REG - AFC Energy Plc - Final Audited Results
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RNS Number : 2480U AFC Energy Plc 25 February 2026
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25 February 2026
AFC Energy Plc
("AFC Energy" or the "Company")
Final Audited Results for the Financial Year Ended 31 October 2025
Delivering strategic and operational progress
AFC Energy Plc (AIM: AFC), a leading provider of ammonia-based low carbon
hydrogen production and hydrogen-to-power solutions at a commercially viable
price point, is pleased to announce its audited results for the financial year
ended 31 October 2025 ("FY25").
John Wilson, Chief Executive of AFC Energy, said:
"12 months ago, we announced plans to accelerate our path to scalable
commercial success, focus on areas of greatest opportunity and deliver a
market push, rather than relying solely on market pull. We are successfully
delivering on these plans, working to ensure AFC Energy creates significant
shareholder value.
The successful execution of our oversubscribed £27.5 million (gross)
fundraising in July 2025 was a further vote of confidence in the evolution of
the business, enabling the business to invest with purpose to accelerate the
commercial development and deployment of our fuel cell and ammonia cracking
products. This has enabled the recent launch of our new LC30 fuel cell
generator and continued progress to availability of our Hy-5 ammonia cracker,
capable of producing 500kg/day of hydrogen which we aim to target selling at
£10/kg.
We continue to execute successfully on our strategy as we look to deliver
low-cost hydrogen power at scale without the need for government subsidies.
AFC Energy remains well on track for 2026 to be a year of conversion of our
growing pipeline of opportunities to contractual orders and the beginning of
sustained revenue growth for our business. We look forward to the future with
strong and increasing optimism."
FY25 Operational Highlights
• Strategic reset and focus on delivering the commercial deployment of our
proprietary technology and products to create significant shareholder value
• Multiple successful deployments of AR2 30kW fuel cell generators through our
joint venture Speedy Hydrogen Solutions
• Launch of our first hydrogen production product - the Hy-5 ammonia cracker -
capable of producing 500 kg/hydrogen per day, for delivery in calendar year
2026
• Joint Development Agreement ("JDA") signed with S&P 500 partner to develop
small to large scale decentralised ammonia to hydrogen crackers. Successful
completion of first phase of JDA and discussions ongoing regarding commercial
opportunities prior to commencing next phase
• Strategic partnership with Volex Plc to manufacture at scale our fuel cell
generators
• Joint venture with Industrial Chemicals Group Limited to use AFC Energy's
proprietary, leading ammonia cracking technology to produce the lowest cost
bulk hydrogen available to industrial customers in the UK, by the end of
calendar year 2026 (subject to permitting)
• We announced targeting the provision of hydrogen-as-a-service, with an offer
to customers of low-carbon hydrogen at £10/kg - making us one of the most
cost-competitive, low-carbon hydrogen suppliers in the UK
• Working in partnership with Tamgo, the successful deployment of H-Power 200kW
liquid cooled fuel cell generator at the FIA Extreme H World Cup in Qiddiya
City, Saudi Arabia
• Significant focus on commercial viability, driving a streamlined business
reorganisation with reduced headcount and footprint, and a clearer operational
focus through the establishment of a Project Management Office and commercial
function, with appointments of Programme Director, Chief Strategy Officer and
Chief Commercial Officer to complement the leadership team
FY25 Financial Highlights
• £27.5m successful oversubscribed placing to support the business' development
ambitions
• £25.3m cash, cash equivalents and short term investments at year end (FY24:
£15.4m), with current cash of £20.4m as at 31 January 2026 (including short
term investments).
• Loss after tax of £22.2m (FY24: £17.4m) which includes an increase in
non-cash expenditure of £8.4m (£5.5m due to stock and debtor write-offs,
£1.9m increase in depreciation/amortisation, £0.5m in share-based payments
and £0.5m of remuneration settled via equity)
• R&D investment of £11.7m (FY24: £9.5m), with £1.6m R&D tax credits
received (FY24: £2.7m)
Post Period Developments
• Launch of the LC30, 30kW fuel cell generator, c. 85% lower cost, up to 20%
more efficient, >95% fewer components and substantially smaller footprint
than its predecessor, resulting in inbound commercial interest
• Joint Development Agreement signed with Komatsu Ltd, c.$2 million contract
value, to design and integrate AFC Energy's proprietary ammonia cracking
technology with a Komatsu industrial internal combustion diesel engine to
assess the feasibility of a new ammonia fuelled engine platform capable of
scaled production
• UK Environment Agency permit agreed to enable the sale of hydrogen produced
from our pilot ammonia cracker in Dunsfold, ensuing AFC Energy will generate
revenues from hydrogen production 3-4 months ahead of schedule
Business Priorities - Commercialisation
• Commercial traction to deliver pre-orders of LC30 and Hy-5 units
• Establish Fuel as a Service (FaaS) offering for UK customers
• Progressing JDAs to deliver product and technology based commercial revenues
• Continued expansion of our channel and refinement of go to market strategy
o North American market focus
o TAMGO market applications and optimal product set review
o European market entry point and partnership review
Business Priorities - Development and Technical
• Finalising development, build and roll out of Hy-5, the world's first
containerised, portable, cracking system capable of producing up to 500kg/day,
for delivery at the end of calendar year 2026
• Continuation of roadmap development for both fuel cell generator portfolio and
cracker development, to further productise our technology
• Continued successful patent applications filed based on core technology
Outlook
• Through continued execution of our strategic plan, commercial momentum is
building
• Remain well on track for 2026 to be a year of conversion of our growing
pipeline of opportunities to contractual orders and the beginning of sustained
revenue growth for our business
Investor Presentation
John Wilson, Chief Executive Officer, and Karl Bostock, Chief Financial
Officer, will host a live presentation for retail investors via Investor Meet
Company on Friday 27 February 2026, at 14:00 hrs GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
Wednesday 25 February 2026, 17:00 hrs, or at any time during the live
presentation.
Investors can sign up to Investor Meet Company for free and add to meet AFC
ENERGY PLC via:
https://www.investormeetcompany.com/afc-energy-plc/register-investor
(https://www.investormeetcompany.com/afc-energy-plc/register-investor)
FOR FURTHER INFORMATION, PLEASE CONTACT:
AFC Energy Plc +44 (0) 14 8327 6726
John Wilson (Chief Executive Officer) investors@afcenergy.com (mailto:investors@afcenergy.com)
Karl Bostock (Chief Financial Officer)
Peel Hunt LLP - Nominated Adviser and Joint Broker +44 (0) 207 418 8900
Richard Crichton / Georgia Langoulant / Emily Bhasin
Zeus - Joint Broker +44 (0) 203 829 5000
David Foreman / James Hornigold (Investment Banking)
Dominic King (Corporate Broking) / Rupert Woolfenden (Sales)
DGA Group - Financial PR and Communications Advisors +44 (0) 7747 113 930
James Benjamin / James Styles +44 (0) 7510 385 554
afcenergy@dgagroup.com (mailto:afcenergy@dgagroup.com)
ABOUT AFC ENERGY
AFC Energy Plc is a leading provider of ammonia-based low carbon hydrogen
production and hydrogen-to-power solutions. Our market-leading decentralised
ammonia cracker and fuel cell generator products are engineered to unlock the
low carbon hydrogen market by meeting customers' needs with scalable, reliable
supplies of low carbon hydrogen and power. AFC Energy is enabling customers to
decarbonise at a price that is commercially viable.
We are focused on the successful commercial rollout of our core product suite
and on creating significant shareholder value by converting our growing
opportunity pipeline into contracted orders and delivering sustained revenue
growth.
Our core strategy is to develop and deploy products that enable the production
of scalable, reliable supplies of clean hydrogen at commercially viable prices
and without reliance on government subsidies or incentives. AFC Energy
achieves this through our proprietary, decentralised and modular ammonia
cracker technology, and providing low carbon, off‑grid power solutions with
our fuel cell generators that are competitive with, and capable of displacing,
diesel generators on a total cost of ownership basis.
The Company's modular, decentralised ammonia cracker systems have production
capacities of approximately 0.5 and 4 tonnes of hydrogen per day respectively.
These enable the generation of scaled volumes of low carbon hydrogen at the
point of use within a highly compact footprint. Our systems have the potential
to drive substantial revenue growth across a wide range of addressable
markets, including hard‑to‑abate industrial facilities, transportation and
power generation applications.
AFC Energy's fuel cell generator systems are currently offered with generation
capacities of 30 kW and 200 kW. They are well-suited to off‑grid,
decentralised and temporary power applications, including the displacement of
diesel generators on construction and infrastructure sites. Further use cases
include electric vehicle charging for cars, buses and trucks, as well as
charging of battery‑powered non‑road machinery, with additional emerging
opportunities in maritime, data centre and rail applications.
AFC Energy is listed on the London Stock Exchange's AIM Market and
headquartered in Dunsfold, Surrey, UK.
Please read more on our website https://www.afcenergy.com/
(https://www.afcenergy.com/) and follow us on LinkedIn
(https://www.linkedin.com/company/afc-energy/)
Chairman's Statement
This year has been one of significant positive change for AFC Energy.
Building on the progress of previous years, the Company has taken decisive
action to reposition itself for scalable commercial success to accelerate the
creation of significant shareholder value.
As Chairman, I am proud to say that the Board is fully aligned with the
executive leadership in both recognising the need for strategic change and
supporting its rapid implementation.
In what has remained a challenging external environment, the Company has made
great strides and is well positioned for the future.
We also welcomed a refreshed executive team early in the financial year. The
appointments of John Wilson as Chief Executive Officer and Karl Bostock as
Chief Financial Officer marked a critical turning point for the business.
Under their stewardship, the Company has been restructured with a clear focus
on execution, cost efficiency, and the creation of significant shareholder
value. The progress made since their appointments reflects not only strong
strategic and operational leadership, but a renewed cultural energy across the
business, ensuring AFC Energy is well positioned to meet its ambitions. The
strategic reset has addressed key realities in our sector, namely the high
cost of capital, policy uncertainty, and a market that increasingly demands
economically viable clean energy solutions. AFC Energy's sharpened focus on
cost competitiveness, product simplification, and meaningful commercial
partnerships is a necessary evolution and has already begun to deliver
encouraging results.
The successful execution of our oversubscribed £27.5 (gross) million
fundraising in July 2025 was a further vote of confidence in the evolution of
the business, supported by both new and existing shareholders. On behalf of
the Board, I would like to extend our sincere thanks to all shareholders who
participated. This capital is enabling the business to invest with purpose in
cost-down initiatives, strategic hires, and the infrastructure necessary to
accelerate the commercial development of both our fuel-cell and ammonia
cracking products.
Crucially, the business is not only developing advanced technology, but it is
also now bringing that technology to market in defined commercial fuel cell
and ammonia cracker products. The evolution of our go-to-market strategy,
exemplified through the Speedy Hire joint venture, is allowing us to validate
our proposition in live environments. The response from end-users to our
diesel-equivalent pricing and low-emission profile has been encouraging and
signals a maturing commercial platform.
Beyond the UK, our engagement with global supply chain partners such as Volex
plc positions us to scale efficiently as demand increases. This aligns with a
broader industry shift: hydrogen technologies at a commercially viable price
point are now forming part of near-term procurement decisions across
construction, infrastructure and logistics.
From a macro perspective, the global hydrogen economy is entering a new phase.
Governments and industry stakeholders around the world are pushing forward
with commercial-scale green hydrogen and ammonia projects. Ammonia is fast
becoming the carrier of choice for transporting hydrogen due to its lower
cost, scalability, and ability to utilise existing infrastructure. As an early
advocate of this model, we are already seeing that belief rewarded through
progress at our joint venture with ICL on Teesside.
Our early investment in ammonia-based systems not only differentiates our
technology but also solves some of the hardest problems in the hydrogen value
chain. It gives us the ability to decouple clean hydrogen supply from
traditional infrastructure constraints, which is essential for us to enable
widespread off-grid power applications.
Internally, the business has also matured. The restructuring carried out
during the year has created a leaner, more agile and focused organisation.
Strategic new hires have brought added capability in commercial and
operational roles, and we have instilled a culture of delivery that will
support the next stage of growth. Cost efficiency measures and operational
discipline introduced this year are expected to deliver c.£1.5 million in
annualised savings, extending our cash runway while improving focus.
While these strategic and operational developments are crucial, the resilience
and determination of our team deserves recognition. The pace of change in the
business over the past 12 months has been significant, and our team has met
this challenge with professionalism and conviction. On behalf of the Board, I
would like to extend heartfelt thanks to every member of the AFC Energy team.
Their dedication continues to be the bedrock of our success.
I would also like to reiterate our gratitude to our shareholders for their
continued support and belief in our vision. The success of this year's
fundraising has allowed us to move forward with confidence and clarity. We
remain committed to open and transparent engagement, and we understand the
responsibility we carry to convert your investment into long-term, sustainable
value.
Looking ahead to 2026, we do so with strong momentum and increasing confidence
in our sector. AFC Energy is now well placed to play a central role in
enabling the global transition to zero-emission power. With cost-competitive
products, validated routes to market, and a strengthened leadership team, the
Company has the right foundations for scalable growth and the creation of
significant shareholder value.
The use of hydrogen as the green fuel of the future is a reality, and with
ammonia an enabler, and innovation at our core, AFC Energy is ready to lead
and successfully deliver on its ambitions.
Chief Executive Officer's Statement
Dear Shareholders,
In January 2025, I was appointed Chief Executive Officer of AFC Energy, with
Karl Bostock joining as Chief Financial Officer. This report covers progress
from that date.
Since appointment my focus has been on resetting the Company's strategy and
delivering on it. We now live in a world where the cost of capital is high
and both micro and macro uncertainty preclude willingness to invest. This,
coupled with challenges in the global sector, necessitated a change of
direction and pace.
Our business was on the cusp of commercialisation, but at a price point that
the market was unwilling to bear, with product complexity that would not
enable economies of scale to drive commercial viability. This needed to
change.
While regulatory tailwinds support our sector in the medium term, a lack of
long term government policy clarity, dilution of policy commitments and
unwillingness to pay substantially more for "green," provided a clear steer of
both the challenge and opportunity available to us. We need to build a
business in which the "noise" of policy is secondary to our value proposition.
Our business is blessed with an incredibly talented team that has developed,
and continues to develop, world-class technology. The task at hand is to
harness this creativity to create value, which is now our approach: Establish
a product suite and offering that drives commercial viability without
government subsidy.
With our go-to-market strategy for our fuel cell generators well defined in
the UK through our JV with Speedy Hire, we undertook a comprehensive analysis
to determine total cost of ownership of diesel generators, servicing and fuel
cost over their economic life. In doing so, we confirmed very clear price
points that we needed to attain to meet our goals. What followed was an 85%
cost reduction from the 20-unit volume build the business undertook to satisfy
the JV demand. In conjunction, we announced the launch of our first hydrogen
production product - the Hy-5 ammonia cracker - under a fuel as a service
model which will first be delivered at the back end of calendar year 2026,
supported by Environment Agency approval for commercial use of hydrogen
produced in Dunsfold to power our Speedy Hydrogen Solutions fuel cell
generators. These products will enable us to be highly competitive with
incumbent technology with respect to price.
1) Provide balance sheet strength to finance the Company's short-term
goals
In July we announced an oversubscribed fundraise from both institutional and
private investors. The c.£27.5m (gross) fundraise was a clear mandate to
deliver the strategy. Through the process we have welcomed several new
institutions to our business as shareholders.
2) Laser focus on costs and building Company infrastructure to deliver
Post fundraise, and following a strategic cost and business structure review,
we have taken several steps to drive down costs:
a) Reduction of the Company's footprint, including the closure of our
Germany facility in Stade, resulting in a £250,000 annual saving and the
release of a significant bond guarantee to our balance sheet.
b) Realigning the headcount of the business to our new business strategy.
This has resulted in a c.20% reduction in headcount as we seek to benefit from
outsourcing manufacturing in the medium term.
c) Reduction of the number of advisors.
These actions are expected to deliver c.£1.5m of annualised savings. In
addition, we have restructured the business: pooling the engineering talent as
opposed to a divisional split, strengthened the Executive team through the
addition of a Programme Director, Chief Strategy Officer (CSO) and Chief
Commercial Officer (CCO) and introducing a more coherent, and cohesive
organisational structure that focuses on delivery and execution.
3) Deliver proof points, technology validation and supply chains
Throughout the year, we delivered key proof points that served to provide peer
validation of our technology and potential for market adoption, including
validation of our cracker technology by a S&P500 partner and, post-FY25,
Komatsu, in the form of our recently announced joint development agreement.
Our partnership with Volex plc gives us potential access to manufacturing
across multiple geographies served by 27 factories, and access to a
substantial global supply chain that will support further reduction in
generator costs with economies of scale.
Our joint venture with ICL continues at pace as we relocate our pilot cracker
from Dunsfold, Surrey, to Port Clarence, Teesside, to generate the UK's first
commercially available hydrogen from cracked ammonia. We have also worked to
establish the supply chain for green ammonia to support this. Following line
of sight on costings of our new LC30 generators, in conjunction with
confidence of Hy-5 delivery, we offered "tomorrow's price today" to Speedy
Hire's end customers: that of diesel equivalence. This action served to
unlock the market with a pipeline quickly building from multiple end users.
Deployments have begun in earnest across numerous use cases: from recharging
of electrical excavators to powering welfare stations. The lessons learned
from these deployments are essential to continue to build the business model
for geographical expansion.
We successfully concluded our Red Diesel Replacement ("RDR") grant programme,
showcasing our 200kW hydrogen fuel cell generator powering a 1.6 km conveyor,
and 30kW system, as part of a Lower Thames Crossing project. This generated
£2.2m of grant income (cash receipts) and demonstrated the resilience of our
liquid-cooled platform to be utilised in our next generation of products. The
same generator ran faultlessly in Saudi Arabia providing power for almost two
weeks to the FIA Extreme H event.
4) Rebrand and building a commercial function to deliver
We have undertaken a rebranding exercise and website overhaul to better
reflect the evolved business and strategy. This serves to provide greater
clarity to both the investment community and to current and potential
customers of our value proposition and product offerings.
At the start of my tenure, our commercial team consisted of one commercial
director. We have begun to put in place the building blocks of a high
quality commercial function capable of delivering our ambitions. The
appointments of a Chief Strategy Officer, to focus on demand creation, in
conjunction with a Chief Commercial Officer to close opportunities developed,
are central to this.
2026 will be a year of go to market and channel development, with a focus on
customer demand creation and geographic expansion from our newly created
commercial function. 2026 will also see new product availability with our
LC30 fuel cell generators and Hy-5 units, which will help to drive the
conversion of our growing pipeline of opportunities to contractual orders and
the beginning of sustained revenue growth for our business.
The resilience and expertise of our team members has been critical to the
progress made this year to shift significantly the strategic and operational
focus of the business. I extend my sincerest thanks for their support and
dedication since I joined our business, and their belief in our strategy and
ability to deliver.
In a sector mostly reliant on government subsidy for commercial viability, we
stand out from the crowd. Our ability to produce hydrogen from ammonia, at a
price point unmatched in the UK, is key to creating significant shareholder
value. We look forward to the future with optimism.
Financial Review
As highlighted in the CEO Report, the business has undergone a commercial
pivot in its drive to create value from the technology created by our talented
employees. This report presents the impact of these changes on the FY25
financial information:
1. Establish a product suite and offering that drives commercial
viability without government subsidy
The business is fulfilling this ambition by the launch of two products.
Proving the concept (Fuel Cells) - The work undertaken as part of the RDR
grant paved the way for the concept of the new lower cost fuel cell generator
(LC30). This project proved that we could take technology and harness its
strengths to provide a like-for-like solution as the current generators (AR2)
but at a highly reduced cost. In the year, total costs (including labour) of
£2.3m were incurred on this project of which £2.1m was capitalised under IAS
38. Cash inflows relating to government grants totalled £2.2m during the
year, all of which have been deferred (recognised as other creditors) which
will be amortised over the life of the development asset (3 years).
In addition to the expenditure above, we incurred costs of £17k supporting
the deployment of our 200kW hydrogen generator (which contains the same
technology as the new lower cost 30kw hydrogen generator) supporting the
Extreme H World Cup in Qiddiya. The fuel cell performed perfectly in the
Saudi Arabian desert, operating in some of the harshest environmental
conditions on planet. Sales revenues of £15k were recognised for this
support.
Testing (Hy-5) - As part of the development of the Hy-5, the business is
constantly seeking to improve the efficiency and durability of its cracker
technology. During the year the total cash impact of these projects amounted
to £967k.
Developing the product - The FY25 cost of the development for the 2 products
are as follows:
Project Committed Spend (yet to be incurred / spent)
£'000s
Cost in FY25 Total
£'000s £'000s
30kW Fuel Cell 586 559 1,145
Hy-5 627 712 1,339
1,213 1,271 2,484
Accounting for the current technology - As part of the strategic review, the
business made the decision not to manufacture any further AR2 units (the model
sold to the Speedy Hire JV) on the grounds that they were too expensive and
the new model is set to be significantly cheaper. An outcome of this decision
is that all inventory held of both finished goods and raw materials of the AR2
were written down to £nil at 31 October 2025. The total impact of this
decision was £2.6m which is included within operating costs within the
financial information.
In addition to inventory relating to the AR2 unit, the Directors also reviewed
the recoverability of the debtor for the 15 remaining AR2 units which remain
outstanding for payment from Speedy Hydrogen Services Limited (SHS). To
accelerate the transition from diesel generators to hydrogen fuel cells we
want to give the joint venture the lowest cost possible for the best available
technology. For this reason, we have provided for the debt of £2.8m owed by
Speedy Hydrogen Solutions to AFC Energy on the assumption that the joint
venture will transition to the new technology.
2. Provide balance sheet strength to finance the Company's short-term
goals
During July and August 2025, the business raised £27.5m (gross) via a
fundraise, issuing new equity at 10p per share. This fundraise was
oversubscribed and included new institutional investors capable of supporting
future developments.
The cost of the fundraise was £1.7m (£1.4m in commissions and £0.3m in
legal and corporate finance costs) resulting in net proceeds of £25.8m. The
funds will be used to deliver the two product lines listed above.
3. Laser focus on costs and building Company infrastructure to deliver
The business has carried out a review of all costs which included the cost of
employing our talented team. Due to the change in strategy the business
needs different skills today and sadly the business had to part ways with 17
colleagues, and we redeployed a further four during October 2025 at a total
cost of £276k. This cost is in addition to the rationalisation programme
which concluded in November 2024 which cost a total of £262k. A summary of
savings is as follows:
Total Cost in FY25 Cost to Execute in FY25 Annual Run Rate Cost Savings Total cost in FY26
£'000s £'000s £'000s £'000s
Stade (Germany) Facility (excluding provision release) 606 327 279 -
Reduced footprint of UK facility (exited in January 26) 225 - 225 56
People cost (October 25 redundancy programme) 1,206 276 930 -
Broker rationalisation 75 - 75 -
2,112 603 1,509 56
In the CEO Report, John Wilson reports on the pooling of the engineering and
development teams, removing the segregation between fuel cells and fuel
processing (Hyamtec) for the organisation. AFC Energy plc has two
subsidiaries, Hyamtec Limited and H-Power Limited. Both of these entities
are dormant and have no assets or liabilities. Any reference to Hyamtec
within the annual report is making reference to the fuel processing (cracker)
activities of the business and not the legal entity. In addition, the report
makes reference to the ICL Joint Venture. The Joint Venture is in the
progress of obtaining an Environmental Agency permit to enable the relocation
of the AFC portable ammonia cracker from Dunsfold to its intended location in
Middlesborough. After the permit is granted, it is our intention to
incorporate a new limited company and commence trade.
4. Deliver proof points, technology validation and supply chains
Other than a small amount of Engineering Revenue and the expenditure on the
development costs reported above, there is yet to be any impact on the
financial information from these achievements.
Loss for the financial year of £22.2m
At first glance, this loss represents a significant increase from the prior
year of £17.4m. However, the main elements of the increase are already
explained above (with the stock and debtor write offs). Other items where
there have been significant variances from the prior year include:
Revenue: In FY24 the business made revenue
of £4m selling the current AR2 units. On joining the business, the decision
was made not to manufacture or sell any additional AR2 units. Revenue for
FY25 is only £0.1m and includes Rental of the unit to Acciona, Engineering
Services and Extreme H support.
Other Income: Other income has dropped year in year due to
the updated accounting treatment of Research and Development Tax Credits with
the new combined scheme being recognised solely on the taxation line (FY24
£0.2m)..
Operating Costs: Operating costs in FY25 include a number of
non-cash transactions. These are summarised as: (a) the stock write down of
£2.6m (FY24 - £nil) as reported above; (b) the provision for expected credit
losses of £2.9m (FY24 - £nil) as report above; (c) depreciation /
amortisation of £4.4m (FY24 - £2.5m) the increase in this cost being
accelerated depreciation on leasehold improvements on the property the
business has decided to exit and the commencement of amortising the
capitalised R&D spend; (d) share based payment of £2.0m (FY24 - £1.5m),
the increase relating to a full year impact of the options issued in FY24
(£0.8m in FY25 vs £0.5m in FY24) as well as to the new leadership team
(£0.8m in FY25 vs £nil in FY24), offset by a revaluation if £0.4m in FY24
which did not repeat in FY25. If we adjust for these non-cash items the
underlying costs would be £13.4m (FY24 - £14.1m).
Taxation: In FY25 the
business focus shifted back towards development from manufacturing which in
turn has increased the amount of expenditure qualifying for tax credits.
This coupled with a change in the qualification framework resulted in the
Company qualifying for the enhanced R&D intensive support scheme in FY25
which was not achieved in FY24.
Cash Management and Closing Cash of £25.3m
Since joining the business, we have worked hard to preserve cash whilst the
new strategy was set.
This resulted in a reduction of the quarterly cash burn from £6.7m per
quarter in the 15 months before joining to £2.9m in the last three months of
the financial year. The cash burn increased in Q4 due to the cost of
restructuring the business, the exit of the German Stade facility and the
reengagement of development activities around the two key products reported
above. Q3 includes the benefit of R&D tax credit receipts in both
financial years. At the year end, the Company had placed £11m in a 95 day
notice account to maximise interest receivable. Due to the notice period,
this £11m is classed as short term investment in the financial information.
References to cash in this report includes these short term investments and
this is different to how it is reported in the financial information.
A summary of the FY25 cash flows are as follows:
2025 2024 2023
£m £m £m
Net Loss Before Tax (25.4) (19.3) (19.6)
Non-cash items 12.4 4.0 2.4
R&D Credits Received 1.6 2.7 3.9
Changes in Working Capital (0.5) (6.3) 0.2
Cash used in Operations (11.9) (18.9) (13.1)
Investing Activities (3.5) (7.7) (1.2)
Financing Activities (net of costs) 25.3 14.6 1.5
Cash Movement in the Year 9.9 (12.0) (12.8)
Opening Cash 15.4 27.4 40.2
Closing Cash 25.3 15.4 27.4
A summary of non-cash items are as follows:
2025 2024 2023
£m £m £m
Share Based Payment £2.0m £1.5m £0.8m
Depreciation / Amortisation / Loss on Disposal £4.4m £2.5m £1.7m
Stock Provision / Write Off £2.6m - -
Provision for Expected Credit Losses £2.9m - -
Staff costs paid in Equity £0.5m - -
Consideration in kind - - (£0.1m)
£12.4m £4.0m £2.4m
Going Concern
The Directors have prepared and reviewed forecasts for the period ending
February 2027 which they consider to be the appropriate period for assessing
going concern. Whilst events and conditions beyond this period of assessment
have been considered. In the judgement of the directors, such events and
conditions do not require an extension to the period of assessment.
The base case forecast predominantly includes the continuation of the
development of the Hy-5 ammonia cracker and the next generation of Fuel Cell
products together with their associated costs and the fixed running costs of
the business offset by a moderate volume of equipment and gas sales from the
products developed. The sales commence in September 2026 and ramp steadily.
In this base case scenario, the forecasts show that the business has
sufficient resources throughout the assessment period.
As with prior years, the Directors have applied sensitivities to the above
base case when considering their opinion on going concern. The sensitivities
considered were:
· A 50% reduction in sales volumes
· A 6-month slippage in project delivery
· The timing and quantum of expected R&D tax credits
These sensitivities have been applied without any management action and the
Directors have the ability to control the cost base as well as slow down the
pace of development in order to preserve cash if one or more of the scenarios
became a reality.
Given the outcome of the assessment above, the directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future, being the period to 28 February 2027.
Accordingly, the directors continue to adopt the going concern basis of
preparation in this financial information.
Longer Term Assessment
Considering the maturity of the organisation and the fact that the business is
transitioning from a R&D led company to one which is commercially viable,
the Directors have prepared forecasts which extend beyond the going concern
assessment period. The longer term forecasts (beyond the assessment period)
show that the business will require a sizable increase in revenue (delivering
sustainable commercial revenues in excess of total costs) or additional
funding through debt or a further fundraise in order to be able to continue to
trade in the medium term (second half of calendar year 2027).
Whilst the Directors recognise the challenges of fundraising in the current
economic climate, they are confident that when the Company chooses to seek
additional funding that it will be available. This view is based on:
· A track record of being able to raise funds in the current economic
climate (£27.5m raised in July 2025);
· The new product road map delivering an end to end solution at a
comparable cost to the incumbent diesel technology in FY26;
· UK Government requirement for construction tenders to include a
non-diesel solutions for onsite electricity generation on projects such as HS2
and the Lower Thames Crossing;
· Commercial and technical validation of our products through the JDA
partnerships delivered in FY25; and
· Deployments of the current generator fleet through our Joint Venture
partner Speedy Hire
The Directors acknowledge the requirement to create a commercially viable
business as quickly as possible, with the recent strategy refresh having this
objective at its core.
Statement of comprehensive income
For the year ended 31 October 2025
Year Ended Year Ended
31 October 2025 31 October
2024
Note £000 £000
Revenue from customer contracts 5 125 4,002
Cost of sales (232) (5,868)
Gross loss (107) (1,866)
Other income 6 294 429
Expected Credit Losses 19 (2,937) -
Operating costs 7 (22,851) (18,133)
Operating loss (25,601) (19,570)
Finance income 11 213 316
Finance costs 11 (66) (55)
Loss before tax (25,454) (19,309)
Taxation 12 3,259 1,890
Loss for the financial year and total comprehensive loss attributable to the
owners of the company
(22,195) (17,419)
Basic loss per share (pence) 13 (2.41) (2.22)
Diluted loss per share (pence) 13 (2.41) (2.22)
All amounts relate to continuing operations. There was no other comprehensive
income in the year (2024: £nil).
Statement of financial position
As at 31 October 2025
31 October 31 October 2024
2025
Note £000 £000
Assets
Non-current assets
Intangible assets 14 8,738 4,626
Right-of-use assets 15 175 646
Investment in joint venture 16 625 625
Property, plant and equipment 17 2,508 4,666
12,046 10,563
Current assets
Inventory 18 - 1,948
Trade and other receivables 19 1,923 6,737
Income tax receivable 3,159 1,517
Restricted cash - 433
Short term investments 20 11,000 -
Cash and cash equivalents 20 14,317 15,374
30,399 26,009
Total assets 42,445 36,572
Current liabilities
Trade and other payables 21 5,630 4,955
Asset finance 63 -
Lease liabilities 22 141 505
Provisions 23 96 217
5,930 5,677
Non-current liabilities
Lease liabilities 22 19 159
Asset finance 62
Provisions 23 39 468
120 627
Total liabilities 6,050 6,304
Capital and reserves attributable to the owners of the company
Share capital 24 1,131 854
Share premium 24 159,046 133,555
Other reserve 7,054 4,629
Retained loss (130,836) (108,770)
Total equity attributable to shareholders 36,395 30,268
Total equity and liabilities 42,445 36,572
Statement of changes in equity
For the year ended 31 October 2025
Share capital Share premium Other reserve Retained loss Total
£000 £000 £000 £000 £000
Balance at 1 November 2023 746 118,520 3,779 (91,960) 31,085
Loss after tax for the year - - - (17,419) (17,419)
Issue of equity shares 105 14,810 - - 14,915
Equity-settled share-based payments
- Lapsed or exercised in the year 3 225 (609) 609 228
- Charged in the year - - 1,459 - 1,459
Balance at 31 October 2024 854 133,555 4,629 (108,770) 30,268
Loss after tax for the year - - - (22,195) (22,195)
Issue of equity shares 275 25,491 - - 25,766
Equity-settled share-based payments
- Equity settled renumeration - - 557 - 557
- Exercised in the year 2 - - - 2
- Lapsed in the year - - (129) 129 -
- Charged in the year - - 1,997 - 1,997
Balance at 31 October 2025 1,131 159,046 7,054 (130,836) 36,395
Share capital is the amount subscribed for shares at the nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of these shares net of share issue expenses. The issue
of shares above is presented net of issue cost (refer to Note 24 for further
details on issue costs).
Other reserve represents the charge to equity in respect of unexercised
equity-settled share-based payments and warrants granted.
Retained loss represents the cumulative loss of the Company attributable to
equity shareholders of the parent company.
Cash flow statement for the year ended 31 October 2025
Year ended 31 October 2025 Year ended 31 October 2024
Note £000 £000
Cash flows from operating activities
Loss before tax for the year (25,454) (19,309)
Adjustments for:
Amortisation of intangible assets 14 1,049 81
Depreciation of right-of-use assets 15 471 470
Depreciation of property, plant and equipment 17 2,728 2,043
Loss on disposal of property, plant and equipment 17 145 -
Share-based payments 25 1,997 1,459
Staff costs settled in equity 558 -
Finance income (213) (316)
Lease finance charges 29 41
Inventory write down 2,573 -
Movement in expected credit losses 7 2,937 -
Income recognised on government grants (45) -
R&D tax credits receivable - (224)
Working capital changes:
Decrease in restricted cash 434 (176)
(Increase) in inventory (625) (1,770)
Decrease in receivables 1,860 (5,506)
(Decrease) in payables (1,133) 1,227
(Increase) in provisions (550) 384
(13,239) (21,596)
R&D tax credits received 1,616 2,685
Net cash flows from operating activities (11,623) (18,911)
Capital investment in joint venture 16 - (625)
Purchase of plant and equipment 17 (724) (2,952)
Government Grant received 1,871
Additions to intangible assets 14 (5,160) (4,443)
Term Deposits 26 (11,000) -
Interest received 11 213 316
Net cash flows used in investing activities (14,800) (7,704)
Proceeds from the issue of share capital 27,473 15,792
Proceeds from the exercise of options 2 228
Asset finance 125 -
Cost of issue of share capital 24 (1,707) (877)
Lease finance Charge (29) (41)
Lease payments 22 (498) (520)
Net cash flows from financing activities 25,366 14,623
Net increase/(decrease) in cash and cash equivalents
(1,057) (11,992)
Cash and cash equivalents at the start of the year 15,374 27,366
Cash and cash equivalents at the end of the year 20 14,317 15,374
Notes forming part of the financial information
1. Corporate information
AFC Energy Plc (the Company) is a public limited company incorporated in
England & Wales. The address of the registered office is Unit 68.3,
Dunsfold Park, Cranleigh, Surrey, GU6 8TB. The Company is quoted on the AIM
Market of the London Stock Exchange with the ticker symbol LSE: AFC.
The principal activity of the Company is the development and manufacturing of
fuel cells and development of fuel processing technology and equipment.
2. Accounting policies
Accounting convention
The final results for the year ended 31 October 2025 were approved by the
Board of Directors on 24 February 2026. The final results do not constitute
full accounts within the meaning of section 434 of the Companies Act 2006 but
are derived from audited financial information for the year ended 31 October
2025 and the year ended 31 October 2024. This announcement is prepared on the
same basis as set out in the audited statutory accounts for the year ended 31
October 2025. The accounts for the years ended 31 October 2025 and 31 October
2024, upon which the auditors issued unqualified opinions, also had no
statement under section 498(2) or (3) of the Companies Act 2006. While the
financial information included in this results announcement has been prepared
in accordance with the recognition and measurement criteria of UK adopted
international accounting standards (IFRS), this announcement does not in
itself contain sufficient information to comply with IFRS.
The Company has taken advantage of the exemption under Section 402 of the
Companies Act 2006, which allows a parent company not to prepare consolidated
financial information where its subsidiaries are immaterial both individually
and in aggregate.
The Directors have assessed the size, nature, and financial impact of the
company's subsidiaries and have concluded that they are immaterial for the
purpose of presenting a true and fair view of the company's financial
position. Accordingly, the company has not prepared consolidated financial
information and instead has prepared individual financial information in
accordance with applicable accounting standards.
The company accounts for its investment in joint ventures at cost in
accordance with IAS 27 Separate Financial Statements. For further details
refer to the accounting policy note below.
This financial information is prepared in pounds sterling and rounded to the
nearest thousand.
Going concern
The Directors have prepared and reviewed forecasts for the period ending
February 2027 which they consider to be the appropriate period for assessing
going concern. Whilst events and conditions beyond this period of assessment
have been considered. In the judgement of the directors, such events and
conditions do not require an extension to the period of assessment.
Longer-term factors are included in the Financial Review section within the
Strategic report.
The base case forecast predominantly includes the continuation of the
development of the HY-5 ammonia cracker and the next generation of Fuel Cell
products together with their associated costs and the fixed running costs of
the business offset by a moderate volume of equipment and gas sales from the
products developed. The sales commence in September 2026 and ramp steadily.
In this base case scenario, the forecasts show that the business has
sufficient resources throughout the assessment period.
As with prior years, the Directors have applied sensitivities to the above
base case when considering their opinion on going concern. The sensitivities
considered were:
• A 50% reduction in sales volumes
• A 6-month slippage in project delivery
• The timing and quantum of expected R&D tax
credits
These sensitivities have been applied without any management action and the
Directors have the ability to control the cost base as well as slow down the
pace of development in order to preserve cash if one or more of the scenarios
became a reality.
Given the outcome of the assessment above, the directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future, being the period to 28 February 2027.
Accordingly, the directors continue to adopt the going concern basis of
preparation in this financial information.
Standards, amendments, and interpretations to published standards not yet
effective.
The following amendments to International Financial Reporting Standards
(IFRS), issued by the International Accounting Standards Board (IASB) and
endorsed by the UK, are effective for annual periods beginning on or after 1
November 2024. The Company has adopted these amendments from 1 November 2024,
where applicable, and their adoption has not had a material impact on the
Company's results, financial position, or disclosures:
· IAS 1 (amended) - Classification of Liabilities as Current or
Non-current; Non-current Liabilities with Covenants: Amends the requirements
for classifying liabilities as current or non-current and introduces new
disclosure requirements for covenants (IAS 1.69-76, 76ZA-76ZB).
· IFRS 16 (amended) - Lease Liability in a Sale and Leaseback: Amends
the measurement requirements for lease liabilities arising in sale and
leaseback transactions (IFRS 16.100A-100B).
· IAS 7 and IFRS 7 (amended) - Supplier Finance Arrangements:
Introduces new disclosure requirements for supplier finance arrangements (IAS
7.44F-44I, IFRS 7.39A-39C).
The following standard and amendments issued by the IASB have been endorsed by
the UK and have not been adopted by the Company. The Company intends to adopt
these new and amended standards and interpretations, if applicable, when they
become effective:
· IAS 21 (amended) - Lack of Exchangeability: Provides guidance on how
to determine the spot exchange rate when exchangeability between two
currencies is lacking (IAS 21.8A-8D), effective for annual periods beginning
on or after 1 January 2025.
· IFRS 18 - Presentation and Disclosure in Financial Statements: A new
standard replacing IAS 1, effective for annual periods beginning on or after 1
January 2027.
· IFRS 19 - Subsidiaries without Public Accountability: Disclosures:
Provides reduced disclosure requirements for eligible subsidiaries, effective
for annual periods beginning on or after 1 January 2027.
· Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments: Amendments relating to financial assets with ESG-linked
features and settlement of financial liabilities by electronic payments,
effective for annual periods beginning on or after 1 January 2026
Capital policy.
The Company manages its equity as capital. Equity comprises the items detailed
within the principal accounting policy for equity and financial details can be
found in the statement of financial position. The Company adheres to the
capital maintenance requirements as set out in the Companies Act 2006.
Revenue recognition
Revenue is recognised in accordance with IFRS 15 using the following five-step
model:
· Identify the contract with a customer
· Identify performance obligations
· Determine the transaction price
· Allocate the transaction price to performance obligations
· Recognise revenue as performance obligations are satisfied
Revenue arises from:
· Sale of goods and parts
· Sale of services and maintenance
· Short-term rental contracts
Contracts are assessed to determine whether performance obligations are
satisfied at a point in time or over time:
· Point in time: Standard product sales are recognised when control
transfers to the customer, typically at factory or site acceptance.
· Over time: Customised products, rentals, and long-term service
agreements are recognised based on progress toward completion, using input or
output methods as appropriate.
Consideration received in advance of performance is recorded as deferred
revenue; conversely, performance ahead of consideration is recorded as a
contract asset.
Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the related costs, for which it is
intended to compensate, are expensed. The company presents grants related to
an expense item as other operating income in the statement of comprehensive
income.
When the grant relates to an asset, it is recognised as other operating income
in equal amounts over the expected useful life of the related asset.
Foreign currency
The financial information of the Company is presented in the currency of the
primary economic environment in which it operates (the functional currency)
which is pounds sterling. In accordance with IAS 21, transactions entered by
the Company in a currency other than the functional currency are recorded at
the rates ruling when the transactions occur.
At each Statement of Financial Position date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the date of the
Statement of Financial Position.
Inventory
Inventory is recorded at the lower of actual cost and net realisable value,
applying the average cost methodology.
Work in progress comprises direct labour, direct materials, and direct
overheads. Direct labour is allocated on an input basis that reflects the
consumption of those resources in the production process.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents
comprise cash balances and bank overdrafts that form an integral part of the
Company's cash management process. They are recorded in the statement of
financial position and valued at amortised cost.
Restricted cash represents bank deposit accounts where disbursement is
dependent upon certain contractual performance conditions.
Term deposits
Term deposits with original maturities exceeding three months are not
classified as cash and cash equivalents under IAS 7. These instruments are
instead recognised as short‑term investments (or financial assets), with
their carrying amount based on amortised cost. Any interest income is accrued
and recognised in profit or loss over the deposit period, consistent with the
effective interest method.
Other receivables
These assets are initially recognised at fair value and are subsequently
measured at amortised cost less any provision for impairment.
Property, plant, and equipment
Property and equipment are stated at cost less any subsequent accumulated
depreciation and impairment losses. Where parts of an item of property and
equipment have different useful lives, they are accounted for as separate
items of property and equipment.
Depreciation is charged to the statement of comprehensive income within cost
of sales and/or operating expenses on a straight-line basis over the estimated
useful lives of each part of an item of plant, machinery, and equipment.
Depreciation of the assets commences when the assets are available for use.
The estimated useful lives are as follows:
Decommissioning asset Life of the contract
Leasehold improvements Life of the lease
Plant, machinery and equipment 3 to 10 years
Expenses incurred in respect of the maintenance and repair of property and
equipment are charged against income when incurred. Refurbishment and
improvement expenditure, where the benefit is expected to be long lasting, is
capitalised as part of the appropriate asset.
The useful economic lives of tangible fixed assets are reviewed annually, and
any revision is accounted for as a change in accounting estimate and the net
book value of the asset, at the time of the revision, is depreciated over the
remaining revised economic life of the asset.
Right-of-use assets
At inception each contract is assessed as to whether it conveys the right to
control the use of an identified asset and obtain substantially all the
economic benefits from the use of that asset, for a period in exchange for
consideration. If so, the contract should be accounted for as a lease and the
Company should recognise a right-of-use asset, and related lease liability, at
the lease commencement date.
The right-of-use assets comprise the corresponding lease liability, lease
payments made before the commencement date, less any lease incentives received
and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses. The lease liability is
initially measured at the present value of the lease payments and discounted
using the interest rate implicit in the lease or, if that rate cannot be
determined, the incremental borrowing rate is used. The lease liability
continues to be measured at amortised cost using the effective interest
method. It is remeasured when there is a change in the future lease payments.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset.
At lease commencement date, a right-of-use and lease liability are recognised
on the statement of financial position. The right-of-use asset is measured at
cost, which comprises the initial measurement of the lease liability, any
initial direct costs incurred, an estimate of costs to dismantle and remove
the asset at the end of the lease term and any lease payments made in advance
of the lease commencement date.
Lease payments included in the measurement of the lease liability are made up
of fixed payments (including in-substance fixed), variable payments based on
an index or rate, amounts expected to be payable under a residual value
guarantee and payments arising from options reasonably certain to be
exercised.
After initial measurement, the liability will be reduced for payments made and
increased for interest. It is remeasured to reflect any reassessment or
modification, or if there are changes to in-substance payments. Interest
expense is recognised in finance costs in the statement of comprehensive
income.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of the assets. The
depreciation expense is recognised within operating costs or cost of sales
depending on the nature of the underlying asset.
When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero.
Short-term leases and low value assets are accounted for using the practical
expedients set out in IFRS 16 and the payments are recognised as an expense in
profit or loss on a straight-line basis over the lease term.
The Company has elected not to recognise right-of-use assets and lease
liabilities for leases of less than 12-months and leases of low value assets.
These largely relate to short-term rentals of equipment. The lease payments
associated with these leases are expensed on a straight-line basis over the
lease term.
Intangible assets
The useful economic lives of intangible fixed assets are reviewed annually,
and any revision is accounted for as a change in accounting estimate and the
net book value of the asset, at the time of the revision, is amortised over
the remaining revised economic life of the asset. Amortisation only commences
when the asset is available for use.
Development costs
Development expenditures on an individual project are recognised as an
intangible asset when the Company can demonstrate:
· The technical feasibility of completing the intangible asset so that
the asset will be available for use or sale
· Its intention to complete and its ability and intention to use or
sell the asset
· How the asset will generate future economic benefits
· The availability of resources to complete the asset
· The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the
asset is carried at cost less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins when development is
complete with key objectives achieved as intended by management, and the asset
is available for use. It is amortised over the period of expected future
benefit. The amortised period is agreed by management and the Technical
Advisory board.
The following periods are used:
Capitalised Development
Costs
3 to 5 years
Amortisation is recorded in operating costs. During the period of
development, the asset is assessed for impairment annually.
Research costs are expensed as incurred.
Patent, commercial rights and trade marks
Intangible assets that are acquired by the Company are stated at cost less
accumulated amortisation and impairment losses. Amortisation of intangible
assets is charged using the straight-line method to operating expenses over
the following periods:
Patents 5 to 20 years
Commercial rights 5 years
Trade marks 5 years
Investment in joint ventures
The Company holds 50% interest in a joint venture, Speedy Hydrogen Services
Limited.
A joint venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control.
The Company's investment in its joint venture is initially recognised at cost,
including directly attributable transaction costs. Subsequently, the carrying
amount is adjusted for any impairment losses, if applicable. The Company
assesses the investment for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Impairment testing of intangible assets and property, plant, and equipment
At each statement of financial position date, the carrying amounts of the
assets are reviewed to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent of the
impairment loss (if any). In assessing whether an impairment is required, the
carrying value of the asset is compared with its recoverable amount. The
recoverable amount is the higher of the fair value less costs of disposal
(FVLCD) and value in use (VIU).
Financial instruments
Financial instruments are measured on initial recognition at fair value, plus,
in the case of financial instruments other than those classified as fair value
through profit or loss (FVTPL), directly attributable transaction costs.
Receivables are initially recognised at transaction price. Financial
instruments are recognised when the Company becomes a party to the contracts
that give rise to them and are classified as amortised cost, fair value
through profit or loss or fair value through other comprehensive income, as
appropriate. The Company considers whether a contract contains an embedded
derivative when the entity first becomes a party to it. The embedded
derivatives are separated from the host contract if the host contract is not
measured at fair value through profit or loss and when the economic
characteristics and risks are not closely related to those of the host
contract. Reassessment only occurs if there is a change in the terms of the
contract that significantly modifies the cash flows that would otherwise be
required.
In the periods presented the Company does not have any financial assets
categorised as FVTPL or FVOCI.
Financial assets at amortised cost
A financial asset is measured at amortised cost if it is held within a
business model whose objective is to hold assets to collect contractual cash
flows and its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding and is not designated as FVTPL. Financial assets classified as
amortised cost are measured after initial recognition at amortised cost using
the effective interest method, less any provision for impairment Cash,
restricted cash, trade receivables, and certain other assets are classified
as, and measured at, amortised cost.
Financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net
gains and losses, including any interest expense, are recognised in profit or
loss.
Other financial liabilities are subsequently measured at amortised cost using
the effective interest method. Gains and losses are recognised in net earnings
when the liabilities are derecognised as well as through the amortisation
process. Borrowing liabilities are classified as current liabilities unless
the Company has an unconditional right to defer settlement of the liability
for at least 12 months after the statement of financial position date.
Accounts payable and accrued liabilities and lease liabilities are classified
as, and measured at, amortised cost.
Impairment of financial assets
A loss allowance for expected credit losses is recognised in the Statement of
Comprehensive Income for financial assets measured at amortised cost. At each
year end date, on a forward-looking basis, the Company assesses the expected
credit losses associated with its financial assets (such as trade receivables)
carried at amortised cost.
The expected loss rates are based on the historical credit losses adjusted to
reflect current and forward-looking information on economic factors affecting
the ability of the customers to settle the receivables.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk. The expected credit losses are required
to be measured through a loss allowance at an amount equal to the 12-month
expected credit losses (expected credit losses that result from those default
events on the financial instrument that are possible within 12 months after
the reporting date), or full lifetime expected credit losses (expected credit
losses that result from all possible default events over the life of the
financial instrument). A loss allowance for full lifetime expected credit
losses is required for a financial instrument if the credit risk of that
financial instrument has increased significantly since initial recognition.
Derecognition of financial assets and liabilities
A financial asset is derecognised when either the rights to receive cash flows
from the asset have expired or the Company has transferred its rights to
receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party. If
neither the rights to receive cash flows from the asset have expired nor the
Company has transferred its rights to receive cash flows from the asset, the
Company will assess whether it has relinquished control of the asset or not.
If the Company does not control the asset, then derecognition is appropriate.
A financial liability is derecognised when the associated obligation is
discharged, cancelled, or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
the statement of Comprehensive Income.
Share-based payment transactions
The fair value of options granted under the Employee Share Option Plan, the
Employee Performance Share Plan and the Save-As-You-Earn scheme are recognised
as an employee benefits expense, with a corresponding increase in equity. The
total amount to be expensed is determined by reference to the fair value of
the options granted:
* Including any market performance conditions (e.g., the Company's share
price)
* Excluding the impact of any service and non-market performance vesting
conditions (e.g., profitability, sales growth targets and remaining an
employee for a specified time)
* Including the impact of any non-vesting conditions (e.g., the
requirement for employees to save or hold shares for a specific period)
The total expense is recognised over the vesting period, which is the period
over which all the specified vesting conditions are to be satisfied. At the
end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to equity.
Modifications after the vesting date to terms and conditions of equity-based
payments which increase the fair value are recognised over the remaining
vesting period. If the fair value of the revised equity-based payments is less
than the original valuation, then the original valuation is expensed as if the
modification never occurred.
The fair value of warrants issued is also recognised as a share-based payment
expense with a corresponding increase in equity.
Provisions
General
Provisions are recognised when the Company has a present obligation because of
a past event and it is probable that the Company will be required to settle
the obligation. Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present obligation at
the statement of financial position date and are discounted to present value
where the effect is material.
Warranty provisions
Warranty provisions are recognised for the estimated liability to repair or
replace products under warranty at the time revenue is recognised. The
provision is an estimate calculated based on most likely serviceable component
to wear out at modular and generator level, level of volumes, product mix and
repair and replacement cost.
Decommissioning liability
The Company records a provision for decommissioning costs to remediate the
environmental damage of a manufacturing facility for supply of hydrogen fuel.
Decommissioning costs are provided for at the present value of expected costs
to settle the obligation using estimated cash flows and are recognised as part
of the cost of the relevant asset. The cash flows are discounted at a current
pre-tax rate that reflects the risks specific to the decommissioning
liability. The unwinding of the discount, where material, is expensed as
incurred and recognised in the statement of profit or loss as a finance cost.
The estimated future costs of decommissioning are reviewed annually and
adjusted as appropriate.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the statement of comprehensive income except to the extent
that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Tax due for the current and prior periods is recognised as a liability, to the
extent that it has not yet been settled, and as an asset if the amounts
already paid exceed the amount due. The benefit of a tax loss which can be
carried back to recover current tax of a prior period is recognised as an
asset.
Current tax assets and liabilities are measured at the amount expected to be
paid to/ recovered from taxation authorities, using the rates/laws that have
been enacted or substantively enacted by the balance sheet date.
A deferred tax asset is recognised for deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable
that taxable profit will be available against which the deductible temporary
differences can be utilised, unless the deferred tax asset arises from the
initial recognition of an asset or liability other than in a business
combination which, at the time of the transaction, does not affect accounting
profit or taxable profit.
The carrying amount of deferred tax assets are reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow the benefit of part or
all of that deferred tax asset to be utilised. Any such reduction is
subsequently reversed to the extent that it becomes probable that sufficient
taxable profit will be available.
A deferred tax asset is recognised for an unused tax loss carry forward or
unused tax credit if, and only if, it is considered probable that there will
be sufficient future taxable profit against which the loss or credit carry
forward can be utilised.
R&D tax credits
For accounting periods beginning on or after 1 April 2024, the UK government
has merged the previous SME R&D Tax Relief Scheme and the Research &
Development Expenditure Credit (RDEC) Scheme into a single R&D Expenditure
Credit (RDEC) regime, with the exception of loss-making, R&D intensive
SMEs who may claim under the Enhanced R&D Intensive Support (ERIS) regime
(Finance Act 2024).
If the Company qualifies for the Enhanced R&D Intensive Support (ERIS)
scheme under the merged R&D regime. In accordance with IAS 12 Income
Taxes, all R&D tax credits are treated as income tax items. The credits
are recognised within the taxation line in the statement of comprehensive
income, reflecting their nature as refundable tax credits.
The Company will continue to monitor developments in R&D tax relief
legislation and guidance and will update its accounting policy as required to
ensure compliance with the latest standards and HMRC requirements.
Pension contributions
The Company operates a defined contribution pension scheme which is open to
all employees and makes monthly employer contributions to the scheme in
respect of employees who join the scheme. These employer contributions are
capped at 5% of the employee's salary and are reflected in the statement of
comprehensive income in the period for which they are made.
The amount recognised in the period is the contribution payable in exchange
for services rendered by employees during the period.
3. Critical accounting judgments and key sources of estimation
uncertainty
In the preparation of the financial information, management makes certain
judgments and estimates that impact the financial information. While these
judgments are continually reviewed, the facts and circumstances underlying
these judgments may change, resulting in a change to the estimates that could
impact the results of the Company. In particular:
Critical accounting judgments
The following are the judgments made by management in applying the accounting
policies of the Company that have the most significant effect on the financial
information:
Capitalisation of development expenditure
The Company capitalises costs for product development projects. Such costs
include non-recurring engineering, design costs, and prototype costs. Initial
capitalisation of costs is based on management's judgement that technological
and economic feasibility is confirmed, usually when a product development
project has reached a defined milestone according to an established project
management model. All development costs associated with the fuel cell cash
generating (production) unit have been capitalised from the point of signing
the Supply and Maintenance Agreement with Speedy Hydrogen Solutions (SHS)
Limited on 14(th) November 2023. A key milestone for all liquid cooled fuel
cell related projects was the signing of the exclusive distribution agreement
with Tamgo group on 4(th) September 2023 and therefore all development costs,
related to liquid-cooled projects incurred the year ended 31 October 2025 have
been capitalised on projects related to this.
For the Fuel Processing Cash Generating Unit a key milestone event for
establishing economic feasibility was the externally verified Hydrogen purity
output, announced via RNS on 4(th) December 2023.
In determining the amounts to be capitalised, management makes assumptions
regarding the expected future cash generation of the project and the expected
period of benefits. At 31 October 2025, the carrying amount of capitalised
development costs was £5,587,000 for fuel cell manufacturing technologies and
£2,998,000 for fuel processing.
Identification of Cash Generating Units
The Company performs impairment assessments in accordance with IAS 36
Impairment of Assets. A critical area of judgement involves determining the
appropriate Cash-Generating Units (CGUs) to which assets are allocated. CGUs
represent the smallest identifiable group of assets that generates cash
inflows largely independent of other assets or groups of assets. This
assessment requires management to consider factors such as the interdependence
of cash flows, the nature of products and services, and the level at which
management monitors operations. The identification of CGUs can significantly
affect the outcome of impairment testing, as recoverable amounts are
determined at the CGU level. Changes in assumptions regarding CGU composition
could lead to material differences in impairment results.
Key source of estimation uncertainty
Impairment review of capitalised development expenditure
Impairment exists when the carrying value of an asset or cash generating unit
exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use. The fair value less costs of disposal
calculation is based on available data from brokers, assuming transactions
conducted at arm's length, for similar assets or observable market prices
less incremental costs of disposing of the asset.
Share-based payments
Certain employees (including Directors and senior Executives) of the Company
receive remuneration in the form of share-based payment, whereby employees
render services as consideration for equity instruments (equity-settled
transactions).
The fair value is determined using either the Black-Scholes valuation model,
Modified Binomial Tree model or a Monte Carlo model for market-based
conditions. Both are appropriate for considering the effects of the vesting
conditions, expected exercise period and the dividend policy of the Company.
The cost of equity-settled transactions is expensed, together with a
corresponding increase in equity over the period the Directors expect the
performance criteria will be fulfilled. For market performance criteria this
estimate is made at the time of grant considering historic share price
performance and volatility. For non-market-based performance criteria, an
estimate is made at the time of grant and reviewed annually thereafter
considering progress on the operational objectives set, plans and budgets.
The estimation uncertainty relating to share-based payments is not at risk of
material change in future years other than in relation to management's
estimate of the extent to which the non-market-based performance criteria will
be met.
Expected credit losses on debtor balances
The company exercised significant judgement in assessing the recoverability of
a material receivable due from a related party. In accordance with IFRS 9
Financial Instruments, management evaluates expected credit losses ("ECL")
using forward‑looking information, including the counterparty's financial
position, forecast cash flows and the probability of default. During the year,
indicators of impairment arose relating to the related party's ability to
settle the balance, resulting in the recognition of a full write‑off of the
debtor. The determination of the ECL involved significant estimation
uncertainty due to the inherent difficulty in assessing the counterparty's
future financial capacity and the absence of observable market data. As
required by IAS 1 Presentation of Financial Statements, this judgement is
disclosed due to its material effect on the financial information. Further
details of the transaction are included in the related party disclosures.
4. Segmental analysis
Operating segments are determined by the chief operating decision maker based
on the information used to allocate the company's resources. The information
as presented to the internal management is consistent with the Statement of
Comprehensive Income.
In the prior year financial information, it indicated that going forward, the
Company may identify two operating segments. However, during the current
financial year, AFC Energy restructured its leadership, moving from two Chief
Technology Officers (CTOs) to one, and consolidated its R&D activities
into a single team focused on hydrogen fuel cells and fuel conversion
technologies combined. This reflects the company's strategic shift to a
single, market-led focus.
In accordance with IFRS 8, as AFC Energy continues to operate as one
reportable segment - therefore no further segmental disclosures are
required.
5. Revenue
Year ended 31 October 2025 Year ended 31 October 2024
Revenue from contracts with customers £000 £000
Sales of fuel cell generators 75 3,976
Rental revenue 50 26
125 4,002
Being:
Cash consideration 125 4,002
Consideration in kind - -
125 4,002
Four Customers customer A - B (FY24: one customer A) accounted for more than
10% of revenue:
Year ended 31 October 2025 Year ended 31 October 2024
£000 % £000 %
Customer A 18 14 3,829 96
Customer B 57 46 - -
Customer C 35 28 - -
Customer D 15 12 - -
Unsatisfied performance obligations were:
Within two to five years
Within one year
Total
£000 £000 £000
31 October 2024 1,571 148 1,423
31 October 2025 1,423 - 1,423
The aggregate amount of the transaction price allocated to one contract that
is not fully satisfied as of 31 October 2025 was £1,423,000 (2024:
£1,571,000). This £1.4m deferred revenue is to be recognised over a
three-year period from the date a commercial and fully certified product is
available. The £1.4m deferred revenue liability is to be offset against each
unit sold to the customer at a rate of £150,000 per unit, up to a maximum
value of £1.5m.
6. Other income
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Government grants income 161 130
R&D expenditure credits - 224
Other 133 75
294 429
Other income includes unutilised provision released under IAS 37 relating to
the release of decommissioning costs, fully settled in the year.
7. Operating costs
Year ended 2025 Year ended 2024
Total Total
£000 £000
Materials 1,643 1,685
1,643 1,685
Payroll costs
Payroll (excluding Directors) 6,136 6,746
Directors' costs 1,910 1,526
Other employment costs 577 865
8,621 9,137
Other administrative expenses
Occupancy costs 556 461
Other administrative expenses 3,085 2,825
3,641 3,286
Non-cash costs
Amortisation of intangible assets 1,049 81
Depreciation of right-of-use assets 471 470
Depreciation of Property, plant and equipment
2,728 2,043
Loss on Disposal of PPE 145 -
Less depreciation of rental asset charged to cost of sales
(18) (28)
Inventory Write-down 2,573 4
Share-based payments charge 1,997 1,459
8,946 4,025
22,851 18,133
Research and development costs
The Company's fuel cells manufacturing and fuel processing research and
development activities concentrate on the development of improved design,
engineering, and prototype build. In 2025 the Company spent in total
£11,702,000 (2024: £9,512,000) on research and development.
Research and development costs of £6,582,000 (2024: £5,108,000) that are not
eligible for capitalisation have been expensed in the period incurred and
recognised in operating expenses.
In 2025 development costs meeting the recognition criteria for capitalisation
under IAS 38 Intangible Assets were £ 5,120,000 (2024: £4,403,000), (refer
to note 14). Out of the total capitalised development costs, £2,662,000
relate to labour on development projects.
8. Auditor's remuneration
Fees paid to the auditors included within the operating costs were:
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Audit 193 260
9. Employee numbers and costs, including Directors
The average number of employees in the year were:
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Support, operations and technical 115 130
Directors 6 6
121 136
The aggregate payroll costs for Directors and employees were:
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Wages and salaries 9,259 8,803
Social security 1,141 992
Employers' pension contributions 311 335
Total employee costs 10,711 10,130
Less: capitalised as development costs (2,662) (1,507)
8,049 8,623
Equity-settled share-based payments expense 1,997 1,459
10,046 10,082
Details of the employee costs associated with the company's key management
personnel are included in note 27.
10. Directors' remuneration
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Salary and benefits 972 1,153
Pension 32 28
Total Directors' remuneration 1,004 1,181
In addition, Directors received total of £114,000 (2024: £235,000)
termination benefits in the year. In 2025 the termination benefit did not
impact the highest paid director.
Year ended 31 October 2025 Year ended 31 October 2024
Highest paid director £000 £000
Wages and salaries 739 503
Termination benefit - 235
Benefits in kind 19 45
758 783
Employers' pension contributions 17 17
775 800
11. Net finance income/(cost)
Year ended 31 October 2025 Year ended
31 October
2024
£000 £000
Lease / Loan interest (29) (41)
Exchange rate differences (28) -
Bank charges (9) (14)
Total finance cost (66) (55)
Finance income 213 316
Net finance income 147 261
12. Taxation
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Recognised in the statement of comprehensive income
R&D tax credit - current year 3,159 1,293
R&D tax credit - prior year 100 597
Total tax credit 3,259 1,890
Reconciliation of effective tax rates
Loss before tax (25,454) (19,309)
Tax using the domestic rate of corporation tax at 25.00% (2024: 25%)
6,364 4,827
Effect of:
Change in unrecognised deferred tax resulting from tax losses
(2,511) (2,430)
Non-deductible items (40) (245)
Depreciation in excess of capital allowances (253) (19)
Other differences (631) (320)
R&D expenditure credits - (75)
R&D enhanced deduction on qualifying R&D expenditure 913
2,509
R&D rate adjustment on surrendered losses (2,279) (1,358)
Adjustment to R&D tax credit - prior year 100 597
Total tax credit 3,259 1,890
Deferred tax assets that have not been recognised are set out below:
Year ended 31 October 2025 Year ended 31 October
2024
£000 £000
Intangible assets (838) (1,814)
Property, plant, and equipment 1,452 1,923
Share-based payments 275 142
Losses carried forward 18,973 16,825
Unrecognised deferred tax assets 19,863 17,076
Deferred tax assets of £838,000 (2024: £1,814,000) have been recognised but
offset against deferred tax liabilities of the same amount arising in the same
jurisdiction.
The cumulative tax losses in the amount of £75.9 million (2024: £67.3
million) that are available indefinitely for offsetting against future taxable
profits have not been recognised as the Directors consider that it is unlikely
that they will be realised in the foreseeable future.
The prior year R&D tax credit of £100,000 is largely due differing
treatment of RDEC and SME tax credit scheme in the financial information to
the tax return.
13. 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 year.
Year ended 31 October 2025 Year ended
31 October
2024
Basic loss per share (pence) (2.41) (2.22)
Diluted loss per share (pence) (2.41) (2.22)
Loss attributable to equity shareholders £000 (22,195) (17,419)
Weighted average number of shares in issue 921,398,330 784,681,892
Diluted earnings per share
As set out in note 25, there are share options and warrants (accounted for
under IFRS 2: Share based payments) outstanding as at 31 October 2025 which,
if exercised, would increase the number of shares in issue. Given the losses
for the year, there is no dilution of losses per share in the year ended 31
October 2025 nor the previous year.
14. Intangible assets
Total intangible assets
Patents & commercial rights
Development costs
£000 £000 £000
Cost
At 1 November 2023 - 1,404 1,404
Additions 4,403 40 4,443
Disposals - - -
At 31 October 2024 4,403 1,444 5,847
Additions 5,119 41 5,160
Transfers 1 - -
At 31 October 2025 9,523 1,485 11,008
Amortisation
At 1 November 2023 - 1,140 1,140
Charge for the year - 81 81
At 31 October 2024 - 1,221 1,221
Charge for the year 938 111 1,049
Disposals - - -
At 31 October 2025 938 1,333 2,270
Net book value
At 31 October 2024 4,403 223 4,626
At 31 October 2025 8,585* 152 8,738
*The carrying amount of capitalised development cost is attributed development
of Fuel processing activities (£2,998,000) and Fuel Cell activities
(£5,587,000). With the remaining amortisation period being 30 months.
Impairment review of capitalised development costs
In accordance with IAS 36 Impairment of Assets, intangible assets not yet
available for use are tested annually for impairment. At year-end, the Company
held £2,661k of capitalised development costs that are not being amortised.
These assets have been allocated to two Cash-Generating Units (CGUs): Fuel
Cell and Fuel Processing.
The recoverable amount of each CGU was determined using Fair Value Less Costs
of Disposal (FVLCD), based on an independent market valuation consistent with
IFRS 13's exit price principles. Costs of disposal, including broker fees,
legal costs, and applicable taxes, were deducted in accordance with IAS 36.
The estimated recoverable amount substantially exceeds the combined carrying
amount of £11.4m, resulting in this assumption being deemed unsensitive in
the calculation.
15. Right-of-use assets
Cars Buildings Total
£000 £000 £000
Cost
At 1 November 2023 - 1,985 1,985
Additions 19 - 19
Disposals - - -
At 31 October 2024 19 1,985 2,004
Additions 0 - 0
Disposals - - -
At 31 October 2025 19 1,985 2,004
Depreciation
At 1 November 2023 - 888 888
Charge for the year 1 469 470
Disposals - - -
At 31 October 2024 1 1,357 1,358
Charge for the year 6 465 471
At 31 October 2025 7 1,822 1,829
Net book value
At 31 October 2024 18 628 646
At 31 October 2025 11 163 175
Refer to Note 22 for disclosure of the associated lease liabilities.
16. Investment in joint venture
The Company has a 50% interest in a joint venture, Speedy Hydrogen Solutions
Limited. The joint venture was incorporated on 6(th) November 2023, and the
two joint venture partners invested £625,000 capital each.
2025
£000
1 November 2024 625
Capital invested -
Impairment -
31 October 2025 625
As part of the JV agreement the Company along with its partner may subscribe
to up to £3,750,000 Secured Loan Notes. The loan notes are repayable in three
years' time and interest is payable at 2.00% above bank of England base rate.
The milestone conditions required for the allotment of the loan notes had not
occurred as of 31(st) October 2025.
17. Property, plant, and equipment
Rental Asset Plant, machinery and equipment
Total
Leasehold improvements Decommissioning Asset Assets under construction
£000 £000 £000 £000 £000 £000
Cost
At 1 November 2023 - 3,546 300 3,871 694 8,411
Additions 348 169 167 1,886 382 2,952
Transfers - 303 - 103 (406) -
Disposals - - - (2,483) - (2,483)
At 31 October 2024 348 4,018 467 3,377 670 8,880
Additions 0 157 48 275 245 725
Transfers (100) 20 - 884 (804) -
Disposals (248) - (417) (1) (9) (675)
At 31 October 2025 0 4,195 98 4,535 102 8,930
Depreciation
At November 2023 - 1,394 300 2,961 - 4,655
Charge for the year 29 1,221 77 716 2,043
Disposals - - (2,483) - (2,483)
At 31 October 2024 29 2,615 377 1,194 - 4,215
Charge for the year 116 1,179 128 1,305 2,728
Transfers (42) 0 42
Disposals (103) - (416) (2) - (521)
At 31 October 2025 0 3,794 89 2,539 - 6,422
Net book value
At 31 October 2024 319 1,403 90 2,184 670 4,666
At 31 October 2025 - 401 9 1,996 102 2,508
18. Inventory
31 October 2025 31 October 2024
£000 £000
Raw materials 1,819 1,782
Work-in-progress - 615
Finished Goods 754 -
Provision (2,573) (449)
Inventory - 1,948
Inventory expensed as cost of sales during the year was £136,000 (2024:
£5,348,000).
The provision represents a write down of inventory for the fuel cell
generators that will superseded by the model being released in Q2 FY26.
19. Trade and other receivables
31 October 2024 31 October 2024
£000 £000
Trade receivables 387 249
Receivable from Joint Venture 3,416 4,114
Provision for expected Credit losses (2,937) -
VAT receivables 69 8
Other receivables 49 313
Prepayments 939 2,053
1,923 6,737
Included within trade and other receivables is a provision for expected credit
losses of £2,937,000 (2024: NIL). This provision is required to support the
market adoption Hydrogen which is being enabled through the delivery of the
new lower cost generator being launched in FY26. The provision has been
recognised in accordance with the requirements of IFRS 9 - Financial
Instruments, which mandates the use of an expected credit loss model for
impairment of financial assets.
Of the £2.9m ECL, £2.8m is associated with related parties (see note 27).
Included within prepayments is an amount of £332,000 (2024: £1,378,000)
representing payments made to suppliers in advance for the procurement of
research and development materials and stock items.
There is no significant difference between the fair value of the receivables
and the values stated above.
20. Cash and cash equivalents and short term deposits
31 October 2025 31 October 2024
£000 £000
Cash at bank 997 769
Bank deposits 13,320 14,605
Short Term Deposits 11,000 -
25,317 15,374
There is no material foreign exchange movement in respect of cash and cash
equivalents. See note 26 for term deposit.
21. Trade and other payables
31 October 2025 31 October 2024
£000 £000
Trade payables 646 1,826
Deferred revenue 3,598 1,804
Other payables 426 468
Accruals 960 857
5,630 4,955
Deferred revenue under the ABB contract of £2m is reduced by £577,000 fair
value of the warrants granted on the same day, 15 November 2021, as the two
contracts are linked.
Government grant monies are also included within deferred revenue, where the
corresponding costs have been considered are included in Intangible assets
under IAS38 Capitalised Development Costs. The deferred income is amortised
over the expected life of the associated asset which is 48 months starting in
October 2025.
22. Lease liabilities
Changes in liabilities arising from financing activities:
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Opening position 664 1,124
Cash flows
Repayment (498) (520)
Non-cash
Additions / (adjustment) (24) 19
Interest expense 18 41
160 664
31 October 2025 31 October 2024
£000 £000
Lease liabilities less than 12 months 141 505
Lease liabilities more than 12 months 19 159
160 664
£147,000 of the Company's lease liability as at 31 October 2025 relates to
buildings for the occupancy of the campus at Dunsfold Park. A number of
buildings are occupied under licences, and these have not been recognised as
right-of-use assets. Of the leases recognised as right-of-use assets, the
Company has a commitment on one lease until February 2027. The Company has a
commitment on one lease until November 2025 with no break clauses. Two leases
were renewed in January 2023 until January 2026 with no break clauses.
The expense relating to short term leases and leases of low value assets
incurred during the year is £102,350 (2024: £84,250).
23. Provisions
Product warranties Decommissioning Total
£000 £000 £000
Balance at 31 October 2024 217 468 685
Additions - 67 67
Utilisation (181) (314) (495)
Release - (122) (122)
Balance at 31 October 2025 36 99 135
Current 36 60 96
Non-current - 39 39
Decommissioning
A provision of £417,150 was recognised in FY2024 in accordance with IAS 37 -
Provisions, Contingent Liabilities and Contingent Assets, relating to AFC
Energy's contractual obligation to a site owned by another Hydrogen Provider.
Although the contract was extended to 31 December 2027, a six-month break
clause was exercised and became effective in September 2025.
During the current period, the obligation was settled through payments
totalling £314,889, which was lower than the originally estimated provision.
Consequently, a release of £121,661 has been recognised in profit or loss.
During the year, AFC Energy reassessed its dilapidation provision in respect
of leased sites. The reassessment was based on updated cost estimates to
restore the properties to their original state, reflecting adaptations made
during the lease term.
In accordance with IAS 37, the provision was increased to reflect the revised
expected outflow, with a corresponding increase in the associated RoU asset.
The change has been accounted for as a change in accounting estimate under IAS
8 and recognised prospectively in the current period. A corresponding asset
has been recognised for the increase in provision.
Product warranties
During the year, there was a stock provision under IAS2 - Inventories, writing
down the value of the warranty pool of replacement key components. The
remaining balance represents an estimate of additional costs equivalent to 10%
of a key component, which may be incurred in fulfilling warranty obligations.
As the warranty pool has been covered by another standard, the write down of
warranty pool has been considered as "utilised" in the year.
24. Issued share capital
Share premium before costs of issue Share premium net of costs of issue
Ordinary shares Share capital Costs of issue
Price
£ £000 £000 £000 £000
At 1 November 2023 7746,516,30 - 746 121,789 (3,269) 118,520
Exercise of options
13 March 2024 900,000 79,200 1 78 - 78
Exercise of options
23 May 2024 25,000 2,000 - 2 - 2
Exercise of options
04 June 2024 37,500 5,775 - 6 - 6
Issue of shares 13 June 2024 74,741,630 11,211,244 75 11,137 (670) 10,467
Issue of shares 1 July 2024 30,537,369 4,580,605 30 4,550 (207) 4,343
Exercise of options 11 September 2024 1,600,000 140,800 2 139 - 139
As at 31 October 2024 854,357,806 - 854 137,701 (4,146) 133,555
Issue of shares 1,089
05 February 2025 1,088,990 1 - - -
Exercise of options
24 April 2025 30,000 30 - - - -
Exercise of options
22 May 2025 1,226,350 1,226 1 - - -
Exercise of options
18 June 2025 70,000 70 - - - -
Issue of shares
22 July 2025 85,544,679 8,554,468 86 8,469 (809) 7,660
Issue of shares
11 August 2025 189,184,574 18,918,457 189 18,729 (898) 17,831
Exercise of options
27 October 2025 40,000 40 - - - -
1,131,542,399 - 1,131 164,899 (5,853) 159,046
The Company considers its capital and reserves attributable to equity
shareholders to be the Company's capital. In managing its capital, the
Company's primary long-term objective is to provide a return for its equity
shareholders through capital growth. Going forward the Company will seek to
maintain a gearing ratio that balances risks and returns at an acceptable
level and to maintain a sufficient funding base to enable the Company to meet
its working capital needs. The Company has no debt, other than property
leases, and an immaterial amount on asset finance and therefore a target debt
to equity ratio is not relevant at the time.
Share premium is shown before the permitted deduction of costs of issue. After
such deduction, the value equals £159,046,000.
Details of the Company's capital are disclosed in the statement of changes in
equity.
There have been no other significant changes to the Company's management
objectives, policies, and processes in the year, nor has there been any change
in what the Company considers to be capital.
25. Share-based payments
Share-based payment charge:
31 October 2025 31 October 2024
£000 £000
Employee Share Option Plan 2,023 911
Employee Performance Share Plan (23) 591
SAYE (3) (43)
1,997 1,459
Employee Share Option Plan
The establishment of the Employee Share Option Plan was approved by the Board
on 1 August 2018 and amended on 10 October 2018. The Plan is designed to
attract, retain and motivate employees. Under the Plan, participants can be
granted options which vest unconditionally or conditionally upon achieving
certain performance targets. There is also a time-based condition on the
options granted. Participation in the Plan is solely at the Board's
discretion, and no employee has a contractual right to participate in the Plan
or to receive any guaranteed benefits.
Options are granted under the Plan for no consideration and carry no dividend
nor voting rights.
When exercisable, each option is convertible into one ordinary share.
Set out below are summaries of options granted under the Plan:
Average Average exercise price per share option
exercise price 2024
per share
option Number of options Number of options
2025 2025 2024
£ £
At 1 November 0.07 20,261,013 0.32 12,970,500
Granted during the year 0.01 23,712,406 0.12 10,428,013
Exercised during the year 0.001 (1,366,350) 0.09 (2,562,500)
Lapsed during the year 0.18 (2,019,648) 0.19 (285,000)
Forfeited during the year 0.09 (2,314,000) 0.19 (290,000)
At 31 October 2025 0.03 38,273,421 0.07 20,261,013
Vested and exercisable at 31 October 0.03 11,792,745 0.07 7,283,000
Share options outstanding at the end of the year have the following expiry
dates and exercise prices:
Share options 2025 Share options 2024
Grant date Expiry date Exercise price
£
17 July 2015** 17 July 2028 0.2200 5,000,000 6,000,000
20 April 2020 20 April 2030 0.1540 443,000 783,000
09 June 2023* 28 June 2031 0.1000 500,000 500,000
09 June 2023* 28 June 2031 0.1250 500,000 500,000
09 June 2023 28 June 2031 0.1526 1,500,000 1,500,000
04 July 2022 04 July 2032 0.1900 90,000 215,000
27 April 2023 27 April 2033 0.0188 125,000 625,000
04 April 2024 04 April 2034 0.1300 99,365 238,013
18 April 2024 18 April 2034 0.1900 4,170,000 5,890,000
10 June 2024 10 June 2034 0.2000 70,000 70,000
10 June 2024 10 June 2034 0.2000 70,000 70,000
13 June 2024 13 June 2034 0.1600 - 110,000
24 July 2024 24 July 2034 0.1600 110,000 110,000
05 September 2024 05 September 2034 0.0010 3,400,000 3,400,000
06 September 2024 06 September 2034 0.1300 250,000 250,000
07 October 2024 07 October 2034 0.1300 - 70,000
12 November 2024 12 November 2034 0.1000 210,000 -
21 December 2023*** 21 December 2033 0.0010 350,000 -
29 November 2024 29 November 2034 0.1100 480,000 -
03 December 2024 03 December 2034 0.0900 570,000 -
11 December 2024 11 December 2034 0.1000 280,000 -
16 December 2024 16 December 2034 0.0010 1,400,980 -
07 January 2025 07 January 2035 0.0010 9,389,671 -
20 January 2025 20 January 2035 0.0010 5,515,405 -
11 February 2025 11 February 2035 0.0800 250,000 -
01 May 2025 01 May 2035 0.07 70,000 -
02 May 2025 02 May 2035 0.07 110,000 -
11 May 2025 11 May 2035 0.10 70,000 -
04 June 2025 04 June 2035 0.13 2,000,000 -
12 June 2025 12 June 2035 0.17 110,000 -
11 August 2025 11 August 2035 0.08 70,000 -
08 September 2025 08 September 2035 0.09 1,000,000 -
16 September 2025 16 September 2035 0.08 70,000 -
38,273,421 20,261,013
* Award amended by Deed of Variation in 2023.
** Award amended by Deed of Variation in 2024.
*** Award amended by deed of variation in 2025
The table below sets out the inputs used in determining the fair value of the
grants of options per the previous table as well as the expense recognised in
the accounts in the current year. The grants in the previous table are linked
below based on the exercise price and grant date.
Average grant date share price Average expected volatility per annum Average risk-free interest rate per annum Average dividend yield per annum Average implied option life in years Average fair value per option
Exercise price
Grant date
£ £ £
20 April 2020 0.1540 0.1500 83.60% 0.46% 0.00% 3.0 0.1200
04 July 2022 0.1900 0.1900 95.00% 1.83% 0.00% 3.0 0.1140
27 April 2023 0.1880 0.1882 78.00% 3.82% 0.00% 3.0 0.0990
09 June 2023 0.1000 0.1682 72.00% 4.51% 0.00% 0.7 0.0791
09 June 2023 0.1000 0.1682 72.00% 4.51% 0.00% 0.9 0.0825
09 June 2023 0.1250 0.1682 72.00% 4.51% 0.00% 1.7 0.0817
09 June 2023 0.1250 0.1682 72.00% 4.51% 0.00% 1.9 0.0847
09 June 2023 0.1530 0.1682 72.00% 4.51% 0.00% 2.7 0.0856
09 June 2023 0.1530 0.1682 72.00% 4.51% 0.00% 2.9 0.0883
21 December 2023 0.0010 0.1900 84.77% 3.34% 0.00% - 0.1900
04 April 2024 0.1300 0.1700 85.08% 3.77% 0.00% - 0.1500
18 April 2024 0.1900 0.1900 85.06% 4.01% 0.00% - 0.1600
10 June 2024 0.2000 0.1900 85.56% 4.05% 0.00% - 0.1600
13 June 2024 0.1600 0.1600 85.40% 3.86% 0.00% - 0.1400
24 July 2024 0.1600 0.1500 85.40% 3.89% 0.00% - 0.1300
05 September 2024 0.0010 0.1300 85.36% 3.63% 0.00% - 0.1300
06 September 2024 0.1300 0.1200 85.35% 3.60% 0.00% - 0.1000
07 October 2024 0.1300 0.1000 85.33% 3.88% 0.00% - 0.0800
13 May 2024* 0.2200 0.2100 76.50% 4.13% 0.00% - 0.0972
13 May 2024* 0.2200 0.2100 76.50% 4.13% 0.00% - 0.1213
29 November 2024 0.1100 0.1000 85.49% 3.84% 0.00% - 0.1100
03 December 2024 0.1100 0.1000 85.45% 2.85% 0.00% - 0.0900
11 December 2024 0.1000 0.0900 85.73% 3.88% 0.00% - 0.0900
16 December 2024 0.0010 0.0900 85.44% 3.99% 0.00% - 0.1000
07 January 2025 0.0010 0.0900 85.70% 4.21% 0.00% - 0.1000
20 January 2025 0.0010 0.0800 84.81% 4.19% 0.00% - 0.0900
11 February 2025 0.1000 0.0900 85.76% 4.05% 0.00% - 0.0800
01 May 2025 0.0800 0.0700 83.35% 4.06% 0.00% - 0.0700
02 May 2025 0.0800 0.0700 83.36% 4.06% 0.00% - 0.0700
11 May 2025 0.1000 0.0900 70.88% 3.82% 0.00% - 0.1000
04 June 2025 0.1300 0.1200 76.46% 3.88% 0.00% - 0.1300
12 June 2025 0.1700 0.1600 74.47% 3.88% 0.00% - 0.1700
11 August 2025 0.0900 0.0800 84.95% 4.13% 0.00% - 0.0800
08 September 2025 0.0900 0.0800 74.59% 3.75% 0.00% - 0.0900
16 September 2025 0.0900 0.8000 84.81% 4.17% 0.00% - 0.0900
* The grant date is the date of modification of the
original share options granted on 17(th) July 2015.
Performance Share Plan
The establishment of the Performance Share Plan was approved by the Board on 1
September 2021. The Plan is designed to attract, retain and motivate
employees. Under the Plan, participants can be granted options which vest
unconditionally or conditionally upon achieving certain performance targets.
Participation in the Plan is solely at the Board's discretion, and no employee
has a contractual right to participate in the Plan or to receive any
guaranteed benefits. Award holders are not required to make payment for the
grant of an award unless the board determines otherwise.
Options are granted under the Plan for no consideration and carry no dividend
nor voting rights.
When exercisable, each option is convertible into one ordinary share.
Set out below are summaries of options granted under the Plan:
Average exercise price per share option Average exercise price per share option
2025 2024
Number of options Number of options
2025 2024
£
At 1 November 0.001 13,275,328 0.001 7,600,904
Granted during the year 0.001 10,058,410 0.000 6,295,394
Exercised during the year 0.001 - 0.001 -
Lapsed during the year 0.001 - 0.001 (620,970)
Forfeited during the year 0.001 (4,465,785) 0.001 -
At 31 October 0.001 18,867,953 0.001 13,275,328
Vested and exercisable at 31 October 0.001 1,972,527 - -
Share options outstanding at the end of the year have the following expiry
dates and exercise prices:
Share options 2025 Share options 2024
Grant date Expiry date Exercise price
£
12 July 2022 12 July 2032 0.001 1,972,527 2,315,934
1 June 2023 1 June 2033 0.001 2,865,340 4,664,000
02 May 2024 02 May 2034 0.001 369,405 369,405
02 May 2024 02 May 2034 0.001 3,602,271 5,925,989
01 August 2025 01 August 2035 0.001 10,058,410 -
18,867,953 13,275,328
The table below sets out the inputs used in determining the fair value of the
grants of options per the previous table as well as the expense recognised in
the accounts in the current year. The grants in the previous table are linked
below based on the exercise price and grant date.
Average grant date share price Average expected volatility per annum Average risk-free interest rate per annum Average dividend yield per annum Average implied option life in years Average fair value per option
Exercise price
Grant date
Pence Pence Pence
19 November 2021 0.001 53.80 76.00% 0.05% 0.00% 0.40 0.43
19 November 2021 0.001 53.80 76.00% 0.35% 0.00% 1.40 0.42
19 November 2021 0.001 53.80 76.00% 0.05% 0.00% 3.00 0.45
15 July 2022 0.001 20.70 95.00% 1.76% 0.00% 3.00 12.70
15 July 2022 0.001 20.70 95.00% 1.76% 0.00% 3.00 16.60
01 June 2023 0.001 17.91 74.00% 4.29% 0.00% 3.00 8.79
01 June 2023 0.001 17.91 74.00% 4.29% 0.00% 3.00 10.92
02 May 2024 0.001 18.00 88.11% 4.03% 0.00% 3.00 15.00
02 May 2024 0.001 18.00 67.50% 4.49% 0.00% 3.00 10.00
01 August 2025 0.001 9.00 75.07% 3.66% 0.00% 3.00 7.00
SAYE
Save-as-you-earn (SAYE) 'Sharesave' schemes are open to all eligible
employees. The SAYE schemes allow eligible employees to commit to making a
deduction from salary monthly over three years. At the end of the three-year
period, employees can purchase the Company's ordinary shares of 0.1 pence each
("Ordinary Shares") using the funds saved.
The first AFC Energy SAYE scheme was launched in August 2022 at an exercise
price of 20.48 pence per Ordinary Share, representing a 20% discount to the
closing market price of the Ordinary Shares prior to the scheme being launched
on 3 August 2022. These options matured during the year. At maturity, the
exercise price of the options exceeded the market price of the Company's
shares, resulting in the options being "underwater." Consequently,
participants exercised no options, and no shares were issued under the scheme.
There are no outstanding share options on this scheme.
The scheme remains accounted for in accordance with IFRS 2 - Share-Based
Payment, and no additional expense or reversal has been recognised in respect
of these options.
The second AFC Energy SAYE scheme was launched in September 2023 at an
exercise price of 14.304 pence per Ordinary Share, representing a 20% discount
to the closing market price of the Ordinary Shares prior to the scheme being
launched on 6 September 2023.
The discounts to the closing market prices are in line with the limits of the
SAYE scheme as defined by HMRC.
Average exercise price per option 2025 Average exercise price per option 2024
Number of options 2025 Number of options 2024
Pence £
01 November 15.58 2,028,798 17.44 3,944,601
Granted during the year - - - -
Forfeited during the year 15.64 (783,649) 19.42 (1,915,803)
31 October 15.55 1,245,149 15.58 2,028,798
Vested and exercisable at 31 October - - - -
Exercise price Share options 2025 Share options 2024
Pence
Grant date Expiry date
03 August 2022 31 March 2026 20.480 250,483 420,989
19 October 2023 30 April 2027 14.304 994,666 1,607,809
Average grant date share price Average expected volatility per annum Average risk-free interest rate per annum Average dividend yield per annum Average implied option life in years Average fair value per option
Exercise price
Grant date
Pence Pence Pence
03 August 2022 20.480 25.60 95.00% 2.93% 0.00% 3.08 17.700
19 October 2023 14.304 13.97 73.00% 4.72% 0.00% 3.03 7.060
Warrants
While the Board issues share options to employees, the Board has the
discretion to award warrants from time to time to non-employees, such as
non-executive Directors and third parties. Typically, warrants are granted and
vest upon certain performance targets. Grant of warrants is solely at the
Board's discretion.
Warrants are granted for no consideration and carry no dividend nor voting
rights. When exercisable, each warrant is convertible into one ordinary share.
Set out below are summaries of warrants granted under the Plan:
Average exercise price per warrant 2025 Average exercise price per warrant 2024
Number of warrants 2025 Number of warrants 2024
£ £
01 November 0.770 5,000,000 0.670 11,802,720
Lapsed during the year 0.770 (5,000,000) 0.585 (6,802,720)
31 October - - 0.770 5,000,000
Vested and exercisable at 31 October - -
In the case of the ABB warrants in the table above, the warrant life is two
years from the date of vesting. The final tranche was fully vested and expired
on 13 March 2025, without exercise. All warrants are now expired.
26. Financial instruments
In common with other businesses, the Company is exposed to risks that arise
from its use of financial instruments. This note describes the Company's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout this financial information.
Principal financial instruments
The principal financial instruments used by the Company, from which financial
instrument risk arises, are as follows:
Year ended 31 October Year ended 31 October 2024
2025
Note £000 £000
Financial instruments held at amortised cost:
Cash and cash equivalents 20 14,317 15,374
Restricted cash - 433
Short Term Deposits 11,000 -
Trade and other receivables 19 915 4,676
Total financial assets held at amortised cost 26,232 20,483
Trade & other payables 21 2,031 3,151
Leases 22 160 664
Finance Loans 125 -
Total financial liabilities held at amortised cost 2,316 3,815
There is no significant difference between the fair value and book value of
financial instruments.
The Company does not enter forward exchange contracts or otherwise hedge its
potential foreign exchange exposure. The Board monitors and reviews its
policies in respect of currency risk on a regular basis.
At the reporting date, the Company held term deposits with maturities greater
than 90 days amounting to £11m (FY24 NIL) These are presented within
short-term investments and excluded from cash and cash equivalents in the
statement of cash flows.
General objectives, policies, and processes
The Board has overall responsibility for the determination of the Company's
risk management objectives and policies and, while retaining ultimate
responsibility for them, it has delegated part of the authority for designing
and operating processes that ensure the effective implementation of the
objectives and policies to the Company's finance team. The Board receives
reports from the financial team through which it reviews the effectiveness of
the processes put in place and the appropriateness of the objectives and
policies it sets.
The overall objective of the Board is to set policies that seek to reduce
ongoing risk as far as possible without unduly affecting the Company's
competitiveness and flexibility. Further details regarding these policies are
set out below.
Credit risk
Credit risk arises principally from the Company's trade and other receivables
and cash and cash equivalents and short term deposits. It is the risk that the
counterparty fails to discharge its obligation in respect of the instrument.
The maximum exposure to credit risk equals the carrying value of these items
in the financial information as shown below:
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Cash and cash equivalents 14,317 15,374
Short term Deposits 11,000 -
Restricted cash - 433
Trade and other receivables 915 4,676
Credit risk with cash and cash equivalents and short term deposits is reduced
by placing funds with banks with acceptable credit ratings and government
support where applicable and on term deposits with a range of maturity dates.
At the year end, most cash balances were temporarily held on short-term
deposit. The credit risk provision is estimated on a case-by-case basis
considering public information of the counterparty and payment history and no
loss is expected.
In accordance with IFRS 9 - Financial Instruments, the Company recognises
expected credit losses (ECL) on financial assets measured at amortised cost.
During the year, a significant increase in the loss allowance was recorded in
respect of receivables due from the joint venture. Following a detailed
assessment of the counterparty's financial position and a change in its
business plan, these receivables have been considered as likely irrecoverable.
Consequently, the related charge has been recognised in profit or loss within
administrative expenses (see Note 19).
The Company continues to apply the simplified approach for trade receivables,
recognising lifetime ECL at initial recognition. The loss allowance reflects
historical default experience, current economic conditions, and
forward-looking information in accordance with IFRS 9 requirements.
Liquidity risk
Liquidity risk arises from the Company's management of working capital and the
amount of funding required for the development programme. It is the risk that
the Company will encounter difficulty in meeting its financial obligations as
they fall due. The Company's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they become due.
The principal liabilities of the Company are trade and other payables in
respect of the ongoing product development programme. Trade payables are all
payable within two months. The Board receives cash flow projections on a
regular basis as well as information on cash balances.
The following table shows the Company's financial liabilities by relevant
maturity grouping based on contractual maturities. The amounts included in the
analysis are contractual, undiscounted cashflows.
Total contracted cash flows
Less than one year One to two years Two to five years Carrying amount
31 October 2025 £000 £000 £000 £000 £000
Trade & other payables 2,031 - - 2,031 2,031
Lease liabilities 141 19 - 160 163
Asset Finance 63 57 5 125 139
Total financial liabilities 2,235 76 5 2,316 2,333
Total contracted cash flows
Less than one year One to two years Two to five years Carrying amount
31 October 2024 £000 £000 £000 £000 £000
Trade & other payables 3,151 - - 3,151 3,151
Lease liabilities 525 144 19 664 688
Total financial liabilities 3,676 144 19 3,815 3,839
See also note 22, which sets out the lease liabilities for less than 12 months
and more than 12 months.
Interest rate risk
The Company is exposed to interest rate risk in respect of surplus funds held
on deposit and, where appropriate, uses fixed interest term deposits to
mitigate this risk.
27. Related party transactions
Details of Directors' remuneration are given in note 10. On the 17(th) July
2025 directors subscribed to 5,000,000 shares for a total consideration of
£500,000.
A full list of subsidiaries and joint ventures is given in note 28.
Joint venture
During the year, the company made sales of £56,000 to Speedy Hydrogen
Solutions Limited. At year end there was a debtor balance of £3,400,000. In
accordance with IFRS 9 - Financial Instruments, the Company assessed the
recoverability of the receivable due from the JV. Following a detailed review
of the JV's financial position and a change in its business plan, the
receivable has been considered irrecoverable. An expected credit loss
allowance for £2.8m has therefore been recognised in profit or loss within
administrative expenses, with the remaining debtor balance being associated
with reclaimable VAT.
(see Note 19).
Remuneration of key management personnel
Key management personnel are those individuals who have authority and
responsibility for planning, directing, and controlling the activities of the
Company. For AFC Energy Plc these are all executive and non-executive
Directors in office during each financial year.
Year ended 31 October 2025 Year ended 31 October 2024
£000 £000
Short-term employee benefits:
Salaries and bonuses 1,416 1,300
Termination benefits 114 234
Benefits in kind 34 52
1,564 1,586
Post-employment benefits:
Defined contribution pension plans 31 28
1,595 1,614
Share-based payments 1,102 756
Total 2,697 2,370
Aggregate gains made by Directors on the exercise of share options and
warrants was £nil (2024: £nil).
28. Joint venture, subsidiary, and ultimate controlling party
The company controls 50% of the voting rights of joint venture, Speedy
Hydrogen Solutions Limited, which is accounted for and disclosed in accordance
with IFRS 11 Joint Arrangements. The joint venture is registered in the United
Kingdom with a company number 15264396. The address of the registered office
is Chase House 16 The Parks, Newton-Le-Willows, Merseyside, United Kingdom
WA12 0JQ. The principal activity of the joint venture is the leasing of
hydrogen fuel cells.
On 29 August 2024, the company incorporated Hyamtec Limited, the first
subsidiary of the company. The subsidiary is registered in the United
Kingdom with a registration number 15924441. The address of the registered
office is Unit 68.3 Dunsfold Park, Cranleigh, Surrey, United Kingdom, GU6 8TB.
The subsidiary is 100% owned by the company and it has not traded since
incorporation. Total unpaid share capital of £100 is included within other
payables on the company statement of financial position.
On 22 August 2025, the company incorporated H-Power Limited, the second
subsidiary of the company. The subsidiary is registered in the United Kingdom
with a registration number 16667976. The address of the registered office is
Unit 68.3 Dunsfold Park, Cranleigh, Surrey, United Kingdom, GU6 8TB. The
subsidiary is 100% owned by the company and it has not traded since
incorporation. Total unpaid share capital of £1 is included within other
payables on the company statement of financial position.
There is no ultimate controlling party.
29. Events occurring after the end of the reporting period
On 13 November 2025, the Company entered into a new lease agreement for its
head office premises located at Dunsfold. The lease has a term of five years,
commencing on 1 January 2026, with an annual lease charge of approximately
£325,000.
This event relates to conditions that arose after the reporting date and does
not provide evidence of conditions existing at 31 October 2025 . Accordingly,
no adjustment has been made to the financial information for the year ended 31
October 2025.
The new lease represents a significant commitment that will impact future cash
flows and operations.
Executive Directors Appointed Resigned
BOSTOCK, Karl Robert 20-Jan-25
WILSON, John Frederick 06-Jan-25
BULLARD, Gary Bruce 23-Jul-24 31-Jan-25
DIXON-CLARKE, Peter 01-Dec-22 16-Dec-24
Non-executive Directors Appointed
AGNEW, Gerald Daniel, Dr 09-Sep-19
BIDDULPH, Monika, Dr 03-Dec-21
BULLARD, Gary Bruce 15-Apr-21
NEALE, Duncan John 01-Aug-23
Company Secretary Appointed
KEANE, Brendan James 09-Oct-23
Registered Office
Unit 68.3 Dunsfold Park, CRANLEIGH, GU6 8TB
Bankers
Barclays Bank Plc, 40/41 High Street, CHELMSFORD, CM1 1BE
Lloyds Bank Plc, 77-81 High Street, CHELMSFORD, Essex, CM1 1DU
Joint Broker
Zeus Capital Limited, 82 King Street, MANCHESTER, M2 4QW
AIM Nominated Adviser and Joint Broker
Peel Hunt LLP, 100 Liverpool Street, LONDON, EC2M 2AT
Auditors and reporting accountants
Grant Thornton UK LLP, 8 Finsbury Circus, LONDON, EC2M 7EA
Financial PR Advisers
DGA Group, One Fleet Place, EC4M 7RA, London, United Kingdom
Registrars
Computershare Limited, The Pavilions, Bridgwater Road, Bristol, BS13 8AE
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