Well, well, well. Directa Plus has just dropped its 2024 results, and let’s just say it’s been a bit of a rollercoaster. The graphene specialist faced some serious headwinds, but before you hit the panic button, there’s some fascinating strategic manoeuvring and genuine green shoots emerging. Let’s peel back the layers.
The Financial Lowdown: Revenue Dips, But Cash Gets a Boost
First, the headline numbers. Revenue took a significant hit, falling to €6.66 million from €10.53 million in 2023. That’s a 37% drop – ouch. Digging deeper, we see:
- Adjusted LBITDA loss widened by 42% to €3.64 million (2023: €2.56m loss).
- Loss before tax increased by 25% to €5.37 million.
- Basic loss per share held steady at €0.06.
So, what caused this? A perfect storm, really:
- Contract delays: Key projects in Environmental Remediation and Textiles were pushed back.
- Strategic pruning: The company consciously exited lower-margin contracts to focus on more profitable work.
- Market wobbles: Weaker consumer spending hit the Textiles division hard, particularly in Europe.
But here’s the kicker, and it’s crucial: cash and equivalents soared to €4.98 million (up from €2.39m). Why? A successful £6.9 million capital raise completed in June 2024 provided vital breathing room. This wasn’t just survival cash; it funded a major strategic play – grabbing full control (99.95%) of their environmental services subsidiary, Setcar. Smart move.
Market Performance: Environmental Steps Up, Textiles Takes a Breather
The revenue mix tells a story of shifting sands within the business.
Environmental Remediation (79% of Revenue)
This division, powered by Directa Plus’s Grafysorber® tech (which absorbs over 100 times its weight in oil-based pollutants), became the dominant revenue driver. Despite the overall dip, its share grew from 69% in 2023. Highlights include:
- Securing full control of Setcar and initiating a major operational overhaul.
- Contract renewals with big names like FORD Otosan.
- Post-period wins: A significant €1.59 million extension with OMV Petrom (using Grafysorber®) and a new $1.5m agreement with Midia International for offshore work in the Black Sea.
Yes, they faced setbacks (a major €44m tender unexpectedly lost, delays with Liberty Galați due to the customer’s financial issues), but the core technology and pipeline look robust.
Textiles (20% of Revenue)
This segment felt the sting of squeezed European consumer spending. Revenue share dropped from 30% to 20%. However, it’s not all doom and gloom:
- Continued work with major workwear, defence, and fashion brands.
- Growing global interest in G+ graphene’s properties (thermal conductivity, antimicrobial).
- Signs of a potential market recovery later in 2025 as inflation stabilises.
- Notable win: A contract with Heathcoat Fabrics (UK) for thermal dissipation tech.
The slowdown appears temporary, linked more to macroeconomics than product appeal.
Other Verticals (1% of Revenue)
Keep an eye on:
- GiPave (Asphalt): Used at the Imola F1 circuit and Rome resurfacing projects – proving its durability and green credentials.
- Batteries: Collaboration with shareholder Nant G Power on next-gen lithium-ion prototypes.
These represent exciting future growth vectors, albeit small for now.
Operational Shifts: Cutting Costs & Boosting Efficiency
Management hasn’t been idle. Recognising the tough environment, they’ve been busy sharpening the axe:
- €0.5 million annualised cost savings identified, set to flow through in 2025.
- Production line overhaul: A renewed team is remodelling the line for greater flexibility and lower costs.
- Major efficiency win: Swapping argon gas for nitrogen gas in production – slashing costs and improving the environmental footprint.
- R&D refocus: Strengthening the team to better align with near-term market needs.
- Setcar restructuring: Post-acquisition, headcount has been reduced and new leadership (including a General Manager with 15+ years experience) installed to drive efficiency.
This isn’t just cost-cutting; it’s strategic repositioning for profitability.
Outlook: Green Shoots & A Solid Order Book
Here’s where things get decidedly more upbeat. The early signs for 2025 are promising:
- Q1 FY2025 Revenue: Approximately €2 million – that’s a 40% jump on Q1 2024!
- Current Order Book: A healthy €7 million for FY2025, providing much-improved visibility.
- Pipeline Strength: Described as “good,” supporting confidence in meeting market expectations for the full year.
The momentum from late 2024 contract wins (Grassi, Ford Otosan, Cummins, Metchem) and the recent OMV Petrom/Midia deals is tangible. The Board’s confidence in hitting FY25 targets feels more than just boilerplate.
A Founding Era Ends: CEO Succession Plan Announced
In a significant but planned development, Founder and CEO Giulio Cesareo confirmed he will step down by the 2026 AGM. Cesareo has been the driving force since 2005, taking the unique graphene production process from concept to commercial reality.
The Board now has a clear 12-month runway to manage the succession, emphasising the need to retain Cesareo’s “knowledge, expertise and customer contacts.” This isn’t a sudden exit; it’s a considered transition for a company moving from its pioneering phase into a new chapter of commercial scaling. One to watch closely.
The Bottom Line: Tough Year, Stronger Foundations, Brighter Future?
Let’s be clear: 2024 was undeniably challenging for Directa Plus. Revenue fell sharply due to external pressures and strategic choices. However, looking beyond the headline loss reveals a company making decisive moves:
- Fortifying its balance sheet with a successful capital raise.
- Doubling down on its high-margin Environmental Remediation segment by taking full control of Setcar.
- Actively driving down costs and improving production efficiency.
- Securing a solid order book and showing strong early revenue growth in 2025.
- Planning thoughtfully for the post-founder CEO era.
The graphene market potential remains enormous. Directa Plus, with its patented, eco-friendly production process and focus on practical applications like environmental cleanup and performance textiles, is still well-positioned. 2024 was about battening down the hatches and setting new foundations. 2025 looks set to be the test of whether they can truly capitalise on that positioning and deliver sustainable growth. The Q1 bounce and €7m order book suggest the recovery story has genuine legs. Keep this one on your watchlist.
