TIDMAXS
RNS Number : 6962E
Accsys Technologies PLC
12 February 2015
AIM: AXS
NYSE Euronext Amsterdam: AXS
12 February 2015
ACCSYS TECHNOLOGIES PLC
("Accsys" or "the Company")
Third Quarter Trading Update
Accsys, the chemical technology group, focused on the
acetylation of wood, today issues a trading update for the third
quarter ending 31 December 2014.
Key points include:
-- Total revenue increased by 41% to EUR32.4m in the nine months
to 31 December 2014 (2013: EUR23.0m);
-- Total Accoya(R) production volumes increased by 43% in the nine months to 31 December 2014;
-- Continuing growth in demand with Accoya(R) wood revenue
increasing by 42% to EUR28.7m for the nine months ended December
2014 (2013: EUR20.2m); 5% price increase successfully implemented
during the quarter will become fully effective for the final
quarter of the financial year;
-- Strong balance sheet maintained with cash balance of EUR9.0m
at 31 December 2014 (30 September 2014: EUR13.5m) and net cash of
EUR7.1m (30 September 2014: EUR12.0m); 48% improvement in
underlying cash-flow compared to same quarter last year;
-- Improved sales and profitability gives us confidence that the
Company will be cash-flow positive during the final quarter of the
current financial year;
-- Record production delivered in January 2015 resulting from
on-going plant optimisation; indicates Arnhem production capacity
in excess of 40,000 cubic meters per annum;
-- Global marketing contract finalised with Solvay, our
Accoya(R) licensee, with EUR2m of advance payments received to
date; work on the new plant at Freiberg remains on track with
progress including site clearance and the appointment of an
Engineering, Procurement and Construction Management
contractor;
-- Appointment of two highly experienced non-executive directors, Sean Christie and Sue Farr.
Trading update
Accoya sales and production
Revenue from the sales of Accoya increased by 42% in the nine
months to December 2014 compared to the same period the year
before. Growth has been achieved in almost all regions. The UK and
Solvay's region in particular have seen strong growth with Accoya
revenue increasing by 71% and 59% respectively in the nine months.
During the last quarter we successfully implemented a 5% price
increase which will become fully effective for the final quarter of
the financial year.
We have continued to make improvements at the Arnhem production
facility in order to meet the higher demand and to improve the
efficiency of our process. We have started the new calendar year by
achieving record breaking production volumes in January, indicating
that the manufacturing capacity of the plant is now in excess of
40,000 cubic meters per annum, compared to the previously stated
35,000 cubic meters.
Sales of Accoya to Medite for the production of Medite(R)
Tricoya(R) have increased by 114% to EUR4.0m in the nine months to
31 December 2014, reflecting the increased demand Medite has
experienced from its customers.
Overall, the outlook remains positive with Accoya revenue for
January 40% higher than last year and almost double the amount of
Accoya orders in place versus the corresponding period last year.
The continued growth in sales volumes, the impact of the price
increase and the economies of scale associated with the
manufacturing plant will result in further improvements in our
manufacturing profitability.
Solvay
Since the Group's interim results in November, Solvay has
completed the clearance of the prospective Freiburg site and
engaged an Engineering, Procurement and Construction Management
contractor for the project, in line with the expected schedule of
completion in 2016.
In December 2014 we entered into an Accoya Marketing Agreement,
being the first full agreement resulting from the binding term
sheet agreed with Solvay in August 2014. The Accoya Marketing
Agreement is a multi-year global co-operation agreement to develop
Accoya(R) under which Accsys will carry out agreed targeted
marketing activities outside of Europe. Solvay will fund the agreed
activities which will initially focus on North America. In this
respect, Solvay has made a non-refundable pre-payment of EUR2m with
EUR0.4m of this having been recognised as revenue in the period. In
addition Accsys is carrying out certain marketing activities on
behalf of Solvay in Europe and will also separately continue
marketing activities in other regions outside of Europe at its own
expense.
The Accoya Marketing Agreement is conditional on Solvay and
Accsys completing full agreements in respect of the remaining parts
of the binding term sheet later in 2015. These allow for Accsys to
grant Solvay a non-exclusive global Accoya(R) licence option for
available regions and for Solvay to grant Accsys the option to
invest in a substantial minority share in the European project and
future Accoya(R) production projects.
Financial results
Total revenue increased by 41% to EUR32.4m for the nine months
to December 2014 (2013: EUR23.0m) while revenue for the quarter
increased by 47% to EUR10.6m compared to the same quarter last
year.
Accoya revenue increased by 42% to EUR28.7m for the nine months
(2013: EUR20.2m) reflecting continued, increasing demand. Licence
revenue of EUR0.1m was recorded reflecting the progress with
Solvay's licence since November 2014 and is expected to continue at
this rate as further progress is made.
The EUR9.0m cash balance is after taking account of EUR1.9m of
proceeds from short term borrowings (September 2014: EUR1.5m)
resulting in a net cash balance of EUR7.1m (September 2014:
EUR12.0m). The underlying cash out-flow of EUR1.7m in the quarter
was a 48% reduction compared to the previous year (excluding
exceptional Diamond Wood costs, one-off payments relating to the
Life + Tricoya EU subsidy and changes in short term borrowing).
The net cash balance is anticipated to be approximately EUR8m at
the financial year-end after taking into account seasonal working
capital requirements and the expectation that the group is expected
to be cash-flow positive during the final quarter as a result of
increased revenues and profitability.
Board of Directors
We were pleased to announce the appointment of Sean Christie and
Sue Farr as Non-Executive Directors in November, adding strength
and diversity to the current Board of Directors. The fact that we
have been able to attract individuals of Sue and Sean's calibre to
the Company speaks volumes about what Accsys has achieved recently
and the potential of our business.
Sean Christie is the former Group Finance Director of Croda
International plc, a global manufacturer of speciality chemicals.
He is also a Non-Executive Director of Applied Graphene Materials
plc.
Sue Farr is a highly experienced marketing and communications
professional and has been part of the executive management team at
Chime Communications plc since 2003. She is also a Non-Executive
Director of British American Tobacco plc, Dairy Crest Group plc and
Millennium & Copthorne Hotels plc, a former Non-Executive
Director of Motivcom plc and a former Trustee of the Historic Royal
Palaces from 2007-2013.
Ends
For further information, please contact:
Accsys Technologies Paul Clegg, CEO via MHP
PLC Hans Pauli, COO Communications
Will Rudge, FD
Nominated Adviser: Oliver
Cardigan
Corporate Broking: Christopher
Wilkinson +44 (0) 20 7260
Numis Securities Ben Stoop 1000
Tim Rowntree
James White +44 (0) 20 3128
MHP Communications Tess Harris 8100
Frank Neervoort +31 681 734 236
Off the Grid (The Netherlands) Giedo Van Der Zwan +31 624 212 238
Notes to editors:
Accsys Technologies PLC(www.accsysplc.com) is a chemical
technology group whose primary focus is on the production of
Accoya(R) wood and technology licensing via its subsidiary, Titan
Wood Limited, which has manufacturing operations in Arnhem, the
Netherlands (through its subsidiary Titan Wood B.V.), a European
office in Windsor, United Kingdom, and an American office in
Dallas, Texas (via its subsidiary Titan Wood, Inc). All group
subsidiaries are ultimately 100% owned by Accsys and trade as
Accsys Technologies. Any references in this announcement to
agreements with Accsys shall mean agreements with either Accsys or
its subsidiary entities unless otherwise specified. Accsys
Technologies PLC is listed on the London Stock Exchange AIM market
and on Euronext Amsterdam by NYSE Euronext, under the symbols
'AXS'. Accsys' operations comprise three principal business units:
(i) Accoya(R) wood production; (ii) technology development, focused
on a programme of continuous development of and improvements to the
process engineering and operating protocols for the acetylation of
solid wood and the development of technology for the acetylation of
wood elements; and (iii) the licensing of technology for the
production of Accoya(R) wood and Tricoya(R) wood elements across
the globe.
Accoya(R) wood (www.accoya.com) is produced using Accsys'
proprietary patented acetylation technology, that effectively
converts sustainably grown softwoods and non-durable hardwoods into
what is best described as a "high technology wood". Distinguished
by its durability, dimensional stability and, perhaps most
importantly of all, its reliability (in terms of consistency of
both supply and quality), Accoya(R) wood is particularly suited to
exterior applications where performance and appearance are valued.
Unlike most tropical and European hardwoods, its colour does not
degrade when exposed to ultraviolet light. Moreover, the Accoya(R)
wood production process does not compromise the wood's strength or
machinability. The combination of UV resistance, dimensional
stability, durability and retained strength means that Accoya(R)
wood offers a wealth of new opportunities to architects, designers
and specifiers. These benefits result in lower maintenance and
total cost of ownership while using a higher sustainable and
environmental responsible building material. For a full archive of
Accoya(R) news, visit www.accoya.com/news.asp.
Tricoya(R) Wood Elements(www.tricoya.com) are produced using
Accsys' proprietary technology for the acetylation of wood chips,
and particles for use in the fabrication of wood based composites,
including panel products. These composites demonstrate enhanced
durability and dimensional stability which allow them to be used in
a variety of applications that were once limited to solid wood or
man-made products. Exploitation of Accsys' proprietary technology
relating to Tricoya(R) Wood Elements is carried out through Tricoya
Technologies Limited, a joint venture between Accsys and INEOS
Industries Holdings Limited. Tricoya(R) Wood Elements are lauded as
the first major innovation in the wood composites industry in more
than 30 years.
Wood Acetylation is a process which increases the amount of
'acetyl' molecules in wood, thereby changing its physical
properties. When carried out to a sufficient level throughout the
wood, this process protects wood from rot by making it "inedible"
to most micro-organisms and fungi, without - unlike conventional
treatments - making it toxic. It also greatly reduces the wood's
tendency to swell and shrink, making it less prone to cracking and
ensuring that, when painted, it requires dramatically reduced
maintenance.
Accsys Technologies is the trading name of Titan Wood Limited.
ACCOYA(R), TRICOYA(R) and the Trimarque Device are registered
trademarks owned by Titan Wood Limited ("TWL"), a wholly owned
subsidiary of Accsys Technologies PLC, and may not be used or
reproduced without written permission from TWL, or in the case of
the Tricoya(R) registered trademark, from Tricoya Technologies
Limited, a joint venture between TWL and INEOS Industries Holdings
Limited with exclusive rights to exploit the Tricoya(R) brand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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