REG - Ceres Power Holdings - Final Results for the year ended 31 December 2021
17/03/2022 07:00
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RNS Number : 0550F Ceres Power Holdings plc 17 March 2022
17 March 2022
Ceres Power Holdings plc
Final Results for the year ended 31 December 2021
SIGNIFICANT PROGRESS DRIVES GROWTH AND INVESTMENT FOR FUTURE SCALE
Ceres Power Holdings plc ("Ceres Power", "Ceres", the "Company" or the
"Group") (AIM: CWR.L), a global leader in fuel cell and electrochemical
technology, announces its final results for the year ended 31 December 2021.
Phil Caldwell, CEO of Ceres Power commented: "The recent global volatility has
only served to highlight the urgency for energy security around the world,
with governments under increasing pressure to decarbonise their societies and
hydrogen now widely acknowledged as an essential part of the route to net
zero. We need a different energy landscape and Ceres' purpose to deliver
technology that enables a clean and efficient energy future is absolutely
aligned with that goal. We have made significant progress on our growth
ambitions this year, to establish Ceres as a leading player in the sector."
Financial highlights
· Strong progress on major contracts has driven a 44% increase in
revenue and other operating income to £31.7m for the year ended 31 December
2021 (CY 2020(1): £21.9m)
· Increased gross profit of £20.3m (CY 2020(1): £14.6m) at
sector-leading gross margin of 66% (CY 2020(1): 67%) driven by our IP
licensing model
· £250m of cash and investments as at 31 December 2021 (Dec
2020: £110m) following a successful fundraising in March netting proceeds
of £179m to support growth into electrolysis for the production of green
hydrogen
Strategic highlights
· Building manufacturing scale globally
- After the year end, Weichai, Bosch and Ceres signed China JV
Heads of Terms; aimed at a third global manufacturing centre
- Bosch to invest €400m into its solid oxide fuel cell (SOFC)
business in Germany between now and 2024
- Doosan announced 143.7bn won (c.£89m) investment to build an
SOFC stack manufacturing plant in Korea
· Embedding Ceres' technology in systems globally
- 30kW stationary power system development with Weichai, extends
applications alongside transportation
- Bosch installing ~100 small-scale stationary fuel cell power
plants across Germany
- Doosan preparing soft launch of its 10kW SOFC system using
Ceres' technology later in 2022
- Doosan signed a letter of intent with Shell and Hyundai Heavy
Industries, to develop an SOFC marine system
· Unique and valuable technology to address climate change
- First-of-a-kind solid oxide electrolyser (SOEC) 1MW-scale
demonstrator in build to become operational in 2022
- Strong interest and discussions in progress with several
potential commercial partners on SOEC
- Formation of Ceres Radar; first joint development with
long-duration energy storage company RFC Power
· Investment in our business
- Continued to attract and retain highly talented scientists and
engineers, adding over 160 people in 2021
- "Investment in the future"(2) increased to £34.9m (CY2020
£26.0m) driven by growth in SOEC investment
- Executive team strengthened with the addition of Eric Lakin
(CFO), Deborah Grimason (General Counsel) and Caroline Hargrove (CTO)
(1) Calendar Year 2020 (CY 2020) results for the 12 months ended 31 December
2020 are an Alternative Performance Measure, as defined and reconciled to the
Group's results for the 18 months ended 31 December 2020 in the non-GAAP
section towards the end of this report.
(2) "Investment in the future" defined as R&D costs, capitalised
development and capital expenditure
Financial Summary: 12 months ended 31 December 2021 12 months ended 31 December 2020 18 months ended 31 December 2020
Audited Unaudited(1) Audited
£'000 £'000 £'000
Total revenue and other operating income, comprising: 31,700 21,947 32,987
Licence fees 16,646 7,748 10,519
Engineering services revenue 6,777 5,970 10,866
Provision of technology hardware 7,353 7,953 10,297
Other operating income 924 276 1,305
Gross margin % 66% 67% 67%
Adjusted EBITDA loss(2) - SOFC(3) (4,492) (8,312) (9,063)
Adjusted EBITDA loss(2) - SOEC(3) (12,183) (1,643) (2,305)
Adjusted EBITDA loss(2) - total Group (16,675) (9,955) (11,368)
Operating loss (23,430) (14,788) (17,634)
Net cash used in operating activities (20,342) (2,257) (5,824)
Net cash and investments 249,584 110,186 110,186
1. To assist users of the accounts with understanding the Group's underlying
trading, unaudited calendar year results have been presented on a
like-for-like basis with the comparative period covering the 12 months ended
31 December 2020. CY 2020 results are reconciled to the results for the 18
months ended 31 December 2020 in the non-GAAP section towards the end of this
report.
2. Adjusted EBITDA loss is an Alternative Performance Measure, as defined and
reconciled to operating loss in the non-GAAP section at the end of this report
3. Following the Group's decision to invest more heavily into solid oxide
electrolysis cell (SOEC) technology, the separate disclosure of SOEC Adjusted
EBITDA in addition to the Group's historical solid oxide fuel cell (SOFC)
technology Adjusted EBITDA is considered to provide additional useful
information to allow readers of the interim results to more fully understand
the Group's performance. Adjusted EBITDA by segment is reconciled to operating
loss in Note 3.
Analyst presentation
Ceres Power Holdings plc will be hosting a live webcast for analysts and
investors on 17 March 2022 at 09.30 GMT. To register your interest in
participating, please go to:
https://www.investormeetcompany.com/ceres-power-holdings-plc/register-investor
(https://www.investormeetcompany.com/ceres-power-holdings-plc/register-investor)
.
For further information please visit www.ceres.tech (http://www.ceres.tech) or
contact:
Ceres Power Holdings plc Tel: +44 (0)7932 023 283
Elizabeth Skerritt
Investec Bank PLC (NOMAD & Joint Broker) Tel: +44 (0)207 597 5970
Jeremy Ellis / Patrick Robb / Ben Griffiths
Berenberg (Joint Broker) Tel: +44 (0)203 207 7800
Ben Wright / Mark Whitmore
FTI Consulting (Financial PR) Tel: +44 (0)203 727 1000
Dwight Burden Email: ceres_power@fticonsulting.com (mailto:Ceres_power@fticonsulting.com)
About Ceres Power
Ceres is a world-leading developer of electrochemical technologies: fuel cells
for power generation, electrolysis for the creation of green hydrogen and
energy storage. Its asset-light, licensing model has seen it establish
partnerships with some of the world's largest engineering and technology
companies, such as Weichai in China, Bosch in Germany, Miura in Japan, and
Doosan in Korea, to develop systems and products that address climate change
for power generation, transportation, industry, data centres and everyday
living. Ceres is listed on the AIM market of the London Stock Exchange
("LSE") (AIM: CWR) and is classified by the LSE Green Economy Mark, which
recognises listed companies that derive more than 50% of their activity from
the green economy.
Chief Executive's Statement
We have yet again delivered strong growth; with a 44% increase in revenue and
other income compared with the 12 months ended 31 December 2020, a £179m
fundraising completed to support an expanded strategy for green hydrogen, and
a step-change in the ambition of our partners to scale our technology for mass
production.
It is the urgency of the climate change agenda that requires us to act now and
to deploy clean technologies at scale and pace - and Ceres is achieving that
through collaboration with some of the world's most progressive
companies.
Collaboration with global partners
Having worked in the industry for almost 20 years, I can see the demand for
hydrogen and fuel cell technologies has never been as great. This is down to a
combination of three factors: the need for corporates to transition from
existing technologies such as combustion engines towards a net zero future,
government policies aligned with a low-carbon future and a shift in investing,
providing unprecedented levels of capital for companies with strong ESG
credentials. It is not a coincidence that Ceres' first commercial partnerships
have been in locations with more progressive targets around climate action and
ambitious plans for deployment of fuel cell and hydrogen technologies.
Ceres aims to achieve scale through partnerships and the ecosystem is growing,
with Bosch targeting 200MW of production capacity in Germany, Doosan
installing 50MW as a first step of capacity in South Korea, and now a planned
collaboration with Bosch and Weichai scaling up in China. Ceres has deep
expertise in hydrogen and fuel cell technology, but to realise our ambition
for our technology to impact the climate challenge, we must work with partners
who know how to industrialise products for mass production on a global scale.
Weichai, Bosch and Ceres form strategic collaboration for the Chinese market
In February 2022, we were pleased to share our progress on the formation of a
three-way collaboration with Weichai and Bosch to access the substantial
opportunities that exist for fuel cell technologies in the Chinese market. We
believe it could be the largest market for our technology as China addresses
its goals towards a low-carbon future.
History tells us that companies in China know how to scale, how to mass
produce and how to drive down cost curves. Whilst China accounts for 30% of
global emissions, it also represents a key part of how we achieve net zero.
Following the period end, we signed non-binding Heads of Terms setting out
plans for two separate joint ventures in Shandong Province, China. It is
intended that a three-way system Joint Venture ("System JV") will be set up
for the development and manufacture of SOFC system products, with Weichai as
the majority shareholder and Bosch and Ceres as minority shareholders. Ceres
will invest around £20 million over time and hold a maximum 10% share with
Board representation.
Separately, a stack manufacturing JV ("Stack JV") will be jointly established
between Bosch and Weichai, with Bosch as the majority shareholder. Ceres will
not be a shareholder but will receive royalties from this JV on the sale of
stacks. The Stack JV would be the second manufacturing facility for Bosch and
is planned to follow its initial 200MW facility in Germany, where start of
production is anticipated for 2024.
We have every confidence in our collaboration with Weichai and, with the
addition of Bosch's expertise in industrialisation and manufacturing, we have
the potential to establish one of the strongest partnerships in the fuel cell
industry globally.
Market Opportunities
Ceres has a proprietary technology that is truly reversible. Running in one
direction it can use multiple fuels to generate power highly efficiently when
and where you need it. Run in reverse, it generates green hydrogen at high
efficiencies and low cost.
We have established a leading technology position in fuel cells that is being
demonstrated in multiple applications and geographies with established global
partners. Now, we have the potential to address an even greater market for
electrolysis through a highly efficient, low-cost production method for
hydrogen in a market where the requirement for hydrogen is predicted to double
each decade between 2030 and 2050.
Across our energy systems, there is a need to reinforce power grids that are
coming under increasing demand from electrification. Stationary fuel cell
systems, such as those developed by Miura, Doosan and Bosch using Ceres' SOFC
technology provides highly efficient, scalable, fuel-flexible and
environmentally friendly power generation systems for use in many
applications. As an example, Bosch's product achieves electrical efficiency
of over 60% and provides useful temperatures for heating and hot water,
delivering a total efficiency greater than 85%. The Bosch system is scalable
providing flexible, decentralised power for cities, data centres, electrical
charging infrastructure or in industrial or commercial settings. Bosch is
aiming for production capacity of about 200 megawatts output per year from
2024, enough to supply around 400,000 people with household electricity.
In transportation, batteries are a good fit for lighter vehicles in an urban
environment. As you require more power density for heavier vehicles a hybrid
battery and fuel cell system, such as the 30kW range extender for buses and
commercial vehicles we are developing with Weichai Power for the Chinese
market, is ideal. Especially for high-utilisation, long-distance applications,
or vehicles with heavy payloads.
Similarly, in decarbonising heavier transportation such as shipping we are
seeing strong interest in our fuel flexible technology as a route to
decarbonisation. Ceres is working with two maritime consortia in the UK to
carry out separate feasibility studies on the use of SOFC technology in ship
architecture. South Korea is one of the biggest shipbuilding nations in the
world; here our partner Doosan has signed a letter of intent with Shell and
the shipping division of Hyundai Heavy Industries, looking to apply Ceres'
fuel cell technology to auxiliary and even prime propulsion in ships, with
international shipping accounting for around 2% of global energy-related CO2
emissions according to the International Energy Agency.
Expanding our strategy
Globally, industry accounts for 24% of carbon dioxide emissions and
electrification is not a credible route to decarbonise many processes. For
steel (accounting for 7% of global carbon emissions), ammonia and cement (2%
each), hydrogen provides an economic solution to address parts of the energy
system that cannot be directly electrified, where we rely on fossil fuels
today. We need to start working on these hard-to-abate areas now as they are
significant problems with major infrastructure challenges.
In early 2021, we took the decision to broaden the addressable market of the
Company, moving into the production of green hydrogen using Ceres' technology
through electrolysis. To do that we are committing £100 million to develop
megawatt-scale, high-efficiency Ceres electrolysers. Importantly, solid
oxide electrolysers such as Ceres' aim to produce hydrogen at efficiencies
around 20% greater than other technologies, in the range from mid-80s to 90%
efficiency, where it is possible to make use of waste heat in industrial
processes to drive this high efficiency. We believe we have a pathway to
produce green hydrogen at $1.5/kg, which is the point at which electrolysis
becomes competitive with blue and grey hydrogen produced using fossil fuels,
at a price point that is key to making green hydrogen commercially viable.
Estimates suggest hydrogen could eventually account for 18% of primary energy.
That is a big opportunity - according to McKinsey it is a $2.5 trillion
opportunity. In March last year, we raised £179m in the public markets to
support our growth. I am seeing a change in the capital markets, certainly
from when I took over as Chief Executive of Ceres in 2013, with recognition
that greater investment is needed to scale companies like Ceres, and others,
to meet the climate challenge. I believe we have a very strong investment
case.
Our licensing business model differentiates us from a pure play fuel cell or
electrolyser manufacturing company. As a licensing business, committed to
delivering clean energy for a net zero future, it is imperative that alongside
delivering our fuel cell and hydrogen electrolysis businesses, we continue to
drive innovation to create future value, both through investment in further
progressing our own technology and partnering in new areas, which are aligned
with our purpose. That is why we have now formed Ceres Radar, which is
seeking to capitalise on the deep experience our team has built in identifying
technologies aligned with our purpose where we can employ our expertise in
technology development and licensing to accelerate these towards
commercialisation.
Our first investment, announced in November, is in long-duration energy
storage with RFC Power, an early-stage company that has a strategy to develop
the world's lowest-cost flow battery - a hybrid between a fuel cell and a
battery that decouples power from energy. Long-duration energy storage
technologies, such as hydrogen and flow batteries, have an important role to
play in decarbonising the energy system. Before we decide to increase our
ownership, we are going to work with RFC for up to a year giving us time to
get to know the Company and the technology and to understand the commercial
opportunity.
In meeting the challenge of the scale and pace required to meet a net zero
future, not everything we do at Ceres will be organic. We now have
considerable capability we can deploy into new areas in developing unique and
often difficult and IP-rich technologies, and scaling through our licensing
partnerships model.
In March 2022, we announced a multi-million pound investment to establish a
state-of-the-art fuel cell and electrolysis test facility in partnership with
global engineering and testing consultancy, Horiba Mira. The agreement expands
Ceres' test stand capacity and includes development of next-generation testing
infrastructure to support Ceres' core technology and systems to be delivered
at scale and pace with global partners. The partnership combines
best-in-class UK expertise and our commitment to grow jobs and value for the
UK economy through delivering clean energy technology to global markets.
Our people
The war in Ukraine has put many things into perspective and at Ceres I feel so
proud to be a high-growth UK company with such a talented, multi-cultural
workforce, including team members from Ukraine. We went into lockdown in 2020
with around 200 people and have emerged this year with over 500 passionate
scientists and engineers operating across two sites in the UK and many now
remotely, both in the UK and internationally. At Ceres we have a strong
culture and we were proud to be the recipient of a Queen's Awards for
Enterprise in 2021 recognising our people's commitment to excellence in
International Trade.
To support the Company's growth, we also developed and launched a new Ceres
Academy platform designed and tailored around our core purpose, strategy and
values. It sits at the heart of nurturing and developing our people through
onboarding, general e-learning and tailored high-potential programmes. We
also strengthened our management - with the arrival of Eric Lakin as Chief
Financial Officer, Caroline Hargrove as Chief Technology Officer and Deborah
Grimason as General Counsel and Company Secretary - who bring fresh
perspective to our existing, talented team.
I would like to take the opportunity to thank all the Ceres employees for
their hard work during the year and add my personal thanks to Richard Preston,
who became CFO as I joined the Company in 2013 and has made a major
contribution to the success of the business over the last nine years.
The UK is a science and technology powerhouse: as a nation we have invented
some of the world's best technology that we still deploy widely around us
today. I believe the same thing can be true of hydrogen and fuel cell
technology. At Ceres we are world leaders in this technology, and through
our global partners we can scale at pace to deliver clean energy for society
and for all our benefit.
Phillip Caldwell
Chief Executive Officer
Financial Review
During 2020 we changed our accounting period end from 30 June to 31 December,
and as a result we have prepared the prior period financial statements for the
18 months ended 31 December 2020. To assist with understanding the underlying
results of the business, we have also prepared a set of unaudited Calendar
Year results for the 12 months to 31 December 2020 (CY2020) to compare with
the 12 months ended 31 December 2021 (CY2021), which the commentary of the
results below also reflects.
The Group saw strong top-line growth of 44% in 2021 compared to the previous
12-month period, with revenues and other income of £31.7m (CY2020: £22.0m
and 18-month period to 31 December 2020: £33.0m). All revenue in 2021 related
to the fuel cell business and the growth was driven by licence fee income,
principally from our partner Doosan. Gross margins remained high at 66%
(CY2020 and 18-month period to 31 December 2020: 67%), driven by a high
proportion of licence fee revenue recognised in the year.
Order book and pipeline fell to £79.8m at 31 December 2021 from £98.7m at 31
December 2020; much of this decrease was a result of recognising licence fees
from the Doosan contract during the year. Going forwards, the order book and
pipeline will continue to vary depending on the timing of contracts won and
revenue earned from them.
Segmental reporting: Fuel cells and electrolysis
During the year we began to report SOEC as a separate segment to the SOFC
business as we started our SOEC activities in earnest. This is in line with
internal reporting, which we have done to separate the progress in both parts
of the business, that are at different stages of commercialisation.
The SOFC part of the business, which had strong sales and gross profit growth
of £9.1m and £5.8m respectively, compared to CY2020, reduced its adjusted
EBITDA loss by £3.8m to £4.5m (CY2020: £8.3m). There will be continued
investment in SOFC to support future expansion, and so the level of losses or
future profitability of this part of the business will continue to be highly
influenced by the level of SOFC licence fee revenue recognised in a given
period until royalty revenue streams become material.
Our SOEC business showed an adjusted EBITDA loss of £12.2m (CY2020: £1.6m),
reflecting research and development activities as well as the initial costs of
setting up the 1MW demonstration unit.
Focused investment for the future
The underlying theme across both segments of the business in 2021 was
investments to drive innovation and future growth, including capital
investments and strategic resources. We have put focus on building the
commercial, engineering, test and energy materials science teams. Overall, our
employee base grew as planned, with 489 people employed at 31 December 2021
compared to 325 people as at 31 December 2020. Overall research and
development costs increased by 38% and £6.3m compared to CY2020.
Capitalised development in the year, which only relates to ongoing SOFC
development, increased to £4.6m compared to £2.7m for CY2020 and we hold net
£8.5m capitalised to date. Amortisation of this to the income statement
increased, as expected, to £1.0m from £0.2m in the 18-month period to 31
December 2020.
Our investment in property, plant and equipment of £7.4m (CY2020: £6.7m) was
principally on manufacturing improvement and capacity expansion, as well as
expanding our test infrastructure. This continued investment also resulted in
increased depreciation of £4.8m in 2021 compared to CY2020 of £3.6m.
Going forward, we plan to accelerate growth of our test capability
significantly over the coming year to support the expected growth of our
partners, and also cater for additional market opportunities including SOEC
and new SOFC applications such as marine and alternative fuels. We also intend
to expand our manufacturing capacity for prototypes and demonstrators for both
SOFC and SOEC products. Consequently, we expect our capital expenditure to
increase significantly in 2022 from 2021 levels.
Overall, this "investment in the future" (R&D costs, capitalised
development and capital expenditure) increased 34% to £34.9m (CY2020:
£26.0m). The £34.9m comprises £22.9m in R&D (excluding depreciation,
amortisation and share-based payments), £7.4m in capital expenditure and
£4.6m in capitalised development. Of the £34.9m, £10.7m was investment in
SOEC (CY2020: £1.3m).
As a result of these investments and increased amortisation and depreciation,
the Group reported an increased operating loss of £23.4min 2021, up from a
loss of £14.8m in CY2020 (£17.6m in the 18-month period to 31 December
2020).
Strong financial position: the foundation for continued progressive growth
The Group ended the year with a strong cash position of £250m in cash and
investments as at 31 December 2021
(31 December 2020: £110m) reflecting the equity fundraise of £179m during
the year.
Equity free cash outflow (defined and reconciled to net cash from operating
activities at the end of this report) was £32.0m (CY2020: £11.8), being
driven by net cash used in operating activities of £20.3m, capital
expenditure of £7.4m, capitalised development of £4.6m with the balance from
interest payments and exchange rate movements. The net cash used in operating
activities in the year was adversely impacted by a movement in net contract
assets of £9.7m due to timing differences between invoicing and recognising
revenue on contracts.
Other significant movements in the balance sheet included inventories
increasing to £3.1m (31 December 2020: £2.1m) due to increased activity at
our manufacturing facility and trade and other payables reducing to £2.8m (31
December 2020: £9.1m) reflecting the payment of receipts received in December
2020 relating to the exercise of certain share options.
Financial outlook
Significant opportunities exist as the Group invests in innovative
electrochemical technology and expands its relationships with international
strategic partners to build a pioneering position in the global energy
transition away from the dependency on hydrocarbons.
Strong top-line growth is expected to continue into 2022 and the phasing of
revenue in the year will be materially influenced by the timing of the new
China Joint Venture formation. We are planning to significantly increase our
investments in R&D and capital investment in 2022 to drive Ceres' future
growth including electrolysis and new application capabilities in line with
our strategy. The Group is well positioned to address the broadening
opportunities we see across fuel cells, electrolysis and other clean energy
technology solutions. We continue to work with our partners to enable them to
access the end markets in volume, as planned for 2024 and beyond.
Calendar Year Results (unaudited)
The Group has prepared comparative Calendar Year results to enable a more
consistent like-for-like review of the trading performance of the business.
The Calendar Year results are an Alternative Performance Measure and cover the
trading period for the 12 months ended 31 December 2021 (CY2021) and the 12
months ended 31 December 2020 (CY2020). The basis of preparation applied to
the Calendar Year results together with a reconciliation to the Group's
Statutory IFRS Results are provided at the end of this report.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS - CALENDAR YEAR (NON-GAAP) CY2021 CY2020
for the 12 months ended 31 December 2021
Unaudited
£'000 £'000
Revenue 30,776 21,671
Cost of sales (10,427) (7,085)
Gross profit 20,349 14,586
Other operating income 924 276
Operating costs (44,703) (29,650)
Operating loss (23,430) (14,788)
Finance income 438 698
Finance expense (380) (434)
Loss before taxation (23,372) (14,524)
Taxation credit 1,970 1,353
Loss for the financial year (21,402) (13,171)
Adjusted EBITDA(1) (16,675) (9,955)
SEGMENTAL REPORTING - ANALYSIS OF RESULTS BETWEEN FUEL CELLS AND ELECTROLYSIS
(NON-GAAP)
for the 12 months ended 31 December 2021
Unaudited
CY2021 CY2020
SOFC SOEC Total SOFC SOEC Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 30,776 ꟷ 30,776 21,671 ꟷ 31,682
Cost of sales (10,427) ꟷ (10,427) (7,085) ꟷ (7,085)
Gross profit 20,349 ꟷ 20,349 14,586 ꟷ 14,586
Other operating income 924 ꟷ 924 276 ꟷ 276
Operating costs (excluding adjusting items) (25,765) (12,183) (37,948) (23,174) (1,643) (24,817)
Adjusted EBITDA(1) (4,492) (12,183) (16,675) (8,312) (1,643) (9,955)
(1) Adjusted EBITDA is an Alternative Performance Measure, as defined and
reconciled to operating loss at the end of this report.
CONSOLIDATED CASH FLOW STATEMENT - CALENDAR YEAR (NON-GAAP) CY2021 CY2020
for the 12 months ended 31 December 2021
Unaudited
£'000 £'000
Loss before income tax (23,372) (14,524)
Non-cash adjustments 6,697 4,732
Movements in working capital (6,745) 5,075
Income tax received 3,078 2,460
Net cash used in operating activities (20,342) (2,257)
Investing activities
Purchase of property, plant and equipment (7,377) (6,656)
Capitalised development expenditure (4,573) (2,719)
Decrease/(increase) in long-term investments 3,000 (8,000)
Net increase in short-term investments (23,898) (29,231)
Finance income received 438 669
Net cash used in investing activities (32,410) (45,937)
Financing activities
Proceeds from issuance of ordinary shares 181,472 50,249
Expenses from issuance of ordinary shares (2,572) (344)
Cash (paid)/received on behalf of employees on the sale of share options (7,490) 7,490
Repayment of lease liabilities (405) (389)
Finance interest paid (316) (434)
Net cash generated from financing activities 170,689 56,572
Net increase in cash and cash equivalents 117,937 8,378
Exchange gains/(losses) on cash and cash equivalents 563 (29)
Cash and cash equivalents at beginning of year/period 32,955 24,606
Cash and cash equivalents at end of year/period 151,455 32,955
Short-term investments 93,129 69,231
Long-term investments 5,000 8,000
Cash, short and long-term investments 249,584 110,186
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
for the 12 months ended 31 December 2021 12 months ended 31 December 2021 18 months ended 31 December 2020
Note £'000 £'000
Revenue 2 30,776 31,682
Cost of sales (10,427) (10,355)
Gross profit 20,349 21,327
Other operating income(1) 924 1,305
Operating costs 4 (44,703) (40,266)
Operating loss (23,430) (17,634)
Finance income 5 438 989
Finance expense 5 (380) (664)
Loss before taxation (23,372) (17,309)
Taxation credit 6 1,970 2,493
Loss for the financial period and total comprehensive income (21,402) (14,816)
Loss per £0.10 ordinary share expressed in pence per share:
- basic and diluted 7 (11.53)p (9.12)p
The accompanying notes are an integral part of these consolidated financial
statements
(1) Other operating income refers to grant income
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December 2021 31 December 2020
as at 31 December 2021
Note £'000 £'000
Non-current assets
Property, plant and equipment 8 18,141 14,979
Right-of-use assets 9 2,438 3,971
Intangible assets 10 8,478 4,909
Long-term investments 14 5,000 8,000
Investments in associates 500 ꟷ
Other receivables 12 741 741
Total non-current assets 35,298 32,600
Current assets
Inventories 11 3,145 2,107
Contract assets 2 7,331 864
Other current assets 13 1,133 1,002
Derivative financial instruments 1,073 59
Current tax receivable 3,531 3,124
Trade and other receivables 12 4,865 5,570
Short-term investments 14 93,129 69,231
Cash and cash equivalents 14 151,455 32,955
Total current assets 265,662 114,912
Liabilities
Current liabilities
Trade and other payables 15 (2,783) (9,112)
Contract liabilities 2 (4,290) (7,505)
Other current liabilities 16 (5,818) (2,675)
Derivative financial instruments ꟷ (43)
Lease liabilities 17 (754) (823)
Provisions 18 (1,579) (612)
Total current liabilities (15,224) (20,770)
Net current assets 250,438 94,142
Non-current liabilities
Lease liabilities 17 (2,285) (3,622)
Provisions 18 (1,828) (1,610)
Total non-current liabilities (4,113) (5,232)
Net assets 281,623 121,510
Equity attributable to the owners of the parent
Share capital 19 19,073 17,217
Share premium 404,726 227,682
Capital redemption reserve 3,449 3,449
Merger reserve 7,463 7,463
Accumulated losses (153,088) (134,301)
Total equity 281,623 121,510
The accompanying notes are an integral part of these consolidated financial
statements
CONSOLIDATED CASH FLOW STATEMENT 12 months ended 18 months ended
for the 12 months ended 31 December 2021 31 December 2021 31 December 2020
Note £'000 £'000
Cash flows from operating activities
Loss before taxation (23,372) (17,309)
Adjustments for:
Finance income 5 (438) (989)
Finance expense 5 380 664
Depreciation of property, plant and equipment 8 4,215 3,820
Depreciation of right-of-use assets 9 541 776
Amortisation of intangibles 10 1,004 208
Net foreign exchange (gains)/losses (563) 139
Net change in fair value of financial instruments (1,057) (55)
Share-based payments 2,615 1,378
Operating cash flows before movements in working capital (16,675) (11,368)
Decrease/(increase) in trade and other receivables and other current assets 22 (2,338)
Increase in inventories (1,038) (704)
Increase in trade and other payables and other liabilities 2,832 752
Increase in contract assets (6,467) (142)
(Decrease)/increase in contract liabilities (3,215) 4,444
Increase in provisions 1,121 1,072
Net cash used in operations (23,420) (8,284)
Taxation received 3,078 2,460
Net cash used in operating activities (20,342) (5,824)
Investing activities
Purchase of property, plant and equipment (7,377) (9,256)
Capitalised development expenditure (4,573) (3,795)
Decrease/(increase) in long-term investments 3,000 (8,000)
Increase in short-term investments (62,898) (74,380)
Repayment of short-term investments 39,000 68,849
Finance income received 438 1,123
Net cash used in investing activities (32,410) (25,459)
Financing activities
Proceeds from issuance of ordinary shares 181,472 50,851
Expenses from issuance of ordinary shares (2,572) (344)
Cash (paid)/received on behalf of employees on the sale of share options (7,490) 7,490
Repayment of lease liabilities 17 (405) (523)
Finance interest paid 17 (316) (664)
Net cash generated from financing activities 170,689 56,810
Net increase in cash and cash equivalents 117,937 25,527
Exchange gains/(losses) on cash and cash equivalents 563 (139)
Cash and cash equivalents at beginning of year/period 32,955 7,567
Cash and cash equivalents at end of year/period 14 151,455 32,955
The accompanying notes are an integral part of these consolidated financial
statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share capital Share premium Capital redemption reserve Merger reserve Accumulated losses Total
for the 12 months ended 31 December 2021 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2019 15,277 179,116 3,449 7,463 (120,863) 84,442
Comprehensive income
Loss and total comprehensive loss for the financial period ꟷ ꟷ ꟷ ꟷ (14,816) (14,816)
Total comprehensive loss ꟷ ꟷ ꟷ ꟷ (14,816) (14,816)
Transactions with owners
Issue of shares, net of costs 1,940 48,566 ꟷ ꟷ ꟷ 50,506
Share-based payments ꟷ ꟷ ꟷ ꟷ 1,378 1,378
Total transactions with owners ꟷ ꟷ ꟷ ꟷ 1,378 51,884
At 31 December 2020 17,217 227,682 3,449 7,463 (134,301) 121,510
Comprehensive income
Loss and total comprehensive loss for the financial year ꟷ ꟷ ꟷ ꟷ (21,402) (21,402)
Total comprehensive loss ꟷ ꟷ ꟷ ꟷ (21,402) (21,402)
Transactions with owners
Issue of shares, net of costs 1,856 177,044 ꟷ ꟷ ꟷ 178,900
Share-based payments ꟷ ꟷ ꟷ ꟷ 2,615 2,615
Total transactions with owners 1,856 177,044 ꟷ ꟷ 2,615 181,515
At 31 December 2021 19,073 404,726 3,449 7,463 (153,088) 281,623
The accompanying notes are an integral part of these consolidated financial
statements
1. Basis of preparation
The financial information presented in this preliminary announcement has been
prepared in accordance with the recognition and measurement requirements of UK
adopted international accounting standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). The principal accounting
policies adopted in the preparation of the financial information in this
preliminary announcement are unchanged from those used in the company's
statutory financial statements for the year ended 31 December 2021. Whilst the
financial information included in this announcement has been computed in
accordance with the recognition and measurement requirements of IFRS, this
announcement does not itself contain sufficient disclosures to comply with
IFRS.
The financial information contained in this final announcement does not
constitute statutory financial statements as defined by in Section 434 of the
Companies Act 2006. The financial information has been extracted from the
financial statements for the year ended 31 December 2021 which have been
approved by the Board of Directors, and the comparative figures for the 18
months ended 31 December 2020 are based on the financial statements for that
year.
On 31 December 2020, IFRS as adopted by the European Union at that date was
brought into the UK law and became UK-adopted international accounting
standards, with future changes being subject to endorsement by the UK
Endorsement Board. The Group transitioned to UK-adopted international
accounting standards in its consolidated financial statements on 1 January
2021. There was no impact or changes in accounting from the transition.
The financial statements for 2020 have been delivered to the Registrar of
Companies and the 2021 financial statements will be delivered after the Annual
General Meeting on 5 May 2022.
The Auditor has reported on both sets of accounts without qualification, did
not draw attention to any matters by way of emphasis without qualifying their
report, and did not contain a statement under Section 498(2) or 498(3) of the
Companies Act 2006.
The Directors confirm that, to the best of their knowledge, this condensed set
of consolidated financial statements has been prepared in accordance with the
AIM Rules.
In 2020, the Group extended its accounting period from the 12 months ended 30
June 2020 to the 18 months ended 31 December 2020. As a result, the
comparative period covers the 18-month period ended 31 December 2020.
Going concern
The Group has reported a loss after tax for the year ended 31 December 2021 of
£21.4m and net cash used in operating activities of £20.3m. At 31 December
2021, following the receipt of c.£179m of funds from the equity placement in
March 2021, it held cash and cash equivalents and investments of £250m. The
directors have prepared annual budgets and cash flow projections that extend
beyond 15 months from the date of approval of this report. These projections
were supported by stress testing forecast cash flows considering the impact of
different scenarios including the Group's expectation of the potential future
impact of Covid-19. In each case the projections demonstrated that the Group
will have sufficient cash reserves to meet its liabilities as they fall due
and to continue as a going concern. For the above reasons, the directors
continue to adopt the going concern basis in preparing the financial
statements. The financial statements do not include the adjustments that would
result if the Group was unable to continue as a going concern.
New standards and amendments applicable for the reporting period
The Group has adopted all standards, interpretations amended or newly issued
by the IASB that were effective in the year, with no material effect on the
consolidated financial statements. A number of adopted IFRSs have been issued
with an effective date for annual periods beginning 1 January 2022 that the
Group has not yet adopted. The adoption of these unissued standards is not
expected to have any material effect on the consolidated financial statements.
2. Revenue
The Group's revenue is disaggregated by geographical market, major
product/service lines, and timing of revenue recognition:
Geographical market 12 months ended 31 December 2021 18 months ended 31 December 2020
£'000 £'000
Europe 7,676 14,228
Asia 22,748 16,613
North America 109 841
Rest of World 243 ꟷ
30,776 31,682
Major product/service lines 12 months ended 31 December 2021 18 months ended 31 December 2020
£'000 £'000
Engineering services 6,777 10,866
Provision of technology hardware 7,353 10,297
Licenses 16,646 10,519
30,776 31,682
Timing of transfer of goods and services 12 months ended 31 December 2021 18 months ended 31 December 2020
£'000 £'000
Products and services transferred at a point in time 15,326 15,280
Products and services transferred over time 15,450 16,402
30,776 31,682
The contract-related assets and liabilities are as follows 31 December 2021 31 December 2020
£'000 £'000
Trade receivables 2,612 3,328
Contract assets - accrued income 7,010 837
Contract assets - deferred costs 321 27
Contract assets 7,331 864
Total contract-related assets 9,943 4,192
Contract liabilities - deferred income (4,290) (7,505)
3. Segmental analysis
In accordance with IFRS 8, the Group identified reporting segments based on
internal management reporting information that is regularly reviewed by the
chief operating decision maker, which the Group considers to be the Executive
team.
Historically the Group has reported its performance in a single segment,
reflecting the Group's solid oxide fuel cell (SOFC) technology. For the
current year, following increased investment in and development of the Group's
solid oxide electrolysis cell (SOEC) technology, the Group has introduced
segmental reporting internally that separately discloses the results of the
two segments, down to adjusted EBITDA level, to the Executive team.
Following the change of segmental reporting during the year, comparatives for
the 18 months ended 31 December 2020 have been represented accordingly.
12 months ended 31 December 2021 18 months ended 31 December 2020
SOFC SOEC Total SOFC SOEC Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 30,776 ꟷ 30,776 31,682 ꟷ 31,682
Cost of sales (10,427) ꟷ (10,427) (10,355) ꟷ (10,355)
Gross profit 20,349 ꟷ 20,349 21,327 ꟷ 21,327
Other operating income 924 ꟷ 924 1,305 ꟷ 1,305
Operating costs (excluding adjusting items) (25,765) (12,183) (37,948) (31,695) (2,305) (34,000)
Adjusted EBITDA(1) (4,492) (12,183) (16,675) (9,063) (2,305) (11,368)
Adjusting items:
Depreciation and amortisation (5,760) (4,804)
Share-based payment charge (2,615) (1,378)
Net foreign exchange losses/(gains) 563 (139)
Fair value adjustment 1,057 55
Operating loss (23,430) (17,634)
Finance income 438 989
Finance expense (380) (664)
Loss before taxation (23,372) (17,309)
Taxation credit 1,970 2,493
Loss for the financial year (21,402) (14,816)
( )
(1) Adjusted EBITDA is an Alternative Performance Measure, as defined and
reconciled to operating loss at the end of this report.
4. Operating costs
12 months ended 18 months ended
Operating costs are split as follows: 31 December 2021 31 December 2020
£'000 £'000
Research and development costs 31,290 27,820
Administrative expenses 11,245 10,060
Commercial expenses 2,168 2,386
44,703 40,266
5. Finance income and expenses
12 months ended 18 months ended
31 December 2021 31 December 2020
£'000 £'000
Interest received 438 989
Interest on lease liabilities (316) (664)
Unwinding of discounts on provisions (64) ꟷ
Total interest expense (380) (664)
6. Taxation
12 months ended 18 months ended
31 December 2021 31 December 2020
£'000 £'000
UK corporation tax (2,917) (3,124)
Foreign tax suffered 973 798
Adjustment in respect of prior periods (26) (167)
(1,970) (2,493)
No UK corporation tax liability has arisen (2020: £nil) due to the losses
incurred.
The current tax rate of 19% is unchanged (2020:19%)
A tax credit has arisen as a result of expenditure surrendered and claimed
under the SME R&D and RDEC tax credit regimes in the current year and
prior period. Foreign tax relates to withholding tax arising on license income
receivable from customers based in China and South Korea
7. Loss per share
12 months ended 18 months ended
31 December 2021 31 December 2020
£'000 £'000
Loss for the financial year/period attributable to shareholders (21,402) (14,816)
Weighted average number of shares in issue 185,689,432 162,474,146
Loss per £0.10 ordinary shares (basic and diluted) (11.53)p (9.12)p
8. Property, plant and equipment
Leasehold Plant and Computer Fixtures and fittings Assets under construction Motor vehicles Total
Improvements machinery equipment £'000 £'000 £'000 £'000
£'000 £'000 £'000
Cost
At 1 July 2019 2,222 10,846 1,458 69 6,803 12 21,410
Additions 708 5,904 603 35 1,780 9,030
Transfers 2,958 4,659 ꟷ 210 (7,827) ꟷ ꟷ
Disposals (5) ꟷ ꟷ ꟷ ꟷ ꟷ (5)
At 31 December 2020 5,883 21,409 2,061 314 756 12 30,435
Additions 1,529 3,521 502 34 1,791 7,377
Transfers ꟷ 572 ꟷ ꟷ (572) ꟷ ꟷ
At 31 December 2021 7,412 25,502 2,563 348 1,975 12 37,812
Accumulated depreciation
At 1 July 2019 2,096 8,478 998 69 ꟷ ꟷ 11,641
Charge for the period 621 2,718 400 80 ꟷ 1 3,820
Disposals (5) ꟷ ꟷ ꟷ ꟷ ꟷ (5)
At 31 December 2020 2,712 11,196 1,398 149 ꟷ 1 15,456
Charge for the year 646 3,089 392 83 ꟷ 5 4,215
At 31 December 2021 3,358 14,285 1,790 232 ꟷ 6 19,671
Net book value
At 31 December 2021 4,054 11,217 773 116 1,975 6 18,141
At 31 December 2020 3,171 10,213 663 165 756 11 14,979
At 30 June 2019 126 2,368 460 ꟷ 6,803 12 9,769
Assets under construction primarily comprise plant and machinery and leasehold
improvements related to the Group's manufacturing facility.
9. Right-of-use assets
Land and buildings Computer equipment Total
£'000 £'000 £'000
Cost
At 1 July 2019 ꟷ ꟷ ꟷ
Initial recognition on adoption of IFRS 16 4,729 18 4,747
At 31 December 2020 4,729 18 4,747
Additions ꟷ 43 43
Adjustment of lease term (1,035) ꟷ (1,035)
Disposals ꟷ (18) (18)
At 31 December 2021 3,694 43 3,737
Accumulated depreciation
At 1 July 2019 ꟷ ꟷ ꟷ
Charge for the period 766 10 776
At 31 December 2020 766 10 776
Charge for the year 523 18 541
Disposals ꟷ (18) (18)
At 31 December 2021 1,289 10 1,299
Net book value
At 31 December 2021 2,405 33 2,438
At 31 December 2020 3,963 8 3,971
At 30 June 2019 ꟷ ꟷ ꟷ
During the year ended 31 December 2021, the Group revised the expected term on
one of its property leases, recognising an adjustment of £1,035,000 to reduce
the right of use asset, with a corresponding adjustment to the lease
liability.
10. Intangible assets
Internal developments in relation to manufacturing site Customer and internal development programmes Perpetual software licences Patent costs Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 July 2019 234 1,101 ꟷ ꟷ 1,335
Additions 177 3,323 ꟷ 295 3,795
At 31 December 2020 411 4,424 ꟷ 295 5,130
Additions ꟷ 3,983 252 338 4,573
At 31 December 2021 411 8,407 252 633 9,703
Accumulated depreciation
At 1 July 2019 ꟷ 13 ꟷ ꟷ 13
Charge for the period 82 126 ꟷ ꟷ 208
At 31 December 2020 82 139 ꟷ ꟷ 221
Charge for the year 82 899 23 ꟷ 1,004
At 31 December 2021 164 1,038 23 ꟷ 1,225
Net book value
At 31 December 2021 247 7,369 229 633 8,478
At 31 December 2020 329 4,285 ꟷ 295 4,909
At 30 June 2019 234 1,088 ꟷ ꟷ 1,322
Capitalised intangible assets are amortised over their useful economic lives,
as follows:
Capitalised development costs - 2 to 7 years
Capitalised patent costs - 3 to 10 years
The customer and internal development intangible primarily relates to the
design, development and configuration of the Company's core fuel cell and
system technology. Amortisation of capitalised development commences once the
development is complete and is available for use.
11. Inventories
31 December 2021 31 December 2020
£'000 £'000
Raw materials 1,299 1,016
Work in progress 969 838
Finished goods 877 253
Total inventory 3,145 2,170
12. Trade and other receivables
31 December 2021 31 December 2020
Current: £'000 £'000
Trade receivables 2,612 3,328
Other receivables 2,253 2,242
4,865 5,570
Non-current:
Other receivables 741 741
13. Other current assets
31 December 2021 31 December 2020
Current: £'000 £'000
Prepayments 673 648
Accrued interest income 322 129
Accrued grant income 138 225
1,133 1,002
14. Net cash and cash equivalents, short-term and long-term investments
31 December 2021 31 December 2020
£'000 £'000
Cash at bank and in hand 4,957 20,684
Money market funds 146,498 12,271
Cash and cash equivalents 151,455 32,955
Short-term investments (bank deposits > one month and less than 12 months) 93,129 69,231
Long-term investments 5,000 8,000
Cash and cash equivalents and investments 249,584 110,186
The Group's primary objective to manage credit risk from its holdings of cash,
cash equivalents and investments is to minimise the risk of a loss of capital
and eliminate loss of liquidity having a detrimental effect on the business.
The Group places surplus funds of no more than £30m per institution into
pooled money market funds with same-day access and of no more than £10m per
institution for bank deposits with durations of up to 24 months. During the
period the Group's treasury policy restricted investments in short-term money
market funds to those which carry short-term credit ratings of at least two of
AAAm (Standard & Poor's), Aaa-mf (Moody's) and AAAmmf (Fitch) and deposits
with banks with minimum long-term rating of A-/A3/A and short-term rating of
A-2/P-2/F-1 for banks which the UK Government holds less than 10% ordinary
equity.
15. Trade and other payables
31 December 2021 31 December 2020
Current: £'000 £'000
Trade payables 2,425 1,752
Taxation and social security ꟷ 713
Other payables 358 6,647
2,783 9,112
At 31 December 2020, taxation and social security and other payables primarily
comprised timing differences on payments relating to the exercise of certain
share options in December 2020. These amounts were paid in January 2021
16. Other current liabilities
31 December 2021 31 December 2020
£'000 £'000
Accruals 4,803 1,464
Deferred income 1,015 1,211
5,818 2,675
Accruals have increased when compared with the prior period reflecting timing
differences relating to invoices received for certain significant costs
incurred during the second half of the year.
17. Lease liabilities
£'000
Balance as at 1 July 2019 ꟷ
Leases recognised on the adoption of IFRS 16 4,971
Lease payments (1,190)
Interest expense 664
Balance as at 31 December 2020 4,445
New finance leases recognised 41
Lease payments (721)
Interest expense 316
Adjustment to lease term (1,042)
Balance as at 31 December 2021 3,039
Current 754
Non-current 2,286
Balance as at 31 December 2021 3,039
Current 823
Non-current 3,622
Balance as at 31 December 2020 4,445
18. Provisions
Property dilapidations Warranties Contract losses Total
£'000 £'000 £'000 £'000
Balance as at 1 January 2021 1,610 418 194 2,222
Movements in the Consolidated Statement of Profit and Loss:
Amounts used ꟷ (404) (175) (579)
Unwinding of discount 64 ꟷ ꟷ 64
Increase in provision 154 1,239 307 1,700
Balance as at 31 December 2021 1,828 1,253 326 3,407
Current ꟷ 1,253 326 1,579
Non-current 1,828 ꟷ ꟷ 1,828
Balance as at 31 December 2021 1,828 1,253 326 3,407
Current ꟷ 418 194 612
Non-current 1,610 ꟷ ꟷ 1,610
Balance as at 31 December 2020 1,610 418 194 2,222
19. Share capital
31 December 2021 31 December 2020
Number of £0.10 ordinary shares £'000 Number of £0.10 ordinary shares £'000
Allotted and fully paid
At 1 January 2021/1 July 2019 172,171,527 17,217 152,769,812 15,277
Allotted £0.10 Ordinary shares on exercise of employee share options 1,490,531 149 4,024,665 402
Allotted £0.10 Ordinary shares on cash placing 17,067,580 1,707 15,377,050 1,538
At 31 December 190,729,638 19,073 172,171,527 17,217
On 17 March 2021 the Group announced a fundraise that would allot 17,067,580
new ordinary shares of £0.10 each in the Company, for a total gross cash
consideration of £180,916,340. In conjunction with the placing, 12,967,629
shares were allotted on 17 March 2021 which included Bosch and certain
Directors of the Company subscribing for 3,649,150 and 24,376 shares
respectively. On 19 May 2021 Weichai subscribed for and were allotted the
remaining 4,099,951 shares.
During the year ended 31 December 2021, 1,490,531 ordinary £0.10 shares were
allotted for cash consideration of £705,636 on the exercise of employee share
options (18 months ended 31 December 2020: 4,024,665 ordinary £0.10 shares
were allotted for cash consideration of £1,581,148).
20. Events after the reporting date
On 9 February 2022, the Group announced the intention to collaborate with
Weichai and Bosch to access the substantial opportunities that exist for fuel
cell technologies in the Chinese market. This is likely to include a three-way
system collaboration (referred to externally as the "JV") to be set up in
Shandong province in China to develop and manufacture SOFC system products,
with Weichai being the majority shareholder and Bosch and Ceres minority
shareholders. Ceres is expected to take up a holding of 10%. Detailed
non-binding Heads of Terms have been signed by all parties and full contracts
are expected to be agreed in 2022.
On 8 March 2022, the Group announced that it had signed a multi-million pound,
long-term agreement with Horiba Mira to be our fuel cell and electrolysis test
partner and supplier of test stands.
21. Capital commitments
Capital expenditure that has been contracted for but has not been provided for
in the financial statements amounts to £8,086,000 as at 31 December 2021 (31
December 2020: £1,142,000), in respect of the acquisition of property, plant
and equipment, primarily related to the Group's planned test stand expansion.
22. Related party transactions
As at 31 December 2021 the Group's related parties were its Directors. During
the period one Director exercised and retained 8,491 share options under the
Company's employee Sharesave scheme. There were no other transactions between
the Company and the Directors during the period.
Non-GAAP Alternative Performance Measures - Calendar year results
reconciliation to statutory IFRS results (unaudited)
The following tables set out the reconciliation between the Statutory IFRS
Results (which the Group defines as comprising the Consolidated Statement of
Profit and Loss and Other Comprehensive Income, and the Consolidated Cash flow
statement) and the unaudited Calendar Year results (which the Group defines as
comprising the Consolidated Statement of Profit and Loss - Calendar Year and
the Pro-forma Consolidated Cash Flow Statement - Calendar Year).
The basis of preparation for the Group's Statutory IFRS Results is set out in
note 1. The Calendar Year results have been determined as follows:
Calendar Year results for the 12 months ended 31 December 2021 (CY2021)
The CY2021 results exactly reflect the results for the 12 months ended 31
December 2021.
Calendar Year results for the 12 months ended 31 December 2020 (CY2020)
The CY2020 results for the 12 months ended 31 December 2020 have been derived
from the Statutory IFRS Results for the 18 months ended 31 December 2020, less
the results for the six months ended 31 December 2019 (as presented in the
interim announcement dated 16 March 2020).
Reconciliation of the Consolidated Statement of Profit and Loss between the 18
months comparative period ending 31 December 2020 and the 12-month period
ending 31 December 2020
18 months ended 31 December 2020 Audited Less: CY2020
6 months ended 31 December 2019 Unaudited 12 months ended 31 December 2020 Unaudited
£'000 £'000 £'000
Revenue 31,682 10,011 21,671
Cost of sales (10,355) (3,270) (7,085)
Gross profit 21,327 6,741 14,586
Other operating income 1,305 1,029 276
Operating costs (40,266) (10,616) (29,650)
Operating loss (17,634) (2,846) (14,788)
Finance income 989 291 698
Finance expense (664) (230) (434)
Loss before taxation (17,309) (2,785) (14,524)
Taxation credit 2,493 1,140 1,353
Loss for the financial year (14,816) (1,645) (13,171)
Adjusted EBITDA (11,368) (1,413) (9,955)
Reconciliation of the Consolidated Cash Flow Statement between the 18 months
comparative period ending 31 December 2020 and the 12-month period ending 31
December 2020
18 months ended 31 December 2020 Audited Less: CY2020
6 months ended 31 December 2019 Unaudited 12 months ended 31 December 2020 Unaudited
£'000 £'000 £'000
Loss before income tax (17,309) (2,785) (14,524)
Non-cash adjustments 5,941 1,209 4,732
Movements in working capital 3,084 (1,991) 5,075
Income tax received 2,460 ꟷ 2,460
Net cash used in operating activities (5,824) (3,567) (2,257)
Investing activities
Purchase of property, plant and equipment (9,256) (2,600) (6,656)
Capitalised development expenditure (3,795) (1,076) (2,719)
Increase in long-term investments (8,000) ꟷ (8,000)
Net (increase)/decrease in short-term investments (5,531) 23,700 (29,231)
Finance income received 1,123 454 669
Net cash used in investing activities (25,459) 20,478 (45,937)
Financing activities
Proceeds from issuance of ordinary shares 50,851 602 50,249
Expenses from issuance of ordinary shares (344) ꟷ (344)
Cash received on the sale of employee share options 7,490 ꟷ 7,490
Repayment of lease liabilities (523) (134) (389)
Finance interest paid (664) (230) (434)
Net cash generated from financing activities 56,810 238 56,572
Net increase in cash and cash equivalents 25,527 17,149 8,378
Exchange losses on cash and cash equivalents (139) (110) (29)
Cash and cash equivalents at beginning of period 7,567 7,567 24,606
Cash and cash equivalents at end of period 32,955 24,606 32,955
Reconciliation between operating loss and Adjusted EBITDA
Management believes that presenting Adjusted EBITDA loss allows for a more
direct comparison of the Group's performance against its peers and provides a
better understanding of the underlying performance of the Group by excluding
non-recurring, irregular and one-off costs. The Group currently defines
Adjusted EBITDA loss as the operating loss for the period excluding
depreciation and amortisation charges, share-based payment charges, unrealised
losses on forward contracts and exchange gains/losses.
12 months ended 31 Dec 2021 18 months ended 31 Dec 2020 12 months ended 31 Dec 2020 CY2020
£'000 £'000 £'000
Operating loss (23,430) (17,634) (14,788)
Depreciation and amortisation 5,760 4,804 3,811
Share-based payment charges 2,615 1,378 942
Unrealised (gains)/losses on forward contracts (1,057) (55) 52
Exchange (gains)/losses (563) 139 30
Adjusted EBITDA (16,675) (11,368) (9,955)
Reconciliation between net cash from operating activities and equity-free cash
flow
The Group defines equity-free cash flow as net cash from operating activities
plus capital expenditure and adjusted for interest payments and receipts and
exchange rate movements. The table below reconciles net cash from operating
activities to equity-free cash flow for each period.
12 months ended 31 Dec 2021 18 months ended 31 Dec 2020 12 months ended 31 Dec 2020 CY2020
£'000 £'000 £'000
Net cash from operating activities (20,342) (5,824) (2,257)
Capital expenditure (11,950) (13,051) (9,375)
Interest payments (net) (283) (64) (154)
Exchange rate movements 563 (139) (29)
Equity-free cash flow (32,012) (19,078) (11,815)
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. END FR EANDKFSLAEFARecent news on Ceres Power Holdings
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