Versarien

By Justin Reynolds

New Hexotene.jpg

Stronger than a diamond but lighter than paper, the Graphene market exhibits stunning growth potential. So time to look once again at Versarien?

“…Just three years ago the company’s share price touched nearly 200p, reflecting investor excitement in the sheer range of possibilities open to the company. The company’s current share price, currently around 40p, will look rather cheap if they come good…”

The revolutionary promise of graphene – the superconductive, one atom-thick carbon material that is 200 times the strength of steel – has been a staple in futurist literature for some time now. Discovered in 2004 by researchers at Manchester University, graphene opens transformative possibilities for everything from the tiniest electronic components to the skylines of cities.

The potential applications include flexible digital screens, ultra-efficient batteries, artificial bodily organs, radical new extrusion, moulding, and 3D printing processes, stronger, lighter aircraft, ultra durable clothing, new printing inks, and architectural structures previously thought impossible. The material is ubiquitous in near future science fiction imagining space elevators reaching miles into the sky, and super high skyscrapers reinforced by diamond-hard graphene cladding.

But like all new technologies that have become a part of everyday life, or are on the verge of doing so – like solar, wind, hydrogen and flow batteries – graphene has to pass through the gateway of commercial viability. Versarien (VSR.L) is one of a still select set of companies that has been working to bring the material to market, working with research institutions and other enterprises to turn concepts into viable products. The company has developed an intriguing set of vehicles for graphene’s commercialisation.

Seeking the ‘inflection point’

Total Carbide manufactures ‘sintered tungsten carbide’ –  hard metallic coatings – suitable for arduous environments, such as the oil and gas platforms and the flow control mechanisms used in the defence and aerospace sectors. 2-DTech, a spin-out from the Manchester University lab that pioneered graphene, has designed a range of graphene enhanced polymers with commercial possibilities, including Polygrene, Nanene and Hexotene. Cambridge Graphene Limited, linked to Cambridge University, produces a range of high performance, electrically conductive graphene inks suitable for a variety of printing applications. AAC Cyroma designs vacuum-formed and injection-moulded graphene enhanced plastic products for the automotive, construction, utilities and retail industry sectors. And Gnanomat is focused on energy storage devices with high power density, fast recharging and very long lifetimes for use in electrical vehicles and portable electronics products.

Versarien is seeking the breakthrough that proves the ‘inflection point’ for graphene has been reached: a product – or products – that appeals to consumers, and which can be produced at a low enough cost. The company has sunk considerable investment into its ventures, as demonstrated by its results for the year ending 31 March 2020, in which it recorded a pretax loss of £4.7m (against £8.3m in revenues), a deficit partly due to a spike in share based payments, which came £1.2m, up from £700,000 the year before.

New funding

But Versarien has continued to succeed in securing funding for the ongoing development of its portfolio. In July the company won a £5m loan for its G SCALE programme from the government’s Innovate UK initiative. G SCALE (Graphene-Seat, Concrete, Arch, Leisure, Elastomer) includes a series of collaborative projects, including the design of nano-platelets and graphene inks for consumer textile applications in the apparel and footwear sectors, a venture with China Railway to develop graphene-based transport infrastructure, and the production of new polymers for down-hole oil and gas drilling components.

Earlier this year the company raised £6m from US-based Lanstead Capital Investors for ongoing product development. Another €350,000 grant will go towards an initiative with Airbus to develop graphene based thermo-electric ice protection systems to prevent icing on aircraft surfaces, and a grant of £104,000 from the Advanced Propulsion Centre will fund development of low-carbon technologies that seek to reduce vehicle emissions.

The most eye-catching, perhaps, of the company’s most recent plays, is its development and manufacture of graphene enhanced protective face masks. Just last month Versarien announced that 100,000 masks are being delivered to a British university, and 20,000 more have been ordered by a UK electrical and mechanical servicing and repairs business.

Other intriguing collaborations include a project with Rolls Royce aiming to improve the electrical performance of 2D materials and increase resistance to corrosion of components in future engine systems; a partnership with textile firm MAS Innovation developing new garments using graphene ink; and an agreement with J&P Coats Limited to incorporate graphene nano-platelets and graphene inks into consumer textiles.

Total Carbide’s supply of tough materials to the oil and gas sector has been something of a cash cow for Versarien, and new orders continue to be received for the manufacture of parts reducing the seepage of water into wells. But the vehicle has shifted its focus to avoid too much exposure to the pandemic-damaged sector: Total Carbide is now diversifying into space technology, designing components to improve the thrust of satellite-launching rockets.

Doubling-down

Versarien’s most recent announcements have been keen to stress the company’s current focus on monetising the opportunities it is already pursuing, rather than diversifying yet further. It will not be declaring or proposing any dividends before the commercialisation of its current range of interests has generated sufficient distributable cash reserves. Detailed projections of expected cash flows have been prepared for the next 12 months to ensure operations are fully funded.

Versarien has succeeded in retaining a broad range of interests that reflect graphene’s versatility, leaving it well placed to capitalise should they start to bring in significant revenue. Just three years ago the company’s share price touched nearly 200p, reflecting investor excitement in the sheer range of possibilities open to the company. Those opportunities may take some time to monetise, but they continue to proliferate. The company’s current share price, currently around 40p, will look rather cheap if they come good.

Below, in this technical video we show the impact of Graphene and the impact on society and the economy…

The author was paid for this article but does not hold shares in the company.



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