period. In support of them, and our continuing development, the Company raised £0.6m through a placing and broker option in August 2022 and at the same time £0.1m of a loan advanced by my family interests was also capitalised. This fundraise provided the Company with the wherewithal to secure the opportunities presented to it, for the benefit of shareholders and stakeholders alike.

Successful growth‑oriented enterprises are built on sturdy foundations. Sabien's unwavering commitment to introducing innovative solutions to enduring challenges and our readiness to adapt as circumstances evolve have further fortified the bedrock upon which our growth firmly stands.

M2G Business

Despite the continuing world semiconductor supply shortage and the overall weakness of the UK economy driven by inflationary pressures, the Board is very pleased with the growth of the new M2G Cloud business.

During the 2023 financial year, M2G Cloud Solutions revenue of £0.96m was achieved (2022: £0.56m).  In addition, the Company has deferred revenue of £0.20m, and open orders of £0.10m, that will carry over into FY24.  In total, at the year end M2G has 2024 revenue identified and charged, but not yet booked, of £0.3m (2023 £0.3m). The majority of the deferred revenue is also recurring cloud services revenue.  At year end annual recurring cloud services revenue to be billed in 2024 had increased to £0.13m (2022: £0.02m).

As M2G continues to develop the available customer base for its applications, it is focused also on the cost of providing them. Specifically, we are pleased to report strong progress in the development of the M2G Evo. This next generation development combines three devices that Sabien had to previously procure separately; the M2G, the M2G Cloud dongle, and the M2G Interface box. 

In combination, with updated technology interfaces, we expect a cost reduction of up to 50% on the current separate cost of all three devices. Additionally, it should be noted that the M2G Interface box is not required on all boiler installations, further enhancing the cost of deployment.  M2G Evo will also be easier for the Company to procure because it is designed around a more readily available base processor (Raspberry Pi Module). M2G has procured its first batch of production devices for market testing and expects the M2G Evo to become the Company's sole M2G product by 2024.

M2G Cloud connect delivers the savings visibly across all client estate buildings locally and globally and has the enhanced capability to provide industry unique plant analytics. Engineers can now review their plant and controls performance holistically with objective data. Solving visible and invisible issues to maximise their plant efficiency and performance.

With the delivery of M2G EVO, a reduced product footprint will be achieved. In place, this should allow the Group to review the opportunity for SAP approval. Installations within residential settings continue, with one installation, a 48‑apartment building completed during June 2023, delivering 16% savings over the summer period.

COF / b.grn Business
COF is a South Korean business that has developed an innovative proprietary technology - Regenerated Green Oil (RGO), which focuses on the production of light and ultra‑pure fuel products from low temperature processing of end of life plastics using a proprietary catalyst.  In December 2021 Sabien established a special purpose vehicle with my family office, Parris Group Limited, to rollout the technology in the Western hemisphere: b.grn Group Limited (b.grn).

On 2 November 2022 Sabien announced that b.grn and COF had signed a contract for the first RGO plant in the UK. The agreement remains subject to agreeing terms on the first site and securing funding, but if these terms are satisfied it should result in commission to Sabien of approximately US$1m.

Following a first visit in the last financial year, Sabien executives made a further visit to South Korea during the year under review, in conjunction with a major US oil trading business to carry out technical due diligence.  During the visit a significant Memorandum of Understanding ("MOU") between b.grn, COF, Hanyang Corporation ("Hanyang"), and Woori Technology Inc. This MOU established the intent of the parties to jointly deliver a Recycling Cluster Project for a site in the Midlands region of the UK. The collaboration with these key partners strengthens b.grn's position in the waste plastic recycling sector.

The Group is pivoting away from its proposed Midlands (UK) site and has negotiated Heads of Terms for another location. This is in response to pressure on local authority finances and the consequent uncertainty created around local waste management priorities.

In addition, COF executives made a return visit with the Korean Environment Agency (KECO) in April 2023.  The return visit resulted in two additional key agreements being signed between Sabien, b.grn, and COF:

1)         MOU between Sabien, Parris Group and COF in relation to restructuring of b.grn; and
2)         Sabien ‑ COF Intellectual Property Agreement.

These two agreements set out steps to prepare b.grn for investment by sharing ownership with COF, by giving b.grn manufacturing rights and rights to buy catalyst, an option to invest in COF, and rights to undertake a research project with leading UK universities. 

During the year, there was no repeat of the management fees charged to b.grn in 2022 of £0.15m, comprising Sabien board time managing the project and the recharge of professional fees incurred. However, the proposed restructuring of b.grn will involve additional fees being charged of up to £0.35m expected to be in the forthcoming financial year.

Proton Technologies Canada Inc.
On 14 October 2021, Sabien invested £100k in Proton, giving the Company a 0.08% shareholding. Subsequently, Sabien entered into a licensing agreement with Proton on 1 February 2022. This agreement allowed Sabien to deploy Proton's technology within the UK and the right to install a plant for the COF plastic to oil technology on Proton's Saskatchewan site. Sabien retains the rights conferred by this licensing agreement.

On 29 September 2023 Sabien received notification that a proposal from a third party to inject new capital, restructure its balance sheet, and reform its management team (the "Proposal") had been successful. Pending further information from the new management team, the Board of Sabien has concluded that an impairment provision of £99k is required at 30 June 2023 to reflect the dilution and notional value ascribed by the Proposal.

The Board considers that the Proton UK project offers strong long‑term prospects for the Group but is not a current area of focus. Sabien will continue discussions with the new management team at Proton in relation to its option to install a COF plant at Proton's Saskatchewan site.

Aeristech investment
Sabien invested £100k in Aeristech in February 2021 at a price of £2.40 per share.  The investment was made to support Aeristech's development of e boost technologies for hydrogen fuel cell, hybrid electric, and internal combustion engine powertrains.  Since Sabien's investment, Aeristech has continued to make progress in developing its customer base and raised funds at up to £2.75 per share in February 2023.

Financial results

In the year to 30 June 2023, the Group has generated revenue of £1.10m (2022: £0.68m), with £0.86m recorded in the second half . An overall increase in sales in the year of 62% compared to the prior year.  Following the year end, to date the Company has achieved sales of £0.18m to 30 September 2023 and received orders of £0.16m.

The Board considers that the prospects for the Group from its main two business lines are strong for 2024.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2023

		2023	2022
	Notes	£000	£000
Revenue	6	1,098	679
Cost of sales		(394)	(231)
Gross profit		704	448
Administrative expenses		(1,331)	(1,327)
Exceptional item	8	-	(9)
Operating loss	7	(627)	(888)
Other income	10	1	158
Finance cost	12	(7)	(13)
Finance income	12	3	-
Impairment loss	18	(99)	-
Share of associate loss	18	-	-
Loss before tax		(729)	(743)
Tax credit		27	-
Loss for the year attributable to equity holders of the parent company		(702)	(743)
Other comprehensive income		-	-
Total comprehensive income for the year		(702)	(743)
Loss per share in pence ‑ basic	14	(3.59)	(5.06)
Loss per share in pence ‑ diluted	14	(3.59)	(5.06)

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

AS AT 30 JUNE 2023

Company Reg No: 05568060

		Group	Group	Company	Company
		2023	2022	2023	2022
	Notes	£000	£000	£000	£000
ASSETS
Non‑current assets
Property, plant and equipment	15	1	2	-	-
Intangible assets	16	112	152	94	97
Investments	18	382	200	382	200
Total non‑current assets		495	354	476	297
Current assets
Inventories	17	79	40	-	-
Trade and other receivables	20	202	387	53	231
Cash and cash equivalents	21	436	573	125	306
Total current assets		717	1,000	178	537
TOTAL ASSETS		1,212	1,354	654	834
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables	22	500	487	63	98
Borrowings	23	39	138	3	102
Total current liabilities		539	625	66	200
Non‑current liabilities
Borrowings	23	72	109	-	-
Total non‑current liabilities		72	109	-	-
Equity
Equity attributable to equity holders of the parent
Share capital	24	3,563	3,354	3,563	3,354
Share premium		4,021	3,543	4,021	3,543
Other reserves		(3)	1	-	10
Retained earnings		(6,980)	(6,278)	(6,996)	(6,273)
Total equity		601	620	588	634
TOTAL EQUITY AND LIABILITIES		1,212	1,354	654	834

CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023

	Group	Group	Company	Company
	2023	2022	2023	2022
	£000	£000	£000	£000
Cash flows from operating activities
Loss after taxation	(702)	(743)	(723)	(572)
Adjustments for:
Depreciation and amortisation	64	63	3	3
Impairment loss on investments	99	-	99	-
Loss / (gain) on foreign currency reserve	6	(9)	-	-
Corporation tax	(27)	-	-	-
Finance cost	7	13	2	3
Less movement in interest accrual	(1)	(2)	(1)	(2)
Fixed assets transferred to inventory	-	6	-	-
Equity settled current liability	-	33	-	33
Increase / (decrease) in trade and other receivables	29	(334)	24	(65)
Increase in inventories	(39)	(16)	-	-
Increase / (decrease) in trade and other payables	12	326	(38)	14
Net cash outflow from operating activities	(552)	(663)	(634)	(586)
Cash flows from investing activities
Investments acquired	(89)	(100)	(89)	(100)
Purchase of intangible assets	(24)	(131)	-	(100)
Loan advance to associated undertaking	(37)	-	(37)	-
Research and development corporation tax refund	27	-	-	-
Net cash used in investing activities	(123)	(231)	(126)	(200)
Cash flows from financing activities
Proceeds from borrowings	-	100	-	100
Repayment of borrowings	(36)	(36)	-	-
Interest paid	(6)	(11)	(1)	-
Proceeds from share issues	600	15	600	15
Share issue costs	(20)	-	(20)	-
Net cash generated by financing activities	538	68	579	115
Net decrease in cash and cash equivalents	(137)	(826)	(181)	(671)
Cash and cash equivalents at the beginning of the year	573	1,399	306	977
Cash and cash equivalents at the end of the year	436	573	125	306
Cash and cash equivalents comprise
Cash and cash equivalents	436	573	125	306
	436	573	125	306

 

END