TIDMCWR
RNS Number : 2157A
Ceres Power Holdings plc
28 September 2020
Ceres Power Holdings plc
Interim Results for the 12 months ended 30 June 2020
strategic partnerships continue to deliver commercial GROWTH
Ceres Power Holdings plc ("Ceres Power", "Ceres", the "Company"
or the "Group") (AIM: CWR.L), a global leader in fuel cell and
electrochemical technology, announces its second set of interim
results for the 12 months ended 30 June 2020, following the change
of year end to 31 December.
Financial Highlights
* Strong progress on major contracts has driven a 21%
increase in revenue and other operating income to
GBP19.9m (2019: GBP16.4m)
* Increased gross profit of GBP13.8m (2019: GBP11.5m)
at sector leading gross margin of 73% (2019: 75%)
* Adjusted EBITDA loss increased slightly to GBP6.5m
(2019: GBP5.9m) due to further investment in growth
area of electrolysis for hydrogen
* Increased equity investment by Bosch and Weichai, of
GBP49m, supports strong cash and short-term
investments of GBP108m at 30 June 2020
* Order book* of GBP14m and strong pipeline* of GBP54m
as at 30 June 2020
Operating and Corporate Highlights
* Bosch has commenced manufacturing of Ceres' core cell
technology at its pilot facility in Germany
* Weichai 30kW range extender system for electric buses
targeting the Chinese market moving into field
trials. Some delays in timing due to Covid-19 means
establishment of a joint venture in China is now
likely to be H1 2021
* Wider deployment of the Group's combined heat and
power ("CHP") system in the Japanese market by Miura
Co.
* Hydrogen Electrolysis R&D delivering positive results
triggers further investment in the technology
* Successful development of Ceres' first zero-emission
CHP system designed for exclusive use with hydrogen
fuel
* 2MW advanced manufacturing pilot facility built,
commissioned and running in Redhill, UK
* Appointment of Warren Finegold as Chairman and Uwe
Glock and Qinggui Hao as Non-executive Directors
Covid-19
The disruption from Covid-19, coinciding with the commissioning
of our new facility at Redhill, has meant that some revenues
have been deferred from this reporting period. Nonetheless,
we have delivered a solid set of results, with continued revenue
growth through good progress with our customer programmes
and increased manufacturing output; a huge credit to the entire
Ceres team.
Phil Caldwell, CEO of Ceres Power commented:
"The urgency for climate action continues to drive the global
demand for clean energy technologies, and our strategy of licensing
to global partners, with a leading position in their products and
markets, continues to be highly successful. "Despite the disruption
from Covid we have delivered a solid set of results, with continued
revenue growth and sector leading margins. This is driven by good
progress with our customer programmes and increased manufacturing
output thanks to the hard work of the entire Ceres team.
"Trading since the period end has remained strong with good
commercial progress with our partners globally. Bosch has now
installed prototype products of its 10kW system utilising Ceres'
technology at five locations in Germany while, despite an initial
delay in the early part of 2020 due to the pandemic, good progress
is now being made to validate Ceres' technology for transportation
applications with Weichai's SOFC team in China.
"These developments, combined with the opportunities from our
new, long term growth areas of electrolysis for hydrogen, mean that
Ceres is very well positioned to build on the strong momentum
generated during the period as we look to play our part in
delivering clean energy technology to enable a net zero
future."
(*Order book refers to confirmed contracted revenue and other
income while pipeline is contracted revenue and other income which
management estimate is contingent upon options not under the
control of Ceres.)
Financial Summary: 12 months
ended 30 Year ended
June 2020 30 June 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- --------------
Total revenue and other operating income,
comprising: 19,942 16,365
Licence fees 5,841 7,412
Engineering services revenue and provision
of technology hardware 13,056 7,888
Other operating income 1,045 1,065
Gross margin % 73% 75%
Adjusted EBITDA loss (1) (6,519) (5,881)
Operating loss (10,081) (7,924)
Net cash used in operating activities (5,442) (3,058)
Net cash and short-term investments 107,981 71,267
1 Adjusted EBITDA loss is calculated as the operating loss for
the 12 months ended 30 June 2020 of GBP10,081k (2019 - GBP7,924k)
excluding depreciation charges of GBP2,683k (2019 - GBP1,025k),
share-based payment charges of GBP873k (2019 - GBP909k), unrealised
gains on forward contracts of GBP40k (2019 - GBP42k loss) and
exchange losses of GBP46k (2019 - GBP67k). Management believes that
adjusted EBITDA loss provides a better understanding of the
underlying performance of the Group by removing non-recurring,
irregular and one-off costs.
Analyst Presentation
Ceres Power Holdings plc will be hosting a live webcast for
analysts and investors today at 09.30 (GMT). A link to the webcast
will be made available on the Ceres website www.ceres.tech or can
be accessed directly here:
https://kvgo.com/IJLO/CERES_Interim_Results_2020
Conference Call:
To access the conference call, please use the following details
5-10 minutes prior to the start time:
Dial: +44 (0) 20 3003 2666
For further information please visit www.ceres.tech or
contact:
Ceres Power Holdings plc Tel: +44 (0)1403 273
Elizabeth Skerritt 463
Investec Bank PLC (NOMAD & Joint Tel: +44 (0)207 597 5970
Broker)
Jeremy Ellis / Patrick Robb / Ben
Griffiths
Berenberg (Joint Broker) Tel: +44 (0) 203 207
Ben Wright / Mark Whitmore 7800
Powerscourt (Financial PR) Tel: +44 (0) 20 7250
Peter Ogden / James White 1446
About Ceres Power
Ceres is a world-leading developer of fuel cell and electrochemical
technology that enables its partners to deliver clean energy
at scale and speed. Its asset-light, licensing model has seen
it embed its technology in some of the world's most progressive
companies - such as Weichai in China, Bosch in Germany, Miura
in Japan, and Doosan in South Korea - to develop systems and
products that address climate change and air quality challenges
for transportation, industry, data centres and everyday living.
Ceres is listed on the AIM market of the London Stock Exchange
("LSE") (AIM: CWR.L) and was awarded the Green Economy Mark
by the LSE, which recognises listed companies that derive more
than 50% of their revenues from the green economy.
Chief Executive's Statement
I am very proud of our continued progress in 2020 and the way
our people and the business as a whole have responded to the social
and economic shock of Covid-19. While employees' health and safety
remains our priority, the day-to-day challenges have only
highlighted the resilience and adaptability of our business and we
are focused on our purpose of developing clean energy technologies
that address climate change. We are convinced more than ever that
Ceres has the technology, the people and the capability to
commercialise technology that the world needs to realise a net zero
future. Hence, this year we are continuing to invest in our core
fuel cell business that helps to decarbonise power generation and
transportation, and also expanding into new areas such as
electrolysis for the production of hydrogen which are key to
decarbonise society.
Despite the challenging business environment, we continue to
deliver top line growth with revenue and other operating income up
21% to GBP19.9m (2019: GBP16.4m) reflecting strong progress in
major contracts and delivering sector leading gross margins of 73%
supported by our licensing business model. A f urther equity
injection of GBP49m from Bosch and Weichai since January has
supported a strong cash position of GBP108m at 30 June 2020, giving
us confidence to increase strategic investment in the business to
grow future value. We are pleased to have Bosch alongside Weichai
as commercial partners as well as significant strategic
investors.
It is testament to the talents and hard work of our teams, and
to the support of our partners and suppliers, that we have
continued to progress customer programmes and to ramp up
manufacturing output at our new Redhill facility, despite the
impact of Covid-19. We have reduced the number of people on site to
only those essential to maintain operations while those employees
who are able to do so continue to work remotely. We have not needed
to make use of the government furlough scheme and indeed we have
continued to recruit new employees throughout 2020 to meet the
increased demand for Ceres' technology. Notwithstanding current
restrictions on travel, we continue to find ways to work
effectively with commercial partners. There has been some impact on
the supply chain due to market disruption and the speed at which
Ceres and our customers are able to work. However, we are managing
these well and continue to monitor and remain responsive to the
changing dynamics of the situation.
If anything, the pandemic has brought into sharp focus the need
for strong and sustainable growth to drive the global recovery and
the EU and Germany have followed the lead of countries such as
Japan and South Korea in setting out ambitious targets around
hydrogen and fuel cell deployment. Ceres is well-placed, with a
scalable technology and strong commercial relationships in these
key markets, to deliver significant value over the coming months
and years.
Commercial
As at 30 June 2020 our order book stood at GBP14m and we had a
further GBP54m pipeline, being a combination of staged licensing
payments and engineering services. As an asset-light, licensing
business we have historically signed around one to two new licenses
per year with a blend of upfront license payments and engineering
revenues delivering strong gross margins.
Bosch
During the last 12 months, it has been very encouraging to see
Bosch's progress with the deployment and profiling of Ceres'
technology. Bosch has become the first partner to successfully
manufacture our core cell technology under licence and is now
manufacturing cells for its own stacks and systems in Germany. We
view Bosch's decision to increase its investment in Ceres in
January 2020, from 4% to 18% of the enlarged issued share capital,
as a strong signal of its intention to move towards future scale up
to high volume manufacture of the SteelCell(R).
Bosch started trialling its 10kW units in 2020 and in July this
year officially opened a fuel cell power installation, consisting
of three solid oxide fuel cell (SOFC) devices utilising Ceres'
technology, to meet most of the energy requirements of one of the
buildings at Bosch's Wernau training centre in Germany. Additional
SOFC pilot schemes for testing and validation are located at other
Bosch locations in Germany. Bosch has stated its intention that the
Group's locations will no longer leave a carbon footprint worldwide
from 2020.
The 10kW Bosch 'power station', based on two 5kW SteelCell(R)
stacks, was showcased to more than 10,000 attendees at Bosch
Connected World in February 2020. The 10kW unit, which can operate
biogas or natural gas and blends of hydrogen, provides a technology
that is highly complementary to today's energy infrastructure, is
hydrogen ready for the future, and can form a critical building
block of a future zero carbon economy. In April, Bosch announced
that it anticipates the market for the fuel cell power stations to
be worth more than 20 billion euros by 2030.
In June, we were pleased to announce the appointment of Mr. Uwe
Glock as a Non-Executive Director on the Board of Ceres. Mr. Glock
is Chairman of the Board of Management of Bosch Thermotechnik GmbH
and brings over 35 years of experience from across Bosch Mobility
Solutions and Energy and Building Technology - Worcester Bosch in
the UK is part of the Bosch Thermotechnik division. His appointment
increases Ceres' exposure to the Bosch organisation and brings
significant value through Mr. Glock's leading role in the wider
German and European energy and building industry.
Weichai
Having successfully developed a world-first 30kW solid oxide
fuel cell ("SOFC") prototype range extender for electric city buses
running on compressed natural gas, the team moved on to the second
iteration of the design at the end of 2019. This is currently being
built into a fleet of five buses which are undergoing trials in
China. There were some delays to the project in the early part of
2020 due to the pandemic which will delay completion of these
trials by up to six months, but Weichai's SOFC team with support
from Ceres has been back at full capacity for some time and good
progress is now being made to validate the Ceres technology for
automotive applications.
The delay in completing these trials means there will be some
impact to the timing of the establishment of a fuel cell
manufacturing company in Shandong Province, China, to manufacture
SteelCell(R) SOFC systems. As previously disclosed, the joint
venture is intended to provide a staged path to high volume
manufacturing potentially for buses, commercial vehicles and other
markets in China.
Following the decision in January 2020 by Bosch to increase its
stake in Ceres to 18%, Ceres viewed it very positively that Weichai
exercised its own non-dilution rights and has invested a further
GBP11 million to maintain its equity stake at 20%. We have also
welcomed a new Weichai representative to the Board of Ceres, the
Investment Director of Weichai Power's parent company Shandong
Heavy Industry Group Co., Ltd., Mr. Qinggui Hao.
Doosan
In July 2019, Ceres signed a collaboration and licensing
agreement with Doosan, to jointly develop SOFC distributed power
systems, initially targeting the South Korean commercial building
market. The agreement, worth GBP8 million over two years, includes
licensing, technology transfer and engineering services to develop
a low carbon 5-20kW power system.
South Korea is an important market for Ceres and Doosan boasts
the number one position in the stationary fuel cell market
globally. We are looking to expand our collaboration with them to
access broader applications within South Korea and internationally.
South Korea benefits from extremely progressive regulation and
targets that encourage the deployment of hydrogen and fuel cell
technology.
Miura
Following a successful initial market launch of its combined
heat and power (CHP) product using Ceres' technology in October
2019, Miura has since announced the establishment of a specialist
maintenance team to support its wider deployment in the Japanese
market. The system, which is aimed at the commercial building
sector, operates on the mains gas supply and captures heat as hot
water with an overall efficiency of up to 90%, delivering both
major energy savings and a lower carbon footprint. Its long-term
deployment will be supported through specialist maintenance teams
in metropolitan areas such as Tokyo, Osaka, Nagoya and Fukuoka, to
enable quick and quality service to customers. We continue to
provide low volumes of stacks to Miura for its commercial product
and first products have been running successfully for over a
year.
Others
We continue to make good progress with other partners including
continuing our collaboration with Honda and will provide further
updates as they progress. We are also close to successfully
completing our joint development with Cummins and the US DoE of a
10 kW SOFC power system which is undergoing final testing in the
USA. However, there are no plans for further collaboration with
Cummins at this time.
In order to grow our business at pace we are intending to form a
strategic relationship with a global engineering consultancy with
engineering services and business development capability, which can
enable further opportunities for the Ceres technology in a variety
of applications globally. We believe partnering in this way will
increase Ceres' ability to scale the business and to enhance the
long-term value created from our licensing model.
Manufacturing
Having successfully completed the build of the new advanced
manufacturing facility in Redhill in January 2020, the production
ramp up was impacted by the timing of Covid-19. A reduced team
remained onsite throughout the period and continued to deliver fuel
cells to support our customers globally. From early May the full
onsite team returned, delivering an outstanding effort to ramp up
cell manufacturing output, with record production achieved in June.
Further investment in manufacturing capacity is underway at Ceres'
R edhill facility which will increase annual production capacity
from 2MW to 3MW in 2021.
This facility is a key asset for Ceres in enabling technology
transfer of our advanced manufacturing processes and know-how to
licensee partners as well as delivering near term volume to
customer programmes.
A great example of this was the successful technology transfer
to Bosch earlier this year. This was made possible through the
close working relationship between the Ceres and Bosch
manufacturing teams first in the UK at our new facility at Redhill
and then transferring this knowledge to Bosch in establishing its
parallel pilot manufacturing plant in Germany, which successfully
started production in Q1 this year. This was a key milestone for
both companies as it is the first time a third-party partner has
manufactured Ceres cell and stack technology under license.
Technology
Fuel cells
As a licensing company, it is imperative that Ceres remains at
the leading-edge of its unique solid oxide fuel cell technology,
continually maturing existing products and furthering R&D into
new applications for customers.
At the beginning of the year, we announced further investment in
the development of higher power systems, and the associated
investment in capital for test capability, to meet increased
customer demand for high power applications moving from 30kW to
100s of kW in the next few years.
We also continue to focus R&D spend on improving our
competitive advantage in power density, cost and product lifetime
and remain on track to release the next generation (V6) of our core
technology in 2021.
In November 2019, Ceres announced the successful development of
its first zero-emission combined heat & power (CHP) system,
designed exclusively for use with hydrogen fuel. In initial
testing, the system has achieved greater than 50% electrical
efficiency, with an overall efficiency of 90% achievable in
combined heat & power mode. Ceres' hydrogen CHP is simpler than
its existing fuel-flexible system, delivering an equivalent
performance with fewer components, a reduced size and up to a 40%
unit cost reduction.
Electrolysis
Over the past 18 months there has been significant momentum
around the potential for hydrogen and Ceres believes its extremely
efficient solid oxide technology has a crucial part to play in a
future clean energy economy. Today, around 80% of the cost of
producing green hydrogen, that is hydrogen generated from splitting
water with renewable sources of electricity, is the cost of input
electricity. Ceres believes its unique solid oxide electrochemical
technology can deliver tangible value - through the same advantages
of robustness, cost, and crucially efficiency, that make it a
leader in fuel cells.
In January, we announced that early stage testing on the
application of Ceres' technology as a solid oxide electrolyser
(SOEC), essentially the process of reversing fuel cells to produce
hydrogen and e-fuels from renewable energy, has delivered
encouraging results. We believe that it could deliver significant
future business opportunities for Ceres and in July, we announced
further R&D investment of GBP5 million in the period to 2021 to
develop the deployment of our SOEC technology for hydrogen.
Ceres has a credible path to participate, not only in delivering
hydrogen at scale but, also due to the characteristics of higher
temperature electrolysers, in utilising waste heat making this
technology particularly useful in decarbonising industrial
processes such as steel and refineries. Over a quarter of the
patents on Ceres' core technology apply equally to its use in SOEC
and we have existing manufacturing and test capability that can be
deployed to progress SOEC stacks as well as a leading team of
electrochemical scientists with over a decade of intimate working
knowledge of Ceres' technology. We look forward to providing
updates on our progress in due course.
Financial
Following the extension of the Group's accounting period to the
18 months ended 31 December 2020, these interim financial
statements are the second set of interim results that the Group has
reported in this period.
The business continues to achieve solid commercial growth and we
delivered revenue and other income in the 12 months to June 2020 of
GBP19.9m, up from GBP16.4m in the previous year. The Group
delivered an increased gross profit of GBP13.8m (2019: GBP11.5m) at
a gross margin of 73% (2019: 75%). The gross margin achieved
depends primarily on the mix between licence fees and engineering
services, and we continue to anticipate that this mix will vary
going forwards, based on deal flow.
Adjusted EBITDA loss of (GBP6.5m) increased from the prior year
(GBP5.9m), reflecting the higher gross profit offset by continued
investment in additional resources to support the company's growth.
Operating loss increased from GBP7.9m to GBP10.1m reflecting the
movement in adjusted EBITDA loss as well as increased depreciation,
as the new manufacturing plant came onstream during the period.
Loss after tax increased to (GBP7.3m), from (GBP4.8m), broadly
mirroring the change in operating loss. The tax credit of GBP2.4m
(2019: GBP2.5m) includes a Research and Development tax credit
("R&D tax credit") of GBP2.4m which we received in early 2020
and is presented net of withholding tax suffered on foreign
revenues of GBP0.2m.
Net cash used in operating activities (GBP5.4m) increased from
the prior year (GBP3.1m) primarily reflecting the movement in
EBITDA loss and movements in working capital. During the 12-month
period we invested GBP5.6m in capex (2019: GBP7.7m), mainly
relating to enhancing our manufacturing facility. We also invested
GBP2.5m (2019: GBP1.3m) in intangible assets, primarily in respect
of development costs, which we capitalised reflecting our
confidence in the commercialisation potential of the technology. As
a result, equity-free cash outflow(1) was (GBP13.4m) (2019:
(GBP11.9m)).
Following the Group's adoption of IFRS 16 from 1 July 2019,
right-of-use assets of GBP4.2m (2019: GBPnil) have been recognised
as at 30 June 2020, relating to lease liabilities of GBP4.8m,
primarily relating to leases of premises. Net contract assets and
liabilities increased to GBP4.3m (2019: GBP3.2m) primarily due to
timing differences between raising invoices and recognising revenue
on the Group's long-term contracts.
The Group is well-financed, holding GBP108m of cash, cash
equivalents and short-term investments at 30 June 2020 (at 30 June
2019: GBP71m). During the last 12 months, our strategic partners
Bosch and Weichai invested GBP49m of new equity shares in Ceres,
through the issue of 15.4 million new ordinary shares, reinforcing
our existing strong financial position.
(1) Equity-free cash flow is defined as the net change in cash
and cash equivalents in the relevant period less net cash generated
from financing activities plus the movement in short-term
reserves.
Principal risks and uncertainties
There are a number of risks and uncertainties that have the
potential to impact the execution of the Group's strategy, as well
as its short-term results. The Board regularly reviews the risks
facing the Group and these risks are set out in the Annual Report
along with mitigations to reduce the likelihood of them occurring
and to manage any possible impact. The Directors consider the
following risks have emerged or changed since the publication of
the 2019 Annual Report.
Covid-19 has emerged and remains a risk to future manufacturing
output and the timing of partner programmes principally if in the
future our people are not able to access our facilities or our
supply chain is disrupted. So far, we have put mitigations in place
which have limited any impact to our operations and we have managed
the impact on the Group's results for the 12 months ended 30 June
2020 to be relatively small. The risk of a hard Brexit remains and
the potential impact to the business is disruption to supply chain
and shipments around the end of 2020. We are mitigating this by
increasing inventory levels.
An increasing operational risk is that, given recent commercial
progress, the Group may be unable to support the scale up of
production in our licence partners through supply chain issues,
short term supply of stacks or the ability to access key skills and
resources. The Company is mitigating these risks by near term
expansion of its manufacturing capacity, bringing on new employees
ahead of demand and working closely with suppliers. As we progress
to mass manufacture, the financial and reputational impact of any
issues with product performance at scale are also increasing and we
are putting significant focus on product design and maturity.
Similarly, as our technology becomes available in multiple
applications and geographies there is an increased risk of IP loss
or infringement and we are continuing to increase the protection of
our IP.
Finally, due to our significant cash reserves following the
recent equity investments from our strategic partners, the risk of
access to capital is considered to have further reduced as our need
for further capital has fallen. This strong financial position,
combined with a review of stress-tested cashflow forecasts, provide
the Directors with confidence supporting the Group's continued
ability to operate as a going concern for the foreseeable
future.
Strategy and Outlook
The urgency for climate action continues to drive the global
demand for clean and flexible sources of energy. Leading power
system and engineering companies are increasing their investments
in new and complementary technologies to orientate their businesses
towards this purpose. Ceres' strategy of focusing on these
blue-chip OEMs, with a leading position in their products and
markets, has been highly successful and we continue to build on
strong foundations established in Japan, South Korea, Germany and
China.
The past 12 months has provided important validation of Ceres'
asset-light, licensing model in power generation. We have assembled
one of the world's best teams of engineers and scientists working
in solid oxide technology, which has allowed us to grow our
portfolio of global licensees and applications.
In tandem, we are committed to adapting our technology for
further and future applications and at the beginning of the year we
announced our initial plan to position the business to include
electrolysis. More bullish reports from the Hydrogen Council
estimate the market for hydrogen could reach $2.5 trillion by 2050.
We believe that the Ceres' SteelCell(R), when used as an SOEC,
could deliver significant future value for Ceres and we are
beginning to invest to ensure we are well-positioned to capitalise
on these opportunities.
In the period, we have invested in our organisational structure,
research and development activities and in the expansion of pilot
manufacturing at Redhill. We see a clear path to mass
commercialisation of our fuel cell technology with our partners,
and with over GBP100 million of cash reserves available we have the
financial strength to deploy our technology in further applications
and geographies.
Despite the current turmoil in the global economy, Ceres has
delivered a strong performance in the last 12 months and continued
positive trading gives us significant optimism for the outlook and
future success of the business. We are proud to be a UK high growth
clean technology business and view our purpose, to deliver clean
energy for a clean world, as being closely aligned with momentum
around the green recovery and as a path to deliver value to our
shareholders, our employees and customers, and to the benefit of
society as a whole.
Philip Caldwell
Chief Executive Officer
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
For the 12 months ended 30 June 2020
12 months
ended Year ended
30 June 30 June
2020 (Unaudited) 2019 (Audited)
Note GBP'000 GBP'000
Revenue 3 18,897 15,300
Cost of sales (5,095) (3,804)
Gross profit 13,802 11,496
Other operating income (1) 1,045 1,065
Operating costs 4 (24,928) (20,485)
Operating loss (10,081) (7,924)
Finance income 5 846 552
Finance expense (451) -
Loss before taxation (9,686) (7,372)
Taxation credit 6 2,418 2,538
Loss for the financial period/year
and total comprehensive loss (7,268) (4,834)
================== ================
Loss per GBP0.10 ordinary share
expressed in pence per share:
Basic and diluted loss per share 7 (4.60)p (3.43)p
The accompanying notes are an integral part of these
consolidated financial statements.
(1) (Other operating income relates to grant income.)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June 30 June
2020 (Unaudited) 2019 (Audited)
Note GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 8 12,970 9,769
Right-of-use assets 9 4,232 -
Intangible assets 10 3,800 1,322
Other receivables 12 741 741
Total non-current assets 21,743 11,832
Current assets
Inventories 11 2,055 1,403
Contract assets 3 1,821 722
Trade and other receivables 12 4,643 4,204
Prepayments and accrued income 13 987 1,497
Derivative financial instrument 2 28
Current tax receivable 6 2,450 2,292
Short-term investments 14 90,782 63,700
Cash and cash equivalents 14 17,199 7,567
------------------ ----------------
Total current assets 119,939 81,413
Liabilities
Current liabilities
Trade and other payables 15 (2,560) (2,365)
Contract liabilities 3 (1,014) (3,061)
Accruals and deferred income 16 (3,667) (1,838)
Lease liabilities 17 (1,026) -
Derivative financial instrument (1) (66)
Provisions 18 (308) (158)
Total current liabilities (8,576) (7,488)
------------------ ----------------
Net current assets 111,363 73,925
Non-current liabilities
Accruals and deferred income - (323)
Lease liabilities 17 (3,823) -
Provisions 18 (1,117) (992)
Total non-current liabilities (4,940) (1,315)
Net assets 128,166 84,442
================== ================
Equity attributable to the owners
of the parent
Share capital 19 17,082 15,277
Share premium 227,430 179,116
Capital redemption reserve 3,449 3,449
Merger reserve 7,463 7,463
Accumulated losses (127,258) (120,863)
Total equity 128,166 84,442
================== ================
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED CASH FLOW STATEMENT
For the 12 months ended 30 June 2020
Note 12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
-------------
Cash flows from operating activities
Loss before taxation (9,686) (7,372)
Adjustments for:
Finance income (846) (552)
Finance expense 451 -
Depreciation of property, plant
and equipment 2,167 1,025
Depreciation of right-of-use assets 515 -
Amortisation of intangible assets 55 13
Share-based payments charge 873 909
Net foreign exchange (gains)/losses 46 67
Net change in fair value of financial
instruments at fair value through
profit and loss (40) 42
------------- -----------
Operating cash flows before movements
in working capital (6,465) (5,868)
Increase in trade and other receivables (492) (1,412)
Increase in inventories (652) (3)
Increase/(decrease) in trade and
other payables 2,578 (559)
Increase in contract assets (1,099) (722)
(Decrease)/increase in contract
liabilities (2,047) 3,061
Increase in provisions 275 299
------------- -----------
Net cash used in operations (7,902) (5,204)
------------- -----------
Taxation received 2,460 2,146
------------- -----------
Net cash used in operating activities (5,442) (3,058)
------------- -----------
Investing activities
Purchase of property, plant and
equipment (5,554) (7,693)
Investment in intangible assets (2,533) (1,288)
Increase in short-term investments (27,082) (63,700)
Finance income received 743 193
Net cash used in investing activities (34,426) (72,488)
------------- -----------
Financing activities
Proceeds from issuance of ordinary
shares 50,462 77,926
Net expenses from issuance of
ordinary shares (344) (1,141)
Repayment of lease liabilities (121) -
Finance interest paid (451) -
Net cash generated from financing
activities 49,546 76,785
Net increase in cash and cash
equivalents 9,678 1,239
Exchange gains/(losses) on cash
and cash equivalents (46) (67)
Cash and cash equivalents at beginning
of period/ year 7,567 6,395
------------- -----------
Cash and cash equivalents at end
of period/ year 14 17,199 7,567
============= ===========
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 12 months ended 30 June 2020
Capital
Share Share redemption Merger Accumulated
capital premium reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- ------------ --------- ------------ --------
At 1 July 2018 10,163 107,445 3,449 7,463 (116,938) 11,582
Comprehensive
income
Loss for the
financial year - - - - (4,834) (4,834)
Total comprehensive
loss - - - - (4,834) (4,834)
--------- --------- ------------ --------- ------------ --------
Transactions
with owners
Issue of shares,
net of costs 5,114 71,671 - - - 76,785
Share-based
payments charge - - - - 909 909
------------
Total transactions
with owners 5,114 71,671 - - 909 77,694
--------- --------- ------------ --------- ------------ --------
At 30 June 2019 15,277 179,116 3,449 7,463 (120,863) 84,442
--------- --------- ------------ --------- ------------ --------
Comprehensive
income
Loss for the
financial period - - - - (7,268) (7,268)
Total comprehensive
loss - - - - (7,268) (7,268)
Transactions
with owners
Issue of shares,
net of costs 1,805 48,314 - - - 50,119
Share-based
payments charge - - - - 873 873
Total transactions
with owners 1,805 48,314 - - 873 50,992
--------- --------- ------------ --------- ------------ --------
At 30 June 2020 17,082 227,430 3,449 7,463 (127,258) 128,166
========= ========= ============ ========= ============ ========
The accompanying notes are an integral part of these
consolidated financial statements.
1. Basis of preparation
On 2 April 2020, the Group announced that it was extending its
current accounting period from the twelve months ended 30 June 2020
to the 18 months ended 30 December 2020. As a result, these interim
financial statements are the second set of interim results that the
Group has reported during this period, following the half-year
report for the six months ended 31 December 2019 that the Group
announced on 16 March 2020.
The condensed interim financial statements have been prepared in
accordance with the requirements of the AIM Rules for Companies and
should be read in conjunction with the annual financial statements
for the year ended 30 June 2019. They 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 interim financial information has been prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards (IFRS) and IFRIC
interpretations issued by the International Accounting Standards
Board (IASB) adopted by the European Union. This report is not
prepared in accordance with IAS 34.
The principal accounting policies adopted in the preparation of
the interim financial statements are unchanged from those applied
in the Group's financial statements for the year ended 31 December
2019. The accounting policies applied are consistent with those
expected to be applied in the financial statements for the year
ended 31 December 2020.
The financial information contained in the condensed interim
financial statements 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 2019,
on which the auditors gave an unqualified audit opinion, and did
not draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006, have been filed with the Registrar of Companies.
The consolidated interim financial information for the twelve
months ended 30 June 2020 has been reviewed by the Company's
Auditor, BDO LLP in accordance with International Standard of
Review Engagements 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity.
Going Concern
The Group has reported a loss after tax for the 12 month period
ended 30 June 2020 of GBP7,268,000 and net cash used in operating
activities of GBP5,442,000. At 30 June 2020, it held cash and cash
equivalents and short-term investments of GBP107,981,000. The
directors have prepared annual budgets and cash flow projections
that extend beyond 12 months from the date of approval of this
report. These projections were supported by stress testing forecast
cash flows considering the impact of different scenarios including
the Group's expectation of the potential future impact of Covid-19
and Brexit. In each case the projections demonstrated that the
Group will have sufficient cash reserves to meet its liabilities as
they fall due and to continue as a going concern. For the above
reasons, the directors continue to adopt the going concern basis in
preparing the financial statements. The financial statements do not
include the adjustments that would result if the Group was unable
to continue as a going concern .
2. Changes in accounting policies and standards
Except as described below the accounting policies adopted are
consistent with those of the financial statements for the year
ended 30 June 2019, as described in those financial statements.
New standards and amendments applicable as of 1 July 2019
The Group has adopted the following new standard with a date of
initial application of 1 July 2019.
-- IFRS 16 'Leases'
IFRS 16 - 'Leases'
IFRS16 specifies how to recognise, measure, present and disclose
leases. The standard provides a single lessee accounting model,
requiring lessees to recognise assets and liabilities for all
leases unless the lease term is 12 months or less or the underlying
asset has a low value. The adoption of this standard is mandatory
for accounting periods starting after 1 January 2019.
The Group has applied IFRS 16 using the modified retrospective
approach and therefore the comparative information has not been
restated and continues to be reported under IAS 17 and IFRIC
14.
2. Changes in accounting policies and standards (continued)
The group holds leases for premises and IT equipment with lease
terms ranging from 6 months - 10 years.
As a lessee, the Group previously classified leases as operating
or finance leases based on its own assessment of whether the lease
transferred significantly all the risks and rewards incidental to
ownership of the underlying asset to the Group. Under IFRS 16, the
Group recognises right-of-use assets and lease liabilities for most
leases. i.e. these leases are on balance sheet.
The Group decided to apply recognition exemptions to short term
leased plant and machinery. For leases of other assets, which were
classified as operating under IAS 17, the Group has recognised
right-of use assets and lease liabilities.
Leases classified as operating leases under IAS 17
At transition, lease liabilities were measured at the present
value of the remaining lease payments discounted at the Group's
incremental borrowing rate as at 1 July 2019. The associated
right-of-use asset for property leases and other assets was
measured at the amount equal to the lease liability adjusted for
the amount of any prepaid or accrued lease payments relating to
that lease.
The Group used the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
- Applied a single discount rate to a portfolio of leases with similar characteristics; and
- Excluded initial direct costs from measuring the right-of-use
asset at the date of initial application.
When measuring lease liabilities, the Group discounted lease
payments using the incremental borrowing rate as at the 1 July
2019. This is estimated by management to be 10%.
Impact on the financial statements.
On transition to IFRS 16 the Group recognised GBP4,747,000 of
right-to-use assets and a lease liability of GBP4,971,000.
Prepayments and accruals were decreased by GBP122,000 and
GBP346,000 respectively.
As at 30 June 2020 the Group held right-of use assets of
GBP4,232,000 and a lease liability of GBP4,849,000 (GBP3,823,000 of
which is non-current). The impact on the consolidated statement of
profit and loss and other comprehensive income for the 12 months
ended 30 June 2020 was an increase to the loss for the financial
period of GBP143,000. Operating costs were decreased by GBP308,000,
relating to additional charges of GBP515,000 for depreciation and a
reduction to rental charges on operating leases of GBP823,000.
Finance expenses of GBP451,000 were incurred during the period.
Reconciliation of lease commitments in the prior year to lease
liability recognised under IFRS 16
Land
and
Buildings Other
GBP'000 GBP'000
----------- --------
Operating lease commitments
at 30 June 2019 as disclosed
in the Group's consolidated
financial statements 3,812 29
Recognition of period from 3,469 -
break clause to lease end(1)
Discounted using the incremental
borrowing rate at 1 July
2019 (2,328) (2)
Less short-term leases recognised
as an expense on a straight-line
basis - (9)
----------- --------
Lease liabilities recognised
1 July 2019 4,953 18
(1) Under the previous accounting policy the lease commitment
was disclosed for the non-cancellable element of the lease, that
is, until the first break clause. IFRS 16 requires companies to
calculate the initial liability on the full lease term, if it is
considered to be reasonably certain the break will not be
exercised.
3. Revenue
The Group's revenue is disaggregated by geographical market,
major product/service lines, and timing of revenue recognition:
Geographical market
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
-------------
Europe 8,438 10,553
Asia 9,669 4,441
North America 790 306
------------- -----------
18,897 15,300
------------- -----------
Major product/service lines
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
Engineering services and provision
of technology hardware 13,056 7,888
Licenses 5,841 7,412
-----------
18,897 15,300
------------- -----------
Timing of transfer of goods and services
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
Products and services transferred
at a point in time 6,600 7,057
Products and services transferred
over time 12,267 8,243
-----------
18,897 15,300
------------- -----------
The contract assets and liabilities are as follows:
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
Trade receivables 12 3,787 2,404
Contract assets - accrued income 1,559 306
Contract assets - deferred costs 262 416
-----------
5,608 3,126
------------- -----------
Contract liabilities - deferred
income (1,014) (3,061)
Provision for loss making contracts (86) (65)
Provision for warranties (222) (93)
-----------
(4,286) (3,219)
------------- -----------
4. Operating costs
Operating costs are split as follows:
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
Research and development costs 16,754 13,799
Administrative expenses 6,529 4,618
Commercial 1,645 2,068
-----------
24,928 20,485
------------- -----------
5. Finance income
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
Interest received 646 552
Foreign exchange gain on cash,
cash equivalents and short-term
deposits 200 -
846 552
------------- -----------
6.Taxation
12 months
ended
Year ended
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------- -----------
UK corporation tax (2,450) (2,292)
Adjustment in respect of prior periods (168) (246)
Withholding tax 200 -
-----------
(2,418) (2,538)
------------- -----------
No UK corporation tax liability has arisen (2019: GBPnil) due to
the losses incurred.
A tax credit has arisen as a result of expenditure surrendered
and claimed under the SME and large company R & D tax credit
regimes in the current and prior years.
Withholding tax has arisen on license income from China and
South Korea.
7. Loss per share
12 months
ended
Year ended
30 June
30 June 2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
--------------- ------------
Loss for the financial period/year
attributable to shareholders (7,268) (4,834)
--------------- ------------
Weighted average number of shares
in issue 158,072,531 140,956,490
--------------- ------------
Loss per GBP0.10 ordinary share
(basic and diluted) (4.60)p (3.43)p
8. Property, plant and equipment
Assets
Leasehold Plant Computer Fixtures under Motor
improvements and machinery equipment and fittings construction vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Cost
At 1 July 2018
(audited) 2,090 9,311 995 69 348 - 12,813
Additions
(audited) 132 1,535 463 - 6,455 12 8,597
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2019
(audited) 2,222 10,846 1,458 69 6,803 12 21,410
Additions
(unaudited) 542 3,318 320 34 1,154 - 5,368
Transfers
(unaudited) 2,958 4,659 - 210 (7,827) - -
Disposals
(unaudited) (5) - - - - - (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020
(unaudited) 5,717 18,823 1,778 313 130 12 26,773
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Accumulated
depreciation
At 1 July 2018
(audited) 2,028 7,680 839 69 - - 10,616
Charge for the
year
(audited) 68 798 159 - - - 1,025
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2019
(audited) 2,096 8,478 998 69 - - 11,641
Charge for the
period
(unaudited) 375 1,520 227 42 - 3 2,167
Disposals
(unaudited) (5) - - - - - (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020
(unaudited) 2,466 9,998 1,225 111 - 3 13,803
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Net book value
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020
(unaudited) 3,251 8,825 553 202 130 9 12,970
At 30 June 2019
(audited) 126 2,368 460 - 6,803 12 9,769
------------- --------------- ----------- -------------- ---------------- ---------- ---------
'Assets under construction' represents the cost of purchasing,
constructing and installing property, plant and equipment ahead of
their productive use. The category is temporary, pending completion
of the assets and their transfer to the appropriate and permanent
category of property, plant and equipment. As such, no depreciation
is charged on assets under construction.
Assets under construction primarily consist of plant and
machinery and leasehold improvements relating to the new
manufacturing site which started production in January 2020.
Leasehold improvements of GBP2,958k, Plant and Machinery of
GBP4,659k and Office equipment of GBP210k relating to the new
factory have been transferred to the relevant categories within the
period. Leasehold improvements are being depreciated over the life
of the lease and other assets relating to the factory are being
depreciated over the expected useful life of 7 years.
9. Right of use assets
Land and Computer
Buildings equipment Total
(Unaudited) (Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
------------- ------------- -------------
Cost
At 1 July 2019 - - -
Additions as a result of IFRS16 4,728 19 4,747
------------- ------------- -------------
At 30 June 2020 4,728 19 4,747
Accumulated depreciation
At 1 July 2019 - - -
Charge for the period/ year 507 8 515
------------- ------------- -------------
At 30 June 2020 507 8 515
Net book value
------------- ------------- -------------
At 30 June 2020 4,221 11 4,232
At 30 June 2019 - - -
------------- ------------- -------------
10. Intangible assets
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
-------------- ------------
Cost
At 1 July 1,335 47
Additions from internal developments
in relation to manufacturing site 178 187
Additions from customer and internal
development programmes 2,355 1,101
--------------
At 30 June 3,868 1,335
-------------- ------------
Accumulated amortisation
At 1 July 13 -
Charge for the period/year 55 13
-------------- ------------
At 30 June 68 13
-------------- ------------
Net book value
-------------- ------------
At 30 June 3,800 1,322
-------------- ------------
Capitalised development costs are amortised over their useful
economic lives of 2-7 years.
The development intangible primarily relates to the design,
development and configuration of the Company's core fuel cell and
system technology and manufacturing processes. Amortisation of
capitalised development commences once the development is complete
and is available for use.
11. Inventory
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
-------------- ------------
Raw materials and finished goods 2,055 1,403
-------------- ------------
Inventories in raw materials and finished goods have increased
in line with the Group's increased manufacturing capacity in the
period and management's decision to hold a greater volume of some
raw materials as the UK moves closer to a withdrawal from the
EU.
12. Trade and other receivables
30 June 30 June
2020 2019
(Unaudited) (Audited)
Current: GBP'000 GBP'000
-------------- ------------
Trade receivables 3,787 2,404
Other receivables 856 1,800
-------------- ------------
4,643 4,204
-------------- ------------
Non-current:
Other receivables 741 741
-------------- ------------
13. Prepayments and accrued income
30 June 30 June
2020 2019
(Unaudited) (Audited)
Current: GBP'000 GBP'000
-------------- ------------
Prepayments 548 523
Prepayments of capital expenditure - 409
Accrued grant income 439 565
-------------- ------------
987 1,497
-------------- ------------
14. Net cash and cash equivalents, short-term investments and
financial assets
30 June 30 June
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
-------------- ------------
Cash at bank and in hand 5,431 1,502
Money market funds 11,768 6,065
-------------- ------------
Cash and cash equivalents 17,199 7,567
Short-term investments (bank deposits
> 3 months) 90,782 63,700
-------------- ------------
Short-term investments 107,981 71,267
-------------- ------------
The Group typically places surplus funds into pooled money
market funds with durations of up to 3 months 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-/A3/A and
short-term rating of A-2/P-2/F-1 for banks which the UK Government
holds less than 10% ordinary equity.
15. Trade and other payables
30 June 30 June
2020 2019
(Unaudited) (Audited)
Current: GBP'000 GBP'000
-------------- ------------
Trade payables 2,332 2,255
Taxation and social security 16 -
Other payables 212 110
-------------- ------------
2,560 2,365
-------------- ------------
16. Accruals and deferred income
30 June 30 June
2020 2019
(Unaudited) (Audited)
Current: GBP'000 GBP'000
-------------- ------------
Accruals 2,546 1,838
Deferred grant income 1,121 -
-------------- ------------
3,667 1,838
-------------- ------------
Non-current:
Accruals - 323
-------------- ------------
17. Lease Liabilities
GBP'000
--------
Balance as at 1 July 2019 -
Finance leases recognised as a result
of IFRS16 4,971
Lease payments (573)
Interest expense 451
Balance as at 30 June 2020 4,849
Current 1,026
Non-current 3,823
--------
18. Provisions
Property Contract
Dilapidations Warranties Losses Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------- ----------- --------
At 1 July 2019 992 93 65 1,150
Movements in the Consolidated
Statement of Profit and Loss
and Other Comprehensive income:
Unused amounts reversed - - (38) (38)
Increase in provision 125 129 59 313
--------------- ------------- ----------- --------
At 30 June 2020 1,117 222 86 1,425
Current - 222 86 308
Non-current 1,117 - - 1,117
--------------- ------------- ----------- --------
At 30 June 2020 1,117 222 86 1,425
--------------- ------------- ----------- --------
19. Share capital
2020 2019
--------------------------- -------------------------------------------
Number Number Number
of GBP0.10 of GBP0.01 of GBP0.10
Ordinary (Unaudited) Ordinary Ordinary (Audited)
shares GBP'000 shares shares GBP'000
------------ ------------- ---------------- ------------ -----------
Allotted and fully paid
At 1 July 152,769,812 15,277 1,016,269,193 - 10,163
Allotted GBP0.01 Ordinary
shares on exercise of share
options - - 6,041,441 - 60
27 July 2018 - Allotted
GBP0.01 Ordinary shares
on cash placing - - 260,952,296 - 2,609
7 August 2018 - 1-for-10
share consolidation - - (1,283,262,930) 128,326,293 -
Allotted GBP0.10 Ordinary
shares on exercise of employee
share options 2,668,580 267 - 926,155 93
Allotted GBP0.10 Ordinary
shares on cash placing
(see below) 15,377,050 1,538 - 23,517,364 2,352
------------ ------------- ---------------- ------------ -----------
At 30 June 170,815,442 17,082 - 152,769,812 15,277
------------ ------------- ---------------- ------------ -----------
During the period 2,668,580 ordinary GBP0.10 shares were
allotted for cash consideration of GBP1,255,791 on the exercise of
employee share options. On the 12 March 2020, the Company completed
an allotment of 11,888,070 ordinary GBP0.10 shares in respect of
the Bosch strategic investment, announced via the Regulatory News
Service (RNS) on the 22 January 2020 for GBP38,041,824 and on the
15 April 2020 the Company completed an allotment of 3,488,980
ordinary GBP0.10 shares for GBP11,164,736 in respect of Weichai
exercising its anti-dilution rights, this was announced via the RNS
on the 23 March 2020.
20. Contingent liabilities
Contingent liabilities are potential future cash outflows which
are either not probable or cannot be measured reliably.
Grants received of GBP705,000 (2019: GBP705,000), or an element
thereof, may require repayment if the Group generates revenue (net
of expenses and reasonable overheads) from the intellectual
property created from the grant. In such case,
the Group may be liable to pay back the grant at a rate of 5% of
the net revenue generated in any one year. The Directors of the
Group believe it is unlikely that any of the grants received will
need to be repaid.
21. Capital commitments
Capital expenditure that has been contracted for but has not
been provided for in the financial statements amounts to
GBP2,072,000 as at 30 June 2020 (2019: GBP1,116,000), in respect of
the acquisition of property, plant and equipment.
22. Related party transactions
As at 30 June 2019, the Group's related parties were its
Directors and IP Group plc, through IP2IPO Ltd, which held 19.8% of
the Group's issued share capital. On 21 May 2020, IP Group plc
reduced its holding to 5.1% of the issued share capital, and on 11
June 2020 Alan Aubrey stepped down from his role as Chairman. As a
result of Alan stepping down as Chairman, Ceres determined that IP
Group plc ceased to be a related party from 11 June 2020.
Subsequent to the period end, IP Group plc further reduced its
holding to 0.02%.
Alan Aubrey and Robert Trezona will continue to serve in their
roles as Non-Executive Directors until 28 September 2020.
Transactions with IP Group plc during the period 1 July 2019 until
11 June 2020 amounted to GBP60,978 (2019: GBP83,000) comprising
primarily of Non-Executive Director fees of GBP37,912 (2019:
GBP40,000), disbursements and other expenses of GBP8,065 (2019:
GBP3,000), recruitment fees GBP15,000 (2019: GBP20,000), and
corporate finance fees of GBPnil (2019: GBP20,000).
INDEPENDENT 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 interim financial report for the
twelve months ended 30 June 2020 which comprises the Consolidated
Statement of Profit and Loss and Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Cash Flow Statement
and the Consolidated Statement of Changes in Equity.
We have read the other information contained in the interim
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the interim report be presented and prepared in a form consistent
with that which will be adopted in the Company's annual accounts
having regard to the accounting standards applicable to such annual
accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the interim financial
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 Financial Reporting Council for use
in the United Kingdom. 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 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 interim financial report for the twelve months ended 30 June
2020 is not prepared, in all material respects, in accordance with
the rules of the London Stock Exchange for companies trading
securities on AIM.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
BDO LLP
Chartered Accountants
Guildford
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
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For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR EAANXADKEEFA
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