TIDMCWR
RNS Number : 4611N
Ceres Power Holdings plc
30 September 2021
30 September 2021
Ceres Power Holdings plc
Half-yearly results for the six months ended 30 June 2021
COMMERCIAL partnerships deliver STRONG FIRST HALF 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 half-yearly results for
the six months ended 30 June 2021.
Financial highlights
* Revenue and other income up 96% to GBP17.4m (H1 2020:
GBP8.9m), reflecting strong progress of commercial
partnerships
* Increased gross profit of GBP12.2m (H1 2020: GBP7.1m)
at sector-leading gross margin of 72% (H1 2020: 79%)
* Successfully raised net proceeds of GBP179m in March
through an equity fundraising of 17.1 million new
ordinary shares to support growth into electrolysis
for green hydrogen and further SOFC applications.
Weichai (20%) and Bosch (18%) fully supportive of the
fundraising and strategy
* Group had GBP263m of cash and investments at 30 June
2021
* Order book* of GBP42.0m and pipeline* of GBP43.8m as
at 30 June 2021
Commercial highlights
* New joint development programme for a 30kW stationary
power system with Weichai, increasing the commercial
scope of the agreement alongside transportation
* Discussions progressing well with Weichai on the JV
and wider strategic relationship. No further update
at this time
* First-of-a-kind solid oxide electrolyser (SOEC)
1MW-scale demonstrator to become operational in 2022.
Strong commercial interest and discussions now in
progress with several commercial partners
* Bosch to invest EUR400m into its solid oxide fuel
cell (SOFC) business between now and 2024. It plans
to put up to 100 small-scale stationary fuel cell
power plants into operation this year
* AVL List strategic collaboration progressing well,
with three early-stage projects and a strong pipeline
* Doosan signed a memorandum of understanding with the
shipbuilding division of Hyundai Heavy Industries, to
develop a marine system based on Ceres' proprietary
SOFC stack technology
Current Trading and Outlook
* On track to achieve revenue in line with consensus
estimates of GBP31.5 million for the 12 months ending
30 December 2021, subject to no significant
constraints on our operations
* Doosan announced that it has completed development of
its 10kW SOFC system using Ceres' technology. Soft
commercial launch is planned for 2022
* Successful in two separate projects awarded UK grant
funding as part of the Clean Maritime Demonstration
Competition to explore the use of our technology in
marine applications
* Caroline Hargrove joining the Executive team as Chief
Technology Officer and Mark Selby appointed to a new
role as Chief Innovation Officer, both with effect
from 25(th) October 2021
* Plan to move up to the London Stock Exchange Main
Market Premium Listing is on track for mid-2022
Phil Caldwell, chief executive of Ceres commented: "We are
pleased to report a strong performance for the Company in the first
half of 2021, including a notable increase in our revenues at
sector-leading gross margins. The outlook for clean technology
innovation and hydrogen remains strong, buoyed by growth in
strategies, regulation and green investment. Our partners continue
to announce significant developments in the scale and application
of our technology and the high level of interest and early
engagement around its use for electrolysis to produce green
hydrogen is very promising."
(*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: Six months Six months 18 months
ended ended ended 31
30 June 30 June December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ----------
Total revenue and other operating
income, comprising: 17,436 8,900 32,987
Licence fees 10,682 3,035 10,519
Engineering services revenue 2,669 3,104 10,866
Provision of technology hardware 3,759 2,747 10,297
Other operating income 326 14 1,305
Gross margin % 72% 79% 67%
Adjusted EBITDA loss(1) - SOFC(2) (371) (4,332) (9,063)
Adjusted EBITDA loss(1) - SOEC(2) (4,144) (656) (2,305)
----------- ----------- ----------
Adjusted EBITDA loss(1) - total
Group (4,515) (4,988) (11,368)
Operating loss (7,602) (7,172) (17,634)
Net cash used in operating activities (13,170) (1,862) (5,824)
Net cash and investments 262,889 107,981 110,186
(1) 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.
(2) Following the Group's decision to invest more heavily into
solid oxide electrolysis cell (SOEC) technology, the separate
disclosure of SOEC Adjusted EBITDA in addition to the Group's
historical solid oxide fuel cell (SOFC) technology Adjusted EBITDA
is considered to provide additional useful information to allow
readers of the interim results to more fully understand the Group's
performance. 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 30 September 2021 at 09.30 BST. To
register your interest in participating, please go to:
https://www.investormeetcompany.com/ceres-power-holdings-plc/register-investor
For further information please visit www.ceres.tech or
contact:
Ceres Power Holdings plc
Elizabeth Skerritt +44(0)7932 023 283
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
Madano (Financial PR) Tel: +44 (0) 20 7593
Michael Evans / Hoda Awad 4000
About Ceres Power
Ceres is a world-leading developer of solid oxide electrochemical
technology for applications in fuel cells and hydrogen 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 power generation,
transportation and industrial applications. 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
We are pleased to report that Ceres has continued to develop at
pace in the first half of 2021.
Firstly, we have focused on building resilient operations, on
delivering new and existing product initiatives and programmes and
a solid set of financial results. Partner contracts converted to
revenue during the period delivered growth of 96% in revenue and
other operating income up to GBP17.4 million (H1 2020: GBP8.9m). We
have also invested strongly in the business, expanding research,
development, test and manufacturing capacity across our two
sites.
Secondly, the Board and management have expanded the Company's
strategy to ensure we continue to drive sustainability and
innovation, enhancing the competitiveness and relevance of our
technology across the clean energy market and delivering future
value for our shareholders.
To support this strategy, we successfully raised a further net
GBP179 million in March through an equity fundraise, which will
principally be used to accelerate our investment in the development
and potential commercialisation of our technology in electrolysis
to produce green hydrogen. It is a market predicted by McKinsey and
the Hydrogen Council to be worth as much as US$2.5 trillion for
hydrogen gas and electrolysis equipment to meet 2050 targets and we
were pleased to secure the full support of our strategic investors,
Bosch and Weichai Power, for our fundraise.
With the UK due to host the COP26 climate talks in the coming
weeks, the focus is squarely on the ambition of countries for
decarbonisation and hydrogen technologies. Ceres aims to play a
central role in the global energy transition to affordable clean
power, supported by our strategic partnerships with some of the
world's most progressive companies in those markets leading the
global charge on climate change.
Commercial progress and partnerships
As at 30 June 2021 our order book stood at GBP42.0 million and
we had a further GBP43.8 million in the pipeline, being a
combination of staged licensing payments and engineering services.
The high proportion of licence fees continues to support healthy
gross margins, which at 71.6% is consistent with the prior 18-month
period and differentiated from our peers.
B osch
In its annual update in March, Bosch published significant
positive progress on its programme for SOFC development in
partnership with Ceres, reiterating its aim for a production
capacity of approximately 200MW output per year by 2024. This is
the culmination of over two years of work, with the Ceres team
supporting technology transfer and initial manufacturing under
licence at Bosch's site in Bamberg, Germany.
Once scaled, production will be focused on series manufacturing
of decentralised power plants, the equivalent of supplying around
400,000 people with household electricity. Bosch has stated that it
will invest EUR400 million into its SOFC business, including
manufacturing capacity, between now and 2024. It plans to put up to
100 small-scale fuel cell power stations into operation this year,
which will generate electricity for data centres, industrial firms
and residential neighbourhoods.
In the period, Bosch also continued to support its corporate
relationship with Ceres by maintaining its equity holding at 18%,
contributing an additional GBP38.7 million as part of the equity
fundraise in in March 2021.
Doosan
In September 2021, Doosan announced that it has completed the
development of its 10kW SOFC system, the product of a joint
collaboration with Ceres signed in July 2019. Doosan is planning a
soft commercial launch of the product in 2022. The combined heat
and power (CHP) system, uses two of Ceres' 5kW SOFC stacks and has
delivered 40% higher power generation efficiency when compared with
Doosan's existing PEM based technology. The 10kW system for use in
commercial and residential buildings is similar in size to existing
5kW SOFC products on the market in Korea, saving 50% on
installation space and maintaining the equivalent power generation
efficiency.
In Korea, the fuel cell power generation market for commercial
and residential properties is expanding because of a combination of
zero-energy building certification, public institutions' mandatory
renewable energy policies, and the local governments' mandatory
private building renewable energy policy. Doosan estimates the
compound annual growth rate in the Korean market for stationary
fuel cells is 24%. Doosan is expanding manufacturing capacity to
meet market demand and is targeting 50MW annual capacity of Ceres
SteelCell(R) fuel cell stacks by 2024. We believe this could still
increase further, given Doosan's plans to develop utility-scale
SOFC power stations and marine applications using Ceres'
technology.
In March, Doosan announced the signing of a memorandum of
understanding with Korea Shipbuilding & Offshore Engineering ,
a division of the world's largest shipbuilding company Hyundai
Heavy Industries, for the joint development of a megawatt class
SOFC system for clean energy marine propulsion and power generation
. The agreement continues the expansion of Doosan's business into
the marine market and reflects the growing interest in Ceres'
technology as a differentiated solution to support the
decarbonisation of the global shipping industry.
Weichai
In March, Weichai Power supported the Ceres equity fundraising
investing a further GBP43.5 million to maintain its shareholding in
Ceres at 20%. Positive discussions are progressing on the wider
strategic relationship including the establishment of a joint
venture in late 2021, to produce Ceres SteelCell(R) SOFC systems
.
The pandemic has created challenges in remote working practices
and so the commencement of a new programme for a 30kW stationary
power module is a welcome development, expanding the scope of our
collaboration alongside transportation. We are making good progress
with discussions and technology field trials and we will provide
further updates to the market in due course.
AVL List
The strategic collaboration with engineering consultancy AVL is
progressing well. Formed at the end of 2020, the partnership brings
important strategic benefits combining AVL's applications expertise
and market presence with Ceres' IP and systems know-how, enabling
us to reach into more end-market applications than we could on our
own.
Ceres and AVL are working together on customer acquisition and
to identify and exploit the growing interest in SOFC technology in
new applications and regions. Three early-stage pieces of work have
commenced, each in new and different regions, covering both
stationary and mobile applications and span a range of ratings up
to 250kW. We also have a strong pipeline of future opportunities
capitalising on AVL's experience and expertise in large-scale
marine and distributed power systems.
SOEC
Work is going well on our first-of-a-kind solid oxide
electrolyser (SOEC) 1MW-scale demonstrator to be operational in
2022. Whilst still early days, we have already seen strong interest
from commercial partners, seeking to unlock green hydrogen
opportunities for close integration with industrial and energy
generation processes. We are engaging with a number of global
majors across the oil and gas, industrial and clean energy sectors
to demonstrate and commercialise our technology.
Deployment of first commercial SOEC plants is expected from
2025. Ceres is targeting a levelised cost of hydrogen production at
<$1.50 per kilogram, which enables green hydrogen production to
be competitive with blue fossil fuel based hydrogen in time to meet
a market projected to more than double in size every decade from
2030 to 2050. Importantly, access to royalty streams in SOEC will
be additive and complementary to royalties already enabled in our
SOFC business.
Progress in the high-volume manufacturing of Ceres' core
SteelCell(R) should support economies of scale and enable bringing
both our fuel cell and electrolysis technology to the mass market.
We see significant opportunities to further our commercial
relationships and the scope of our existing partnerships.
Operations
During 2020 we achieved manufacturing capacity of 2MW at our
pilot manufacturing production facility in Redhill in the UK. We
also continue to support our manufacturing partners Bosch and
Doosan in their progress towards mass market launch. Doosan is
targeting annual production capacity of 50MW in 2024 and Bosch is
now preparing to scale up to mass manufacture in 2024, targeting
annual production capacity of 200MW.
We will continue to supply systems licensees with stacks until
our manufacturing partners come onstream and we can migrate them
across to this supply. As such, Ceres' initial manufacturing
capacity is now being increased to 3MW through the installation of
additional equipment to support production of our 1kW and 5kW
stacks, which will supply our partners for their testing and trials
as well as meeting the demand for our internal R&D activities
for both SOFC and SOEC.
In general, electrolysis systems are much larger, going to MW or
even GW-scale, versus fuel cell systems running to 100kWs to low
MWs. In both use cases, partners are seeking to take our technology
into larger arrays, and we are focusing on our 5kW fuel stack as a
core module to support this development. Part of the net proceeds
of the March fundraise will be used for general working capital
purposes, to cover the increased operating cost base of what will
be a larger business addressing both SOFC and SOEC uses of our
technology, as well as capital to enhance test capability and
infrastructure and further expand pilot production.
Technology
Ceres' technology and competencies span applications essential
for the energy transition; from fuel cells that deliver energy
conversion through storage and the production of green hydrogen and
other chemicals utilising solid oxide electrolysis.
The market for electrolysis enables growth for Ceres by building
on our fuel cell capability and technology. It is the same core
cell and stack technology platform, the same IP portfolio covering
SOFC and SOEC, the same manufacturing process and supply chain and
continuing the partnering model to deliver scale.
Importantly, electrolysis is a cornerstone technology for
decarbonising hard-to-abate sectors, such as steel, ammonia,
methanol and shipping. SOEC has an intrinsic thermodynamic
advantage over low-temperature electrolysis and, when coupled with
industrial heat reclamation, can deliver efficiencies up to 90%
thereby unlocking green hydrogen opportunities for close
integration with industrial and energy generation processes . Our
MW-scale SOEC demonstrator set to be delivered in 2022 will pave
the way for commercialisation of the technology.
In addition to the GBP100 million earmarked for development of
SOEC, part of the net proceeds of the March fundraise will be used
to invest in the core business to accelerate innovation and to
maintain technology leadership across both SOFC and SOEC. In
addition to expanding research and development, engineering and
advanced manufacturing capabilities, the proceeds provide further
capital for IP generation and acquisition together with the
addition of new team members.
We recruited an additional c.100 employees in the first six
months of 2021, around half of whom are scientists and engineers.
We also strengthened our industry-academia research collaboration,
announcing Profe ssor Stephen Skinner as the Ceres Royal Academy of
Engineering Research Chair in Electrochemical Devices for a Zero
Carbon Economy, with the intention to establish a world-leading
research group in the field of materials engineering.
Financial Review
During the six months to 30 June 2021, the Group reported
revenue and other income from the fuel cell business of GBP17.4
million. Licence fee income drove the Group's revenue to grow 93%
when compared to the same period in 2020, with a slightly reduced
gross margin of 71.6% (H1 2020: 79.5%) reflecting the change in
revenue mix. The higher proportion of higher-margin licence fees
was offset by a period of lower output of stacks as extra equipment
was installed and commissioned to facilitate an increase in plant
capacity, which is now largely in place. Consequentially, in the
period to 30 June 2021, the absolute gross profit increased 73.4%
to GBP12.2 million (H1 2020: GBP7.1 million). As we have stated
previously, gross margin percentage will vary period on period
based on timing and quantum of licence revenue recognition and
revenue mix.
From this period onwards, we will disclose the key financial
metrics of our nascent electrolysis business separate from the core
fuel cell business, in line with internal reporting, in order to
help show progress and where we are making investment into the
business.
Investing in the future: people and technology
We continued to invest in building the business for the
opportunities we see ahead. Operating costs for the business in the
six-month period were GBP20.2 million (H1 2020: GBP14.2 million),
the bulk of the increase being additional R&D investment.
Throughout the period we increased the team size as planned,
employing 432 people as at 30 June 2021 (325 as at 31 December
2020). We have added people across all aspects of the business,
including in manufacturing and mechanical engineering and the
testing teams to support existing and expected commercial projects,
as well as in core Energy Materials to continue to drive
innovation.
As a result of an increased gross profit, the SOFC (or Power)
part of the business reduced its adjusted EBITDA loss from GBP4.3
million in the 6 months to 30 June 2020 to GBP0.4 million. Due to
the impact of the continued investment across the business as
described above and depending on revenue mix and progress, we
expect the SOFC part of the business to remain adjusted EBITDA
loss-making in the short term.
Our SOEC (or Hydrogen) business showed an adjusted EBITDA loss
of GBP4.1 million (H1 2020: GBP0.7 million), reflecting the initial
set up, focus on activities and the initial investment there.
Solid financial position: the foundation for continued
progressive growth
The Group ends the period with a strong position of GBP263
million in cash and investments as at 30 June 2021 (31 December
2020: GBP110 million) as a result of the equity fundraising in the
period, and we have begun to put these funds to good use already,
as shown by our equity free cash outflow in the period increasing
to GBP18.7 million from GBP6.1m in the six months ended 30 June
2020.
We invested GBP3.6 million in property, plant and equipment in
the period (H1 2020: GBP3.0 million) on manufacturing improvement
and capacity expansion, as well as the start of building out our
test infrastructure to accommodate new products including the Green
Hydrogen electrolysis programme. We capitalised GBP1.6 million of
eligible development and related costs in the period (H1 2020:
GBP1.5 million), with GBP5.9 million capitalised to date (31
December 2020: GBP4.9 million).
The other significant movements in the balance sheet included
the recognition of net contract assets of GBP1.9 million at the
period end, compared with net contract liabilities of GBP6.6m as at
31 December 2020, reflecting timing differences between invoicing
customers and recognising revenue on contracts. Finally, trade and
other payables reduced to GBP2.5 million
(31 December 2020: GBP9.1 million) reflecting the payment of
receipts received in December 2020 which related to the exercise of
certain share options.
Board and Management Changes
During the first six months of the year we welcomed two new
Non-executive Directors to the plc Board - namely Tudor Brown,
formerly of ARM Holdings, and Professor Dame Julia King, Baroness
Brown of Cambridge. We welcome their perspective and their depth of
knowledge and experience as we continue to grow and diversify.
At the executive level, we recently announced that Caroline
Hargrove has been appointed as CTO and that Mark Selby, the current
Chief Technology Officer (CTO), will move to a newly created
position as Chief Innovation Officer (CIO), both effective from
25(th) October 2021. Caroline will step down from her current
position as a non-executive Director of Ceres to take up this full
time executive position and her unique skills and experience in
leading digitalisation and managing high-growth technology teams
will be invaluable for the next chapter of Ceres' development. The
new CIO role provides the opportunity for Mark to use his
considerable knowledge to focus on establishing future innovative
technology for Ceres.
Outlook
Ceres is committed to clean energy innovation in everything it
does. We have an established and growing business in fuel cell
power and through the successful equity fundraising we are now
addressing the potentially even greater market for electrolysis for
green hydrogen. Above all, it is consistent with Ceres's purpose of
embedding our unique technology in the products of world-class
companies to address climate change and to create significant
shareholder value.
I would like to thank our shareholders, partners and suppliers
for their continued interest and support for the business and all
our employees for their dedicated commitment and hard work through
this exciting period in the Company's growth.
Philip Caldwell
Chief Executive Officer
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
For the six months ended 30 June 2021
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue 2 17,110 8,886 31,682
Cost of sales (4,866) (1,825) (10,355)
Gross profit 12,244 7,061 21,327
Other operating income
(1) 326 14 1,305
Operating costs 4 (20,172) (14,247) (40,266)
Operating loss (7,602) (7,172) (17,634)
Finance income 5 243 556 989
Finance expense 5 (352) (287) (664)
Loss before taxation (7,711) (6,903) (17,309)
Taxation credit 6 1,166 1,278 2,493
Loss for the financial
period and total comprehensive
loss (6,545) (5,625) (14,816)
============= ============== =============
Loss per GBP0.10 ordinary
share expressed in pence
per share:
Basic and diluted loss
per share 7 (3.62)p (3.47)p (9.12)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 2021
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 8 16,688 12,970 14,979
Right-of-use assets 9 2,714 4,232 3,971
Intangible assets 10 5,939 3,800 4,909
Long-term investments 14 2,000 8,000
Other receivables 12 741 741 741
-----------
Total non-current assets 28,082 21,743 32,600
Current assets
Inventories 11 2,988 2,055 2,107
Contract assets 2 5,626 1,821 864
Other current assets 13 975 987 1,002
Derivative financial instruments 17 845 2 59
Current tax receivable 4,659 2,450 3,124
Trade and other receivables 12 7,159 4,643 5,570
Short-term investments 14 95,733 90,782 69,231
Cash and cash equivalents 14 165,156 17,199 32,955
----------- ----------- ------------
Total current assets 283,141 119,939 114,912
Liabilities
Current liabilities
Trade and other payables 15 (2,502) (2,560) (9,112)
Contract liabilities 2 (3,773) (1,014) (7,505)
Other current liabilities 16 (3,959) (3,667) (2,675)
Derivative financial instruments (1) (43)
Lease liabilities 18 (622) (1,026) (823)
Provisions 19 (1,112) (308) (612)
-----------
Total current liabilities (11,968) (8,576) (20,770)
----------- ----------- ------------
Net current assets 271,173 111,363 94,142
Non-current liabilities
Lease liabilities 18 (2,616) (3,823) (3,622)
Provisions 19 (1,642) (1,117) (1,610)
-----------
Total non-current liabilities (4,258) (4,940) (5,232)
-----------
Net assets 294,997 128,166 121,510
=========== =========== ============
Equity attributable to
the owners of the parent
Share capital 20 19,041 17,082 17,217
Share premium 404,788 227,430 227,682
Capital redemption reserve 3,449 3,449 3,449
Merger reserve 7,463 7,463 7,463
Accumulated losses (139,744) (127,258) (134,301)
-----------
Total equity 294,997 128,166 121,510
=========== =========== ============
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2021
Six months Six months 18 months
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- -----------
Cash flows from operating activities
Loss before taxation (7,711) (6,903) (17,309)
Adjustments for:
Finance income (243) (556) (989)
Finance expense 352 287 664
Depreciation of property, plant
and equipment 1,930 1,433 3,820
Depreciation of right-of-use assets 265 256 776
Amortisation of intangible assets 556 55 208
Net foreign exchange losses/(gains) 63 (64) 139
Net change in fair value of financial
instruments (829) 66 (55)
Share-based payments charge 1,102 437 1,378
----------- ----------- -------------
Operating cash flows before movements
in working capital (4,515) (4,989) (11,368)
(Increase)/decrease in trade and
other receivables (1,944) 629 (2,338)
Increase in inventories (881) (411) (704)
Increase in trade and other payables 2,164 3,181 752
(Increase)/decrease in contract
assets (4,762) 1,541 (142)
(Decrease)/increase in contract
liabilities (3,732) (4,350) 4,444
Increase in provisions 500 77 1,072
----------- ----------- -------------
Net cash used in operations (13,170) (4,322) (8,284)
----------- ----------- -------------
Taxation received 2,460 2,460
----------- ----------- -------------
Net cash used in operating activities (13,170) (1,862) (5,824)
----------- ----------- -------------
Investing activities
Purchase of property, plant and
equipment (3,639) (2,954) (9,256)
Capitalised development expenditure (1,586) (1,457) (3,795)
Decrease/(increase) in long-term
investments 6,000 (8,000)
Increase in short-term investments (52,502) (82,782) (74,380)
Repayment of short-term investments 26,000 32,000 68,849
Finance income received 243 289 1,123
----------- ----------- -------------
Net cash used in investing activities (25,484) (54,904) (25,459)
----------- ----------- -------------
Financing activities
Proceeds from issuance of ordinary
shares 181,502 49,860 50,851
Net expenses from issuance of ordinary
shares (2,572) (344) (344)
Cash (paid)/received on behalf
of employees on the sale of share
options (7,490) 7,490
Repayment of lease liabilities (207) (523)
Interest paid (315) (221) (664)
----------- ----------- -------------
Net cash generated from financing
activities 170,918 49,295 56,810
----------- ----------- -------------
Net increase/(decrease) in cash
and cash equivalents 132,264 (7,471) 25,527
----------- ----------- -------------
Exchange (losses)/gains on cash
and cash equivalents (63) 64 (139)
Cash and cash equivalents at beginning
of period 32,955 24,606 7,567
----------- ----------- -------------
Cash and cash equivalents at end
of period 14 165,156 17,199 32,955
=========== =========== =============
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2021
Capital
redemption Merger Accumulated
Share capital Share premium reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ----------- -------- ----------- --------
At 1 July 2019 (audited) 15,277 179,116 3,449 7,463 (120,863) 84,442
Comprehensive income
Loss for the financial
period (14,816) (14,816)
Total comprehensive loss (14,816) (14,816)
Transactions with owners
Issue of shares, net of
costs 1,940 48,566 50,506
Share-based payments charge 1,378 1,378
Total transactions with
owners 1,940 48,566 1,378 51,884
------------- ------------- ----------- -------- ----------- --------
At 31 December 2020 (audited) 17,217 227,682 3,449 7,463 (134,301) 121,510
------------- ------------- ----------- -------- ----------- --------
Comprehensive income
Loss for the financial
period (6,545) (6,545)
Total comprehensive loss (6,545) (6,545)
Transactions with owners
Issue of shares, net of
costs 1,824 177,106 178,930
Share-based payments charge 1,102 1,102
-----------
Total transactions with
owners 1,824 177,106 1,102 180,032
------------- ------------- ----------- -------- ----------- --------
At 30 June 2021 (unaudited) 19,041 404,788 3,449 7,463 (139,744) 294,997
============= ============= =========== ======== =========== ========
Comparatives for the six months ended 30 June 2020 are provided
separately below:
Capital
redemption Merger Accumulated
Share capital Share premium reserve reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ----------- -------- ----------- -------
At 1 January 2020 (audited) 15,277 179,601 3,449 7,463 (122,072) 83,836
Comprehensive income
Loss for the financial
period (5,623) (5,623)
Total comprehensive loss (5,623) (5,623)
Transactions with owners
Issue of shares, net of
costs 1,687 47,829 49,516
Share-based payments charge 437 437
Total transactions with
owners 1,687 47,829 437 49,953
------------- ------------- ----------- -------- ----------- -------
At 30 June 2020 (unaudited) 17,082 227,430 3,449 7,463 (127,258) 128,166
------------- ------------- ----------- -------- ----------- -------
Notes to the financial statements for the six months ended 30
June 2021
1. Basis of preparation
The condensed interim financial statements have been prepared in
accordance with the requirements of the AIM Rules for Companies.
They do not include all of the information required for full annual
financial statements and should be read in conjunction with the
annual financial statements for the 18 months ended 31 December
2020 which were prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006. The interim financial statements have been
prepared on a historical cost basis except that the following
assets and liabilities are stated at their fair value: derivative
financial instruments and financial instruments classified as fair
value through the profit or loss.
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. Ceres Power
Holdings plc transitioned to UK-adopted international accounting
standards in its consolidated financial statements on 1 January
2021. There was no impact or changes in accounting policies from
the transition.
The interim financial information has been prepared in
accordance with the recognition and measurement requirements of UK
adopted international accounting standards and applicable law and
regulations. 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 18 months ended 31
December 2020. The accounting policies applied are consistent with
those expected to be applied in the financial statements for the
year ended 31 December 2021.
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 18 months ended 31
December 2020, 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 six
months ended 30 June 2021 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 six-month period
ended 30 June 2021 of GBP6.5m and net cash used in operating
activities of GBP13.2m. At 30 June 2021, following the receipt of
c.GBP179m of funds from the equity placement in March 2021, it held
cash and cash equivalents and investments of GBP263m. The directors
have prepared annual budgets and cash flow projections that extend
14 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 ongoing impact of Covid-19 on the business. 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.
Critical accounting judgements and key sources of estimation
uncertainty
In the application of the Group's accounting policies,
management is required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources.
In preparing the interim condensed consolidated financial
statements, the areas where judgement has been exercised remain
consistent with these applied to the annual report and accounts for
the period ended 31 December 2020.
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 condensed
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
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Europe 3,855 4,284 14,228
Asia 12,995 4,501 16,613
North America 20 101 841
Rest of World 240
-------------- -------------- -------------
17,110 8,886 31,682
-------------- -------------- -------------
For the six months ended 30 June 2021, 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 65% and 23% of the Group's total
revenue recognised in the period (six months ended 30 June 2020:
three customers that accounted for approximately 51%, 19% and 17%
of the Group's total revenue for that period).
Major product/service lines
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Engineering services 2,669 3,104 10,866
Provision of technology hardware 3,759 2,747 10,297
Licenses 10,682 3,035 10,519
17,110 8,886 31,682
-------------- -------------- -------------
Timing of transfer of goods and services
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Products and services transferred
at a point in time 11,732 4,305 15,280
Products and services transferred
over time 5,378 4,581 16,402
-------------- -------------- -------------
17,110 8,886 31,682
-------------- -------------- -------------
Amounts transferred at a point in time during the current period
mostly related to the recognition of license income for a major
contract.
The contract-related assets and liabilities are as follows:
31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------- ------------- ------------
Trade receivables 12 3,618 3,787 3,328
------------- ------------
Contract assets - accrued
income 5,626 1,559 837
Contract assets - deferred
costs 262 27
------------- ------------
Total contract assets 5,626 1,821 864
------------- ------------- ------------
Contract liabilities
- deferred income (3,773) (1,014) (7,505)
------------- ------------- ------------
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.
Historically the Group has reported its performance in a single
segment, primarily reflecting the Group's solid oxide fuel cell
(SOFC) technology. For the current period, following increased
investment in and development of the Group's solid oxide
electrolysis cell (SOEC) technology over the past six months, the
Group has introduced segmental reporting internally that separately
discloses the results of the two segments, down to adjusted EBITDA
level, to the Executive team.
Following the change of segmental reporting in the period,
comparatives for the six months ended 30 June 2020 have been
restated accordingly.
SOFC SOEC Consolidated
Six months ended 30 June GBP'000
2021 (unaudited) GBP'000 GBP'000
Revenue 17,110 - 17,110
Cost of sales (4,866) - (4,866)
Gross profit 12,244 - 12,244
Other operating income 326 - 326
Operating costs (excluding
adjusting items) (12,941) (4,144) (17,085)
--------- -------- -------------
Adjusted EBITDA(1) (371) (4,144) (4,515)
--------- -------- -------------
Adjusting items:
Depreciation & amortisation (2,751)
Share-based payment charge (1,102)
Unrealised foreign exchange
losses (63)
Fair value adjustment 829
-------------
Operating loss (7,602)
Finance income 243
Finance expense (352)
Loss before taxation (7,711)
Taxation credit 1,166
Loss for the financial period (6,545)
=============
SOFC SOEC Consolidated
Six months ended 30 June GBP'000
2020 (unaudited) GBP'000 GBP'000
Revenue 8,886 - 8,886
Cost of sales (1,825) - (1,825)
Gross profit 7,061 - 7,061
Other operating income 14 - 14
Operating costs (excluding
adjusting items) (11,407) (656) (12,063)
--------- -------- -------------
Adjusted EBITDA(1) (4,332) (656) (4,988)
--------- -------- -------------
Adjusting items:
Depreciation & amortisation (1,745)
Share-based payment charge (437)
Unrealised foreign exchange
losses 64
Fair value adjustment (66)
-------------
Operating loss (7,172)
Finance income 556
Finance expense (287)
Loss before taxation (6,903)
Taxation credit 1,278
Loss for the financial period (5,625)
=============
3. Segmental analysis (continued)
SOFC SOEC Consolidated
18 months ended 31 December GBP'000
2020 (audited) GBP'000 GBP'000
Revenue 31,682 - 31,682
Cost of sales (10,355) - (10,355)
Gross profit 21,327 - 21,327
Other operating income 1,305 - 1,305
Operating costs (excluding
adjusting items) (31,695) (2,305) (34,000)
--------- -------- -------------
Adjusted EBITDA(1) (9,063) (2,305) (11,368)
--------- -------- -------------
Adjusting items:
Depreciation & amortisation (4,804)
Share-based payment charge (1,378)
Unrealised foreign exchange
losses (139)
Fair value adjustment 55
-------------
Operating loss (17,634)
Finance income 989
Finance expense (664)
Loss before taxation (17,309)
Taxation credit 2,493
Loss for the financial period (14,816)
=============
(1) Adjusted EBITDA is an alternative performance measure, as
defined in the Non-GAAP section at the end of this report.
4. Operating costs
Operating costs can be analysed
as follows:
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Research and development
costs 14,402 10,002 27,820
Administrative expenses 4,775 3,638 10,060
Commercial 995 607 2,386
20,172 14,247 40,266
-------------- -------------- -------------
5. Finance income and expenses
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Interest received 243 356 989
Foreign exchange gain on
cash, cash equivalents and
short-term deposits 200
-------------- -------------- -------------
Finance income 243 556 989
Interest on lease liability (204) (221) (664)
Unwinding of provisions (32)
Impairment of investment (5) (66)
Foreign exchange loss on
cash, cash equivalents and
short-term deposits (111)
-------------- -------------- -------------
Interest expense (352) (287) (664)
-------------- -------------- -------------
6. Taxation
No corporation tax liability has arisen during the year (period
ending 31 December 2020: 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.
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
UK corporation tax (1,535) (1,111) (3,124)
Foreign tax suffered 369 798
Adjustment in respect of
prior periods (167) (167)
-------------- --------------
(1,166) (1,278) (2,493)
-------------- -------------- -------------
7. Loss per share
18 months
Six months Six months ended
ended ended 31 December
30 June 2021 30 June 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Loss for the financial period
attributable to shareholders (6,545) (5,625) (14,816)
-------------- -------------- -------------
Weighted average number of
shares in issue 180,783,345 162,059,660 162,474,146
-------------- -------------- -------------
Loss per GBP0.10 ordinary
share (basic and diluted) (3.62)p (3.47)p (9.12)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 2019 2,222 10,846 1,458 69 6,803 12 21,410
Additions 708 5,904 603 35 1,780 9,030
Transfers 2,958 4,659 210 (7,827)
Disposals (5) (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 31 December
2020 5,883 21,409 2,061 314 756 12 30,435
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Additions 863 1,466 316 28 966 3,639
Transfers 572 (572)
At 30 June 2021 6,746 23,447 2,377 342 1,150 12 34,074
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Accumulated
depreciation
At 1 July 2019 2,096 8,478 998 69 11,641
Charge for the
period 621 2,718 400 80 1 3,820
Disposals (5) (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 31 December
2020 2,712 11,196 1,398 149 1 15,456
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Charge for the
period 268 1,444 169 46 3 1,930
At 30 June 2021 2,980 12,640 1,567 195 4 17,386
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Net book value
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2021 3,766 10,807 810 147 1,150 8 16,688
At 31 December
2020 3,171 10,213 663 165 756 11 14,979
------------- --------------- ----------- -------------- ---------------- ---------- ---------
'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.
8. Property, plant and equipment (continued)
Comparatives for the six months ended 30 June 2020 are provided
separately below:
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
2020 5,091 12,311 1,499 69 5,159 12 24,141
Additions 361 1,853 279 34 110 2,637
Transfers 270 4,659 210 (5,139)
Disposals (5) (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020 5,717 18,823 1,778 313 130 12 26,773
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Accumulated
depreciation
At 1 January
2020 2,214 8,985 1,105 69 1 12,374
Charge for the
period 257 1,013 120 42 2 1,434
Disposals (5) (5)
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020 2,466 9,998 1,225 111 3 13,803
------------- --------------- ----------- -------------- ---------------- ---------- ---------
Net book value
------------- --------------- ----------- -------------- ---------------- ---------- ---------
At 30 June 2020 3,251 8,825 553 202 130 9 12,970
------------- --------------- ----------- -------------- ---------------- ---------- ---------
9. Right of use assets
Land and Computer
Buildings equipment Total
GBP'000 GBP'000 GBP'000
----------- ----------- --------
Cost
At 1 July 2019
Additions on adoption of IFRS16 4,729 18 4,747
----------- ----------- --------
At 31 December 2020 4,729 18 4,747
Additions 43 43
Adjustment of lease term (1,035) (1,035)
Disposals (18) (18)
----------- ----------- --------
At 30 June 2021 3,694 43 3,737
Accumulated depreciation
At 1 July 2019
Charge for the period 766 10 776
----------- ----------- --------
At 31 December 2020 766 10 776
Charge for the period 254 11 265
Disposals (18) (18)
----------- ----------- --------
At 30 June 2021 1,020 3 1,023
Net book value
----------- ----------- --------
At 30 June 2021 2,674 40 2,714
At 31 December 2020 3,963 8 3,971
----------- ----------- --------
9. Right of use assets (continued)
During the period, the Group revised the expected term on one of
its property leases, recognising an adjustment of GBP1,035,000 to
reduce the right of use asset.
Comparatives for the six months ended 30 June 2020 are provided
separately below:
Land and Computer
Buildings equipment Total
GBP'000 GBP'000 GBP'000
----------- ----------- --------
Cost
At 1 January 2020 and 30 June
2020 4,729 18 4,747
----------- ----------- --------
Accumulated depreciation
At 1 January 2020 255 3 258
Charge for the period 253 4 257
----------- ----------- --------
At 30 June 2020 508 7 515
----------- ----------- --------
Net book value
----------- ----------- --------
At 30 June 2020 4,221 11 4,232
----------- ----------- --------
10. Intangible assets
Internal
developments Customer
in relation and internal
to manufacturing development
site programmes Patent costs Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- ------------ ---------
Cost
At 1 July 2019 234 1,101 1,335
Additions 177 3,323 295 3,795
----------------- ------------- ------------ ---------
At 31 December 2020 411 4,424 295 5,130
Additions 1,403 183 1,586
----------------- ------------- ------------ ---------
At 30 June 2021 411 5,827 478 6,716
----------------- ------------- ------------ ---------
Accumulated depreciation
At 1 July 2019 13 13
Charge for the period 82 126 208
----------------- ------------- ------------ ---------
At 31 December 2020 82 139 221
Charge for the period 41 515 556
----------------- ------------- ------------ ---------
At 30 June 2021 123 654 777
----------------- ------------- ------------ ---------
Net book value
----------------- ------------- ------------ ---------
At 30 June 2021 288 5,173 478 5,939
At 31 December 2020 329 4,285 295 4,909
----------------- ------------- ------------ ---------
Capitalised intangible assets are amortised over their useful
economic lives, as follows:
Capitalised development costs - 2 to 7 years
Capitalised patent costs - 3 to 10 years
10. Intangible assets (continued)
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.
Comparatives for the six months ended 30 June 2020 are provided
separately below:
Internal developments
in relation Customer and
to manufacturing internal development
site programmes Total
GBP'000 GBP'000 GBP'000
--------------------- --------------------- ---------
Cost
At 1 January 2020 411 2,000 2,411
Additions 1,456 1,456
--------------------- --------------------- ---------
At 30 June 2020 411 3,456 3,867
Accumulated depreciation
At 1 January 2020 13 13
Charge for the period 41 13 54
--------------------- --------------------- ---------
At 30 June 2020 41 26 67
Net book value
--------------------- --------------------- ---------
At 30 June 2020 370 3,430 3,800
--------------------- --------------------- ---------
11. Inventories
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------- ----------- ------------
Raw materials 1,162 554 1,016
Work in progress 977 1,410 838
Finished goods 849 91 253
-------------------- ----------- ------------
Total inventory 2,988 2,055 2,107
-------------------- ----------- ------------
Inventories have increased in line with the Group's increased
manufacturing capacity in the period.
12. Trade and other receivables
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
Current: GBP'000 GBP'000 GBP'000
----------- ----------- ------------
Trade receivables 3,618 3,787 3,328
Other receivables 3,541 856 2,242
----------- ----------- ------------
7,159 4,643 5,570
----------- ----------- ------------
Non-current:
Other receivables 741 741 741
----------- ----------- ------------
Included within other current receivables is the research and
development tax credit of GBP1,767,000 (31 December 2020:
GBP1,265,000).
13. Other current assets
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ------------
Prepayments 651 548 648
Accrued interest 232 261 129
Accrued grant income 92 178 225
----------- ----------- ------------
975 987 1,002
----------- ----------- ------------
14. Net cash and cash equivalents, short-term and long-term
investments
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ------------
Cash at bank and in hand 3,424 5,431 20,684
Money market funds 161,732 11,768 12,271
----------- ----------- ------------
Cash and cash equivalents 165,156 17,199 32,955
Short-term investments(1) 95,733 90,782 69,231
Long-term investments 2,000 8,000
----------- ----------- ------------
Cash and cash equivalents and
investments 262,889 107,981 110,186
----------- ----------- ------------
(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
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
Current: GBP'000 GBP'000 GBP'000
----------- ----------- ------------
Trade payables 2,334 2,332 1,752
Taxation and social security 16 713
Other payables 168 212 6,647
----------- ----------- ------------
2,502 2,560 9,112
----------- ----------- ------------
As at 31 December 2020, other payables included timing
differences on payments relating to the exercise of certain share
options in December 2020. These amounts were paid in January
2021.
16. Other current liabilities
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------- ----------- ------------
Accruals 2,822 2,546 1,464
Deferred grant income 1,137 1,121 1,211
--------------------- ----------- ------------
3,959 3,667 2,675
--------------------- ----------- ------------
17. Derivative financial instruments
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Financial assets measured at
fair value through profit or
loss
Forward exchange contracts 230 2 55
Non-deliverable forward contracts 615
Currency options 4
----------- ----------- ------------
Total derivative assets 845 2 59
----------- ----------- ------------
In the previous period the Group entered into a non-deliverable
forward (NDF) to hedge its exposure to Korean Won (KRW) with
respect to a major customer contract. As at 30 June 2021, the
unrealised fair value gain was GBP615,000 (31 December 2020: loss
of GBP31,000). The Group also had a number of forward exchange
contracts in place to hedge expected transactions in other
currencies including EUR and CAD, with an unrealised total gain of
GBP230,000 as at 30 June 2021 (31 December 2020: GBP55,000). All
derivative financial instruments are measured using techniques
consistent with level 2 of the fair value hierarchy.
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Financial liabilities measured
at fair value through profit
or loss
Forward exchange contracts 1 10
Non-deliverable forward contracts 31
Currency options 2
----------- ------------
Total derivative assets 1 43
----------- ------------
18. Lease liabilities
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ------------
At the start of the period 4,445 4,836
Leases recognised on adoption of
IFRS 16 4,971
New finance leases recognised 42
Lease payments (411) (208) (1,190)
Interest expense 204 221 664
Early settlement (7)
Adjustment to lease term (1,035)
----------- ----------- ------------
At the end of the period 3,238 4,849 4,445
----------- ----------- ------------
Current 622 1,026 823
Non-current 2,616 3,823 3,622
----------- ----------- ------------
Total at the end of the period 3,238 4,849 4,445
----------- ----------- ------------
19. 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:
Amounts used (65) (65)
Increase in provision 618 325 194 1,137
--------------- ------------- ----------- --------
At 31 December 2020 1,610 418 194 2,222
Movements in the Consolidated
Statement of Profit and
Loss:
Unwinding of the discount 32 32
Amounts used (13) (75) (88)
Increase in provision 371 217 588
--------------- ------------- ----------- --------
At 30 June 2021 1,642 776 336 2,754
Current 776 336 1,112
Non-current 1,642 1,642
--------------- ------------- ----------- --------
At 30 June 2021 1,642 776 336 2,754
--------------- ------------- ----------- --------
Current 418 194 612
Non-current 1,610 1,610
--------------- ------------- ----------- --------
At 31 December 2020 1,610 418 194 2,222
--------------- ------------- ----------- --------
19. Provisions (continued)
Comparatives for the six months ended 30 June 2020 are provided
separately below:
Property Contract
Dilapidations Warranties Losses Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------- ----------- --------
At 1 January 2020 1,054 122 171 1,347
Movements in the Consolidated
Statement of Profit and
Loss:
Amounts used (38) (38)
Decrease in provision (47) (47)
Increase in provision 63 100 163
--------------- ------------- ----------- --------
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
--------------- ------------- ----------- --------
20. Share capital
2021 (unaudited) 2020 (audited)
---------------------- ------------------------
Number Number
of GBP0.10 of GBP0.10
Ordinary Ordinary
shares GBP'000 shares GBP'000
------------ -------- ------------ ----------
Allotted and fully paid
At 1 January 2021 / 1 July
2019 172,171,527 17,217 152,769,812 15,277
Allotted GBP0.10 Ordinary
shares on exercise of employee
share options 1,172,153 117 4,024,665 402
Allotted GBP0.10 Ordinary
shares on cash placing (see
below) 17,067,580 1,707 15,377,050 1,538
------------ -------- ------------ ----------
At 30 June 2021 / 31 December
2020 190,411,260 19,041 172,171,527 17,217
------------ -------- ------------ ----------
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.
Comparatives for the six months ended 30 June 2020 are provided
separately below:
2020 (unaudited)
------------------------
Number
of GBP0.10
Ordinary
shares GBP'000
------------ ----------
Allotted and fully paid
At 1 January 2020 153,949,521 15,395
Allotted GBP0.10 Ordinary shares on exercise
of employee share options 1,488,871 149
Allotted GBP0.10 Ordinary shares on cash
placing 15,377,050 1,538
------------ ----------
At 30 June 2020 170,815,442 17,082
------------ ----------
20. Share capital (continued)
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
GBP1,232,000 as at 30 June 2021 (31 December 2020: GBP1,142,000),
in respect of the acquisition of property, plant and equipment.
22. Related party transactions
As at 30 June 2021 the Group's related parties were its
Directors. During the period one Director exercised and retained
8,490 share options under the Company's employee share save scheme.
There were no other transactions between the Company and the
Directors during the period.
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.
Six months Six months 18 months
ended ended ended
30 June 30 June 31 Dec
2021 2020 2020
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ----------
Operating loss (7,602) (7,172) (17,634)
Depreciation and amortisation 2,751 1,745 4,804
Share-based payment charges 1,102 437 1,378
Unrealised losses/(gains) on forward
contracts (829) (64) 139
Exchange (gains)/losses 63 66 (55)
-------------------------------------- ----------- ----------- ----------
Adjusted EBITDA (4,515) (4,988) (11,368)
-------------------------------------- ----------- ----------- ----------
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.
Six months Six months 18 months
ended ended ended
30 June 30 June 31 Dec
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ----------- ----------
Net cash from operating activities (13,170) (1,875) (5,824)
Capital expenditure (total) (5,225) (4,411) (13,051)
Interest and lease payments (net) (279) 81 (64)
Exchange rate movements (63) 64 (139)
------------------------------------ ----------- ----------- ----------
Equity-free cash flow (18,737) (6,141) (19,078)
------------------------------------ ----------- ----------- ----------
INDEPENT REVIEW REPORT TO Ceres power holdings plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the interim financial report for the six
months ended 30 June 2021 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 six months ended 30 June
2021 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).
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END
IR DZGZLLLRGMZM
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September 30, 2021 02:00 ET (06:00 GMT)
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