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Versarien revenues remain steady as it works to secure partners

By Josh White

Date: Wednesday 17 Jul 2019

Versarien revenues remain steady as it works to secure partners

(Sharecast News) - Engineering materials group Versarien reported "steady" group revenues in its preliminary results on Wednesday, at £9.14m, compared to £9.02m in the prior financial year.
The AIM-traded company's adjusted EBITDA loss totalled £1.1m for the 12 months ended 31 March, widening from the £0.8m loss it reported in the 2018 financial year.

Its loss before tax was £2.8m, compared to £1.6m a year earlier, after a share-based payments charge in the year of £0.7m, which was larger than the £0.1m charge in the prior period.

Cash as at 31 March totalled £4.3m, up from £2.3m, with the company successfully completing a fundraising of £5.2m gross in September.

Net assets increased by 66% to £13.3m.

Looking at its operations, Versarien reported 13 new graphene application collaborations and memorandum of understanding agreements during the year - one of which was entered into post period - with partners based in the UK and overseas.

Versarien joined the Graphene Engineering Innovation Centre (GEIC) as a tier one member during the year, a move which it said allowed it to gain access to development and scale-up facilities worth £60m.

It made continued investment in its capital equipment as collaboration agreements progressed, and acquired Spain-based Gnanomat, which develops energy storage technology.

The firm also established a US subsidiary, Versarien Graphene, to exploit opportunities in North America.

Versarien said the UK Government had continued to support its international expansion plans by seconding staff to it as an 'Export Champion'.

The company did launch 'Polygrene', which it described as a new graphene-enhanced polymer to improve thermal and electricity conductivity, and said that its mature businesses were showing steady financial performance, providing stability for the emerging businesses.

Since the financial year ended, Versarien became the first company in the world to complete the US Graphene Council's 'Verified Graphene Producer' programme, which the board said validated its technology to customers and collaborators.

It also received its first graphene orders received from the US and Japan, and signed a term sheet with the Beijing Institute of Graphene Technology (BIGT) for expansion in China.

The company also won EU 'REACH' approval to produce up to 10 tonnes of graphene per annum.

"The year to 31 March has, again, been one of great progress for Versarien particularly in our emerging technologies businesses, globally and in the UK," said chief executive officer Neill Ricketts.

"The graphene businesses have delivered on our strategy of expansion into global markets and progress is being seen in our existing collaborations, as well as new collaborations being entered into.

"We look forward to showcasing our new technologies at future investor events."

Ricketts said that, having spent some time examining opportunities for expansion into China, the board concluded that the best one lay with BIGT, and as a result it signed a term sheet with them in April.

A wholly-owned foreign enterprise was now being established and would be managed by BIGT on behalf of Versarien, with planned investment from a BIGT-managed fund.

BIGT would focus on both the manufacture and sale of Versarien's graphene in China, using its patented technology, Neill Ricketts explained.

"Opportunities in South Korea, Japan and India are emerging as a result of the support given to us by the UK Government seconded staff and we have established operations in North America, albeit they are at an early stage.

"New graphene production equipment has been installed in the UK and is now up and running at our Cheltenham manufacturing site which will enable us to meet the initial expected demands of our graphene based products.

"Testing of new equipment is underway which, if successful, would expand our production capacity to up to 30 tonnes per annum of high quality graphene."

Manufacture and sale of graphene at those levels required certain permissions under EU regulations, with Ricketts confirming that the company was successful in its registration, and was now accredited to produce "significant volumes" of graphene under the EU rules for chemical production.

"Our mature businesses have focussed on efficiency gains and overall have returned acceptable results whilst also looking at opportunities for inclusion of graphene in their future products.

"This includes using graphene in headphones and mobile phone cases, through to producing Hexotene enhanced ceramics for use in satellite engines," Neill Ricketts explained.

"I would like to take this opportunity to thank our continually supportive investor base and our employees for their hard work as we look forward to the future with optimism and confidence."

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