THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) 596 / 2014 WHICH FORMS PART OF UNITED KINGDOM LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Light Science Technologies Holdings plc

("LSTH", "Light Science", the "Company" or the "Group")

Final Results & Notice of AGM

Record Revenue, Margin Growth and Strong Progress towards Profitability

Light Science Technologies Holdings plc (AIM: LST), comprising three divisions: controlled environment agriculture ("CEA"); contract electronics manufacturing ("CEM") and passive fire protection ("PFP"), announces its audited results for the year ended 30 November 2023.

The Company will be posting its annual report & accounts, together with notice of AGM, to shareholders later today, with this document now available on its website.

Financial Highlights

·    Record revenue of £9.30m, up 13.8% (2022: £8.17m)

·    Gross margins increased to 23.4% (2022: 17.7%)

·    Reduced loss before tax of £1.14m (2022: £2.72m)

·    Successful £1.45m (net proceeds) fundraise  facilitating product development and CEA IP protection

Operational Highlights

·    CEM division continued strong revenue growth, up 13% to £9.09m (2022: £8.04m)

·    Acquisition of Tomtech by the CEA division

o  Earnings enhancing and complementary CEA addition, further strengthening product range and market reach

·    Acquisition of Injecta Fire Barrier trade and assets, creating  new PFP division

o  Earnings enhancing and expected near-term cash-generative acquisition of scalable trade; addressing UK potential market value up to £50bn*

o  Creating a balanced portfolio of companies providing near-term revenue and cash-flow opportunities

Post-Period Highlights

·    Strengthened Board positions Group for continued growth

o  Graham Cooley appointed as Non-Executive Chairman bringing invaluable public company experience

o  Richard Mills appointed as Independent Non-Executive Director significantly expanding global CEA reach

·    £188k CEA grant award funded by DEFRA & Innovate UK

·    £130K CEM first order received from sports entertainment market segment

·    £600k Injecta Fire Barrier contract commenced

·    Recently agreed terms with Close Brothers for updated debt facilities, providing group-wide financing underpinned by an additional £850,000 group facility: subject to contract, expected during May 2024.

o  Provides increased financial resilience and positions the Group to exploit future growth initiatives

Investor Presentation: 16:00, Wednesday 8 May

Management will be providing a presentation and hosting an investor Q&A session on the Company's results and future prospects at 16:00 today. Investors can sign up for free and register to meet LSTH via the following link: https://www.investormeetcompany.com/light-science-technologies-holdings-plc/register-investor

Questions can be submitted pre-event via the platform or by emailing lst@walbrookpr.com, or in real time during the presentation via the "Ask a Question" function.

Institutional Investor Meetings:

The Company will be in London for meetings during the week commencing 13 May 2024. If you would like to meet with management, please contact aimeemccusker@oberoninvestments.com.

Simon Deacon, CEO of Light Science Technologies Holdings plc, commented: "We are very pleased to report significant operational progress in the period, with strong progress across all parts of the business delivering record Group revenues which exceeded internal management expectations.

"The CEM division continues to underpin Group revenue generation and present significant growth opportunities in new and existing markets, whilst the PFP and CEA divisions offer exciting, and potentially very lucrative, growth opportunities in the medium to long term.

"We move forward with a significantly strengthened corporate team and long-term global structural drivers that complement our business model. The Light Science management team is committed to growing a complementary portfolio of companies that is diverse, operationally self-funding, and delivers for its shareholders."

*Estimators price cladding replacement at 10 times government budget (theconstructionindex.co.uk)

For additional information please contact:

Notes to Editors:

About Light Science Technologies Holdings plc (www.lightsciencetechnologiesholdings.com)

Light Science Technologies Holdings plc operates through three divisions: controlled environment agriculture ("CEA"); contract electronics manufacturing ("CEM"); and passive fire protection ("PFP"). The company is involved in the design, manufacturing, and installation of products and customized solutions spanning various industry sectors, including commercial horticulture, pest control, lighting, audio, gas detection, and fire protection. With a focus on addressing global challenges related to food security, climate change, and fire protection, the Group is committed to developing robust solutions in these rapidly growing market sectors.

LSTH is the holding company for Light Science Technologies Ltd ("Light Science Technologies") and Tomtech (UK) Limited ("Tomtech") in the CEA division; UK Circuits and Electronics Solutions Limited ("UK Circuits") in the CEM division; and LSTH IFB Limited ("LSTH IFB") in the PFP division.

Controlled Environment Agriculture

The Group's tailored solutions encompass control systems, grow lights, sensor technology, venting, and irrigation systems, catering to both UK and global customers. Key markets include indoor, vertical, glasshouses, polytunnels, and medicinal farming. Driving factors comprise global food and water shortages, a growing population, government policies promoting sustainable growth methods, heightened scrutiny of food production's impact on climate change, and a shift away from processed foods. Key markets span the Americas, Australasia, and select locations in the Middle East.

The sensorGROW technology enables real-time monitoring of essential air zone growing factors such as carbon dioxide, air humidity, air pressure, air temperature, and light. In development, it aims to extend monitoring to soil temperature, soil moisture, and soil electroconductivity. This empowers farmers to enhance resource management, saving costs on water, nutrients, fertilizers, and energy, while simultaneously increasing yields and cultivating healthier crops. Learn more here https://lightsciencetech.com/sensorgrow/ . The nurturGROW sustainable grow lighting product range, applicable to greenhouses, vertical farming, polytunnels, and medicinal plants, addresses a robust market with an anticipated global worth exceeding US$6.5 billion by 2026. Explore solutions here https://lightsciencetech.com/solutions/greenhouse/

Through Tomtech, the Group stands out as a UK leader in control systems for commercial greenhouses and polytunnels. Tomtech enables growers in optimizing and automating cultivation environments, leading to superior crop growth. The product range includes control systems, software, irrigation, lighting, sensors, and venting, applicable across various crops, ultimately improving yields and profitability. Discover more here https://www.tomtech.co.uk/

Contract Electronics Manufacturing (https://www.ukcircuits.co.uk/)

UK Circuits serves as the Group's profitable and revenue-strong CEM-focused division. It excels in designing, procuring, and manufacturing high-quality CEM products, with a specialization in Printed Circuit Boards. These products find application across diverse sectors such as audio, automotive, electronics, gas detection, lighting, pest control, telecommunications, and, more recently, in the CEA market.

Passive Fire Protection (https://injectafirebarrier.com/)

LSTH IFB offers a practical and cost-effective solution to rectify non-compliant public and private buildings, spanning residential, commercial, and industrial sectors, with regard to fire safety regulations-a challenge addressed by a £5.1 billion allocation from the UK government. Serving as the UK's premier independent approved installer, LSTH IFB utilizes the ground-breaking Injectaclad fire-resistant graphite barrier system. This system is retroactively installed within building cavities, reinstating fire-resistant performance and containing the spread of fire and smoke compliant with regulatory requirements. This innovative solution stands out as an appealing alternative to the more costly and disruptive method of removing external facades and installing traditional fire barriers. With a proven track record in the passive fire protection market and a robust sales pipeline, LSTH IFB targets a UK market potentially valued at up to £50 billion**.

Chairman's statement

I am pleased to present the Light Science Technologies Holdings plc Annual Report for the year ended 30 November 2023. I am also delighted to have joined the Board as Non-Executive Chairman, together with Richard Mills who became an independent Non-Executive Director, post period end.

This year has been marked by significant achievements and strategic developments for the Company. I am delighted to report a commendable sales growth of 13.0% (FY22: 9.2%) for our Contract Electronics Manufacturing ("CEM") division, contributing to the Group's overall revenue growth of 13.8% and resulting in a record turnover. Our Group gross profit margin has grown to a robust 23.4% (FY22: 17.7%), reflecting the improved efficiency and competitiveness of our operations in a still challenging supply chain and inflationary environment during 2023.

Throughout the year, we continued to execute our growth strategy, culminating in the successful earnings enhancing acquisitions of Tomtech, which was integrated into our Controlled Environment Agriculture ("CEA") division, and the assets and trade of Injecta Fire Barrier, which now forms our Passive Fire Protection ("PFP") division. These acquisitions strategically expanded our portfolio and market presence, positioning us for sustained growth and success in the years to come.

Our business model integrates both organic growth and strategic bolt-on acquisitions, providing a balanced approach to expansion. We operate three distinct but complementary divisions, each contributing to the financial stability and potential of the Company. Our immediate objective is to attain positive cash flow in the near term.

Additionally, we have successfully undertaken proactive measures to enhance our financial resilience and facilitate sustainable and scalable cash generation in the near to mid-term. These efforts, which included a successful fundraise of £1.45 million net proceeds and recently, negotiating a credit-backed agreement with our incumbent debt provider, Close Brothers, to restructure our Group debt facilities - helping fund further product development and IP protection - and cost reduction initiatives, underscore our commitment to delivering long-term value to our shareholders.

The momentum achieved during the year sets us up well for the current year, which has seen forward orders and stock levels in the CEM division reverting towards pre-pandemic levels. This division has recently received a new order worth £130,000 in the sports entertainment market segment, with potential for significant follow-on revenues. In March 2024, our CEA division was awarded a product development grant worth £188,251, while our PFP division has continued work on its first project order, worth approximately £600,000.

Our short term strategy has focused on lowering our cost base and driving revenue growth. We believe that the combination of steps taken during the year and the growth dynamics of our target markets present us with a compelling opportunity to further grow our footprint as we provide solutions to a range of potential end customers ensuring that the Company is well placed to grow revenues, margins and cash flow.

Graham Cooley

Non-Executive Chairman

7 May 2024

Chief Executive's report

This was a very encouraging year of progress for operational achievements within our Company - with a focus on setting the foundations for the business to move towards becoming cashflow positive in the near-term, creating a springboard for sustainable long term growth.

The combination of growing revenues and margins and a lower cost base meant that losses for the year were significantly reduced, positioning the Company to further strengthen its balance sheet with the aim of creating an operationally self-funded business.

Strong organic and acquisitive growth

I am proud to report robust sales growth of 13.0% from our CEM division, contributing significantly to the Group's overall revenue growth of 13.8%. This achievement is a testament to the dedication and hard work of our operations team, who have consistently delivered high-quality products and services to our customers. Having invested in new plant and equipment, as well as our continued investment in staff training, further margin improvement is expected within this division.

While the CEM division contributed the majority of revenues during the year, the Company took a number of steps to broaden growth opportunities, which are expected to see a rebalancing of divisional contributions as the Company further develops its operations.

Throughout the year, the focus was on optimising our operational processes to drive efficiency and enhance customer satisfaction. These efforts were significantly bolstered by the strategic acquisitions of Tomtech and the assets and trade of Injecta Fire Barrier, which have both expanded our capabilities and strengthened our market position, importantly adding near-term revenues and further enhancing the Company's growth opportunities.

Tomtech is increasingly providing commercial and operational synergies within our CEA division - introducing new revenue streams and cross-selling opportunities, while the Injecta Fire Barrier trade and assets provide a whole new platform for growth within our PFP division. Given the timing of these acquisitions, which were completed in September 2023 and November 2023 respectively, the benefits are yet to materially feed through to the bottom line, with results for H1 2024 expected to reflect the initial benefit of our rebalanced portfolio.

In addition, we have implemented rigorous cost reduction initiatives and successfully completed a fundraise. Recently we negotiated a credit-backed agreement with our incumbent debt provider, Close Brothers, to restructure our Group debt facilities, to further bolster our financial position and support future growth initiatives. These actions demonstrate our commitment to operational excellence and long-term value creation for our shareholders.

Significant CEA Growth Opportunities

It's worth noting the substantial global growth in the controlled environment agriculture and vertical farming markets, which present significant opportunities for our Company. As the agriculture industry increasingly adopts sustainable growing methods, our technology solutions are well-positioned to meet the evolving needs of these market segments.

We have established a number of core product lines and our broadened technology base means that we are well placed to take advantage of growing requirements for digitisation. Equally, we are positioned to benefit from cross selling opportunities offered by the Tomtech acquisition while the global market provides a strong backdrop for us to develop international partnership agreements - an area Richard Mills is focused on helping the Company exploit.

The combination of Light Science Technologies' expertise and modern technology and Tomtech's product range positions the Company at the forefront of the next generation of smart farming products, which can optimise inputs of seeds, fertilisers chemicals, water and more, to meet the individual needs of farmers' growing environments and enabling them to maximise crop yields, which gives them better financial control and improves sustainability.

As such, we believe that the Company is strongly positioned at the forefront of growing demand for innovative solutions that tackle energy, labour, food security and global cultivation challenges.

Portfolio Approach

Furthermore, we remain excited by the potential for growth across all parts of the business. The CEA opportunity is underpinned by growing public and governmental recognition of the need to re-think the way we approach sustainable food production and the importance of locally supplied produce.

We are delighted by the strong margin improvement within the CEM division, where expanded capacity and increased automation are helping gain further traction, while more generally, reduced supply chain constraints are underpinning an improved backdrop.

Meanwhile, the creation of our PFP division positions the Company strongly within a high demand sector with significant levels of committed government funding. Importantly, this is a near-term cash generative and scalable operation, which is well placed to take advantage of the growing fire safety retrofit market in the UK. The PFP quoted pipeline of sales opportunities currently stands over £9 million and we remain optimistic about securing new contracts, with our reach stretching the length and breadth of mainland UK.

The Fire Safety Act 2021 and Building Safety Act 2022 (which came into force on 1 October 2023) will lead, in the Board's view, to Government pressuring developers, building owners, housing associations etc. to undertake remediation works.

Board Changes

I am delighted to note the strengthening of our Board post-year end with the addition of Graham Cooley as Non-Executive Chairman and Richard Mills as an Independent Non-Executive Director - both highly experienced individuals who bring diverse expertise and perspectives to our leadership team. Their contributions will be invaluable as we navigate the evolving landscape of our industry. At the same time, I would like to thank Myles Halley and Robert Naylor for their valued contributions to the Company, including their oversight of admission to trading on AIM, both of whom have stepped down from the Board.

Financial Review

Income Statement

The CEM division saw revenue growth of 13.0% from £8.04 million to £9.09 million, with an improved gross margin facilitated by an easing of supply chain constraints and an enhanced ability to pass on inflationary increases to the end customer. Gross margin increased to 22.6% from 16.7%, and the Board continues to take various actions aimed at maintaining and improving margin generation, against the risk of persisting inflationary pressures.

The CEA division saw revenue growth of 73.5% from £0.13 million to £0.22 million, following the acquisition and integration of Tomtech into the division in September 2023, in the backdrop of the continued challenging macro trends experienced during the year, leading a number of potential customers to continue delaying projects.

The cost reduction programme saw a 29% decrease in administrative expenses from £4.26 million to £3.03 million, helping to reduce the Group's loss before tax by 58.2% from £2.72 million to £1.14 million, ahead of internal management expectations. This was achieved despite exceptional non-recurring administrative expenses of £0.26 million from acquisition costs and product-specific impairment charges, due to a change in scope resulting from the impact of the energy crisis, on projected payback of the advanceGROW product in development.

Balance Sheet

The Group continued to invest in developing the CEA division's core product offering, leading to additions in the year of £592,000 in intangible development assets. As development of the sensorGROW and advanceGROW products were partly covered by UKRI grants, a further £140,000 of grant income has been deferred within the year in relation to these intangible assets, shown separately within other payables.

Additionally, there was further investment in the CEM division's plant and machinery, to drive efficiency and improve gross margins, totalling c.£110,000 in the year with a further £39,000 committed at year end.

As supply chain shortages started to ease towards the year end, and with the improved visibility and control facilitated by our MRP system, inventory levels reduced to £1.40 million from £1.58 million in 2022. Inventory is predominantly allocated to specific customer orders and the year-end stock-take loss amounted to 0.045%, showing excellent efficiency and accuracy of our MRP system.

Cash and cash equivalents increased to £0.98 million (2022: £0.59 million) at the year end, such increase derived from the net proceeds of the fundraise undertaken in April 2023; cash acquired as part of the Tomtech acquisition; and a positive contribution from net cash flow from operating activities. Net debt decreased to £1.38 million (2022: £2.35 million).

Acquisitions

The Company completed two earnings-enhancing acquisitions, Tomtech (UK) Limited, with excellent synergies with the Group's CEA division; and the trade and assets of Injecta Fire Barrier, to form a new Passive Fire Protection division for the Group.

Total consideration for Tomtech amounts to £0.52 million payable over 30 months (£0.37 million of which remains payable), with the business already contributing £0.11 million to the Group's profit by the year end date.

Contingent consideration for the Injecta Fire Barrier business is up to £1.75 million, fair valued at £1.0 million. The business was purchased close to the year-end so there was insufficient time to mobilise and generate revenue or profit for the Group, but it is expected to deliver near-term cash generation.

Debt Refinancing

After the year end, the Company negotiated and recently received a credit-backed offer (legal documentation to be completed imminently), from its CEM division's incumbent debt provider, Close Brothers, to convert the existing facilities into Group-wide facilities, and to draw £850,000 in the form of a new term loan, to provide growth and working capital wherever it may be required in the Group. This allows the Group to exploit potential opportunities presented to its divisions. Completion of the refinancing is expected during May 2024.

Outlook

Looking forward, I am optimistic about the future prospects of Light Science Technologies Holdings plc. Our Company's key strengths, including our sustainable products, established platform business, early mover advantage, scalability, and strong IP protection, position us for continued success and growth in the dynamic markets we serve.

We have established a portfolio of businesses that have a market potential worth of over $100 billion: in the CEA sector, the cumulative smart agriculture sales growth for the nine years from 2023 to 2032 is expected to be $55 billion with a 12% CAGR**; in the PFP sector, the market is potentially worth £50 billion*. We have a quoted pipeline of sales opportunities within the CEA division worth nearly £40 million and over £9 million in the PFP division.

Our focus in each of our divisions is to grow revenue, margins and global opportunities. This will be achieved via organic growth as well as strategic acquisitions, at the same time as creating a network of global distributors within our CEA division, expanding our reach but keeping costs under control, focusing on fastest growing countries first which have more pressured food security issues.

I would like to express my gratitude to our shareholders, employees, customers, and partners for their continued support and dedication. Together, we will continue to drive innovation, excellence, and value creation across all facets of our business.

Simon Deacon   
Chief Executive Officer

7 May 2024 

*Estimators price cladding replacement at 10 times government budget (theconstructionindex.co.uk)

**Smart Agriculture Market Size & Share, Growth Report 2032 (gminsights.com)

Consolidated Statement of Comprehensive Income

For the year ended 30 November 2023

Consolidated Balance Sheet

As at 30 November 2023

 Consolidated Statements of Changes in Equity

 For the year ended 30 November 2023