Preliminary results for the year ended 31 March 2014
Preliminary results for the year ended 31 March 2014
?Accsys, the chemical technology group focussed on the development and commercialisation of a range of transformational technologies based upon the acetylation of solid wood (Accoya®) and wood elements (Tricoya®) for use as class leading, environmentally sustainable construction materials, today announces preliminary results for the year ended 31 March 2014.
Total Group Revenue Gross profit
Loss before tax
Underlying loss before tax1 Period end cash balance
2014 2013 €33.5m €18.8m
€7.8m €3.3m (€8.2m) (€10.7m) (€7.5m) (€10.7m) €15.2m €20.5m
Change
+78%
+132% Improved 23% Improved 30% -26%
1 Underlying loss excludes €726,000 of legal costs associated with the Diamond Wood arbitration.
Highlights
? Highly encouraging performance, marginally ahead of market expectations;
? Very strong revenue growth of 78%, with increases recorded across all geographic territories;
? Gross profit more than doubled, with Group gross operating margin improved to 23% (2013: 18%), driven by higher sales volumes, price increases and improved operating efficiency;
? Increased awareness and market acceptance for Accoya® through further enhancement of global distribution network; 19 new Accoya® distribution and agency agreements signed in the period, bringing the total to 61 (2013: 42); extensive coverage now in place across Europe, the Americas and Asia-Pacific;
? Arnhem manufacturing facility reported inaugural annual profit, delivering EBITDA of €2.4 million (2013: loss of €0.9 million); gross manufacturing margin improved to 20% (2013: 15%);
? Significant licensing progress achieved:
– Accoya® licence agreement with Solvay became fully effective in December 2013; Solvay’s decision concerning the investment in its plant and its location is expected in next few months; Accsys and Solvay are also currently in discussions examining the scope of a possible cooperation agreement between the parties;
– TTL, Accsys’ 50:50 joint venture with INEOS, entered licence agreement with Medite in July 2013; formal Medite Board approval expected later this financial year;
– Post period end, in July 2014, licence option agreement, covering the majority of Latin America, between TTL and Masisa was extended and Masisa Tricoya® Super MDF launched;
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? Diamond Wood licence agreement was terminated in August 2013 following robust legal advice; the subsequent arbitration process is currently in progress and details are subject to confidentiality; an update will be made once the matter is concluded; and
? Balance sheet strength maintained with cash balance of €15.2 million at 31 March 2014 (30 September 2013: €16.9 million).
Outlook
? Strong start to the current financial year, with continuing sales growth;
? Short-term focus on driving operational efficiencies in order to achieve and enhance the manufacturing
capacity at Arnhem plant;
? Confident of making further licensing progress in current financial year.
Paul Clegg, Chief Executive commented: “Accsys enjoyed a highly encouraging financial year, delivering progress on all fronts. Our rate of revenue growth demonstrates the traction our products are gaining in the global marketplace. This growth has enabled us to more than double gross profits, helping to reduce our rate of cash burn and maintain a healthy balance sheet with more than adequate financial strength to see us through to profitability in the medium-term.
“While broadening and deepening the market penetration of our products remains key, the current financial year brings a new, most welcome, challenge of maximising capacity at our Arnhem manufacturing facility in order to meet the market demand our sales and marketing efforts have created.
“In terms of licensing, our licence with Solvay is now formally approved, and we await the final Solvay decision on the plant and its location. This represents a strong validation of our products and processes, and we have made significant progress towards securing our first, fully effective Tricoya® licence with Medite.
“Overall, I am confident that Accsys is now very well positioned to take advantage of the significant investment that has been made over the last few years in sales, marketing, R&D and business development, enabling the Company to further increase sales volumes and margins while simultaneously progressing licensing opportunities with existing and potential licensees.”
There will be a presentation relating to these results at 10:00 BST on 3 July 2014. The presentation will take the form of a web based conference call, details of which are below: