TIDMIES
RNS Number : 1385N
Invinity Energy Systems PLC
28 September 2021
This announcement contains inside information
28 September 2021
Invinity Energy Systems plc
("Invinity" or the "Company" or the "Group")
Interim Results
Invinity Energy Systems plc (AIM:IES), leading global
manufacturer of vanadium flow batteries, is pleased to announce its
unaudited consolidated results for the six months ended 30 June
2021 (the "Period").
Invinity's management team will host a virtual results
presentation and interactive Q&A for shareholders on Thursday
30 September at 5 pm (UK Time). To register to join the session,
please do so via the registration page. Please note the deadline
for registration is 23:59 (UK Time) on Wednesday 29 September.
HIGHLIGHTS
Financial
-- Operating loss of GBP8.8m (H1 2020 GBP5.0m)
-- Inventory build-up of GBP8.6m (H1 2020 GBP0.1m)
-- Cash at 30 June 2021 GBP10.9m (H1 2020 GBP4.5m)
-- Loans and borrowings GBPnil (H1 2020 GBP0.9m)
Operational
The Period saw successful deployment of capital raised in
December 2020 to scale up Invinity's manufacturing and
organisational capabilities and progress with the delivery of key
strategic projects. Highlights include:
-- Expansion of Invinity's global manufacturing capabilities leading to a 100% increase in capacity.
-- Despite ongoing global supply chain disruption, significant progress toward the delivery of more than 16MWh of
key projects including:
o 5MWh Energy Superhub Oxford project - currently in commissioning
phase and scheduled for completion in Q4 2021. First stage
of commissioning expected to complete within weeks.
o 0.8MWh Scottish Water project - currently in delivery phase,
shipping expected to commence in early Q4 2021.
o 1.8MWh Flow + Hydrogen + Tidal project, Orkney Islands
- manufacturing phase nearing completion, delivery scheduled
to commence during Q4 2021.
o 8MWh Yadlamalka Energy solar-plus-storage power plant,
South Australia - manufacturing nearing completion, shipping
to site scheduled to commence later in Q4 2021. Delivery
remains contingent on the customer's receipt of local construction
approvals, which management have recently learned may require
more time. Due to this delay, Invinity anticipates that
the site may not be ready to receive delivery of product
until early 2022. Further updates in respect of this project's
timeline will be provided in due course.
o Various other projects for delivery across the USA and
Asia totalling 1.5MWh are in the final stages of manufacturing
with delivery expected to take place during Q4 2021 and
early 2022.
Commercial
Further to figures presented in the Group's 2020 Annual Report,
the Group's latest commercial opportunity pipeline as at 14
September 2021 is summarised below.
Base Upside Pipeline
--------------------------- -------- -------- ---------
14 September 2021 18.8 MWh 38.4 MWh 262.6 MWh
17 May 2021 (FY2020) 10.1 MWh 30.8 MWh 232.0 MWh
23 September 2020 (HY2020) 13.7 MWh 36.4 MWh 68.9 MWh
Year-on-Year Change +37% +5% +281%
--------------------------- -------- -------- -----------
Movements in the commercial opportunity pipeline primarily
reflect a significant increase in both the number and average size
of prospective projects that have been qualified by Invinity's
Commercial team over the course of 2021, driven in large part by
significantly increased inbound interest in the Group's products
and solutions. The number of opportunities categorised as either
"Upside" or "Base" has increased 40% since May 2021, whilst early
stage "pipeline" interest has continued to grow steadily, up 13%
over the same period.
Invinity remains encouraged by the volume of opportunities that
have progressed from "Pipeline", representing opportunities that
have met certain qualification thresholds, to the "Upside"
(expected to enter contracting in the near term) and "Base" (in
contracting) categorisations which include deals with significant
commercial traction and a high degree of certainty of near-term
close.
Key contracts closed during the Period included the 0.5 MWh sale
in California to Indian Energy LLC for a project supported by the
California Energy Commission announced on 17 May 2021. Cash
receipts for milestone payments during the Period totalled
GBP3.2m.
Further information is provided in the commercial update section
below.
Outlook
The global need for large-scale energy storage has become
clearer and more compelling since Invinity's last report, while
concerns about lithium-based systems are increasing, creating a
large market opportunity for a utility-grade alternative to lithium
storage. The Group is focused on establishing its position as the
leading provider of that alternative by developing and delivering
the Invinity VS3, our factory-built flow battery product.
Overcoming obstacles and delays, the Group has doubled its
manufacturing capacity, increased its product and project delivery
capabilities, instituted quality systems and scalable processes,
and advanced toward completion of signed projects.
Perhaps most significantly, the Group has entered into a Joint
Development and Commercialisation Agreement with Gamesa Electric
and Siemens Gamesa Renewable Energy to co-develop a next-generation
vanadium flow battery able to address projects at utility scale.
The gated development process is proceeding with the achievement of
the first milestone anticipated before the end of the year.
Finally, the Group has been progressing a number of sales
contracts, completion of which, management expect to be able to
announce soon.
Larry Zulch, Chief Executive Officer at Invinity said:
"We spent the Period building Invinity's ability to address the
global opportunities for non-lithium energy storage now and for
years to come. This vital 'behind the scenes' work is paying off as
we establish Invinity as foremost in providing a factory-built flow
battery product, progressing to our goal of being the global leader
in utility-grade energy storage. Our VS3 is finally shipping as a
standardized product into multiple projects, marking a highly
significant inflection point for the Group. I couldn't be more
pleased at the progress we've made, the size of the opportunity in
front of us, and our ability to address it."
Enquiries :
+44 (0)204 551
Invinity Energy Systems plc 0361
Larry Zulch, Chief Executive Officer
Peter Dixon-Clarke, Chief Financial Officer
Joe Worthington, Director of Communications
Canaccord Genuity (Nominated Adviser and Joint +44 (0) 20 7523
Broker) 8000
Henry Fitzgerald-O'Connor / James Asensio
VSA Capital (Financial Adviser and Joint Broker) +44 (0)20 3005
Andrew Monk / Simon Barton 5000
Hudson Sandler (Financial PR) +44(0) 207 796
Nick Lyon / Nick Moore 4133
STRATEGY UPDATE
During the first six months of 2021, the Group made tremendous
advances in its strategic goal of becoming the first battery
manufacturer to offer a truly viable alternative to existing
lithium-ion stationary energy storage systems. This strategy relies
on delivering a modular, value engineered, factory-built product -
not a prototype, one-off, custom installation, or experiment - and
doing so efficiently and in volume.
It is only when combined with energy storage that wind and solar
become a dispatchable asset rather than a periodic, and sometimes
unreliable, contributor to global energy needs. As wind and solar
take their proper place in the energy infrastructure, they must be
matched with utility-grade energy storage. Until Invinity unveiled
what we believe to be the industry's first flow battery delivered
as a turn-key, factory-built product, battery energy storage with
the following four primary characteristics was not available:
1) Safe. Utility grade storage must not pose a persistent fire
risk. Invinity's VS3 stores energy in an aqueous electrolyte which
simply cannot catch fire. Our products are designed with a "safety
in depth" philosophy.
2) Long life. Utility grade energy storage should last as long
as the renewable energy products it supports, which is generally 25
years for wind and solar products. The VS3 is designed to have a
25-year lifetime with no limitations on cycling.
3) Economical. The cost per unit of energy stored and discharged
must be lower than the alternatives. Based on research, the costs
per megawatt hour (MWh) of the Invinity VS3 are anticipated to be
less than lithium-ion systems over the lifetime of the battery.
4) Proven. Utility-grade energy storage must be proven in
operation in the field. Invinity has over 25 MWh installed or in
committed projects. We expect this "proven" quality to be
demonstrated upon the imminent completion of Energy Superhub
Oxford, the first of a number of projects the Group will complete
in 2021.
We don't believe any energy storage battery product without all
four of these characteristics can accurately call itself utility
grade. In this ability, Invinity stands alone.
Certainly, the timing is right to make utility-grade energy
storage available to the global market. In many of today's largest
energy markets, renewable penetration is currently constrained by
the inability to use all the energy produced when the wind is
blowing and the sun is shining, coupled with shortages when they
are not. The UK, for example, will require a three-fold increase
(an additional 200 GWh) to its grid capacity alone by 2050 to meet
its renewable targets. Utility grade energy storage is expected to
deliver a large proportion of this.
The amount of lithium needed to support the electrification of
transport will impact global supplies, reducing its availability
for the stationary storage applications where it would be in direct
competition with our flow batteries. Finally, increasing scepticism
about so-called "Blue Hydrogen" has propelled interest in "Green
Hydrogen" made from renewable energy, which requires energy storage
to provide a consistent electrical supply to the electrolysers as
demonstrated by the Group's announced project with EMEC, the
European Marine Energy Centre, which uses tidal power, smoothed by
our vanadium flow battery, to create Green Hydrogen.
Preparing the Group to properly meet this global opportunity for
stationary energy storage has been management's primary focus.
Overseen by a team with exceptional experience in flow batteries
and energy storage, the Group has deployed capital raised in
December 2020 to add employees in product development, project
management, quality systems, supply chain, manufacturing
operations, customer solutions, logistics, and more. We have
instituted systems, processes, and procedures to support the
GroupÕs ability to scale including progress toward ISO
certification. Plus we have efficiently built product now held as
inventory which will imminently convert to revenue.
The Group has been addressing ever-larger commercial
opportunities, progressing from hundreds of kilowatt hours (kWh) to
multiple megawatt hours (MWh). But to properly meet future global
demand for energy storage alternatives to lithium systems, the
Group must be able to address requirements measured in 100s of MWh
and even in gigawatt-hours (GWh).
Projects of this size are the goal of the Group's recently
announced Joint Development and Commercialisation Agreement (JDCA)
with Gamesa Electric and Siemens Gamesa Renewable Energy, leaders
in grid-scale power systems and wind turbines. Together, Invinity
and Gamesa Electric are developing the next generation of vanadium
flow batteries with an unprecedented ability to scale to meet the
largest, most significant requirements in the transition to a
renewable energy future. The joint development process progresses
as a sequence of defined milestones, the achievement of the first
of which is expected by the end of 2021. The Group has devoted
considerable resources to this effort and anticipates this
commitment to continue for the two years of joint product
development and the many years thereafter of joint
commercialisation.
The Group's efforts toward building a robust product and a
scalable organization will see its first external expression in
Energy Superhub Oxford and other projects the Group will deliver in
2021. Like many companies over the past 18 months, we have had to
overcome significant obstacles in completing and delivering our VS3
product. While the well-publicised global chip shortage, supply
chain disruptions, shipping issues, and component delivery delays
have put all our projects behind their original schedules, the
Invinity team has persevered and solved the issues, emerging
stronger and more confident than ever.
Everyone at Invinity is focused on realising the objective of
being the flow battery leader. Indeed, we believe we are at the
forefront of providing an alternative to lithium systems for
stationary battery storage, we are deploying a compelling product,
our market potential is of a very significant magnitude, our team
is experienced and dedicated, and we enjoy the support of our
shareholders and investors. We can't wait to show you what's
next.
COMMERCIAL UPDATE
2021 has been a year when energy shortages and grid disruptions,
from Texas to the UK, have repeatedly been front-page news.
Universally one of the best responses to instability is to build
resilience, meaning the addition of assets to the grid that can
overcome supply shortages and extreme weather. This has generated
significant discussion in our industry on the technical solutions
and business models that can be deployed in response. Few mature
energy storage solutions can deliver the same resilience and
flexibility to the electric grid as Invinity's safe, robust and
economical vanadium flow batteries.
As our market presence matures, Invinity is seeing an
ever-larger number of industry players adopt exactly this view. In
the days following the recent "thermal event" at a major battery
project in Southern California, for example, we saw a tremendous
increase in the number of enquiries seeking to understand how
Invinity's VFBs can provide an alternative long-duration,
high-throughput utility-grade energy storage solution with
significantly lower risk.
This growing awareness that our VFBs deliver capabilities above
and beyond those of other storage technologies in some of the
toughest, heaviest-duty applications is one of the major reasons
our commercial pipeline continues to grow. And while we continue to
have a healthy group of opportunities which we categorise as "Base"
(in contracting) and "Upside" (expected to enter contracting in the
near term), our customers, their engineers and constructors, and
the professionals who support them continue to manage the
disruptions of the last year, slowing the completion of new
contracts.
Nevertheless, we remain very positive about the opportunities in
the nearer categories of our pipeline and expect that several will
close before the end of 2021. There are some very exciting events
to come: As stimulus bills focused on infrastructure in the U.S.
and elsewhere become written into law, and as our lawmakers
themselves gather for COP26 a stone's throw away from Invinity's
newly expanded manufacturing facility in Bathgate Scotland, we
expect the impetus for existing and new customers to contract for
and to construct breakthrough storage solutions using Invinity's
VFBs will only accelerate.
Against that backdrop, our commercial opportunities as at 14
September are as follows:
Base Upside Pipeline
--------------------------- -------- -------- ---------
14 September 2021 18.8 MWh 38.4 MWh 262.6 MWh
17 May 2021 (FY2020) 10.1 MWh 30.8 MWh 232.0 MWh
23 September 2020 (HY2020) 13.7 MWh 36.4 MWh 68.9 MWh
Year-on-Year Change +37% +5% +281%
--------------------------- -------- -------- ---------
As we reported in our 2020 Annual Report, we continue to see an
increase in the average size of the opportunities in our commercial
pipeline, with the average opportunity value 17% higher than in May
2021. As noted at that time, those larger opportunities tend to
introduce complexities that present longer time horizons to close.
We are at the early stages of development of even larger and truly
exciting opportunities. As Invinity advances our VFBs to fulfil
their promise as the first batteries that are utility-grade at
utility-scale, we expect these enormous opportunities to become the
focus of our future efforts.
FINANCIAL REPORT
The six-months under review have been characterised by scaling
up manufacturing capability and expanding the business to service
the current and growing future demand for our product. To this end,
GBP11.2m of cash (GBP15.9m gross of receipts) was deployed in the
Period. Of this GBP15.9m, notably GBP8.6m was used to build the
inventory needed to deliver on our contracts and a further GBP3.9m
to continue building the leading team in our sector.
Income statement & balance sheet
The result for the six-month period was a loss of GBP8.8m
(against GBP5.0m loss for the comparative period and GBP24.3m loss
for the prior year).
With revenue on closed contracts not being booked until
commencement of delivery in the second half of this year, the
primary drivers of the result were administrative expenses of
GBP5.9m (H1 2020: GBP4.0m) and other items of GBP1.9m (H1 2020:
GBP1.0m). As ongoing product research and development is not
typically capitalised, it is included within administrative
expenses under the GroupÕs accounting policies.
Other items of GBP1.9m relates primarily to an increase in the
provision for onerous contracts, which is mainly due to global cost
increases in the supply chain being experienced by all
manufacturers over the last twelve-months, particularly for
shipping from China, which, for example, increased six-fold from
approximately $3,700 to $21,000 per 40-foot container from China to
Europe.
As planned, we have been deploying cash to deliver on contracts
and build our ongoing capabilities. The main balance sheet
movements have therefore been the GBP8.6m build of completed and
in-process Inventory, a GBP3.0m increase in contract liabilities
representing milestone payments on closed contacts received before
revenue can be recognised for accounting, and the GBP11.2m use of
funds (see table below).
Current terms of trade and the need for early orders for
long-lead items mean that inventory payments are initially recorded
as prepayments within other current assets until the goods or
services are transferred to the Group, at which point they are
classified as inventory until transferred to the customer. At the
Period end, GBP4.6m of inventory related payments were classified
as prepayments and GBP5.5m as inventory, before allocated contract
losses.
Use of funds
A summary of the payments and receipts during the six-month
period is as follows:
Payments and receipts GBP'm
--------------------------------------------- ------
Inventory (including ESO & Yadlamalka) 8.6
Property, plant and equipment 0.6
Product related expenditure (including R&D) 0.8
Payroll 3.9
Other 2.0
--------------------------------------------- ------
15.9
Receipts (4.7)
--------------------------------------------- ------
11.2
--------------------------------------------- ------
Payroll primarily reflects the investment in human resource
within the Group to support growth targets with employee headcount
increasing from 103 at the start of the Period to 132 at the end.
The increased headcount has allowed for the creation of a specific
Customer Operations department and all but one of the new hires
across the Group are product facing, as set out below:
Headcount 1 January 30 June
2021 2021
------------------------------------ ---------- ----------------
Operations 20 48
Commercial 17 17
Product development & technology 19 27
Solutions engineering and customer
operations 14 26
Other 13 14
------------------------------------ ---------- ----------------
103 132
------------------------------------ ---------- ----------------
Receipts include GBP1.0m from the exercise of warrants under the
Riverfort facility and GBP0.5m of UK Government grants. The GBP3.2m
balance relates to milestone payments on closed contracts.
Going concern
The Group is debt free and had cash balances of GBP10.9m and
GBP6.1m at the end of June 2021 and August 2021 respectively. It
has closed contracts to the value of approximately GBP13.5m, of
which GBP5.7m had been received by the end of June 2021 with most
of the GBP7.8m balance expected by the end of June 2022. Most of
the inventory payments required to deliver those contracts have
already been made.
The Group has a growing pipeline of future sales (see above)
with 57.2MWh of potential new contracts in Base and Upside and a
further 262.6 MWh in Pipeline. This continued increase has largely
been driven by the rapidly improving macro environment, both in
terms of total addressable market and active and growing government
support in its key markets.
The Group continually reviews its funding position and the
funding options that are available to it. Based on this ongoing
review and subject to the near-term rate of customer deliveries and
new closed contracts, the Group expects to require additional
finance within the next six months, assuming the continued rate of
growth. The expectation is that additional finance will be
available from both equity and non-equity sources or a combination
of the two.
Having taken all of the above factors into account, the
directors continue to believe it is appropriate to prepare these
financial statements on a going concern basis, noting the material
uncertainty arising from the need to secure additional funding
within the coming months.
Financial outlook
The outlook for the Group remains positive both at a Group level
and a macro level.
At the Group level, a further GBP7.8m of receipts are expected
on closed contracts and revenue for most of those contracts is
expected to be recognised in the second half of this year. Site
delays (see above) at Yadlamalka mean that the revenue, of about
GBP6.7m, is unlikely to be recognised on that contract until
2022.
At a macro level, the growing imperative for a utility grade
alternative to lithium places the Group in exactly the right place
to take full advantage both in the near term and beyond.
Unaudited, consolidated statement of comprehensive loss
For the six months ended 30 June 2021
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Continuing operations Note GBP'000 GBP'000 GBP'000
--------------------------------------------- ----- ----------- ------------ -------------
Revenue 3 15 67 406
Cost of sales 5 (756) (91) (1,221)
--------------------------------------------- ----- ----------- ------------ -------------
Gross loss (741) (24) (815)
Operating costs
Administrative expenses 6 (5,852) (3,848) (9,593)
Other items of operating income and
expense 7 (1,856) (1,047) (9,822)
--------------------------------------------- ----- ----------- ------------ -------------
Loss from operations (8,449) (4,919) (20,230)
Finance income - 1 1
Finance costs (17) (67) (2,298)
Loss on foreign currency transactions (343) (42) (1,744)
--------------------------------------------- ----- ----------- ------------ -------------
Net finance costs (360) (108) (4,041)
--------------------------------------------- ----- ----------- ------------ -------------
Loss before income tax (8,809) (5,027) (24,271)
Income tax expense - (1) -
--------------------------------------------- ----- ----------- ------------ -------------
Loss from continuing operations (8,809) (5,028) (24,271)
Loss for the year (8,809) (5,028) (24,271)
Other comprehensive loss
Items that may subsequently be reclassified
to profit or loss:
Exchange difference on the translation
of foreign operations 26 1,094 (2,162)
--------------------------------------------- ----- ----------- ------------ -------------
Total comprehensive loss for the year (8,783) (3,934) (26,433)
--------------------------------------------- ----- ----------- ------------ -------------
Basic loss per share in pence
From continuing operations 8 (10.1) (8.9) (44.3)
------------------------------- ---- ----------- ---------- -------
Diluted loss per share in pence
From continuing operations 8 (9.58) (8.9) (44.3)
--------------------------------- ---- --------- --------- -------
The above unaudited consolidated statement of comprehensive loss
should be read in conjunction with the accompanying notes.
Unaudited, consolidated statement of financial position
At 30 June 2021
Restated
30 June 30 June 31 December
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
-------------------------------------- ------ ---------- ---------- ------------
Non-current assets
Property, plant and equipment 11 1,194 683 695
Right-of-use assets 967 881 1,014
Goodwill and other intangible assets 10 23,868 35,113 24,127
-------------------------------------- ------ ---------- ---------- ------------
Total non-current assets 26,029 36,677 25,836
Current assets
Inventories 15 3,379 689 905
Other current assets 13 6,965 1,201 1,414
Contract assets 4 2 - 5
Trade receivables 4,12 173 42 33
Cash and cash equivalents 14 10,942 4,503 21,953
-------------------------------------- ------ ---------- ---------- ------------
Total current assets 21,461 6,435 24,310
-------------------------------------- ------ ---------- ---------- ------------
Total assets 47,490 43,112 50,146
-------------------------------------- ------ ---------- ---------- ------------
Current liabilities
Trade and other payables 16 (3,340) (1,813) (2,468)
Contract liabilities 4 (5,656) (970) (2,644)
Lease liabilities (240) (167) (161)
Provisions 4 (2,462) (748) (1,927)
-------------------------------------- ------ ---------- ---------- ------------
Total current liabilities (11,698) (3,698) (7,200)
Net current assets 9,763 2,737 17,110
Non-current liabilities
Lease liabilities (514) (689) (595)
-------------------------------------- ------ ---------- ---------- ------------
Total non-current liabilities (514) (689) (595)
-------------------------------------- ------ ---------- ---------- ------------
Total liabilities (12,212) (4,387) (7,795)
-------------------------------------- ------ ---------- ---------- ------------
Net assets 35,278 38,725 42,351
-------------------------------------- ------ ---------- ---------- ------------
Share capital and share premium 163,399 138,544 162,415
Share based payment reserve 4,541 2,969 3,762
Accumulated losses (130,994) (102,942) (122,185)
Other reserves (1,668) 154 (1,641)
-------------------------------------- ------ ---------- ---------- ------------
Total equity 35,278 38,725 42,351
-------------------------------------- ------ ---------- ---------- ------------
The above unaudited consolidated statement of financial position
should be read in conjunction with the accompanying notes.
Unaudited consolidated statement of changes in equity
For the six months ended 30 June 2021
Share
capital Share-based
and share payment Accumulated Translation Other
premium reserve losses reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
At 1 January 2021 162,415 3,762 (122,185) (1,680) 39 42,351
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
Total comprehensive
loss for the year - - (8,811) - - (8,811)
Other comprehensive
loss
Foreign currency translation
differences - - - (26) - (26)
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
Total comprehensive
loss for the year - (8,811) (26) (8,837)
Transaction with owners
in their capacity as
owners
Contribution of equity,
net of transaction
costs 975 - - - - 975
Exercise of share options 9 17 - - - 26
Share based payments - 762 - - - 762
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
Total contributions
by and distributions
to owners 984 779 - - - 1,763
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
At 30 June 2021 163,399 4,541 (130,996) (1,706) 39 35,277
------------------------------ ----------- ------------ ------------ ------------- -------------- ------------
Share
capital
and Share-based
share payment Accumulated Translation Other
premium reserve losses reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
At 1 January 2020 109,192 2,250 (97,914) 482 (1,422) 12,588
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
Total comprehensive
loss for the year - - (5,028) - - (5,028)
Other comprehensive
loss
Foreign currency translation
differences - - - 1,094 1,094
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
Total comprehensive
loss for the year - - (5,028) 1,094 (3,934)
Transaction with owners
in their capacity as
owners
Contribution of equity,
net of transaction
costs 29,352 - - - - 29,352
Share based payments - 719 - - - 719
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
Total contributions
by and distributions
to owners 29,352 719 - - - 30,071
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
At 30 June 2020 138,544 2,969 (102,942) 1,576 (1,422) 38,725
------------------------------ --------- ------------ ------------ ------------ ---------- ---------
Share
capital Share-based
and share payment Accumulated Translation Other
premium reserve losses reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
At 1 January 2020 109,192 2,250 (97,914) 482 (1,422) 12,588
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
Total comprehensive
loss for the year - - (24,271) - - (24,271)
Other comprehensive
loss
Foreign currency translation
differences - - - (2,162) - (2,162)
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
Total comprehensive
loss for the year - (24,271) (2,162) (26,433)
Transaction with owners
in their capacity
as owners
Contribution of equity,
net of transaction
costs 31,734 - - - - 31,734
Issue of ordinary
shares as consideration
for a business combination,
net of transaction
costs 21,403 - - - - 21,403
Exercise of share
options 86 - - - - 86
Fair value realisation
on note conversion - - - - 1,461 1,461
Share based payments - 1,512 - - - 1,512
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
Total contributions
by and distributions
to owners 53,223 1,512 - - 1,461 56,196
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
At 31 December 2020 162,415 3,762 (122,185) (1,680) 39 42,351
----------------------------- ----------- ------------ ------------- ---------------- ---------- ---------------
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
Consolidated statement of cashflows
For the six months ended 30 June 2021
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
--------------------------------------------- ----- ----------- ------------ -------------
Cashflows from operating activities
Cash used in operations 9 (11,497) (6,032) (10,885)
Interest received - - 1
Interest paid (1) (2) (32)
Income taxes paid - (1) -
--------------------------------------------- ----- ----------- ------------ -------------
Net cash outflows from operating activities (11,498) (6,035) (10,916)
--------------------------------------------- ----- ----------- ------------ -------------
Cashflows from investing activities
Acquisition of property plant and equipment 11 (609) (202) (349)
Acquisition of intangible assets 10 (19) - (9)
Net cash outflows from investing activities (628) (202) (358)
--------------------------------------------- ----- ----------- ------------ -------------
Cashflows from financing activities
Payment of lease liabilities (17) (82) (163)
Proceeds from the exercise of share
warrants 975 - -
Proceeds from the issue of share capital,
net of transaction costs - 7,350 28,915
Proceeds from the issuance of convertible
notes, net of transaction costs - - 1,944
Proceeds from borrowings - 862 -
Acquisition of cash through business
combination - 1,279 1,264
Proceeds from the exercise of share
options 1 - 37
--------------------------------------------- ----- ----------- ------------ -------------
Net cash inflows from financing activities 959 9,409 31,997
--------------------------------------------- ----- ----------- ------------ -------------
Net (decrease)/increase in cash and
cash equivalents (11,167) 3,172 20,723
Cash and cash equivalents at the beginning
of the year 21,953 1,243 1,243
Effects of exchange rate changes on
cash and cash equivalents 156 88 (13)
--------------------------------------------- ----- ----------- ------------ -------------
Cash and cash equivalents at the end
of the year 10,942 4,503 21,953
--------------------------------------------- ----- ----------- ------------ -------------
The above statement of consolidated cashflows should be read in
conjunction with the accompanying notes.
Notes
(forming part of the of the consolidated historical financial
information)
1 General information
Invinity Energy Systems plc (the 'company') is a public limited
company incorporated in Jersey under the Companies (Jersey) Law
1991. The company's registered address is 3rd floor, Standard Bank
House, 47-49 La Motte Street, St. Helier, Jersey, JE2 4SZ. The
company is listed on the Alternative Investment Market of the
London Stock Exchange with the ticker symbol IES.L.
The principal activities of the company and its subsidiaries
(together, the 'Group') relate to the manufacture and sale of
vanadium flow battery systems together with associated
installation, warranty and other services.
2 Summary of significant accounting policies
Basis of preparation
This unaudited condensed consolidated interim financial
information for the six-months ended 30 June 2021 (the 'interim
financial information') has been prepared in accordance with IAS
34, 'Interim financial reporting' as adopted by the European Union.
The financial information should be read in conjunction with the
Group's annual financial statements for the year ended 31 December
2020, that were prepared in accordance with International Financial
Reporting Standards as adopted by the European Union.
The annual report and financial statements for the year ended 31
December 2020 are available on the company's website
(www.invinity.com).
This interim financial information has been prepared using the
historical cost basis of accounting. The accounting policies
applied across all the Group's subsidiaries when preparing the
financial information are consistent with those adopted and
disclosed in the annual financial statements for the year ended 31
December 2020. The accounting policies have been consistently
applied across all Group entities for the purpose of producing this
interim financial information.
The financial information included in this document does not
comprise statutory accounts within the meaning of Companies
(Jersey) Law 1991. The comparative figures for the financial year
ended 31 December 2020 are not the company's statutory accounts for
that financial year within the meaning of Companies (Jersey) Law
1991. Those accounts have been reported on by the company's
auditors and delivered to the Jersey Financial Services
Commission.
The report of the auditors included in the annual report and
financial statements for the year ended 31 December 2020 was
unqualified. However, the auditors' report did contain an emphasis
of matter related to the application of the going concern basis of
preparation.
The Group's business activities, together with factors likely to
affect its future development, performance and position, are set
out in the operations and financial review sections of this
report.
The financial position of the Group, its cash flows and
liquidity position are described in the financial review
section.
Going concern
The Group is debt free and had cash balances of GBP10.9m and
GBP6.1m at the end of June 2021 and August 2021 respectively. It
has closed contracts to the value of approximately GBP13.5m, of
which GBP5.7m had been received by the end of June 2021 with most
of the GBP7.8m balance expected by the end of June 2022. Most of
the inventory payments required to deliver those contracts have
already been made.
The Group has a growing pipeline of future sales (see above)
with 57.2MWh of potential new contracts in Base and Upside and a
further 262.6 MWh in Pipeline. This continued increase has largely
been driven by the rapidly improving macro environment, both in
terms of total addressable market and active and growing government
support in its key markets.
The Group continually reviews its funding position and the
funding options that are available to it. Based on this ongoing
review and subject to the near-term rate of customer deliveries and
new closed contracts, the Group expects to require additional
finance within the next six months, assuming the continued rate of
growth. The expectation is that additional finance will be
available from both equity and non-equity sources or a combination
of the two.
Having taken all of the above factors into account, the
directors continue to believe it is appropriate to prepare these
financial statements on a going concern basis, noting the material
uncertainty arising from the need to secure additional funding
within the coming months.
Estimates and judgements
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities and of items of income and
expense. Actual results may differ from these estimates.
In preparing this interim financial information, the significant
judgements made by management in applying the Group's accounting
policies were the same as those that applied to the consolidated
financial statements for the year ended 31 December 2020.
Similarly, the key sources of estimation uncertainty related to the
financial information were the same as those encountered when
applying the Group's accounting policies in relation to the
preparation of the consolidated financial statements for the year
ended 31 December 2020.
Principal risks and uncertainties
In preparing the condensed consolidated financial information
management is required to consider the principal risks and
uncertainties facing the Group. In management's opinion the
principal risks and uncertainties facing the Group are unchanged
since the preparation of the consolidated financial statements for
the year ended 31 December 2020. Those risks and uncertainties,
together with management's response to them are described in the
risk review section of the annual report and financial statements
for the year ended 31 December 2020.
Accounting policies
The accounting policies applied in this condensed consolidated
financial information are consistent with those applied in
preparing the financial statements for the year ended 31 December
2019.
Reclassification of prior year figures
Comparative figures for June 2020 have been restated, where
necessary, to conform with the presentation of this period and 31
December 2020 results.
3 Revenue from contracts with customers and income from
government grants
Segment information
The Group derives revenue from a single business segment, being
the manufacture and sale of vanadium flow battery systems and
related hardware together with the provision of services directly
related to battery systems sold to customers.
The Group is organised internally to report on its financial and
operational performance to its chief operating decision maker,
which has been identified as the three executive directors as a
group.
All revenues were derived from continuing operations.
Revenue from contracts with customers
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------------------- ----------- ------------ -------------
Battery systems and associated control
systems - - 369
Integration, commissioning and other related
services 14 - 34
Other services 1 67 3
------------------------------------------------- ----------- ------------ -------------
Total revenue in the statement of comprehensive
loss 15 67 406
------------------------------------------------- ----------- ------------ -------------
Grant income other than revenue
The Group receives grant income to help fund certain projects
that are eligible for support, typically in the form of innovation
grants. The Group also received grant income related to operating
costs under government subsidy programmes as part of national COVID
response efforts. The total grant income that was received in the
year was as follows:
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Grant income received GBP'000 GBP'000 GBP'000
------------------------------------------ ----------- ------------ -------------
Business support grants against cost of
sales Ð COVID-19 - - 17
Business support grants against employee
costs Ð COVID-19 - - 240
Grants for research and development 471 147 203
Economic and social development grants - 35 35
------------------------------------------ ----------- ------------ -------------
Total government grants received 471 182 495
------------------------------------------ ----------- ------------ -------------
4 Contract related balances
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
---------------------------------------------- ---------- -------------- ------------
Amounts due from contract customers included
in trade receivables 173 42 33
Contract assets (accrued income for work
done and not yet invoiced) 2 - 5
Contract liabilities (deferred revenue
related to contract advances) (5,656) (970) (2,644)
---------------------------------------------- ---------- -------------- ------------
Net position of sales contracts (5,481) (928) (2,606)
---------------------------------------------- ---------- -------------- ------------
No revenue was recognised in the current or prior periods that
was recorded as a contract liability at the end of the previous
period.
Provisions related to contracts with customers
Provision
Warranty for onerous
provision contracts Total
GBP'000 GBP'000 GBP'000
------------------------------------------------ ------------ ------------- ---------
At 1 January 2021 824 1,103 1,927
Charged/ credited to profit and loss:
Provision created in the period 318 1,003 1,321
Unused amounts reversed/ unwind of provision (2) (353) (355)
Amounts used in the period (431) - (431)
------------------------------------------------ ------------ ------------- ---------
At 30 June 2021 709 1,753 2,462
------------------------------------------------ ------------ ------------- ---------
Provision
Warranty for onerous
provision contracts Total
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------- ---------
At 1 January 2020 95 - 95
Acquisition of subsidiaries 191 - 191
Charged/ credited to profit and loss:
Provision created in the period 136 358 494
Amounts used in the period (32) - (32)
--------------------------------------- ------------ ------------- ---------
At 30 June 2020 390 358 748
--------------------------------------- ------------ ------------- ---------
Provision
Warranty for onerous
provision contracts Total
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------- ---------
At 1 January 2020 95 - 95
Acquisition of subsidiaries 1,011 39 1,050
Charged/ credited to profit and loss:
Provision created in the period 340 1,084 1,424
Unused amounts reversed (51) - (51)
Amounts used in the period (571) (20) (591)
--------------------------------------- ------------ ------------- ---------
At 31 December 2020 824 1,103 1,927
--------------------------------------- ------------ ------------- ---------
Warranty provision
The warranty provision represents management's best estimate of
the costs anticipated to be incurred related to known warranty
claims from customers in respect of products sold that remain in
their warranty period. It also includes a best estimate of the
costs expected to be incurred in respect of claims that may arise
in the future related to products already sold to customers.
The estimate of future warranty costs is updated periodically
based on the company's actual experience of warranty claims from
customers. The element of the provision that is related to
potential future claims is based on management's experience and is
judgemental in nature. As for any product warranty, there is an
inherent uncertainty around the likelihood and timing of a fault
occurring that would cause further work to be undertaken or the
replacement of equipment parts.
A standard warranty of up to two years from the date of
commissioning is provided to all customers on products sold and is
included in the original cost of the product. Customers are also
able to purchase extended warranties that extend the warranty
period for up to a total of ten years.
Provision for contract losses
A provision is established for contract losses when it becomes
known that a commercial contract has become onerous. A contract is
onerous when the unavoidable costs of fulfilling the company's
obligations under a contract are greater than the revenue that will
be earned from the contract.
The unavoidable costs of fulfilling contract obligations will
include both direct and indirect costs. Any provision made for
contract losses will similarly include provision for both direct
and indirect costs to fulfil the company's remaining obligations
under a contract.
The creation of an additional provision is recognised
immediately in profit and loss. The provision is used to offset
costs that are incurred as the contract moves to completion.
5 Cost of sales
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ------------ -------------
Movement in inventories of finished battery
systems - - 436
Production costs 318 91 374
Depreciation of production facilities,
equipment and intangibles 77 - 107
Movement in provisions for warranty costs 361 - 304
--------------------------------------------- ----------- ------------ -------------
Total cost of sales 756 91 1,221
--------------------------------------------- ----------- ------------ -------------
6 Administrative expenses
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------------ ----------- ------------ -------------
Staff costs 3,669 1,781 5,811
Research and non-capitalised development
costs 288 662 1,099
Professional fees 371 381 960
Sales and marketing costs 222 43 96
Facilities and office costs 358 557 787
Other administrative expenses 944 424 840
------------------------------------------ ----------- ------------ -------------
Total administrative expenses 5,852 3,848 9,593
------------------------------------------ ----------- ------------ -------------
7 Other items of operating income and expense
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
----------------------------------------------- ----------- ------------ -------------
Income
Gain on disposal of scrap inventory and
equipment - - 27
Expense
Merger transaction costs - (1,047) (1,412)
Provision for onerous contracts, net of
amounts unwound (700) - (1,064)
Impairment of inventory to net realisable
value (1,061) - (1,019)
Accelerated amortisation of development
costs - (6,138)
Impairment of property, plant and equipment - (56)
Impairment of obsolete inventory and disposal
of scrap inventory (95) - (8)
Abnormal unabsorbed production overheads - (152)
----------------------------------------------- ----------- ------------ -------------
Total other operating income and expense
(net) (1,856) (1,047) (9,822)
----------------------------------------------- ----------- ------------ -------------
8 Loss per share
The weighted average number of shares used to calculate basic
and diluted loss per share as presented in the consolidated
statement of comprehensive loss was as follows:
Restated
Six Six
months months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------------- ----------- ----------- -------------
In issue at 1 January 85,900,459 19,025,009 19,025,799
Shares issued in the year - weighted
average 807,258 25,374,448 40,180,789
------------------------------------------- ----------- ----------- -------------
Weighted average shares in issue at the
end of the period 86,707,717 44,399,457 59,206,588
Effect of employee share options and
warrants not exercised - - 431,089
Potentially dilutive 5,197,536
------------------------------------------- ----------- ----------- -------------
Weighted average number of diluted shares
at the period end 91,905,253 44,399,457 59,637,677
------------------------------------------- ----------- ----------- -------------
Additional potential shares used in the calculation of diluted
earnings per share primarily relate to potential shares that may be
issued in satisfaction of in-the-money employee share options. In
addition, potentially dilutive shares also relate to warrants to
subscribe for ordinary shares in the company that were issued for
services or related to financing transactions that have an exercise
price lower than the quoted share price and remain outstanding at
the relevant period end.
Where additional potential shares have an anti-dilutive impact
on the calculation of loss per share calculation, such potential
shares are excluded from the weighted average number of shares used
in the calculation.
Additional potential shares are anti-dilutive where their
inclusion in the calculation of loss per share results in a lower
loss per share.
9 Cashflows from operating activities
Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------------------- ----------- ------------ -------------
Loss after income tax (8,809) (5,028) (24,271)
Adjustments for:
Depreciation and amortisation 188 267 577
Impairment of property plant and equipment - - 56
Accelerated amortisation of intangible
asset - - 6,138
Loss on disposal of property plant and
equipment - - (6)
Impairment of inventory 1,156 - 1,027
Gain on disposal of scrap inventory - - 27
Taxation - 1 -
Equity settled share-based payment expenses 786 (207) 707
Equity issued in lieu of service - 61 68
Equity settled transaction costs on acquisition
of a subsidiary - - (456)
Equity settled interest and transaction
costs on convertible notes - - (592)
Fair value adjustment on convertible notes
and warrants - - 300
Net finance costs/ income 17 108 2,297
Net foreign exchange differences 62 - (1,220)
--------------------------------------------------- ----------- ------------ -------------
(6,600) (4,798) (15,348)
--------------------------------------------------- ----------- ------------ -------------
Change in operating assets and liabilities
Decrease in inventories (3,630) (99) (1,359)
Decrease in contract assets 3 - 53
(Increase)/ decrease in trade and other
receivables (140) (2) 115
Decrease in other current assets (5,551) (810) (750)
Increase/ (decrease) in trade and other
payables 874 (1,448) 3,348
Decrease in warranty provision (115) - (380)
Increase in onerous contract provision 650 463 1,060
Increase in contract liabilities 3,012 662 2,376
--------------------------------------------------- ----------- ------------ -------------
(4,897) (1,234) 4,463
--------------------------------------------------- ----------- ------------ -------------
Cash used in operations (11,497) (6,032) (10,885)
--------------------------------------------------- ----------- ------------ -------------
10 Goodwill and intangible assets
Software
Development Patents and domain
Goodwill costs and certifications names Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 1 January 2021
Cost 23,944 - 203 29 24,176
Accumulated amortisation - - (30) (19) (49)
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 23,944 - 173 10 24,127
Period ended 30 June 2021
Opening net book amount 23,944 - 173 10 24,127
Effect of movements in foreign
exchange (254) - - - (254)
Additions - - - 19 19
Amortisation charge - - (20) (4) (24)
-------------------------------- --------- ------------ -------------------- ------------ ---------
Closing net book amount 23,690 - 153 25 23,868
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 30 June 2021
Cost 23,690 - 203 48 23,941
Accumulated amortisation - - (50) (23) (73)
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 23,690 - 153 25 23,868
-------------------------------- --------- ------------ -------------------- ------------ ---------
Software
Development Patents and domain
Goodwill costs and certifications names Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 1 January 2020
Cost 6,971 5,818 - - 12,789
Accumulated amortisation - - - - -
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 6,971 5,818 - - 12,789
Period ended 30 June 2020
Opening net book amount 6,971 5,818 - - 12,789
Acquisition of subsidiaries 21,283 - - - 21,283
Effect of movements in foreign
exchange 651 390 - - 1,041
-------------------------------- --------- ------------ -------------------- ------------ ---------
Closing net book amount 28,905 6,208 - - 35,113
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 30 June 2020
Cost 28,905 6,208 - - 35,113
Accumulated amortisation - - - - -
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 28,905 6,208 - - 35,113
-------------------------------- --------- ------------ -------------------- ------------ ---------
Software
Development Patents and domain
Goodwill costs and certifications names Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 1 January 2020
Cost 6,971 5,818 - - 12,789
Accumulated amortisation - - - - -
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 6,971 5,818 - - 12,789
-------------------------------- --------- ------------ -------------------- ------------ ---------
Year ended 31 December 2020
Opening net book amount 6,971 5,818 - - 12,789
Effect of movements in foreign
exchange (1,233) 320 - 1 (912)
Acquisition of subsidiaries 18,206 - 203 2 18,411
Additions - - - 9 9
Amortisation charge - - (30) (2) (32)
Accelerated amortisation - (6,138) - - (6,138)
-------------------------------- --------- ------------ -------------------- ------------ ---------
Closing net book amount 23,944 - 173 10 24,127
-------------------------------- --------- ------------ -------------------- ------------ ---------
At 31 December 2020
Cost 23,944 - 203 12 24,159
Accumulated amortisation - - (30) (2) (32)
-------------------------------- --------- ------------ -------------------- ------------ ---------
Net book amount 23,944 - 173 10 24,127
-------------------------------- --------- ------------ -------------------- ------------ ---------
Goodwill
The opening goodwill balance on 1 January 2021 represents
goodwill recognised in the year ended 31 December 2015 on the
completion of the step acquisition by the company of Renewable
Energy Dynamics Holdings Limited (REDH), the holding company for
the redT energy storage business and goodwill related to the
business combination transaction with Avalon that completed on 1
April 2020.
All goodwill is tested annually for potential impairment. At 30
June 2021, goodwill was tested for impairment using a fair value
less costs of disposal methodology by reference to the company's
quoted market capitalisation using the price of 117 pence per share
at that date. No impairment loss was identified in relation to
goodwill.
Patents and certifications
Patents and certification acquired in the 1 April 2020 merger
transaction with Avalon were stated at their assessed fair value in
the purchase price allocation used for consolidation accounting.
There have been no events or circumstances since the merger that
would indicate that the carrying value of patents and
certifications may be impaired at 30 June 2021.
Development Costs
The development costs represent costs associated with the redT
Gen 3 vanadium flow battery that has been superseded by the
Invinity VS3 battery system were impaired in full in the period
ended 31 December 2020.
11 Property plant and equipment
Computer
and office Leasehold Vehicles
equipment improvement and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021
Cost 748 513 753 2,014
Accumulated depreciation and impairment (694) (357) (268) (1,319)
----------------------------------------- ------------ ------------- --------------- ---------
Net book amount 54 156 485 695
Period ended 30 June 2021
Opening net book amount 54 156 485 695
Effect of movement in foreign exchange - 1 3 4
Additions and transfers 60 23 526 609
Depreciation charge (22) (22) (70) (114)
----------------------------------------- ------------ ------------- --------------- ---------
Closing net book amount 92 158 944 1,194
At 30 June 2021
Cost 808 537 1,282 2,627
Accumulated depreciation and impairment (716) (379) (338) (1,433)
----------------------------------------- ------------ ------------- --------------- ---------
Net book amount 92 158 944 1,194
----------------------------------------- ------------ ------------- --------------- ---------
Computer
and office Leasehold Vehicles
equipment improvement and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2020
Cost 747 302 105 1,154
Accumulated depreciation and impairment (595) (242) (63) (900)
----------------------------------------- ------------- --------------- --------------- -------------
Net book amount 152 60 42 254
Period ended 30 June 2020
Opening net book amount 152 60 42 254
Effect of movement in foreign exchange (1) 1 3 3
Acquisition of subsidiaries 22 86 289 397
Additions and transfers 4 53 145 202
Disposals (21) - - (21)
Depreciation charge (62) (58) (32) (152)
----------------------------------------- ------------- --------------- --------------- -------------
Closing net book amount 94 142 447 683
At 30 June 2020
Cost 741 451 543 1,735
Accumulated depreciation and impairment (657) (300) (95) (1,052)
----------------------------------------- ------------- --------------- --------------- -------------
Net book amount 84 151 448 683
----------------------------------------- ------------- --------------- --------------- -------------
Computer
and office Leasehold Vehicles
equipment improvement and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------ ------------- --------------- ---------
At 1 January 2020
Cost 747 302 105 1,154
Accumulated depreciation and impairment (595) (242) (63) (900)
----------------------------------------- ------------ ------------- --------------- ---------
Net book amount 152 60 42 254
Year ended 31 December 2020
Opening net book amount 152 60 42 254
Effect of movement in foreign exchange 2 (1) (1) -
Acquisition of subsidiaries 22 86 364 472
Additions and transfers 20 90 239 349
Disposals (6) - - (6)
Depreciation charge (136) (79) (103) (318)
Impairment charge - - (56) (56)
----------------------------------------- ------------ ------------- --------------- ---------
Closing net book amount 54 156 485 695
At 31 December 2020
Cost 748 513 753 2,014
Accumulated depreciation and impairment (694) (357) (268) (1,319)
----------------------------------------- ------------ ------------- --------------- ---------
Net book amount 54 156 485 695
----------------------------------------- ------------ ------------- --------------- ---------
The Group has no assets pledged as security. No amounts of
interest have been capitalised within property, plant and equipment
at 30 June 2021 (31 December 2020: GBPnil, 30 June 2020:
GBPnil).
For the period ended 30 June 2021 manufacturing equipment
includes GBP326,000 (31 December 2020: GBPnil, 30 June 2020:
GBPnil) of assets under construction that have not been put into
service and depreciated.
Impairment loss
The impairment loss related to vehicles and equipment recognised
in the year ended 31 December 2020 was due to assets taken out of
service, and hence written down, when new versions of the same
assets came into service. The impairment loss was recognised within
other items of operating income and expense in the consolidated
statement of comprehensive loss for the year ended 31 December
2020.
Acquisition of subsidiaries
Assets acquired in 2020 relate to the combination transaction
with Avalon that completed on 1 April 2020 .
12 Trade and other receivables
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- --------- ------------
Trade receivables from contracts with
customers 173 59 33
Provision for doubtful receivables - (17) -
--------------------------------------- ---------- --------- ------------
Total trade and other receivables 173 42 33
--------------------------------------- ---------- --------- ------------
Trade receivables are amounts due from customers for sales of
vanadium flow battery systems in the ordinary course of
business.
Trade receivables do not bear interest and generally have 30-day
payment terms and are therefore classified as current. The actual
credit loss in the six months to 30 June 2021 was determined to be
0% of total sales (year ended 31 December 2020: 0%).
13 Other current assets
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
-------------------------------- ---------- --------- ------------
Prepayments and deposits 5,427 591 1,108
Government grants receivable 267 72 -
Tax credits Ð recoverable 371 126 127
Due from joint venture 436 - 168
Other receivables 464 412 11
-------------------------------- ---------- --------- ------------
Total other current assets 6,965 1,201 1,414
-------------------------------- ---------- --------- ------------
14 Cash and cash equivalents
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------- ---------- --------- ------------
Cash at bank and in hand 10,752 4,208 21,760
Short term investments 190 295 193
--------------------------------- ---------- --------- ------------
Total cash and cash equivalents 10,942 4,503 21,953
--------------------------------- ---------- --------- ------------
Short term investments
Term deposits are presented as cash equivalents if they have a
maturity of three months or less from the date of acquisition and
are repayable with 24 hours' notice with no loss of interest .
15 Inventories
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
---------------------- ---------- ----------- ------------
Components and parts 3,330 336 698
Work in progress 49 186 207
Finished goods - 167 -
---------------------- ---------- ----------- ------------
Total inventories 3,379 689 905
---------------------- ---------- ----------- ------------
Included in parts and components are third-party custom
manufactured components, parts and electrolyte.
Total inventory, before impairment, is valued at GBP5,536,572
(31 December 2020: GBP2,001,561, 30 June 2020: GBP689,000).
Inventories recognised as an expense during the current period
amounted to GBPnil (31 December 2020: GBP436,461, 30 June 2020: GBP
nil). These were included in cost of sales.
Write-downs of inventories to net realisable value amounted to
GBP1,061,017 (31 December 2020: GBP1,045,232, 30 June 2020: GBP
nil).
16 Trade and other payables
Restated
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
-------------------------------- ---------- --------- ------------
Trade payables 1,818 710 498
Accrued liabilities 1,310 946 653
Accrued employee compensation 207 123 1,010
Government remittances payable 5 34 307
-------------------------------- ---------- --------- ------------
Total trade and other payables 3,340 1,813 2,468
-------------------------------- ---------- --------- ------------
Trade payables are unsecured and are usually paid within 30
days. The carrying amounts of trade and other payables are assessed
as being the same as their fair values due to the short-term nature
of the underlying obligation representing the liability to pay.
17 Events occurring after the reporting period
No events occurred after the end of the reporting period that
require disclosure in this unaudited condensed consolidated interim
financial information.
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END
IR FFFIIAFIDFIL
(END) Dow Jones Newswires
September 28, 2021 02:00 ET (06:00 GMT)
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