from OTAQ Plc (isin : GB00BK6JQ137)
Unaudited Interim Results
OTAQ Plc (OTAQ)
1 August 2023 OTAQ plc ("OTAQ", the "Company" or the “Group”)
Unaudited Interim Results
OTAQ, the innovative technology company targeting the aquaculture, geotracking and offshore markets, is pleased to announce unaudited interim results for the six months ended 30 June 2023.
Financial Highlights:
*Figures restated to reflect the change of year end from 31 March to 31 December **Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation
Highlights:
Post-Period Highlights:
Commenting on the results and prospects, Phil Newby, Chief Executive at OTAQ, said:
“The Board is satisfied with these results which are in line with our budget for the year. The Group is now delivering on the strategic goals set for OTAQ to realise its full potential, significantly increase shareholder value and return the Group to profitability.
“I am confident of achieving at least £4m Revenue in the current year and we have the potential to substantially exceed this based around the order enquiries we are currently receiving. Shareholders will be updated accordingly with developments.”
Enquiries
About OTAQ
OTAQ is a highly innovative technology company targeting the aquaculture, geotracking and offshore markets. It already has a number of established products in its portfolio and is focused on further developing its presence, customer base and cross selling opportunities within core markets both organically and via acquisition.
OTAQ’s aquaculture products, which include a sonar device (developed for Minnowtech LLC) to scan shrimp in ponds and water quality monitoring, are focused on maximising welfare and production yields. Additionally, the Company is at the advanced development stage of a potentially game changing live plankton analysis system (LPAS). It also continues to target opportunities in the acoustic deterrent devices market via its Sealfence product, which is used by salmon farmers in multiple large global territories.
The Company is also developing high accuracy location trackers for specialist applications. Having already added clients within safety and multiple participant sport/racing applications, the Company is investigating wider market potential - including opportunities in the seafood industry.
OTAQ’s offshore product range includes OceanSense subsea leak detection, Eagle IP camera systems, Lander seabed survey devices and subsea electrical connectors and penetrators. It is targeting a number of growth opportunities in new territories and has a strong client base including Expro, Amphenol and National Oilwell Varco. The Company is also focused on the development of new products through this division, with the aim of increased cross-deployment of skills and technologies into the aquaculture arena.
Summary
The Group presents its unaudited interim results for the six-month period ended 30 June 2023.
Trading As anticipated, revenue has improved from H2 2022 of £1.3m to £1.8m (H1 2022: £2.7m) with the Offshore division achieving £1.4m (H2 2022: £0.9m, H1 2022: £1.4m) and the Aquaculture division achieving £0.3m (H2 2022: £0.4m, H1 2022: £1.0m). The Company has reported an Adjusted EBITDA* loss of £347k (2022: profit £454k)
Offshore The Offshore division, as expected, has continued to build on the strong performance reported in 2022. The opportunities identified in new international markets through investment in sales resource are now coming to fruition with the OceanSense subsea leak detection system achieving record rental levels in H1 2023. The launch of a deep water OceanSense 4 model has been particularly well received as well as further sales of the Group’s advanced IP subsea camera systems. We are confident that the strong performance of the Offshore division will continue into H2 2023.
Aquaculture Having launched a number of exciting new products for the aquaculture sector in the last 12 months, the challenge is to now build on the early interest shown at launch across the industry. From Minnowtech LLC, a company we continue to hold a 15% investment in, we have received significant orders for the shrimp sonar devices. Two six-figure orders are scheduled for delivery in H2 2023 with the prospect of further orders from Minnowtech in the remainder of 2023.
As announced in April, the Group has secured its first trial partners for the Live Plankton Analysis System (LPAS). The LPAS product automatically identifies phytoplankton around marine aquaculture sites that could potentially result in harmful algae blooms adversely impacting on fish health and reducing yields. Through the system’s AI technology, the local analysis software program generates on-site alerts for staff, alerting the presence of specific algae species that are of concern in a particular area, enabling farmers to respond to any threat far quicker than the current manual process. The first beta systems have been deployed in Ireland and in Scotland.
The Group’s Water Quality Monitoring System, currently for salmon farmers, provides continuous monitoring and recording of crucial environmental parameters across the entire growing cycle, supplying invaluable visibility and insight to support the maintenance and safeguarding of fish welfare. Contracts or orders have been fulfilled to supply the systems to salmon farms in Chile and in Scotland.
As reported previously, revenue from the Group’s historically core product, Sealfence, has reduced significantly since 2022. However, we are pleased to report that a modest level of Sealfence sales to customers in Scandinavia was achieved in H1 2023, with regulatory trials ongoing in other territories.
Geotracking Trials with OTAQ’s partners serving the rail sector, which commenced in 2022, are continuing as planned with a number of successful field trials now completed. This is a highly regulated sector and, accordingly, progress can be slow. However, the Group is hopeful that the first significant orders will be received in H2 2023.
Financial Highlights for the six months ended 30 June 2023 The results for H1 2022 and H2 2022, being the six months to June 2022 and six months to December 2022 respectively, are restated for comparative purposes following the Company’s change of accounting reference date from 31 March to 31 December.
*Figures restated to reflect the change of year end from 31 March to 31 December **Adjusted EBITDA means earnings before income, tax, depreciation, exceptional costs, impairment, share option charges and amortisation
Adjusted EBITDA was a loss of £0.35m from a profit of £0.45m in 2022. This reduction followed the exit of the Sealfence industry in Scotland and the investment in growing new product lines made in 2023.
Net debt as at 30 June was £0.51m (2022: £1.23m) with cash balances of £0.91m.
Outlook I am pleased that the Group is on track to achieve the Board’s growth target for 2023 with revenue of at least £4.0 million in the current year and a return to EBITDA profitability in the current year within reach if this revenue figure can be improved upon, as anticipated.
The Offshore Division continues to benefit from strengthening market demand and, whilst the timing of new client orders can be difficult to predict, we anticipate significant further orders for shrimp sonar devices, together with further sales of the Sealfence, in the current financial year. We also expect to see further progress and initial sales from railway customers in the Geotracking Division.
Phil Newby Chief Executive Officer
The Board confirms that to the best of its knowledge the consolidated half year financial statements for the six months to 30 June 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting amended in accordance with changes in IAS 1 Presentation of Financial Statements, as adopted by the UK
Unaudited Condensed Consolidated Statement of Comprehensive Income
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