TIDMNTQ
RNS Number : 4358R
Enteq Technologies PLC
06 July 2022
Enteq Technologies plc
("Enteq" or the "Company" or the "Group")
Final results for the year ended 31 March 2022
and
IMC Investor Presentation
Enteq (AIM: NTQ.L), the energy services technology supplier,
today announces its final results for the year ended 31 March
2022
Key features
-- Total revenue up from $5.1m to $7.3m due to strengthening
North American market, offsetting reduced activity in China:
o North America revenue up from $1.9m to $6.2m
o International revenue down from $3.2m to $1.1m
-- Adjusted EBITDA(2) up from $0.1m to $0.3m
-- Gross profit margin down from 53% to 36% due to change in
product mix from new strategic distribution partnerships
-- Administrative expenses before amortisation reduced from $3.9m to $3.2m:
o Underlying overheads(1) reduced from $2.6m to $2.3m
o Depreciation on rental fleet down from $0.9m to $0.5m
o Depreciation on other fixed assets steady at $0.2m
-- Loss attributable to shareholders reduced from $1.1m to $0.8m
-- The SABER project has progressed well:
o Key test objectives achieved
o Extensive industry and customer engagement has demonstrated
market potential
Financial metrics
Years ended 31 March ($m):
2022 2021
* Revenue 7.3 5.1
* Gross profit margin 36% 53%
* Underlying overheads(1) 2.3 2.6
* Adjusted EBITDA(2) 0.3 0.1
* Exceptional items - 0.1
* Total post tax loss 0.8 1.1
* Post tax loss per share (cents) 1.1 1.7
* Cash balance(3) 4.8 8.1
* Investment in engineering projects 2.7 1.6
Outlook
-- Continued US rig count growth gives optimism regarding US market
-- Focus on international opportunities as markets recover
-- Ongoing investment in the development and deployment of new market-led technologies
-- Emphasis on maintaining a strong balance sheet
Andrew Law, CEO of Enteq Technologies plc, commented:
"Enteq has continued investment in the SABER RSS project
development, resulting in an enhanced, simplified design with a
wider range of operation and a low cost to operate. Sustained
testing has confirmed the system has performed to the design
criteria and met all requirements to date, thereby further reducing
technical risk. Extensive industry engagement with existing and new
customers both internationally and across North America, has
confirmed that SABER is on-track to meeting the market
requirements.
Enteq's core MWD business has benefitted from the continued
growth in the US market, new customers in the US, new customers
internationally and from access to selected technology distribution
agreements. Additionally, the core existing customer base will be
the initial target market for SABER.
As with the core MWD technology, SABER has applications in
geothermal and methane capture operations as well as conventional
oil and gas, giving the Board grounds for optimism for the short,
medium and long term outlook."
Investor Presentation
Please note that Andrew Law and David Steel, Chief Financial
Officer, will be providing a live presentation relating to these
results via the Investor Meet Company platform on 8th July 2022 at
10:30am BST.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via the Investor
Meet Company dashboard up until 9.00am the day before the meeting
or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and
attend this presentation via the following link:
https://www.investormeetcompany.com/enteq-technologies-plc/register-investor
Investors who already follow Enteq on the Investor Meet Company
platform will automatically be invited.
(1) The reconciliation between Underlying overheads and
Administrative expenses before amortisation is follows:
Year to 31 March 2022 Year to 31 March 2021
$m $m
Total underlying overheads 2.3 2.6
Depreciation - fixed assets 0.2 0.2
Depreciation - rental fleet 0.5 0.9
PSP Share charge 0.2 0.2
Administrative expenses before amortisation (including bad debt charge) 3.2
3.9
(2) The reconciliation between Loss attributable to shareholders
and Adjusted EBITDA is follows:
Year to 31 March 2022 Year to 31 March 2021
$m $m
Loss attributable to shareholders
(0.8) (1.1)
Exceptional items - 0.1
Amortisation 0.2 -
Depreciation - fixed assets 0.2
0.2
Depreciation - rental fleet 0.5
0.9
PSP Share charge 0.2
0.2
Interest -
(0.1)
Adjusted EBITDA
0.3 0.1
Both the above alternative performance measures are shown as the
Board consider these to be key to the management of the business as
a whole.
(3) The cash balance includes:
Year to 31 March 2022 Year to 31 March 2021
$m $m
Cash and cash equivalents 3.3 8.1
Bank deposits 1.5 -
Cash balance 4.8 8.1
For further information, please contact:
Enteq Technologies plc +44 (0)1494 618739
www.enteq.com
Andrew Law, Chief Executive Officer
David Steel, Chief Financial Officer
finnCap Ltd (NOMAD and Broker) +44 (0)20 7220 0500
Ed Frisby, Emily Watts, Tim Harper (Corporate Finance)
Andrew Burdis, Barney Hayward (ECM)
Combined Chief Executive and Chairman's report
Review of the Year
This year has been one of capturing North American market
recovery coupled with a concentrated effort on the SABER
development project.
In North America, Enteq has expanded the offering of innovative
solutions to customers through a number of exclusive distributor
agreements that were signed during the year. These agreements cover
technologies such as improved signal detection; MEMS
(micro-electro-mechanical systems) directional sensors; gamma
logging and depth tracking.
To capture North American market growth, a VP of sales for the
MWD division was recruited as a replacement for a vacant senior
operational post.
The improving market conditions seen throughout the year
resulted in an increasing demand for equipment. The contracts have
been predominantly sale compared to rental, with the proportion of
revenue from the rental fleet this year at 13% compared to the 23%
seen in the year to 31 March 2021 (44% in the year to 31 March
2020). As at 31 March 2022 there were 3 kits on rental .
The international market showed signs of recovery during the
latter part of the financial year, lagging the US recovery as
expected. International revenue was $1.1m this financial year, with
$0.6m from two new customers and entry into two new geographical
markets. The market slowdown in China inevitably drove the
reduction in this
year's international revenue, compared to $3.2m in the year to 31 March 2021 .
The SABER development project has progressed during the year
with the most important milestone being that the tool has
demonstrated that this novel method of steering can generate ample
steering forces during flow loop tests. Extensive customer and
industry engagement about the SABER project confirmed there is a
high degree of appetite for this technology. SABER remains on-track
for commercialisation during 2022, with existing resources in place
to complete the remaining phase of the development project.
Overall year-on-year a further $0.3m was removed from overheads
through a focus of incremental cost savings rather than major
reduction programs.
Staff
There was a total of 16 employees at the end of the year, up
from the 15 at the previous year end. The Board would like to
recognise the on-going loyalty, dedication and support of the staff
as Enteq continues with its excellent reputation for the
reliability of equipment and commitment to customer support.
Prospects
Enteq has continued investment in the SABER RSS project
development, resulting in an enhanced, simplified design with a
wider range of operation and a low cost to operate. Sustained
testing has confirmed the system has performed to the design
criteria and met all requirements to date, thereby further reducing
technical risk. Extensive industry engagement with existing and new
customers both internationally and across North America, has
confirmed that SABER is on-track to meeting the market
requirements.
Enteq's core MWD business has benefitted from the continued
growth in the US market, new customers in the US, new customers
internationally and from access to selected technology distribution
agreements. Additionally, the core existing customer base will be
the initial target market for SABER.
As with the core MWD technology, SABER has applications in
geothermal and methane capture operations as well as conventional
oil and gas, giving the Board grounds for optimism for the short,
medium and long term outlook.
Financial Review
This review contains pro-forma statements which are different in
presentation to the statutory format shown on the following
pages.
Income Statement
Year to 31 March: 2022 2021
$ million $ million
Revenue 7.3 5.1
Cost of Sales (4.7) (2.4)
Gross profit 2.6 2.7
Overheads (2.3) (2.6)
----------------------------- ---------- ----------
Adjusted EBITDA 0.3 0.1
Depreciation & amortisation (0.8) (1.1)
Other charges (0.3) (0.1)
Ongoing operating loss (0.8) (1.1)
Exceptional items - (0.1)
Operating Loss (0.8) (1.2)
Interest - 0.1
----------------------------- ---------- ----------
Loss before tax (0.8) (1.1)
Tax - -
----------------------------- ---------- ----------
Loss after tax (0.8) (1.1)
============================= ========== ==========
The North American market saw a dramatic improvement during the
year with the rig count rising from 430 as at 31 March 2021 to 673
as at 31 March 2022, an increase of 243 (57%). The majority of this
increase was seen in the second half of the financial year when 145
rigs were added which represented 60% of the full year additional
rigs. This improvement was directly related to the price of a
barrel of WTI which rose from $61 at 31 March 2021 to $104 at the
end of March 2022, an increase of 71%. Again, the majority of this
increase was seen in the second half of the financial year when WTI
rose from $72, representing a 52% increase in this six month
period. The impact of the above was that North American revenue
rose to US$6.2m this year from $1.9m last year. The international
market appeared to take longer to recover from the COVID impact
with international revenue at $1.1m down from the $3.2m reported
last year. As previously mentioned, pleasingly, US$0.6m of this
revenue came from two new customers based in geographical markets
where Enteq had not sold before.
The full year gross margin was 36%, down from last year's 53%,
due to an increasing proportion of revenue coming from the
integration of third-party components into the total product
range.
Total underlying overheads, at $2.3m, was down $0.3m on last
year's figure. This reflected the concentration on reducing all
levels of overheads were possible without impacting the level of
customer support given.
The combined depreciation and amortisation charge was
significantly down on the previous year due to the reduced level of
rental income this financial year. This reflected the market
dynamics whereby customers were more inclined to buy rather than
rent due to their increased level of activity.
The "Other charges" shown above relate, primarily, to the
non-cash cost associated with the Performance Share Plan.
Statement of Financial Position
Enteq's net assets at the financial year-end comprised of the
following items:
As at 31 March: 2022 2021
$million $million
Intangible assets 4.1 1.7
Property, plant & equipment 2.2 2.3
Rental fleet 0.3 -
Net working capital 4.1 3.9
Cash balance 4.8 8.1
----------------------------- ----------- -----------
Net assets 15.5 16.0
============================= =========== ===========
Both the closing balance and the increase in the year in the
intangible assets relate to the on-going spend on all the
engineering projects, predominately the SABER rotary steerable
system.
The net book value of property, plant & equipment at $2.2m
is $0.1m down primarily due to the depreciation charge as only
minimal additions were made during the year.
The net book value of the rental fleet reflects the 3 kits on
hire at the end of the year, whereas there were only a small number
of components on hire as at March 2021.
The net working capital of $4.1m has increased $0.2m during the
year. This is primarily due to an increase in debtors ($1.0m) being
countered by an increase in creditors ($0.4m) and a decrease of
inventory ($0.5m). All these movements relate to the impact of the
higher level of trading seen in the last quarter of the financial
year.
Cash flows
Overall, the Group saw a net cash outflow of $3.3m (2021: $2.1m)
reducing the Group's closing cash balance as at 31 March 2022 to
$4.8m. The majority of this reduction ($2.7m) related to the
on-going investment in the engineering projects, primarily the
SABER tool.
Year to 31 March: 2022 2021
$ million $ million
Adjusted EBITDA 0.3 0.1
Change in net operational working
capital (0.2) (0.9)
------------------------------------ ------------- -------------
Operational cash generated 0.1 (0.8)
Net investment in rental fleet (0.8) -
Investment in engineering projects (2.7) (1.6)
Investment in fixed assets (0.1) -
Interest and share issues 0.2 0.3
Disposal of fixed assets - 0.5
Severance and transaction costs - (0.5)
Net cash movement (3.3) (2.1)
Opening cash balances 8.1 10.2
Closing cash balances 4.8 8.1
==================================== ============= =============
Financial Capital Management
Enteq's financial position continues to be robust. Enteq had no
bank borrowings, or other debt, and had a closing cash position of
$4.8m as at 31 March 2022. In addition, the Company has in place an
undrawn $1m overdraft facility, offering additional flexibility
should an accelerated introduction to the marketplace of SABER RSS
be appropriate in future.
Enteq monitors its cash balances daily and operates under
treasury policies and procedures which are set by the Board.
The financial statements are presented in US dollars as the
Company's primary economic environment, in which it operates and
generates cash flows, is one of US dollars. Apart from its UK based
overhead costs, substantially all other transactions are transacted
in US dollars.
Enteq is subject to foreign exchange rate fluctuations to the
extent that it holds non-US Dollar cash deposits. The year-end GBP
denominated holdings are approximately 5% of total cash holdings,
up from the 3% of last year's balance.
Annual Report and Accounts
The 2022 Annual Report and Accounts, together with the notice of
Annual General Meeting, have today been sent to shareholders and
are available on the Company's website, www.enteq.com .
Annual General Meeting
The Company's Annual General Meeting will be held on 21
September 2022 at 12:00 noon at the offices of finnCap, 1
Bartholomew Close, London, EC1A 7BL.
David Steel
CFO & Company Secretary
Enteq Technologies Plc
Consolidated Income Statement
Year to Year to
31 March 31 March
2022 2021
Notes $ 000's $ 000's
Revenue 2 7,306 5,078
Cost of Sales (4,678) (2,367)
Gross Profit 2,629 2,711
Administrative expenses before amortisation (3,185) (3,851)
Bad debt provision charge to income
statement - (56)
Amortisation of acquired intangibles 6 (199) (19)
Other exceptional items 3 (7) (85)
Foreign exchange profit on operating
activities (40) 78
---------- ----------
Total Administrative expenses (3,431) (3,933)
Operating loss (802) (1,222)
Finance income 16 67
Loss before tax (787) (1,155)
Tax 4 - 46
Loss for the period (787) (1,109)
========== ==========
Loss attributable to:
---------- ----------
Owners of the parent (787) (1,109)
========== ==========
Loss per share (in US cents): 5
Basic (1.1) (1.7)
Diluted (1.1) (1.7)
There are no other items requiring disclosure as comprehensive
income.
Enteq Technologies Plc
Consolidated Statement of Financial
Position
As at 31 As at 31
March 2022 March 2021
Notes $ 000's $ 000's
Assets
Non-current
Intangible assets 6 4,143 1,728
Property, plant and equipment 2,506 2,272
Trade and other receivables - 168
Non-current assets 6,649 4,168
------------ ------------
Current
Trade and other receivables 3,537 2,405
Inventories 2,410 2,888
Cash and cash equivalents 3,296 8,059
Bank deposits 1,500 -
------------ ------------
Current assets 10,743 13,352
------------ ------------
Total assets 17,392 17,520
============ ============
Equity and liabilities
Equity
Share capital 1,072 1,056
Share premium 91,919 91,789
Share based payment reserve 432 455
Retained earnings (77,894) (77,324)
Total equity 15,529 15,976
------------ ------------
Liabilities
Current
Trade and other payables 1,863 1,544
Total liabilities 1,863 1,544
------------ ------------
Total equity and liabilities 17,392 17,520
============ ============
Enteq Technologies Plc
Consolidated Statement of Changes in Equity
Share
Called
up based
share Retained Share payment Total
capital earnings premium reserve equity
$ 000's $ 000's $ 000's $ 000's $ 000's
As at 1 April 2021 1,056 (77,324) 91,789 455 15,976
Issue of share capital 16 - 130 - 146
Transfers between reserves - 217 - (217) -
Share based payment charge - - - 194 194
Transactions with owners 16 217 130 (23) 340
Loss for the year - (787) - - (787)
Other comprehensive income
for the year - - - - -
Total comprehensive income - (787) - - (787)
-------- --------- -------- -------- --------
Total movement 16 (570) 130 (23) (447)
As at 31 March 2022 1,072 (77,894) 91,919 432 15,529
======== ========= ======== ======== ========
As at 1 April 2020 1,027 (76,943) 91,579 1,048 16,711
Issue of share capital 29 - 210 - 239
Transfers between reserves - 728 - (728) -
Share based payment charge - - - 135 135
Transactions with owners 29 728 210 (593) 374
Loss for the year - (1,109) - - (1,109)
Other comprehensive income
for the year - - - - -
Total comprehensive income - (1,109) - - (1,109)
-------- --------- -------- -------- --------
Total movement 29 (381) 210 (593) (735)
As at 31 March 2021 1,056 (77,324) 91,789 455 15,976
======== ========= ======== ======== ========
Enteq Technologies Plc
Consolidated Statement of Cash Flows
Year to 31 Year to 31
March 2022 March 2021
$ 000's $ 000's
Cash flows from operating activities
Loss for the year (787) (1,109)
Net finance income (16) (67)
Gain on disposal of fixed assets (30) (455)
Share-based payment non-cash items 194 135
Foreign exchange charge (40) 78
Depreciation and Amortisation
charges 840 1,130
161 (288)
Tax received - 46
Decrease in inventory 478 222
(Increase)/decrease in trade and
other receivables (964) (554)
Decrease in trade and other payables 320 (820)
Increase in rental fleet assets (817) (17)
Net cash from operating activities (822) (1,411)
------------ ------------
Investing activities
Purchase of Property Plant and
Equipment (58) (29)
Disposal proceeds of tangible
fixed assets 30 511
Increase in intangible fixed assets (2,614) (1,423)
Funds placed on interest bearing
deposit (1,500) -
Interest received 16 67
Net cash from investing activities (4,126) (874)
------------ ------------
Financing activities
Share issue 145 239
Net cash from financing activities 145 239
------------ ------------
Decrease in cash and cash equivalents (4,803) (2,046)
Non-cash movements - foreign exchange 40 (78)
Cash and cash equivalents at beginning
of period 8,059 10,183
Cash and cash equivalents at
end of period 3,296 8,059
============ ============
1. BASIS OF PREPARATION
The results for the year ended 31 March 2022 have been prepared
using the accounting policies and methods of computation consistent
with those used in the Group's annual report for the year ended 31
March 2021. The results have also been presented and prepared in a
form consistent with that which will be adopted in the Group's
annual report for the year ended 31 March 2022 and in accordance
with the recognition and measurement requirements of the
International Financial Reporting Standards as adopted by the
European Union.
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 March 2022 and
the year ended 31 March 2021, but is derived from those accounts.
Statutory accounts for 2021 have been delivered to Companies House.
Those for the year ended 31 March 2022 will be delivered following
the Company's Annual General Meeting on 21 September 2022.
The financial information has been extracted from the Group's
Annual Report for the year ended 31 March 2022. The auditors have
reported on these accounts; their reports were unqualified and did
not contain statements under s498(2) or (3) Companies Act 2006. The
Group published its 2022 Annual Report and Accounts on 6 July
2022.
2. SEGMENTAL REPORTING
For management purposes, the Group is currently organised into a
single business unit, the Drilling Tools division, which is
currently based solely in the USA.
The principal activities of the group is the design, manufacture
and selling of specialised parts and products for Directional
Drilling and Measurement While Drilling operations for use in the
energy exploration and services sector. Revenue is only generated
by the selling activity.
At present, there is only one operating segment and the
information presented to the board is consistent with the
consolidated profit and loss statement and the consolidated
statement of financial position.
The revenues, net assets and non-current assets of the Group can
be analysed by geographic location (post-consolidation adjustments)
as follows:
Revenues
31 March 31 March
2022 2021
$ 000's $ 000's
United States of America 6,201 1,939
Central Asia 396 -
Australasia 243 -
China 187 2,735
Europe 51 323
Rest of the world 228 81
Total Group revenue 7,306 5,078
------------- ---------
31 March 31 March
2022 2021
$ 000's $ 000's
Contracts with customers 6,364 3,930
Operating lease income 942 1,148
Total Group revenue 7,306 5,078
--------- ---------
Net Assets
31 March 31 March
2022 2021
$ 000's $ 000's
Europe (UK) 3,649 6,674
United States 11,880 9,302
Total Group net assets 15,529 15,976
--------- ---------
Non-current Assets
31 March 31 March
2022 2021
$ 000's $ 000's
Europe (UK) - -
United States 6,649 4,168
Total Group non-current
assets 6,649 4,168
--------- ---------
All of the Group's revenue arises from the sale and rental of
specialised parts and products for Directional Drilling and
Measurement While Drilling operations. The Group had 2 customers
that contributed in excess of 10% of the Group's total sales for
the year (2021: 3). These customers contributed $4,0868k and
$1,014k respectively. (2021: $ 2,088k, $1,020k and $572k). No
revenue relates to customers based in the UK (2021: none).
3. EXCEPTIONAL ITEMS
The exceptional items can be analysed as follows:
31 March 31 March
2022 2021
$ 000's $ 000's
Severance payments and other
plant closure costs 37 397
Gain on sale of fixed assets (30) (455)
Aborted project costs incurred - 147
Other - (4)
--------- ---------
Total exceptional items 7 85
========= =========
4. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities
for the period.
Factors affecting the tax charge
The tax assessed for the period is different from the standard
rate of corporation tax in the UK. The difference is explained
below:
31 March 31 March
2022 2021
$ 000's $ 000's
Loss on ordinary activities before tax (787) (1,109)
--------- ---------
Loss on ordinary activities multiplied
by the
standard rate of corporation tax in
the UK of 19% (2021: 19%): (149) (211)
Effects of:
Items not subject to corporation tax (31) 136
Tax losses to carry forward 181 75
R&D tax credit - 46
Total income tax - 46
========= =========
There has been no deferred taxation recognised in these
financial statements due to the uncertainty surrounding the timing
of the recovery of these amounts. The total losses available to the
Group in the relevant tax jurisdictions are as follows: UK $0.5m;
United States $22.2m (2021: UK $1.4m; United States $20.3m). There
were no significant deferred tax liabilities. These tax losses have
no expiry date.
5. EARNINGS PER SHARE AND DIVIDS
Basic earnings per share
Basic earnings per share is calculated by dividing the loss
attributable to ordinary shareholders for the year of $787k (31
March 2021: loss of $1,109k) by the weighted average number of
ordinary shares in issue during the year of 68,604k (31 March 2021:
67,065k).
As the Group is loss making, any potential ordinary shares have
the effect of being anti-dilutive. Therefore, the diluted EPS is
the same as the basic EPS. As the year end share price is below the
weighted average option price of all the options issued, the
adjusted diluted EPS is the same as adjusted EPS.
The number of outstanding share options, including senior
managers, that are not included in the above figures are as
follows:
31 March 31 March
2022 2021
000's 000's
EMI plan 233 398
PSP plan 3,670 3,825
--------- ---------
Total 3,903 4,223
========= =========
March 2022: EPS Weighted
average number Per-share
Earnings of shares amount
$ 000's 000's US cents
Loss attributable to ordinary
shareholders (787) 68,604 (1.1)
========== =============== =========
March 2021: EPS Weighted
average number Per-share
Earnings of shares amount
$ 000's 000's US cents
Loss attributable to ordinary
shareholders (1,109) 67,065 (1.7)
========== =============== =========
During the year Enteq Technologies Plc did not pay any dividends
(2021: nil).
6. INTANGIBLE ASSETS
Other Intangible Assets
Developed IPR&D Brand Customer Total
technology technology names relationships
$ 000's $ 000's $ 000's $ 000's $ 000's
Developed IPR&D Brand Customer Total
technology technology names relationships
$ 000's $ 000's $ 000's $ 000's $ 000's
Cost:
As at 1 April 2021 12,842 13,048 1,240 20,586 47,716
Transfers 275 (275) - - -
Disposal - - - (20,586) (20,586)
Capitalised in period 120 2,494 - - 2,614
------------ ------------ -------- --------------- ---------
As at 31 March 2022 13,237 15,267 1,240 - 29,744
------------ ------------ ---------
Amortisation/Impairment:
As at 1 April 2021 12,842 11,320 1,240 20,586 45,988
Disposal - - - (20,586) (20,586)
Charge for the year 199 - - - 199
------------ ------------ -------- --------------- ---------
As at 31 March 2022 13,041 11,320 1,240 - 25,601
------------ ------------ -------- --------------- ---------
Net Book Value:
------------ ------------ -------- --------------- ---------
As at 1 April 2021 - 1,728 - - 1,728
============ ============ ======== =============== =========
As at 31 March 2022 196 3,947 - - 4,143
============ ============ ======== =============== =========
Developed IPR&D Brand Customer Total
technology technology names relationships
$ 000's $ 000's $ 000's $ 000's $ 000's
Cost:
As at 1 April 2020 12,823 11,454 1,240 20,586 46,103
Capitalised in period 19 1,594 - - 1,613
------------ ------------ -------- --------------- ---------
As at 31 March 2021 12,842 13,048 1,240 20,586 47,716
------------ ------------ ---------
Amortisation/Impairment:
As at 1 April 2020 12,823 11,320 1,240 20,586 45,969
Charge for the year 19 - - - 19
As at 31 March 2021 12,842 11,320 1,240 20,586 45,988
------------ ------------ -------- --------------- ---------
Net Book Value:
------------ ------------ -------- --------------- ---------
As at 1 April 2020 - 134 - - 134
============ ============ ======== =============== =========
As at 31 March 2021 - 1,728 - - 1,728
============ ============ ======== =============== =========
The main categories of Intangible Assets are as follows:
Developed technology:
This is technology which is currently commercialised and
embedded within the current product offering.
IPR&D technology:
This is technology which is in the final stages of field
testing, has demonstrable commercial value and is expected to be
launched within the foreseeable future.
Brand names:
The value associated with the various trading names used within
the Group.
Customer relationships:
The value associated with the on-going trading relationships
with the key customers acquired.
Impairment
Due to the volatility seen in the price of oil seen since the
start of March 2020, all intangible assets were assessed as to
their future commercial viability.
There are now considered to be two cash generating units ("CGU")
- see the accounting policy note on page 48.
The recoverable amount of each CGU is determined from value in
use calculations both where the asset is currently in use or will
be in the future. The key assumptions for the value in use
calculations are those regarding the future revenues, discount
rates, growth rates and expected changes to selling prices and
direct costs during the period. Management estimates discount rates
using pre-tax rates that reflect current market assessment of the
time value of money and the risks specific to the CGU. The growth
rates are based on management forecasts for the five years to March
2026. Cash flow forecasts are prepared from the most recent
financial plans approved by the Board.
Currently the SABER project is in the development phase and has
not generated any revenue. On the assumption that the SABER project
is launched successfully, the longer-term forecast assumes annual
growth rates between 5% and 3%. The impairment test assumes annual
growth rates of 123% in the year to March 2023, 103% in the year to
March 2024, 85% in the year to March 2025, 10% in the years to
March 2026, and March 2027, followed by 3% thereafter. The high
growth rates are due to the introduction of the SABER product line
in the years under review.
The pre-tax rate used to discount both cash flow forecasts is
13.4% (2021: 12.8%). Management have based this rate on the
following factors: a Risk Free Rate of 2.9%; a levered equity beta
of 1.5; a market risk premium of 5.5%; a small cap premium of 3.8%
and an implied cost of debt of 4.5%.
Intangible assets
The intangible assets acquired during the year comprise both
externally procured services from specialist suppliers, which is
shown at the purchase cost, and internally generated costs which is
shown at the cash cost of the items acquired, primarily payroll
related costs.
Amortisation
All categories of intangible assets, apart from the IPR&D
technology, are being amortised over their respective useful lives,
on a straight-line basis. The rotary steerable project will have
its useful life assessed once the field trials have been completed
which will give a better estimate of the usefulness of this
asset.
7. RESPONSIBILITY STATEMENT OF THE DIRECTORS
To the best of the knowledge of the Directors (whose names and
functions are set out below), the final results announcement has
been prepared using accounting policies and methods of computation
consistent with those used in the Group's annual report for the
year ended 31 March 2021 and adopted for the financial year ended
31 March 2022, gives a true and fair view of the assets,
liabilities, financial position and profits and losses for the
Company and the undertakings included in the consolidation taken as
a whole.
Executive Directors
Andrew Law Chief Executive Officer
David Steel Chief Financial Officer
Non-Executive Directors
Martin Perry Chairman
Iain Paterson
Neil Hartley
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR GZGGNGKKGZZZ
(END) Dow Jones Newswires
July 06, 2022 02:00 ET (06:00 GMT)
Grafico Azioni Enteq Technologies (AQSE:NTQ.GB)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Enteq Technologies (AQSE:NTQ.GB)
Storico
Da Giu 2023 a Giu 2024
