Neill Ricketts talks us through the next steps following the recent bull run
Since TMS spoke to Versarien at the beginning of March, shares in the smart materials firm have advanced from 76.5p to their current 130p. The business, which now has a market cap of £201.3m, has been boosted by considerable progress across its US and China operations and a major vote of confidence from the Graphene Council. Here, the company’s chief executive Neill Ricketts explains the significance of recent newsflow and why he thinks this positive momentum could continue.
Versarien has plastic, thermal, and hard-wear divisions, but its primary focus at present is graphene. The material is a type of carbon made up of sheets just one atom thick that has previously been called the most durable material ever tested. It has been introduced in display screens, electric/photonics circuits, solar cells, and various medical, chemical and industrial processes.
Some think the uptake of graphene will accelerate considerably over the coming years. For example, a report from Statistics Market Research Consulting says the global graphene market will grow by 40pc p.a between 2017 and 2026. Meanwhile, another analyst expects it to be worth $311.2m by 2020.
In the weeks since we last spoke to Ricketts, Versarien has taken several steps forward in its push into the Chinese market. For example, it has signed an MoU with a state-owned company involved in the research, design, and manufacture of materials and systems used in the aerospace sector. The initial agreement sets out the firms’ intentions to collaborate and accelerate the market for Versarien’s graphene in the Chinese aerospace sector and other industries using similar materials and technology.
Following this agreement, Versarien’s second with a Chinese aerospace outfit, the business revealed a letter of intent with world-leading display material supplier Tunghsu Optoelectronic. The two organisations, who entered an MoU last November, eventually plan to establish a manufacturing JV to develop and manufacture a new generation of graphene heaters in China.
Versarien’s most significant step forward in China, however, came earlier this month when it announced that it had signed a term sheet with the Beijing Institute of Graphene Technology. The agreement with the state-backed entity, founded in 2017, covers a proposed collaboration to develop Versarien’s graphene operations in China.
Under the proposed terms, the Beijing Institute will assist Versarien with the establishment of a wholly-owned Chinese subsidiary focused on the manufacture of graphene and other 2D materials. Specifically, the Institute would provide funding to Versarien in the form of an equity investment of up to 15pc. Although a formal agreement is yet to be secured, Ricketts tells us that the deal marks a massive vote of confidence for Versarien’s strategy in China.
‘The Institute clearly like what it has seen in its due diligence and wants to support us in our next phase of growth in China. This is really pivotal to what happens next to Versarien as it is a big injection of cash that can allow us to consolidate or to at least look at consolidating in our markets, while also supporting our international expansion,’ he says. ‘It is also an excellent deal for shareholders, and one of the reasons we have yet to complete the transaction is that we want to do it on the most favourable terms for our investors.
Alongside its progress in China, Versarien has also been stepping up its US activity. Notably, in March, the firm established a new corporate entity to contain its operations in the country. Alongside this, it has set up a new office, laboratory facility, and applications centre in Texas that will act as a hub for its North American activities.
The move follows Versarien’s work with the US National Graphene Association and various collaboration partners in the region. The firm added that it has identified further potential local collaboration partners and customers that it now hopes to pursue with maximum efficiency using its bolstered presence.
In particular, the company said it is looking forward to being a leading participant in the American Graphene Summit next month. This will bring together leaders of US industry and government agencies and key international figures in the graphene sector to discuss graphene technologies and their impact on the US and global economy.
Heading up the new US office is Patrick Abbott, an experienced speciality materials professional and former US Marine Corps Officer. Earlier this month, Versarien announced that it had recently learned that Abbott was the subject of an ongoing criminal proceeding brought by the State of Texas. However, the firm said it is monitoring the proceedings with advice from its US attorney and has determined that Abbott should continue in his role with the company under board and senior management guidance. Ricketts told us that the business continues to support Abbott as the case progresses.
Perhaps the most prominent recent development at Versarien, however, came at the beginning of this month. The outfit revealed that it had become the first graphene player in the world to complete the Graphene Council’s ‘verified graphene producer’ programme successfully.
According to Versarien, this is an independent, third-party verification system that involves a physical inspection of a company’s production facilities and a review of its entire production process. It also requires a random sampling of product material and characterisation and testing by an international materials laboratory.
Ricketts says the development was a ‘huge validation of Versarien’s technology’ that can show both partners and potential customers that its product meets globally-accepted standards. He added that the approval of the Graphene Council has led enquiries into its graphene to go ‘through the roof’.
‘Alongside this, some of our competitors are starting to feel the pressure because these tests are becoming a requirement moving forward for their contracts. So, there is quite a lot going on in terms of new business, and people are asking us for assistance and help on some of their projects,’ he added.
Moving forward, Ricketts is optimistic that Versarien can maintain the positive momentum recently enjoyed by its shares, with plenty of newsflow on the horizon:
‘Recent developments have seen the level of enquiries into our product increase, and we have also had some exciting progress with our current collaborators. These are huge programmes, and we are keen to update the market on as soon as we can – it is all positive news. All of our collaborations are moving forward, some quicker than others. We currently find ourselves in an excellent position.’
IGTV Invited Versarien CEO, Neill Ricketts, to answers your questions!
The author does not hold shares but was remunerated