Tirupati Graphite plc (LON:TGR), the specialist flake graphite company and supplier of the critical mineral for the global energy transition, has announced its audited annual results and filing of the Annual Report & Financial Statements for the year ended 31 March 2024.
Publication of the 2024 Annual Report has been delayed from last year, originally due to the uncertain financial position and severe liquidity challenges faced by the Group in 2024, including not being in a position during 2024 to fund completion of the audit, and uncertainty around the ability of the Group to continue as a going concern. Fund raising in 2025 has significantly improved the financial outlook. Following changes in the Board in late 2024 and early 2025, the former CEO was removed from his position. The former CEO had previously provided the Company’s accounting systems and financial reporting on an outsourced basis from a private company in India controlled by him and his daughter (also a former director of the Company). That entity has denied the Company access to its IT systems and its underlying accounting records (even though owned by and held on systems licensed to Tirupati Graphite plc) following the Board changes in January 2025. This has required the Company to implement new systems and reconstruct its accounting records, now substantially completed, but which led to the further delay, as in the last month has the unavailability of the reviewing audit partner for unforeseen reasons.
Key points for the year ended 30 March 2024:
· Total production was 7,096 metric tonnes (“MT”) of flake graphite from the Group’s two projects in Madagascar: Vatomina and Sahamamy;
· Vatomina had intermittent production, due to operational and funding problems;
· The Sahamamy project was placed in care and maintenance in March 2024;
· Operating loss: £5.1 million (FY23: £2.1 million);
· Completed acquisition of Suni Resources SA (“Suni Resources”) as announced in April 2023, adding two mining concessions in Mozambique. Business combination accounting for the acquisition resulted in recognition of a gain of £6.1 million in the income statement;
· Profit before tax: £64 thousand (FY23: £2.4 million loss);
· Loss after tax: £13 thousand (FY23: £2.4 million);
· Subsequent to 31 March 2024, operational and liquidity challenges, and failure to raise new funds, led to the pausing of production operations and to further development of the mines. Trading of the Company’s shares though its listing on the LSE was suspended in August 2024.
A fuller description of the challenges which the Company faced in 2024 and the actions since taken to overcome them are presented under Events Subsequent to 31 March 2024 described below and the Chairman’s Statement from the Annual Report, which is also re-produced below.
Mark Rollins, Executive Chairman of Tirupati Graphite, commented:
“We are pleased to publish the delayed 2024 annual report and accounts. While the annual report covers a very difficult period for the Company and all its stakeholders, and the Company was at that time on a path to failing, the turnaround initiatives in 2025 have now placed it on a much firmer basis to realise the underlying potential of its assets.
This is a key step in returning to compliance with our listing obligations.”
Summary of the Operating Results for the year ended 31 March 2024.
| Units | FY 2023-24 | FY 2022-23 | YoY Change | |
| Total Production | MT | 7,096 | 4,770 | +49% |
| Total Costs of Production for units sold (Excl. Depreciation) | £ | 4,389,010 | 1,531,349 | +189% |
| Cost per MT of Production | £ | 619 | 321 | +95% |
| Total Sales Volume | MT | 7,434 | 3,982 | +87% |
| Total Revenues | £ | 4,903,856 | 2,890,010 | +70% |
| Average Selling price per MT of Production | US$ / £ per MT | 828 / 660 | 875 / 726 | -9% |
Production during the year ended 31 March 2024 increased by 49% and sales volume increased by 87% over the previous year, although operations became increasingly intermittent from mid 2024. The realised average selling price per MT of graphite decreased by 9% in GBP terms and 5% in dollar terms, reflecting weaker market dynamics. Operating margins decreased significantly, principally because of:
· lower ore head grade feed into both Vatomina and Sahamamy plants, due in part to sub-optimal mine development;
· poor performance of plant and equipment due to breakdowns and interruptions, and lack of spare part availability during the period;
· breakdown of vehicles and inability to operate vehicles at certain points reduced efficiency of operation and plants; and
· plant capacity being underutilised and not energy efficient, while fixed costs increased.
See below for corrective actions taken since the changes in Company leadership.
Summary of the Financial Results for the year ended 31 March 2024
The Group reported a small loss after tax for the year ended 31 March 2024 (FY2024) of £0.01 million, but a pre tax operating loss of £5.1 million.
The operating loss for FY 2024 (2023: £2.1 million loss) resulted from a combination of the Madagascar mines producing only a small gross margin of £0.5 million, which was insufficient to cover a depreciation expense for the assets of £1.5 million, and high administration expenses in the period. The low margin reflected high unit operating costs as described above. Administration expenses of £4.1 million at the group level reflected an unusually high level of legal and professional fees (£0.5 million) partly associated with the Board representation issues but also the level of salaries paid to the previous leadership of the Company. They also include the Madagascar local office and all local labour tax and social security costs, as well as £0.7 million of Mozambique expenses. The Mozambique costs are currently all being expensed until full project development commences, and include site security and subsistence costs.
In terms of non-GAAP KPIs, EBITDA for the year to 31 March 2024 was a loss of £3.6 million (2023: £0.8 million) as a result of the above factors.
An impairment charge of £0.8 million was taken against the Sahamamy asset in recognition of production being placed on hold and certain areas of the mine being unlikely to be developed further. The central facilities at Sahamamy are, however, expected to be of value for a re-development at Sahamamy focused on new mine areas where improved ore qualities are expected.
The operating loss was more than offset by a bargain purchase gain recorded on the acquisition of Suni Resources in Mozambique, which completed on 1 April 2023, of £6.1 million. The Suni acquisition has been accounted for as a business combination, and the gain (negative goodwill) represents the surplus of the assessed fair valuation for the net assets acquired over the fair value of the consideration. The Group re-evaluated the fair valuation of both the net assets and consideration since the interim results announced in December 2023 under the Company’s previous leadership, resulting in a lower bargain purchase gain than previously indicated.
Interest expense was £0.4 million (2023: £0.25 million); increased finance costs reflected a full year of interest expense on the loan notes issued in 2022.
The result before tax was at just above breakeven, while a previous deferred tax asset of £0.1 million was expensed, resulting in a non cash tax charge.
As a result, loss after tax was £13 thousand (2023: £2.4 million loss) and loss per ordinary share was £0.01 (2023: £2.59 loss per share).
Liquidity and Capital Resources
The principal financial challenge faced by the Group in FY2024 and in the subsequent period through to 31 December 2024 and the launch of the corporate re-structuring and re-financing was a lack of funding for working capital and investment. This was partly due to poor operating performance but also unsuccessful financing initiatives. As a result, significant arrears of creditors were built up, while the business was funded significantly through advance payments for graphite sales which could then not be delivered on schedule. The resulting liquidity crisis almost led to insolvency, but this was averted in early 2025 with the successful re-financing and resumption of production.
During the year to 31 March 2024, the Company had raised gross proceeds of £1,045,000 by way of a placing in January 2024 of 9,500,000 new ordinary shares at a placing price of £0.11 per share. The Company also issued 12.1 million new shares as part consideration for the acquisition of Suni Resources to create a business in Mozambique, along with cash of £1.5 million.
As at 31 March 2024 the Group had cash and cash equivalents of £0.2 million.
Group net assets as at 31 March 2024 were £22.9 million, with net debt at £2.8 million, but the Group also had creditors for prepaid graphite deliveries included within trade payables of £2.8 million. Group receivables of £5.4 million at 31 March 2024 include VAT recoverable of £2.8 million and bank deposits securing guarantees of licence obligations of £1.8 million, both of which are not available in the near term to support operations, though some VAT recoveries have since been achieved.
The auditor’s report on the 2024 financial statements is unqualified but includes reference to material uncertainty around the ability of the Group to continue as a going concern if it is unable to satisfy the conditions to convert the 2019 and 2025 Convertible Loan Note to equity, as planned.
Events Subsequent to 31 March 2024
Since 31 December 2024 the Group has been through a re-structuring and re-financing led by a new Board and management team, including:
1. The resumption of production following earlier suspension: production in Madagascar was restarted in February 2025 with operations focused on ramping up production to profitable levels over the course of 2025.
2. Board Changes: as more fully explained in the Chairman’s Statement and Directors’ Report, a shareholder group sought changes to the composition of the Company Board, which were agreed in late 2024. This initiative was undertaken due to the high risk of financial failure of the Group and poor governance, in the view of the shareholders. Following the Board changes, the contract of the former CEO was terminated in February 2025 and new management installed.
3. Re- financing: in early 2025, the Company has launched a number of restructuring and financing measures, including raising £4.5 million of new convertible loan notes (“2025 CLNs”). The 2025 CLNs are convertible at the option of the holder, and by the Company when the conversion shares can be admitted to trading. Conversion will be at a share price of 3.75 pence per ordinary share and can be elected once: (i) the Company has received approval from shareholders in a general meeting for the issue of the conversion shares; (ii) listing of the Company’s ordinary shares on the LSE is resumed and the present suspension is lifted; and (iii) approval is received for the required prospectus for issue of the new conversion shares. Further steps including re-negotiation of the terms of existing CLNs have been separately announced.
Below are extracts from the Chairman’s Statement In the Annual Report and Financial Statement for the year ended 31 March 2024
I am pleased to present our Annual Report to shareholders for the year ended 31 March 2024. I am able to present a much improved outlook for your Company following difficult steps taken in the last 12 months to resolve major challenges which had become increasingly clear to investors during the last few years.
Major shortcomings in management performance and poor governance practices resulted in material destruction of shareholder value. Due to an increasingly precarious liquidity position and in order to reverse the Company’s negative trajectory, shareholders initiated action to change the composition of the Board in 2024. This action was eventually successful in December 2024. This led to the appointment of three experienced new directors, the retirement of one of the existing directors, and subsequently my appointment as Chairman. An earlier effort by a group of shareholders to restructure the Board in June 2024 had been unsuccessful. The December 2024 changes led to the replacement of the founder and CEO, and removal of previous conflicts of interest, through termination of supply and service arrangements with parties connected to him.
As a reconstituted Board and management we rapidly arranged a strategic re-financing of the business in order to implement a much-needed turnaround strategy. This strategy aimed to position the Group onto a more stable footing to capitalise on the strong market trends in the sector.
The year ended 31 March 2024 had been a challenging year. In Madagascar, the Group operated its Vatomina graphite project and also its Sahamamy graphite project for part of the year. It also completed the acquisition of two graphite projects at the pre-development stage, but of globally significant scale, in Mozambique. However, challenges were encountered in the form of large synthetic graphite production capacity increases in China, which negatively impacted natural graphite prices. The Company was also unable to adequately meet its working capital requirements during much of the year and subsequently, to support production growth.
While the operational team in Madagascar succeeded in achieving the highest annual graphite production from the Madagascar projects to date of 7,096 MTs in the year under report, lack of funds and inefficient planning across the projects hindered the Group from realising the potential of its assets. Efforts to bridge the funding and operational needs of the projects sufficiently were impeded by poor corporate governance and conflicts of interest posed by the composition of the former Board and its leadership. This prevented the Company from accessing the funding necessary to maintain any momentum or progress through 2023 and 2024.
Subsequent to the 31 March 2024 year end, the Group’s projects had to be shut in due to lack of funding and poor results, and the Group was in severe financial distress. The Company’s listing on the London Stock Exchange was suspended in August 2024, with the share price then at 6.25 pence per share. The Company was unable to prepare its consolidated financial statements and annual report for March 2024 by the filing deadline. Only once the new team had taken over the audit process, raised additional financing, and re-constructed the accounting system was it possible to finish this report and for the auditors to complete their work.
Since the end of the reporting period, the new executive team has successfully re-started production at the Vatomina project, with sustainable and increasing volumes. Customer demand has been robust across all product grades, leading to strong sales and an increasingly diversified customer base. Indeed, production reached a record level in April 2025 and is on track to exceed breakeven levels and reach our reported target of 1000 MT per month by the end of July.
Graphite markets have stabilised and have shown signs of a turnaround. Despite turbulent geopolitical and socio-economic events, industrial markets have been resilient and global sales of electric vehicles have continued to grow year on year, with battery and energy storage demand for graphite continuing to grow. Global policy developments affecting critical minerals has meant that new regions are developing hubs for consumption of battery raw materials, including graphite, outside of China as end-users seek to diversify their supply sources. This presents significant opportunities for the likes of Tirupati Graphite with its projects across East Africa, to establish itself as a preferred supplier.
We have received an updated Mineral Resources at the Madagascar mines and have commissioned a full, updated Competent Persons’ Report which will be available later this year. While the inferred resource numbers, especially at Vatomina, have reduced since the last numbers reported, in 2020, this is largely attributable to poor data records and lack of updates to models for several years under the previous management. With better discipline and mining practices we would expect to see an improvement in future.
I am pleased to report that the fund-raising initiatives have been successful, with £4.5 million subscribed for new convertible loan notes which we expect to be able to convert to equity this year. And we have reached agreement with holders of existing convertible loan notes for a restructuring of those liabilities. The £0.9 million of the 2019 Series, which had a final maturity in December 2024 are being converted to equity, and the £1.9 million of the 2022 Series which are due to mature in July and August 2025, have been extended by one year. While these steps will result in a substantial number of new shares being issued including, potentially, from attached warrants, and dilution for previous shareholders, the alternative for equity and existing note holders was likely a much greater loss. The Board is grateful for the backing of many shareholders and the loan note holders for their support of the re-structuring and the new funds which many have invested. We have also welcomed some new investors who see great potential for our Company going forward.
This has been a very difficult time for the Group’s employees and suppliers. Employees at our operations have been remarkably resilient and have been instrumental in our successful turnaround efforts over the past months. Also, we are well aware that many of our suppliers were not treated well during the past few years. Early in its tenure the new Board has taken steps to redress past issues and put these critical relationships back onto a positive footing. The Board is grateful for the patience and loyalty of all concerned.
As regards the Board itself – I am committed to ongoing review of its composition and strengths as our Company grows. We will continue to reinforce the processes and procedures that underpin our decision making and governance in line with the development of our business and the expectations of our stakeholders. We understand that effective governance is essential to good stewardship of all aspects of our Company and the support of many key constituencies – not least our shareholders.
Strong governance is also needed to ensure high standards in respect to the way we interact with the communities in which we operate and our attitude to environmental and health and safety matters. As a Board we will seek to promote continuous improvement in these areas across our operations in Madagascar and Mozambique, and across our industry as a whole.
The Board would like to bring to your attention the annual general meeting of shareholders which will be asked to approve a number of resolutions which we consider vitally important for the realisation of our turnaround plan. A necessary Prospectus for new shares is in progress and will be issued in the coming weeks. This will permit conversion of the 2019 and 2025 CLN issues to equity and a significant strengthening of the equity base of the Company. We urge all shareholders to vote in favour of the resolutions as recommended by the Board.
The new Board is committed to transparency and clear communications with all of its stakeholders as it continues seeking to transition Tirupati Graphite towards becoming a globally significant graphite producer, capitalising on positive market trends for natural flake graphite and our existing asset base in order to realise exceptional value for our shareholders.
We firmly believe that the strong foundation that we have been building over the past months will enable us to meet these goals.
