Vivopower International PLC — FY2021 Form 20-F Summary
Reporting period: Fiscal year ended June 30, 2021. This is an annual report, not a filing for 2020 Q4. Unless noted, amounts are U.S. dollars; financial statements follow IFRS and were audited by PKF Littlejohn LLP.
Business context
Vivopower shifted toward sustainable energy solutions, combining electric vehicles, critical-power services, solar and battery/microgrid capabilities to help customers decarbonize. Its five reported segments were Critical Power Services, Electric Vehicles, Sustainable Energy Solutions, Solar Development and Corporate Office. The November 2020 acquisition of Tembo and the subsequent purchase of its remaining interest brought the company fully into ruggedized electric-vehicle conversion. SES was newly established and generated immaterial revenue.
Key financial metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $40.4 million | $48.0 million |
| Gross profit / margin | $6.3 million / 15.7% | $7.1 million / 14.8% |
| Operating profit (loss) | $(4.8) million | $2.2 million |
| Net loss | $(8.0) million | $(5.1) million |
| Adjusted EBITDA | $(1.4) million | $3.9 million |
| Net cash from (used in) operations | $(15.4) million | $(4.6) million |
| Cash and cash equivalents at year-end | $8.6 million | $2.8 million |
| Total borrowings | $23.1 million | $26.0 million |
| Net debt | $14.5 million | $23.1 million |
| Current assets / current liabilities | $24.0 million / $13.4 million | $20.5 million / $19.7 million |
| Current ratio | 1.79 | 1.04 |
FY2021 cash increased by $5.5 million overall, principally from $23.5 million of financing cash inflow, including net capital-raise proceeds, offset by operating and investing outflows. The company reported $40.4 million of total assets and $40.4 million of equity. Intangible assets were $47.4 million.
Material changes versus FY2020
- Revenue fell $7.6 million, mainly because COVID-19 restrictions delayed Critical Power Services projects and site access. That segment generated $38.8 million, down from $47.9 million.
- Critical Power Services gross margin improved to 15.5% from 14.5%, but the lower revenue base reduced gross profit.
- Tembo contributed $1.4 million revenue and $0.1 million gross profit for eight months after acquisition; its segment reported a $2.2 million operating loss.
- General and administrative expense more than doubled to $11.1 million, reflecting increased staffing, professional costs, equity incentives and investment in growth.
- Cash from operations worsened, with a $10.4 million working-capital outflow, including a $9.5 million reduction in trade and other payables.
- Cash rose following a capital raise: the company issued 4.1 million shares during the year and reported $32.0 million in net capital-raise proceeds.
Outlook, risks and unusual items
- Funding and going concern: Management estimated a minimum additional funding requirement of $15 million for FY2022, to be met through asset-backed, debtor and inventory financing and potentially equity. It stated that available cash, forecast operating cash flows and planned financing should meet requirements for at least 12 months, while also noting that directors believed resources supported operations through September 2021. Continued losses or failure to obtain financing or realize asset-sale proceeds could threaten liquidity and going-concern status.
- Debt and related party exposure: $21.2 million of borrowings was a secured loan from major shareholder AWN. Repayments were deferred to January 2023, with maturity extended to December 2027; the loan bears 8% interest plus a 0.8% line fee. AWN held 44.2% at June 30, 2021 and 49.1% after shares were issued in July 2021.
- Growth plans and execution: Management expected a rebound in Critical Power Services and investment in Tembo production, SES capabilities and solar-project development. Tembo had distribution arrangements and potential kit commitments, including a binding Australian distributor agreement; other disclosed commitments included intentions or non-binding terms and should not be treated as firm orders. A Toyota Australia letter of intent was a precursor to a potential master services agreement.
- Solar portfolio: The company took full ownership of the U.S. Caret portfolio, with 12 active projects totaling 682 MW and 26 projects discontinued or put on hold. Management anticipated realizing value from active projects over 12–24 months. FY2021 included a $7.8 million bargain-purchase gain, largely offset by a $7.0 million loss on discontinued projects.
- Valuation sensitivity: Goodwill and intangible assets totaled $47.4 million and no impairment was recorded. Impairment testing relied on significant growth assumptions; the filing states that lower SES implementation or project revenue assumptions could trigger impairment.
- Legal and other unusual items: The former CEO litigation resulted in $2.66 million of payments and an additional $0.48 million provision for disputed legal success fees. Restructuring and other non-recurring costs were $2.9 million, including litigation and Tembo acquisition costs. Australian COVID-19 support contributed to other income, while a $2.1 million foreign-exchange gain supported finance results.
- Other risks: The filing highlights COVID-related operational and supply-chain disruption, EV product acceptance and production scaling, customer and delivery risks, foreign-exchange exposure, competition, potential dilution and dependence on external financing. No dividends were planned.
Important facts for investors to verify
- Whether the stated FY2022 funding plan was secured and how much further equity issuance or dilution followed.
- Cash burn, working-capital movements, operating performance and actual liquidity after the stated September 2021 planning horizon.
- AWN loan terms, security, repayment obligations and related-party governance; reconcile AWN ownership at year-end with the post-July share issuance.
- Tembo production readiness, delivered orders, realized revenue and gross margins; distinguish binding contracts from non-binding or intended purchases.
- Progress, financing, sale proceeds and impairment sensitivity for the 12 active U.S. solar projects and the SES pipeline.
- Basis for the $47.4 million intangible-asset balance and the material forecast assumptions used in impairment testing.
- The filing’s controls discussion refers to an assessment date of June 30, 2020 despite covering FY2021; verify the correct assessment period and related disclosures.