Dyesol Limited
Dyesol Limited: Appendix 4E – Preliminary Final Report – Commentary on Results
Dyesol Limited / Key word(s): Miscellaneous/Miscellaneous The Dyesol board and management challenge is threefold: (1) optimising the use of cash as commercial opportunities expand, (2) exploiting the company's existing and developing intellectual property portfolio and (3) establishing long-term, exclusive, global, commercial collaborations. On that score, we are very happy with our progress in FY2011 and are now beginning to see tangible evidence of our investment. Few companies, if any, have the outstanding commercial prospects that Dyesol enjoys.
The increase in financial net loss by 20% to $17.28 million is attributable to a number of factors. The implementation of the Dyesol employee share ownership plan (ESOP) resulted in almost half of the increased loss attributable to non-cash items. This is a key part of the board's employee incentive and retention strategy. Other non-cash loss items of significance include an increase in forex related losses as the Australian dollar continued to appreciate during the period along with our international commitments. Increased cash loss items of significance include those related to senior management changes (-$560k), milestone based payments to CSIRO (-$462k) and expenses related to increased business development activity. The level of percentage subsidy from the Welsh Assembly Government also declined as the three year project neared its successful completion in July 2011. Many of these expenses are either abnormally high or have a 'one-off' character. This explanation is strongly supported by the gradual decline and stabilisation in monthly cash burn over the past six months – three months either side of the end of last financial year. As an offset, marketing related expenses fell by a commensurate amount as related travel and consultancies were reduced as the company focussed on achieving better quality revenue streams.
A pleasing aspect of this year's accounts is the stabilisation of cash utilisation. Net operating cash usage for 2011 at $10.97 million was similar to that of 2010 at $10.91 million. This was achieved despite a significant fall in operational revenue from $3.0 million to $1.4 million. Dyesol has changed its emphasis to long-term wealth creation as the prospects of its commercial collaborations become more certain. Both steel and glass projects are firmly on track – on time and within budget. Future cost trends should see further reduction in corporate development expenditure and administration while increasing commitments will be directed to delivering our products to the market through engineering development, technology innovation and expansion of materials production, which will be countered by significant revenue generated by the commercialisation success of its multi-national collaborators.
The company's balance sheet has finished the financial year in a robust position. The principal change is the reduction in net assets by $10.6 million. This reflects lower net cash reserves and an increase in equity-related loans or current liabilities. Notably, current liabilities have fallen by $0.8 million subsequent to balance date. In essence, the establishment of an equity loan facility means the company can carry less cash which helps ameliorate shareholder dilution in the transition period between formal commercialisation and generation of substantial partnership related cash flow. Reduced cash at bank is more than offset by undrawn and flexible loan facilities of approximately $20 million. Dyesol's financial prospects are also strongly enhanced by the reliance of its collaborators on materials supply and future technology – this is our responsibility and where we will direct our efforts. As these projects enter the production phase, Dyesol will generate the cash necessary through a mix of government incentives, partner finance and in-company equity – finding the best balance to return value to shareholders.
Since listing on the Australian Securities Exchange (ASX), Dyesol's principal objective has been to effectively manage the risk in transitioning from research and development to full-scale commercialisation of a new, disruptive solar technology, dye solar cells (DSC). The reality and excitement of this prospect will become increasingly apparent in the forthcoming period. Tata, in particular, has published exciting global commercialisation opportunities that, on commitment, will help transform Dyesol to a major specialist materials supplier for the multi-billion dollar building integrated photovoltaic market (BIPV). Audited accounts will be finalised for the market on schedule. For the full report please see : www.asx.com.au / www.dyesol.com
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The Technology – DYE SOLAR CELLS
The Company – DYESOL Limited More details about the company and the technology can be found at: http://www.dyesol.com End of Corporate News 02.09.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
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