WindarPhotonics AnnualReport 2018 All - Flipbook - Page 18
STRATEGIC REPORT
The Directors present their Strategic Report and the audited
financial statements for the year ended 31 December 2018.
PRINCIPAL ACTIVITIES OF
THE GROUP
Windar Photonics is a technology
Group that has developed and sells
cost efficient and innovative Light
Detection and Ranging sensors
(‘LiDAR’) and associated products
for use on electricity generating
wind turbines. LiDAR wind sensors
in general are designed to
remotely measure wind speed
and direction.
The Group’s key products are the
WindEYE™ and WindVISION™
sensors which measure the wind
speed at different measuring
points by scanning a laser beam
ahead of the wind turbine.
By measuring the wind speed a
variety of wind information is
derived such as wind direction,
turbulence, wind shear, wind gust
and wake detection. The products
and various algorithms are
designed for the general
optimisation of wind turbines
both in respect of increasing the
Annual Energy Production and
general load reduction options.
REVIEW OF THE BUSINESS
The Chairman’s Statement on page
14 includes a general review of the
Group’s business for the year.
FUTURE DEVELOPMENTS
IN THE BUSINESS
Independent Power Producers
(IPPs) and Wind Park Operators
are primarily interested in general
optimisation of existing wind
turbines thereby potentially
increasing power output. One
method of achieving this is by
optimisation of the yaw alignment
of the wind turbine which can be
obtained by fitting a LiDAR wind
sensor such as the WindEYE™
sensor. Following the Company’s
Distribution Agreement with the
industry’s largest maintenance
provider, Vestas, Windar Photonics
is in discussions with numerous
IPPs. The Board is hopeful that
these will convert in the coming
months.
Original Equipment Turbine Manufacturers (OEMs) are primarily
focused on fully integrating LiDAR
16
wind sensor information to address
both yaw misalignment and more
complex load reduction strategies.
OEMs typically have longer design
times for product integration
compared to the shorter time
normally taken to retrofit a sensor
on an existing wind turbine.
The Group continues to work with
both IPPs and OEMs with on-going
trials in both of the Group’s key
markets.
During 2019, Windar’s R&D focus
will continue, focused on additional
new features, turbine optimisation
solutions and reducing manufacturing costs.
BREXIT
The Group has reviewed its
operations as a result of the UK’s
referendum to leave the European
Union (“Brexit”). It is not expected
that this will have a material
impact on the operations or financial
results of the Group, given that its
principal places of operation are in
Denmark and China. The Group
additionally reports in Euro and
although it is recognised that
depending on the specific exit
arrangements that are agreed and
how these are implemented, there
could be an impact on exchange
rates, this is not expected to impact
significantly on the Group.
INTERNATIONAL TRADING
SITUATION
The Group has reviewed its operations based on the current ongoing
trade war between the United States
of America (USA) and People’s
Republic of China (PRC). Based on
the current situation it is not
expected to have any material
impact on the operations or financial
results of the Group, The Groups
products are predominantly
manufactured within the European
Union (EU) but manufacturing also
depends on imports from other parts
of the world including USA. A further
escalation of the current trade
tensions including potential
increases of import/ export tariffs
or other restrictions could potentially have a material impact on the
operations or financial results of the
Group.
Windar Photonics - Annual Report and Accounts 2018
GROUP RESULTS AND
DIVIDENDS
In the year ended 31 December
2018, Windar Photonics achieved
revenue of €3.5 million (2017; €2.2
million) from sales of WindEYETM and
WindVISIONTM sensors and related
services which represent a revenue
growth of 59% in 2018. The total
gross profit for the year amounted
to €1.8 million (2017; €0.9 million)
representing a growth of 92%.
The Group loss for the year after
taxation was reduced by 64%
to €0.8 million (2017: Loss €2.2
million).
No dividends are payable for the
year under review (2017: No
dividends payable).
PRINCIPAL RISKS AND
UNCERTAINTIES
Sales cycle and product
acceptance
As with many large projects the
successful addition of a client
and the successful installation of
the Group’s product for a potential
client can entail a long sales cycle,
which often also involves
protracted negotiations and meeting
detailed technical specifications
and requirements, the length of
which may adversely affect the
Group’s financial situation and cash
flow and increase project costs.
Further, there can be no guarantee
that the commencement of such
negotiations will result in successful
addition of a client and, as such,
significant time may be spent and
expense may be incurred without
return for the Group.
As the Group increases its
presence in the market and is
undertaking projects with IPP, Wind
Farm Operators and OEMs the sales
cycle risk is reduced, as there are
more potential clients and the nonconversion of any potential client
is less of a risk to the business. As
the Group continues to grow this
risk will become a normal trading
risk.
Products and services failure
Quality is critical to the Group’s
business solution. While the
Group’s technology is complete
and extensive security and
scalability testing has been carried
out, a major system defect, due to
design mistake or technology failure
could impact upon current and
future customer demand. This may
lead to adverse press and market