Cleantech Building Materials plc: Unaudited Interim Results to 30 June 2019
29 August 2019
CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH, COPENHAGEN
TICKER: CBM
Cleantech Building Materials plc
Unaudited Interim Results to 30 June 2019
Cleantech Building Materials plc (“CBM” or the “Company” or the “Group”), presents its unaudited results for the six months ended 30 June 2019. The financial statements are appended to this announcement.
Strategy and Objectives
The Group’s primary strategic objectives for 2019 are to:
- To secure the land, permitting and financing required to commence the construction of its own Accoya® wood manufacturing facility in China to enable the commercial production of its own Accoya® wood.
- To increase sales of Accoya® wood imported from Europe both to new and existing wholesalers, and directly to wood manufacturers.
- To build commercial relationships with large-volume Chinese wood manufacturers in anticipation of significant Accoya® wood capacity increase in the Chinese and ASEAN markets once the Group has commenced its commercial production of Accoya® wood.
The Group has made significant progress towards achieving these objectives during the six months ended 30 June 2019. We refer the reader to the significant developments in the Events after the reporting date section below.
Financial Review of the Business
The Group’s revenues for the six months ended 30 June 2019 amounted to €545,000 (six months ended 30 June 2018: €385,000). The revenues were limited by the constrained supply of Accoya® wood. There continues to be strong demand for Accoya® wood from the Group’s distributors.
The Group realised a net loss of €2,234,000 for the six months ended 30 June 2019 (six months ended 30 June 2018: €2,169,000). The net loss for the current period was mainly due to salaries and professional costs, and a lower than expected contribution margin from sales.
As at 30 June 2019, the Group had cash and cash equivalents of €25,000 (30 June 2018: €58,000), € Nil (30 June 2018: €Nil) in interest bearing borrowings from independent third parties and net current liabilities of €2,020,000 (30 June 2018: €1,377,000). The Company increased its existing loan facility by a further €1 million during February 2019 and €1.5 million during May 2019, bringing the total available facility to €3.9 million at 30 June 2019. This financing provides sufficient working capital to continue the expansion of the Group’s marketing and sales activities in China and the ASEAN markets, and to progress the financing and build plans for its own Accoya® wood factory in China. The Group continues to closely manage its cash position to ensure that any costs of financing are mitigated as fully as possible.
The Group has been investing to increase its marketing and sales activities and has successfully appointed seven wholesalers and distributors of AccoyaÒ wood in the China and ASEAN regions. These agreements include escalating volume purchase commitments over a three-year period in exchange for market segment exclusivity. All of these Offtake Distribution agreements are extendable beyond 2020, conditional on sales performance. The Group foresees a growing order book from 2019 onwards; but in the short term remains reliant on Titan Wood’s supply of Accoya® wood until the Group has completed the construction of its own Accoya® wood factory.
Once the Group is producing its own Accoya® wood, the CBM Board believes the financial performance of the Group shall be radically transformed.
Events After the Reporting Date
Joint venture with Nantong Acetic Acid Chemical Company Ltd.
On 9 July 2019 an investment agreement was signed to build the first Accoya® wood factory in China. The agreement provides for a joint venture to be formed between CBM’s subsidiary, Diamond Wood China Limited and Nantong Acetic Acid Chemical Company Ltd (“NTAAC”), an international Chinese chemical group. The joint venture will construct an Accoya® wood factory with an initial capacity of 160,000 m3 and an ultimate target capacity of 480,000 m3. The initial financing is for circa US$ 50,000,000.
Representatives from CBM and NTAAC have been in discussion for over 12 months to conduct a feasibility study for an Accoya® wood factory in China and to work through the engineering, government permissions and contractual details of the project.
On 10 July 2019 a subscription agreement was signed with a private family office (the “Investor”) for €15,000,000. The Investor will purchase shares in CBM at €1.25 per share and the Company will use these funds to finance its share of the joint venture Accoya® wood factory project.
The interim financial information for the six months ended 30 June 2019 was approved by the Board for release on 29 August 2019.
THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Further information may be found at the Company's website at
Further Enquiries:
| Cleantech Building Materials plc Adrian Wyn-Griffiths | 1 |
| Keswick Global AG (Certified Adviser) | 5 |
| IFC Advisory Limited (Financial PR) Tim Metcalfe Miles Nolan | 0 |
The information communicated in this announcement is “inside information” for the purposes of article 7 of the Market Abuse Regulation 596/2014.
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