Versarien hit by Oil&Gas malaise, cash levels fall

The advanced engineering materials group recorded losses before tax of £1.8m, up from £0.9m in 2015.

Revenues declined 10% from £4.98m to £4.4m, with improved sales at its thermal products arm failing to offset a drop in Hard Wear products unit.

Sales at the former, which manufactures microporous copper foam, improved from £0.4m to £1.3m, benefitting from the purchase of its heat sink business in February 2015.

In parallel, Hard Wear product sales were hit by the adverse environment in the oil and gas market, although new opportunities were emerging in defence and aerospace, the company said in a statement.

The unit makes sintered tungsten carbide for “arduous environment” applications, primarily in Oil&Gas.

Since the end of the reporting period, the company had closed four partnerships to introduce its grapheme products into four key markets: batteries, carbon fibre products and enhanced composites for 3D printing and the aerospace industry.

It had also negotiated its first OEM contract for the use of low profile copper foam heat sinks in consumer devices.

Cash at period end was down from £3.5m one year ago to £1.6m, with £1.26m having been funneled into operating activities and another £276,000 towards the purchase of intangible assets.

Regarding the company’s outlook, the board said it remained confident it was on track to benefit from progress made, saying that graphene was moving quickly towards commercial applications, while thermal products had moved into commercial production.

As of 15:56 BST shares in AIM-listed Versarien were 6.38% down to 11.0p.