REG - AMTE Power PLC - Final Results
01/12/2022 07:00
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RNS Number : 1786I AMTE Power PLC 01 December 2022
1 December 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
AMTE POWER PLC
Final Results
Year of investment in the commercialising of battery cell technology provides
platform for accelerated growth
AMTE Power (AIM: AMTE) ("AMTE Power" or the "Company"), a leading developer
and manufacturer of lithium-ion and sodium-ion battery cells for specialist
markets, announces its final results for the year ended 30 June 2022.
Full year results reflect continued investment in commercialisation plans:
· Turnover up 12% to £2.2m (2021: £2.0m)
· Adjusted EBITDA loss of £6.2m (2021: loss £3.1m)
· Cash of £0.9m (2021: £9.3m) and a term deposit of £2m that
expired and was released to cash on 7 July 2022
· Loss after taxation of £5.8m (2021: loss £3.7m)
· Growing pipeline of potential business with opportunities of
circa £240 million across the AMTE Power product range
· Pathway to commercialisation supported by post year-end £5
million convertible bond facility
Alan Hollis, CEO of AMTE Power, commented:
"I am delighted to have joined AMTE Power at such an exciting stage of its
growth trajectory. In our financial year ended June 2022, the company recorded
a loss after tax of £5.8m, reflecting the investment needed to commercialise
our battery cell technology. I am pleased to say that with demand expected to
accelerate as the UK goes electric, we expect this investment to deliver
significant returns going forward.
"In the short time I have been with the business I have met teams from across
the Group and have been impressed by the depth of knowledge and experience of
our highly skilled team.
"AMTE Power has achieved several important milestones during the year
including a production contract with the UK Battery Industrialisation Centre,
a consistent six-minute full charge time with our Ultra High Power automotive
cell and entering into binding heads of terms for Dundee as the preferred site
for our first MegaFactory. Together, this puts us in a highly competitive
position.
"The business is well placed with high performance products and manufacturing
expertise. I look forward to building on the achievements made to date to take
the business forward on the next stage of its growth."
Key achievements
AMTE Power has been making batteries for almost 30 years and is one of the
only companies manufacturing them in the UK today. The Company has continued
to make good progress across its highly differentiated core products during
the period: Ultra High Power, Ultra Safe and Ultra Prime.
· Automotive sector Ultra High Power cells:
o Cells are performing well against the Company's target specification on
commercial scale equipment at the UK Battery Industrialisation Centre
("UKBIC"), demonstrating AMTE Power's ability to manufacture these cells at
high volume scale
o Cells demonstrated a consistent six-minute full charge time in trials
o Significant early interest from major automotive partners
o Expected to commence commercial production in early 2023
· Energy storage sector Ultra Safe cells:
o Cell development is nearing completion having reached its energy density
specification of 140 Wh/kg
o Planned to commence production at Thurso for delivery to customers for
initial evaluation and project and supply validation
o Initial order signed for 1000 Ultra Safe cells with AceOn - the first
supply contract for this product - in a growing pipeline of opportunities
which includes large household brands in the energy generation industry as
well as smaller entities focussed on energy storage at the household level
· Specialist sector Ultra Prime cells:
o Contracted supply agreement in place
o Progressing to initial supply and trials in 2023, with scale up thereafter
o Initial sales expected to commence in FY24, with production centred on
Thurso
· Product development underpinned by commercial agreements
o AMTE Power has non-binding memoranda of understanding in place with key
automotive partners Cosworth, Viritech and MAHLE Powertrain, in addition to
development agreements with Sprint Power, Eltrium and BMW
· Production contract signed with UKBIC
o Key milestone to upscale production ahead of mass commercialisation,
enabling the business to bring products to market quicker
o To produce up to 60,000 Ultra High Power cells per year, over an initial
term of 24 months, for the high power automotive and fuel cell electric
vehicle markets
o Contract starts in January 2023 for anticipated sales to customers in
sufficient scale to allow them to progress to in-vehicle trials
· Binding heads of terms for Dundee, Scotland, as preferred site
for first MegaFactory
o Will enable AMTE Power to deliver high value cells to market more quickly
and meet high levels of demand for battery technology
o The facility will be capable of producing more than 8 million cells with a
revenue stream in excess of £200m
o AMTE Power plans to have its new, state of the art 0.5GWh MegaFactory in
Dundee ready within three years
· Strengthened senior management team for next phase of growth
o Alan Hollis and Anita Breslin appointed to the Board as Chief Executive
Officer and Chief Financial Officer (Designate) respectively, bringing
extensive combined experience to the business. Anita Breslin has today
commenced her role as Chief Financial Officer
· £5 million convertible bond facility with Arena Investors
announced post year end
o Facility will enable the Company to secure and execute on production
contracts for AMTE Power's core cells: Ultra High Power, Ultra Safe and Ultra
Prime
Outlook
· Ultra High Power cell expected to commence commercial production
at the UKBIC in early 2023
· Ultra Safe cell expected to commence commercial production at
Thurso in 2023
· Ultra Prime cell expected to be produced for initial supply in
2023, with commercial production anticipated at Thurso in 2024
· Business is at an exciting stage of its growth trajectory and
strategic plans for the next phase of growth to be outlined in early 2023
Posting of Annual Report and Notice of AGM
AMTE Power's Annual Report and Accounts for the year ended 30 June 2022 and
Notice of Annual General Meeting ("AGM") will be posted to shareholders by
Friday 2 December and will also be made available on the Company's website.
The AGM will be held at Bee House, 140 Eastern Avenue, Milton Park,
Oxfordshire, OX14 4SB on Thursday 29 December 2022 at 10.00 am.
The person responsible for arranging the release of this announcement on
behalf of the Company is Alan Hollis, Chief Executive Officer of the Company.
Enquiries
AMTE Power plc +44 (0)1847 867 200
Alan Hollis (Chief Executive Officer)
Anita Breslin (Chief Financial Officer)
WH Ireland (NOMAD and Joint Broker) +44 (0)207 220 1666
Chris Fielding / James Bavister / Megan Liddell (Corporate Finance)
Fraser Marshall (Corporate Broking)
Panmure Gordon (UK) Limited (Joint Broker) +44 (0)207 886 2500
John Prior / James Sinclair-Ford (Corporate Finance)
Hugh Rich (Corporate Broking)
Camarco (Financial PR) +44 (0)203 757 4981
Ginny Pulbrook / Tom Huddart / Rosie Driscoll
About AMTE Power
AMTE Power was founded in 2013 and is a leading developer and manufacturer of
lithium-ion and sodium-ion battery cells for specialist markets. In March
2021, the Company was admitted to trading on the AIM market of the London
Stock Exchange. The Company is focused on launching a series of next
generation battery cells based on new chemistries and cell structures that are
designed to solve key problems in power delivery, energy performance, and
safety. These new products are targeted at a range of specialist markets
including the electric vehicle industry and energy storage sector.
AMTE Power's purpose-built cell manufacturing facility in Thurso, Scotland has
the second largest cell manufacturing capacity in the UK and the Company also
has a product development team based in Oxford. AMTE's proposed
state-of-the-art MegaFactory in Dundee, Scotland is expected to be operational
and in production by Q3 2025 and will be capable of producing over 25,000 high
added value batteries per day enabling the Company to rapidly scale up cell
production.
For further information visit the Company's website: www.amtepower.com
(http://www.amtepower.com)
Chair's Statement
The business continues to operate at the heart of the UK's drive towards net
zero carbon emissions and has a range of high-performance lithium and sodium
ion cells along with an extensive IP portfolio. AMTE Power is currently
focused on the delivery of high-performance cells into the energy storage,
automotive and other specialist markets.
The business continues to follow a strategic direction that separates it from
much of the competition, with highly differentiated cells supplied into
substantial, but nonetheless specialised, markets. Key highlights throughout
the reported period were the successful trials for our high-performance
automotive cell, achieving full charging rates of 6 minutes, alongside a
continuing shift in commercial engagements from development to supply, with
the signing of a number of non-binding MoUs with well-known automotive marques
and a pipeline of opportunities across our full portfolio of cells in excess
of £240 million.
Strategic Direction on Track
2022 has been a landmark year for AMTE Power which has further established the
Group as a leading high-performance battery cell developer and one of the only
companies manufacturing battery cells in the UK today with established
commercial partnerships in place.
In July this year we announced a key strategic step in our journey to
gigafactory scale production as we entered into a binding letter of intent for
a new, state of the art 0.5GWh MegaFactory located in Dundee which can be
operational within three years. The facility will be capable of producing
annually more than 8 million cells with a revenue stream in excess of £200m.
The site in Dundee will significantly increase our cell production capacity,
thereby allowing the Group to respond to the high levels of interest in its
differentiated high added value cells.
Prior to the MegaFactory becoming operational, we have enhanced our near term
capacity; on 6th October 2022 we announced we had signed a production
agreement with the UKBIC Agreement which allows the Group to request the UKBIC
to produce up to 60,000 of its Ultra High Power cells each year, over an
initial term of 24 months. This, coupled with our existing Thurso production
facility, will allow us to commence product supply in the near term, and
generate first production revenue and ultimately underpin the MegaFactory with
commercial arrangements ahead of finalising and securing funding to commence
the build out.
Bond Issuance
Following on from our highly successful IPO in 2020, the Group has continued
to utilise its funds for the intended purpose of developing its product range
and client engagement prior to scaling up production. I am delighted to report
that having now reached a point where the Group needs to move from development
to supply, on 4th November we announced the outcome of a successful fund raise
through an unsecured convertible bond facility to the Group for a total amount
of up to £5 million, available for drawdown in three tranches:
£3 million on completion of the Proposed Facility and two further tranches
of £1 million each at least 60 days following drawdown of the previous
tranche.
I would like to thank all the shareholders who supported us at the EGM which
allowed us to successfully close the funding. The net proceeds of the capital
raising will be used to conclude the final development of each of our
core battery cells; to finance capital expenditure at the Thurso factory in
order to achieve commercial production volumes and to finance the costs of
scaling up early commercial production.
Enhancing the management team:
In order to support the dynamic growth from within the Group and our
requirement to skill up our manufacturing expertise, we announced on 6th
September 2022 that Alan Hollis had been appointed an Executive Director of
the Company and Chief Executive Officer Designate. He initially worked
alongside the AMTE Power executive management team and took on the role of
Chief Executive Officer on 31 October 2022, now leading the business in its
growth strategy.
Alan Hollis has a 20-year public company track record of developing and
executing profitable growth strategies within engineering and manufacturing
businesses with turnovers ranging from £4 million to £200 million. In his
last two roles he was a Divisional CEO in Videndum (Vitec) Group plc
("Videndum") from 2015 to 2021, and a Divisional President in the USA in a
division of NYSE listed Crane Co. from 2014 to 2015. Previously, Alan held
leadership roles within the automotive and aerospace component and system
supply businesses Doncasters Group, Firth Rixson and the PFW Group, as well as
in the materials businesses of Delloro Stellite and Weir plc.
At the same time we also announced that Kevin Brundish, who had founded the
Company in 2013, would remain as a Board Director in the role of Strategy
Director, allowing him to focus on the continuing development of AMTE Power's
high performance battery cells, and it's relationships with its customers,
suppliers and Government entities, in addition to playing a key part in
co-ordinating the strategic direction of the Group. I would like to thank
Kevin for his work in bringing the Company to this transitional stage where
product development moves to product supply, and I would like to welcome Alan
to the team.
Finally, it was announced on 5 September 2022 that James Hobson, Chief
Financial Officer, had advised the Board of his intention to leave AMTE Power.
It has been agreed that he will leave AMTE Power on 30 November 2022. The
Board has recruited Anita Breslin as his replacement as announced on
17 November 2022. I would like to thank James for his support during this
transitional phase of the business.
Outlook
AMTE Power is in a good position. There is a high level of commercial interest
in our products. We remain on target with the plans to commercialise our
highly differentiated products and we are seeing a growth in new opportunities
arising which are now focussed on supply rather than product development. We
have an immediately accessible production capacity which will allow us to
convert market opportunity into product supply revenue. Near term revenue and
commercial supply arrangements will underpin the demand and lead to our
funding the expansion of our production capacity through our proposed
MegaFactory in Dundee. As we transition into this phase of product
manufacture and supply, I would like to extend my sincerest thanks to all the
AMTE Power team during this highly active period and look forward to
continuing on this exciting phase of the Group's development to full
commercialisation of its highly specialised products.
David Morgan
Independent Non-Executive Chair
CEO Statement
Introduction
AMTE Power is a leading battery cell manufacturer in the UK - we have been
making batteries for almost 30 years and are one of the only companies
manufacturing them in the UK today. Focussed on highly differentiated products
within the Automotive, Renewable Energy Storage and other specialised markets,
we are at the forefront of the net-zero transition. This is why I welcomed the
opportunity to join the Group as Chief Executive Officer in October this year,
with the goal of driving the business' planned route to commercialisation,
improving manufacturing execution, attracting battery cell technology
expertise and engaging more closely with customers and stakeholders.
Since my arrival eight weeks ago, I have been on the road meeting all the
teams and staff at Thurso in Scotland, Oxford and our office in London,
learning about the business, gaining their feedback and crystallising my
insight into how I can support AMTE Power's ambitious growth plans. In
addition, I have attended industry events, forums, and met key stakeholders,
all of whose views are crucial to formulating my future plans.
Once I have undertaken a deep review of the business, I intend to share my
strategic vision for AMTE Power with the key stakeholders in early 2023,
setting out a clear path for growth and execution thereon. These plans will
give clarity on the launch plans of our three core high performance battery
cell products, and how we will drive the strategic development of the proposed
MegaFactory.
In my visits around the business I have been impressed by the highly skilled
teams of world class electrochemists, technicians and engineers with years of
experience in product development and production, gained from our 30 year
heritage. Our people remain our best asset and I intend to continue to develop
and grow our team as we scale the business, bringing in new blood and skills,
both at the Board level and on the manufacturing production lines. Two such
appointments have been the recent selection of Anita Breslin as our new Chief
Financial Officer and the recruitment of a new Supply Chain Director.
AMTE Power is at an exciting stage of its corporate growth trajectory, with
existing high margin, high performance products and manufacturing expertise. I
look forward to working with my new colleagues on delivering my strategic
vision for 2023-2025.
FY22 Overview
FY22 has been an important year for AMTE Power. The Group continued to develop
its differentiated product range (Ultra High Power, Ultra Safe and Ultra
Prime) in line with expectations. Of particular note was the progress made in
trials for the Ultra High Power automotive cell, which has achieved a
consistent full charge time of six minutes and these are now being
manufactured at UK Battery Industrialisation Centre (UKBIC) on commercial
scale equipment, demonstrating our ability to manufacture these cells at high
volume scale. This achievement, combined with product performance and
manufacturing maturity puts the Group in a highly competitive position with
market leading products.
The use of UKBIC to manufacture cells will enable AMTE Power to upscale
production ahead of mass commercialisation as the business progresses towards
its first MegaFactory, with a proposed site identified in Dundee, Scotland.
Under the "road to net zero", the Government continues to provide significant
support to its policy of switching the motor industry to electric vehicles by
2030, alongside decarbonising the grid, and Government backed funding is now
in excess of £1 billion for the sector.
Commercial collaboration
Throughout the period the Group saw a move in commercial interest from product
development to supply interest, and initial commercial arrangements
(non-binding MoUs) were put in place around supply for the Ultra High Power
cell, among others, Cosworth and MAHLE Powertrain, both well-established
powertrain providers into the automotive market.
An important signal to the future demand for our battery cells is the
involvement of original equipment manufacturers ("OEM") in key projects such
as CELERITAS, a new government funded three-year project aimed at developing
ultra-fast charging cells for the electric vehicle and fuel cell hybrid
electric vehicles markets. AMTE Power is part of the consortium and our Ultra
High Power cell development is an important part of this project. This
demonstrates the high level of interest in our battery cells both from
government and commercial partners. Vehicle OEM BMW a named development
partner on this programme alongside BP and Sprint Electric.
The business has also signed an initial order for 1000 of our Ultra Safe cells
with AceOn. This is the first supply contract for our Ultra Safe product, in a
growing pipeline of opportunities which includes large household brands in the
energy generation industry as well as smaller entities focussed on energy
storage at the household level. Our objective is to develop this early supply
interest into long-term engagements to sit alongside our existing seven year
development and supply agreement we have for our Ultra Prime cell.
Operational review
AMTE Power continues to make good progress across its three core cells: Ultra
High Power, Ultra Safe and Ultra Prime. These differentiated products are
focused on High performance electric vehicles, hybrid vehicles and fuel cell
electric vehicles and energy storage sectors and other specialist markets,
with properties outpacing other cells currently in the market. The business
currently has a number of key commercial opportunities for its products and a
growing overall pipeline of potential business with opportunities of circa
£240m.
Ultra High Power
These cells are ideally suited to key automotive sectors of high-performance
electric vehicles, hybrid vehicles, and fuel cell electric vehicles, with an
increasing number of automotive OEMs committing to fuel cell electric vehicle
production. The Ultra High Power cells are currently being produced at the
UKBIC, utilising our existing development agreement with the facility to scale
up production to gigafactory rates. The cells are delivering exceptionally
well against the Company's target specification, at ever increasing volumes.
The cell has demonstrated its high power capability, with full charging times
of six minutes in initial testing being consistently achieved. This high level
of performance, coupled with the manufacturing maturity of the cell at UKBIC,
puts the Ultra High Power cell in a very competitive position to move to
initial product supply against the growing automotive market interest.
Ultra Safe
Given the continued challenges on pricing of key materials for batteries there
has been significant interest in AMTE Power's sodium-ion cell, Ultra Safe,
from major energy generators to home energy storage producers. This cell uses
no lithium, cobalt or copper and is more cost effective, safer and more
sustainable than lithium cells.
Our Ultra Safe cell is meeting its development targets, with cell development
nearing completion having reached its energy density specification of 140
Wh/kg and cells made at our Thurso facility having met our target performance
levels.
As we have increased production, we have seen steady progression towards
manufacturing maturity.
In March 2022, the Company announced an initial order for 1000 cells from
AceOn targeted for delivery in 2023, which we expect to be the first of a
number of such orders as we enhance the manufacturing capacity at Thurso and
prepare to invest in our first MegaFactory.
Ultra Prime
Ultra Prime is a non-rechargeable cell designed for use in some of the most
difficult environments on earth, with very high energy density and
high-temperature performance. This cell also has a low self-discharge, making
it well suited for applications where temperature, access and long duration of
charge retention are key considerations.
Our Ultra Prime product continues to meet our expectations and performance
targets. AMTE Power has a contracted supply agreement in place for this cell
and is progressing to initial supply and trials in 2023, with scale up
thereafter in 2024/2025.
Industrialisation
As our core product development activities near conclusion, we have looked to
ensure we have near term and longer term capacity in place to meet the growing
demand for our cells. We have taken the first step in our plans to expand our
production capabilities and in July 2022 announced AMTE Power's first proposed
site for a MegaFactory in Dundee with a capacity of 0.5GWh/annum. This factory
will enable AMTE Power to increase manufacturing volume capacity to over 8m of
our Ultra High Power and Ultra Safe cells per annum and will be a massive step
change in the production capacity of the Group. Based on current timings, this
facility could be operational and in production by Q3 2025.
In the interim, our strategy is to utilise the existing and immediately
accessible production capacity of the Group.
In October 2022 we announced a production contract with UKBIC to produce up
to 60,000 Ultra High Power cells each year, over an initial term of 24 months.
This will enable AMTE Power to deliver its first Ultra High Power cells in
sufficient scale to allow customers to progress to in-vehicle trials, as the
automotive industry transitions away from traditional fuels. Ramp up of
existing production of the Ultra High Power cells at the UKBIC is due to start
in January 2023, generating initial revenues for the Company and enabling the
Company to meet growing demand from within the automotive sector, principally
for high performance Electric Vehicles and Fuel Cell Electric Vehicles. AMTE
Power has existing non-binding memoranda of understanding in place with key
automotive partners Cosworth, Viritech and MAHLE Powertrain, in addition to
collaboration agreements with Sprint Power and BMW.
Financial review
Whilst financial performance indicators are a key part in managing the Group's
cash position, other financial indicators are less representative of the
Group's performance as the product was still in development throughout the
reported period. The Group made a conscious decision during the period to
reduce focus on Commercial income and focus more acutely on taking its
products to market.
As a Group we grew turnover 12% to £2.2m compared to £2.0m for the previous
period. This was driven by an increase in grant income of 53% compared to the
previous period. Grant income accounted for 91% of turnover in the year (up
from 65% in 2021). The Group continues to invest in its product development,
which resulted in operating losses of £5.8m for the year (2021: loss of
£3.6m). As at 30 June 2022 the Group held cash and cash equivalents of £0.9m
(2021: £9.3m) plus a 12 month term deposit of £2.0m which was released to
cash on 7 July 2022.
Post period end, the £5m convertible bond facility will allow the Company to
secure and execute on production contracts for the Ultra Safe and Ultra Prime
cells at its existing Thurso facility.
Outlook
AMTE Power is at an exciting stage of its journey. We are in a structurally
growing sector in a jurisdiction that is focused on the climate agenda. We are
a specialist business, within a very large market, offering highly
differentiated products to our customers. We have already achieved several
significant milestones and the recently announced £5m convertible bond
facility leaves the Group well placed for further progress in the year ahead.
Alan Hollis
Chief Executive Officer
Financial Review
The financial performance and position of the Group during the year ended 30
June 2022 reflects the Group's continued focus on the development of its cells
with the aim of progressing towards commercialisation. Increased costs were
incurred due to substantial work undertaken on cell development including at
the UK Battery Industrialisation Centre, addressing and progressing through
the continued challenges faced in achieving product milestones.
During the year the Group undertook a significant exercise to re-evaluate the
medium term commercial strategy, resulting in the Group opting for a 0.5GW
MegaFactory to manufacture its high value Ultra High Power and Ultra Safe
cells. Focusing on high value cell manufacture in such a MegaFactory enables
AMTE Power to generate good returns at a smaller scale with associated lower
capital investment, and much quicker build and commissioning timeframes.
Trading performance
Revenue increased by 12% to £2.2m for the year ended 30 June 2022 (2021:
£2.0m), which comprises of a 53% increase in Grant income to £2.0m (2021:
£1.3m) and a 65% reduction in commercial income to £0.2m (2021: £0.7m).
This swing from 2021 to 2022 reflects the Group's focus on developing its
cells, progress towards completion and commercialisation.
The Gross margin for the year ended 30 June 2022 was a 14% loss compared to a
16% profit for the comparative year, a result of the change in revenue mix
mentioned earlier.
Operating losses for the year ended 30 June 2022 increased to £5.8m (2021:
loss of £3.6m), predominantly due to increased workforce costs, energy costs,
and corporate expenditure relating to being listed on the London Stock
Exchange AIM market.
Expensed net finance costs were £233k for the year ended 30 June 2022 (2021:
£246k). The finance costs include interest recognised from lease liabilities
over right-of-use assets as well as interest arising from licence obligations
that have not been capitalised to cell development intangible asset.
Adjusted EBITDA moved to a loss of £6.2m (2021: loss of £3.1m). Adjusted
EBITDA is defined as operating losses after all amortisation, depreciation,
fair value movement in derivatives, movement in provisions and equity settled
share-based payments have been added back and payments against licence
obligations and liabilities for right-of-use property assets deducted.
The Group was a recipient of R&D tax claims, resulting in a positive tax
charge of £159k for the year (2021: £105k). As the business is currently
loss making, there is no corporation tax payable on earnings.
The basic and diluted loss per share for the year to 30 June 2021 was 16.33
pence (2021: 12.59 pence loss).
Cash movement
Our cash position at the end of the year was £0.9m and a 12 month term
deposit of £2m which expired and was released to cash on 7 July 2022, which
was not defined as Cash and Cash Equivalents under IFRS (2021: £9.3m).
Operating activities resulted in £5.2m of cash outflow for the period to
30 June 2022 (2020: £2.5m). Investment in PPE was £0.4m (2021: £0.3m) and
funding on intangible assets was £1.0m (2021: £0.7m). Financing of
borrowings, asset financing and licence obligations totalled £1.0m (2021:
£0.9m). The Group received proceeds from the issue of shares of £0.8m
largely as a result the exercise of staff options during the year.
Research and development
Development formed a material part of the Group's activities this year, with a
significant portion relating to the development of the Group's products. The
Group capitalised development costs of £3.6m for the year (2021: £3.1m) in
relation to its products where it believes there are suitable, near and
mid-term sales opportunities.
The Group had qualifying research and development costs of £1.4m (2021:
£1.6m) against which it secured both R&D tax credits (recognised as tax
relief) and R&D expenditure credits (recognised as other income and taxed
accordingly).
Capital Reduction
During the year the Group's share premium account was reduced by £21,130,392
as approved by shareholders at the AGM held on Wednesday 17 November 2021. The
cancellation was to remedy an administrative oversight of not filing certain
documents to Companies House within the required time frame prior to the
Company listing on the London Stock Exchange AIM market.
Going concern
As at 30 June 2022 the Group had cash and cash equivalents of £0.9m and a
term deposit of £2m which expired and was released to cash on 7 July 2022. On
4 November 2022 the Group agreed a £5m convertible bond facility with Arena
Investors, LP subject to a maximum £4m principal being outstanding at any
time. This funding will be drawn down over the period to March 2023 and is
expected to amount to c. £3.9 after expenses and fees.
As detailed in Note 1 in Notes to the Group Financial Statements, the
Directors have prepared a cash flow forecast for the period ending 31 December
2023, which shows that the Group will need to raise further funds to meet its
obligations as and when they fall due, in order to continue meeting planned
milestones within the production plans for the Group's key products.
Based on current forecasts, additional funding will need to be raised from
third parties by April 2023 in order to meet current operating cost
projections. The Group is currently in advanced discussions with a number of
parties to secure further funding resources. which the Directors believe will
be sufficient to continue operations with minimal disruption until June 2023.
At this point the Directors plan to raise further finance which will be
predicated on meeting the milestones within the production plans for each of
the Group's three core cells. The Directors are confident of fundraising
prospects at this point upon progress towards production milestones.
James Hobson
Chief Financial Officer (up to 30 November 2022)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
2022 2021
Notes £ £
Turnover 4 2,193,759 1,967,348
Cost of sales (2,511,367) (1,645,708)
Gross (loss) / profit (317,608) 321,640
Other operating income 4 478,030 461,396
Administrative expenses (5,916,772) (4,374,028)
Operating loss 5 (5,756,350) (3,590,992)
Investment revenues 10 7,345 3,952
Finance costs 11 (233,307) (245,893)
Other gains and losses 12 (14,547) 23,624
Loss before taxation (5,996,859) (3,809,309)
Income tax income 13 158,749 104,794
Loss and total comprehensive income for the year (5,838,110) (3,704,515)
Loss for the financial year is all attributable to the owners of the parent
company.
Total comprehensive income for the year is all attributable to the owners of
the parent company.
Earnings per share 14
Basic (pence per share) (16.33) (12.59)
Diluted (pence per share) (16.33) (12.59)
All results were derived from continuing operations.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
2022 2021
Notes £ £
Non-current assets
Intangible assets 15 24,067,313 20,998,109
Property, plant and equipment 16 2,362,153 2,235,439
Investments 17 9,079 23,626
26,438,545 23,257,174
Current assets
Inventories 20 714,668 280,666
Investments 17 2,000,000 -
Trade and other receivables 21 2,163,173 1,823,505
Current tax recoverable 379,077 240,000
Cash and cash equivalents 906,917 9,272,416
6,163,835 11,616,587
Current liabilities
Borrowings 23 30,522 20,365
Lease liabilities 26 203,052 147,453
Licence liabilities 27 985,704 676,191
Provisions 28 9,927 -
Derivative financial instruments 3,538 11,466
Trade and other payables 25 2,222,108 957,540
Deferred revenue 29 28,564 28,564
3,483,415 1,841,579
Net current assets 2,680,420 9,775,008
Non-current liabilities
Borrowings 23 45,681 75,636
Lease liabilities 26 778,183 853,465
Licence liabilities 27 17,368,390 16,188,357
Long term provisions 28 200,000 209,082
Deferred revenue 29 2,582,685 2,299,682
20,974,939 19,626,222
Net assets 8,144,026 13,405,960
Equity
Called up share capital 32 179,943 176,223
Share premium account 33 200,485 20,808,951
Share option reserve 536,879 821,641
Retained earnings 7,226,719 (8,400,855)
Total equity 8,144,026 13,405,960
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Share capital Share premium account Share option reserve Retained earnings Total
Notes £ £ £ £ £
Balance at 1 July 2020 321 8,067,562 128,052 (4,733,051) 3,462,884
Period ended 30 June 2021:
Loss and total comprehensive income for the period - - - (3,704,515) (3,704,515)
Transactions with owners in their capacity as owners:
Issue of share capital 32 38,461 13,812,062 - - 13,850,523
Cost of share issues 33 - (1,598,831) - - (1,598,831)
Bonus issue 32 134,548 (134,548) - - -
Warrant expense in the year 31 - (36,928) 36,928 - -
Share option expense in the year 31 - - 979,384 - 979,384
Share option exercise 31 2,893 699,634 (286,012) - 416,515
Share option forfeit 31 - - (36,711) 36,711 -
Balance at 30 June 2021 176,223 20,808,951 821,641 (8,400,855) 13,405,960
Year ended 30 June 2022:
Loss and total comprehensive income for the year - - - (5,838,110) (5,838,110)
Transactions with owners in their capacity as owners:
Capital reduction 33 - (21,130,392) - 21,130,392 -
Share option expense in the year 31 - - 50,530 - 50,530
Share option exercise 31 3,720 521,926 (331,693) 331,693 525,646
Share option forfeit 31 - - (3,599) 3,599 -
Balance at 30 June 2022 179,943 200,485 536,879 7,226,719 8,144,026
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
2022 2021
Notes £ £ £ £
Cash flows from operating activities
Loss for the year after tax (5,838,110) (3,704,515)
Adjustments for:
Share of results of associates and joint ventures 14,547 -
Taxation credit and RDEC income 13 (371,613) (277,128)
Finance costs 11 240,391 245,893
Investment income 10 (7,345) 27,576
Amortisation and impairment of intangible assets 15 152,553 140,562
Depreciation and impairment of property, plant and equipment 16 397,485 328,537
Equity settled share based payment expense 31 50,530 979,387
Deferred income released (28,514) -
Fair value movement on derivatives (7,928) 7,743
Decrease in provisions 28 845 773
Movements in working capital:
Increase in inventories 20 (434,002) 61,533
Increase in trade and other receivables 21 (658,913) 462,456
Increase in trade and other payables 25 1,266,905 292,312
Cash absorbed by operations (5,223,169) (2,538,001)
Interest paid (96,403) (111,362)
Income taxes refunded 232,536 37,128
Net cash outflow from operating activities (5,087,036) (2,612,235)
Investing activities
Purchase of intangible assets 15 (964,481) (712,215)
Purchase of property, plant and equipment 16 (368,542) (252,174)
Purchase of investments (2,000,000) -
Government grants received 311,567 430,155
Interest received 7,345 3,952
Net cash used in investing activities (3,014,111) (530,282)
Financing activities
Proceeds from issue of shares (net of share issue costs) 839,173 12,325,120
Repayment of borrowings (19,798) (29,438)
Payment of lease liabilities 26 (175,727) (106,703)
Payment of licence liabilities 27 (908,000) (723,615)
Net cash (used in)/generated from financing activities (264,352) 11,465,364
Net (decrease)/increase in cash and cash equivalents (8,365,499) 8,322,847
Cash and cash equivalents at beginning of year 9,272,416 949,569
Cash and cash equivalents at end of year 906,917 9,272,416
General information
AMTE Power Plc is a public company limited by shares incorporated in England
and Wales. The registered office is Suite 1, 3rd Floor, 11-12 St. James's
Square, London, SW1Y 4LB. The company's principal activities and nature of its
operations are disclosed in the directors' report.
The group consists of AMTE Power Plc and all of its subsidiaries.
Significant Accounting Policies
Accounting Convention
The financial statements have been prepared in accordance with international
accounting standards (IFRS) in conformity with the requirements of the
Companies Act 2006. These financial statements for the year ended 30 June 2022
are the first group financial statements of AMTE Power Plc prepared in
accordance with IFRS.
The financial statements are prepared in sterling, which is the functional
currency of the group. Monetary amounts in these financial statements are
rounded to the nearest £1.
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of certain financial
instruments at fair value. The principal accounting policies adopted are set
out below.
Basis of Consolidation
The consolidated group financial statements consist of the financial
statements of the parent company AMTE Power Plc together with all entities
controlled by the parent company (its subsidiaries) and the group's share of
its interests in joint ventures and associates.
All financial statements are made up to 30 June 2022. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Subsidiaries are consolidated in the group's financial statements from the
date that control commences until the date that control ceases.
Entities in which the Group holds an interest and which are jointly controlled
by the Group and one or more other venturers under a contractual arrangement
are treated as joint ventures. Entities other than subsidiary undertakings or
joint ventures, in which the Group has a participating interest and over whose
operating and financial policies the Group exercises a significant influence,
are treated as associates.
Investments in joint ventures and associates are carried in the Group
statement of financial position at cost plus post-acquisition changes in the
Group's share of the net assets of the entity, less any impairment in value.
The carrying values of investments in joint ventures and associates include
acquired goodwill.
If the Group's share of losses in a joint venture or associate equals or
exceeds its investment in the joint venture or associate, the Group does not
recognise further losses unless it has incurred obligations to do so or has
made payments on behalf of the joint venture or associate.
Going Concern
As at 30 June 2022 the Group had net assets of £8,144,026 and cash and cash
equivalents of £906,917 and a term deposit of £2,000,000 which expired and
was released to cash on 7 July 2022.
Subsequent to 30 June 2022, on 4 November 2022 the Group agreed a £5m
convertible bond facility with Arena Investors, LP subject to a maximum £4m
principal being outstanding at any time. This funding will be drawn down over
the period to March 2023 and is expected to amount to c. £3.92m after
expenses and fees.
The Directors have prepared a cash flow forecast for the period ending 31
December 2023, which shows that the Group will need to raise further funds to
meet its obligations as and when they fall due, in order to continue meeting
planned milestones within the production plans for the Group's key products.
Based on current forecasts, additional funding will need to be raised from
third parties by April 2023 in order to meet current operating cost
projections. The Company is currently in advanced discussions with a number of
parties to secure further funding resources which the Directors believe will
be sufficient to continue operations with minimal disruption until June 2023.
At this point the Directors plan to raise further finance which will be
predicated on meeting the milestones within the production plans for each of
the Group's three core cells. The Directors are confident of fundraising
prospects at this point once the commercial viability of the products is
proven.
While the Directors remain confident that necessary funds will be available as
and when required, as at the date of this report the future required funding
arrangements are not secured, and accordingly there is material uncertainty
that may cast significant doubt over the Group's ability to continue as a
going concern. The financial statements have been prepared on a going concern
basis. The financial statements do not include the adjustments that would
result if the Group was unable to continue as a going concern.
Turnover
IFRS 8 'Operating Segments' requires operating segments to be identified on
the basis of internal reports of the Group that are regularly reviewed by the
Group's chief operating decision maker, based on information used to allocate
the Group's resources. The information as presented to internal management is
consistent with the statement of comprehensive income.
It has been determined that there is one operating segment, the development of
battery cells, and accordingly no segmental analysis is presented on the basis
that this would replicate the Income Statement.
In the periods covered in the financial statements, the Group operated mainly
in the United Kingdom. All non-current assets are located in the United
Kingdom. The Group does not have any goodwill to allocate to its operating
segment.
Year Ended Year Ended
30 June 2022 30 June 2021
£ £
Turnover analysed by class of business
Commercial contracts 238,084 687,287
Grant income 1,955,675 1,280,061
2,193,759 1,967,348
Year Ended Year Ended
30 June 2022 30 June 2021
£ £
Turnover analysed by geographical market
United Kingdom 2,059,186 1,868,347
Rest of the World 134,573 99,001
2,193,759 1,967,348
During the year three customers each accounted for over 10% of revenue,
relating to commercial contracts, these customers accounted for £110,690,
£30,000 and £25,000 (2021: £446,442 in total). All commercial contract
revenues have arisen from contracts with customers, and has been disaggregated
to provide revenue amounts for material categories in accordance with the
disclosure requirements of IFRS 15 'Revenue from Contracts with Customers'.
Although government grant income is not typically accounted for under IFRS 15,
this has been presented within revenue as the Group's business model
anticipates significant revenues from such grants in its current business
lifecycle phase.
The Group deferred income of £311,569 (2021: £430,155) against product
development costs that were capitalised. Such income is recognised on the
performance model under IAS 20 'Accounting for Government Grants and
Disclosures'.
CALCULATION OF ADJUSTED EBITDA
In reporting EBITDA, the Directors use an adjusted EBITDA metric to better
reflect the performance of the business. This metric is calculated as follows:
Year Ended Year Ended
30 June 2022 30 June 2021
£ £
Operating Loss (5,756,350) (3,590,992)
Add back:
Equity settled share based payment expense 50,530 979,387
Amortisation of intangible assets 152,553 140,561
Depreciation of property, plant & equipment 397,485 328,537
Deduct:
Payment of licence obligations (908,000) (723,615)
Payment of liabilities for property right-of-use assets (172,500) (189,237)
EBITDA (ADJUSTED) (6,236,282) (3,055,359)
The Directors have opted to include the following cash payments as they
believe that this better reflects a key performance indicator focused on the
operating performance of the Group. The cash payments are: payments for the
licence obligations which is effectively the annual payment for the use of the
licences; and the payments for the right-of-use property assets reflects the
rental payments made for the use of these assets reflected in the balance
sheet as an asset and liability.
LOSS PER SHARE
Year Ended Year Ended
30 June 2022 30 June 2021
£ £
Number of shares
Weighted average number of ordinary shares for diluted earnings per share 35,755,700 29,422,110
In the current and comparative year the Group has incurred losses and as such
has not presented any dilutive shares in accordance with IAS 33 'Earnings per
share'. However, the Group does have a number of share options and warrants
that would dilute the earnings per share should the Group become profitable.
Earnings (all attributable to equity shareholders of the company)
Continuing operations
Loss for the period from continued operations (5,838,110) (3,704,515)
Earnings per share for continuing operations
Basic earnings per share (pence per share) (16.33) (12.59)
Diluted earnings per share (pence per share) (16.33) (12.59)
Basic earnings per share
From continuing operations (16.33) (12.59)
All earnings per share are derived from continuing operations. If the prior
year restatements were not recognised, the comparative basic and diluted
earnings per share (pence per share) would be (9.41).
SHARE CAPITAL
2022 2021 2022 2021
Ordinary share capital Number Number £ £
Authorised, issued and fully paid
Ordinary shares of 0.5p each 35,988,580 35,244,670 179,943 176,223
Reconciliation of movements during the year:
Number
At 1 July 2021 35,244,670
Exercise of share options 743,910
At 30 June 2022 35,988,580
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