Final Results for the Year to 30 June 2022

RNS Number : 8688C

Sabien Technology Group PLC

14 October 2022

 

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.

14 October 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 2022

(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 2022 (the "Annual Report").

Sabien Technology Group highlights 2022

· Sales for the year £0.68m (2021: £0.97m)

· Management fee from associated party £0.15m (2021: £nil).

· Loss before tax £0.74m (2021 £0.51m loss)

· Sales from Alliance Partners £0.06m (2021: £0.04m)

· Deferred revenue carried into 2023 £0.18m (2021: £0.02m)

· Forward orders carried into 2023 £0.09m (2021: £0.04m)

· Overseas sales £0.06m (2021: £0.04m)

· Net cash balance at 30 June 2022 was £0.33m (30 June 2021: £1.22m)

Highlights since the year end

· Sales of £0.13m to 30 September 2022.

· Net cash balance at 30 September 2022 of £0.63m.

· £500k gross placing and £100k oversubscribed broker option.

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/8688C_1-2022-10-13.pdf

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

Richard Parris, Executive Chairman, commented,

"Sabien is a microcosm of the challenges and opportunities facing the world today.  The Group has developed, and is developing, a series of operations whose purpose and growth are both strong now and likely to strengthen further in the medium term.  The Board of Sabien has prepared for this growth through acquiring selectively, partnering constructively and managing prudently.  We look forward to the future with greater confidence than we have for some time."

Notice of AGM

The Company will hold its Annual General Meeting at 11.00 am on 22 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]
Allenby Capital Limited (Nominated Adviser) John Depasquale / Nick Harriss	[phone]
Peterhouse Capital Limited (Broker) Duncan Vasey / Lucy Williams	[phone]

Executive Chairman's Statement

On 1 July 2021 the world in which Sabien operates was a different place from that which faces the company into 2023. Specifically, Covid was still a clear and present danger and the economic impact of our addressing this danger less understood or assessed. Today, Covid appears more under control but the impact of our fight against it is only now becoming apparent. Inflation figures, last seen in the 1970s, combine with fiscal and monetary structures ill‑suited to combat them. The flight from cities appears more structural than temporary with consequential impacts on where we live and work. Energy pricing, and the inter‑dependence of the market at a time of war, poses a fundamental risk for the economic system which prevailed pre‑Covid.

In short: I believe that there is no return to "normal" and that the establishment of a new "normal" is months, if not years, away.

Sabien, under the management's leadership, recognised these changes early. During the year ended 30 June 2022, Sabien's Green Aggregation Strategy has focussed on three principal technology led initiatives. M2G, the existing Sabien CO2 mitigation device for commercial boilers, the UK rollout of Proton's oil to hydrogen technology, and the City Oil Field Inc. ("COF") plastic to oil technology.

We have shared the development of these initiatives with shareholders and the wider market throughout. In support of them, and our continuing development, the Company has raised £0.6m through a placing and broker option. This provides the Company with the wherewithal to secure the opportunities presented to it, for the benefits of shareholders and stakeholders alike.

M2G Business

Despite the world semi‑conductor supply shortage and its impact on the completion of sales during the second half of the 2022 financial year, the Board is very pleased with the growth of the new M2G Cloud business.

During the 2022 financial year, 293 M2G Cloud Solutions were sold (2021: nil) of which 262 (89.4% of the annual total) occurred in the second half of the year.  In addition, the Company has deferred revenue of £175k, and open orders of £91k, that will carry over into FY23 as well as £23k of recurring revenue from the M2G Cloud Solutions sold to date to be recognised in FY23. In total, M2G has 2023 revenue identified and charged, but not yet booked, of £289k (July 2021 forward revenue: £43k).

The Board is encouraged that despite the supply chain problems affecting many companies, it has secured revenue which, had it fallen in the year to 30 June 2022 would have resulted in a stable performance year‑on‑year including other income of £0.15m (2021:£nil) to the associated party b.grn Group Ltd ("b.grn"). It is encouraged, further, that the momentum of revenue is growing through the first half of the Company's financial year to 30 June 2023.

The Board was also pleased to recently announce that Sabien is working with City Energy Network Ltd and EDF Plc to obtain The Standard Assessment Procedure (SAP) approval for M2G.  This has the potential to expand Sabien's reach for the M2G product line into the residential/domestic market via district heating schemes and increases its current addressable market by three times.

COF / b.grn Business

During the financial year to 30 June 2022, Sabien signed a sales agency agreement with COF.  COF is a South Korean business that has developed an innovative proprietary technology ‑ Resource Gathering Operation (RGO), which focuses on the production of light and ultra‑pure fuel products from low temperature processing of end‑of‑life plastics.  In August 2022 we announced that the sales agency agreement had been renewed for a further year.  We also announced that construction has started on the first commercial COF installation in South Korea.

During the year the business has been developed in combination with Sabien's development partner b.grn Group Ltd ("b.grn").  Key milestones have been reached including the establishment of a range of partner relationships with funding partners and professional advisors. The latter includes development managers, ESG advisors, and real estate advisors.  In consultation with advisers, b.grn has assessed a range of potential sites in England and Wales for the first European COF installation.  As previously announced, exclusivity was agreed on a site near Northampton; discussions were held in relation to a site on the Humber Estuary; and most recently an indicative bid was submitted to acquire the ex‑Anglesey Aluminium site in Anglesey, supported by b.grn funding partners, from the site's administrators.  These three main sites considered to date are not being actively pursued, primarily due to the level of cost involved in acquiring the sites or the time required to develop them.

Through this work to date, the Board has developed a strong understanding of the emerging real estate market in key locations in the UK. Within this, the Company and b.grn have developed an advanced assessment of the most efficient sites for the deployment of COF. From this emerging knowledge, the Company and b.grn are now actively considering a number of sites in the UK, and beyond, where b.grn could deploy COF without, necessarily, acquiring the underlying real estate.  Investigations into potential sites continue with b.grn's partners. It is likely that the first active deployment will be an initial 24 tonne ("24t") per day plastic to oil proof of concept plant.

During the year, Sabien charged management fees of £0.15m to b.grn (2021: £nil) comprising Sabien board time managing the project and the recharge of professional fees incurred during the year to 30 June 2022.

Proton UK Business

During the year Sabien has been working with multiple UK oil field owners to identify suitable sites on which to deploy the Proton Technologies Canada Inc. ("Proton") proprietary hydrogen capture technology.  In the long term, owners are motivated to develop such hydrogen production facility on their near to end of life fields. The Board believes that this motivation is secular and is likely to grow as the global fuel portfolio adapts to the clear trends in hydrocarbon demand. In the short term, reflecting the current high level of oil prices in the market, field owners have focussed on maximising short term oil production. The Proton project continues to hold strong prospects for the Group, however is not a current area of primary focus for the field owners due to the high oil price.

Sabien is working with Proton to develop its option to install a COF plant at Proton's Saskatchewan site.  Sabien and Proton have discussed various options for the sale of the off‑take oil from the COF process and both teams are motivated to develop the first North American COF installation. 

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 made excellent progress in developing its customer base and has raised funds at up to £3.00 per share.

Financial results

In the year to 30 June 2022, the Group has generated revenue of £0.68m (2021: £0.97m), with £0.56m recorded in the second half as well as £0.15m other income in relation to b.grn. Whilst overall revenue has decreased in comparison to 2021, the Group carries £0.29m (2021: £0.04m) into 2023.  The forward revenue comprises deferred revenue unable to be completed in 2022 due to delayed supply chain caused by the worldwide semiconductor shortage, forward orders, and a growing level of recurring revenue from the M2G Cloud rollout.

Following the year end, the Group has closed a £500k placing from existing and new investors and a £100k oversubscribed broker option.  Combined with our forward orders and revenue, the Group is well placed in 2023 to take its three main business lines to the next stages in their development.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022
		2022	2021
	Notes	£000	£000
Revenue		679	971
Cost of sales		(231)	(153)
Gross profit		448	818
Administrative expenses		(1,327)	(1,182)
Exceptional item	8	(9)	(180)
Operating loss	7	(888)	(544)
Other income	10	158	35
Finance cost	12	(13)	-
Loss before tax		(743)	(509)
Tax credit	13	-	-
Loss for the year attributable to equity holders of the parent company		(743)	(509)
Other comprehensive income		-	-
Total comprehensive income for the year		(743)	(509)
Loss per share in pence ‑ basic	14	(5.06)	(6.22)
Loss per share in pence ‑ diluted	14	(5.06)	(6.22)

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2022
		Group	Group	Company	Company
		2022	2021	2022	2021
	Notes	£000	£000	£000	£000
ASSETS
Non‑current assets
Property, plant and equipment	15	2	35	-	-
Intangible assets	16	152	57	97	-
Investments	18	200	100	200	100
Total non‑current assets		354	192	297	100
Current assets
Inventories	17	40	24	-	-
Trade and other receivables	20	387	51	231	180
Cash and bank balances	21	573	1,399	306	977
Total current assets		1,000	1,474	537	1,157
TOTAL ASSETS		1,354	1,666	834	1,257
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables	22	487	161	98	99
Borrowings	23	138	36	102	-
Total current liabilities		625	197	200	99
Non‑current liabilities
Borrowings	23	109	145	-	-
Total non‑current liabilities		109	145	-	-
Equity
Equity attributable to equity holders of the parent
Share capital	24	3,354	3,350	3,354	3,350
Share premium		3,543	3,508	3,543	3,508
Other reserves		1	1	10	1
Retained earnings		(6,278)	(5,535)	(6,273)	(5,701)
Total equity		620	1,324	634	1,158
TOTAL EQUITY AND LIABILITIES		1,354	1,666	834	1,257

CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
	Group	Group	Company	Company
	2022	2021	2022	2021
	£000	£000	£000	£000
Cash flows from operating activities
Loss before taxation	(743)	(509)	(572)	(993)
Adjustments for:
Depreciation and amortisation	63	51	3	-
Loss on disposal of fixed assets	-	11	-	-
Gain on foreign currency reserve	(9)	-	-	-
Finance cost	13	-	3	-
Less movement in interest accrual	(2)	-	(2)	-
Fixed assets transferred to inventory	6	-	-	-
Equity settled current liability	33	-	33	-
(Decrease) / increase in trade and other receivables	(334)	32	(65)	284
(Increase) / decrease in inventories	(16)	15	-	-
Increase / (decrease) in trade and other payables	326	(466)	14	(430)
Net cash outflow from operating activities	(663)	(866)	(586)	(1,139)
Cash flows from investing activities
Investments acquired	(100)	(100)	(100)	(100)
Purchase of property, plant and equipment	-	(33)	-	-
Purchase of intangible assets	(131)	-	(100)	-
Net cash used in investing activities	(231)	(133)	(200)	(100)
Cash flows from financing activities
Proceeds from borrowings	100	-	100	-
Repayment of borrowings	(36)	-	-	-
Interest paid	(11)	-	-	-
Proceeds from share issues	15	1,700	15	1,700
Share issue costs	-	(80)	-	(80)
Net cash generated by financing activities	68	1,620	115	1,620
Net (decrease) / increase in cash and cash equivalents	(826)	621	(671)	381
Cash and cash equivalents at the beginning of the year	1,399	778	977	596
Cash and cash equivalents at the end of the year	573	1,399	306	977

 

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