Tuesday, March 22, 2016

News: Xeros delivering on strategy

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Innovative Rotherham company, Xeros, is delivering on its strategy to exploit a number of commercial applications for its patented polymer bead technology.

Based on the Advanced Manufacturing Park (AMP), Xeros is a Leeds University spin-out that 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.


Admitted to AIM in 2014, Xeros is commercialising the system which uses at least 70% less water, up to 50% less energy and approximately 50% less detergent.

In its financial results for the five months to December 31 2015, the group outlined the progress made in commercial laundry, leather processing and other potential applications.

In November, Xeros secured a further £40m from a share placing to maintain momentum and accelerate the roll out strategy of its commercial laundry business in the Americas and Europe.

The operational review stated that Xeros machines were being installed at an approximate rate of one per working day, with sales and service margins in line with expectations. 56 commercial washing machines were installed during the period and the total installed passed the 200 mark in February.

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Targeting the billion dollar US laundry market, Xeros utilises an increasing number of partners to sell the systems. The Xeros business model is more about the deployment and servicing of the patented polymer beads than the machines themselves. The company and resellers benefit from a monthly recurring revenue stream from services and sales of "Sbeadycare," the all-inclusive laundry management programme, to hotels, commercial and industrial laundries, dry cleaners, fitness clubs and spas.

Continuing to invest £1.9m in R&D, the group reported a loss after tax of £5.6m, widening from the £3.8m in 2014. Earned income increased to £744,000 in the five months ended December 31 2015 (prior period 2014: £95,000).

With initial machines manufactured in China, a second source manufacturer is now producing and shipping units. A smaller machine to meet a gap in the market is also being trialled.

A system for the home is also a target for the company which is trialling models to assess the best route to the domestic market. Discussions continue with major machine manufacturers, who have shown an encouraging level of interest in working with Xeros. A washing machine for the US market is being developed to conduct consumer field trials in due course.

Xeros is also targeting the $50 billion leather processing market and is working on a joint development programme with LANXESS to develop a system using the polymer beads. Traditional leather processing machines can consume approximately 90 tonnes of water to produce one tonne of leather.

The update states that results of tannery trials have so far been encouraging and that an optimised system could be developed on the AMP toward the end of the year.

The group continues to invest in its R&D programme and a new engineering centre for commercial laundry in the US is freeing up capacity to enable researchers on the AMP to undertake applications engineering in leather processing and beyond.

In the search for additional revenue opportunities, studies to identify future potential applications are close to completion and the company is about to commence detailed reviews of areas identified as being potentially high in opportunity. Other applications range from garment-finishing to the potential use of the technology in the metal sector.

Mark Nichols, chief executive of Xeros, said: "Our business development activities have continued in line with the plans laid out during our £40m fundraising in November last year.

"The roll out of Commercial Laundry continues at a good pace. We are now installing machines at an approximate rate of one per working day and expect this rate to progressively increase.

"In Leather Processing, our full scale trials are on track and are scheduled to be completed around the middle of the year. We anticipate that these trials will show that our polymer beads, which were specifically designed for this application, deliver economic, operational and sustainability improvements.

"Studies to identify new potential applications are also progressing on schedule and are providing further evidence that we possess a platform technology."

Xeros website

Images: Xeros

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