Vivopower International PLC — FY2023 Form 20-F
Reporting period: Fiscal year ended June 30, 2023; comparative FY2022 figures are restated where noted. This is an annual report, not a report for calendar 2022 Q4. Financial statements are prepared under IFRS in U.S. dollars. VivoPower provides critical power services, commercial electric-vehicle conversion products, sustainable energy solutions and solar project development.
Financial performance and position
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue from continuing operations | $15.1 million | $22.4 million |
| Gross profit/(loss), continuing operations | $(2.3) million; margin approximately (15%) | $0.3 million; margin approximately 1% |
| Operating loss, continuing operations | $(11.3) million | $(14.5) million |
| Net loss, including discontinued operations | $(24.4) million | $(22.1) million |
| Adjusted EBITDA, continuing operations | $(5.7) million | $(9.1) million |
| Cash from/(used in) operating activities | $(8.6) million | $(5.1) million |
| Cash and cash equivalents at year end | $0.6 million | $1.3 million |
| Total borrowings | $32.4 million | $28.6 million |
- Net cash decreased by $0.7 million: operating outflow of $8.6 million and investing outflow of $1.9 million were partly offset by $9.8 million of financing inflows.
- Year-end current assets were $10.3 million versus current liabilities of $18.9 million; the current ratio was 0.54. Restricted cash of $0.6 million was not freely available.
- Net assets fell to $3.7 million from $21.6 million. Goodwill and other intangible assets totaled $42.2 million, including $7.8 million of capitalized Tembo development costs.
Changes and notable items
- Continuing revenue declined 33%, primarily because Aevitas Solar completed fewer projects; Critical Power Services revenue was $13.6 million, down from $21.0 million. Electric Vehicles revenue was $1.5 million, largely from non-EV vehicle conversions; no EUV conversion kits were sold in FY2023.
- Gross results were hit by $3.9 million of non-recurring extreme-weather costs on the Edenvale solar project. Management reported a 10.5% continuing gross margin excluding the identified exceptional weather and prior-year disruption costs.
- General and administrative expenses declined to $7.6 million from restated $13.8 million, reflecting lower salaries, share-based compensation and marketing costs. The company also recorded $2.1 million of restructuring and other non-recurring costs, including a charge related to disputed fiscal refunds.
- The July 2022 sale of J.A. Martin’s non-solar operations resulted in a $4.2 million discontinued-operation loss in FY2023. The final contingent consideration was received in August 2023.
Outlook, liquidity and risks
- Management expects Tembo to begin shipping its new EUV23 conversion kits in the second half of calendar 2023 and intends to scale production. The filing describes potential partner commitments for more than 15,000 kits over five years; these are not equivalent to completed sales, and FY2023 kit orders were recorded as deferred revenue.
- VivoPower reported a material uncertainty that may cast significant doubt on its ability to continue as a going concern. Auditors issued an unmodified opinion but included a going-concern explanatory paragraph. Management expects substantial FY2024 funding needs and plans to seek equity, asset-backed and debtor financing, supplier/customer working-capital support and possible asset-sale proceeds; availability is not assured.
- AWN, a major shareholder and related-party lender, accounted for about $28.6 million of the company’s debt. Loan terms were amended to defer principal payments to begin April 2025; a qualifying liquidity event can trigger mandatory repayments. The company also agreed to issue AWN 500,000 warrants at $0.67 per share.
- Principal risks include financing and refinancing needs, continued losses and cash burn, Tembo production scale-up and supplier availability, solar project sale timing, weather and cost overruns, customer concentration, foreign exchange exposure, and potential dilution. The filing gives no clear numerical revenue or profit guidance.
- Nasdaq had granted an extension through October 23, 2023 to regain the $1.00 minimum bid-price requirement. Shareholders separately authorized a possible share consolidation; neither compliance nor the outcome of any consolidation was assured.
- Management stated that disclosure controls and internal control over financial reporting were effective at June 30, 2023; the auditor was not engaged to attest to internal-control effectiveness. The Texas land-related lawsuit remained pending, and the company recorded no provision for it.
Investor facts to verify
- Near-term liquidity, subsequent financing, cash runway and compliance with AWN loan terms, including mandatory repayments after qualifying liquidity events.
- Whether Tembo has converted stated partner commitments and deferred-revenue orders into firm, deliverable orders, and whether production and customer shipments began as planned.
- The basis and recoverability of $42.2 million of goodwill and intangible assets, particularly Tembo development costs and the assumptions underlying impairment tests.
- The solar portfolio disclosures: the filing describes seven active U.S. projects totaling 365 MW in its business narrative, while a project table elsewhere appears to list a different number and capacity. Clarify the current active portfolio and realizable sale proceeds.
- The final financial impact and status of the disputed fiscal-refund matter, the Texas lawsuit, and any other contingent obligations.
- Potential dilution from outstanding warrants, incentive awards and future capital raises; also verify the current share count and Nasdaq bid-price status.