Versarien’s 1H21 Results highlight growth in Graphene sales and progress across its GSCALE programmes
1H21 results show total revenue decreasing to £3.12m following a difficult period in the legacy markets, with significant financial and operational progress across its Graphene and GSCALE programmes.
Versarien successfully launched its graphene enhanced protective face masks during the period, utilising its proprietary Polygrene™ enhanced polymer and commenced its project with Rolls Royce and the graphene innovation centre to understand technological advances in the aerospace sector further by utilising CVD grapheme and other 2D materials.
From a corporate perspective, the Board was strengthened by the appointment of James Stewart as its new Non-Exec Chairman and appointed Steve Hodge to the Board as CTO post period end. Steve has become Chairman of the Graphene REACH Registration Consortium Technical Working Group (“TWG”) and is a representative of Graphene Flagship's ECHA-REACH Committee.
Group revenues for the period reduced to £3.12m (1H19: £4.38m) largely reflecting the slowdown in the petrochemical industry due to the COVID-19 Pandemic.
Importantly however, product sales of graphene related products rose five fold to £0.35m (1H19: £0.07m).
Adjusted LBITDA therefore increased to £1.13m (1H19: £0.57m) before Lanstead finance costs and other exceptional items incurred during the period.
Cash, as at 30 September 2010, was £2.5m (FY19: £1.66m) post £0.93m received from the Lanstead Sharing Agreement and £1.96m from Innovate UK
Post period end
The Company announced a report by Ankara University confirmed that its graphene materials significantly inhibit viral infection and possess and the viral activity towards the coronavirus with the Company subsequently launching its second generation graphene enhanced face mask, which showed a 99.92% anti-viral activity rate against the CV19 .
From a balance sheet perspective, the company was awarded a €0.36m EU to scale and develop electrode materials and awarded a £1.95 million developer agreement by the Defence Science and technology Laboratory, part of the MoD, in the UK.
Perhaps most importantly for investors however was the acquisition of the CVD graphene assets and IP from Hanwha Aerospace Company Limited, South Korea, which holds the biggest clue to the Company’s growth ambitions. The acquisition is expected to provide the Company with access to patented technology and equipment to produce high quality single and dual layer graphene that has particular applications in the electronics sector, together with other areas, including in relation to some of our existing collaborations, particularly the project with Rolls Royce.
The European Chemicals Agency (“ECHA”) has recently accepted an updated graphene-dossier that now complies with the amended REACH regulation covering nanomaterials, introduced on 1 January 2020. Versarien’s REACH registration has also now been transferred to UK-REACH following Brexit.
Neill Ricketts, CEO of Versarien, commented: "Despite the challenges posed by the COVID-19 pandemic, I am pleased with the level at which Versarien has continued to operate and particularly with the progress achieved within the graphene businesses where we have commenced the sale of our graphene enhanced face masks, as well as making further progress with a number of our collaborative projects.”
The Company’s GSCALE (an acronym for Graphene, Seat, Concrete, Arch, Leisure, Elastomer) project, designed to significantly increase its manufacture of quality-assured graphene, is progressing well with several milestones planned for the coming year. Importantly, the plans to scale Graphene production and commercialise several applications are expected to generate positive Newsflow during the coming year.
Whilst some Investors may be disappointed by the headline fall in revenue, confidence should be taken from both the significant growth in Graphene sales and operational progress across its GSCALE programmes. Positive Newsflow from the GSCALE programmes will be key in supporting the share price and valuation during the development phase and we expect the Company to update on several initiatives during 2H21. Nevertheless, shares in VRS have performed strongly over 22 month and 3 month timeframe respectively, rising from los of 25p to open today at 59.8p and moving lower in early morning trade to 57p.
Reasons to Follow VRS
Versarien is an advanced engineering materials group that leverages proprietary technology through innovative engineering solutions. The company holds eight subsidiaries which operate under two divisions, Graphene and Plastics and Hard Ware and Metallic Products.
Commercialisation of the ‘Wonder Material’
In 2019/20 Versarien entered into collaborations with global partners. The group completed a process required to achieve the award of a £5 million Innovate UK loan. It said its focus ‘is now very much on the monetisation of the graphene technologies’ in its portfolio.
The loan is for a project named G SCALE, (Graphene-Seat, Concrete, Arch, Leisure, Elastomer), covering a number of Versarien's existing collaborations, which is designed to enable Versarien to ‘significantly increase’ its manufacture of quality assured graphene.
Expanding Product Portfolio
In August 2020, the company launched its first graphene enhanced protective face mask, which utilises Polygrene, Versarien’s graphene enhanced polymer. The mask is a filtering facepiece designed to protect against airborne bacteria and the spread of viral infection.
Versarien has also formed the Versarien Graphene Advisory Panel (VGap) to commercialise ‘the many opportunities’ of graphene. This will focus on the dual agenda of scoping Versarien's current and future technologies, along with wider graphene related topics.
In addition, last week Versarien released results of a preliminary study of modified graphene materials, which were shown to possess properties inactivating the SARS-CoV-2 virus.
The report concluded that the preliminary test results show that these materials significantly inhibit viral infection and possess antiviral activity towards SARS-CoV-2. The company said the results obtained were ‘statistically highly significant with a p-value of less than 0.0001.’
The report concludes that the results show GNA22 and GNA24 to significantly inhibit viral infection and suggests that these materials possess antiviral activity towards SARS-CoV-2.
“While we must stress that these results have been achieved under laboratory conditions, they do demonstrate that our hybrid graphene nanomaterials have the potential to provide protection from COVID-19,” said Neill Ricketts, Chief Executive Officer of Versarien.
International Expansion into China and South Korea
The company plans to use Beijing Versarien Technology Company Limited, its wholly owned Chinese foreign entity, to form the base for its expansion activities in China.
Additionally, Company plans to establish operations in South Korea via its new subsidiary, which will be overseen initially by Versarien's Head of International Strategy and Government Relations, Matt Walker.
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