OTAQ [AQSE:QTAQ], became the Aquis’ Growth Exchange’s newest company earlier this week as it cancelled its listing on the Standard Segment of the London Stock Exchange and listed on the Access Segment of the AQSE Growth Market. OTAQ originally listed on the LSE on 31st March 2020 and raised GBP1.5m at IPO.
A spokesperson for the company said that: “…given OTAQ’s size and general market liquidity concerns, management decided that the Aquis Growth Exchange was a more appropriate listing for the company and would support the company’s growth plans in a more efficient way.”
OTAQ’s shares were admitted to trade on AQSE at 1p on 9th November, raising GBP3.6m (GBP3.2m net of expenses), which will be used for working capital for the next 12 months.
The raising will strengthen QTAQ’s balance sheet and fund QTAQ’s growth, helping it develop its aquaculture, marine geo-tracking and offshore product range. The company said in a statement that its stronger balance sheet would allow it to pursue both organic growth as well as seek acquisition opportunities. In 2021 OTAQ made a 10% investment in Blue Lion Labs, a company registered in Canada that specialises in plankton detection and identification. The company has been experiencing liquidity issues this year as regulators in Scotland and Chile suspended use of one of its main products whilst they complete research on the impact of the product on local marine environments.
The company also made a further placing of 22,499,978 Warrants, that will entitle the holders to subscribe to one Ordinary Share at 12p up until the second anniversary of the date of admission. Post admission the company has 122,758,052 ordinary shares in issue with voting rights. The company welcomed Harald Rotsch as chief technology officer, and Giles Clifford as NED.
Downgate Capital acted as corporate adviser and broker for the transaction.
Who is OTAQ?
The Lancaster-based company, with a market capitalization of GBP5.7m, manufactures marine technology products. One of its main products is in aquaculture, where it produces sensory and software products for the salmon farming industry (and other aquaculture systems) that creates a robust marine acoustic barrier that deters predator attacks on fish farms from seals and sealions and is used in Scotland, Chile, Finland and Russia. The company also produces low-optics, underwater cameras and plankton/algal bloom sensors and a sonar device to scan shrimp in ponds and water quality monitoring, in order to maximize welfare and production yields. It is also developing a real-time plankton monitoring system for finfish and shellfish farmers.
The company has a rental/lease as well as a purchase option for its products, but is focused on an ‘Infrastructure as a Service’ model concentrating on design, build, install and maintain its products on long-term leases. OTAQ operates in Scotland, Australia, Chile, Scandinavia and Russia.
OTAQ also manufactures products for the offshore sector – oil and gas and wind farms – that includes subsea leak and cement detection, laser measurement systems, underwater imagery & telemetry solutions, as well as subsea survey solutions, using optics, electronics, video processing, machine vision and artificial intelligence to sense changes in subsea structures. Additionally, OTAQ provides seabed survey devices and subsea electrical connectors and penetrators.
OTAQ sees rise in revenues
In its last results for the 12 months to 31st March 2022, OTAQ reported a rise in revenues year-on-year of 5.9% to GBP4.3m. Adjusted EBITDA declined to a loss of GBP0.05m from GBP0.52m profit in 2021 with the corresponding EBITDA operating margin declining from 13% in the prior year to a 1% EBITDA operating loss. This decline was driven by the increase in administrative expenses to GBP4.14m.
Profit was down 12% to GBP2m loss with net debt GBP1.3m a change since 2021 where the company had a positive cash balance of GBP0.7m.
The company said at the time that it was experiencing momentum in the North Sea Oil & Gas sector, as exploration and production was ramped up in response to the War in Ukraine, as well as a prospective surge in offshore wind installations being planned in the North Sea, but was still waiting on Marine Scotland, the regulator, to authorize the use of its acoustic deterrents in Scottish waters. The chairman, Alex Hambro, warned of a difficult year.
He said: “The group enters the new financial year with a degree of uncertainty around its revenue forecasts. The group is working hard to commercialize its strong pipeline of new products, but the timing of new revenues is inherently difficult to forecast. For this reason, there remains material uncertainty around the cash position of the group and whether there will be sufficient resources to trade and meet all obligations for the next twelve months.”
