REG - AFC Energy Plc - Interim Results
23/07/2024 07:15
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RNS Number : 3673X AFC Energy Plc 23 July 2024
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23 July 2024
AFC Energy PLC
("AFC Energy" or the "Company")
Interim Results for the half year to 30 April 2024
AFC Energy plc (AIM: AFC), a leading provider of hydrogen power generation
solutions and technologies, is pleased to announce its interim results for the
half year ended 30 April 2024 (H1 FY24).
Corporate Highlights
· Joint venture signed with Speedy Hire and Speedy Hydrogen
Solutions (SHS) created
· First order from SHS, for £2.0m, and first sales, of £0.4m,
with more to follow in H2 FY24
· £26.2m order book, after adjusting for the £0.4m delivered in H1
FY24
· Delivery of world's largest modular, scalable ammonia cracker
facility
Post-period end
· £15.8m (gross) raised via placing and subscription, including by
AFC Energy directors
· Strategic Supply Agreement with Illuming Power for scale
production of fuel cell plates and stacks
· First operation of 200kW S+ Series H-Power generator
· Strategic Supply Agreement with Zollner for scale production of
fuel cell modules
Outlook
· Continued revenue growth in H2 FY24 through further sales to
SHS
· Delivery of 45kVA generator plus battery solution to ACCIONA
· First sales orders from TAMGO for the Saudi Arabian market
· Delivery of first partners for ammonia cracker
Board change
As announced earlier today, Adam Bond, CEO, advised the Board on 22 July 2024
of his decision to step down from his executive role as CEO. To facilitate a
smooth transition, Gary Bullard, non-executive Chairman, will become executive
Chairman until a successor CEO is in place.
Key Financials
£'000 Six-months Six-months Year to
to Apr 2024 to Apr 2023 Oct 2023
Revenue 408 201 227
R&D tax credit generated 1,138 1,765 2,086
Loss after tax (8,318) (6,252) (17,475)
£'000 At At At
Apr 2024 Apr 2023 Oct 2023
Inventory 2,424 43 178
Cash & cash equivalents 12,288 32,736 27,366
Post-period-end fundraise 15,792 - -
Adam Bond, Chief Executive of AFC Energy, said:
"We are delighted to see first revenues from our strategy to sell our
generators to equipment hire companies. The first production run has already
been assembled and sold and we will deploy the recent funding to accelerate
production to deliver greater sales in H2.
We continue to see growing momentum behind the construction market's
transition to non-diesel generators and are well positioned to take full
advantage, not least through the agreement with Speedy Hydrogen Solutions.
Whilst the enormous value of our ammonia cracking technology is, as yet,
unrecognised, the follow-on discussions from the high levels of industry
interest are progressing well and we look forward to providing further detail
on these in due course."
-ENDS-
For further information, please contact:
AFC Energy plc +44 (0) 14 8327 6726
Gary Bullard (Executive Chairman) investors@afcenergy.com (mailto:investors@afcenergy.com)
Adam Bond (Chief Executive Officer)
Peel Hunt LLP - Nominated Adviser and Joint Broker +44 (0) 207 418 8900
Richard Crichton / Georgia Langoulant / Brian Hanratty
Zeus - Joint Broker +44 (0) 203 829 5000
David Foreman / James Hornigold (Investment Banking)
Dominic King (Corporate Broking) / Rupert Woolfenden (Sales)
RBC Capital Markets - Joint Broker +44 (0) 20 7653 4000
Matthew Coakes / Teri Su
Eduardo Famini / Jack Wood
FTI Consulting - Financial PR Advisors +44 (0) 203 727 1000
Ben Brewerton / Tilly Abraham / Evie Taylor afcenergy@fticonsulting.com (mailto:afcenergy@fticonsulting.com)
About AFC Energy
AFC Energy plc is a leading provider of hydrogen energy solutions, to provide
clean electricity for on and off grid power applications. The Company's fuel
cell technology is targeting near term commercial deployment across the
construction and temporary power markets with longer term opportunities in
electric vehicle charging, maritime and data centres as part of a portfolio
approach to the decarbonisation of society's growing electrification needs.
The Company's proprietary ammonia cracking technology further highlights
emerging opportunities across the distributed hydrogen production market with
a focus on hydrogen's role in supporting the decarbonisation of hard to abate
industries.
Chief Executive's Statement
Revenue
Speedy Hydrogen Solutions (SHS) was created at the start of H1 FY24 and within
that period we received our first order from SHS, for £2.0m, and made our
first sales, of £0.4m, to it. Our rapid inventory build-up, accelerated
since the fundraise, means that in H2 FY24 we will complete delivery of the
first order. We expect additional orders within H2 FY24 and, supported by
the recent fundraise, are building further capacity to deliver them in the
coming months.
Order book
Our order book represents the total value of existing contracts and framework
agreements. It underwrites our production scale-up and stands at £26.2m,
being £26.6m at the end of FY23, less the £0.4m of subsequent sales.
This value reflects equipment only and does not include the additional revenue
within the agreement from the sale of related services and hydrogen, the
procurement of which we have considerable experience in-house.
ACCIONA, who has already provided so much valuable market feedback, are
stringently testing our 45kWh generator and harmonised battery. Release of
the generator and battery to Madrid, where the first deployment has been
identified, is expected within a month.
Near-term orders
In the UK alone, we are seeing significant demand for our H-Power Generators
driven largely by increasing requirements that Government projects, including
multi-billion-pound projects such as HS2 and the Lower Thames Crossing, are
decarbonised.
Since launching SHS, we have hosted several of the UK's top tier construction
contractors, including Balfour Beatty, Costain and Vinci, who intend to
decarbonise at the earliest opportunity. The high levels of interest for
these visits benefits from the fact that many of our visitors are existing
customers of Speedy Hire.
Beyond SHS, the sizeable market potential that exists, particularly within the
Kingdom of Saudi Arabia, means we are already supporting TAMGO in their
initial proposals to customers, including some of the largest companies and
projects in the world. We are seeing first-hand the scope and size of these
deployment opportunities and believe that TAMGO and the Zahid Group are well
positioned to exploit the growing opportunities in the region.
In May, we announced a new collaboration with NiftyLift, the UK's leading
supplier of mobile elevated work platforms with first revenue expected in
2025. This would be the first time we have supplied modules as a component
to a third party's product and is one where huge potential demand has already
been proven.
Fuel Cell Update
Leveraging the FY22 and FY23 successes of the H-Power Tower programme has
driven improvements to form factor, system modularity (through an improved
blade design), control systems and electronics.
Since our first factory acceptance, announced this March, the subsequent tests
of multiple systems give growing confidence that our generators are well
placed for deployment alongside SHS, ACCIONA and TAMGO.
As a precursor to sales, we announced receipt of independently awarded
Attestation of Conformity from Germany's industry certification agency, TUV
SUD. This award enables us to issue CE certified products for sale into the
UK and European markets. This is the first certification awarded to AFC
Energy and, having taken six months to achieve, is a testament to the
engineering and quality of our system's design and compliance with
regulations.
To get the best from outsourcing, we will maintain an internal capability to
ensure that we retain both the 'know how' and quality assurance. To this
end, we have rolled out a pilot assembly line and, supported by the recent
fundraise, continue to build inventory and look for scale discounts within our
supply chain.
Whilst our existing facilities could have capacity of up to 200 generators per
annum, we expect to be outsourcing most of the work on our generators well
before we achieve this throughput. A major step in our outsourcing strategy
was the announcement of a strategic supply agreement with Illuming Power
("Illuming") in May. Illuming has already begun supplying stacks with
improved performance and at pricing significantly below that of previous
stacks.
Building on the agreement with Illuming, we have just announced a strategic
supply agreement with Zollner, to bring scaling capability and a global
footprint to the next generation of the modules that house our fuel cell
stacks.
As part of our value engineering, we continue to engineer reduced cost stacks
and modules to be introduced into subsequent generations of our H-Power
Generators.
We were pleased to announce recently the initial operation of our latest 200kW
S+ Series liquid cooled generator. This generator, which was co-funded by
ABB e-Mobility, is designed to provide the backbone of the higher power class
generators with a nameplate capacity of between 100kW and 500kW utilising the
blade platform adopted by the air-cooled technology. The 200kW generator is
continuing operational testing across all controls and systems.
Between the S Series offering 10-50kW and the S+ Series 100-500kW nameplate
power ratings, we are in a unique position of providing standardised modules
across all key power ranges utilising our own technology platforms.
Fuel Conversion Update
As the global investment in hydrogen production approaches US$1bn, the need
for a global hydrogen trade in is also increasing. This is because the cost
of producing hydrogen favours locations with low renewables costs (such as the
Middle East) whilst the demand is usually located in higher renewable cost
areas (such as Europe).
Ammonia is recognised as one of the market's leading carrier fuels for
hydrogen, as it is carbon free, has relatively high energy density and good
existing infrastructure for international storage and transportation. As
ammonia is so critical to the hydrogen value chain there is a need to unlock
the reconversion of ammonia back into hydrogen at place of use, which is the
role of our ammonia cracker technology.
Over the last six months, we have delivered the world's first and largest
modular, scalable ammonia cracker plant designed to deliver 400kg of fuel cell
grade hydrogen per day, and the resultant technology is already achieving
market leading efficiency when assessing power needs per kg of hydrogen
production.
The flexibility of our modular ammonia cracker reactor means we can facilitate
standalone fuel cell grade hydrogen for refuelling trucks, planes and buses,
through to the integration of crackers with combustion engines. We are
delivering the latter as part of our Entice (Enhanced Ammonia Cracking to
Improve Engine Combustion and Emissions) project, which is our first
Government grant win for fuel processing, under the Clean Maritime
Demonstration Competition (CDMC) alongside Mahle Powertrains and Nottingham
University.
The cracker has had many visitors from across the globe, including some of the
world's largest industrial gas companies, chemicals groups, construction
contractors and heavy plant and machinery OEMs. ICL, one of the UK's largest
industrial chemicals businesses, presented at our Capital Markets Day,
highlighting the UK based applications it is reviewing for our cracker
technology. We are progressing a number of these use cases with partners and
expect to make further announcements on these over the coming months.
Financial update
Overview
The results show the parallel transition of the company from research to
development and development to commercial.
The transition from research to development, is evident in the capitalisation
of £1.7m of development costs. The transition from development to
commercial, is evident in the recognition of £0.4m of revenue, build-up of
inventory to £2.4m and investment of £1.6m in equipment. The summarised
cash flow, below, sets out the primary uses of funds over the period.
£'m
Loss before tax (9.5)
Non-cash items 1.5
(8.0)
R&D credits received -
Working capital movement (3.1)
Cash absorbed by operating activities (11.1)
Investing activities (3.8)
Financing activities (0.2)
(15.1)
Brought forward cash 27.4
12.3
Based on the £11.1m of cash absorbed by operating activities, adjusted for
the £3.1m working capital movement and six-months-worth of the £2.1m FY23
R&D tax credit (received in full in the second half of each year), the
monthly cash burn for H1 FY24 was £1.2m, which is consistent with prior
guidance.
Operating activities
For H1 FY24 we recognised a post-tax loss of £8.3m (H1 FY23: £6.3m). This
was after revenue of £0.4m (H1 FY23 £0.2m) and was driven by operating costs
of £9.6m (H1 FY23: £8.2m) less R&D tax credits of £1.1m (H1 FY23:
£1.8m).
The £1.4m increase to operating costs was due to an increase in payroll
(excluding directors) of £0.6m and other employment costs, which includes
temporary contractors and recruitment fees, of £0.6m.
The decrease in R&D tax credits was due to recent legislative changes,
which decreased the uplift from 130% to 86% and the tax recovery rate from
14.5% to 10.0%. The £3.2m (FY23: £2.1m) receivable is generated by £2.1m
from FY23 and £1.1m from H1 FY24. If the company qualifies under the recent
legislative changes as an R&D intensive small or medium sized company,
then the receivable balances could increase.
Of the £3.1m (H1 FY23: £1.2m) negative working capital movement, £2.2m
related to inventory build-up and £0.7m to an increase in receivables. The
inventory balance of £2.4m (FY23: £0.2m) includes additional modules for the
generators to support after sales servicing.
Investing activities
Of the £3.8m (H1 FY23: £1.1m) invested in H1 FY24, £0.6m (H1 FY23: £0.0m)
related to the initial investment into SHS, £1.7m (H1 FY23: £0.2m) to
intangible assets and £1.6m (H1 FY23: £1.1m) into plant & equipment.
Under the terms of the SHS joint venture agreement, both parties have made
initial equity investments of £625,000, with additional SHS cash requirements
to be funded from receipts and the issuance of loan notes to the owners, up to
a total value of £1,875,000 each, and giving a total investment of £2.5m by
each investee.
Of the £1.7m of development costs capitalised as intangible assets, £1.0m
relates to fuel cells projects and the £0.7m balance to fuel processing
projects.
Of the £1.6m of plant & equipment, £0.8m relates to the purchase of the
Octopus hydrogen assets at the start of H1 FY24 and the balance to
manufacturing equipment for assembly of the fuel cell generators.
Financing activities (post balance sheet)
In June, we announced a successful placing and retail offer which raised a
total of £15.8m (placing of £13.7m plus retail subscription of £2.0m plus
directors' subscription of £0.1m). The primary use of proceeds will be the
scale up of our manufacturing and inventory to support sales to SHS.
Outlook
We remain optimistic about our aim to displace diesel in general and diesel
generators in particular and will continue to focus on growing the revenue
from doing this.
Our £26.2m order book already underwrites our scale-up, and further
opportunities such as TAMGO and NiftyLift will continue to build momentum.
The progress of our ammonia cracker will continue, both technologically and
commercially, with news flow expected in the coming months.
The continued execution of our strategy to displace diesel aligns well with
industry projections and commitments and we will continue to capitalise on
these opportunities by focusing on market penetration.
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 April 2024
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Note Unaudited Unaudited Audited
Revenue from customer contracts 3 408 201 227
Cost of sales (523) (164) (294)
Gross (Loss)/ profit (115) 37 (67)
Other income 176 13 41
Operating costs 4 (9,612) (8,209) (19,994)
Operating loss (9,551) (8,159) (20,020)
Finance costs 5 (51) (42) (53)
Bank interest receivable 5 146 184 512
Loss before tax (9,456) (8,017) (19,561)
Taxation 6 1,138 1,765 2,086
Loss for the financial period and total comprehensive loss attributable to
owners of the Company
(8,318) (6,252) (17,475)
Basic loss per share: pence 7 (1.11) (0.85) (2.36)
Diluted loss per share: pence 7 (1.11) (0.85) (2.36)
All amounts relate to continuing operations. There were no items of other
comprehensive income during the period.
The above unaudited statement of comprehensive income should be read in
conjunction with the accompanying notes.
STATEMENT OF FINANCIAL POSITION
As at 30 April 2024
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Note Unaudited Unaudited Audited
Assets
Non-current assets
Intangible assets 8 1,942 496 264
Right-of-use assets 9 860 1,353 1,097
Tangible fixed assets 10 4,389 3,761 3,756
Investment in JV 14 625 - -
7,816 5,610 5,117
Current assets
Inventory 11 2,424 43 178
Receivables 12 1,937 2,892 1,231
Income tax receivable 3,226 4,815 2,088
Cash and cash equivalents 12,288 32,736 27,366
Restricted cash 435 612 258
20,310 41,098 31,121
Total assets 28,126 46,708 36,238
Current liabilities
Payables 13 (3,676) (3,084) (3,728)
Lease liabilities (491) (478) (477)
(4,167) (3,562) (4,205)
Non-current liabilities
Lease liabilities (4) (847) (647)
Provisions (326) (301) (301)
(730) (1,148) (948)
Total liabilities (4,897) (4,710) (5,153)
Total net assets 23,229 41,998 31,085
Capital and reserves attributable to owners of the Company
Share capital 747 745 746
Share premium 118,598 118,477 118,520
Other reserve 4,162 4,585 3,779
Retained deficit (100,278) (81,809) (91,960)
Total equity attributable to shareholders
23,229 41,998 31,085
The above unaudited statement of financial position should be read in
conjunction with the accompanying notes.
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 April 2024
Share capital Share premium Other reserve Retained loss
£000 £000 £000 £000 Total
£000
Balance at 1 November 2023 746 118,520 3,779 (91,960) 31,085
Loss after tax for the period - - - (8,318) (8,318)
Exercise of share options 1 78 - - 79
Equity settled share-based payments
- Charged in the period - - 383 - 383
Balance at 30 April 2024 747 118,598 4,162 (100,278) 23,229
For the six months ended 30 April 2023
Share capital Share premium Other reserve Retained loss
£000 £000 £000 £000 Total
£000
Balance at 1 November 2022 735 116,487 4,073 (75,557) 45,738
Loss after tax for the period - - - (6,252) (6,252)
Issue of equity shares 10 1,990 - - 2,000
Equity settled share-based payments
- Charged in the period - - 512 - 512
Balance at 30 April 2023 745 118,477 4,585 (81,809) 41,998
For the year ended 31 October 2023
Share capital Share premium Other reserve Retained loss
£000 £000 £000 £000 Total
£000
Balance at 1 November 2022 735 116,487 4,073 (75,557) 45,738
Loss after tax for the year - - - (17,475) (17,475)
Issue of equity shares 10 1,990 - - 2,000
Equity settled share-based payments
- Lapsed or exercised in the period 1 43 (1,072) 1,072 44
- Charged in the period - - 778 - 778
Balance at 31 October 2023 746 118,520 3,779 (91,960) 31,085
The above unaudited statements of changes in equity should be read in
conjunction with the accompanying notes.
CASH FLOW STATEMENT
For the six months ended 30 April 2024
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Note Unaudited Unaudited Audited
Cash flows from operating activities
Loss before tax for the period (9,456) (8,017) (19,561)
Adjustments for:
Amortisation of intangible assets 8 40 34 110
Loss on disposal of intangible assets 8 - - 1
Depreciation of right-of use-assets 9 237 229 455
Depreciation of tangible assets 10 949 578 1,084
Loss on disposal of tangible assets 10 - - 34
Depreciation of decommissioning asset 10 - - 15
Equity-settled payments 383 512 778
Interest received 5 (146) (184) (428)
Lease finance charges 5 23 35 69
Cash flows from operating activities before changes in working capital and
provisions
(7,970) (6,813) (17,443)
R&D tax credits received - 1,025 4,073
(Increase)/decrease in restricted cash (176) - 354
(Increase) in inventory (2,246) - (135)
(Increase) in receivables (706) (2,153) (109)
Increase/(decrease) in payables (52) (141) 121
Increase in provision 25 - -
Cash absorbed by operating activities (11,125) (8,082) (13,139)
Cash flows from investing activities
Investment in Joint Venture (625) - -
Additions to intangible assets (1,717) (218) (63)
Purchase of plant and equipment (1,582) (1,057) (1,607)
Interest received 146 184 428
Net cash absorbed by investing activities
(3,778) (1,091) (1,242)
Cash flows from financing activities
Proceeds from the issue of share capital - 2,000 2,000
Proceeds from the exercise of options 79 - 45
Lease payments (231) (276) (449)
Lease interest paid (23) (35) (69)
Net cash from financing activities (175) 1,689 1,527
Net decrease in cash and cash equivalents (15,078) (7,484) (12,854)
Cash and cash equivalents at start of period/ year
27,366 40,220 40,220
Cash and cash equivalents at end of period/ year
12,288 32,736 27,366
The above unaudited statement of cash flows should be read in conjunction with
the accompanying notes.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Details of the significant accounting policies are set out below.
a) Basis of preparation
These interim results for the six-months ended 30 April 2024 are unaudited.
They have been prepared in accordance with IAS 34 'Interim Financial
Reporting' in conformity with Companies Act 2006. These interim results have
been drawn up using the accounting policies and presentation consistent with
those disclosed and applied in the annual report and accounts for the year
ended 31 October 2023. The comparative information contained in the report
does not constitute the accounts within the meaning of section 435 of the
Companies Act 2006.
A number of new or amended standards became applicable for the current
reporting period. The Company did not have to change its accounting policies
or make retrospective adjustments as a result of adopting these standards.
These interim results have been prepared on a going concern basis
notwithstanding the trading losses being carried forward and the expectation
that trading losses will continue for the near future as the company
transitions from research and development to commercial operations.
The directors are required to assess whether it is appropriate to prepare
these interim results on a going concern basis. In making this assessment
the directors need to be satisfied that the company can meet its obligations
as they fall due for at least 12 months from the date of this report.
The directors make their assessment based on a cash flow model prepared by
management which sets out expected cash flows for the 12 months from the date
of this report.
The downside sensitivities applied to the cash flow forecasts primarily relate
to delays to development and delivery and/ or an overspend of cost of sales.
Having concluded that the company remains a going concern, these interim
results have therefore been prepared on that basis.
2. SEGMENTAL ANALYSIS
Operating segments are determined by the chief operating decision maker based
on information used to allocate the Company's resources. The information as
presented to internal management is consistent with the statement of
comprehensive income. It has been determined that there is one operating
segment, which researches and develops fuel cell and fuel conversion
technologies. In the period to 30 April 2024, the Company operated mainly in
the United Kingdom. All non-current assets are in the United Kingdom.
3. REVENUE
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Rendering of services earned over time
Rental 8 133 137
Other revenue 400 68 90
Revenue 408 201 227
Being
Cah consideration 408 129 161
Consideration in kind 0 72 66
Revenue 408 201 227
Other revenue represents sales to SHS. The consideration in kind related to
marketing services received from the customer and fair valued in accordance
with the contract. The fair value was expressly quantified in the contract
and agreed by both parties.
4. OPERATING COSTS
The operating costs consist of:
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Materials 1,350 1,502 4,679
Payroll (excluding directors) 3,719 3,078 6,690
5,069 4,580 11,369
Directors' costs 656 776 1,895
Other employment costs 1,106 463 1,033
Occupancy costs 417 368 884
Other administrative expenses 1,279 911 2,370
8,527 7,098 17,551
Amortisation of intangible assets 40 34 110
Depreciation of Right of Use assets 237 229 455
Depreciation of tangible fixed assets 950 578 1,099
Less depreciation of rental asset charged to cost of sales
- (96) (65)
Consideration in kind - 72 66
Share based payments 383 512 778
Operating costs capitalised (525) (218) -
9,612 8,209 19,994
Occupancy costs include repairs and maintenance, utilities and lease
payments.
5. NET FINANCE INCOME
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Lease interest (23) (35) (69)
Exchange rate differences (19) - 22
Bank charges (9) (7) (6)
Total finance cost (51) (42) (53)
Bank interest receivable 146 184 512
95 142 459
6. TAXATION
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Recognised in the statement of comprehensive income:
R&D tax credit - current period 1,138 1,765 2,088
R&D tax credit - prior year - - (2)
Total tax credit 1,138 1,765 2,086
7. LOSS PER SHARE
The calculation of the basic loss per share is based upon the net loss after
tax attributable to ordinary Shareholders and a weighted average number of
shares in issue for the period.
Six months ended Six months ended Year ended
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Basic loss per share: pence 1.11 0.85 2.36
Diluted loss per share: pence 1.11 0.85 2.36
Loss attributable to equity Shareholders £8,318 £6,252 17,475
Weighted average number of shares in issue
746,759 736,732 741,451
Diluted earnings per share: There are share options and warrants outstanding
as at 30 April 2024 which, if exercised, would increase the number of shares
in issue. However, the diluted loss per share is the same as the basic loss
per share, as the loss for the period has an anti-dilutive effect.
8. INTANGIBLE ASSETS
Development costs Commercial Intangible
£0000 Patents rights assets
£000 £000 £000
Cost
As at 1 November 2023 - 1,283 121 1,404
Additions 1,691 27 - 1,718
As at 30 April 2024 1,691 1,310 121 3,122
Amortisation
As at 1 November 2023 - 1,049 91 1,140
Charge for the financial period - 28 12 40
As at 30 April 2024 - 1,077 103 1,180
Net book value
As at 1 November 2023 - 234 30 264
As at 30 April 2024 1,691 233 18 1,942
Development Commercial Intangible
costs Patents rights assets
£000 £000 £000 £000
Cost
As at 1 November 2022 229 1,220 121 1,570
Additions 218 1 - (219)
Disposal (229) - - (229)
As at 30 April 2023 218 1,221 121 1,560
Amortisation
As at 1 November 2022 229 979 51 1,259
Charge for the financial period - 22 12 34
Disposal (229) - - (229)
As at 30 April 2023 - 1,001 63 1,064
Net book value
As at 1 November 2022 - 241 70 311
As at 30 April 2023 218 219 58 496
Development Commercial Intangible
costs Patents rights assets
£000 £000 £000 £000
Cost
As at 1 November 2022 229 1,220 121 1,570
Additions - 63 - 63
Disposal (229) - - (229)
As at 31 October 2023 - 1,283 121 1,404
Amortisation
As at 1 November 2022 229 979 51 1,259
Charge for the year - 70 40 110
Disposal (229) - - (229)
As at 31 October 2023 - 1,049 91 1,140
Net book value
As at 1 November 2022 - 241 70 311
As at 31 October 2023 - 234 30 264
9. RIGHT-OF-USE ASSETS
Buildings
£000
Cost
As at 1 November 2023 1,985
As at 30 April 2024 1,985
Depreciation
As at 1 November 2023 888
Charge for the financial period 237
As at 30 April 2024 1,125
Net book value
As at 1 November 2023 1,097
As at 30 April 2024 860
Buildings
£000
Cost
As at 1 November 2022 1,885
Additions 606
Disposals (476)
As at 30 April 2023 2,009
Depreciation
As at 1 November 2022 909
Charge for the financial period 229
Disposals (476)
As at 30 April 2023 662
Net book value
As at 1 November 2022 976
As at 30 April 2023 1,353
Buildings
£000
Cost
As at 1 November 2022 1,885
Additions 576
Disposals (476)
As at 31 October 2023 1,985
Depreciation
As at 1 November 2021 909
Charge for the year 455
Disposals (476)
As at 31 October 2022 888
Net book value
As at 1 November 2021 976
As at 31 October 2022 1,097
10.tangible fixed ASSETS
Leasehold Decommissioning Fixtures, Assets Under Construction Total
Improvements Asset fittings and £000 £000
£000 £000 equipment
£000
Cost
As at 1 November 2023 3,848 300 3,975 288 8,411
Additions 30 25 983 544 1,582
As at 30 April 2024 3,878 325 4,958 832 9,993
Depreciation
As at 1 November 2023 1,394 300 2,961 - 4,655
Charge for the financial period 603 25 321 - 949
As at 30 April 2024 1,997 325 3,282 - 5,604
Net book value
As at 1 November 2023 2,457 - 1,012 288 3,756
As at 30 April 2024 1,881 - 1,676 832 4,389
The company has set up a decommissioning asset for the estimated cost of
removing the plant and equipment installed at the Stade site in Germany. As
the hydrogen offtake agreement, for five-years from January 2023, was renewed
no decision has been taken as to when the site might be decommissioned.
Leasehold Decommissioning Fixtures, Asset Under construction Total
Improvements Asset fittings and £000 £000
£000 £000 equipment
£000
Cost
As at 1 November 2022 2,570 300 3,562 406 6,838
Additions - - 73 984 1,057
As at 30 April 2023 2,570 300 3,635 1390 7,895
Depreciation
As at 1 November 2022 746 285 2,525 - 3,556
Charge for the financial period
303 5 270 - 578
As at 30 April 2023 1,049 290 2,795 - 4,134
Net book value
As at 1 November 2022 1,824 15 1,036 406 3,282
As at 30 April 2023 1,521 10 839 1,390 3,761
Leasehold Decommissioning Fixtures, Asset Under Construction Total
Improvements Asset fittings and £000 £000
£000 £000 equipment
£000
Cost
As at 1 November 2022 2,570 300 3,562 406 6,838
Additions 985 - 334 288 1,607
Disposals (9) - (25) - (34)
Transfer between categories 303 - 103 (406) -
As at 31 October 2023 3,849 300 3,974 288 8,411
Depreciation
As at 1 November 2022 746 285 2,525 - 3,558
Charge for the year 648 15 436 - 1,097
As at 31 October 2023 1,394 300 2,961 - 4,655
Net book value
As at 1 November 2022 1,824 15 1,037 406 3,282
As at 31 October 2023 2,455 - 1,013 288 3,756
11. INVENTORY
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Raw materials 1,118 173 185
Work in progress 1,792 - 405
Provision (486) (130) (412)
2,424 43 178
Inventory is valued per IAS2 as the lowest of cost or net realisable value.
The increase in inventory reflects the order for H-Power Generators from SHS.
12. RECEIVABLES
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Trade receivables 744 166 107
VAT receivables 506 1,110 383
Other receivables 92 844 217
Prepayments 595 772 524
1,937 2,892 1,231
There is no significant difference between the fair value of the receivables
and the values stated above
The increase in trade receivables is mainly due to the sale of the first
H-Power Generators to SHS. All receivables have subsequently been paid to
the company.
13. PAYABLES
30 April 2024 30 April 2023 31 October 2023
£000 £000 £000
Unaudited Unaudited Audited
Trade payables 1,381 986 931
Deferred revenue 1,423 1,424 1,423
Other payables 354 485 416
Accruals 518 189 958
3,676 3,084 3,728
The deferred revenue relates to non-refundable payments made under the
November 2021 contract with ABB E-mobility. As part of the renegotiation of
this contract in March 2023, it was agreed with ABB that this balance would be
earned against pre-agreed discounts over the sale of the first ten units.
14. INVESTMENT IN JV
The company signed a Joint Venture Agreement (JVA) with Speedy Hire (SDY) plc
in November 2023 which resulted in the creation of Speedy Hydrogen Services
(SHS) limited.
The company has assessed the relationship with SHS under IFRS11: Joint
Arrangements and concluded that it is a joint venture. As the company does
not control SHS, it has not been consolidated into the company's results.
SHS is owned 50:50 by the company and SDY, with both parties providing initial
funding via equity investments of £625,000. This investment, and any
further investments, will be accounted for on a cost basis.
In addition to the JVA with SDY, the company signed a Supply & Maintenance
Agreement (SMA) with SHS under which it will supply goods, hydrogen fuelled
generators, and services. The SMA has been assessed under IFRS15: Revenue
from Contracts with Customers and the company has concluded, amongst other
things, that SHS will be acting as principal in the purchase of generators
from the company for onwards hire. All such transactions with SHS are at
arms-length.
15. PosT BALANCE SHEET EVENTS
On 8 May 2024, the company announced a strategic supply agreement with
Illuming for scale production of fuel cell plates and stacks.
On 20 May 2024, the company announced its agreement to supply Niftylift (UK)
with its S Series fuel cell modules for integration into its next generation
mobile elevating work platform.
On 11 June 2024, the company announced the Placing of 91,279,000 shares at a
price of 15p each, which raised £13.7m, and a Subscription by certain
directors for 666,666 shares at a price of 15p each, which raised £0.1m,
making a total of 13.8m.
On 12 June 2024, the company announced the issue of 13,333,333 shares at a
price of 15p each, via a REX Retail Offer, which raised an additional £2m and
making a total raised of £15.8m.
On 22 July 2024, the company announced a strategic supply agreement with
Zollner for scale production of fuel cell modules.
On 22 July 2024, Adam Bond, CEO, advised the Board of his decision to step
down from his executive role as CEO. Gary Bullard, non-Executive Chairman,
will become Executive Chairman until a successor CEO is in place.
16. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information contained in this interim statement does not
constitute accounts as defined by the Companies Act 2006. The financial
information for the preceding period is based on the statutory accounts for
the year ended 31 October 2023. Those accounts, upon which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies.
Copies of the interim statement may be obtained from the Company Secretary,
AFC Energy PLC, Unit 71.4 Dunsfold Park, Cranleigh, Surrey GU6 8TB, and can be
accessed from the Company's website at www.afcenergy.com
(http://www.afcenergy.com) .
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