Xeros Tech Grp plc - Interim Results 2025

30 September 2025

Xeros Technology Group Plc

("Xeros" or the "Company" or the "Group")

Interim Results 2025

First fruits from commercialisation and significant new agreements

Xeros Technology Group plc (AIM:XSG), the creator of technologies that reduce the impact of clothing on the planet, announces its unaudited interim results for the six months ended 30 June 2025. The results show the first sales from denim processing partner Yilmak, and significant new agreements as the benefits of Xeros' technology for businesses, and the planet, continue to gain traction.

Highlights

Neil Austin, CEO said:

"The Board and I are excited. We now have in place commercial and development agreements across all three of our technologies that are capable of delivering meaningful revenue. 

"The team is focused on new development agreements, capitalising on the inroads made into top global brands, and the supply chains that will expediate the scaling of our technology. The power of Xeros' technology to reshape the future of clothing care and production to deliver measurable benefits for businesses, and the planet, has never been closer."

Investor Presentation

An online investor Q&A session will be hosted later this week with the management. The session will be held on the Investor Meet Company ("IMC") platform. Registered investors, who follow Xeros on IMC, will be invited automatically, everyone else should register at:

https://www.investormeetcompany.com/xeros-technology-group-plc/register-investor

Enquiries

About Xeros

Xeros Technology plc has developed patented and proven, industry-leading technologies which reduce the environmental impact of how industries make and care for clothes.

The traditional wet processing methods used in industrial and domestic laundry and garment manufacturing consume billions of litres of fresh water and large amounts of energy and chemicals, as well as damaging and weakening clothing fibres and creating rising levels of environmental pollution. It is estimated that washing machines contribute 35% of the 171 trillion microplastic particles in the ocean.

A range of actors, including consumers, the media NGOs and regulators are exerting pressure on these industries, with legislative action beginning to be taken.

Xeros' three main technologies, Microfibre Filter, Laundry Care, and Garment Finishing, facilitate garment manufacturers, industrial laundries, domestic washing machine manufacturers and consumers, to reduce their environmental impact, whilst also significantly improving efficiency in the process.

Xeros' model is to generate revenue from licensing its technologies, generating royalties and the sale of consumables. Currently there are eight agreements in place. The addressable markets in Microfibre Filter, Laundry Care, and Garment Finishing are estimated to be valued at £350m p.a., £3bn p.a. and £132m p.a. respectively.

CEO STATEMENT

I am pleased to report on the progress the Group has made in the six months to 30 June 2025 and to provide an update on significant commercial progression to date.

So far in 2025 we have seen the first sales of Yilmak's Xeros enabled denim processing machine, with multiple orders expected; received an LOI from a major Chinese appliance manufacturer to develop our internal microfibre filter, XF1;  secured a brand partnership for our external microfibre filter, the XF3, with Russell Hobbs, with plans to distribute the unit into UK retailers through Product Care Group ("PCG") before the year end; agreed launch plans with  Europe's leading consumer and electronics retailer and a leading global OEM to launch branded XF3 units across Europe; and excitedly, one of the four leading global OEMs currently in technical verification for Laundry Care (XC1) is anticipated to move to a paid for agreement imminently.

My aim since joining Xeros in 2022 has been to commercialise our innovative sustainable technologies by putting them in the hands of global partners with the capability and reach to bring them to market at scale, in a sustained and effective way. The achievements this year show strong progress towards achieving this aim.

The global laundry industry has moved closer towards Xeros' technology in recent years. Our direct engagement with leading global OEMs has cemented their awareness of our technology's potential. Global washing machine brands know that consumers want their clothes to be clean, while looking their best for as long as possible and without deteriorating through the washing process.  They are also under consumer and legislative pressure to improve the environmental performance of their machines. The Xeros Laundry Care technology provides an unmatched innovation that meets all these demands, and the growing interest that global OEMs have in our technology is testament to this.

Equally, the fashion industry is under that same consumer and legislative pressure to reduce its very significant impact on the environment. Through our partnership with Yilmak we have been able to demonstrate that our technology significantly reduces cost and environmental impact of denim, while still meeting the high standards demanded by the processors and brands.

The importance of the Group's achievements so far within 2025 should not be underestimated. We firmly believe that we are closer than ever to Xeros' technology underpinning a revolution in the laundry and fashion industries.

Business update

Laundry Care (XC1 - Domestic, XC2 - Commercial)

Xeros' Laundry Care System uses reusable polymer spheres, known as XOrbs, to gently increase mechanical action, improve chemical efficiency, wash performance and protect clothing from harsh fabric on fabric contact during the laundering process. This means that the life of clothing can be extended by up to 100% using Xeros technology, whist also reducing water and detergents. The benefits of the technology have been proved to a number of global, blue-chip OEMs over the course of the last 18 months.

The Group currently has four global washing machine manufacturers in technical verification, and we are pleased to report that one of these, a significant player, is close to signing a paid for agreement. Although any of these could be potentially transformational for the Group, and we hope to be able to make an announcement shortly.

Whilst exciting progress is being made, the IFB washing machine is not progressing to launch this year, contrary to what we had been led to understand, and despite IFB having completed its order for XOrbs. To this end, we have taken the decision to remove the anticipated royalty revenue from IFB sales from our outlook for the current year. We still believe that IFB will launch the 9kg Xeros-enabled washing machine at some point in the future but that any revenue generation from this element of the business should be classed as upside for 2026.

Our commercial laundry partners continue to perform well. Through our partner in France, Georges, the uniforms of Air France, EDF, SNCF and Renault are all being cleaned using Xeros' XOrb technology as well as across the firefighting industry.

In conjunction with IFB, we have continued to expand our 'proof of concept' commercial machines in major hotels around the world. We now have a commercial machine installed across five hotel chains, the Marriott, Taj, ITC, St. Regis and Fairfax. These machines have been well received and show promising results for the hotel chains.

There are near-term commercial opportunities from commercial laundry, which we plan to focus on in 2026.

Microfibre Filtration (XF1 - Domestic, XF2 - Commercial, XF3 - External)

We are delighted to announce that a Letter of Intent ("LOI") has been signed with Guangdong Welly Electrical Appliance Co. LTD ("Welly") a key supplier to the fast-moving Chinese appliance industry to develop a branded washing machine with Xeros' integrated microfibre filter. Welly will also develop a module version for other washing machine manufacturers and brands to fit into their own machines.

This collaboration deepens the relationship with Xinbao  Group, owner of Welly and Donlim (Xeros' XF3 manufacturing partner). The agreement with Welly serves both to open the Chinese domestic washing machine market and gives the Group a critical position in the global washing machine supply chain, as global legislative movements push for the integration of microfibre technology.

Interest in the Group's microfibre pollution filter, XF3, has exceeded expectations. Launch Plans are in place with two major global companies intending to market and sell the XF3 unit under their respective brands. The first is with Europe's leading consumer electronics retailer, and the other a major global appliance company. These partnerships will give Xeros the opportunity to sell the filter alongside over 27 million washing machine sales per annum, and launches XF3 into all major European markets in the first phase of the launch. Purchase orders are anticipated within the next six months.

The pilot production of the XF3 in partnership with PCG, under the Russell Hobbs brand, has now been completed and consumer trials are expected to conclude shortly. The filter has received strong interest from UK retailers and is expected to be launched before the year end.

Microplastics and the damage they cause to human health and the environment remain a focus for legislators around the world and we believe that integrated filters on new washing machines will be universal within the next 10 years. The inroads to global brands and suppliers that the Xeros team has made, put the Group in a strong position to be the technology provider of choice for the industry.

Garment Finishing (XFN1 - Denim, XFN2 - Washing)

We are delighted to announce Yilmak's first denim manufacturing partnership with Ambition Apparel, a prominent textile company, which produces around nine million pairs of jeans per year.  The partnership will see Yilmak's denim processing machinery, which uses Xeros' XOrb technology integrated across Ambition Apparel's manufacturing facilities in Pakistan.

Yilmak is also in final stage trials with one of Türkiye's largest manufacturing and brand groups, which produces 11 million pairs of jeans a year.

The progress seen within the denim finishing market has been extremely encouraging. Xeros and Yilmak have worked together to validate the benefits of washing denim with XOrbs with headlines of 20% cost reduction, elimination of pumice and an overall CO2e reduction of 30% whilst maintaining a quality of finish commensurate with traditional methods. We have consistently demonstrated the benefits of our technology within the development facility, and it is rewarding to see them proven, at scale, in operational production sites.

The interest in the Xeros enabled machines from denim manufactures is high, and discussions continue with several European and UK fashion brands who are interested in denim products manufactured using Xeros' technology.

The exact timing of the sales by Yilmak, and the sales of the XOrbs required to produce the machines, remains uncertain but the progress is tangible and, with confidence that the machines will continue to garner interest, they should form a growing source of revenue for the Group.

Strategy

Our strategy is to become an IP-rich, capital light licensor of propriety technology solutions to multiple scale industries, all of which deploy the same Xeros core technologies. To date our focus has been on Garment Manufacture, Commercial and Domestic laundry.

These are multi-billion-pound industries that will benefit from adopting Xeros' Technology and are being driven to it by consumer and legislative pressure for reducing environmental impact and improved performance. Our technology delivers both alongside reduced operating costs, making it economically incontestable.

To achieve market penetration at scale, we have a three-pronged approach: commercial partnerships, direct engagement, and driving influence. The commercial partnerships we have secured to date have come from our increasing direct engagement. We continue to engage with major fashion and consumer brands, and leading global OEMs. We also continue to support legislators, industry groups, and NGOs working to drive better environmental practices.

Advisory Board strengthened with two key strategic appointments

Dr Tim Moore joins with over 20 years of experience in developing and releasing consumer products for global brands such as ghd, Shark Ninja, Scalextric and Bosch. His unique mix of capabilities across product commercialisation, market understanding and product definition through to manufactured products will significantly add to our ability to capitalise on the growing commercial opportunities that we are seeing. He has extensive experience in scaling businesses having operated in both fast-growing start-up and large corporate environments and has a strong understanding of how to create and sustain high-functioning engineering teams that deliver rapidly.

Stuart Sawyer joins with over 30 years of experience in the development and building of brands. Currently CEO of the ingredient brand D3O, he brings commercial expertise, marketing capabilities in bringing complex technologies and products to market.  He has extensive experience in scaling and exiting businesses, having owned and operated in both fast-growth start-up and PLC environments. He has a strong understanding of extracting value through the creation of IP from both the technology and brand.

As interest in our technologies gains traction, the expertise of the Advisory Board is key to helping us unlock the full potential of the commercial opportunities we are now seeing.

Trading update

Whilst exciting progress is being made, the partnerships on filtration and denim manufacturing, detailed above, were finalised later than anticipated, resulting in some revenue from royalty payments and XOrbs moving from the current year into 2026. In addition, the IFB delay has led to the decision to remove the anticipated royalty revenue from IFB sales from our outlook for the current year. As noted, we still believe that IFB will launch the 9kg Xeros-enabled washing machine but that any revenue generation from this element of the business should be classed as upside for 2026. This decision, together with the other timing issues which have pushed some revenue into 2026, means that the Group will report revenue for the year ending 31 December 2025 below current expectations.

The Group's cash position remains positive, with cash inflow from the sale of XOrbs to IFB, for royalty payments from commercial machine sales and service revenue from existing contracts. It has also received R&D tax credits and a payment from Qualus, the Group's leather processing partner. These payments together with tight cost controls and lower second half outgoings, have resulted in a cash balance of c£0.8m at the end of September. With further inflows expected during the latter part of Q4, the Group will remain cash positive for 2025.

Outlook

In spite of the lower revenue outlook for 2025, the Board is delighted with the Group's progress and is now more confident about the prospects for the Group than at any previous point in its recent history. We now have in place commercial and development agreements across all three of our technologies that are capable of delivering meaningful revenue and are anticipating further news shortly. The expansion of agreements over the medium term will offer the Group increasing protection from licensor product delays.

Neil Austin

CEO

FINANCIAL REVIEW

Group revenue was generated as follows:

The Group financial results for the six months ended 30 June 2025 reflect further cost control as the Group progresses towards the anticipated mass-market launches by its licence partners. The group recorded a 32.6% reduction in operating loss to £1.7m (H1 2024: £2.5m)

Licensing income represents royalties from licence partners for the sale of Xeros enable technology, which has decreased slightly in 2024 due to the timing of sales by partners and the shipments of XOrbs. Service income and machine sales represents payments from existing Xeros customers in the UK and Europe for servicing mostly legacy machines. The Group expects that future revenues will be comprised mostly of licensing revenue and revenue from the sale of goods, as it supplies XOrbs to customers.

Gross profit for the six months ended 30 June 2025 remained static at £0.05m (2024: £0.05m).

Administrative expenses decreased by 31.1% to £1.8m (H2 2024: £2.6m), driven by further close management of the Group's cost base. Headcount was broadly in line with the  previous year, with 23 employees as of 31 August 2025 (2024: 24).The Group's adjusted EBIDTA loss fell by 31.1% to £1.6m (H1 2024: £2.4m).

Adjusted EBITDA is considered one of the key financial performance measures of the Group as it reflects the true nature of our continuing trading activities. Adjusted EBITDA is defined as the loss on ordinary activities before interest, tax, share-based payment expense, non-operating exceptional costs, depreciation and amortisation.

The Group decreased its operating loss to £1.7m (H1 2024: £2.5m), a decrease of 32.6%. The loss per share was 0.33p (2024: loss 1.69p).

Net cash outflow from operations decreased 40.1% to £1.6m (H1 2024: £2.6m), reflecting cost control in place across the Group. The Group had existing cash resources (including cash on deposit) as at 30 June 2024 of £1.2m (2024: £4.7m) and remains debt free. Group cash as at 30 September 2024 is expected to be £0.8m.

Overall cash utilisation remains in line with the Board's expectations at below £0.25m per month. The directors expect cash utilisation remain at around this level as the Group moves into full commercialisation with licence partners.

Alex Tristram

Finance Director 

Consolidated statement of profit or loss and other comprehensive income

For the six months ended 30 June 2025

*Adjusted EBITDA comprises loss on ordinary activities before interest, tax, share-based payment expense, depreciation and amortisation.

Consolidated statement of changes in equity

For the six months ended 30 June 2025

Consolidated statement of financial position

As at 30 June 2025

Consolidated statement of cash flows

For the six months ended 30 June 2025

Notes to the interim financial information

for the six months ended 30 June 2025

1. General information

The principal activity of Xeros Technology Group plc ("the Company") and its subsidiary companies (together "Xeros" or the "Group") is the development and licensing of platform technologies which transform the sustainability and economics of clothing and fabrics during their manufacture and over their lifetime of use.

Xeros Technology Group plc is domiciled in the UK and incorporated in England and Wales (registered number 8684474), and its registered office address is Unit 2 Evolution, Advanced Manufacturing Park, Whittle Way, Catcliffe, Rotherham, S60 5BL. The Company's principal activity is that of a holding company.

The interim financial information was approved for issue on 30 September 2025.

2. Basis of preparation

The interim financial information has been prepared under the historical cost convention and in accordance with the recognition and measurement principles of UK-adopted International Accounting Standards ("IFRSs").

The interim financial information has been prepared on a going concern basis and is presented in Sterling to the nearest £'000.

The accounting policies used in the interim financial information are consistent with those used in the prior year.

The following adopted IFRSs have been issued but have not been applied by the Group in this financial information. Their adoption is not expected to have a material effect on the financial information unless otherwise indicated:

Further IFRS standards or interpretations may be issued that could apply to the Group's financial statements for the year ending 31 December 2025. If any such amendments, new standards or interpretations are issued then these may require the financial information provided in this report to be changed. The Group will continue to review its accounting policies in light of emerging industry consensus on the practical application of IFRS.

The preparation of financial information in conformity with the recognition and measurement requirements of IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.

The interim financial information does not include all financial risk management information and disclosures required in annual financial statements. There have been no significant changes in any risk or risk management policies since 31 December 2024. The principal risks and uncertainties are materially unchanged and are as disclosed in the Annual Report for the year ended 31 December 2024.

The interim financial information for the six months ended 30 June 2025 and for the six months ended 30 June 2024 does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006 and is neither reviewed nor audited. The comparative figures for the year ended 31 December 2024 are not the Group's consolidated statutory accounts for that financial year.  Those accounts have been reported on by the Group's auditor and delivered to the Registrar of Companies.  The report of the auditor was (i) unmodified, (ii) did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006. The report did contain an emphasis of matter paragraph in relation to a material uncertainty in respect of the going concern status of the Group as at 31 December 2024. The circumstances that gave rise to this emphasis of matter paragraph are unchanged as at the date of this report.

The half year condensed consolidated financial statements do not include all of the information and disclosures required for full annual financial statements and should be read in conjunction with the group's annual financial statements as at 31 December 2024, which have been prepared in accordance with UK adopted International Accounting Standards (IFRS).

IAS 34 'Interim financial reporting' is not applicable to these half-year condensed consolidated financial statements and has therefore not been applied.

3. Taxation

The Group accounts for Research and Development tax credits where there is certainty regarding HMRC approval. There is no certainty regarding the claim for the year ended 31 December 2024 and as such no relevant credit or asset is recognised.

4. Trade and other receivables

There is no material difference between the lease receivable amounts as in other receivables noted above and the minimum lease payments or gross investments in the lease as defined by IFRS 16.

The minimum lease payment is receivables as follows:

Contractual payment terms with the Group's customers are typically 30 to 60 days. The Directors believe that the carrying value of trade and other receivables represents their fair value. In determining the recoverability of trade receivables the Directors consider and change in the credit quality of the receivable from the date credit was granted up to the reporting date.

5. Trade and other payables

6. Loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of shares in issue during the period.  The Group was loss-making for the 6-month periods ended 30 June 2025 and 30 June 2024 and also for the year ended 31 December 2024.  Therefore, the dilutive effect of share options has not been taken account of in the calculation of diluted earnings per share, since this would decrease the loss per share reported for each of the periods reported.

The calculation of basic and diluted loss per ordinary share is based on the loss for the period, as set out below. Calculations of loss per share are calculated to two decimal places.

7. Leases

The Group has leases for office buildings and associated warehousing and operational space. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the statement of financial position as a right-of-use asset and a lease liability. The Group classifies its right-of-use-assets in a manner consistent with its property, plant and equipment.

Each lease generally imposes and restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use-asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. The Group is prohibited from selling of pledging the underlying leased assets as security. For leases over office buildings and warehousing and operations space, the Group must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Group must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts.

The table below describes the nature of the Group's leasing activities by type of right-of-use asset recognised on the statement of financial position:

Right-of-use assets

Additional information on the right-of-use assets by class is as follows:

Lease liabilities

Lease liabilities are presented in the statement of financial position as follows:

8. Seasonality

The Group experiences no material variations due to seasonality.

9. Availability of interim statement

This interim statement will be available on Xeros' website at www.xerostech.com

Forward-looking statements

This announcement may include certain forward-looking statements, beliefs or opinions, including statements with respect to Xeros' business, financial condition and results of operations.  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other various or comparable terminology. These statements are made by the Xeros Directors in good faith based on the information available to them at the date of this announcement and reflect the Xeros Directors' beliefs and expectations. By their nature these statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, developments in the global economy, changes in government policies, spending and procurement methodologies, and failure in health, safety or environmental policies.

No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements speak only as at the date of this announcement and Xeros and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this announcement. No statement in the announcement is intended to be, or intended to be construed as, a profit forecast or to be interpreted to mean that earnings per Xeros share for the current or future financial years will necessarily match or exceed the historical earnings. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.