Thursday, September 13, 2018

News: Xeros reports more interest, engagement and agreements

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Rotherham-based Xeros Technology Group plc has provided an update on its "IP-rich, capital-light" business models as global interest grows in addressing issues such as water scarcity and pollution.

Based on the Advanced Manufacturing Park (AMP), Xeros is a Leeds University spin-out that uses polymer technology to significantly reduce the amount of water used in a number of major applications. The remaining water becomes far more efficient in either affixing or removing molecules from substrates such as fabrics and garments. The result being significant improvements in economic, operational and sustainability outcomes.

In an update, the AIM-listed firm reported an income of £1.9m for the six months to June 30 2018, up 77.3% on £1.1m in the same period of 2017. Earnings before tax (EBITDA) saw Xeros post a loss of £11.6m as it continues to spend on research and commercialisation. A loss of £13.2m was reported for the first six months of 2017.

The board said that it reached a number of milestones which provide "strong evidence that our technologies have the capacity to transform industries and that market incumbents in cleaning, tanning and textile industries are increasingly accepting this situation."

Xeros aims to complete the commercialisation of current applications by the end of 2019. With £10.4 in the bank at the end of June 2018, the group said it expects to raise further funds in 2018 for the execution of its strategy.

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Mark Nichols, chief executive of Xeros, said: "The environmental macro drivers - water scarcity and pollution - are major factors in the increasing level of interest, engagement and agreements we are now seeing in our unique and proven technologies, with a number of large OEMs as well as distributors around the world.

"Changing the products and production processes of large industries is inevitably challenging but the high levels of engagement across our portfolio of applications is strong evidence that wide-scale adoption is increasingly likely. OEMs incorporating our technologies has been key to this increased uptake - as demonstrated by our first licensing deal in China.

"We are on track to deliver further major commercialisation milestones, based on our IP-rich, capital-light business models, with market incumbents during the remainder of 2018."

Milestones reached include the confirmation of its "Symphony Project" licensing deal which is set to see Sea-Lion integrate Xeros' technology in its commercial washing machines and sell them though its own extensive distribution network in China on an exclusive basis.

Also in commercial cleaning, which Xeros has now renamed Hydrofinity, export orders through overseas partners have also been secured in South Africa and the UAE.

Moving to a fully indirect business model, the group's income comes from the 389 Hydrofinity machines deployed around the world and it's Marken business which services High Performance Workwear users in the US.
On domestic cleaning, Xeros said that it is "continuing structured discussions with leading domestic washing machine brands regarding licenses for China, India, EMEA, the Americas and Asia Pacific (excluding China and India)" over the project which enables Xeros technology to be embedded in the production lines of existing manufacturers.

In tanning, which uses huge volumes of water during the process, Xeros said that contract awards have taken longer than anticipated with end customer approval requirements being a factor. Heads of Terms agreements have been made with two tanneries which will hopefully lead to Xeros receiving an up-front payment followed by ongoing payments for the polymer beads, now called XOrbs.

In textiles, Xeros has carried out trials on denim processing and has proven the benefits of its technology. It is now testing garments from leading Chinese manufacturers.

Xeros website

Images: Xeros

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