Versarien Reports £4.3M Loss, Faces Critical Cash Crunch
Why we think this is bad
Versarien's financial position is precarious, with declining revenues and a critical need for immediate funding. While losses have narrowed, the company is still far from profitability. Cash reserves have dwindled to a mere £0.1 million, and without additional financing, the company may be unable to meet its liabilities by mid-May 2025. The transition to a manufacturing-light and licensing model presents high execution risks. Despite some positive developments in partnerships and graphene sales, these are overshadowed by the immediate financial challenges and uncertainty about the company's ability to continue as a going concern.
Key Points
- Group revenues down to £2.4 million from £3.0 million
- Loss before tax improved to £4.3 million from £14.1 million
- Cash reserves critically low at £0.1 million
- Urgent need for additional funding by mid-May 2025
- In discussions to raise £0.5 million in equity funding
- Transition to manufacturing-light and licensing model ongoing
- Material uncertainty about ability to continue as a going concern
- Expects to reach EBITDA break-even by end of current financial year
- Graphene revenues increased to £0.4 million from £0.2 million
- Several new partnerships and commercialization highlights reported
Summary
Versarien plc, an advanced engineering materials group, has reported its audited results for the year ended 30 September 2024. The company's financial situation remains challenging:
- Group revenues decreased to £2.4 million from £3.0 million in the previous year
- Loss before tax improved to £4.3 million from £14.1 million
- Cash reserves critically low at £0.1 million, down from £0.6 million
- Adjusted LBITDA improved to £1.7 million from £3.0 million
The company is in urgent need of additional funding, with current resources only sufficient until mid-May 2025. Versarien is in advanced discussions to raise £0.5 million in equity funding, but this is not guaranteed. The company's transition to a manufacturing-light and licensing model presents both opportunities and risks.
Despite some positive developments in partnerships and graphene sales growth, the overall financial health of the company remains precarious. The auditors have highlighted a material uncertainty that casts significant doubt on the Group's ability to continue as a going concern.