TIDMMWG
RNS Number : 6372Z
Modern Water PLC
22 September 2020
Modern Water plc ("Modern Water" or "the Company")
INTERIM RESULTS
Modern Water (AIM:MWG), the owner of leading technologies for
water and wastewater treatment and the monitoring of water quality,
announces
interim results for the 6 months ended 30 June 2020
Commenting on the results, Gerard Brandon, Chairman of Modern
Water, said:
"T he necessary structural changes that were outlined in the
recently published 2019 annual results, were carried on through H1
2020. The Company business model in 2020 has moved to a
collaboration, cooperation and partnership business model resulting
in a high volume, high margin recurring revenue strategy. The
increased order levels, seen in H1, are currently being prepared
for shipping in H2 2020.
"Modern Water continues to retain a leadership position within
the water contamination monitoring sector and is adding the latest
technologies in ecommerce, logistics, comms, networking and data
encryption which extends the global reach of the Company beyond the
US, Europe and Far East offices. With thousands of sites and
hundreds of water systems installed over the last 30 years, the
Company retains a strong international position in water
monitoring. The strategic challenge through this COVID-19 pandemic
is being met with the move to provide support services online,
making it easier and safer to interact with customers while at the
same time to increase the capacity of our equipment to provide
surveillance against all sorts of contaminants and threats
including viruses and pathogens.
"The new platform gives us the ability to further exploit the
data the Company generates from different water systems across the
world. Data analytics within the latest AI systems, produced in
collaboration with Company partners positions Modern Water to
receive multiple revenue streams from equipment, consumables and
predictive services for our existing and new clients coming online
to manage their COVID-19 risk. "
For further information:
Modern Water plc +44 (0) 20 3827 3439
Simon Humphrey, Chief Executive
Cairn Financial Advisers LLP (Nominated
Adviser) +44 (0) 207 213 0880
Sandy Jamieson / Liam Murray / Ludovico
Lazzaretti
Turner Pope Investments Ltd (Broker) +44 (0) 203 657 0050
Andy Thacker
GROUP STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
SIX MONTH PERIODED 30 JUNE 2020
6 months
6 months ended 6 months
ended 30 June ended Year ended
30 June 2019- 30 June 31 December
2020 Restated 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------- --------- ---------- --------- -------------
Revenue 733 1,934 2,019 2,941
Cost of Sales (335) (972) (1,005) (1,475)
---------------------------------------------- --------- ---------- --------- -------------
Gross profit 398 961 1,014 1,466
---------------------------------------------- --------- ---------- --------- -------------
Administration expenses (913) (1,606) (2,112) (2,386)
Inventory valuation adjustment - - - (7)
---------------------------------------------- --------- ---------- --------- -------------
Operating loss before interest, tax,
depreciation & amortisation (515) (645) (967) (927)
---------------------------------------------- --------- ---------- --------- -------------
Depreciation and amortisation (261) (212) (213) (687)
Operating loss (776) (856) (1,180) (1,614)
Finance income - 265 265 65
Finance costs (43) (44) (44) (97)
---------------------------------------------- --------- ---------- --------- -------------
Loss on ordinary activities before
taxation (819) (635) (959) (1,646)
---------------------------------------------- --------- ---------- --------- -------------
Taxation (3) (9) (9) (27)
---------------------------------------------- --------- ---------- --------- -------------
Loss for the period (822) (644) (968) (1,673)
---------------------------------------------- --------- ---------- --------- -------------
Other comprehensive income
Items may be subsequently reclassified
to profit or loss
Foreign currency translation differences
on foreign operations 156 (310) (310) 181
---------------------------------------------- --------- ---------- --------- -------------
Total comprehensive loss for the
half year (666) (954) (1,278) (1,492)
---------------------------------------------- --------- ---------- --------- -------------
Discontinued Operations:
Modern Water Services Limited - (273) - (546)
Modern Water Monitoring Limited - (19) - (37)
---------------------------------------------- --------- ---------- --------- -------------
Total Loss for the year - (292) - (2,075)
---------------------------------------------- --------- ---------- --------- -------------
Loss attributable to:
Owners of the parent (822) (644) (968) (2,071)
Non-controlling interests - (1) (1) (4)
---------------------------------------------- --------- ---------- --------- -------------
(822) (645) (969) (2,075)
--------------------------------------------- --------- ---------- --------- -------------
Total comprehensive loss attributable
to:
Owners of the parent (666) (953) (1,277) (1,488)
Non-controlling interests - (1) (1) (4)
---------------------------------------------- --------- ---------- --------- -------------
(666) (954) (1,278) (1,492)
--------------------------------------------- --------- ---------- --------- -------------
Loss per share attributable to the
equity holders of the parent
Basic loss per share 0.16p 0.60p 0.91p 2.22p
Diluted loss per share 0.16p 0.60p 0.91p 2.22p
---------------------------------------------- --------- ---------- --------- -------------
The notes form an integral part of this condensed consolidated
interim financial information.
GROUP STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 JUNE 2020
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 278 146 363
Intangible assets 1,277 1,483 1,190
------------------------------------- --------- --------- ------------
1,555 1,629 1,553
------------------------------------ --------- --------- ------------
Current assets
Inventories 777 920 706
Trade and other receivables 791 742 268
Cash and cash equivalents 799 68 176
------------------------------------- --------- --------- ------------
2,367 1,730 1,150
------------------------------------ --------- --------- ------------
Total assets 3,922 3,359 2,703
------------------------------------- --------- --------- ------------
Equity and liabilities
Equity
Ordinary shares 1,312 283 311
Share premium account 43,659 42,965 43,140
Warrant reserve 401 100 105
Merger reserve 398 398 398
Foreign exchange reserve (332) (652) (488)
Accumulated losses (43,645) (41,920) (42,823)
------------------------------------- --------- --------- ------------
1,793 1,174 643
Non-controlling interests - 154 5
------------------------------------- --------- --------- ------------
Total equity 1,793 1,328 648
------------------------------------- --------- --------- ------------
Liabilities
Non-current liabilities
Bank Loan 408 524 440
Deferred tax liabilities - - -
------------------------------- ---- --------- --------- ------------
408 524 440
------------------------------------ --------- --------- ------------
Current liabilities
Trade and other payables 1,721 1,507 1,615
------------------------------------- --------- --------- ------------
Total liabilities 2,129 2,031 2,055
------------------------------------- --------- --------- ------------
Total equity and liabilities 3,922 3,359 2,703
------------------------------------- --------- --------- ------------
The notes form an integral part of this condensed consolidated
interim financial information.
GROUP STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
SIX MONTH PERIODED 30 JUNE 2020
Called
up Share
share premium Warrant Merger Retained Total Non-controlling Total
Foreign
exchange
capital account reserve reserve reserve Earnings interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six month
period ended
30 June 2019
Balance as at
1 January
2019 261 42,613 100 398 (669) (40,642) 2,061 9 2,070
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Comprehensive
loss
Loss for the
period ended
30 June 2019 - - - - - (1,414) (1,414) (9) (1,423)
Foreign
currency
translation
differences - - - - 17 - 17 - 17
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Total
comprehensive
loss - - - - 17 (1,414) (1,261) (9) (1,261)
Transactions
with owners
Issue of
shares 22 530 - - - - 552 - 552
Share-based
payments - - - - - 86 86 - 86
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Total
transactions
with owners - - - - 86 86 - 86
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Balance as at
30 June 2019 283 43,143 100 398 (652) (41,970) 1,302 0 1,302
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Six month
period ended
30 June 2020
Balance as at
1 January
2020 311 43,140 105 398 (488) (42,823) 643 5 648
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Comprehensive
loss
Loss for the
period ended
30 June 2020 - - - - - (822) (822) (5) (827)
Foreign
currency
translation
differences - - - - 156 - 156 - 156
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Total
comprehensive
loss - - - - 156 (822) (666) - (671)
Transactions
with owners
Issue of
shares 1,001 519 389 - - - 1,909 - 1,909
Share-based
payments - - (92) - - - (92) - (92)
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Total
transactions
with owners - - - - 1,816 - 1,816
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
Balance as at
30 June 2020 1,312 43,659 401 398 (332) (43,645) 1,793 - 1,793
--------------- --------- ---------- -------- -------- --------- --------- -------- ---------------- --------
The notes form an integral part of this condensed consolidated
interim financial information.
GROUP STATEMENT OF CASH FLOWS (UNAUDITED)
SIX MONTH PERIODED 30 JUNE 2020
6 months 6 months 6 months Year
ended Ended Ended ended
30 June 30 June 30 June 31 December
2019-
2020 Restated 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss on ordinary activities before taxation (819) (626) (1,261) (1,646)
Adjustments for:
Inventory valuation adjustment - - - 7
Depreciation of property, plant and
equipment 121 56 56 210
Amortisation of intangible assets 140 157 157 477
Impairment of goodwill - - - -
Discontinued operations - (635) - (573)
Net finance (income)/cost (43) 130 130 32
Share-based payments 5 86 86 5
Movements in working capital:
(Increase)/Decrease in inventories 71 15 15 229
Decrease in trade and other receivables (523) 272 272 746
(Decrease) in trade and other payables 129 170 170 (13)
----------------------------------------------- --- --------- ---------- --------- --------------
Net cash flows used in operating activities (919) (375) (375) (523)
---------------------------------------------- ---- --------- ---------- --------- --------------
Cash flows from investing activities
Purchase of property, plant and equipment 0 0 0 (93)
Proceeds from sale of property, plant -
and equipment - - -
Purchase of patents and development
costs (87) (354) (354) (108)
Interest received/Paid (20) - - -
Tax Received / (Paid) - (9) (9) -
---------------------------------------------- ---- --------- ---------- --------- --------------
Net cash flows used in investing activities (107) (363) (363) (246)
---------------------------------------------- ---- --------- ---------- --------- --------------
Cash flows from financing activities
Disc operations - - - 533
Proceeds from borrowings (210) - - (92)
IFRS 16- finance lease interest (9) - - (27)
IFRS 16- repayment and capital on
liability (145) - - (290)
Proceeds from bank loan 177 - - -
Proceeds from issuance of ordinary
shares 1,819 552 552 577
---------------------------------------------- ---- --------- ---------- --------- --------------
Net cash flows used in financing activities 1,632 552 552 701
---------------------------------------------- ---- --------- ---------- --------- --------------
Net (decrease)/increase in cash and
cash equivalents 606 (186) (186) (71)
Cash and cash equivalents at start
of period 176 228 228 228
Exchange (losses)/gains on bank balances 17 26 26 19
---------------------------------------------- ---- --------- ---------- --------- --------------
Cash and cash equivalents at end of
period 799 68 68 176
---------------------------------------------- ---- --------- ---------- --------- --------------
The notes form an integral part of this condensed consolidated
interim financial information.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
SIX MONTH PERIODED 30 JUNE 2020
1. General information
Modern Water plc ('the Company') and its subsidiaries (together,
'the Group') invests in, develops and deploys new water technology.
The Company is a public limited company incorporated and domiciled
in England and Wales, whose shares are publicly traded on the AIM
market operated by the London Stock Exchange. The registered office
is 12(th) Floor, 6 New Street Square, London, EC4A 3BF.
This condensed consolidated interim financial information was
approved for issue by the Board of Directors on 21 September 2020.
These interim financial results are unaudited and do not comprise
statutory accounts within the meaning of section 435 of the
Companies Act 2006.
Statutory accounts for the year ended 31 December 2019 were
approved by the board of directors on 21 August 2020. The auditor's
opinion on those accounts was not modified but contained an
emphasis of matter paragraph related to the going concern. They did
not contain any statement under section 498 of the Companies Act
2006.
2. Basis of preparation and going concern
2.1 Basis of preparation
The principal accounting policies have been applied consistently
throughout the period in the preparation of these financial
statements. This condensed consolidated interim financial
information for the six months ended 30 June 2020 has been prepared
in accordance with the AIM Rules for Companies of the London Stock
Exchange plc and with IAS 34, 'Interim financial reporting' as
adopted by the European Union.
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
year ended 31 December 2019, which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union.
2.2 Going concern
The directors are required by company law to be satisfied that
the Group has adequate resources to continue in business for the
foreseeable future. A review has been conducted and the directors
have concluded that such resources are available, and that the
going concern basis is justified in preparation of the financial
statements.
The Group's forecasts prepared by the directors reflect that
funding requirements have reduced significantly following the
restructuring of the Group's Membrane Division and Central function
and the issue of equity in February this year.
The Group's remaining funding requirements will be met from:
-- The GBP799k cash balance as of 30-June-2020;
-- Revenue from the Monitoring Division
-- Revenue from the restructured Membrane Processes Division.
3. Accounting policies
3.1 Accounting policy and disclosure changes
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 December
2019.
4. Principal risks and uncertainties
A detailed explanation of the principal risks and uncertainties
affecting the Group, and the steps taken to manage them, is set out
in the Directors' Report section of the Group's 2019 Annual Report
and Accounts, which is available of the Group's website at
www.modernwater.com. The principal risks and uncertainties are
summarised as follows:
-- customer acceptance of the Group's technologies;
-- competitor technology;
-- socio-political risks;
-- scaling up the technology;
-- IP protection;
-- recruitment and retention of key personnel;
-- health and safety; and
-- financial risks.
There have been no significant changes in the nature of these
risks that will affect the next six months of the financial
year.
5. Critical accounting estimates and judgements
The preparation of financial statements in conformity with
International Financial Reporting Standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. Estimates are continually evaluated and are
based on historical experience and other factors, such as
expectations of future events, and are believed to be reasonable
under current circumstances. Actual results may differ from these
estimates. The key sources of estimation uncertainty during the
current year were consistent with the prior year, as detailed in
the Group's 2019 Annual Report and Accounts.
6. Segmental analysis
The chief operating decision-maker is deemed to be the Board,
for whom monthly financial information is provided by division to
gross profit and direct overheads; below this financial information
is reported in a consolidated Group format. For management
reporting purposes the Group is organised into two operating
segments (i) Membrane Processes; and (ii) Monitoring, which matches
this divisional split.
Administrative expenses which are directly attributable to the
two main operating divisions (comprised of business development,
sales, operations and technical expenditure) are reported as
expenditure in the respective division. However, a significant
proportion of the Group's expenditure (legal, marketing, finance,
facilities and directors' expenditure) is managed and reported
centrally. As the commercial activities of the Group develop, this
financial information is expected to evolve.
6 months ended 30 June 6 months ended 30 June
2020 2019- Restated
Statement of Comprehensive
Income Membrane Monitoring Central Total Membrane Monitoring Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- ----------- -------- -------- --------- ----------- -------- --------
Revenue 36 697 - 733 127 1,808 - 1,935
Cost of sales (1) (334) - (335) (12) (961) - (973)
Gross profit 35 363 - 398 114 847 - 961
Administrative
expenses (610) (298) - (908) (476) (849) (196) (1,521)
Share-based payments - - (5) (5) - - (86) (86)
Operating profit/(loss)
before tax depreciation
and amortisation (575) 65 (5) (515) (362) (2) (282) (646)
Depreciation and
amortisation (75) (186) - (261) (32) (180) - (212)
---------------------------- --------- ----------- -------- -------- --------- ----------- -------- --------
Operating profit/(loss) (650) (121) (5) (776) (394) (182) (282) (858)
---------------------------- --------- ----------- -------- -------- --------- ----------- -------- --------
Finance income - - - - - - 264 264
Finance costs - - (43) (43) - - (44) (44)
Profit/(loss)
before taxation (650) (121) (48) (819) (394) (182) (62) (638)
Taxation (2) (1) - (3) (1) (9) - (10)
---------------------------- --------- ----------- -------- -------- --------- ----------- -------- --------
Profit/(loss)
for the period (652) (122) (48) (822) (395) (191) (62) (648)
---------------------------- --------- ----------- -------- -------- --------- ----------- -------- --------
7. Administrative expenses by nature
6 months 6 months 6 months Year
ended ended ended ended
30 June 30 June 30 June 31 December
2019-
2020 Restated 2019 2019
Note GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ----- --------- ---------- --------- ------------
Employee benefits expense 487 1,067 1,267 1,621
----------------------------------------- ----- --------- ---------- --------- ------------
Share-based payments 8 5 86 86 5
Operating lease payments 24 133 133 22
Research and development - 12 12 20
Auditors remuneration 30 27 27 60
Exceptional item: Inventory valuation
adjustment - - - 7
Other administrative expenses 367 281 456 651
----------------------------------------- ----- --------- ---------- --------- ------------
Total administrative expenses before
depreciation and amortisation 913 1,606 1,981 2,386
----------------------------------------- ----- --------- ---------- --------- ------------
Depreciation and amortisation charges 261 213 213 687
Exceptional item: Goodwill impairment - - - -
----------------------------------------- ----- --------- ---------- --------- ------------
Total administrative expenses including
depreciation and amortisation 1,174 1,819 2,194 3,073
----------------------------------------- ----- --------- ---------- --------- ------------
8. Share-based payments
6 months 6 months Year
Ended ended ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Options (including EMI) 5 86 5
Conditional share awards - - -
------------------------------------------- --------- --------- ------------
Equity-settled share-based payments 5 86 5
------------------------------------------- --------- --------- ------------
Cash-settled share-based payments - - -
------------------------------------------- --------- --------- ------------
Total share-based payments charged to the
income statement 5 86 5
------------------------------------------- --------- --------- ------------
9. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period. As
the Group is loss making, the diluted loss per share is equal to
the basic loss per share.
6 months 6 months 6 months Year
ended ended ended ended
30 June 30 June 30 June 31 December
2020 2019- Restated 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------------- --------- ------------
(Loss) attributable to owners of the
parent (GBP'000) Continuing Operations 822 644 968 1,488
(Loss) attributable to owners of the
parent (GBP'000) Discontinued Operations - - - 583
(Loss) attributable to owners of the
parent (GBP'000) TOTAL - - - 2,071
Weighted Average number of ordinary
shares in issue (thousands) 524,693 106,830 106,830 116,098
Basic Loss per Share - Continuing Operations 0.16p 0.60p 0.91p 1.28p
Basic Loss per share - Discontinued
operations 0.50p
---------------------------------------------- --------- --------------- --------- ------------
Basic Loss per share (pence) 0.16p 0.60p 0.91p 1.78p
---------------------------------------------- --------- --------------- --------- ------------
10. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation in the Group
accounts.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
SIX MONTH PERIOD ENDED 30 JUNE 2020
11. Subsequent Event
On 28 August 2020, the Company announced that it had reached
agreement on the terms of a recommended offer to be made by
Integumen plc for the entire issued and to be issued share capital
of Modern Water plc.
Following the share consolidation approved on 15 September 2020
by Integumen's shareholders, under the terms of the offer Modern
Water shareholders would be entitled to receive 1 new ordinary
Integumen plc share of 0.1p for every 10 Modern Water ordinary
shares held.
It is expected that a formal Offer Document will be issued by
Integumen to Modern Water shareholders in due course.
The directors confirm that, to the best of their knowledge,
these condensed consolidated interim financial statements have been
prepared in accordance with IAS34 as adopted by the European Union.
The interim management report includes a fair review of the
information required by the FCA's Disclosure and Transparency Rules
(4.2.7 R and 4.2.8 R), namely:
-- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The directors of Modern Water plc are listed in the Modern Water
plc Annual Report and Accounts 2019. A list of the current
directors is maintained on the Company's website
www.modernwater.com.
Simon Humphrey
Chief Executive
21 September 2020
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
-ends-
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END
IR KKDBKABKDCCB
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