Versarien Plc (VRS ) unaudited results for the year ended 31 March 2021 highlighted both operational progress across domestic Graphene, Work Packages Graphene and overseas Graphene in addition to finishing the period with a strong balance sheet to invest in further product development. 

Domestic Graphene production now approaching 100 tonnes nameplate capacity 

Domestic UK operations were clearly centred around the GSCALE projects, which were funded by the £5 million Innovate UK loan received during the period. Production assets are located in a new dedicated 14,000 square foot facility in Longhope, Gloucestershire, together with the existing graphene production equipment currently in Cheltenham, where the lease ends in September 2021. 

The objective to scale production of high-quality graphene to greater than 10 tonnes per annum, to meet the expected demand from the Work Packages described below, has been surpassed over 10X. 

Post period end, VRS purchased two large scale systems for ink production and ancillary equipment at a cost of £342,000, which will increase ink production capacity from 3,000 litres per annum to up to 15,000 litres per annum, depending on formulation. 

In addition, the Company acquired second hand graphene manufacturing assets from a former competitor in Spain post period end at a largely discounted cost of €600,000. 

In aggregate, the above investments will enable a name plate capacity Graphene manufacturing facility of 100 tonnes per annum when fully installed, developed and commissioned. 

Domestic Work Packages 

  • Versarien has made significant operational progress across al its domestic Work Packages:. 
  • Work Package S has evolved from airline seat designs to now include Rail applications. 
  • Work Package C has demonstrated the significant advantages of graphene enhanced concrete with further trials of readymix concrete ongoing 
  • Work Package A has demonstrated the use of graphene to enhance recycled polymer products in such a way that the mechanical performance of the 100% recycled product is equal to a virgin polymer, thus breaking the need for addition of climate challenging oil based raw materials 
  • Work package A in the leisurewear sector has scaled the print process, which utilises GraphinksTM, to pilot level production with advanced discussions ongoing with new and collaboration partners for a new range of active wear garments in men's and women's designs, which will see the benefits of thermal regulation, wicking, drying and water repellence given to wearers. 
  • Work Package E to develop large-scale graphene enhanced elastomer for oil and gas and automotive tyres has continued to progress, despite the impact of COVID-19, with rubber samples at the bench scale ready to be dispatched with an agreed a pricing structure. Larger-scale trials are expected to commence in Q3 2021.  

Overseas Graphene 

  • Versarien's has continued to deliver on its stated strategy to expand globally with progress made across a number of continents: 
  • Borne out of the acquisition of CVD equipment and IP from Hanwha (originally Samsung's technology) Versarien Korea Limited ("VKL") now enables VRS to address one of the largest markets for electronics and technology in the world. 
  • Versarien Graphene Inc. ("VGI") continues to make inroads into the US market although it has been slowed by the pandemic. Long term relationships have been established with a number of large players including one of the world's largest paints and coatings companies which has completed the first stage 1000-hour anti-corrosion salt spray trials with promising results using graphene as a substitute for zinc.  
  • Gnanomat ("GNA") expanded the scope of its nanomaterial applications whilst still concentrating on energy storage, where excellent performance was seen when their materials were integrated in electrodes of asymmetric pseudo capacitors. Findings in this application area are currently in the process of intellectual property protection. Work is also ongoing in other energy storage applications such as fuel cells. 
  • Beijing Versarien Technology ("BVT"), the wholly owned subsidiary in China, is continuing to work with a Chinese supplier on the graphene enhanced face mask project. Some variants including a graphene enhanced children's mask and an FFP3 mask have also been developed. Going forward, it is intended BVT will source more opportunities from China under the GSCALE framework agreed between Innovate UK and Versarien, whilst ensuring that Versarien's China operations are carried out fully in line with the letter and spirit of the UK's National Security and Investment Act 2021. 
  • Future expansion plans include establishing a presence in other potentially lucrative global markets, by way of exporting, acquisitions and/or partnerships, as and when the right opportunities arise. We will also work towards growing our current international operations, which will in turn increase our own capability and reach.

Financial Highlights 

Adjusted LBITDA was contained at £1.8m on a decrease in revenue of £1.7m to £6.6m, demonstrating the flexibility in the operating model. 

Importantly, cash outflow from operating activities was only £0.7m (FY20: £1.5m) whilst total cash outflow was £3.6m (FY20: £3.1m) 

Cash at year end was £2.4m (1H21: £2.6m) reflecting the investment from third parties and the Lanstead sharing agreements. 

Current trading and outlook 

Whilst trading of VRS traditional and more mature products is beginning to return to pre-pandemic levels, the economic environment remains uncertain and the Company remains vigilant around costs.  

However, graphene prosects, both in the UK and overseas remain extremely exciting with VRS now transitioning from the laboratory to real world commercial demonstrators across multiple sectors including defence, automotive, aerospace and construction; in particular, interest in using our graphene in large infrastructure projects and in textile

View from Vox

Versarien as operating at the bleeding edge of materials development with several exciting opportunities across a wide range of sectors. 

As such the financial results are somewhat irrelevant as long as the company can meet ongoing investments with grant income or external investment from equity distribution. 

Clearly from this is et of results, it has achieved both with operational progress across all its Work Groups and finalising the year with a strong balance sheet. 

We Importantly, the post period end strategic investment of £1.93m from Graphene Lab, puts the Company in a strong financial position to advance investments in product developments and negotiate commercial agreements from a position of strength. 

We expect further news on product trials and commercial agreements will push the shares higher as the technology risk reduces further over the next 12 months. 

Reasons to  VRS

Versarien is an advanced engineering materials group that leverages proprietary technology through innovative engineering solutions. The company holds eight subsidiaries which operate under two divisions, Graphene and Plastics and HardWare and Metallic Products.  

Commercialisation of the ‘Wonder Material’  

In 2019/20 Versarien entered into collaborations with global partners. The group completed a process required to achieve the award of a £5 million Innovate UK loan. It said its focus ‘is now very much on the monetisation of the graphene technologies’ in its portfolio.  

The loan is for a project named G SCALE, (Graphene-Seat, Concrete, Arch, Leisure, Elastomer), covering a number of Versarien's existing collaborations, which is designed to enable Versarien to ‘significantly increase’ its manufacture of quality assured graphene.  

Expanding Product Portfolio

In August 2020, the company launched its first graphene enhanced protective face mask, which utilises Polygrene, Versarien’s graphene enhanced polymer.  The mask is a filtering facepiece designed to protect against airborne bacteria and the spread of viral infection.  

Versarien has also formed the Versarien Graphene Advisory Panel (VGap) to commercialise ‘the many opportunities’ of graphene.  This will focus on the dual agenda of scoping Versarien's current and future technologies, along with wider graphene related topics.  

Anti-COVID-19 Applications   

In addition, last week Versarien released results of a preliminary study of modified graphene materials, which were shown to possess properties inactivating the SARS-CoV-2 virus.  

The report concluded that the preliminary test results show that these materials significantly inhibit viral infection and possess antiviral activity towards SARS-CoV-2. The company said the results obtained were ‘statistically highly significant with a p-value of less than 0.0001.’   

The report concludes that the results show GNA22 and GNA24 to significantly inhibit viral infection and suggests that these materials possess antiviral activity towards SARS-CoV-2.   

“While we must stress that these results have been achieved under laboratory conditions, they do demonstrate that our hybrid graphene nanomaterials have the potential to provide protection from COVID-19,” said Neill Ricketts, Chief Executive Officer of Versarien.   

International Expansion into China and South Korea  

The company plans to use Beijing Versarien Technology Company Limited, its wholly owned Chinese foreign entity, to form the base for its expansion activities in China.    

Additionally, Company plans to establish operations in South Korea via its new subsidiary, which will be overseen initially by Versarien's Head of International Strategy and Government Relations, Matt Walker.  

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