Windar Photonics losses widen in 'challenging' year

Wind turbine sensor company Windar Photonics updated the market on its trading for 2019 on Friday, reporting a fall in revenue for the year to €1.2m (£1.08m), from €3.5m in 2018.

The AIM-traded firm said its operating costs, excluding depreciation, amortisation and warrant costs, increased to €2.5m from €2.2m, while its EBITDA loss widened to €1.9m from €0.4m year-on-year.

Net cash totalled €1.4m at year-end, including restricted cash holdings of €0.4m, down from €2.2m and €0.5m in the prior year, respectively.

Trade receivables as at 31 December came in at €0.5m, compared to €0.6m a year earlier, while the company’s order backlog at the end of 2019 for deliveries in 2020 totalled €0.1m, compared to €1m at the end of 2018.

“Further to the company's trading update on 8 November, trading conditions remained challenging for the rest of the 2019 financial year, with the conversion of the sales pipeline into confirmed orders being slow,” the board explained in its statement.

“At the same time, the company experienced a slowdown in development of mainly Chinese projects.

“As with previous years, the original equipment manufacturer (OEM) market remained sluggish in 2019 and agreeing test schedules with them was often drawn out.”

In addition, Windar said its distribution agreement with Vestas had a “very slow” start.

Looking at its trade receivables of €0.5m at the end of the year, Windar said €0.4m of that was more than six months old.

“Whilst most of these overdue balances are with large and reputable clients, it is possible that some of these will need to be impaired, in whole or in part.

“The company is actively seeking payment of these receivables and will provide a further update in its 2019 final results.”

Looking at its operations in 2020, Windar said it had kept trading during the Covid-19 pandemic, with those able to work from home doing so, and those required in its facility, including manufacturing personnel, doing that under government guidelines.

The company said it had undertaken cost reductions to maximise its cash position, but had not sought any government grants or funding, with no staff furloughed.

“Given the company's concentration of contracts for projects in China and with Chinese clients generally, there has been a slowdown in delivery of LiDAR and other equipment compared with internal budgets, principally due to the global slowdown resulting from the Covid-19 pandemic.

“Despite this, the Company has obtained orders in 2020 to date for more than €1.7m for delivery in 2020.”

Windar said its current order backlog and sales pipeline for the rest of 2020 and 2021 were stronger that as at the end of 2019.

“In addition, 2020 is seeing - for the first time in the company's history - sustained progress from the OEM market, with order intake for OEM sales being larger than the retrofit market, and at the same time, improved progress with Vestas on retrofit projects.

“However, given the inherent uncertainties surrounding Covid-19, the board continues to believe it is inappropriate to provide forward looking guidance to investors and analysts at the current time.”

Windar Photonics said its final results for the 2019 financial year were expected to be released in early September.

At 0824 BST, shares in Windar Photonics were down 23.08% at 15p.