TIDMAFC
RNS Number : 2516L
AFC Energy Plc
30 September 2016
AFC Energy Quarterly Newsletter - September 2016
Dear Shareholder,
I am pleased to provide an overview of the Company's activities
for the quarter ended 30(th) September 2016.
Highlights
-- New Leadership Team
-- Commercial and Strategic Relationships
-- Technology & Product Development
-- Receipt of R&D Tax Credits
-- Launch of new brand identity
New Leadership Team
Given AFC Energy's ongoing transition from an R&D-focused
technology company to a commercial business, I decided to establish
a new leadership team, reporting directly to me.
Our recent appointment Bill Suglani is our new Head of Finance
and Company Secretary. Bill joined us from BP Plc where he spent 22
years in a wide range of finance and commercial leadership roles,
both in the UK and the US. In his most recent role as Group Finance
and Control Director, Bill was responsible for ensuring and
maintaining a robust and effective financial controls and reporting
environment, leading the delivery of a portfolio of key internal
audits and various change management and finance transformation
projects. Bill was further responsible for preparing quarterly
reporting and presentations for the BP Plc Group CFO, Main Board
Audit Committee and Finance leadership team. He previously
qualified as an ACA, working with KPMG in the UK. Bill is
experienced in leading finance and shared services teams with full
P&L, cash, balance sheet and statutory accounts responsibility,
and end to end financial planning, performance management and
reporting across multiple global and culturally diverse operations.
We are very pleased to welcome Bill to AFC Energy in this key
leadership role.
In addition, Christopher Reynolds, who has been with AFC since
June 2010, was promoted to the new position of Head of Technical
& Operations. Christopher has provided an excellent
contribution to AFC over the past six years leading much of the
work undertaken in the area of manufacturing and quality control,
as well as providing leadership roles across several areas of the
Company, including significant contributions to the fuel cell
development team. In particular, Christopher is leading AFC's Joint
Development Agreement initiative with De Nora and is welcomed to
this new and important role in the Company's commercialisation
strategy.
And last but in no way least, Nick Ploumis, who has been with
AFC since 2014 as Project Manager and led the successful project
management and delivery of the POWER-UP project in Stade becomes
our new Head of Projects. Nick also assumes responsibility for
AFC's project-related business development activities, including
managing the plantIng strategic engineering partnership.
My congratulations go out to all three.
On 26(th) August, we announced the departure of our Finance
Director, Christopher Tawney, in order to pursue other business
interests. Christopher joined AFC Energy in 2014 and I would again
like to thank Christopher for the contribution made to the business
in the last two years and wish him every success in the future.
Commercial and Strategic Relationships
Our active dialogue with prospective global industrial partners
successfully culminated this quarter in the signing on 5(th) August
of one of the Company's most important strategic agreements since
its origination; a Joint Development Agreement ("JDA") with Italy's
Industrie De Nora S.p.A. ("De Nora"), a global leader in the field
of electro-chemistry and electrodes. We're very pleased to have a
quality world class technology partner in De Nora collaborating
with our technical team; and with both teams now actively engaged
in exchanging ideas on technical enhancements, we are already
starting to see the fruits of this initiative both in technology
development and in potential new commercial markets to pursue.
Importantly, the JDA with De Nora aims to facilitate a further
improvement in the performance characteristics of our fuel cell
technology and accelerate the timescale for achieving our targeted
key metrics for: power, longevity, reliability, efficiency and
cost. We look forward to providing further updates to the market on
the outcomes of the JDA with De Nora, believing this collaboration
will present a material opportunity for both parties in the near
term for the enhancement of shareholder value.
Elsewhere, we are acutely aware of the market's desire to see
commitments for the placement of AFC Energy's fuel cell system into
the global energy market; indeed this is an important stated
milestone for the Company this calendar year. Negotiations are
continuing with commercial parties interested in working with AFC
Energy in this regard and we continue to strive to meet the
commitments as stipulated within the milestones for this year.
Technology & Product Development
In addition to the key developments highlighted above in AFC
Energy's collaboration with De Nora, I was very pleased that the
team accomplished Milestone 4 of the 2016 Strategic Milestones
ahead of schedule when in early July we announced completion of the
design and basic engineering of the new 10kW fuel cell system and
its accompanying balance of plant. We continue discussions with
potential supply chain and delivery partners for the 10kW system
which is also likely to provide the basis for the system adopted in
the Alkammonia project currently underway in conjunction with the
EU and project partners.
I'm also happy to report that validation testing of our
Generation 2 fuel cell stacks commenced on schedule in September
and is ongoing at our test facilities in Dunsfold, UK and Stade,
Germany. Notably, during the past three months, through
improvements in stack design and build quality delivered through
the Gen2 development programme, we have achieved over 180%
improvement in fuel cell stack continuous operating hours and over
320% improvement in total stack running hours over the past
quarter, further validating the incredible work our technical teams
have and continue to deliver for the Company. I hope and expect the
collaboration with De Nora will further enhance these metrics in
the short term.
Meanwhile, solid progress continues with the larger 1MW scale
system (Milestone 5). Design concepts have been completed by our
engineering partner plantIng and we are still on target for this
system to be available for procurement next year.
Receipt of R&D Tax Credits
In the past quarter, AFC Energy received GBP927,000 from HMRC
related to the Company's claim for R&D tax credits over the
last financial year. The increase in UK R&D tax credits
relative to prior years relates primarily to the incremental
funding of the Stade project and associated costs in technology
development and upscaling. Importantly, we also commissioned a
review of prior year's R&D tax credit claims where incremental
unclaimed expenses were identified and lodged for payment.
AFC Energy also received a EUR135,000 German VAT refund paid in
the first half of this year. Further, for our EU-funded project
Alkammonia initiative - a proof of concept system designed to
provide power in remote applications - AFC Energy received its
share for the project from the EU's Fuel Cell and Hydrogen Joint
Undertaking (FCH JU), amounting to EUR181,000. This was for costs
incurred for the period 1(st) November 2014 to 30(th) April
2016.
Launch of new brand identity
Last month, we announced the launch of the Company's new brand
identity reflecting its planned transition to a commercial company.
This included a new logo and new website, which I hope you find
easier to navigate and source information.
Finally, I would like to thank all the staff, partners and
contractors working with AFC together with the EU's FCH JU, and the
Board, for their continued support.
Yours sincerely,
Adam Bond
Chief Executive Officer
-------------------------------------
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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