TIDMCWR
RNS Number : 7871Y
Ceres Power Holdings plc
08 March 2017
8 March 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Ceres Power Holdings plc
Half-yearly results for the six months ended 31 December
2016
New partners, new markets and a growing international presence -
INCLUDING FIRST PRODUCT LAUNCH PARTNER
Ceres Power Holdings plc ("Ceres Power", the "Company" or the
"Group") (AIM: CWR.L), a world leading developer of low cost, next
generation fuel cell technology, announces its half-yearly results
for the six months ended 31 December 2016.
Highlights
-- New commercial partners including first 'go-to-market' agreement:
o Two new development agreements signed in the period, bringing
total to four including with Honda, Nissan, Cummins and a further
global OEM
o First 'go-to-market' agreement signed with global OEM to
develop and launch highly efficient combined heat and power ("CHP")
product for business markets
-- Strong revenue and pipeline: Revenue and other operating
income for first half year tripled to GBP1.5 million (FH1 2016:
GBP0.5m). Aiming for full year to at least double. Order book of
GBP4.8 million as at 31 December 2016 and 3 new evaluation
agreements underway with potential future partners.
-- First significant US commercial success with global power
leader Cummins & the US Department of Energy to develop an
energy system for Data Centre and commercial scale applications
-- New market opportunities enabled by rapid progress in
SteelCell(TM) technology. The improvements in efficiency,
robustness and power density have opened up new high growth power
markets in commercial/business sectors
-- Successful fundraise: GBP20m placing enables continued investment in business and technology
Financial Highlights:
Six months Six months
ended 31 ended 31
December December
2016 (unaudited) 2015 (unaudited)
GBP'000 GBP'000
------------------ ------------------
Total revenue and other operating
income, comprising: 1,551 453
Revenue (1) 1,026 235
Other operating income 525 218
Operating loss (6,242) (6,235)
Equity free cash flow (2) (4,176) (5,431)
Net cash and short term investments 22,174 12,753
1 2016 revenue includes the release of GBP0.4 million of
deferred revenue in respect of contracted work completed for
British Gas (2015: GBP0.1m)
2 Equity free cash outflow (EFCF) is the net change in cash and
cash equivalents in the year (GBP0.2 million) less net cash
generated from financing activities (GBP19.4 million) plus the
movement in short term investments (-GBP15.0 million)
Phil Caldwell, CEO of Ceres Power said:
"Ceres Power is on track for an excellent year, driven by new
commercial partnerships, the rapid progress of our technology and
our first 'go-to market' agreement bringing us closer to a first
product launch. We said we would sign five partners by the end of
2017 and with four to date we are on track to do just that, plus we
have three new evaluation agreements and a strong pipeline with a
series of international prospective partners.
With a forward order book of GBP4.8 million and a successful
fundraising secured, we are in a strong position to capitalise on
significant market opportunities. As the world wrestles with the
growing challenge of a decarbonising and decentralising energy
system, our proven SteelCell(TM) technology, and our work with
global power specialists, shows Ceres Power is capable of providing
a cheaper, cleaner, distributed alternative to centralised power
generation."
For further information please contact:
Ceres Power Holdings plc
Phil Caldwell, CEO
Richard Preston, CFO
Dan Caesar, Communications +44 (0)1403 273
& Marketing Director 463
Zeus Capital (Nominated Adviser
and Broker)
Phil Walker/Andrew Jones +44 (0) 20 3829
Hugh Kingsmill Moore 5000
Powerscourt +44 (0) 20 7250
Peter Ogden/Andy Jones 1446
About Ceres Power
Ceres Power is a world leader in low cost, next generation fuel
cell technology for use in distributed power products that reduce
operating costs, lower CO(2) , SOx and NOx emissions, increase
efficiency and improve energy security. The Ceres Power unique
patented SteelCell(TM) technology generates power from widely
available fuels at high efficiency and is manufactured using
standard processing equipment and conventional materials such as
steel, meaning that it can be mass produced at an affordable price
for domestic and business use. Ceres Power offer its partners the
opportunity to develop power systems and products using its unique
SteelCell technology and know-how, combined with the opportunity to
supply the SteelCell(TM) in volume through its manufacturing
partners. For further information please visit:
http://www.cerespower.com/
Chief Executive's statement
Ceres Power is well positioned to continue to execute its
strategy as an enabling technology provider for the world's leading
power systems companies. The SteelCell(TM) technology and the
Company's expertise have a growing, global reputation and we are on
target for an extremely successful year.
The market opportunity - enabling a decarbonised and
decentralised energy system
-- Climate change and the need for clean air, reinforced by the
Paris COP21 agreement and leading global corporates, is maintaining
the momentum towards cleaner distributed power generation
-- The inexorable growth of the Electric Vehicle and Data Centre
sectors will increase the demand for electricity and, coupled with
increasing wind and solar generation, will destabilise the
centralised power generation model
-- Advancements in Ceres Power's SteelCell(TM) technology have
opened up sector opportunities beyond Residential to include the
fast-growing Data Centre, Electric Vehicle and Business sectors
-- SteelCell(TM) is a significantly superior alternative to
conventional gas and diesel engines as it produces close to zero
SOx and NOx emissions at a higher efficiency
We are working towards a vision of embedding our cutting-edge
SteelCell(TM) technology into world-leading products within the
Home, Business, Data Centre and Electric Vehicle markets. Ceres
Power has traditionally been focussed on micro-CHP in the
Residential market, however significant progress has enabled
SteelCell(TM) to rapidly establish itself as a leader in markets
where higher power output is required, significantly expanding the
business opportunity.
The majority of our customer demand is now for larger power
systems than our residential scale product offering, and to
proportionately address these high value markets, we have started
developing larger cells and stacks.
With a strong start to 2017, the Company is ready to capitalise
commercially by securing more key partners, as well as progressing
our existing relationships.
Commercial Progress
-- First 'go-to-market' agreement signed to develop and launch a
highly efficient Combined Heat and Power product to target the
business sector
-- First significant US success with agreement to develop a
power system for data centres and commercial scale applications
-- Field trials progressing well as part of the EU-funded ene.field programme
In the Autumn, Ceres Power announced its key development role in
a recently selected US Department of Energy programme which was
awarded to global power leader, Cummins Inc. Together, Ceres Power
and Cummins will work closely to develop a power system targeting
high electrical efficiency of 60% and scalable to meet multiple
distributed power applications. The initial target application will
be the fast-growing Data Centre market, this power system will be
applicable to other commercial scale uses.
Before the end of 2016, Ceres Power announced a joint
development licence agreement to develop and launch a multi-kW CHP
product its SteelCell(TM) technology with a leading global OEM.
This is Ceres Power's fourth partnership signed and most notably
its first 'go-to-market' agreement with the explicit intention of
developing and launching a product to the business sector on an
ambitious schedule. This is a highly significant step.
Furthermore, field trials, as part of the EU-funded ene.field
programme in UK homes, demonstrate the growing maturity of this
technology and underpin the reputation of the SteelCell(TM) with
our OEM customers.
As a result of this commercial progress, our order book has
increased to GBP4.8m as of 31 December 2016.
Rapid technological progress highlights Ceres Power
expertise
With a well-established R&D roadmap, real progress with the
performance of the technology continues to be made. The most recent
milestone saw the latest iteration of the SteelCell(TM) platform
(version 4) released to customers on time and budget, reinforcing
the Company's reputation for successfully executing against its
technology timelines.
Higher power density and fast start-up timescales have been
proven, making the SteelCell(TM) increasingly commercially
attractive in a growing number of markets. The technology is
well-suited as a range extender for the Electric Vehicle market and
the net electrical efficiencies now being delivered see Ceres Power
developing solutions for the Data Centre market.
The core technology is increasingly applicable to customers that
require a higher power output and we are now increasing cell size
and optimising stack design to meet their requirements.
Adding operational capability to position ourselves for
commercialization
We have seen a significant increase in customer demand for the
SteelCell(TM) technology over the past 6 months, particularly for
high power applications. This increased demand for our existing
SteelCell(TM) technology combined with the development of larger
cells and stacks for new applications has led to the need for
further investment in our manufacturing and test capability.
In the near term, additional demand is being met by increasing
manufacturing capacity in Horsham through the addition of a 3(rd)
shift pattern along with bringing through improvements to key
process steps. Beyond this, we are beginning to explore a number of
options for further manufacturing scale-up.
Financial progress
As highlighted above, the multiple customer programmes won in
the past 12 months are driving our revenues forward. Compared to
the same period last year, we have tripled revenue and other
operating income to GBP1.5 million. We expect this uplift to
continue into the full year, where we aim to at least double our
revenue and other operating income. It is encouraging that this is
being achieved across a growing portfolio of customer
programmes.
Our equity free cash outflow of GBP4.2 million in the period was
less than the prior period (GBP5.4m), mostly due to the Group
receiving its R&D tax credit of GBP2.2m in full (prior period
received GBP0.8m, part of the R&D tax credit, in the period).
Even though we are investing in people and in making the technology
more suitable for customers that require a higher power output, as
we highlighted in last year's annual report, we expect both our
operating loss and our equity free cash outflow for the full year
to decrease from the prior year.
We were very pleased with our GBP20m fundraise in the period,
especially given the uncertain economic conditions in the last 6
months. At 31 December 2016, the Group had cash and cash
equivalents of over GBP22 million and this financial strength, at a
key stage for the Company as we negotiate long term partnerships
with a number of the world's leading companies, gives us the runway
to further embed our SteelCell(TM) in customer development and
'go-to-market' programmes.
Outlook
Our vision is to embed our cutting-edge SteelCell(TM) technology
into world-leading products within the Home, Business, Data Centre
and Electric Vehicle markets.
The leadership team committed itself to signing five global
engineering companies as customers in joint development agreements
by the end of 2017 and being in two launch programmes with OEM
partners by the end of 2018. With four joint development agreements
and one launch programme already signed, Ceres Power is ahead of
its stated schedule. We expect to secure further commercial
partners in due course and to make further progress with our
existing partners.
We anticipate that the commercial progress we are making will
further drive revenues in the second half of FY 2016/17 and into FY
2017/18.
Ceres Power has a committed, experienced team and we would like
to offer our thanks for their continued efforts which we believe
will translate into even greater commercial progress over the next
12 months.
Philip Caldwell
Chief Executive Officer
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
For the six months ended 31 December 2016
Six months Year
ended ended
31 December 30 June
2016 Six months
ended
31 December 2016
(Unaudited) 2015
(Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
Revenue 1,026 235 1,113
Cost of sales (406) (123) (336)
Gross profit 620 112 777
Other operating
income 525 218 555
Operating costs 2 (7,387) (6,565) (14,026)
Operating loss (6,242) (6,235) (12,694)
Finance income 30 49 77
Loss before taxation (6,212) (6,186) (12,617)
Taxation credit 1,044 698 2,157
Loss for the financial
period / year and
total comprehensive
loss (5,168) (5,488) (10,460)
============= ============== ===========
Losses per GBP0.01
ordinary share
expressed in pence
per share:
Basic and diluted
loss per share 3 (0.63)p (0.71)p (1.35)p
All activities relate to the Group's continuing operations and
the loss for the financial year is fully attributable to the owners
of the parent.
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
31 December 30 June
2015 (Unaudited) 2016
31 December
2016 (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and
equipment 2,053 2,559 2,309
------------------
Total non-current
assets 2,053 2,559 2,309
Current assets
Trade and other receivables 2,071 755 1,109
Derivative financial
instrument 14 - 28
Current tax receivable 825 1,378 1,997
Short-term investments 6 16,000 7,000 1,000
Cash and cash equivalents 6 6,174 5,753 5,947
------------------ ------------------ ------------
Total current assets 25,084 14,886 10,081
Liabilities
Current liabilities
Trade and other payables (2,217) (2,663) (2,121)
Derivative financial
instrument (110) - (7)
Provisions for other
liabilities and charges - (77) (78)
------------------ ------------------ ------------
Total current liabilities (2,327) (2,740) (2,206)
------------------ ------------------ ------------
Net current assets 22,757 12,146 7,875
Non-current liabilities
Accruals and deferred
income - (58) (31)
Provisions for other
liabilities and charges (806) (865) (866)
------------------ ------------------ ------------
Total non-current
liabilities (806) (923) (897)
------------------
Net assets 24,004 13,782 9,287
================== ================== ============
Equity
Share capital 4 10,080 7,725 7,779
Share premium account 107,222 90,120 90,120
Capital redemption
reserve 3,449 3,449 3,449
Other reserve 7,463 7,463 7,463
Accumulated losses (104,210) (94,975) (99,524)
Total equity 24,004 13,782 9,287
================== ================== ============
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2016
Year
ended
30 June
2016
Six months Six months
ended ended
31 December 31 December
2016 2015
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash used in operations 5 (6,082) (5,310) (11,773)
Taxation received 2,216 839 1,679
------------- ------------- -----------
Net cash used in operating
activities (3,866) (4,471) (10,094)
------------- ------------- -----------
Cash flows from investing
activities
Purchase of property,
plant and equipment (333) (1,013) (1,302)
Movement in short-term
investments (15,000) (1,000) 5,000
Finance income received 30 49 77
------------- ------------- -----------
Net cash (used in) /
generated from investing
activities (15,303) (1,964) 3,775
------------- ------------- -----------
Cash flows from financing
activities
Proceeds from issuance
of ordinary shares 20,038 - 54
Net expenses from of
issuance of ordinary
shares (635) - -
------------- ------------- -----------
Net cash generated from
financing activities 19,403 - 54
Net increase / (decrease)
in cash and cash equivalents 234 (6,435) (6,265)
Exchange (losses) /
gains on cash and cash
equivalents (7) 4 28
------------- ------------- -----------
227 (6,431) (6,237)
Cash and cash equivalents
at beginning of period 5,947 12,184 12,184
------------- ------------- -----------
Cash and cash equivalents
at end of period 6,174 5,753 5,947
------------- ------------- -----------
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2016
Share Capital
Share premium redemption Other Accumulated
capital account reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July
2015 7,725 90,120 3,449 7,463 (90,076) 18,681
Comprehensive
income
Loss for the
financial
year - - - - (5,488) (5,488)
--------- --------- ------------- --------- ------------ --------
Total comprehensive
loss - - - - (5,488) (5,488)
--------- --------- ------------- --------- ------------ --------
Transactions
with owners
Issue of shares,
net of costs - - - - - -
Share-based
payments charge - - - - 589 589
--------- --------- ------------- --------- ------------ --------
Total transactions
with owners - - - - 589 589
--------- --------- ------------- --------- ------------ --------
At 31 December
2015 7,725 90,120 3,449 7,463 (94,975) 13,782
--------- --------- --------- ------------ --------
Comprehensive
income
Loss for the
financial
year - - - - (4,972) (4,972)
Total comprehensive
loss - - - - (4,972) (4,972)
--------- --------- ------------- --------- ------------ --------
Transactions
with owners
Issue of shares,
net of costs 54 - - - - 54
Share-based
payments charge - - - - 423 423
Total transactions
with owners 54 - - - 423 477
--------- --------- ------------- --------- ------------ --------
At 30 June
2016 7,779 90,120 3,449 7,463 (99,524) 9,287
--------- --------- ------------- --------- ------------ --------
Comprehensive
income
Loss for the
financial
year - - - - (5,168) (5,168)
Total comprehensive
loss - - - - (5,168) (5,168)
Transactions
with owners
Issue of shares,
net of costs 2,301 17,102 - - - 19,403
Share-based
payments charge - - - - 482 482
Total transactions
with owners 2,301 17,102 - - 482 19,885
--------- --------- ------------- --------- ------------ --------
At 31 December
2016 10,080 107,222 3,449 7,463 (104,210) 24,004
--------- --------- ------------- --------- ------------ --------
The accompanying notes are an integral part of these
consolidated financial statements.
Notes to the financial statements for the six months ended 31
December 2016
1. Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
The consolidated financial statements of the Group are prepared
on a going concern basis, in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European
Union, the IFRS Interpretations Committee (IFRS-IC) interpretations
and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The consolidated financial statements have
been prepared on a historical cost basis except that the following
assets and liabilities are stated at their fair value: derivative
financial instruments and financial instruments classified as fair
value through the profit or loss.
The financial information contained in this interim announcement
is unaudited and does not constitute statutory financial statements
as defined by in Section 434 of the Companies Act 2006. The
financial statements for the year ended 30 June 2016, on which the
auditors gave an unqualified audit opinion, have been filed with
the Registrar of Companies.
The accounting policies adopted are consistent with those of the
financial statements for the year ended 30 June 2016, as described
in those financial statements.
After having made appropriate enquiries and in light of the
placing which raised GBP19.4 million net of expenses in October
2016, the Directors have a reasonable expectation that the Group
and Company have adequate resources to progress their established
strategy for the foreseeable future. Accordingly, the Directors
continue to adopt the going concern basis in preparing these
financial statements.
2. Operating costs
Operating costs are
split as follows:
Year
ended
30 June
2016
Six months Six months
ended ended
31 December 31 December
2016 (Unaudited) 2015 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Research and development
costs 5,434 4,905 10,588
Administrative expenses 2,059 1,660 3,714
------------------ ------------------ -----------
7,493 6,565 14,302
Reversal of provision
relating to onerous
lease and property dilapidations (106) - (276)
------------------ ------------------ -----------
7,387 6,565 14,026
================== ================== ===========
3. Loss per share
Six months
ended Year ended
31 December 30 June
2016 (Unaudited) 2016
Six months
ended
31 December
2015 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Loss for the financial
period attributable
to shareholders (5,168) (5,488) (10,460)
================== ================== ============
Weighted average number
of shares in issue 824,447,210 772,537,841 773,999,046
================== ================== ============
Loss per GBP0.01 ordinary
share (basic & diluted) (0.63)p (0.71)p (1.35)p
================== ================== ============
4. Share capital
Ceres Power Holdings plc has called-up share capital totalling
1,008,040,924 GBP0.01 ordinary shares as at 31 December 2016
(777,857,841 ordinary shares of GBP0.01 each at 30 June 2016).
During the period 228,603,083 ordinary shares of GBP0.01 each
were issued through a placing on AIM for cash consideration of
GBP20 million. In addition, 1,580,000 ordinary shares of GBP0.01
each were issued on the exercise of employee share options.
5. Cash used in operations
Year ended
30 June
2016
Six months Six months
ended ended
31 December 31 December
2016 (Unaudited) 2015 (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Loss before taxation (6,212) (6,186) (12,617)
Adjustments for:
Other finance income (30) (49) (77)
Depreciation of property,
plant and equipment 589 534 1,178
Share-based payments 482 589 1,012
Net foreign exchange gains/(losses) 7 - (49)
Operating cash flows before
movements in working capital (5,164) (5,112) (10,553)
(Increase)/decrease in
trade and other receivables (948) 227 (134)
Increase/(decrease) in
trade and other payables 168 (112) (775)
Decrease in provisions (138) (313) (311)
------------------ ------------------ -----------
Increase in working capital (918) (198) (1,220)
Cash used in operations (6,082) (5,310) (11,773)
================== ================== ===========
6. Net cash, short-term investments and financial assets
Year
ended
Six months Six months
ended ended
31 December 31 December 30 June
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 3,716 1,577 805
Money market funds 2,458 4,176 5,142
-------------
Cash and cash equivalents 6,174 5,753 5,947
-------------
Short-term investments
(bank deposits > 3 months) 16,000 7,000 1,000
------------- ------------- -----------
Net cash and short term
investments 22,174 12,753 6,947
------------- ------------- -----------
The Group typically places surplus funds into pooled money
market funds and bank deposits with durations of up to 12 months.
The Group's treasury policy restricts investments in short-term
sterling money market funds to those which carry short-term credit
ratings of at least two of AAAm (Standard & Poor's), Aaa/MR1+
(Moody's) and AAA V1+ (Fitch) and deposits with banks with minimum
long-term rating of A/A-/A3 and short-term rating of F-1/A-2/P-2
for banks which the UK Government holds less than 10% ordinary
equity.
INDEPENT REVIEW REPORT TO CERES POWER HOLDINGS PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly report for the six
months ended 31 December 2016 which comprises Consolidated
statement of profit and loss and other comprehensive income,
Consolidated statement of financial position, Consolidated cash
flow statement, Consolidated statements of changes in equity and
the related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half-yearly report in accordance with the AIM
Rules.
The annual financial statements of the group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly report has been
prepared in accordance with the recognition and measurement
requirements of IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly report for the six months ended 31 December 2016
is not prepared, in all material respects, in accordance with the
recognition and measurement requirements of IFRSs as adopted by the
EU and the AIM Rules.
James Ledward
for and on behalf of KPMG LLP
Chartered Accountants
1 Forest Gate,
Brighton Road, Crawley
RH11 9PT
8 March 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDXCBGBGRR
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