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Versarien PLC Q&A: Confidence in the year ahead (LON:VRS)

Versarien plc (LON:VRS) Chief Executive Officer Neill Ricketts caught up with DirectorsTalk for an exclusive interview to discuss the highlights of the past year, news post period, the appointment of Susan Bowen, overseas expansion and confidence in the year ahead.

Q1: You’ve had your results out this morning, can you just talk us through the highlights of the past year?

A1: In terms of operational highlights, we’ve seen 13 new graphene applications and MoU’s , these tend to be with very large global companies some of which are overseas in China.

We’re turning very very quickly into a global company, we’ve seen the expansion into the US and we’ve seen the acquisition of a Spanish company, Gnanomat, who specialise in developing technology for batteries of supercapacitors. We’ve launched a few products including Polygrene which is a polymer including our 2D technology and a number of other things that mean the results, in my view, look good.

The group revenues remain pretty steady and the reason for that is that we’ve all experienced a bit of a cool-off in the economy as a result of the uncertainty around Brexit but we’ve seen an increase since these results came out so a little bit of light at the end of the tunnel.

If you look at our adjusted LBITDA, it’s only gone up slightly despite the increased additional costs of all our technical teams and the expansion of our overseas development.

So, for me, it looks pretty good, as CEO I’m not unhappy as the largest shareholder, I’m also fairly buoyed especially when you look at the future growth of some of the events that have happened after the period. This includes getting the first certification or being a verified graphene producer from The Graphene Council, something that’s not been repeated yet and further validation of the quality of our materials in China which again, is a huge achievement for such a small company.

Q2: You’ve also had some exciting news post period end, can you tell us a bit more about what you’ve been up to?

A2: As I said, post period, one of the biggest events was the certification which gives us a unique marketing angle. This qualification, this verification of not only our processes but our products mean that our customers and our collaboration partners are getting a huge amount of confidence. A third party validation of what we’re doing which means the enquiries are still rolling in, people are very excited and overjoyed at the fact that we’ve got this certification in place which means their job becomes a little bit easier.

Probably the biggest event that went on post period was the signing of this term sheet with the Beijing Institute of Graphene Technology which will really be the cornerstone of our Chinese operation. We’re going to set up a wholly-owned foreign entity and Chris has been working very hard on setting up all of the necessary things that are required to enable that to happen. It’s a try partner approach with BIGT in that the entity will be owned by us but ran by the Institute, that gives us a similar set up to what we’ve got in the UK with the National Graphene Institute and the Graphene Engineering Innovation Centre where we’ve got these beacons of graphene development that companies are going into in order to solve their engineering problems.

Just a couple of days ago, we actually got the REACH approval as well to produce up to 10 tonnes of graphene per annum. That is again, another milestone, another really great foundation piece in what we’ve been trying to achieve over the last couple of years in setting ourselves away from the competition in terms of validating our proposal. So, a lot going on really.

Q3: Also, post period, Susan Bowen joined the Board, what can you tell us about her background and what she brings to the business?

A3: We like working with people that we like working with, we like working with people who are successful and Susan comes to the Board as a very well experienced Non-Exec Director, not necessarily a graphene expert but someone that’s going to challenge and provide great governance to the Board from her particular angle.

She’s got a great career formally with Hewitt Packard and more recently, with a Canadian company Cogeco and she’s really got into understanding some of the challenges that businesses that are growing very  quickly have to go through. So, I’m really delighted she’s coming on to the Board with a fresh view, she’s already been very active in the audit committee meeting so great to have her on board.

We’re really delighted that we’re continuing to follow QCA guidelines or get as close as we can to QCA guidelines and this is just another way of getting closer to that best practice.

Q4: You’ve just been talking about setting up in China but could you give us some more details on Versarien’s expansion into China and other overseas markets?

A4: So, currently we have a number of MoU’s and collaborations with big Chinese companies, that activity is continuing and being supported from the UK but will gather steam as soon as we get the wholly-owned foreign entity set up in China.

That is, as I said, before a collaboration with the Beijing Institute of Graphene Technology and what we’re going to be doing there is using that as our keystone for our Chinese development, it brings along a significant amount of investment, it means that we’ll be well funded for that development. It also sets a precedent for some of the other activities we have in other geographical locations such as Japan, South Korea and the US.

It’ll be great to have BIGT, Beijing Institute of Graphene Technology, alongside us because, again, it’s a real validation of the quality of the products we’re producing but also, they have an awful lot of experience themselves which they’re bringing to the table.

So, a really good fit for both us and BIGT and it means that together, we’ll really accelerate the use of graphene in China.

Q5: It sounds like you’re primed to take advantage of a number of opportunities, are you confident for the year ahead?

A5: I’ve never been more confident. We set up Versarien up in 2011, two guys in a garage, 2013 we listed it on AIM with one technology, now we have a whole technology. Our emphasis and the direction from the Board has always been the same which is to de-risk the proposition as much as possible, not only for shareholders but for other stakeholders.

In doing so, we’ve attracted great support by being very transparent and very inclusive to all stakeholders whether they be private investors, institutional investors or strategic investors and that means that we are now in a much better position than we were 12 months ago.  

Looking forward, we have a significant number of opportunities, it’s not going to be easy, there’s going to be lots and lots of challenges as we move forward, we’ve got to scale the technology which can never be guaranteed but we’ve got ourselves in a situation where we’ve got a lot of confidence for what’s going to happen over the next 12 months.