Graft Polymer (UK) witnessed a significant drop in its shares on Wednesday as the company expressed concerns about its ability to continue as a going concern. The company experienced a decline in revenue and a wider pretax loss for the first half of 2023.
At 0725 GMT, shares of Graft Polymer fell by 37.5%, or 0.96 pence, reaching a value of 1.6 pence.
Graft Polymer is renowned for its advancements in polymer modification and drug-delivery systems. The company has stated that it is actively seeking additional funding, both non-dilutive and equity-based, to sustain its operations. It believes that its strong financial structure and focus on generating cashflow are crucial for its effective functioning.
However, the company has expressed concerns that if it fails to secure the necessary funding, there is a material uncertainty regarding whether the going concern basis of accounting would be appropriate.
During the six months ended June 30, the London-listed group reported a pretax loss of £1.1 million ($1.4 million) compared to a pretax loss of £815,000 during the same period in the previous year. The company's revenue also declined from £331,000 to £240,000 as it completed the transition to its bespoke production site in Slovenia. It should be noted that this new site has effectively doubled the company's production capacity.
In terms of cash flow, Graft Polymer experienced net cash outflows of £1.1 million during this period. This is in stark contrast to the net cash inflows of £2.4 million reported earlier.
Nevertheless, Graft Polymer remains optimistic about concentrating on sales for the rest of 2023 and for the upcoming year, 2024. The company says it has a healthy pipeline and is well-positioned to secure larger customers and more mandates due to its expanded operations.
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