TIDMCWR
RNS Number : 0844U
Ceres Power Holdings plc
24 March 2023
CWR.L
24 March 2023
Ceres Power Holdings plc
Final results for the year ended 31 December 2022
2022 investments lay strong foundations for future growth
Horsham, UK: Ceres Power Holdings plc ("Ceres", the "Company")
(AIM: CWR.L), a global leader in fuel cell and electrochemical
technology, announces its results for the year ended 31 December
2022.
Financial highlights
* Revenue of GBP22.1 million (2021: GBP30.8 million) in
line with previous guidance
* Gross profit of GBP13.1 million (2021: GBP19.0
million), maintaining sector-leading gross margin at
59% (2021: 62%)
* Investment in the future(1) increased by 67% to
GBP58.4 million (2021: GBP34.9 million), in line with
strategy to expand into electrolysis for green
hydrogen and deliver the next generation of fuel cell
technology
* Strong cash and short-term investments position of
GBP182.3 million (2021: GBP249.6 million)
Strategic highlights
* First 100kW solid oxide electrolyser ("SOEC") module
is on test ahead of scaling into a 1MW demonstrator.
Initial results are positive and give confidence that
this technology can deliver green hydrogen at
* SOEC technology evaluation programme progressing well
with Shell for deployment later this year in India
* Ceres' fuel cell and electrolysis test facility,
developed with Horiba Mira at its site in the UK, is
now open and supporting technology and system
development
* Continued expansion of Ceres' highly skilled
workforce to 570 employees (2021: 489) with
significant investment in commercial resource in
global locations w ith strong momentum and policy
support for hydrogen and fuel cells
Current trading and outlook
* Agreements signed for a collaboration on electrolysis
with Bosch and Linde Engineering to validate Ceres'
technology, as a highly efficient pathway to low-cost
green hydrogen. Builds on Bosch's expertise in solid
oxide fuel cells ("SOFC") and Linde Engineering's
capabilities in industrial process engineering
* Weichai's SOFC power system using Ceres' technology
has passed the EU CE certification of the
international authoritative testing organisation,
TÜV SÜD. Weichai estimates that when its
products reach 1GW of distributed power deployed, it
has the potential to reduce carbon emissions by
around 2 million tonnes per year compared with grid
electricity
* The structure of the China joint ventures has been
agreed. We now await the final agreement between
Bosch and Weichai
* We continue to work towards a move up to the Premium
Listing on the Main Market of the London Stock
Exchange
Phil Caldwell, Chief Executive Officer of Ceres, said:
" It has been another productive year at Ceres with our first
electrolyser modules on test, an exciting new partnership
with Shell, and a collaboration with Linde Engineering and
Bosch for green hydrogen. We are making good progress on power
systems with existing partners Bosch and Doosan to scale production.
"Investment in our business has ensured we are well-positioned
to deliver on our strategy; to support our partners to install
manufacturing capacity at the scale and pace needed to decarbonise
our energy systems and enable a net zero future ."
1. Investment in the future comprises R&D costs, capitalised
development and capital expenditure.
Financial Summary 2022 2021
GBP'000 GBP'000
Total revenue, comprising: 22,130 30,776
Licence fees 7,711 16,646
Engineering services revenue 9,039 6,777
Provision of technology hardware 5,380 7,353
Gross margin %(1) 59% 62%
Adjusted EBITDA loss(2) - Power SOFC(3) (21,557) (4,492)
Adjusted EBITDA loss(2) - Hydrogen SOEC(3) (21,673) (12,183)
Adjusted EBITDA loss(2) - total Group (43,230) (16,675)
Operating loss (51,522) (23,430)
Net cash used in operating activities (51,522) (20,342)
Net cash and investments 182,320 249,584
1. 2021 gross margin restated (previously 66%) to reflect
the classification of the RDEC tax credit within other operating
income rather than offsetting cost of sales.
2. Adjusted EBITDA loss is an Alternative Performance Measure,
as defined and reconciled to operating loss in the non-GAAP
section at the end of this report.
3. Adjusted EBITDA by segment is reconciled to operating loss
in Note 3.
Analyst presentation
Ceres Power Holdings plc will be hosting a live webcast
for analysts and investors on 24 March 2023 at 09.30 GMT.
To register your interest in participating, please go to:
https://www.investormeetcompany.com/ceres-power-holdings-plc/register-investor
.
For further information visit www.ceres.tech or contact:
Ceres Power Holdings plc Tel: +44 (0)7932 023 283
Elizabeth Skerritt
Investec Bank PLC (NOMAD & Joint Broker) Tel: +44 (0)207 597 5970
James Rudd/ Patrick Robb/ Ben Griffiths
Berenberg (Joint Broker) Tel: +44 (0)203 207 7800
Ben Wright/ Mark Whitmore/ Ciaran Walsh
FTI Consulting (PR Adviser) Tel: +44 (0)203 727 1000
Dwight Burden/ Tom Reynolds Email: ceres_power@fticonsulting.com
About Ceres Power
Ceres is a world-leading developer of electrochemical technologies:
fuel cells for power generation, electrolysis for the creation
of green hydrogen and energy storage. Its asset-light,
licensing model has seen it establish partnerships with
some of the world's largest engineering and technology
companies, such as Weichai in China, Bosch in Germany,
Miura in Japan, and Doosan in Korea, to develop systems
and products that address climate change for power generation,
transportation, industry, data centres and everyday living.
Ceres is listed on the AIM market of the London Stock Exchange
("LSE") (AIM: CWR) and is classified by the LSE Green Economy
Mark, which recognises listed companies that derive more
than 50% of their activity from the green economy.
Chief Executive's Statement
It has been another productive year at Ceres with our first
electrolyser modules on test, an exciting new partnership
with Shell, and a collaboration with Linde Engineering
and Bosch for green hydrogen. We are making good progress
on SOFC, with existing partners Bosch and Doosan scaling
production, and steps towards establishing our China JV.
We have also opened a new test centre with Horiba MIRA
in the UK, achieved record cell production at our pilot
facility and grown the Ceres team to 570 colleagues.
These are just some highlights of another year of considerable
progress, despite the challenging macroeconomic backdrop.
Through it all, we remain wholeheartedly committed to the
biggest challenge, to address the urgency for climate action.
The world is not on track to keep global warming at 1.5degC
above pre-industrial levels and we are already starting
to see the devastating effects of climate change around
us, from cyclones and floods to droughts and heatwaves.
We need to decarbonise our energy system, but we also need
to provide energy security, stable power prices and sustainable
employment. There are not many companies that have the
opportunity to do something truly impactful on a global
scale - but I believe that Ceres is one such company. Not
only does it have unique clean energy technology that can
play an important role in hard-to-decarbonise parts of
our energy system, but we sit at the tipping point for
our planet, which means the time to act is now.
It is no longer a question of credibility of technology,
but credibility of scale
At our reference manufacturing plant in the UK, we are
now producing 2MW of capacity, and by the middle of this
decade we will have added 100 times that capacity with
Bosch and at least another 50MW with Doosan. By the time
our partners start planned series production, they will
have invested more than EUR500 million in scaling our solid
oxide fuel cell ("SOFC") technology.
That same technology run in one direction is a highly efficient
fuel cell for power generation, run in reverse enables
low-cost green hydrogen that provides a vital route to
industrial decarbonisation of sectors such as steel, fertilisers
and future fuels. We have committed GBP100 million to the
development of its application in solid oxide electrolysis
("SOEC") and the first 100kW electrolyser module is on
test ahead of scaling into a 1MW demonstrator. Initial
results are positive and give confidence that this technology
can deliver green hydrogen at <40kWh/kg, around 25% more
efficiently than incumbent lower temperature technologies.
In March 2023, we signed a new agreement with Bosch and
Linde Engineering, to assess Ceres' technology for use
in large scale industrial applications as a pathway to
low-cost green hydrogen. This is our second partnership
announcement, following the agreement with Shell to establish
a 1MW technology pilot of Ceres' SOEC system at its R&D
centre in Bangalore, India. The agreement builds on Bosch's
existing expertise in our SOFC technology and combines
with Linde Engineering's world-leading capabilities in
hydrogen process technology and a global customer footprint
in industrial facilities. Our target is to enable the ecosystem
of SOEC partners that can make Ceres' technology even more
competitive and prepare it for mass adoption at scale.
By the end of this decade, we aim to have multiple factories
in place producing multi gigawatts of fuel cell equivalent
capacity globally. It is just the start. This is a global
challenge and if we want to have a real impact on climate
change, technology alone is not enough, we must work with
partners to scale globally and at pace.
Collaboration is key
The war in Ukraine has added energy security to the urgency
for climate action and in Europe we saw RePower EU's ambitious
plans and strong financial incentives to move away from
the reliance on gas and support the deployment of green
hydrogen. In the US, the Inflation Reduction Act, signed
into law last summer saw a record $369 billion earmarked
for energy and climate change policy - in a year when disasters
from drought in the West to hurricanes in the East and
a nationwide winter storm served as a stark reminder of
climate perils. There is simply no turning back to the
world of cheap fossil-based energy.
Hydrogen is now widely recognised by most companies and
governments as key to enabling the energy transition, at
the very least for hard-to-decarbonise industrial sectors
that account for around a third of our energy system and
more than its share of global emissions. Our partners,
Bosch, Doosan, Shell, Weichai and others are among the
most progressive companies, seeking and adopting new clean
energy technologies at scale and pace, and the good news
is that global competition can accelerate us towards achieving
net zero. Where previously we spoke about an energy trilemma
- where clean, low cost and security of supply were in
tension - they now align, and clean energy will be the
most secure and affordable into the future.
In 2022, we celebrated our 21st birthday, bringing the
entire team together for the first time since before the
pandemic. It provided an important pause from the day-to-day
challenges to reflect on the past, present and future opportunities
for the business and with nearly 500 people in one venue,
it was a very visual reminder that we are collaborating
with teams of a similar size across our partner organisations
at Bosch, Doosan and Weichai.
These first steps towards deployment are vital, but they
are not enough. We also seek to grow new partnerships across
the globe to enable greater adoption through many more
teams of people collaborating on Ceres' technology.
Strongest team in the global industry
Our partners come to us because of our technology, but
they stay with us because of our people. They are passionate
and brilliant and above all resilient, and they need to
be because the science and the engineering challenges they
are solving every day are hard. We are also working constantly
to attract and retain the best people, ensuring they have
training and development opportunities, benefits and access
to share in the success of the Company. Many of our employees
are also shareholders in Ceres - through Long Term Incentive
Plans or through our employee save-as-you-earn scheme.
It is an exciting time to be at Ceres. We have a strong
purpose, a talented team, and the opportunity to work alongside
some of the most progressive companies globally, driving
investment and scaling clean technologies. Success is in
our hands, but we are not complacent, and we continue to
focus on executing our strategy:
* To enable our licence partners to succeed
Our partners are investing significant time and resources
into manufacturing Ceres' solid oxide technology, and we
have expanded our engineering and specialist teams to ensure
these early adopters are supported and successful in deploying
new technology into new market opportunities.
* To build commercial scale We create commercial scale
by generating more demand through increasing
commercial partnerships and licences, growing
applications and addressing new markets. This year we
have increased the Commercial teams' presence in
several global locations, reflecting the momentum in
policy support for hydrogen and fuel cell
technologies.
* Maintain our technology leadership As a licensing
company it is imperative that we stay at the leading
edge of our technology - and that is why we continue
to innovate, from the next generation of our solid
oxide technology, continued innovation of our IP for
both fuel cell and electrolyser systems, to
digitalisation programmes and what further
technologies we may need to hit a net zero future.
Sustainability
The IEA estimates that to fulfil 2050 green hydrogen demand,
the world is going to need 3,585GW of electrolyser capacity,
so it is little wonder that the conversation is growing
around the economic and life cycle impact of raw materials
in the electrolysis supply chain. High demand, long processing
times, limited supply and an undiversified supply chain
have already called into question the price and availability
of metals and rare earths to support the viability of large-scale
electrolysis.
Ceres' electrolysis stack does not need to use precious
metals. Its construction comprises over 95% automotive
grade steel by weight, the most widely recycled material
globally, and ceria-based materials within the active elements
of the fuel cell, which is abundant, cost-effective and
has multiple sources from multiple countries.
We understand that scaling technology comes with an environmental
footprint, and we have undertaken a life cycle assessment
of our stack technology where we quantify the potential
climate impact of producing our cells, which you can find
on the Sustainability section of our website.
We recognise the importance of looking beyond carbon impact
to consider the circular economy for raw materials. As
a next step we will undertake a full evaluation of the
end-of-life recyclability or reuse of our technology, cradle-to-grave,
and will seek to lead the industry for our technology,
embedding sustainability considerations into the very heart
of our development and the transfer of IP under licence
to our partners.
Strategy and outlook
In March 2021, we set out a clear strategy on which we
continue to execute. Investment across the business enables
us to build a sustainable competitive advantage in highly
differentiated solid oxide technology. We collaborate with
world-leading partners, and we have built one of the strongest
teams in the global industry for fuel cells and green hydrogen.
All of this gives me confidence that we will deliver on
our ambition to develop and deploy clean energy technology
at the scale and pace needed to decarbonise our energy
systems, and in doing so make a tangible difference for
ourselves, our families and friends, and generations to
come.
Phil Caldwell
Chief Executive Officer
Financial review
The Group reported revenue of GBP22.1 million in 2022,
compared with GBP30.8 million in the prior year. Almost
all of the Group's revenue in 2022 related to the fuel
cell business. As reported in November 2022, the signing
of the China JV contracts has been delayed to 2023 impacting
the timing of the associated licence fee revenue recognition.
Gross margins reduced to 59% (2021: 62%), reflecting the
reduction in high-margin licence fee income recognised
in the year compared with 2021. As noted in our Interim
Results, the phasing of revenue in 2022 and early 2023
is highly sensitive to the timing of signing new licence
agreements.
Other income of GBP1.3 million (2021: GBP2.2 million) relates
to grant income, and now includes our RDEC tax credit as
well as grant funding towards projects.
The order book (contracted revenue bookings) reduced to
GBP67.8 million as at 31 December 2022 from GBP78.7 million
at 31 December 2021; with new order bookings more than
offset by the recognition of revenue primarily on existing
contracts with our partners Doosan and Bosch during the
year. Going forwards, the order book will continue to vary
based on the timing of contracts won, and revenue recognised
from them.
Ceres Power - fuel cells
The SOFC part of the business recorded revenues of GBP22.0
million (2021: GBP30.8 million) and a gross profit of GBP12.9
million (2021: GBP19.0 million), with the reduction compared
with the prior year reflecting the deferral of the China
JV and the expected recognition of associated upfront licence
fee revenue. The segment's Adjusted EBITDA loss increased
to GBP21.6 million (2021: GBP4.5 million). Investment in
research and development ("R&D") for SOFC increased by
48% to GBP29.1 million (2021: GBP19.7 million).
There will be continued investment in SOFC in 2023 to support
future expansion, and so the level of losses or future
profitability of this part of the business will continue
to be highly influenced by the level of SOFC licence fee
revenue recognised in a given period, until royalty revenue
streams become material. Another notable investment is
the development of our second generation of fuel cell technology,
which will offer improvements in power density, durability
and cost.
Ceres Hydrogen - electrolysis
We plan to invest GBP100 million in the development of
our SOEC technology and we are now two years along this
journey and making good progress. Our SOEC business recognised
revenue for the first time in 2022, of GBP0.2 million (2021:
GBPnil), from a contract with a potential new partner in
Asia to evaluate the Group's SOEC technology. The SOEC
business recorded an Adjusted EBITDA loss of GBP21.7 million
(2021: GBP12.2 million). This was primarily driven by a
66% increase in R&D activities to GBP19.2 million (2021:
GBP11.6 million), particularly around the investment in
our "first of a kind" 1MW demonstration unit for use in
the contract with Shell. We made good progress in the year
with the first Electrolysis Cell Module ("ECM"), which
forms part of the demonstrator, now on test with encouraging
early results with respect to green hydrogen production
efficiency.
Focused investment for the future
Throughout 2022, we continued to invest in both capabilities
and people to support our partners, deliver our technology
roadmap and drive future growth. Our employee base includes
specialist expertise such as highly skilled engineers;
electrochemistry and materials scientists; and test and
stack technicians and remains our most valuable strategic
resource. Total employees increased to 570 by the end of
2022 compared to 489 at the end of the prior year. Overall
R&D costs increased by 54% to GBP48.3 million compared
to 2021 of GBP31.3 million as planned with our expansion
of both our SOFC business and development of our SOEC business.
Capitalised development in the year, which currently only
relates to ongoing SOFC development, increased to GBP5.8
million compared to GBP4.6 million for 2021 and we hold
net GBP13.3 million capitalised to date. Amortisation of
this to the income statement was consistent with the prior
year, as expected, at GBP1.0 million (2021: GBP1.0 million).
Our investment in property, plant and machinery increased
to GBP13.3 million (2021: GBP7.4 million), and was principally
on manufacturing improvement, automation and capacity expansion,
as well as expanding our test infrastructure. This continued
investment also resulted in increased depreciation of GBP5.5
million in 2022 compared to 2021 of GBP4.2 million.
Going forward, we plan to continue to grow our test capability
to support the expected growth of our partners, and also
enable additional market opportunities including new SOFC
applications such as marine and alternative fuels, and
SOEC development. We also intend to expand our manufacturing
capacity for prototypes and demonstrators for both SOFC
and SOEC products. Consequently, we expect our capital
expenditure to continue to be at higher levels in 2023.
Overall, this "investment in the future" (R&D costs, capitalised
development and capital expenditure) increased 67% to GBP58.4
million (2021: GBP34.9 million). The GBP58.4 million comprises
GBP40.2 million in R&D (excluding depreciation, amortisation
and share-based payments), GBP12.4 million in capital expenditure
and GBP5.8 million in capitalised development.
As a result of these planned investments, consistent with
the 2021 capital raise and strategy to develop our electrolysis
technology, the Group reported an increased operating loss
of GBP51.5 million in 2022, up from a loss of GBP23.4 million
in 2021.
In December 2022, Ceres concluded a deferral of the option
agreement to acquire the remaining shares of RFC Power
Ltd ("RFC"), which is a "Long Duration Energy Storage"
R&D business with proprietary manganese flow battery technology.
This option is now exercisable in the period 1 January
2024 to 30 April 2024, having previously been exercisable
between May 2022 and November 2022. Simultaneously, Ceres
invested a total of GBP2.0 million in RFC, comprising GBP1.0
million funding capital as well as entering into a joint
development agreement to advance the progress of this promising
technology. Consequently, Ceres' holding of RFC increased
to 24.2% from 8.4%, and our investment in associates increased
to GBP2.5 million (2021: GBP0.5 million).
Strong financial position: the foundation for continued
development and growth
The Group ended the year with a strong liquidity position
of GBP182.3 million in cash and short-term investments
(31 December 2021: GBP249.6 million) reflecting the investment
in the business as described above. Finance income increased
to GBP2.8 million (2021: GBP0.4 million) reflecting the
improved rates applied to the Group's floating rate deposits
and higher rates available when rolling over maturing fixed
rate deposits.
Equity free cash outflow (defined and reconciled to net
cash from operating activities in the non-GAAP section
at the end of this report) was GBP68.4 million (2021: GBP32.0
million), being driven by net cash used in operating activities
of GBP51.5 million (2021: GBP20.3 million), capital expenditure
of GBP12.4 million (2021: GBP7.4 million) and capitalised
development of GBP5.8 million (2021: GBP4.6 million), with
the balance from interest receipts and exchange rate movements.
Other significant movements in the balance sheet included
inventories increasing to GBP5.7 million (31 December 2021:
GBP3.1 million) reflecting increased activity at our manufacturing
facility to meet anticipated demand for our fuel cells
and component parts to support our partners' development
and scale-up activities. We recognised net contract liabilities
of GBP3.1 million which is a change in position against
31 December 2021, when we had net contract assets of GBP3.0
million, with the movement reflecting timing differences
between recognising revenue and issuing invoices to customers.
Trade receivables increased to GBP11.8 million (2021: GBP2.6
million) primarily reflecting a number of significant invoices
raised in the last quarter of 2022 with two major customers.
Of the GBP11.8 million due at 31 December 2022, c.GBP10
million was received in the first two months of 2023.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME
For the year ended 31 December 2022
2021
2022 Restated(1)
Note GBP'000 GBP'000
Revenue 2 22,130 30,776
Cost of sales (9,079) (11,731)
Gross profit 13,051 19,045
Other operating income (2) 1,332 2,228
Operating costs 4 (65,905) (44,703)
Operating loss (51,522) (23,430)
Finance income 5 2,830 438
Finance expense 5 (304) (380)
Loss before taxation (48,996) (23,372)
Taxation credit 6 3,872 2,280
Loss for the financial period and
total comprehensive loss (45,124) (21,092)
Loss per GBP0.10 ordinary share
expressed in pence per share:
Basic and diluted loss per share 7 (23.58)p (11.36)p
The accompanying notes are an integral part of these consolidated
financial statements.
(1) The 2021 taxation credit has been restated to increase
the credit by GBP310,000 following the adjustment of prior
year R&D tax credit claims and a related tax provision reported
in 2021. The 2021 results have further been re-presented to
reflect the re-classification of the Group's RDEC tax credit
of GBP1,304,000. This was previously disclosed within cost
of sales but is now presented within other operating income
to align to the change in presentation applied to the Group's
2022 results. See Note 1 for details.
(2) Other operating income comprises grant income and the
Group's RDEC tax credit.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
31 Dec 31 Dec
31 Dec 2021 2020
2022 Restated(1) Restated(1)
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 8 25,964 18,141 14,979
Right-of-use assets 9 2,647 2,438 3,971
Intangible assets 10 13,278 8,478 4,909
Long-term investments 14 5,000 8,000
Investment in associate 2,460 500
Other receivables 12 741 741 741
Total non-current assets 45,090 35,298 32,600
Current assets
Inventories 11 5,714 3,145 2,107
Contract assets 2 3,309 7,331 864
Other current assets 13 957 1,133 1,002
Derivative financial instruments 17 54 1,073 59
Current tax receivable 7,396 1,615 1,208
Trade and other receivables 12 17,153 5,813 6,208
Short-term investments 14 119,011 93,129 69,231
Cash and cash equivalents 14 63,309 151,455 32,955
Total current assets 216,903 264,694 113,634
Liabilities
Current liabilities
Trade and other payables 15 (4,933) (2,783) (9,112)
Contract liabilities 2 (6,387) (4,290) (7,505)
Other current liabilities 16 (7,286) (5,818) (2,675)
Derivative financial instruments (43)
Lease liabilities 18 (610) (754) (823)
Provisions 19 (929) (1,579) (612)
Total current liabilities (20,145) (15,224) (20,770)
Net current assets 196,758 249,470 92,864
Non-current liabilities
Lease liabilities 18 (2,514) (2,285) (3,622)
Provisions 19 (1,933) (1,828) (1,610)
Total non-current liabilities (4,447) (4,113) (5,232)
Net assets 237,401 280,655 120,232
Equity attributable to the
owners of the parent
Share capital 20 19,209 19,073 17,217
Share premium 405,463 404,726 227,682
Capital redemption reserve 3,449 3,449 3,449
Merger reserve 7,463 7,463 7,463
Accumulated losses (198,183) (154,056) (135,579)
Total equity 237,401 280,655 120,232
(1) 2020 and 2021 trade and other receivables and current
tax receivable have been restated to reflect an adjustment
to prior year R&D tax claims as set out in Note 1.
The accompanying notes are an integral part of these consolidated
financial statements.
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2022
Note 2022 2021
GBP'000 GBP'000
--------- ---------
Cash flows from operating activities
Loss before taxation (48,996) (23,372)
Adjustments for:
Finance income (2,830) (438)
Finance expense 304 380
Depreciation of property, plant
and equipment 5,486 4,215
Depreciation of right-of-use assets 620 541
Amortisation of intangible assets 1,032 1,004
Net foreign exchange gains (690) (563)
Net change in fair value of financial
instruments 1,020 (1,057)
Share-based payments charge 997 2,615
Operating cash flows before movements
in working capital (43,057) (16,675)
(Increase)/decrease in trade and
other receivables (12,693) 22
Increase in inventories (2,569) (1,038)
Increase in trade and other payables 2,655 2,832
Decrease/(increase) in contract
assets 4,022 (6,467)
Increase/(decrease) in contract
liabilities 1,137 (3,215)
(Decrease)/increase in provisions (637) 1,121
Net cash used in operations (51,142) (23,420)
Taxation (paid)/received (380) 3,078
Net cash used in operating activities (51,522) (20,342)
Investing activities
Investment in associate (1,000)
Purchase of property, plant and
equipment (12,347) (7,377)
Capitalised development expenditure (5,832) (4,573)
Repayment of long-term investments 5,000 3,000
Acquisition of short-term investments (99,618) (62,898)
Repayment of short-term investments 74,950 39,000
Finance income received 1,443 438
Net cash used in investing activities (37,404) (32,410)
Financing activities
Proceeds from issuance of ordinary
shares 873 181,472
Net expenses from issuance of ordinary
shares (2,572)
Cash paid on behalf of employees
on the sale of share options (7,490)
Repayment of lease liabilities (744) (405)
Interest paid (212) (316)
Net cash (used by)/generated from
financing activities (83) 170,689
Net (decrease)/increase in cash
and cash equivalents (89,009) 117,937
Exchange gains on cash and cash
equivalents 863 563
Cash and cash equivalents at beginning
of year 151,455 32,955
Cash and cash equivalents at end
of year 14 63,309 151,455
The accompanying notes are an integral part of these consolidated
financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
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 January 2021
- Restated(1) 17,217 227,682 3,449 7,463 (135,579) 120,232
Comprehensive income
Loss for the financial
year(1) (21,092) (21,092)
Total comprehensive
loss (21,092) (21,092)
Transactions with
owners
Issue of shares, net
of costs 1,856 177,044 178,900
Share-based payments
charge 2,615 2,615
-------- -------- ----------- -------- ----------- --------
Total transactions
with owners 1,856 177,044 2,615 181,515
At 31 December 2021
- Restated(1) 19,073 404,726 3,449 7,463 (154,056) 280,655
Comprehensive income
Loss for the financial
year (45,124) (45,124)
Total comprehensive
loss (45,124) (45,124)
Transactions with
owners
Issue of shares, net
of costs 136 737 873
Share-based payments
charge 997 997
Total transactions
with owners 136 737 997 1,870
At 31 December 2022 19,209 405,463 3,449 7,463 (198,183) 237,401
(1) 2020 and 2021 results have been restated to reflect an
adjustment to prior year R&D tax claims as set out in Note
1.
Notes to the financial statements for the year ended 31 December
2022
1. Basis of preparation
The financial information presented in this preliminary announcement
has been prepared in accordance with the recognition and measurement
requirements of UK adopted international accounting standards
("IFRS") as issued by the International Accounting Standards
Board ("IASB"). The principal accounting policies adopted
in the preparation of the financial information in this preliminary
announcement are unchanged from those used in the company's
statutory financial statements for the year ended 31 December
2022. Whilst the financial information included in this announcement
has been computed in accordance with the recognition and measurement
requirements of IFRS, this announcement does not itself contain
sufficient disclosures to comply with IFRS.
The financial information contained in this final announcement
does not constitute statutory financial statements as defined
by in Section 434 of the Companies Act 2006. The financial
information has been extracted from the financial statements
for the year ended 31 December 2022 which have been approved
by the Board of Directors, and the comparative figures for
the year ended 31 December 2021 are based on the financial
statements for that year.
During the year the Group re-classified the presentation of
the RDEC tax credit within the consolidated statement of profit
and loss. The RDEC tax credit was previously presented within
cost of sales, however in order to better align with our peers
and to achieve consistent presentation with other items that
we apply government grant accounting to, the Group now presents
the RDEC tax credit within other operating income. Prior year
comparatives have been re-classified accordingly. The impact
of this change was to increase the current year's cost of
sales and other operating income by GBP1.1m (2021: GBP1.3m).
The 2021 and 2020 results have been restated to reflect an
adjustment to R&D tax credit claims for certain costs which
were inadvertently claimed in 2019 and 2020 under the Small
and Medium-sized Enterprise (SME) R&D tax credit schemes,
whereas they should have been claimed at a lower claim rate
under the RDEC scheme.
As a result, the 2021 taxation credit has been increased by
GBP0.3m to remove a provision that was recognised in 2021
against future tax credits that should have been recognised
in 2019 and 2020. The 2021 net loss has therefore reduced
from GBP21.4m to GBP21.1m. The opening statement of financial
position as at 1 January 2021 has also been presented, restated
by a net GBP1.3m decrease to current assets reflecting a GBP1.9m
decrease in current tax receivable under the SME tax scheme
and a GBP0.6m increase in other receivables under the RDEC
tax scheme. The 2021 other receivables increased by GBP0.9m
and the current tax receivable decreased by GBP1.9m giving
rise to a net decrease in net assets of GBP1.0m.
The financial statements for 2021 have been delivered to the
Registrar of Companies and the 2022 financial statements will
be delivered after the Annual General Meeting on 18 May 2023.
The Auditor has reported on both sets of accounts without
qualification, did not draw attention to any matters by way
of emphasis without qualifying their report, and did not contain
a statement under Section 498(2) or 498(3) of the Companies
Act 2006. The Directors confirm that, to the best of their
knowledge, this condensed set of consolidated financial statements
has been prepared in accordance with the AIM Rules.
Going Concern
The Group has reported a loss after tax for the year ended
31 December 2022 of GBP45.1m (31 December 2021: GBP21.1m)
and net cash used in operating activities of GBP51.5m (31
December 2021: GBP20.3m). At 31 December 2022, the Group held
cash and cash equivalents and investments of GBP182.3m (31
December 2021: GBP249.6m). The directors have prepared annual
budgets and cash flow projections that extend 15 months from
the date of approval of this report. The increased cash used
in the year is in line with the Group's strategy to invest
in the development of our electrolysis and fuel cell technology
to support future revenue streams. Future projections include
management's expectations of the further cash outflows associated
with the Group's investment in R&D projects and expansion
of manufacturing and testing capacity, together with contracted
and anticipated customer contracts and the planned investment
in the China collaboration with Bosch and Weichai. The projections
were stress tested by applying different scenarios including
the loss of significant future revenue and continued adverse
macroeconomic factors. In each case the projections demonstrated
that the Group would 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.
New standards and amendments applicable for the reporting
period
The Group has adopted all standards, interpretations amended
or newly issued by the IASB that were effective in the period.
Their adoption has not had any material effect on the consolidated
financial statements.
2. Revenue
The Group's revenue is disaggregated by geographical market,
major product/service lines, and timing of revenue recognition:
Geographical market
2022 2021
GBP'000 GBP'000
-------- --------
Europe 8,460 7,676
Asia 13,253 22,748
North America 394 109
Rest of World 23 243
22,130 30,776
For the year ended 31 December 2022, the Group has identified
two major customers (defined as customers that individually
contributed more than 10% of the Group's total revenue) that
accounted for approximately 51% and 36% of the Group's total
revenue recognised in the period (31 December 2021: three
major customers that accounted for approximately 59%, 25%
and 11% of the Group's total revenue recognised for that year).
Major product/service lines
2022 2021
GBP'000 GBP'000
-------- --------
Engineering services 9,039 6,777
Provision of technology hardware 5,380 7,353
Licenses 7,711 16,646
22,130 30,776
Timing of transfer of goods and services
2022 2021
GBP'000 GBP'000
-------- --------
Products and services transferred at
a point in time 4,760 15,326
Products and services transferred over
time 17,370 15,450
22,130 30,776
Amounts transferred at a point in time during the prior periods
included the recognition of significant license income in
the first half of 2021 related to a major contract.
The contract-related assets and liabilities are as follows:
31 December 31 December
2022 2021
GBP'000 GBP'000
Trade receivables 12 11,825 2,612
Contract assets - accrued income 3,309 7,010
Contract assets - deferred costs 321
Total contract assets 3,309 7,331
Contract liabilities - deferred
income (6,387) (4,290)
3. Segmental analysis
In accordance with IFRS 8 the method applied to identify reporting
segments is based on internal management reporting information
that is regularly reviewed by the chief operating decision
maker, which the Group considers to be the Executive team.
The Group's internal segmental reporting continues to separately
reflect results down to adjusted EBITDA level from its Power
(SOFC) and Hydrogen (SOEC) divisions.
Power - Hydrogen
SOFC - SOEC Consolidated
Year ended 31 December 2022 GBP'000 GBP'000 GBP'000
--------- --------- -------------
Revenue (external) 21,950 180 22,130
Cost of sales (9,070) (9) (9,079)
Gross profit 12,880 171 13,051
Other operating income 1,332 1,332
Operating costs (excluding
adjusting items) (35,769) (21,844) (57,613)
Adjusted EBITDA(1) (21,557) (21,673) (43,230)
Adjusting items:
Depreciation & amortisation (7,138)
Share-based payment charge (997)
Unrealised foreign exchange
losses 863
Fair value adjustment (1,020)
Operating loss (51,522)
Finance income 2,830
Finance expense (304)
Loss before taxation (48,996)
Taxation credit 3,872
Loss for the financial year (45,124)
Hydrogen
Power - SOFC - SOEC Consolidated
Year ended 31 December 2021 GBP'000
- Restated(2) GBP'000 GBP'000
-------------- --------- -------------
Revenue (external) 30,776 30,776
Cost of sales (11,731) (11,731)
Gross profit 19,045 19,045
Other operating income 2,228 2,228
Operating costs (excluding
adjusting items) (25,765) (12,183) (37,948)
Adjusted EBITDA(1) (4,492) (12,183) (16,675)
Adjusting items:
Depreciation & amortisation (5,760)
Share-based payment charge (2,615)
Unrealised foreign exchange
losses 563
Fair value adjustment 1,057
Operating loss (23,430)
Finance income 438
Finance expense (380)
Loss before taxation (23,372)
Taxation credit(2) 2,280
Loss for the financial year (21,092)
(1) Adjusted EBITDA is an alternative performance measure,
as defined at the end of this report.
(2) The 2021 taxation credit has been restated to remove
a provision of GBP0.3m that was recognised in 2021 against
future tax credits, that should have been recognised in 2019
and 2020. Further, the 2021 RDEC tax credit of GBP1.3m has
been re-presented to disclose the credit within other operating
income rather than within cost of sales. Note 1 sets out the
relevant details.
4. Operating costs
Operating costs can be analysed as follows:
2022 2021
GBP'000 GBP'000
Research and development costs 48,348 31,290
Administrative expenses 15,165 11,245
Commercial 2,392 2,168
65,905 44,703
5. Finance income and expenses
2022 2021
GBP'000 GBP'000
Interest received 2,657 438
Foreign exchange gain on cash, cash
equivalents and short-term deposits 173
Finance income 2,830 438
Interest on lease liability (212) (316)
Unwinding of discount on provisions (87) (64)
Other finance costs (5)
Interest expense (304) (380)
6. Taxation
No corporation tax liability has arisen during the period
(31 December 2021: GBPnil) due to the losses incurred. A tax
credit has arisen as a result of the tax losses being surrendered
in respect of research and development expenditure.
2021
2022 Restated(1)
GBP'000 GBP'000
UK corporation tax (4,470) (2,917)
Foreign tax suffered 828 973
Adjustment in respect of prior periods (230) (336)
(3,872) (2,280)
(1) The 2021 taxation credit has been restated to remove
a provision recognised in 2021 against future R&D tax credits
that should have been recognised in 2019 and 2020. The restatement
has increased the adjustment in respect of prior periods by
GBP310,000, from a credit of GBP26,000 to a credit of GBP336,000.
7. Loss per share
2021
2022 Restated(1)
GBP'000 GBP'000
Loss for the financial year attributable
to shareholders (45,124) (21,092)
Weighted average number of shares in
issue 191,385,618 185,689,432
Loss per GBP0.10 ordinary share (basic
and diluted) (23.58)p (11.36)p
(1) The 2021 loss for the year has been restated to remove
a provision recognised in 2021 against future R&D tax credits
that should have been recognised in 2019 and 2020. The loss
has been decreased by GBP310,000 compared with the amount
previously reported. Details are set out in Note 1.
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 January 2021 5,883 21,409 2,061 314 756 12 30,435
Additions 1,529 3,521 502 34 1,791 7,377
Transfers 572 (572)
At 31 December 2021 7,412 25,502 2,563 348 1,975 12 37,812
------------- --------------- ----------- -------------- ------------- ---------- ---------
Additions 1,111 5,147 203 6,848 13,309
Transfers 71 893 (964)
Disposal (1,621) (6,669) (831) (72) (9,193)
At 31 December
2022 6,973 24,873 1,935 276 7,859 12 41,928
------------- --------------- ----------- -------------- ------------- ---------- ---------
Accumulated
depreciation
At 1 January 2021 2,712 11,196 1,398 149 1 15,456
Charge for the year 646 3,089 392 83 5 4,215
At 31 December 2021 3,358 14,285 1,790 232 6 19,671
------------- --------------- ----------- -------------- ------------- ---------- ---------
Charge for the year 936 4,030 444 73 3 5,486
Depreciation on
disposals (1,621) (6,669) (831) (72) (9,193)
At 31 December
2022 2,673 11,646 1,403 233 9 15,964
------------- --------------- ----------- -------------- ------------- ---------- ---------
Net book value
------------- --------------- ----------- -------------- ------------- ---------- ---------
At 31 December
2022 4,300 13,227 532 43 7,859 3 25,964
At 31 December 2021 4,054 11,217 773 116 1,975 6 18,141
------------- --------------- ----------- -------------- ------------- ---------- ---------
'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 consist entirely of plant and machinery
that will be used in the manufacturing, development and testing
of fuel cells.
9. Right of use assets
Land and Computer
Buildings equipment Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2021 4,729 18 4,747
Additions 43 43
Adjustment to lease term (1,035) (1,035)
Disposals (18) (18)
At 31 December 2021 3,694 43 3,737
Adjustment of lease term 829 829
At 31 December 2022 4,523 43 4,566
Accumulated depreciation
At 1 January 2021 766 10 776
Charge for the year 523 18 541
Disposals (18) (18)
At 31 December 2021 1,289 10 1,299
Charge for the year 606 14 620
At 31 December 2022 1,895 24 1,919
Net book value
At 31 December 2022 2,628 19 2,647
At 31 December 2021 2,405 33 2,438
During the year, the Group signed an extension to a property
lease and revised the expected term of that least accordingly.
An adjustment of GBP0.8m was recognised to increase the right-of-use
asset, with a corresponding adjustment to the lease liability.
During the prior year, the Group revised the expected term
on one of its property leases, recognising an adjustment of
GBP1.0m to reduce the right-of-use asset, with a corresponding
adjustment to the lease liability.
10. Intangible assets
Internal
developments Customer
in relation and internal Perpetual
to manufacturing development software Patent
site programmes licences costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- ----------- -------- ---------
Cost
At 1 January 2021 411 4,424 295 5,130
Additions 3,983 252 338 4,573
----------------- ------------- ----------- -------- ---------
At 31 December
2021 411 8,407 252 633 9,703
Additions 5,340 273 219 5,832
----------------- ------------- ----------- -------- ---------
At 31 December
2022 411 13,747 525 852 15,535
----------------- ------------- ----------- -------- ---------
Accumulated amortisation
At 1 January 2021 82 139 221
Charge for the
year 82 899 23 1,004
----------------- ------------- ----------- -------- ---------
At 31 December
2021 164 1,038 23 1,225
Charge for the
year 82 748 125 77 1,032
----------------- ------------- ----------- -------- ---------
At 31 December
2022 246 1,786 148 77 2,257
----------------- ------------- ----------- -------- ---------
Net book value
----------------- ------------- ----------- -------- ---------
At 31 December
2022 165 11,961 377 775 13,278
At 31 December
2021 247 7,369 229 633 8,478
----------------- ------------- ----------- -------- ---------
The customer and internal development intangible primarily
relates to the design, development and configuration of the
Company's core fuel cell and system technology. Amortisation
of capitalised development commences once the development
is complete and is available for use.
11. Inventories
31 December 31 December
2022 2021
GBP'000 GBP'000
Raw materials 1,566 1,299
Work in progress 1,477 969
Finished goods 2,671 877
Total inventory 5,714 3,145
Inventories have increased in line with the continued improvement
in manufacturing capacity and to ensure the Group can satisfy
existing and anticipated customer demand for technology hardware.
During the year ended 31 December 2022, inventories of GBP5.0m
(12 months ended 31 December 2021: GBP5.9m) were recognised
as an expense and were included within Cost of Sales. In addition,
as at 31 December 2022, a provision of GBP0.7m (2021: GBPnil)
was recognised following the downgrading of a number of stacks
that failed our initial quality control testing. These stacks
potentially have a more limited life than expected and have
therefore been provided against to reflect their lower net
realisable value.
12. Trade and other receivables
31 December 31 December
2022 2021
Restated(1)
Current: GBP'000 GBP'000
Trade receivables 11,825 2,612
Other receivables 5,328 3,201
17,153 5,813
Non-current:
Other receivables 741 741
(1) 2021 other receivables have been restated to reflect
the adjustment of prior year R&D tax claims, as set out in
Note 1. The R&D tax claim receivable has been increased by
GBP948,000 accordingly.
The Group's trade receivables balance at 31 December 2022
is significantly higher than at 31 December 2021 primarily
reflecting a number of significant invoices raised in the
last quarter of 2022 with two major customers. Of the GBP11.8m
due at 31 December 2022, c.GBP10m was received in the first
two months of 2023. Included within other current receivables
is the research and development tax credit of GBP1,350,000
(31 December 2021: GBP1,304,000).
13. Other current assets
31 December 31 December
2022 2021
GBP'000 GBP'000
Prepayments 869 673
Accrued interest 322
Accrued grant income 88 138
957 1,133
14. Net cash and cash equivalents, short-term and long-term
investments
31 December 31 December
2022 2021
GBP'000 GBP'000
Cash at bank and in hand 7,837 4,957
Money market funds 55,472 146,498
Cash and cash equivalents 63,309 151,455
Short-term investments(1) 119,011 93,129
Long-term investments 5,000
Cash and cash equivalents and investments 182,320 249,584
(1) Short-term investments comprise bank deposits with a
maturity greater than 3 months but less than 12 months.
The Group typically places surplus funds into pooled money
market funds with same day access and bank deposits with durations
of up to 24 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-mf (Moody's) and AAAmmf (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
31 December 31 December
2022 2021
Current: GBP'000 GBP'000
Trade payables 4,795 2,425
Other payables 138 358
4,933 2,783
16. Other current liabilities
31 December 31 December
2022 2021
GBP'000 GBP'000
Accruals 6,515 4,803
Deferred grant income 771 1,015
7,286 5,818
17. Derivative financial instruments
31 December 31 December
2022 2021
GBP'000 GBP'000
Financial assets measured at fair value
through profit or loss
Forward exchange contracts 26 321
Non-deliverable forward contracts 28 752
Total derivative assets 54 1,073
In 2020, the Group entered into a non-deliverable forward
(NDF) to hedge its exposure to Korean Won (KRW) with respect
to a major customer contract. The Group also had forward exchange
contracts in place to hedge expected transactions in EUR and
CAD. All derivative financial instruments are measured using
techniques consistent with level 2 of the fair value hierarchy.
18. Lease liabilities
31 December 31 December
2022 2021
GBP'000 GBP'000
------------ ------------
At 1 January 3,039 4,445
New finance leases recognised 41
Lease payments (956) (721)
Interest expense 212 316
Adjustment to lease term 829 (1,042)
At 31 December 3,124 3,039
Current 610 754
Non-current 2,514 2,285
At 31 December 3,124 3,039
19. Provisions and contingent liabilities
Property Contract
Dilapidations Warranties Losses Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 1,610 418 194 2,222
Movements in the Consolidated
Statement of Profit and
Loss:
Amounts used (404) (175) (579)
Unwinding of discount 64 64
Increase in provision 154 1,239 307 1,700
At 31 December 2021 1,828 1,253 326 3,407
Movements in the Consolidated
Statement of Profit and
Loss:
Amounts used (137) (137)
Unused amounts reversed (707) (135) (842)
Unwinding of discount 87 87
Increase in provision 18 329 347
At 31 December 2022 1,933 875 54 2,862
Current 875 54 929
Non-current 1,933 1,933
At 31 December 2022 1,933 875 54 2,862
Current 1,253 326 1,579
Non-current 1,828 1,828
At 31 December 2021 1,828 1,253 326 3,407
During the year, following the conclusion of certain contracts
utilising our fuel cell stacks, and based on a further year's
data around stack failure and degradation rates, GBP0.7m of
the existing warranty provision was released to the consolidated
statement of profit or loss. Of this amount, approximately
GBP0.3m was re-classified as a contingent liability as the
likelihood of the stacks failing or of the Group paying out
on any potential subsequent stack failures for certain stacks
that may still be run by customers is no longer considered
to be probable, but is considered to be more than remote.
20. Share capital
2022 2021
---------------------- ----------------------
Number Number
of GBP0.10 of GBP0.10
Ordinary Ordinary
shares GBP'000 shares GBP'000
Allotted and fully paid
At 1 January 190,729,638 19,073 172,171,527 17,217
Allotted GBP0.10 Ordinary
shares on exercise of employee
share options 1,357,137 136 1,490,531 149
Allotted GBP0.10 Ordinary
shares on cash placing
(see below) 17,067,580 1,707
At 31 December 192,086,775 19,209 190,729,638 19,073
On 17 March 2021 the Group announced a fundraise that would
allot 17,067,580 new ordinary shares of GBP0.10 each in the
Company, for a total gross cash consideration of GBP180,916,340.
In conjunction with the placing, 12,967,629 shares were allotted
on 17 March 2021 which included Bosch and certain Directors
of the Company subscribing for 3,649,150 and 24,376 shares
respectively. On 19 May 2021 Weichai subscribed for and were
allotted the remaining 4,099,951 shares.
During the year ended 31 December 2022, 1,357,137 ordinary
GBP0.10 shares were allotted for cash consideration of GBP866,717
on the exercise of employee share options (31 December 2021:
1,490,531 ordinary GBP0.10 shares were allotted for cash consideration
of GBP705,636).
Reserves
The Consolidated Statement of Financial Position includes
a merger reserve and a capital redemption reserve. The merger
reserve represents a reserve arising on consolidation using
book value accounting for the acquisition of Ceres Power Limited
at 1 July 2004. The reserve represents the difference between
the book value and the nominal value of the shares issued
by the Company to acquire Ceres Power Limited. The capital
redemption reserve was created in the year ended 30 June 2014
when 86,215,662 deferred ordinary shares of GBP0.04 each were
cancelled.
21. Capital commitments
Capital expenditure that has been contracted for but has not
been provided for in the financial statements amounts to GBP8,679,000
as at 31 December 2022 (31 December 2021: GBP8,086,000), in
respect of the acquisition of property, plant and equipment,
primarily related to the Group's planned test stand expansion.
22. Related party transactions
As at 31 December 2022 and as at 31 December 2021, the Group's
related parties were its Directors and RFC Power Ltd.
During the year ended 31 December 2022, one Director exercised
and retained 7,109 share options under the Company's employee
share save scheme and one Director exercised and sold 14,218
share options under the Company's employee share save scheme.
There were no other transactions between the Company and the
Directors during the year.
During the year ended 31 December 2021 one Director exercised
and retained 8,491 share options under the Company's employee
share save scheme. There were no other transactions between
the Company and the Directors.
Transactions between the Group and RFC Power Ltd, being an
associated entity of the Group, comprised engineering consultancy
services provided by the Group to RFC Power for the value
of GBP0.4m (31 December 2021: GBP0.1m) in return for equity
share capital.
Non-GAAP Alternative Performance Measures (unaudited)
Reconciliation between operating loss and Adjusted EBITDA
Management believes that presenting Adjusted EBITDA loss allows
for a more direct comparison of the Group's performance against
its peers and provides a better understanding of the underlying
performance of the Group by excluding non-recurring, irregular
and one-off costs. The Group currently defines Adjusted EBITDA
loss as the operating loss for the period excluding depreciation
and amortisation charges, share-based payment charges, unrealised
losses on forward contracts and exchange gains/losses.
2022 2021
GBP'000 GBP'000
Operating loss (51,522) (23,430)
Depreciation and amortisation 7,138 5,760
Share-based payment charges 997 2,615
Unrealised losses/(gains) on forward
contracts 1,020 (1,057)
Exchange gains (863) (563)
Adjusted EBITDA (43,230) (16,675)
Reconciliation between net cash from operating activities
and equity-free cash flow
The Group defines equity-free cash flow as net cash from operating
activities plus capital expenditure and adjusted for interest
payments and receipts and exchange rate movements. The table
below reconciles net cash from operating activities to equity-free
cash flow for each period.
2022 2021
GBP'000 GBP'000
Net cash used in operating activities (51,522) (20,342)
Capital expenditure (total) (18,179) (11,950)
Interest and lease receipts/(payments)
(net) 487 (283)
Exchange rate movements 863 563
Equity-free cash flow (68,351) (32,012)
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March 24, 2023 03:00 ET (07:00 GMT)
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