LifeSafe Holdings plc

('LifeSafe', the 'Group' or the 'Company')

Interim Results for the six months ended 30 June 2023

Strong revenue growth and first industrial agreement achieves a significant strategic milestone

LifeSafe (AIM:LIFS), a fire safety technology business with innovative fire extinguishing fluids and fire safety products, reports its unaudited Interim Results for the six months ended 30 June 2023 ('H1 2023' or 'the Period').

Financial highlights:

Operational highlights:

Post-period highlights:

¹ Underlying LBITDA represents loss for the period before finance expense, tax, depreciation and amortisation, and non-underlying items.

Commenting on the Interim Results, Dominic Berger, Chairman of LifeSafe, said:

"I am pleased to announce another positive set of financial results that reflect the continued growth and development of our business, driven by our dedicated team.  Having listed on AIM just over 12 months ago, we have consistently outperformed our financial and strategic targets, all whilst ensuring that our potentially life-saving fire safety solutions are made increasingly available to customers globally.  Our IPO occurred in the early stages of our growth and understanding of the market.  It is safe to say we know more now than we did then, but nonetheless we have and will continue to learn and deliver on our journey.

"I am also delighted that we announced our first major partnership in the development of our industrial strategy with Wormald in Australia.  This milestone is a long way ahead of our expectations even though we have been working and testing with Wormald for over 18 months.  We are excited about how the partnership and endorsement of Wormald will now open a huge opportunity in the bulk supply of our fluids through similar partnerships globally.

"My thanks extend to the whole team at LifeSafe and the continued support of our shareholders, both new and old.  We remain on course to deliver on our stated goals where every home should have a StaySafe and of being a global disruptor and leader in fire safety fluids."

Investor presentation

An in-person meeting for sell-side analysts will be held at 9.30am today at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London EC1A 4HD.  Please contact FTI Consulting via LifeSafe@fticonsulting.com if you wish to join the meeting.

The Company will also be hosting an online presentation for retail investors to discuss the announcement on 27 September 2023 at 5.00pm.  Please email LifeSafe@fticonsulting.com to register your interest.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR").  Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

The person responsible for arranging the release of this announcement on behalf of the Company is Mike Stilwell, Chief Financial Officer of the Company.

For further enquiries:

Notes to Editors

LifeSafe is a fire safety technology business that develops eco-friendly, novel and innovative fire extinguishing fluids and life-saving fire safety products.  LifeSafe has developed a market disrupting range of eco-friendly fire safety protection products; a new patent-pending Thermal Runaway Fluid to combat lithium battery fires by permanently extinguishing and preventing re-ignition, and the StaySafe All-in-1, a handheld eco-friendly and fully recyclable extinguisher which is verified to extinguish ten different types of fire and the number one selling fire extinguisher on Amazon UK.  LifeSafe is successfully creating new markets for the Group in fire safety through its innovative technologies, products, digital marketing and multi-channel sales; and is continuing to develop new fluid derivations for applications in various industrial market sectors.

LifeSafe was admitted to trading on AIM in July 2022 with the ticker LIFS.

For further information please visit: https://www.lifesafeholdingsplc.com.

LinkedIn: https://www.linkedin.com/company/lifesafe-technologies

Twitter: https://twitter.com/LifesafeT

Chairman's Statement

Business Review

I am delighted to report on the continued strong operational and strategic progress made by the Group in H1 2023.  This progress is all the more significant considering it is just over a year since the Group was admitted to AIM and was able to access the funds required to progress the commercialisation of LifeSafe's core product containing its proprietary fire extinguishing fluid.

At almost £3 million, our revenue for H1 2023 represents 72% of that achieved in the whole of 2022 and is ahead of the Board's expectations.  The StaySafe All-in-1 remains the number one best-selling fire extinguisher on Amazon UK.

What is particularly impressive, however, is at the same time as managing this considerable growth in the consumer channel, the LifeSafe team developed and launched the new StaySafe All-in-1 in the UK and US consumer markets and, subsequent to the Period end, achieved the significant strategic milestones of signing LifeSafe's first industrial partnership agreement with Wormald Fire & Security with the Group's new fluorine free lithium thermal runaway fluid and being appointed to QBE Insurance Group's Solutions Panel.

The industrial partnership with Wormald represents a key strategic development which could have only been achieved through the exceptional progress made in the consumer market and lays the foundations to access the enhanced margins of bulk fluid supply and international distribution agreements, which avoid many of the costs inherent in the direct consumer supply model.

I reaffirm that the Group remains firmly on track in executing its strategy to build a multi-channel, international fire safety business capable of delivering significant long-term value for our shareholders.

Results

LifeSafe's revenue for H1 2023 more than doubled to £2.9 million, compared with £1.3 million in the same period last year as the commercialisation of the Company's innovative, market disrupting eco-friendly fire extinguishing proposition continued ahead of the Board's expectations.  Sales increased both in the UK, through the introduction of the StaySafe All-in-1 fire extinguisher, and in the US, with a full six months sales of the StaySafe 5-in-1 fire extinguisher since its introduction in the US market during H1 2022.

Gross profit for H1 2023 increased significantly to £1.7 million (H1 2022: £0.7 million) at a gross margin of 57.8% (H1 2022: 55.5%), in line with the Board's expectations despite the strengthening of sterling against the US dollar during the Period compared to the budgeted rate.

Underlying administrative expenses for H1 2023 increased to £2.5 million (H1 2022: £1.4 million) as the Group invested in digital marketing to drive sales with a corresponding increase in logistics costs, particularly in the US, and invested operationally in resource to address the increasing demands of supply chain, customer service and financial management.

The Group made an underlying loss before interest, tax, depreciation and amortisation¹ ('LBITDA') of £760,000 (H1 2022: £681,000) before non-underlying share-based payment charges of £413,000 (H1 2022: non-underlying items of £895,000 comprising IPO costs and share-based payment charges).

Finance expenses of £23,000 were recorded in the Period (H1 2022: £573,000, of which £569,000 related to non-underlying interest on convertible loan notes which subsequently converted to equity on Admission to AIM).

The Group made an underlying loss before tax² of £849,000 (H1 2022: loss of £733,000).  After charging £413,000 for non-underlying costs in relation to share-based payment charges (H1 2022: total non-underlying charges of £1,464,000), the consolidated loss before tax for the Period was £1.3 million (H1 2022: loss of £2.2 million).

The basic and diluted earnings per share were (£0.06) (H1 2022: (£0.14)).

Cash and cash equivalents as at 30 June 2023 were £24,000 (H1 2022: £22,000).  £1.21 million was subsequently raised through the Company's placing, share subscription and retail offer in August 2023 (described below).  Net debt at 30 June 2023 was £440,000 (30 June 2022: net debt of £7,000).

Inventory at 30 June 2023 amounted to £1.0 million (30 June 2022: £0.3 million) as stock was procured in advance of expected demand to ensure this could be satisfied during the seasonally-stronger second half of the year, particularly for stock shipping to the US market.  In 2022, 68% of the Company's revenue was generated in H2 2022, highlighting the importance of front-loading inventory to maintain product availability.  The inventory balance reduced to £0.9 million at 31 August 2023 as stock began to be worked through.

Trade and other receivables at 30 June 2023 amounted to £436,000 and included £154,000 in relation to taxation subsequently received after the Period end (30 June 2022: £3.2 million, of which £3.0 million were committed subscriptions to the Company's placing of shares and Admission to AIM on 6 July 2022).

Trade and other payables at 30 June 2023 amounted to £782,000 and included £515,000 of trade creditors reflecting stock delivered in advance of the expected seasonally higher demand in H2 2023 (30 June 2022: £1,583,000, including IPO costs of £984,000 which were paid subsequently).

Borrowings at 30 June 2023 amounted to £464,000 (30 June 2022: £29,000) and included balances of £22,000 in relation to a Coronavirus Bounce Back Loan, £142,000 in relation to a supplier invoice finance facility announced on 31 March 2023 and originally drawn at £250,000 with final repayments on 31 October 2023, and £250,000 in relation to a trade finance facility announced on 5 June 2023 repayable in full on 30 October 2023.

¹ Underlying LBITDA represents loss for the period before finance expense, tax, depreciation and amortisation, and non-underlying items.

² Underlying loss before tax represents loss for the year before tax and non-underlying items.

Post balance sheet placing, share subscription and retail offer of shares

On 3 August 2023, the Company announced a placing and share subscription at £0.37 per share to raise approximately £0.94 million and £0.14 million, respectively, and up to £0.25 million through a retail offer.  The placing was conducted in two tranches and resulted in the issue of 1,637,565 shares on 9 August 2023 and 936,900 on 22 August 2023, raising gross proceeds of £0.95 million.  The share subscription resulted in the issue of 378,378 shares on 9 August 2023 raising gross proceeds of £0.14 million.  The retail offer resulted in the issue of 315,090 shares on 25 August 2023 raising gross proceeds of £0.12 million.  In total 3,267,933 shares were issued through the placing, share subscription and retail offer, raising gross proceeds of £1.21 million and taking the number of shares in issue to 25,375,983.  The costs of issue amounted to £0.13 million.

We are grateful for the support of both new and existing shareholders, whose investment will be used to maximise the business opportunity in front of us.

Research and development, technology and intellectual property

Since the beginning of 2023, the Company has made a number of significant announcements as a result of accelerating the development of its strong pipeline of innovative new products and fluid derivatives in response to industry demand. 

LifeSafe's Lithium TRF was announced in December 2022 and introduced to the industry in January 2023 at Intersec Dubai, the world's leading event for emergency services, security and safety.  Lithium TRF, a variant of the Group's core eco-friendly patented fluid, is a new non-toxic, non-hazardous and fluorine free fluid designed to permanently extinguish and prevent the re-ignition of lithium battery fires.  The Group has submitted UK and international patent applications to protect its innovation.

In April 2023, the new StaySafe All-in-1 fire extinguisher was launched in the UK featuring the Group's next generation fluid.  The StaySafe All-in-1 is specifically designed to tackle ten different types of fire, replacing the Group's successful debut product, the StaySafe 5-in-1.  The StaySafe All-in-1 was launched in the US in July 2023 and in the Screwfix chain of 850 stores in the UK and on its website in September 2023.  The Group has submitted UK and international patent applications to protect its innovation.

The Group's fluorine free derivatives of its existing fluids have been developed in response to European legislation which, from July 2025, will ban the use of fire-fighting foam containing perfluorooctanoic acid ('PFOA').  This follows similar legislation in North America and Australia.  The global market for soon to be banned foam extinguishers is valued at $1 billion per year (source: Grandview Research) representing a significant opportunity for LifeSafe.

The Group's fluorine free fluids provide an environmentally friendly solution to future proof portable and fixed fire extinguishing solutions ahead of the 2025 deadline and have been endorsed and chosen by Wormald Fire & Security which entered into a distribution agreement in Australia for LifeSafe's TRF in September 2023.  Wormald is a leading provider of fire protection services in Australia with a 130-year heritage and was valued at US$1bn in 1990 when bought by Tyco.  In 2016, Wormald was acquired by Evergreen Capital, LP, a New York based investment firm. 

Capitalised expenditure on technology development during the six-month period amounted to £161,000 (H1 2022: £184,000).

LifeSafe's intellectual property is protected through the grant of two patents and patent applications for eight further fluid derivations across the UK and internationally.

The Board recognises the importance of protecting its intellectual property and rigorously guards its innovation.  The Group employs an intellectual property attorney to protect its interests and has intellectual property defence and pursuit insurance to protect its investments.

Strategic partnerships

The Group announced earlier today the significant strategic milestone of signing its first industrial partnership agreement with Wormald Fire & Security.  Under the strategic partnership agreement, LifeSafe will supply its new fluorine free, lithium ion TRF fire extinguishing fluid exclusively in Australia to Wormald for use in their range of fire safety equipment.  In addition to the expected revenue benefits from the distribution of the Group's fluids, Wormald has provided LifeSafe with crucial introductions and expertise in helping to access other geographies and market sectors.

LifeSafe has also recently been appointed to QBE Insurance Group's Solutions Panel.  The appointment represents the culmination of 14 months assessment and testing of the Group's range of fire extinguishing fluids and products.  As well as generating revenue directly from recommendations to its customer base, QBE's powerful endorsement of the Group's fluids will be invaluable in building trust and credibility in the conversion of LifeSafe's growing industrial sales pipeline.  

Outlook

As previously communicated, our laser focus so far in 2023 has been in continuing to grow consumer market penetration across all territories using our tried and tested digital marketing strategies.  I am delighted that our significant revenue growth in H1 2023 demonstrates this has been achieved.  Our recent fundraise has provided the working capital to satisfy this greater than expected growth by ensuring that sufficient stock is available, and in the right place at the right time, to meet the expected seasonally-weighted demand in H2 2023.

We remain confident that we will achieve EBITDA profitability on a monthly basis during Q4 2023 despite the marketing and logistics costs required to deliver the sales growth.  We are looking forward to further scaling the consumer business in 2024 and enhancing our margins by commencing production in the US.  Given the seasonally-weighted second half of the year, management forecasts for 2023 year remain unchanged at this stage.

What is particularly exciting is the excellent progress we have made in achieving the strategic milestone of signing the first industrial partnership agreement with Wormald Fire & Security and our appointment to QBE Insurance Group's Solutions Panel.  This lays the foundations to accessing the enhanced margins of bulk fluid supply and international distribution agreements, which achieve sales without the scale of marketing, commission or logistics costs inherent in the direct-to-consumer supply model.  It is the evolution of LifeSafe as a recognised, leading fluid technology business which will unlock the highest long-term value for shareholders but would be impossible without the credibility and scale generated by the digital first consumer model which has resonated in the wider business-to-business fire safety market.

Notwithstanding the still huge and untapped addressable market in the consumer channel, the Board is very excited about these recent industry endorsements and expects them to be the first of many potential game-changing opportunities in the industrial supply of LifeSafe's fluids.  As such, the Group is well placed to drive further growth and is confident of delivering shareholder value.

Dominic Berger

Chairman

26 September 2023

Consolidated statement of profit or loss and other comprehensive income

For the six months ended 30 June 2023

All amounts relate to continuing activities.

Consolidated statement of financial position

As at 30 June 2023

Consolidated statement of changes in equity

For the six months ended 30 June 2023

Consolidated statement of cash flows

For the six months ended 30 June 2023

Notes to the unaudited condensed interim consolidated financial statements

1.      General information

These consolidated interim financial statements were approved by the Board of Directors on 26 September 2023.

2.      Basis of preparation

These unaudited consolidated interim financial statements of the Group are for the six months ended 30 June 2023.

The condensed consolidated interim financial statements for the six months to 30 June 2023 do not include all the information and disclosures required in the annual financial statements and have not been audited or reviewed by an auditor pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.  However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Group's financial position and performance in the period.

The condensed consolidated interim financial statements for the six months to 30 June 2023 have been prepared on the basis of the accounting policies expected to be adopted for the year ending 31 December 2023.  These accounting policies are drawn up in accordance with adopted International Accounting Standards ('IAS') and International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board and adopted by the EU.

AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.

3.      Revenue from contracts with customers

During H1 2023 the Group's supply chain resources were focussed on satisfying the increasing demand in the UK and the US.  A new production partner for the European market has been sourced with increased sales expected in H2 2023.

4.      Segmental reporting

The Chief Operating Decision Maker ('CODM') has been determined to be the Board of Directors.  The CODM reviews the Group's internal reporting in order to assess performance and allocate resources.  The CODM has determined that there is one single operating segment being the sale of fire extinguishing and related products.  Information concerning geographical revenue is disclosed in note 3.

5.      Non-underlying items

Share-based payment charges

The Group operates equity-settled share-based remuneration schemes for employees.  The terms and conditions of the grants are detailed below:

¹ The number of share options granted, and the corresponding exercise price, are shown after the Company's 49 for 1 bonus issue of shares on 9 May 2022.

6.      Finance expense

7.      Income tax expense

No income has yet been recognised in H1 2023 in relation to R&D tax credits available from HMRC through the SME R&D relief scheme for 2023.  The charge of £52,000 in the Period relates to an adjustment to the R&D tax credit estimate for 2022 recognised in the year ended 31 December 2022.

8.    Loss per share

Loss per share is calculated as follows:

The calculations of basic and diluted loss per share are based upon:

The calculation of the basic loss per share is based on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

The weighted average number of shares in issue is used as the denominator in calculating the basic loss per share.  As the Group is loss making the effect of instruments that convert into ordinary shares is considered anti-dilutive, hence there is no difference between the diluted and non-diluted loss per share.

9.    Trade and other receivables

Other receivables at 30 June 2022 included £3,000,000 of committed subscriptions to the Company's placing of shares and Admission to AIM on 6 July 2022.  The committed subscriptions were in the form of irrevocable placing letters held by the Company's Broker and Nominated Adviser.

10.  Cash and cash equivalents

11.  Trade and other payables

Trade payables and accruals and deferred income at 30 June 2022 included £984,000 of IPO costs paid after that date.

12.  Convertible loan notes

On Admission to AIM on 6 July 2022, all outstanding convertible loans converted to equity with the Company issuing 2,716,550 ordinary shares to the providers of all convertible loans outstanding at 30 June 2022.

13.  Borrowings

Bank loans comprise a Coronavirus Bounce Back Loan Scheme loan provided by HSBC.  The loan was taken out in May 2020 and matures five years after this date.

Other loans include £142,000 in relation to a supplier invoice finance facility announced on 31 March 2023 and originally drawn at £250,000 with final repayments on 31 October 2023, and £250,000 in relation to a trade finance facility announced on 5 June 2023 repayable in full on 30 October 2023.

14.  Share capital

Called up share capital

Called up share capital represents the nominal value of shares that have been issued.

All classes of shares have full voting, dividends, and capital distribution rights.

Further to the Period end, the Company issued 3,267,933 ordinary shares taking the number of shares in issue to 25,375,983 (see note 16).

15.  Reserves

Share premium account

This represents the excess value recognised from the issue of ordinary shares above nominal value.

Share-based payment reserve

This represents the cumulative fair value of share options charged to the consolidated statement of comprehensive income net of the transfers to the profit and loss reserve on exercised and cancelled/lapsed options.

Retained earnings

This represents cumulative net gains and losses less distributions made.

16.  Post balance sheet events

On 3 August 2023, the Company announced a proposed placing and share subscription at £0.37 per share to raise approximately £0.94 million and £0.14 million respectively, and up to £0.25 million through a retail offer.

The proposed placing was conducted in two tranches and resulted in the issue of 1,637,565 shares on 9 August 2023 and 936,900 on 22 August 2023, raising gross proceeds of £0.95 million.  The share subscription resulted in the issue of 378,378 shares on 9 August 2023 raising gross proceeds of £0.14 million.  The retail offer resulted in the issue of 315,090 shares on 25 August 2023 raising gross proceeds of £0.12 million.

In total 3,267,933 shares were issued through the placing, share subscription and retail offer, raising gross proceeds of £1.21 million and taking the number of shares in issue to 25,375,983.  The costs of issue amounted to £0.13 million.

On 22 August 2023, a General Meeting of the Company was held in which the Directors obtained authority to allot certain of the placing and retail offer shares.  In addition to this specific authority, the Board also obtained the approval of shareholders to give the Directors the additional general authority to freely allot up to 10% of the enlarged share capital.

17.  Availability

Further copies of this interim announcement are available on the LifeSafe Holdings plc investor relations website, www.lifesafeholdingsplc.com.

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