Wednesday, April 30, 2014

News: Xeros sets up for growth as losses widen


Innovative Rotherham company, Xeros, has posted losses in its first financial results since joining the AIM stock exchange as it continues to focus on accelerating the development and commercialisation of its entirely new clothes cleaning process - the first real innovation in the laundry industry for 60 years.

The Leeds University spin-out, based on the Advanced Manufacturing Park (AMP), has developed a patented system using a unique method of special polymer beads rather than the usual large amounts of fresh water to clean clothes. Instead a small amount of water is added to loosen clothing stains and activate the beads.

In its unaudited interim results for the six months ended January 31, Xeros reported a loss before tax of £2.78m, an increase from the £1.36m loss in the first half of 2013. Revenue for the period was £86,195, compared to £41,698 in 2013. Xeros said that this was due to the continuing investment in research and development and the early stage commercialisation of the commercial laundry offering.

As part of putting in place the infrastructure to support the growth of the business, Xeros is also taking on further staff in the UK and the US, its first target market.

In March, shares in Xeros began trading on the AIM on the London Stock Exchange (pictured). The share placing enabled the firm to raise £30m that is expected to allow the group to accelerate roll-out in commercial laundry and to fund the research and development process through to commercialisation in other identified applications, not least in domestic laundry.

The first sales in US commercial laundry market have been achieved and a US domestic laundry prototype has been developed.

The systems are being used in hotels, gyms and commercial cleaners where they use 70% less water, up to 50% less energy and approximately 50% less detergent. 30 systems have been installed or are committed to be installed in the US, UK and EU and Xeros estimates that approximately 120 further machine installations are expected for 2014.

Another revenue stream is the "one-stop-shop" service package of equipment, consumables and maintenance all under a single Xeros banner for which the customer pays a monthly fee and signs up for a minimum five year commitment. In other applications, Xeros intends to license the production, distribution and marketing of machines and detergents to partners.

John Samuel, chairman of Xeros Technology Group, said: "We have achieved much in the last year. Further, as a result of our admission to AIM, the group now enjoys a higher profile within our target markets and this is already generating increased customer and commercial partner engagement.

"There is still much to do but our plans are on track and I believe we have the necessary financial and human resources to drive the deployment of this disruptive technology to its maximum potential."

Jefferies, the investment banking firm that acted for Xeros in its share placing recently supported the move by issuing a "buy" rating.

Joe Spooner, an analyst at Jeffries, said: "Xeros has a patented polymer bead technology that can replace water in cleaning processes. The group is initially focused on laundry applications. It can demonstrate significant benefits from use, has large end markets in its sights and, as a completely new approach, we believe its technology has the potential to change industries."

Xeros website

Images: London Stock Exchange / twitter


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