REG - Invinity Energy Sys - 2024 Financial Results
30/05/2025 07:00
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RNS Number : 7036K Invinity Energy Systems PLC 30 May 2025
30 May 2025
Invinity Energy Systems plc
("Invinity" or the "Company")
2024 Financial Results
Invinity Energy Systems plc (AIM: IES) (OTCQX: IESVF), a leading global
manufacturer of utility-grade energy storage, announces its Full Year Results
for the year ended 31 December 2024.
The Company confirms that its trading results are in line with expectations
and largely reflect a shift in Invinity's product line from the VS3 to the
ENDURIUM battery. As stated in the recent trading update
(https://polaris.brighterir.com/public/invinity/news/rns/story/w9l28gw) ,
Invinity continues to deliver against its key corporate objectives including
important progress made in respect of the ENDURIUM product development
roadmap. As a result, the Company remains on track to achieve its cost
reduction targets while continuing to iteratively develop the ENDURIUM product
to further enhance performance and expand its capabilities in order to reach
new markets and customers.
Highlights
Financial
· First revenues recognised against ENDURIUM product deliveries;
· 20% improvement in adjusted EBITDA loss to £18.0m (2023: £22.4m);
· Total Income: £5.0m (2023: £22.0m);
· Total Cash: £32.4m (2023: £5m);
· The Group remains debt free.
Commercial and Operational
· >5.4 GWh of energy dispatched to date from Invinity batteries
(since Q1 2022);
· Successful launch of next-generation ENDURIUM product in December
2024;
· First ENDURIUM battery system operating in line with expectations at
Gamesa Electric's V-iOn project at La Plana;
· 24% cost reduction achieved on ENDURIUM product in 2025 YTD vs first
order;
· +315% increase in average deal size in 2025 YTD vs 2024 FY, with
further growth expected to be driven by the Company's battery technology being
considered for numerous projects relating to global Long Duration Energy
Storage ("LDES") procurement programmes including, but not limited to, the
UK's LDES Cap and Floor Scheme.
The Company will hold a virtual meeting for analysts at 9.30 a.m. today.
Analysts wishing to attend are kindly requested to email ir@invinity.com
(mailto:ir@invinity.com) to receive dial-in details.
Invinity's management team will also host a results presentation and Q&A
for all shareholders on Monday 9 June 2025 at 4.30 p.m. Those wishing to join
the session can sign up to Investor Meet Company for free via this link
(https://www.investormeetcompany.com/invinity-energy-systems-plc/register-investor)
.
The Company's 2024 Annual Report will be available to download from the
Company's website (https://invinity.com/investors/shareholder-documents/)
shortly.
Notice of Cancellation of Trading on the AQSE Growth Market ('Aquis')
Additionally, further to the announcement made in the trading update on 31
March, the Company today gives notice of cancellation of trading on AQSE. As
the Company will retain its AIM listing on the London Stock Exchange, the
Company is not required to send a circular and seek shareholder approval of a
resolution to cancel in accordance with Rule 5.3 of the AQSE Growth Market
Access Rulebook. In accordance with the procedures of the AQSE Growth Market,
the Board anticipates the cancellation will be completed on or around 4.30
p.m. on 30 June 2025.
Jonathan Marren, Chief Executive Officer at Invinity said:
"These results speak to a very important year for the Company which saw us
execute an important transition to our new ENDURIUM battery product, a
successful funding round and a change in management team. In just the past few
weeks, we have met with high-level government officials, featured in national
news coverage and further advanced commercial discussions with prospective
customers. These recent developments firmly underline the significant shift we
are currently observing across global battery markets towards the next
generation of energy storage technologies and I firmly believe we are in a
strong position to take our place at the forefront of this shift.
"As detailed in my report, we still have challenges to overcome and although
we have made strong progress against the corporate targets I set out when I
took over as CEO, there is more work to be done if we are to compete at the
scale we envision and convert the demand we are seeing for our products into
revenue. However, I remain confident in our team's ability to deliver and
believe there is much to be excited about in Invinity's short-, medium- and
long-term future."
Stay up to date with news from Invinity. Join the distribution list for the
Company's monthly investor newsletter here
(https://invinity.com/newsletter/?utm_source=iesrns) .
Enquiries:
Invinity Energy Systems plc +44 (0)20 4551 0361
Jonathan Marren, Chief Executive Officer
Joe Worthington, Senior Director, Corporate Affairs
Canaccord Genuity (Nominated Adviser and Joint Broker) +44 (0)20 7523 8000
Henry Fitzgerald-O'Connor / Harry Pardoe / Charlie Hammond
VSA Capital (Financial Adviser and Joint Broker) +44 (0)20 3005 5000
Andrew Monk / Andrew Raca
Notes to Editors
Invinity Energy Systems plc (AIM: IES) (OTCQX: IESVF) manufactures vanadium
flow batteries for large-scale, high-throughput energy storage requirements of
business, industry and electrical networks.
Invinity's factory-built flow batteries run continually with no degradation
for over 25 years, making them suitable for the most demanding applications in
renewable energy production. Energy storage systems based on Invinity's
batteries are safe, reliable, and economical, and range in size from less than
250 kilowatt-hours to tens of megawatt-hours.
Invinity was created in April 2020 through the merger of two flow battery
industry leaders: redT energy plc and Avalon Battery Corporation. With more
than 190 MWh of systems deployed, contracted for delivery or awarded for
projects across more than 90 sites in 17 countries, Invinity is active in all
major global energy storage markets and has operations in the UK, Canada, USA
and China. Invinity Energy Systems plc is quoted in the UK on AIM and trades
in the USA on OTCQX.
To find out more, visit invinity.com (https://invinity.com/?utm_source=rns) ,
sign up to our monthly Investor Newsletter here
(https://invinity.com/newsletter/?utm_source=iesrns) or contact Investor
Relations on via +44 (0)20 4551 0361 or ir@invinity.com
(mailto:ir@invinity.com) .
Audited Financial Results for the Year Ended 31 December 2024
Introducing ENDURIUM - Charging the Future
Matt Harper, President & Chief Commercial Officer
Delivering Abundance
Launching ENDURIUM, our next-generation vanadium flow battery, at the end of
2024 was a massive step forward for Invinity.
Around the world, governments and regulators are focused on securing domestic
energy supply. As renewable generation is becoming widely accepted as the way
to achieve that goal at the lowest economic and environmental cost, longer
duration energy storage ("LDES") that can stabilise intermittent renewables is
increasingly acknowledged as a critical component of the future grid.
We and our development partner Gamesa Electric conceived ENDURIUM to deliver
the durable, flexible, safe and low-cost energy storage capabilities that will
fill this need. Capable of serving both megawatt-scale industrial sites and
datacentres as well as gigawatt-scale projects for the electric grid, it is
proving to be up to the challenge of resolving the most difficult
supply-and-demand imbalances within our rapidly evolving energy landscape.
Gamesa's support since 2021 has been vital to delivering a product driven by
market fundamentals and customer needs. With our first ENDURIUM delivery
operating as expected at their wind, solar and battery test site in La Plana,
Spain, we are convinced more than ever that ENDURIUM has what it takes to be
the path to our "north star" - a battery that delivers energy on demand at
lower cost than any conventional fuel-based generation.
Benefits of ENDURIUM - Bigger, Better, Faster, Stronger
To deliver on its promise, ENDURIUM must first and foremost be reliable and
robust, and so it was important that the product be based on our proven
vanadium flow battery technology. From there, we went back to the drawing
board to design a scalable and adaptable hardware and software platform that
would far exceed our customers' expectations while serving their most
challenging storage needs.
Like all of Invinity's flow batteries, ENDURIUM's capacity does not degrade
with use, making it ideal for high-throughput projects whether they be
standalone systems or collocated with intermittent wind or solar generation.
High safety and low noise characteristics also help to streamline planning
permission.
Specifically, just like its predecessors, ENDURIUM features:
· No battery fire risk;
· 100% depth of discharge cycles over 100% of its lifetime;
· Limitless cycling anywhere within its state of charge range;
· Industry-standard interfaces to a wide variety of off-the-shelf power
converters;
· Eliminated reliance on noisy, power-hungry air conditioners for
cooling; and
· An asset life of 25 years or more.
· Enhanced battery round-trip efficiency of 75%
· Significantly reduced up-front capital cost,
· A projected 75% reduction in maintenance and service costs,
· Greater operational flexibility with discharge cycles from 3 to 18
hours;
· Significantly reduced installation complexity, and
· Next-generation, AI-enhanced monitoring and optimisation software.
These critical characteristics, confirmed by global assurance and risk leader
DNV, give operators an inherently safe and long-term asset which costs nothing
to cycle. This means they can dispatch renewable power at near-zero marginal
cost, making reliable wind and solar power for our homes and businesses an
achievable goal.
Finally, ENDURIUM's compact design enables our customers to deploy
significantly more energy storage capacity on their sites compared to our
previous products. This enhanced site energy density is particularly relevant
as battery storage and general LDES projects are becoming larger and larger,
meaning that our customers now have an increasingly proven LDES product that
is suitable for more of their sites at a lower total cost.
Market Opportunities - Primed to Charge
As the year-on-year growth of renewable generation continues, policymakers,
utilities and large utility buyers are looking to LDES to maintain the ability
to deliver firm, dispatchable power while continuing to adopt more low-cost,
low-carbon energy. Policies and programmes that seek to stabilise the grid
while reducing reliance on costly imports or hydrocarbon-fuelled peaking
capacity are at the forefront of decision-makers' minds. LDES solutions
delivering six to ten hours of firm daily capacity are now widely viewed as
the best solution, a capability right in ENDURIUM's sweet spot.
Policymakers and developers are also considering the environmental and human
impact of large-scale storage. Lithium battery fires, notably the one in
January 2025 that destroyed a significant portion of one of the largest
batteries in the world at Moss Landing in California, have highlighted the
need for safer solutions. Recent geopolitical shifts are already disrupting
supply chains for the critical minerals needed for many conventional battery
solutions, increasing costs for those devices. And replacing conventional
generation with offshore-manufactured, renewable equipment means the loss of
good, durable jobs.
For these reasons, LDES programs and policies are increasingly favouring
non-lithium-ion technologies. The UK's LDES Cap & Floor scheme, Ontario's
Long Lead Time Resources solicitation and comparable programmes in California,
New York, Australia and elsewhere are increasingly minimising or discouraging
lithium eligibility. Independently, each of these aims to deploy
gigawatt-hours of LDES capacity on their respective grids by 2030; together,
they represent a massive opportunity for ENDURIUM.
Importantly, these specialised schemes and market-based incentives move beyond
the earlier grant-funded demonstration scale projects and are giving a
beneficial boost to drive highly scalable, economically viable future LDES
deployment at scale.
Domestic Solutions for Domestic Problems
At the same time, recent macro events underscore the need for energy security.
In early February 2025, several Baltic countries disconnected from the Russian
electric grid. Several U.S. jurisdictions, including California and across the
Midwest, regularly see renewable energy supply exceed demand, necessitating
wasteful curtailment of gigawatts of power. In late 2024 an interconnector
fault between the UK and Norway put severe strain on the UK's grid, narrowly
avoiding blackouts. Spain was less lucky, with interconnectors to France
tripping ahead of a massive power outage on 28 April 2025. While grid
reliability is critical, cost is a close second. UK consumers continue to pay
for wind curtailment in times of low demand, while relying heavily on
expensive gas generation to deliver capacity at peak times. These costs weigh
on both economic competitiveness and family budgets. A better solution is
needed.
ENDURIUM is a natural fit to deliver made-at-home solutions to improving grid
reliability and decreasing the cost of power. Made in Britain and in Canada,
it has the flexibility to deliver sub-second regulation to multi-hour energy
shifting. Unlike pumped hydro, which requires specific geography, or
lithium-ion, whose safety risks and noise mean they struggle to be installed
close to homes or businesses, Invinity's batteries can be installed
practically anywhere, solving wind or solar intermittency or alleviating
critical grid constraints wherever the need arises.
Valuing Abundance
Today's LDES policy initiatives are the starting gun in the race to deliver
abundant, low-cost, clean energy on demand. Grids will require ever more
flexibility to accommodate an increasing amount of low-cost but intermittent
renewable generation. Choosing the right storage solutions, meaning ones that
deliver flexibility from milliseconds to hours, are safe and quiet enough to
be installed alongside homes and businesses, and whose manufacture contributes
to our domestic economy is critical. ENDURIUM is up to the task.
Low cost, reliable and clean power is the answer to reducing dependency on
expensive, carbon-emitting generation. The momentum generated by supportive
LDES policy has given important clarity to investors and developers alike to
drive market-based solutions for this toughest of energy challenges. With
ENDURIUM now commercially proven, developers and grid operators have the right
tool for large scale energy storage wherever it is needed.
Chairman's Report: Powering Through
2024 felt like the year that the shift to long duration energy storage
("LDES") began to happen in a meaningful way. Supportive government policies
appeared in many of the major energy storage markets to enable the increased
supply of renewable generation. In Europe, renewables now make up nearly 50%
of total electricity supply, compared to less than 20% just six years ago.
Similar trends can be seen in the UK, the United States, Australia and other
parts of the world. How grid operators balance their network is now a key
question and LDES is increasingly seen as an essential part of the answer. We
are entering the next phase of the global energy transition, and Invinity's
vanadium flow batteries are well-placed to take advantage of this opportunity.
These major policy developments came with a degree of market uncertainty which
temporarily slowed commercial activity and pushed out project timelines.
Whilst this uncertainty still persists in some markets such as the United
States, the ever-evolving policy landscape has presented significant
opportunities for Invinity in other markets. For instance, the UK's LDES Cap
and Floor scheme is designed to support gigawatt hours of projects for which
our vanadium flow batteries are well-suited - underlined by the announcement
in February 2025 that leading developer Frontier Power will target the
deployment of up to 2 GWh of Invinity batteries in the UK through this scheme.
Falling competitor costs remain a key commercial consideration, but I am so
far delighted with the team's response to this ongoing challenge. Key
milestones have been met in terms of product launch and our first ENDURIUM
batteries have already been delivered to our long-term partner, Gamesa
Electric, and are operating in line with expectations. The team has also made
significant progress towards hitting our cost targets for ENDURIUM, and whilst
the team will always continue to work on reducing costs and improving
performance, their achievements to date should be recognised.
I feel Invinity now finds itself with the right product in the right markets
at the right time - a view shared by those new and existing investors who
participated in a successful £57.4 million fundraise the team completed in
May 2024. Notably, this funding round brought in the support of the UK
Government via the National Wealth Fund, which in the process has become our
largest shareholder. Their support, along with that of our other institutional
and strategic investors, has been instrumental in enhancing our credibility.
The funds raised have been put to work, including expanding Invinity's
manufacturing capability and more recently deploying ringfenced capital into
our own projects, most notably the LoDES project which we expect to become an
important commercial asset for the Company at a time of major demand for LDES
battery technology in the UK and globally.
In July, I was delighted to welcome so many of you to our capital markets day,
held at our facilities in Scotland. The event presented an important
opportunity for us to meet face to face with our shareholders and use that
opportunity to showcase our new factory in Motherwell as well as hearing from
our talented team who put on a number of demonstrations highlighting the
safety and durability of our products.
Finally, Invinity completed work to redomicile the Company to the UK from
Jersey in early 2025. This move has already streamlined various corporate
processes and will result in an associated reduction in ongoing costs. Our new
executive team has continued to perform effectively and I am pleased to note
the progress the Company is making in respect of its corporate priorities,
which are covered in more detail in the Chief Executive's report.
In closing, I would like to thank my Board colleagues for their continued
support. We are grateful for the dedication, hard work and vision provided by
Larry Zulch during his tenure as Chief Executive and we wish him all the best
in his retirement. Under Jonathan Marren's leadership, supported by Matt
Harper in the role of President and CCO, I have every faith the Company can
continue to grow to reach its potential and he has my full support, along with
that of the entire Invinity board. I am delighted to welcome our new CFO, Adam
Howard, who joined Invinity from the National Wealth Fund and whose experience
in energy and finance is already bringing significant benefits. Lastly, I am
particularly grateful to Michael Farrow for his guidance over his many years
of service to the Company which has been greatly appreciated and has provided
Invinity with strong governance structures to stand it in good stead. With the
redomiciliation complete, Michael has given notice to the Board of his
intention to retire at the next Annual General Meeting. We wish him all the
best.
Invinity has taken the critical steps in 2024 to build our capabilities ahead
of the transition to volume production of the ENDURIUM product. Jonathan, Matt
and Adam are the right team and, combined with the right product, are powering
the Company on.
Neil O'Brien
Non-Executive Chair
29 May 2025
Chief Executive's Report: From Megawatts to Gigawatts
The rhetoric on batteries was notably transformed throughout 2024 and
continues apace into 2025. Interest in Long Duration Energy Storage ("LDES")
and the role it will play in making our electricity supply not only more
secure, but cheaper and greener too, is at an all-time high and politicians
and policymakers in our core markets (and further afield) appear to have
finally pinned their colours to the energy storage mast, further helped by
recent well-publicised grid outage events in the UK and Europe. The
opportunity ahead of us is enormous and our achievements in 2024 position us
well to capture significant value.
The year saw the Company grow and enhance our own capabilities and global
partnership network to position us to capture value whilst carefully managing
our own resources. Perhaps most notably, 2024 saw Invinity close a significant
funding round in the context of persistently challenging equity markets,
raising £57.4 million in May. This fundraise brought in the UK Government via
the National Wealth Fund as our new largest shareholder, enabling the Company
to invest in our manufacturing capabilities, our team and our projects. 2024
was also the year of the long-awaited launch of ENDURIUM, our highly advanced,
vanadium flow battery product. This was a critical milestone and enabled us to
enter 2025 with a product that can meet the market's LDES requirements at a
competitive price. I am more excited than ever about the opportunity
developing in front of us and believe we are in a strong position to deliver
on our corporate plan.
Delivering Against our 12-month Corporate Plan
When I took over as CEO in September 2024, I set out five corporate goals to
be achieved within the next 12 months. These goals, covering revenue,
products, cost reduction and commercial traction, have formed the backbone of
the agenda at every senior management meeting held since. Our fantastic team
are focused on the task at hand and I am delighted with the progress they have
made since. Notwithstanding this, there is still much more we can achieve and
we continue to challenge ourselves to make further progress.
Goal 1: Recognise Revenue in Line with 2024 Year-End Revised Analyst Forecasts
Shipping product quickly to customers underlines our dedication to good
customer service and operating effectively for the future of the business. Our
team were successful in shipping a number of orders prior to year end,
including the 4 MWh sale to Powerflex, part of EDF Renewables North America,
for a project in California and the 1.2 MWh ENDURIUM system to Gamesa
Electric. Thanks to our team's efforts, this ensured we met our revised
revenue forecasts for FY24.
Goal 2: Launch the ENDURIUM Product for General Sale Before 2024 Year-End
The formal release of ENDURIUM was a critical milestone for Invinity. Our team
successfully executed a well-received global launch of our new product before
year end to achieve this corporate goal. They then went further and
successfully manufactured, tested and shipped before year end our first
ENDURIUM batteries for our partner Gamesa Electric and commissioned them in
early 2025. As I write this report now, these batteries are operating in line
with expectations at the La Plana site in Spain, with further orders for other
customers currently in the project fulfilment phase.
Operating data showing Power and State of Charge of the 1.2 MWh system at La
Plana - February 2025
Goal 3: Close Deals from our Commercial Pipeline to Support Volume Ramp-up in
line with Forecasts
In a year that saw lithium-ion battery costs fall ~20% (the sharpest drop
since 2017) and continue to fall into 2025, the Company also navigated
significant policy changes related to long duration energy storage deployment
globally. Whilst the vast majority of these changes are designed to promote
the adoption of LDES and this is clearly a positive long-term outcome for our
business, this move did have the effect of slowing down discussions on a
number of projects in our commercial pipeline as our partners considered the
implications. In the final quarter of the year, we expanded our commercial
team to help close out nearer term projects and prepare for the new LDES
opportunities embodied by the introduction of new initiatives. The launch of
ENDURIUM has assisted this process and, with the team's renewed focus, I am
encouraged by the progress achieved in the year to date, including a strategic
partnership with Frontier Power targeting the deployment of 2 GWh of our
batteries into the UK via the LDES Cap and Floor Scheme, repeat business with
our partner in Hungary with whom we have secured a supply agreement for a 10.8
MWh project and securing the approval, subject to a planning amendment, to
proceed in respect of the 20.7 MWh LoDES project that Invinity will develop
and which, once built, is expected to be the largest of its kind anywhere in
Europe.
This recent deal flow is demonstrating to our customers that we can support
larger-scale projects and this is imperative if we are to make the transition
to delivering at gigawatt-scale. Converting commercial interest is also
essential, and the commercial team remain focused on closing out opportunities
from our wider commercial pipeline to support near-term revenue targets while
developing in parallel the extremely large deal opportunities that will be
instrumental in supporting Invinity's journey to mass manufacturing.
Goal 4: Further Advance the Cost Reduction Programme for ENDURIUM and
Incrementally Improve Product Margins.
Our progress over the last four years on the VS3 cost curve has resulted in
the Company being able to secure larger projects at incrementally improving
margins and the launch of ENDURIUM facilitates the next step on this journey.
When I took over as CEO in September 2024, I made it clear that advancing our
cost reduction programme on ENDURIUM was an area I had prioritised for
immediate action.
I am happy to report that the team has so far achieved a 24% cost reduction on
ENDURIUM since launch. This has been realised through a combination of product
optimisation, value engineering, supply chain development and process
enhancements which have enabled us to incrementally improve performance and
reduce the delivered cost of our products. This is remarkable progress within
a relatively short timeframe, but this work is far from complete and I
continue to challenge our team to reduce costs yet further, targeting further
material reductions to be realised by the end of 2025 as a next step on this
journey.
The team has already identified a viable route to exceeding our targets as
part of our product development roadmap. The projected outcomes of our cost
down programme are detailed in the following graphic and I'm pleased to note
that we are currently ahead of our own expectations in terms of progress along
our cost curve and on track to meet our incremental projected targets out to
2030.
ENDURIUM Cost Roadmap August 2024 vs May 2025
Economies of scale will also play an important part in our cost roadmap and I
was pleased that the team were able to swiftly secure and harness the
capabilities of our new Motherwell facility in Q3 to enable the faster, more
efficient delivery of projects from the Company's commercial pipeline. This
quadrupling of capacity, alongside the soon to be installed semi-automated
production line in our Bathgate facility, which is expected to nearly double
stack production at this site, will contribute to a further incremental
reduction in unit production costs.
Finally, the operating data coming from the 1.2 MWh ENDURIUM system at La
Plana is encouraging, as well as providing important guidance for future cost
reduction. Having this system operating so soon after launch is greatly
assisting the team and by using AI-driven statistical analysis, we are making
the best use of this high-value data to inform our product development and
value engineering workstreams. This work has already led to material
improvements in the stack design and electrolyte performance in addition to
separate initiatives which see us adopting a higher-volume, lower-cost
manufacturing process and outsourcing appropriate activities to best-cost
regions, for example through our licence and royalty model with partners such
as Everdura Technology Company in Taiwan.
Goal 5: Review Capital Allocation Across the Business and Drive Operational
Efficiencies.
Ensuring our limited resources are allocated effectively is vital to achieving
sustainable corporate growth and I have ensured that this goal remains front
of mind across the entire organisation, with our new CFO, Adam Howard, taking
executive responsibility for this crucial initiative.
The team made important progress during the year enhancing our systems and
processes to drive operational efficiencies. These include advancing the
process of implementing an ERP system, improving our supplier development
procedures and simplifying our corporate structure. Combined, these
initiatives have improved the speed of our contract delivery as well as
helping to reduce overheads in the future. This is an area which benefits from
continued optimisation and by better aligning our supply chain, finance and
customer-facing functions we will continue to unlock incremental benefits as
we grow.
Finally, I am pleased that Invinity's redomiciliation to the UK, a condition
of NWF's investment, completed early in 2025. In line with our efforts to
drive operational efficiencies, this move reduces our corporate costs,
simplifies administrative matters and enhances our corporate positioning
within the UK, a key commercial market for the Company.
Placing LDES Front of Mind with Policy and Political Engagement
Thanks to extensive, constructive engagement with the UK Department for Energy
Security and Net Zero ("DESNZ") during 2024 and in the year to date, we were
delighted to announce in March this year that we had now secured approval to
proceed, subject to a planning amendment, with the LoDES project - an up to
20.7 MWh vanadium flow battery project which will be one of the largest of its
kind anywhere in the world. Owning this project ourselves will bring
significant long-term benefits as we will retain the financial value generated
from this DESNZ grant and enhance our commercial activities by leveraging full
control and access to a flagship LDES asset.
We will always aim to be at the forefront of LDES policy discussions as they
evolve and we made significant progress in this important initiative during
2024 in parallel to the delivery of the corporate goals set out earlier in my
report. All over the world, new support schemes for LDES deployments are now
being implemented and engaging with policy and political stakeholders at all
levels in an effective and collaborative manner remains a vital part of our
market development strategy.
Throughout 2024 we continued our ongoing engagements with the UK Government
and in particular I was pleased to spend time discussing our technology and
expansion plans with Graham Stuart, the UK Minister of State for Energy
Security and Net Zero and Gillian Martin MSP, the Scottish Acting Cabinet
Secretary for Net Zero. In Canada, where our ongoing political engagement is
led by Matt Harper, we were delighted to have the opportunity to engage
extensively with key British Columbia government ministers including Premier
David Eby, following the visit by Canadian Energy Minister Wilkinson to our
facility in 2023. More recently, we were also delighted to welcome a host of
elected officials from both British Columbia and the City of Vancouver as part
of New Economy Canada's "Getting Things Built Tour". In late 2024, shortly
after the U.S. election, I also joined our U.S.-based team in Washington D.C.
where we had a number of productive meetings with U.S. government officials
including representatives from the Department of Energy and Department of
Defence.
Further afield, our projects also continue to attract the attention of key
stakeholders around the world. In March 2024, the Belgian Minister for Energy
attended the launch of our vanadium flow battery alongside our customers
Engie, Equans and Jan de Nul at a commercial site in Aalst, Belgium.
Furthermore, in November 2024, the Western Australian Minister for Energy,
Environment and Climate Action formally launched our battery at Horizon
Power's Kununurra LDES project.
Global Energy Storage Funding Programmes
As demonstrated in the graphic "Global Energy Storage Funding Programmes",
many, if not all, of these LDES deployment support schemes are targeting
projects in or before 2030, just five years from now. These opportunities
require storage duration covering 6+ to 10+ hours and more importantly, many
highlight preferences for non-lithium-based storage technologies (particularly
the UK and Canada). They also favour technologies that offer availability and
cycling over 25+ years without degradation of the system, an improved depth of
discharge and a reduced capex/kWh over longer durations - KPIs that play to
ENDURIUM's strengths.
Invinity, along with the support of our established partners, is carefully
targeting these opportunities in our core markets. Our newest partner,
Frontier Power, is applying for up to 2 GWh of LDES Cap and Floor projects
using our VFBs in the UK. Our partner STS Group is well-placed to apply for
projects for the regime in Hungary. Our experience in California, alongside
our partner Indian Energy, is enabling us to address new opportunities as part
of the State's LDES program and we are using this experience to also target
opportunities in New York's LDES program. Beyond these markets, our long-term
partner Everdura gives us reach into the Taiwanese and Southeast Asian markets
where we are confident that our product has a strong commercial advantage.
Summary and Outlook
In summary, despite the reduction in year-on-year revenue for the period,
Invinity is making incremental progress against our corporate plan. This work
to improve our margins, scale our operations and optimise our cost base
remains a key deliverable and our commitment to achieving this is evidenced by
significant progress made so far since I took over the role as Chief Executive
Officer against our corporate targets in the year to date which I set out
earlier in this report.
There will of course continue to be challenges which we must overcome, and our
approach to these is set out in the risk management section of this report,
but I believe our team have the mindset and skillset to succeed. As we address
the global LDES opportunity across our core markets, I am grateful to be
supported by both Matt and Adam as we navigate the next steps along our
pathway to profitability, moving from Megawatt to Gigawatt scale in a market
where long duration energy storage has now fully come of age.
Jonathan Marren
Chief Executive Officer
29 May 2025
Chief Financial Officer's Report: Material Progress Against Cost-Down and
Investment Plan
2024 2023 2022
Year to 31 December £m £m £m
Revenue 5.0 22.0 2.9
Gross (Loss)/Profit (3.5) (3.3) 0.7
Adjusted EBITDA(1) (18.0) (22.4) (19.1)
Pre-tax Loss (22.8) (23.2) (18.5)
Property, Plant and Equipment plus Intangible Assets 26.3 25.7 25.3
Total Inventory and Pre-paid Inventory 8.2 4.4 14.9
Net Cash 32.4 5.0 5.1
Net Assets 65.7 33.8 34.4
(1) Adjusted EBITDA is a non-statutory measure. The calculation is shown
below.
2024 2023 2022
Year to 31 December £m £m £m
Loss from Operations (24.1) (22.8) (19.0)
Add back
Depreciation and Amortisation 1.3 1.1 1.2
Loss on Disposal of Non-Current Assets 0 0.2 0
Impairment of Inventory and Obsolete Inventory 0.4 0.2 0
Gain on Legal Settlement (0.2) 0 0
Share-based Payment Charge 0.6 0.7 0.3
Redomiciliation and Other One off 0.6 0 0
Warranty and Onerous Contract Provisions 2.1 (1.7) (3.2)
Research and Development Costs 2.4 1.9 2.2
Grants and Research and Development Recoveries (1.1) (2.0) (0.6)
Adjusted EBITDA (18.0) (22.4) (19.1)
2024 Financial Performance
The financial performance of the business during 2024 reflected a transitional
period as the Company ran an overlap of product lines; manufacturing and
selling VS3 at the same time as preparing for the launch of the
next-generation ENDURIUM product. It took longer to get ENDURIUM ready for
launch, and a portion of revenue and grant income shifted into 2025 including
from the Everdura contract and the recently announced supply agreement with
STS, which the Company now expects to receive formal notice to proceed on
later this year. In addition, the LoDES project previously anticipated to
progress during the year, is now moving forward in 2025.
As a result, total income including sales revenue and project related grant
income for the year decreased significantly to £5 million in 2024 (2023: £22
million). In the year, revenue was recognised on three main projects across
Europe and the United States, with V-iOn, Rincon and OPALCO delivering over 7
MWh. While this has been a material decrease from the prior year, it is worth
noting 2023 reflected the culmination of significant VS3 activity over
multiple years prior to 2023. Revenue recognition dictates that project sales
are only shown in the financial statements when specific performance
obligations related to those projects have been satisfied.
The Company recorded a gross loss of £3.5 million (2023: gross loss of £3.3
million). It is notable that £2.1 million of this relates to provisions for
warranties and onerous contracts for parts including the legacy S4 stack and
converters, which have since been superceded. The Company continues its
strategic objective to enhance margins and this trend remains with 2025
projects having been signed at positive gross margins at the project level.
Administrative expenses at £20.3 million (2023: £19.1 million) increased in
line with inflation after allowing for one-off costs, reflecting a continued
focus on controlling costs while growing operations. Administrative
expenditure was represented by stable staff costs of £12.9 million in 2024
(2023: £12.8 million) and professional fees of £0.8 million in 2024 (2023:
£0.7 million) predominantly related to the re-domiciliation exercise. Sales
and marketing costs decreased to £0.8 million (2023: £1.0 million). Net
research and development recoveries were £1.1 million (2023: £1.9 million)
including £0.8 million of recoveries from Gamesa Electric S.A.U. ("Gamesa
Electric") under the Joint Development and Commercialisation Agreement for
ENDURIUM.
Net Finance income increased to £1.3 million (2023: £0.4 million costs) due
to interest payments received on proceeds from the May 2024 fundraising which
were placed into term deposits. Total inventory and pre-paid inventory
increased to £8.2 million (2023: £4.4 million) preparing for the delivery of
several projects including Everdura Technology Company and LoDES.
Overall, the Company recorded a loss for the year of £22.8 million (2023:
loss of £23.2 million), an improvement of £0.4 million supported mainly by
Finance income. There have been a number of 'one-off' costs experienced in the
year including professional fees in relation to the redomiciliation of
Invinity's parent company from Jersey to the UK which concluded early in
January 2025. The EBITDA loss after adjusting for these one-off items,
non-cash expenditures and grant income, reduced from £22.4 million to £18.0
million year-on-year.
The Company has continued to invest in its future capabilities with the
opening of a new production facility in Motherwell, Scotland in June 2024 and
a contract was signed to supply a new semi-automated production line in
Bathgate, Scotland to be delivered in Q2 2025. The outcome of these
investments will realise product cost savings and support increased scale
ahead of the outcome of the UK LDES Cap and Floor application process.
2024 Cash Performance
Year-on-year cash outflow from operations increased to £25.9 million (2023:
£19.7 million) principally because of a net increase in operating assets,
primarily inventory, as set out in note 14.
Delivering on increased margins is a key corporate priority and will make an
important contribution to the Company being able to fund its administrative
costs from operational cash receipts in the future. To this end, the Company
successfully delivered and commissioned the 1.2 MWh ENDURIUM system at the La
Plana site in early 2025 under its partnership with Gamesa Electric. As noted
in the previous year, ENDURIUM is expected to be manufactured at significantly
lower cost than the Company's VS3 product and occupies a comparatively smaller
physical footprint to support lower operation and maintenance costs, in
addition to higher round-trip-efficiency. These characteristics should enable
the Company to sell this new product at a materially lower and more
competitive price point than currently to support future cash generation and
profitability.
Funding and Net Working Capital
In 2024 it was inspiring to note the huge support from our investors in
raising over £57 million to support the growth of the Company as it continues
to develop a market leading solution in non-lithium, long duration battery
energy storage systems.
On 31 December 2024 the Company had cash and cash equivalents of £32.4
million (2023: £5.0 million). The Company's cash balance during 2024 has been
materially increased following the successful conclusion of the capital
raising of £57.4 million which completed in May 2024.
The Company was debt free as of 31 December 2024 and remains so as at the date
of this document.
Going Concern
The Directors have made an assessment of going concern covering the period
from the date of approval of the financial statements to 30 June 2026 and in
making this assessment, have prepared a cash flow forecast covering this
period. The Directors have also considered whether there are any significant
events expected to arise beyond the going concern period.
This forecast indicates that the Group expects to remain cash positive during
the going concern period, without the requirement for further fundraising.
This forecast includes judgements and estimates regarding income from pipeline
projects and expected costs of delivering the contracts.
It is important to note that the visibility around the sales pipeline
underpinning the Company's projected cashflow is more reliable over a period
of 12 months, which is in line with the going concern period noted above.
While a cash flow forecast and projections have been carried out for a period
greater than 12 months, the risk and uncertainty increase in the time
following the going concern assessment period.
Invinity has prepared a downside cash flow forecast for the purposes of going
concern evaluation, which excludes all pipeline contracts that are not yet
signed. In this scenario, the forecast assumes a reduction or deferral of
costs in order to preserve cash. If required, the Directors consider that the
Group has the ability to reduce or defer costs without adversely affecting the
short-term delivery of contracted income in the downside forecast. The outcome
of this scenario is that the Company has sufficient cash throughout the going
concern period. The accounts have therefore been prepared on a going concern
basis.
Adam Howard
Chief Financial Officer
29 May 2025
Financial Statements
Consolidated Statement of Profit and Loss
For the year ended 31 December 2024
2024 2023
Note £000 £000 £000 £000
Revenue 4 5,015 22,006
Direct costs (8,528) (25,361)
Grant income against direct costs 4 - 11
Cost of sales 5 (8,528) (25,350)
Gross loss (3,513) (3,344)
Operating costs
Administrative expenses 6 (20,334) (19,085)
Other items of operating income and expense 10 (210) (349)
Loss from operations (24,057) (22,778)
Finance income 1,358 719
Finance costs (106) (1,233)
Gain on foreign currency transactions 8 113
Net finance income/(costs) 11 1,260 (401)
Loss before income tax (22,797) (23,179)
Income tax expense 12 - -
Loss for the year (22,797) (23,179)
Loss per ordinary share in pence
Basic 13 (6.7) (13.1)
Diluted 13 (6.7) (13.1)
The above consolidated statement of profit and loss should be read in
conjunction with the accompanying notes.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
Continuing operations £000 £000
Loss for the year (22,797) (23,179)
Other comprehensive expense
Items that may be reclassified subsequently to profit or loss:
Exchange differences on the translation of foreign operations (355) (60)
Total comprehensive loss for the year (23,152) (23,239)
The above consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes.
Consolidated Statement of Financial Position
As at 31 December 2024
2024 2023
Note £000 £000
Non-current assets
Goodwill and other intangible assets 15 23,959 24,002
Property, plant and equipment 16 2,346 1,699
Right-of-use assets 17 1,526 1,558
Contract assets 21 - 304
Total non-current assets 27,831 27,563
Current assets
Inventory 19 5,753 3,288
Other current assets 20 7,648 2,721
Contract assets 21 1,149 888
Trade receivables 22 827 2,496
Cash and cash equivalents 23 32,352 5,014
Total current assets 47,729 14,407
Total assets 75,560 41,970
Current liabilities
Trade and other payables 24 (4,525) (3,948)
Derivative financial instruments 25 (271) (406)
Contract liabilities 21 (1,392) (1,312)
Lease liabilities 26 (550) (723)
Provisions 21 (381) (812)
Total current liabilities (7,119) (7,201)
Net current assets 40,610 7,206
Non-current liabilities
Lease liabilities 26 (1,145) (833)
Provisions 21 (1,627) (123)
Total non-current liabilities (2,772) (956)
Total liabilities (9,891) (8,157)
Net assets 65,669 33,813
Equity
Called up share capital 27 53,473 51,348
Share premium 27 215,121 162,883
Share-based payment reserve 27 7,328 6,683
Accumulated losses 27 (208,070) (185,273)
Currency translation reserve 27 (2,222) (1,867)
Other reserves 27 39 39
Total equity 65,669 33,813
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
The financial statements were authorised by the Board of Directors and
authorised for issue on 29 May 2025 and were signed on its behalf by:
Adam Howard
Director
Consolidated Statement of Changes in Equity
As at 31 December 2024
Called up share capital Share premium Share-based payment reserve Accumul-ated losses Currency transla-tion reserve Other reserves Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2024 51,348 162,883 6,683 (185,273) (1,867) 39 33,813
Loss for the year - - - (22,797) - - (22,797)
Other comprehensive income
Foreign currency translation differences - - - - (355) - (355)
Total comprehensive loss for the year - - - (22,797) (355) - (23,152)
Transactions with owners in their capacity as owners
Investment funding arrangement, net of transaction costs 2,125 52,234 - - - - 54,359
Exercise of share options 4 - - - - 4
Share-based payments - - 645 - - - 645
Total contributions by owners 2,125 52,238 645 - - - 55,008
At 31 December 2024 53,473 215,121 7,328 (208,070) (2,222) 39 65,669
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Called up share capital Share premium Share-based payment reserve Accumul-ated losses Currency transla-tion reserve Other reserves Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2023 50,716 141,579 5,957 (162,094) (1,807) 39 34,390
Loss for the year - - - (23,179) - - (23,179)
Other comprehensive income
Foreign currency translation differences - - - - (60) - (60)
Total comprehensive loss for the year - - - (23,179) (60) - (23,239)
Transactions with owners in their capacity as owners
Investment funding arrangement, net of transaction costs 631 21,295 - - - - 21,926
Exercise of share options 1 9 - - - - 10
Share-based payments - - 726 - - - 726
Total contributions by owners 632 21,304 726 - - - 22,662
At 31 December 2023 51,348 162,883 6,683 (185,273) (1,867) 39 33,813
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Note £000 £000
Cash flows from operating activities
Cash used in operations 14 (26,103) (19,657)
Interest received 1,222 299
Interest paid (13) (1)
Net cash outflow from operating activities (24,894) (19,359)
Cash flows from investing activities
Acquisition of property, plant and equipment 16 (1,294) (1,013)
Proceeds from disposal of property, plant and equipment 16 - 57
Deposits on right-of-use assets (7) (28)
Net cash outflows from investing activities (1,301) (984)
Cash flows from financing activities
Payment of lease liabilities 26 (676) (629)
Interest paid on lease liabilities 26 (92) (44)
Proceeds from the issue of share capital 57,383 23,044
Proceeds from the exercise of share options and warrants 4 10
Payment of transaction costs for the issue of share capital (3,001) (1,117)
Proceeds from sale of conversion shares - 742
Financing charges on repayment of derivative financial instruments - (992)
Repayment of investment funding arrangement (881)
Net cash inflow from financing activities 53,618 20,133
Net increase/(decrease) in cash and cash equivalents 27,423 (210)
Cash and cash equivalents at the beginning of the year 5,014 5,137
Effects of exchange rate changes on cash and cash equivalents (85) 87
Cash and cash equivalents at the end of the year 32,352 5,014
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Notes
1 General Information
Invinity Energy Systems plc (the 'Company') is a public company limited by
shares incorporated and domiciled in Jersey. For the period under review, the
registered office address was Third Floor, IFC5, Castle Street, St. Helier,
JE2 3BY, Jersey.
The Company is quoted on the AIM Market of the London Stock Exchange with the
ticker symbol IES.L and on the OTCQX Best Market in the United States of
America with the ticker symbol IESVF.
The principal activities of the Company and its subsidiaries (together the
'Group') relate to the manufacture and sale of vanadium flow battery systems
and associated installation, warranty and other services.
2 Accounting Policies
Basis of Preparation
These consolidated financial statements have been prepared in accordance with
International UK-adopted International Accounting Standards, the associated
interpretations issued by the IFRS Interpretations Committee (together 'IFRS')
and in accordance with the Companies (Jersey) Law 1991.
Separate presentation of the parent company financial statements is not
required by the Companies (Jersey) Law 1991 and, accordingly, such statements
have not been included in this report.
The accounting policies applied in preparing these consolidated financial
statements are set out below. These policies have been consistently applied
throughout the period and to each subsidiary within the Group.
The financial statements have been prepared under the historical cost
convention except where stated.
Going Concern
The Directors are satisfied that the Group has adequate resources to continue
to operate as a going concern for the foreseeable future and that no material
uncertainties exist which could cause significant doubt with respect to this
assessment. In making this assessment, the Directors have considered the
Group's balance sheet position and forecast earnings and cash flows for the
period from the date of approval of these financial statements to 30 June
2026.
As part of the going concern assessment the Directors have prepared a cash
flow forecast which indicates that the Group would expect to remain cash
positive during this period and without the requirement for further
fundraising. The business continues in a cash outflow position, using funding
generated from previous fundraises. However, it plans to move to a cash inflow
position upon the launch and delivery of material volume of the next
generation product.
This cash flow forecast was stress-tested for a worst-case scenario of limited
positive cash receipts from sales and management of costs where necessary. In
these tested scenarios, the business would remain cash positive for the 12
months from the date of approval of these financial statements.
Therefore, the Directors believe it is appropriate to prepare the accounts on
a going concern basis.
New Standards, Amendments and Interpretations Effective and Adopted by the
Group in 2024
Amendments to existing standards previously issued by the IASB with effective
dates during the year ended 31 December 2024 are summarised below. There was
no effect on the Group's consolidated financial statements for the year ended
31 December 2024 as a result of the adoption of these amendments.
Amendments to 'IAS 1 Presentation of Financial Statements - Classification of
Liabilities as Current or Non-Current Liabilities with Covenants'
The Group has adopted the amendments to IAS 1 for the first time in the
current year. The amendments clarify that the classification of liabilities
as current or noncurrent is based solely on an entity's right to defer
settlement for at least 12 months after the reporting date. The right needs to
exist at the reporting date and must have substance. Only covenants with which
an entity must comply on or before the reporting date affect this right.
Covenants to be complied with after the reporting date do not affect
the classification of a liability as current or noncurrent at the reporting
date. However, disclosure about covenants is now required to help users
understand the risk that those liabilities could become repayable within 12
months after the reporting date.
The amendments also clarify that the transfer of an entity's own equity
instruments is regarded as settlement of a liability, in certain
circumstances. If a liability has any equity conversion options, they
generally affect its classification as current or noncurrent (e.g. if the
conversion option is bifurcated as an embedded derivative from the host debt),
unless these conversion options are recognised as equity under IAS 32,
Financial Instruments: Presentation.
Amendments to 'IFRS 16 Leases - Lease Liability in a Sale and Leaseback'
The Group has adopted the amendments to IFRS 16 for the first time in the
current year. The amendment requires a seller-lessee to account for variable
lease payments that arise in a sale-and-leaseback transaction as follows:
· On initial recognition, include variable lease payments when
measuring a lease liability arising from a sale-and-leaseback transaction.
· After initial recognition, apply the general requirements for
subsequent accounting of the lease liability such that no gain or loss
relating to the retained right of use is recognised.
Seller-lessees are required to reassess and potentially restate
sale-and-leaseback transactions entered into since the implementation of IFRS
16 in 2019.
Amendments to 'IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures - Supplier Finance Arrangements'
The Group has adopted the amendments to IAS 7 and IFRS 7 for the first time in
the current year. The amendments require an entity (the buyer) to disclose
qualitative and quantitative information about its supplier finance
arrangements, such as terms and conditions - including, for example, extended
payment terms and security or guarantees provided.
Amongst other characteristics, IAS 7 explains that a supplier finance
arrangement provides the entity with extended payment terms, or the entity's
suppliers with early payment terms, compared to the related invoice payment
due date.
New Standards and Interpretations Not Yet Adopted
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2024 reporting periods and have not been
early adopted by the Company. These standards are not expected to have a
material impact on the entity in the current or future reporting periods or on
foreseeable future transactions and are summarised below:
§ IAS 21 The Effects of Changes in Foreign Exchange Rates - Lack of
Exchangeability (effective for periods beginning on or after 1 January 2025);
§ IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures
- Classification and measurement of financial instruments (effective for
periods beginning on or after 1 January 2026).
§ Annual Improvements to IFRS Accounting Standards (effective for periods
beginning on or after 1 January 2026) - Amendments to:
o IFRS 1 First-time Adoption of International Financial Reporting
Standards;
o IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance
on implementing IFRS 7;
o IFRS 9 Financial Instruments;
o IFRS 10 Consolidated Financial Statements; and
o IAS 7 Statement of Cash flows
§ IFRS 18 Presentation and Disclosure in Financial Statements (effective for
periods beginning on or after 1 January 2027);
§ IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective
for periods beginning on or after 1 January 2027)
Foreign Currency
Presentation Currency
The consolidated financial statements are presented in Great British Pounds
(GBP) rounded to the nearest thousand (£000), except where otherwise
indicated.
Functional Currency
Items included in the financial information of the individual companies that
comprise the Group are measured using the currency of the primary economic
environment in which each subsidiary operates (its functional currency).
Whilst Jersey uses the Jersey Pound as its currency, Jersey is in a currency
union with the United Kingdom and so the functional currency of the parent
company of the Group at 31 December 2024 has been determined to be GBP.
Foreign Currency Transactions
Transactions in currencies other than an entity's functional currency (foreign
currencies) are translated using the exchange rate on the date of the
transaction. Foreign exchange gains and losses resulting from the settlement
of transactions denominated in a foreign currency are translated into
functional currency using the relevant exchange rate at the date of the
transaction.
Foreign exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at the balance sheet date of
monetary assets and liabilities denominated in foreign currencies, are
recognised in the consolidated statement of comprehensive loss within
gains/(losses) on foreign currency transactions.
Foreign currency gains/(losses) realised on the retranslation of subsidiaries
as part of the year-end consolidation are recorded in the translation reserve
that forms a part of shareholders' funds in the consolidated financial
statements of the Group.
Consolidation of Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company
controls an entity when it is exposed to, or has rights over, variable returns
from its involvement with the entity and can affect those returns through its
ability to exercise control over the entity. Subsidiaries are consolidated in
the Group financial statements from the date at which control is transferred
to the Company.
Subsidiaries are deconsolidated from the date that control ceases. The ability
to control an entity may cease because of the sale of a subsidiary or other
change in the Company's shareholding in that subsidiary, voting rights or
board representation.
Foreign Currency Operations
Subsidiaries of the Company may have functional currencies that are different
from that of the Company. Since the Group financial statements are presented
in GBP, the assets and liabilities of foreign currency subsidiaries
consolidated into these financial statements are translated into the Group's
presentational currency using exchange rates prevailing at the end of the
reporting period. Income and expense items are similarly translated using the
average rate for each month during the year. The exchange rates on the actual
dates of transactions are used where exchange rates fluctuate significantly
within a month. Exchange differences arising on consolidation are recognised
in other comprehensive income and are accumulated as part of shareholder's
equity.
Transaction Between Entities Within the Group
Transactions and balances between companies forming part of the Group together
with any unrealised income and expenses arising from intra-group transactions
are eliminated in the preparation of the consolidated financial statements of
the Group.
Operating Segments
The Group is organised internally to report to the Executive Directors as a
whole. The Executive Directors comprise the Chief Executive Officer, the
President & Chief Commercial Officer, and the Chief Financial Officer. The
Executive Directors, as a group, have been determined, collectively, to
prosecute the role of chief operating decision maker of the Group. The chief
operating decision maker is ultimately responsible for entity-wide resource
allocation decisions, the evaluation of the financial, operating and ESG
performance of the Group.
The Group's activities have been determined to represent a single operating
segment being the provision of vanadium flow batteries and ancillary services,
principally comprising installation and integration services, and the
provision of extended warranties for battery units sold.
Revenue
The Group generates revenue from the sale of battery storage systems
integration hardware, installation, extended warranty and other services.
These multiple elements are separate performance obligations that are derived
from contractual arrangements with customers. The sales contracts do not
include a general right of return.
For contracts that contain multiple elements or promises, the Group accounts
for individual goods and services separately if they are distinct. A product
or service is distinct if it is separately identifiable from other items in
the agreement and where a customer can benefit from the good or service on its
own or together with other resources that are readily available.
The consideration paid for each performance obligation is typically fixed. A
significant portion of the aggregate payment due under a contract for sale is
normally due before delivery or completion of the service. The total
consideration under the contract is allocated between the distinct performance
obligations contained in the contract based on their stand-alone selling
prices. The stand-alone selling price is estimated using an adjusted market
assessment approach that looks to industry benchmarks or pricing surveys for
certain standalone products or services.
The Group measures revenue based on the consideration specified in the
contracts for sale with customers. Revenue is recognised when a performance
obligation is satisfied by transferring control over a good or service to a
customer. With respect to the battery system, associated control systems and
integration hardware, control is transferred at a point in time and is usually
based on the contractual shipping terms. In certain instances, the battery
system and integration hardware may be ready for delivery although the
customer is not ready to receive the product. The Group will recognise revenue
in accordance with IFRS 15 as a Bill-and-Hold arrangement if all of the
following conditions are satisfied:
§ The reason for the bill and hold arrangement is substantive;
§ The battery systems and hardware are identified separately as belonging to
the customer;
§ The battery systems and hardware are currently ready for physical transfer
to the customer; and
§ The Company does not have the ability to use the product or to direct it to
another customer.
With respect to the services that includes installation and commissioning, the
performance obligation is usually satisfied at a point in time when a when a
commissioning certificate or site performance report has been issued to the
customer. Revenue excludes any taxes such as sales taxes, value added tax or
other levies that are invoiced and collected on behalf of third parties, such
as government tax authorities.
In addition, under the terms of its contracts for sale, the Group may be
responsible for other services such as storing and delivering battery systems
to its customers. When this is the case, the Group will invoice the relevant
customer for, and will recognise as revenue, any charges incurred together
with any associated handling costs. Revenue is recognised for the storage
services over time as the services are delivered and for shipping services at
a point in time when the goods are delivered to the agreed upon location. The
related costs incurred by the Group for storage, shipping and handling
services are recognised as cost of sales concurrent with the recognition of
the associated revenue.
Grant Income
Government and other grants received are recognised in the consolidated
statement of profit and loss in the period that the related expenditure is
incurred. Grant income received in respect of costs incurred is presented net
within the associated cost category. Capital grants are similarly netted
against the relevant asset acquired or constructed.
Grant income received in advance of the associated expenditure is presented as
deferred income within contract liabilities and released to profit and loss as
the associated expenditure is incurred. Grant income receivable is presented
as accrued income within contract assets until such time as it can be claimed
or is received.
Finance Income and Costs
Finance income comprises interest on cash deposits, foreign currency gains and
the unwind of discount on any assets that are carried at amortised cost.
Interest income is recognised as it accrues using the effective interest rate
method.
Finance costs include foreign currency losses and the unwind of the discount
on any liabilities held at amortised cost, such as lease liabilities arising
from lease contracts.
Employee Benefits
Short-term Benefits
Benefits provided to employees that are short-term in nature are recognised as
expenses in the statement of profit and loss as the related service is
provided. The principal short-term benefits given to employees are salaries,
associated holiday pay and other periodic benefits such as healthcare and
pension contributions made by the Group for the benefit of the employee. A
liability is recognised for the amount expected to be paid under short-term
cash bonus plans if there is either a present legal or constructive obligation
to pay the amount and the amount can be reliably estimated.
Share-based Payments
The Group operates equity-settled share-based compensation plans, under which
it compensates employees for services rendered through the issue of equity
instruments, deferred share awards or options to subscribe for ordinary shares
of the Group. The fair value of the employee services received in exchange for
the grant of the equity instruments, shares or options is recognised as an
expense. The total amount to be expensed is determined by reference to the
fair value of the options granted:
§ including any market conditions (for example, the Group's share price);
§ excluding the impact of any service and non-market performance vesting
conditions (for example, profitability, sales, growth targets, and the
requirement to remain as an employee of the Group over a specified period);
and
§ including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in the assumptions
regarding the number of options that are expected to vest. The total expense
is recognised over the vesting period, which is the period over which all the
specified vesting conditions are to be satisfied.
In some circumstances, employees may provide services in advance of the grant
date and therefore the grant date fair value is estimated for the purposes of
recognising the expense during the period between service commencement and the
grant date.
At the end of each reporting period, the Group revises its estimates of the
number of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if
any, in the consolidated statement of profit and loss, with a corresponding
adjustment to equity.
Any social security contributions payable in connection with the grant of the
share options is considered an integral part of the grant itself, and the
charge will be treated as a cash-settled transaction.
Taxes
The total tax charge or credit recognised in the statement of profit and loss
comprises both current and deferred taxes. Taxation is recognised in the
consolidated statement of profit and loss except to the extent that it relates
to a business combination or items recognised directly in equity or other
comprehensive income.
Current Tax
The current tax charge is based on the taxable profit for the year. Taxable
profit or loss is different from the profit or loss reported in the statement
of profit and loss as it excludes items of income and/or expense that are
taxable or deductible in other years (temporary differences) and it further
excludes items that are never taxable nor deductible (permanent differences).
Deferred Tax
Deferred tax is the tax that is expected to be payable or recoverable on
differences between the carrying value of assets and liabilities in the
financial statements and the corresponding value of those assets and
liabilities used to calculate taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences,
the carry forward of unused tax credits and any unused tax losses. Deferred
tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses can be
utilised.
Deferred tax assets and liabilities are recognised using the liability method
for all taxable temporary differences, except in respect of taxable temporary
differences associated with investments in subsidiaries and associates. Where
the timing of the reversal of temporary difference arising from such
investment related assets and liabilities can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future then
the Group does not recognise deferred tax liabilities on these items.
A deferred tax asset or liability is not recognised if a temporary difference
arises on initial recognition of an asset or liability and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss.
Current and deferred tax is calculated using tax rates and laws that have been
enacted or substantively enacted at the balance sheet date. Deferred tax
balances are presented on a gross basis. Refer to note 18, deferred tax
balances.
Earnings per Share
The Group presents basic and diluted earnings per share ("EPS") data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the year.
Diluted EPS is determined by adjusting the weighted average number of ordinary
shares outstanding used in the EPS calculation to include all potentially
dilutive ordinary shares, which, in the case of the Company, represents
additional shares that could be issued in relation to 'in-the-money'
convertible notes, warrants or share options.
The effects of anti-dilutive potential ordinary shares are ignored in
calculating diluted EPS. Anti-dilution is when an increase in earnings per
share or a reduction in loss per share would result from the exercise of such
options, warrants or convertible instruments.
Intangible Assets
Goodwill
The Group allocates the fair value of the purchase consideration on the
acquisition of a subsidiary to the assets acquired and liabilities assumed
based on an assessment of fair value at the acquisition date. Any excess of
purchase consideration is recognised as goodwill. Where goodwill is
recognised, it is allocated to the cash generating units (CGUs) in a
systematic manner reflective of how the Group expects to recover the value of
the goodwill. Because the Group has been determined to consist of a single
business unit, the carrying value of goodwill is tested for impairment based
on the recoverable value of the Group as a whole.
Goodwill is not amortised but is tested for impairment on an annual basis, and
the Group will also test for impairment at other times if there is an
indication that an impairment may exist. Determining whether goodwill is
impaired requires an estimation of the value-in-use of the CGU. The key
estimates are therefore the selection of the suitable discount rates and the
estimation of future growth rates which may depend on specific risks and the
anticipated economic and market conditions related to the CGU.
As part of determining the value in use of the CGU, sensitivities have been
considered on the underlying inputs included within the value-in-use
calculations used for impairment reviews and no impact exists on the carrying
value of goodwill, given the headroom identified as a result of the impairment
test. Goodwill is impaired where circumstances indicate that the recoverable
amount of the underlying CGU may no longer support the carrying value of the
CGU. An impairment charge is recognised in the statement of profit and loss
for the period in which it is determined the goodwill is no longer
recoverable. Impairment losses related to goodwill cannot be reversed in
future periods.
Internally Generated Intangible Assets - Research and Development Costs
Research
Expenditure on research activities is recognised as an expense in the period
in which it is incurred. Research activities are aimed at creating new
knowledge or the use of existing knowledge in new or creative ways to generate
new concepts. Research activity does not typically have a defined commercial
objective at the outset.
Development
Where projects evolve toward commerciality or are related to a specific
commercial objective they are assessed to determine whether the activity
constitutes development that is associated with a commercial objective or
practical application.
The associated costs represent development costs and can be capitalised if,
and only if, the following conditions can be demonstrated:
§ the technical feasibility of completing the intangible asset so that it can
be made available for use or sale;
§ the intention to complete the intangible asset for use or sale;
§ the availability of adequate technical, financial and other resources to
complete the development and to use or sell it;
§ an asset is created that can be separately identified for use or sale;
§ it is probable that the asset created will generate future economic
benefits; and
§ the development cost of the asset can be measured reliably.
Development work undertaken by the Group typically relates to the refinement
of design, materials selection, construction techniques, firmware and control
systems to enhance battery system performance over successive generations.
Where development costs are capitalised, they are amortised over the expected
period to the introduction of the next generation of battery system.
Amortisation is recorded over that period on a straight-line basis with the
corresponding amortisation charge recognised in the statement of profit and
loss as a component of administrative expenses.
Four years has historically been the typical cycle time between successive
generations of battery system design.
Other Intangible Assets
Intangible assets other than goodwill that are acquired by the Group are
stated at their historical cost of acquisition less accumulated amortisation
and any impairment losses.
Software and Purchased Domain Names
Third-party software is initially capitalised at its cost of purchase.
Amortisation is charged to administrative expenses over the expected useful
life of the software which has been assessed as three years from the date of
acquisition.
Acquired domain names are initially capitalised at cost of purchase.
Amortisation is charged to administrative expenses over the expected useful
life of the domain name which has been assessed as ten years from the date of
acquisition.
Patents and Certifications
Patent rights and certifications are initially capitalised at the cost of
applying for relevant patent rights and other protections, and certifications.
Amortisation is charged to administrative expenses over the expected useful
life of the patents and certifications which has been assessed as five years
from the date of acquisition.
Property, Plant and Equipment
Items of property, plant and equipment are stated at historical cost less
accumulated depreciation and any impairment losses. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent expenditure is only included in the asset's carrying amount or
recognised as a separate asset, as appropriate, when it is probable that
future economic benefits associated with that item will flow to the Group.
Costs that do not enhance the value of an asset such as repair and maintenance
costs are charged to the statement of profit and loss in the period in which
they are incurred.
Depreciation is charged to write off the cost of assets over their estimated
useful lives on a straight-line basis. Depreciation commences on the date the
assets are available for use. Work-in-progress assets are not depreciated
until they are available for use and transferred to the appropriate category
of property, plant and equipment.
Estimated useful lives for property, plant and equipment and other intangible
assets are:
Category Period (Years) Recognition in Statement of Profit and Loss
Computer and office equipment 3 - 5 Administrative expenses
Leasehold improvements Shorter of lease term or useful life Administrative expenses / Cost of sales
Vehicles 3 Administrative expenses
Manufacturing equipment and tooling 3 - 20 Cost of sales
R&D Equipment 5 - 10 Administrative expenses
Software and purchased domain names 3 Administrative expenses
Patents and certifications 10 Administrative expenses
Depreciation methods, useful lives and residual values of assets are reviewed,
and adjusted prospectively as appropriate, at each reporting date.
Where an asset is disposed of, the corresponding gain or loss on disposal is
determined by comparing the sales proceeds received with the carrying amount
of that asset at the date of disposal. Gains or losses on disposal of fixed
assets are included within other items of operating income and expense in the
statement of profit and loss.
Impairment of Tangible and Intangible Assets
The Group reviews the carrying values of its tangible and intangible assets,
other than goodwill, at each balance sheet date to determine if any indicators
exist that could mean those assets are impaired. Where an indicator of
impairment exists the recoverable amount of the relevant asset (or CGU) is
estimated to determine the amount of any potential impairment loss.
Recoverable amounts are determined using a discounted cash flow model related
to each asset or CGU being assessed. The discount rate applied to the cash
flows in the model is a pre-tax discount rate that reflects market assessment
of the time value of money and risks specific to the groups of assets being
considered.
If the recoverable value estimated in the cash flow model for a specific asset
(or CGU) is lower than the carrying value, then the carrying value of the
asset is reduced to its estimated recoverable value with a corresponding
charge immediately recognised in the statement of profit and loss.
Where the condition that gave rise to an impairment loss reverses in a
subsequent period, the impairment loss is similarly reversed and the carrying
value of the asset increased to the revised estimate of its recoverable value.
The carrying value of an asset immediately following the reversal of an
impairment cannot exceed the carrying value that the asset would have had if
the original impairment had not been made and the asset was depreciated as
normal. A reversal of an impairment loss is recognised immediately in profit
or loss.
The value of any impairment (or reversal of impairment) of an asset is
recorded in the same financial statement line item where depreciation or
amortisation of the asset would normally be shown.
Where it is impractical to meaningfully assess recoverable amount using a
discounted cash flow model, for instance where near term cash flows are low or
negative, an assessment of the fair value adjusted for the costs that would be
incurred in the disposal of an asset or operation is used. This is typically
the case for development stage assets, operations or associated intangible
assets (including goodwill) where the underlying products or technologies have
not yet been commercialised.
Provisions
Provisions are established when the Group has a present legal or constructive
obligation because of past events. It is probable that an outflow of resources
will be required to settle the obligation and the amount of that outflow can
be reliably estimated.
Provisions are measured at the Group's best estimate of the expenditure
required to settle the obligation at the financial position date, considering
the risks and uncertainties of the obligation, and are discounted to present
value of the expenditures that are expected to be incurred in settling the
obligation using a pre-tax discount rate that reflects current market
assessment of the time value of money and the risks related to the obligation.
The initial recognition of a provision results in a corresponding charge to
profit or loss. Where discounting is used, the carrying amount of a provision
increases in each period to reflect the passage of time. This increase is
recognised as borrowing cost.
Leases
Group entities only participate in lease contracts as the lessee. Lease
contracts typically relate to facilities.
On inception of a contract, the Group assesses whether it contains a lease. A
contract is a lease or contains a lease if it conveys the right to control the
use of an identified asset for a period of time in exchange for consideration.
The right to control the use of an identified asset is determined based on
whether the Group has the right to obtain substantially all the economic
benefits from the use of the asset throughout the period of use, and if the
Group has the right to direct the use of the asset.
Obligations under a lease are recognised as a liability with a corresponding
right-of-use asset, these are recognised at the commencement date of the
lease.
The lease liability is initially measured at the present value of the lease
payments that have not yet been paid at the inception of the lease, discounted
using the interest rate implicit in the lease contract. Where the interest
rate implicit in the lease contract cannot be readily determined, the Group's
incremental borrowing rate is used.
Variable lease payments that do not depend on an index or rate are not
included in the measurement of the lease liability. The lease liability is
measured at amortised cost using the effective interest rate method.
The lease liability is subsequently measured at amortised cost using the
effective interest method. It is remeasured when:
§ there is a change in future lease payments arising from a change in an
index or rate;
§ there is a change in the Group's estimate of the amount expected to be
payable under a residual value guarantee; or
§ the Group changes its assessment of whether it will exercise a purchase,
extension or termination option.
When a lease liability is remeasured under one of these scenarios, a
corresponding adjustment is made to the carrying value of the right-of-use
asset or in profit and loss when the carrying amount of the asset has already
been reduced to zero.
The corresponding right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability plus any lease payments
made at or before the commencement date, any initial direct costs incurred and
an estimate of the costs required to remove or restore the underlying asset,
less any lease incentives received. The right-of-use asset is amortised over
the shorter of the asset's useful life and the lease term on a straight-line
basis.
The Group has elected not to recognise right-of-use assets and corresponding
lease liabilities for short-term leases, those existing leases with a lease
term of less than 12 months and leases related to low value assets with a
value of £5,000 or less when new. The payments for the exempt leases are
recognised as an expense on a straight-line basis over the lease term.
The Group has elected not to separate non-lease components from lease
components, by class of underlying asset. Each lease component and any
associated non-lease components are accounted for as a single lease component.
As an intermediate lessor the Group has accounted for its interest in the head
lease and the sub-lease separately. The lease classification of a sub-lease is
assessed with reference to the right-of-use asset arising from the head lease,
not with reference to the underlying asset. The Group applies the
derecognition and impairment requirements in IFRS 9 to the net investment in
the lease.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour costs and
those overheads that have been incurred in bringing the inventories to their
current location and condition. Cost is calculated using the first-in,
first-out method.
Net realisable value is calculated as the estimated selling price for an item
of inventory less estimated costs of completion.
Prepaid Inventory
Prepaid inventory is recognised on inventory payments where physical delivery
of that inventory has not yet been taken by the Group and is stated at the
lower of cost and net realisable value.
Financial Instruments
Financial assets and liabilities are recognised by the Group and recorded in
the statement of financial position when the Group is contractually bound to
the terms of the financial instrument. Financial assets and liabilities are
derecognised when the Group is no longer bound by the terms of the financial
instrument through settlement or expiry.
Financial Assets
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive income
(OCI), and fair value through profit or loss.
The classification of financial assets to which the Group is a party is
determined by the nature of the underlying financial instrument and the
characteristics of the contractual cash flows expected to be received under
the terms of instrument.
Financial assets are not reclassified after their initial recognition unless
there is a contractual change in the nature of the cash flows under the
instrument or the business purpose of the instrument has changed.
For a financial asset to be classified and measured at amortised cost or fair
value through OCI, it needs to give rise to cash flows that are 'solely
payments of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or loss, irrespective of
the business model.
Financial assets that the Group is party to are classified and measured as
follows:
Financial Asset Measurement Basis
Trade receivables Amortised cost
Short-term investments Amortised cost
Cash and cash equivalents Amortised cost
Amortised Cost
On initial recognition, the Group measures amortised cost for financial assets
based on the fair value of each financial asset together with any transaction
costs that are directly attributable to the financial asset.
After initial recognition, amortised cost is measured for each financial asset
held using the effective interest rate method less any impairment loss
identified. Interest income is recognised for all financial assets, other than
those that are classified as short-term, by applying the effective interest
rate for the instrument. Interest income on short-term financial assets is not
considered to be material. Short-term financial instruments are determined as
those that have contractual terms of 12-months or less at inception.
Interest income, foreign exchange gains and losses, impairment, and any gain
or loss on derecognition are recognised in profit or loss.
Impairment of Financial Assets
A loss allowance for financial assets is determined based on the lifetime
expected credit losses for financial assets. Lifetime expected credit losses
are estimated based on factors including the Group's experience of collection,
the number and value of delayed payments past the average credit periods
across the Group's financial assets. The Group will also consider factors such
as changes in national or local economic conditions that correlate with
default on receivables and financial difficulties being experienced by the
counterparty.
Financial assets are impaired in full and a corresponding charge is recognised
in profit or loss where there is no reasonable expectation of recovery.
Financial Liabilities
The classification of financial liabilities is determined at initial
recognition. Financial liabilities are classified and measured as follows:
Financial Liability Measurement Basis
Trade and other payables Amortised cost
Derivative financial instrument Fair value through profit and loss
Lease liabilities Amortised cost
Amortised Cost
At initial recognition, the Group measures financial liabilities at amortised
cost using the fair value of the underlying instrument less transaction costs
directly attributable to the acquisition of the financial liability.
Derecognition of Financial Liabilities
The Group derecognises financial liabilities when the Group's obligations
under the relevant instrument are discharged, expired or cancelled.
Derivative Financial Instruments
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into, and they are subsequently remeasured to their fair
value at the end of each reporting period. Changes in the fair value of any
derivative instrument are recognised immediately in profit or loss and are
included in other gains/(losses).
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and on demand deposits, and
other short-term highly liquid investments that are readily convertible to a
known
amount of cash and are subject to an insignificant risk of change in value.
Equity Instruments
Instruments are classified as equity instruments if the substance of the
relative contract arrangements evidences a residual interest in the assets of
the Group after deducting all of its liabilities. Equity instruments issued by
the Company are recorded as proceeds received, net of direct issue costs not
charged to income.
Offsetting
Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, to realise the assets and settle the
liabilities simultaneously.
3 Critical Accounting Judgments and Key sources of Estimation Uncertainty
The preparation of the financial statements in conformity with generally
accepted accounting practice (GAAP) requires management to make estimates and
judgments. Those estimates and judgments can affect the reported values for
assets and liabilities as well as the disclosure of contingent assets and
liabilities at the balance sheet date.
Management is also required to make estimates and judgments related to the
reported amounts of revenues and expenses and related to the timing of the
recognition of those revenues and expenses.
Judgments made and estimates applied are based on historical experience and
other factors including management's expectations of future events that are
considered relevant. Actual results may differ from these estimates. The
estimates, judgments and underlying assumptions made are reviewed on an
ongoing basis and specifically in the preparation of the interim and annual
published financial information.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised and applied consistently in future periods subject to the
ongoing reassessment of estimates.
Critical Judgments for the Year Under Review
Going Concern
The Directors are required to assess whether it is appropriate to prepare the
financial statements on a going concern basis. In making this assessment the
Directors need to be satisfied that the Group can meet its obligations as they
fall due and will remain cash-positive for a period of at least 12 months from
the date of approval of the financial statements. Potential additional funding
that is not yet committed at the date of approval of the financial statements
cannot be anticipated in making the assessment of going concern.
The Directors make their assessment based on a cash flow model prepared by
management and based on its expectation of cash flows for the 18-month period
from the date of approval of the financial statements. The extended period in
the model provides additional comfort that the 12-month solvency requirement
can be met when making the assessment of going concern.
In preparing the cash flow model, assumptions have been made regarding the
timing of cash collection from customers based on the expected cash receipt
under contracts that require milestone payments to be made by customers. The
timing of the receipt of milestone payments may not always align with or
precede the costs incurred by the Company in performing its obligations under
a contract.
Downside sensitivities have been applied to the cash flows primarily related
to limited sales being made and costs being reduced where necessary. Refer to
'Basis of preparation' for details of the going concern analysis performed and
the Directors' conclusions regarding going concern.
The Directors expect that the business will continue to be viable throughout
the model period and, accordingly, the financial statements have been prepared
on a going concern basis.
Revenue Recognition
Sales contracts are assessed in accordance with the Group accounting policy
for revenue recognition. The policy requires the identification of the
performance obligations, or promises, under the contract and a determination
of the conditions and implications of each performance obligation. Revenue is
recognised only when a distinct and appropriate performance obligation under a
contract is satisfied.
Some performance obligations are satisfied separately such as the delivery of
the battery systems and integration hardware. Other obligations may be
satisfied in conjunction with other contract promises or where a contract
calls for equipment sold under the contract to be integrated into a larger
project before formal acceptance is notified by the customer.
Where the ability of a customer to benefit from a product or service is
dependent on the satisfaction of other performance obligations, more than one
promise may need to be bundled together as a combined performance obligation
that must be satisfied before the revenue related to each element can be
recognised.
Identifying where hardware or services are readily available from other
providers is a key determinant as to whether a contract promise represents a
separate performance obligation or if it should be bundled with other promises
that, together, represent a single performance obligation.
Sources of Estimation Uncertainty for the Year Under Review
Warranty Provision
The Company provides time-limited standard warranties in its contracts for
sale of battery systems. In addition, customers may elect to purchase
separate, standalone extended warranties. Extended warranties are for periods
greater than the standard warranties that are provided with the purchase of
all battery systems.
Estimating the costs that may be incurred by the Company in servicing warranty
agreements requires management to estimate the number of expected claims in
relation to the total number of battery systems sold. In addition, an estimate
of costs that the Company could expect to incur to remedy each warranty claim
should also be made to determine the amount of the total provision that should
be recorded for warranties.
Provisions made in respect of expected warranty obligations are reassessed and
remeasured where actual experience indicates the claim rate may be higher or
lower than initially expected or where costs to remedy warranty claims differ
from the assumptions used in calculating the provision. The release of an
over-provision of warranty costs results in other operating income being
recognised in the period whereas an additional provision for warranties
results in a charge being recognised.
A 20% increase in the number of warranty claims or a 20% increase in the cost
to remedy warranty issues would increase the provision by £22,895 (2023:
£120,436). A 40% increase in the number of warranty claims or a 40% increase
in the cost to remedy warranty issues would increase the provision by £45,791
(2023: £240,872).
Refer to note 21, contract related balances.
Provision for Onerous Contracts
A contract is onerous when the unavoidable costs of meeting the Company's
obligations under the contract are expected to be greater than the revenue
earned under that contract.
The assessment of unavoidable costs includes direct costs such as parts and
labour and indirect costs, such as production overhead or indirect labour,
that are expected to be incurred in servicing a warranty claim. Consideration
is made with respect to expected costs to complete the contracts looking at
historical information actualised for revenue contracts.
For extended warranty contracts, management consider the pool of historical
data using fail rates and actualised costs to forecast future expected
warranty costs expected to fulfil a contract. Management do not consider
reimbursements from third parties in making this assessment.
The assessment of future costs is inherently subjective and requires the use
of estimates in determining the appropriate amount of provision that may be
required.
A 20% increase in unavoidable costs would increase the provision by £693,122
(2023: £66,493). A 40% increase in unavoidable costs would increase the
provision by £1,386,244 (2023: £132,986).
Refer to note 21, contract related balances.
4 Revenue from Contracts with Customers and Income from Government Grants
Segment Information
The Group derives revenue from a single business segment, being the
manufacture and sale of vanadium flow battery systems and related hardware
together with the provision of services directly related to battery systems
sold to customers.
The Group is organised internally to report on its financial and operational
performance to its chief operating decision maker, which has been identified
as the three Executive Directors as a group.
All revenues in 2024 were derived from continuing operations.
2024 2023
Revenue from contracts with customers £000 £000
Battery systems and associated control systems 4,008 19,425
Integration hardware 443 1,470
Installation and commissioning 23 504
Other services 541 607
Total revenue in the consolidated statement of profit and loss 5,015 22,006
Analysed as:
Revenue recognised at a point in time 5,000 22,000
Revenue recognised over time 15 6
Total revenue in the consolidated statement of profit and loss 5,015 22,006
Grant income shown against cost of sales - 11
5,015 22,017
Geographic Analysis of Revenue
The Group's revenue from contracts with customers was derived from the
following geographic regions:
2024 2023
Geographic analysis of revenue £000 £000
Asia 62 737
Australia 19 6,212
Europe 503 2,826
North America 4,431 12,231
Total revenue in the consolidated statement of profit and loss 5,015 22,006
The Group maintains its principal production and assembly facilities in
Bathgate and Motherwell, Scotland and Vancouver, Canada. These facilities
include office space for design, sales and administrative teams. The Group
also has offices, operations and management based in London, England and San
Francisco, California.
The Group does not consider that the locations of its operations constitute
geographic segments as they are managed centrally by the executive management
team. The location of the manufacturing plants and business development
activity is a function of time-zone when servicing customers both pre-sale and
during product delivery. The geographic location of offices, facilities and
management is not related to distinct markets or customer characteristics at
the present time.
Significant Customers and Concentration of Revenue
Revenue from contracts with customers was derived from two (2023: three)
customers who each accounted for more than 10% of total revenue as follows:
2024 2023
Significant customers and concentration of revenue £000 £000
Customer A 2,661 -
Customer B 1,387 -
Customer C - 6,238
Customer D - 6,038
Customer E - 4,299
Grant Income Other than Revenue
The Group receives grant income to help fund certain projects that are
eligible for support, typically in the form of innovation grants. The total
grant income that was received in the year was as follows:
2024 2023
Grant income received £000 £000
Grants for research and development 106 160
Grants for product deployment 67 378
Economic and social development 2 1
Total government grants 175 539
- 11
Disclosed as:
Grant income against cost of sales
Grant income against administrative expenses 175 528
5 Cost of Sales
2024 2023
£000 £000
Movement in inventories of finished battery systems 6,434 27,023
Movement in provisions for warranty and warranty costs 524 (429)
Movement in provisions for sales contracts 1,570 (1,233)
Total cost of sales 8,528 25,361
6 Administrative Expenses
2024 2023
£000 £000
Staff costs 12,866 12,750
Research and development costs 2,421 1,868
Research and development recoveries, tax credits and grants (1,150) (1,949)
Professional fees 755 669
Sales and marketing costs 847 1,048
Facilities and office costs 345 232
Depreciation and amortisation 1,314 1,056
Other administrative costs 2,936 3,411
Total administrative expenses 20,334 19,085
No development costs were capitalised in the period (2023: £nil).
7 Auditors' Remuneration
2024 2023
£000 £000
Fees payable to the Company's auditors for the audit of the consolidated
financial statements
328 282
Audit of financial statements of subsidiaries pursuant to legislation 18 17
Fees payable to the Company's auditor for other services:
· Tax compliance services 19 -
365 299
The Group has a policy in place related to the commissioning of non-audit
service from its auditors where all such work requires pre-approval by the
Audit & Risk Committee before the commencement of any non-audit work.
Audit fees are discussed with and approved by the Audit & Risk Committee.
8 Staff Costs and Headcount
2024 2023
Staff costs £000 £000
Wages and salaries 11,010 11,475
Employer payroll taxes 905 839
Contributions to defined contribution plans 143 123
Other benefits 969 977
Share-based payments 622 726
Total staff costs 13,649 14,140
Administrative staff costs in the year were £12,865,615 (2023: £12,749,556)
and staff costs included in cost of sales were £783,333 (2023: £1,390,336).
2024 2023
Average headcount Number Number
Canada 82 73
United Kingdom 54 59
United States of America 9 8
Total 145 140
Key Management Compensation
The key management of the Group comprises the members of the senior leadership
team.
2024 2023
Key management compensation £000 £000
Short-term employee benefits 2,110 2,364
Post-employment benefits 22 14
Termination benefits 82 -
Equity settled share-based payment 386 263
Total key management compensation 2,600 2,641
9 Share-based Payments
Since its incorporation, the Company has operated various share-based
incentive plans. The purpose of each of the schemes has been to incentivise
Directors and employees related to improving Company performance and building
shareholder value.
Set out below is a summary of the option awards in issue at 31 December 2024.
Standard Grant date Final Expiry date Exercise price 2024 2023
redT 2018 plan 18 May 2018 18 May 2023 352.50 p 3,888 3,888
Invinity Energy 2018 ESOP 01 Apr 2020 12 Mar 2030 82.50 p 424,571 441,428
Invinity Energy 2018 Consultant SOP 01 Apr 2020 12 Mar 2030 82.50 p 378,000 378,000
Invinity Energy 2018 ESOP 01 Apr 2020 21 Nov 2029 4.34 p 1,052,134 1,052,134
Invinity Energy 2018 ESOP 01 Apr 2020 08 May 2029 6.84 p 628,358 628,358
Invinity Energy 2018 ESOP 26 Aug 2020 26 Aug 2030 113.00 p 1,360,000 1,540,000
Invinity Energy 2018 ESOP 28 Jan 2021 28 Jan 2031 204.00 p 258,000 313,000
Invinity Energy 2018 ESOP 04 Mar 2021 04 Mar 2031 152.00 p 150,000 170,000
Invinity Energy 2018 ESOP 15 Apr 2021 15 Apr 2031 151.00 p 84,000 84,000
Invinity Energy 2018 ESOP 03 Aug 2021 03 Aug 2031 134.50 p 275,000 290,000
Invinity Energy 2018 ESOP 29 Oct 2021 29 Oct 2031 111.50 p 251,000 263,000
Invinity Energy 2018 ESOP 20 Dec 2021 20 Dec 2031 91.00 p 135,000 135,000
Invinity Energy 2018 ESOP 03 Feb 2022 03 Feb 2032 64.50 p 112,000 150,000
Invinity Energy 2018 ESOP 02 Mar 2022 02 Mar 2032 93.50 p 45,000 45,000
Invinity Energy 2018 ESOP 11 Apr 2022 11 Apr 2032 90.00 p 60,000 60,000
Invinity Energy 2018 ESOP 11 Jul 2022 11 Jul 2032 45.50 p 500,000 500,000
Invinity Energy 2018 ESOP 08 Dec 2022 08 Dec 2032 38.00 p 311,000 531,000
Invinity Energy 2018 ESOP 27 Jan 2023 27 Jan 2033 42.00 p 2,334,400 2,655,100
Invinity Energy 2018 ESOP 20 Apr 2023 20 Apr 2033 43.50 p 62,000 97,000
Invinity Energy 2018 ESOP 19 Jul 2023 19 Jul 2033 51.20 p 3,278,000 4,177,000
Invinity Energy 2018 ESOP 26 Oct 2023 26 Oct 2033 38.00 p 339,000 369,000
Invinity Energy 2018 ESOP 07 Dec 2023 07 Dec 2033 29.50 p 30,000 75,000
Invinity Energy 2018 ESOP 22 Jan 2024 22 Jan 2034 24.00 p 102,000 -
Invinity Energy 2018 ESOP 13 Mar 2024 14 Mar 2034 30.50 p 33,000 -
12,206,351 13,957,908
Weighted average remaining contractual life of options outstanding at the end 7.12 7.96
of the year
No employee options were exercised during the year (2023: 39,956) with a
weighted average exercise price of nil pence per share (2023: 14.64p). On 14
October 2024, the Company extended the expiry date of 1,052,134 options with
grant date of 1 April 2020 to 21 November 2029. These options were fully
vested and extension has no impact on current period loss.
The grant-date fair value of share options issued is calculated using a
Black-Scholes methodology at the date of grant. Key inputs to the model
include the share price at the date of grant, the option exercise price, the
term of the award, share price volatility, the risk-free interest rate (by
reference to government bond yields) and the expected dividend yield rate,
which has historically been and continues to be zero, reflective of the
development-stage nature of the Group.
The aggregate number of options granted, vested, exercised and forfeited
during the year under the plans are summarised and analysed between unvested
and vested awards as follows:
Unvested Vested
At 1 January 2024 8,599,174 51.64p 5,358,734 74.42p
Granted 150,000 25.43p - -
Forfeited (871,176) 46.34p (1,030,381) 71.46p
Vested (2,484,748) 61.73p 2,484,748 61.73p
Exercised - - - -
At 31 December 2024 5,393,250 47.12p 6,813,101 70.24p
Unvested Vested
At 1 January 2023 3,538,691 84.86p 4,249,925 72.80p
Granted 8,184,600 46.41p - -
Forfeited (1,279,738) 52.13p (695,614) 114.21p
Vested (1,844,379) 91.84p 1,844,379 91.84p
Exercised - - (39,956) 14.64p
At 31 December 2023 8,599,174 51.64p 5,358,734 74.42p
Plans with Standard Performance Conditions
The primary share plan that remains outstanding at 31 December 2024 is the
2018 plan. The 2018 plan was adopted by the Board on 14 May 2018 and
introduced HMRC scheme rules related to certain non-taxable option grants. The
plan contains a provision to issue options as CSOP, EMI or unapproved awards.
Subsequent to the report period, on 8 January 2025, the new 2025 Employee
Share Option Plan was adopted without impact to the 2024 period
Refer to note 33, Events Occurring After the Report Period.
Parallel Options Issued
In addition, certain legacy redT options were reissued in 2020 as they were
considered by the Board to be sufficiently 'out-of-the-money' such that they
no longer provided a performance incentive to the holders of the options. As a
mechanism to adjust the terms of the unfavourable options, new parallel
options were issued on a one-for-one basis with the same terms as the original
awards excepting that they were issued with a lower exercise price.
Both the original and parallel option schemes remain in existence. However,
the exercise by an employee of a single option from either pool (original or
parallel) allocated to them will cause the equivalent value in the other pool
to be forfeited. Accordingly, the number of options disclosed above has been
adjusted to remove the number of options that is equivalent to the number of
parallel options issued.
Other Options
On 10 May 2021, the Company granted an option for 8,672,273 shares to Gamesa
Electric S.A. Unipersonal ("GaE"), a wholly-owned subsidiary of Siemens Gamesa
Renewable Energy S.A. The options were granted to GaE in consideration of its
entering into a joint development and commercialisation agreement with
Invinity Energy Nexus Limited, a wholly-owned subsidiary of the Company.
The exercise price of the options is 175 pence and upon exercise of those
options then for as long as GaE holds at least 5% of the issued share capital
of the Company it shall be entitled, subject to certain conditions, to
nominate one non-executive director to the Board of the Company. On 14
October 2024, the Company extended the expiry date by one year to 10 May 2026.
Warrants Issued in the Period or Outstanding
The Company had 909,090 warrants outstanding at 31 December 2023 in relation
to a 2020 investment agreement with Riverfort Global Opportunities
("Riverfort") which expired 2 April 2024I.
VSA Capital was awarded 340,000 warrants with an exercise price of 82.5 pence
in April 2020, at the time of the merger. These warrants expired on 2 April
2025.
In December 2021, the Company issued 14,464,571 'placing units' comprised of
one share, one short-term warrant and one long-term warrant. The short-term
warrants expired in 2023 and the long-term warrants expired 16 December 2024.
In December 2022, the Company issued 1,800,000 warrants as part of the
convertible loan facility with Riverfort Global Opportunities and YA II PN Ltd
("Noteholders"). Each warrant gives the holder the right to subscribe for one
new ordinary share at a price of 32 pence per ordinary share until 14 December
2026.
10 Other Items of Operating Income and Expense
The following items are included in comprehensive loss:
2024 2023
£000 £000
(Income)/expense
Gain on legal settlement (169) -
(Gain)/loss on curtailment of right-of-use asset (2) 205
Gain on disposal of property, plant and equipment - (15)
Sublease income (18)
Impairment of inventory to net realisable value 376 151
Obsolete inventory 70 8
Reversal of impairment of inventory to net realisable value (47)
Total other operating expenses 210 349
11 Net Finance Income and Costs
2024 2023
£000 £000
Finance income
Interest on bank deposits and money market funds (1,220) (299)
Interest on sublease income (2) -
Amortisation of financial instrument (135) (135)
Gain on realised foreign currency transactions (100) (42)
Finance costs
Finance charges on convertible loan notes and financial instruments - 903
Finance charges for lease liabilities 92 44
Finance charges for liabilities held at amortised cost 13 1
Loss/(gain) on unrealised foreign currency transactions 92 (71)
Net finance costs/(income) 1,260 401
12 Income Tax Expense
2024 2023
£000 £000
Current tax
Current tax on profits for the year - -
Total current tax expense - -
Reconciliation of income tax expense calculated using statutory tax rate
2024 2023
£000 £000
Loss before tax (22,797) (23,179)
Tax at the Jersey rate of nil% - -
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Non-taxable gains and expenses not deductible for tax 2 67
Differences in overseas tax rates (5,266) (4,761)
Unrelieved tax losses carried forward 4,852 4,615
Origination and reversal of timing differences not recognised 412 79
Total income tax expense - -
13 Loss per Share
2024 2023
Basic loss per share In pence In pence
From continuing operations (6.7) (13.1)
2024 2023
Diluted loss per share In pence In pence
From continuing operations (6.7) (13.1)
2024 2023
Loss used in calculation of basic and diluted loss per share £000 £000
From continuing operations (22,797) (23,179)
2024 2023
Weighted average number of shares used in calculation Number Number
Basic 342,812,364 176,439,069
Diluted 344,057,635 177,915,837
Additional potential shares used in the calculation of diluted earnings per
share primarily relate to potential shares outstanding at 31 December 2024
that may be issued in satisfaction of 'in-the-money' employee share options.
Potentially dilutive shares related to 'in-the-money' outstanding warrants to
subscribe for ordinary shares in the Company are also included in calculating
diluted earnings per share.
Where additional potential shares have an anti-dilutive impact on the
calculation of loss per share calculation, such potential shares are excluded
from the weighted average number of shares used in the calculation.
2024 2023
Weighted average number of shares used in loss per share calculation - basic
and diluted
Number Number
In issue at 1 January 191,067,464 119,007,846
Shares issued in the year - weighted average 151,744,900 57,431,223
Weighted average shares in issue 31 December 342,812,364 176,439,069
Effect of employee share options and other warrants not exercised 1,245,271 1,476,768
Weighted average number of diluted shares in issue 31 December 344,057,635 177,915,837
Additional potential shares are anti-dilutive where their inclusion in the
calculation of loss per share results in a lower loss per share. The weighted
average number of shares not included in the diluted loss per share
calculation because they had an anti-dilutive effect on the calculation was
nil (2023: 26,279,049).
14 Cash Flows from Operating Activities
2024 2023
£000 £000
Loss after income tax (22,797) (23,179)
Adjustments for:
Depreciation and amortisation 1,383 1,399
Gain on disposal of property, plant and equipment - (15)
Gain on right-of-use asset curtailment (2) -
Impairment of inventory 329 151
Obsolete inventory 70 8
Share-based payments charge 622 726
Equity settled interest and transaction costs on Investment funding -
arrangement
Net finance costs (43) 481
Loss/(gain) on unrealised foreign currency transactions 19 (71)
(20,419) (20,500)
Change in operating assets & liabilities
(Increase)/decrease in inventory (2,971) 6,144
Decrease/(increase) in contract assets 28 (694)
Decrease/(increase) in trade receivables and other receivables 1,610 (796)
(Increase)/decrease in other current assets and prepaid inventory (6,125) 5,823
Increase/(decrease) in trade and other payables 624 (956)
Decrease in warranty provision (481) (647)
Increase/(decrease) in onerous contract provision 1,567 (1,217)
Increase/(decrease) in contract liabilities 64 (6,814)
(5,684) 843
Cash used in operations (26,103) (19,657)
15 Goodwill and Other Intangible Assets
Goodwill Patents and Certifications Software and Domain Names Total
£000 £000 £000 £000
Cost
At 1 January 2024 23,944 203 34 24,181
Disposals - - - -
Foreign currency exchange differences - - (2) (2)
At 31 December 2024 23,944 203 32 24,179
Accumulated amortisation
At 1 January 2024 - (153) (26) (179)
Amortisation charge - (40) (2) (42)
Disposals - - - -
Foreign currency exchange differences - - 1 1
At 31 December 2024 - (193) (27) (220)
Net book value
At 1 January 2024 23,944 50 8 24,002
At 31 December 2024 23,944 10 5 23,959
Goodwill Patents and Certifications Software and Domain Names Total
£000 £000 £000 £000
Cost
At 1 January 2023 23,944 203 50 24,197
Disposals - - (15) (15)
Foreign currency exchange differences - - (1) (1)
At 31 December 2023 23,944 203 34 24,181
Accumulated amortisation
At 1 January 2023 - (112) (35) (147)
Amortisation charge - (41) (7) (48)
Disposals - - 15 15
Foreign currency exchange differences - - 1 1
At 31 December 2023 - (153) (26) (179)
Net book value
At 1 January 2023 23,944 91 15 24,050
At 31 December 2023 23,944 50 8 24,002
For impairment testing goodwill acquired through business combinations and
patents and certifications with indefinite useful lives are allocated to the
single CGU.
Goodwill
All goodwill is tested annually for impairment. At 31 December 2024, goodwill
was tested for impairment using the fair value less cost of disposal method.
The closing share price on 31 December 2024 was 16 pence giving a market
capitalisation of £70.5 million which is more than £4.8 million higher than
the Net Assets value of the Company on this date. The share price would need
to have dropped below 15 pence for the market value to be below the Net Asset
value of the Company at that date. Based on the above, no impairment loss was
identified in relation to goodwill.
On 24 May 2024, the Company announced the results of a placing, subscription
and open offer. The fundraising raised total proceeds of £57.38 million
through placing of 121,739,130 new ordinary shares, subscription of
121,739,130 new ordinary shares and open offer of 6,011,983 new ordinary
shares at 23.0 pence per share.
Post Balance Sheet events: Since 31 December 2024 the share price has traded
across a high-low range of 20.4 pence to 7.76 pence per share.
Patents and Certifications
There have been no events or circumstances that would indicate that the
carrying value of patents and certifications may be impaired at 31 December
2024.
16 Property, Plant and Equipment
Computer and Office Equipment Leasehold Improvements Vehicles and Equipment Total
£000 £000 £000 £000
Cost
At 1 January 2024 554 823 2,235 3,612
Additions 118 386 807 1,311
Transfers 99 (68) 31
Foreign currency exchange differences (17) (51) (108) (176)
At 31 December 2024 655 1,257 2,866 4,778
Accumulated Depreciation
At 1 January 2024 (465) (424) (1,024) (1,913)
Depreciation charge (52) (232) (328) (612)
Foreign currency exchange differences 13 33 47 93
At 31 December 2024 (504) (623) (1,305) (2,432)
Net book value
At 1 January 2024 89 399 1,211 1,699
At 31 December 2024 151 634 1,561 2,346
Computer and Office Equipment Leasehold Improvements Vehicles and Equipment Total
£000 £000 £000 £000
Cost
At 1 January 2023 699 1,119 1,402 3,220
Additions 76 212 799 1,087
Disposals (214) (328) (125) (667)
Transfers - (161) 191 30
Foreign currency exchange differences (7) (19) (32) (58)
At 31 December 2023 554 823 2,235 3,612
Accumulated Depreciation
At 1 January 2023 (662) (635) (715) (2,012)
Depreciation charge (23) (271) (230) (524)
Disposals 214 328 83 625
Transfers - 147 (177) (30)
Foreign currency exchange differences 6 7 15 28
At 31 December 2023 (465) (424) (1,024) (1,913)
Net book value
At 1 January 2023 37 484 687 1,208
At 31 December 2023 89 399 1,211 1,699
The Group has no assets pledged as security. No amounts of interest have been
capitalised within property, plant and equipment at 31 December 2024 (2023:
£nil).
17 Right-of-use Assets
Offices and Facilities
£000
Cost
At 1 January 2024 3,046
Additions 893
Adjustments(1) (126)
Transfers(2) (58)
Curtailments and disposals (815)
Foreign currency exchange differences (136)
At 31 December 2024 2,804
Accumulated Depreciation
At 1 January 2024 (1,488)
Depreciation charge (729)
Adjustments(1) 126
Transfers(2) 27
Curtailments and disposals 710
Foreign currency exchange differences 76
At 31 December 2024 (1,278)
Net book value
At 1 January 2024 1,558
At 31 December 2024 1,526
Offices and Facilities Vehicles and Equipment Total
£000 £000 £000
Cost
At 1 January 2023 3,330 31 3,361
Additions 929 - 929
Adjustments (392) - (392)
Transfers - (30) (30)
Curtailments and disposals (738) - (738)
Foreign currency exchange differences (83) (1) (84)
At 31 December 2023 3,046 - 3,046
Accumulated Depreciation
At 1 January 2023 (1,489) (27) (1,516)
Depreciation charge (824) (4) (828)
Adjustments 200 - 200
Transfers - 30 30
Curtailments and disposals 582 - 582
Foreign currency exchange differences 43 1 44
At 31 December 2023 (1,488) - (1,488)
Net book value
At 1 January 2023 1,841 4 1,845
At 31 December 2023 1,558 - 1,558
(1. ) Non-material adjustment to
reflect opening balance difference for both cost and accumulated depreciation
with no impact to profit & loss in the report period.
(2. ) During the year, right-of-use
assets were transferred to property, plant and equipment upon completion of
lease terms.
Right-of-use assets relate to buildings, vehicles and equipment held under
leases with third-party lessors. A right-of-use asset represents the Company's
right to use a leased asset over the term of the lease. The Company's rights
to use specific buildings, items of equipment or specific vehicles under lease
arrangements represent assets to the Group.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
§ where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in
financing conditions since third party financing was received;
§ uses a build-up approach that starts with a risk-free interest rate
adjusted for credit risk for leases held by the Group, which does not have
recent third-party financing; and
§ makes adjustments specific to the lease, e.g. term, country, currency and
security.
18 Deferred Tax Balances
Net Deferred Tax Assets Not Recognised:
2024 2023
£000 £000
Deferred tax relates to the following:
Accelerated capital allowances 1,707 1,424
Share options 46 79
Accrued liabilities 53 68
Reserves and other 277 221
Tax losses 29,224 24,088
Total net deferred tax assets 31,307 25,880
Gross Deferred Tax Assets Not Recognised:
2024 2023
£000 £000
Deferred tax relates to the following:
Accelerated capital allowances 6,493 5,292
Share options 169 292
Accrued liabilities 199 266
Reserves and other 1,207 901
Tax losses 130,759 110,568
Total gross deferred tax assets 138,827 117,319
Tax Losses Available for Use in Future Periods
The Company's subsidiaries carry on business in other tax regimes where the
corporation tax rate is not zero. At 31 December 2024, the Group had the
following tax losses carried forward available for use in future periods:
2024 2023
£000 £000
United Kingdom 58,376 51,887
Canada 49,290 35,928
United States 18,628 16,539
Ireland 4,465 6,214
Total potential tax benefit 130,759 110,568
Under current tax legislation tax losses in the United Kingdom and Ireland can
be carried forward indefinitely and be offset against future profits arising
from the same activities at the tax rate prevailing at that time. There is a
portion of the tax losses in the United States that will begin to expire in
2036, whereas the majority can be carried forward indefinitely. The tax losses
in Canada can be carried forward 20 years and will begin to expire in 2035.
Due to the uncertainty regarding the timing and extent of future profits
within these subsidiaries, no deferred tax assets have been recognised in
respect of these tax losses. Deferred tax is also not recognised on the timing
differences between accounting and tax treatment in these subsidiaries given
the offsetting tax losses on which no deferred tax has been recognised.
The UK Government announced that the Corporation Tax rate increased from 19%
to 25% on profits of over £250,000, effective 1 April 2023. Profits below
£50,000 continue to be chargeable to Corporation Tax at 19%. In computing the
UK deferred tax asset, management has assumed that as neither the deferred tax
assets nor the deferred tax liabilities will crystallise in the immediate
future, calculations based on 19% are appropriate.
19 Inventory
2024 2023
£000 £000
Raw materials and consumables 3,377 2,961
Work in progress 2,285 285
Finished goods 91 42
Total inventory 5,753 3,288
Inventory recognised as an expense within cost of sales during the current
year amounted to £6,433,679 (2023: £27,023,108).
At 31 December 2024, inventory impairment to net realisable value totalled
£376,000 (2023: £150,988). Net reversal of inventory write-downs during the
current year amounted to £46,626 (2023: £nil).
20 Other Current Assets
2024 2023
£000 £000
Short-term investments 3,000 -
Prepaid inventory 2,469 1,073
Tax credits - recoverable 856 719
Prepayments and deposits 736 475
Sublease net investment 65 -
Other receivables 522 454
Total other current assets 7,648 2,721
Prepaid inventory is recognised on inventory payments where physical delivery
of that inventory has not yet been taken by the Group.
Short-term investments comprise deposits with original maturity greater than
three months but less than twelve months from the date of acquisition and
which are not subject to significant risk of change in value.
21 Contract Related Balances
The Group has recognised the following assets and liabilities related to
revenue from contracts with customers that are in progress at the respective
year-ends:
2024 2023
£000 £000
Amounts due from customer contracts included in trade receivables 827 2,496
Contract assets (accrued income for work done not yet invoiced) 1,149 888
Non-current contract assets - 304
Contract liabilities (deferred revenue related to advances on customer (1,392) (1,312)
contracts)
Net position of sales contracts 584 2,376
The amount of revenue recognised in the year that was included in contract
liabilities at the end of the prior year was £876,586 (2023: £8,097,770).
The aggregate position on customer contracts included in the statement of
financial position will change according to the number and size of contracts
in progress at a given year-end as well as the status of payment milestones
made by customers toward servicing those contracts. The Group structures
payment milestones in its customer contracts to cover upfront expenditure for
parts and materials and other working capital requirements associated with the
delivery of promises under customer contracts to better manage Group cash
flow.
The timing of revenue recognition is based on the satisfaction of individual
performance obligations within a contract and is not based on the timing of
advances received. Customer advances are recognised as contract liabilities in
the statement of financial position and are released to income progressively
as individual performance obligations are met. The difference in timing
between the receipt of contract advances and the timing of the satisfaction of
performance obligations for revenue recognition can cause values to remain in
deferred income. The amount of such deferrals is related to both the overall
size of the underlying contract and the planned pace of delivery in the
related work schedule. This is expected to occur where satisfaction of
performance obligations is evidenced by customer acceptance of the good or
service that is the subject of the performance obligation.
Provisions related to contracts with customers
Warranty Provision Provision Total
for Contract Losses
£000 £000 £000
At 1 January 2024 602 333 935
Charges to profit or loss:
· Provided in the year 81 2,198 2,279
· Unused amounts reversed (103) - (103)
Amounts used in the year (460) (631) (1,091)
Foreign exchange (6) (6) (12)
At 31 December 2024 114 1,894 2,008
Current 85 296 381
Non-current 29 1,598 1,627
Warranty Provision Legacy Products Provision Provision Total
for Contract Losses
£000 £000 £000 £000
At 1 January 2023 284 1,016 1,607 2,907
Charges to profit or loss:
· Provided in the year 552 15 332 899
· Unused amounts reversed (38) (968) (235) (1,241)
Amounts used in the year (195) (13) (1,315) (1,523)
Foreign exchange (1) (50) (56) (107)
At 31 December 2023 602 - 333 935
Current 586 - 226 812
Non-current 16 - 107 123
Warranty Provision
The warranty provision represents management's best estimate of the costs
anticipated to be incurred related to warranty claims, both current and
future, from customers in respect of goods and services sold that remain
within their warranty period. The estimate of future warranty costs is updated
periodically based on the Company's actual experience of warranty claims from
customers.
The element of the provision related to potential future claims is based on
management's experience and is judgmental in nature. As for any product
warranty, there is an inherent uncertainty around the likelihood and timing of
a fault occurring that would cause further work to be undertaken or the
replacement of equipment parts.
A standard warranty of up to two years from the date of commissioning is
provided to all customers on goods and services sold and is included in the
original cost of the product. Customers are also able to purchase extended
warranties that extend the warranty period for up to a total of ten years.
Provision for Contract Losses
A provision is established for contract losses when it becomes known that a
customer contract has become onerous. A contract is onerous when the
unavoidable costs of fulfilling the Group's obligations under a contract are
greater than the revenue that will be earned from it.
The unavoidable costs of fulfilling contract obligations will include both
direct and indirect costs.
The creation of an additional provision is recognised immediately in profit
and loss. The provision is used to offset subsequent costs incurred as the
contract moves to completion.
In determining the amount to be provided, management has evaluated the
likelihood of input costs continuing to rise against a backdrop of inflation
and instability due to current macro-economic factors such as, the increasing
price of oil feeding through to production and shipping costs and continuing
supply chain issues.
Provisions in respect of contract losses relate to contracts which are
expected to be delivered in 2025 and will therefore unwind during that year.
Provisions in respect of contract losses relating to extended warranties for
up to a total of ten years will unwind over that period.
22 Trade Receivables
2024 2023
£000 £000
Total trade receivables 827 2,496
All trade receivables relate to receivables arising from contracts with
customers.
Trade receivables are amounts due from customers for sales of vanadium flow
battery systems in the ordinary course of business. Trade receivables do not
bear interest and generally have 30-day payment terms and therefore are all
classified as current.
The actual credit loss over 2024 was determined to be less than 1% of total
sales (2023: less than 1%). An allowance for potential credit losses of £nil
(2023: £139,639) has been recognised.
23 Cash and Cash Equivalents
2024 2023
£000 £000
Cash and cash equivalents 3,352 5,014
Term deposits 29,000 -
Total cash and cash equivalents 32,352 5,014-
Term deposits are presented as cash equivalents if they have a maturity of
three months or less from the date of acquisition.
24 Trade and Other Payables
2024 2023
£000 £000
Trade payables 2,967 2,166
Other payables 58 29
Accrued liabilities 891 877
Accrued employee compensation 571 772
Government remittances payable 38 104
Total trade and other payables 4,525 3,948
Trade payables are unsecured and are usually paid within 30 days.
The carrying amounts of trade and other payables are the same as their fair
values due to the short-term nature of the underlying obligation representing
the liability to pay.
25 Derivative Financial Instruments
2024 2023
£000 £000
Derivative value of warrants issued 271 406
Total derivative financial instruments 271 406
Investment Funding Arrangement
On 14 December 2022, the Company entered into an investment agreement with
Riverfort Global Opportunities PCC Limited and YA II PN Ltd. ("Noteholders").
Pursuant to the facility, the Noteholders were granted warrants exercisable at
32.0 p to subscribe for 1,800,000 ordinary shares for a period of up to four
years. These warrants remain outstanding.
Information about the Group's exposure to interest rate, foreign currency and
liquidity risks is included in note 29.
26 Lease Liabilities
The Group's obligations under lease contracts are presented as follows:
2024 2023
At 31 December £000 £000
Current - due within 12 months 550 723
Non-current - due after 12 months 1,145 833
Total lease liabilities 1,695 1,556
Payments of lease principal and interest in the period to 31 December were:
2024 2023
At 31 December £000 £000
Payments of lease principal 676 629
Payments of interest 92 44
Total payments under leases 768 673
The contractual undiscounted cash flows for lease obligations at each period
end were:
2024 2023
At 31 December £000 £000
Less than one year 638 784
One to five years 1,266 884
Total lease liabilities 1,904 1,668
Lease liabilities represent the present value of the minimum lease payments
the Group is obliged to make to lessors under contracts for the lease of
assets that are presented as right-of-use assets.
Amounts recognised in the consolidated statement of profit and loss were:
2024 2023
£000 £000
Variable lease payments 298 230
Expenses relating to short-term leases 73 70
Expenses relating to leases of low-value assets 15 8
27 Issued Share Capital and Reserves
2024 2023
No: 000 £000 No: 000 £000
Authorised at 31 December 1,000,000 - 1,000,000 -
Issued and fully paid
At 1 January 191,067 51,348 119,007 50,716
Issued in the year 249,494 2,125 72,060 632
At 31 December 440,561 53,473 191,067 51,348
During the year, 249,494,432 new shares were issued with a nominal value of
£2,124,711. The total gross proceeds were £57,386,945 with the balance of
£55,239,060 credited to the share premium account. Total costs of issuance
were £3,000,838 and these costs were charged directly to the share premium
account.
On 22 November 2022, the Company subdivided each ordinary share of €0.50
nominal value into one ordinary share of €0.01 each and one Deferred A Share
of €0.49 each. The Deferred A Shares did not have any voting rights and were
not admitted to trading on AIM or any other market. They carried only a
priority right to participate in any return of capital or in any dividend to
the extent of €1 in aggregate over the class. The Deferred A Shares were,
for all practical purposes, valueless. On 24 October 2024, the Deferred A
shares were redeemed and cancelled by the Company for nil consideration.
Ordinary shares have a par value of €0.01. The holders of ordinary shares
are entitled to receive dividends as may be declared from time to time and are
entitled to one vote per share at meetings of the Company.
Share Capital and Share Premium
Share capital comprises issued capital in respect of issued and paid-up
shares, at their par value. Share premium comprises the difference between the
proceeds received and the par value of the issued and paid-up shares.
Share-based Payment Reserve
The share-based payment reserve comprises the equity component of the
Company's share-based payments charges.
Currency Translation Reserve
The translation reserve comprises foreign currency differences arising from
the translation of the financial statements of foreign operations.
Other Reserve
Other reserve comprises the portion of the consideration paid for redT energy
Holdings (Ireland) Limited's minority interests over the fair value of the
shares purchased.
28 Financial Assets and Liabilities
All financial assets are held at amortised cost. There were no financial
assets measured at fair value through other comprehensive income nor through
profit and loss in either period presented.
The maximum exposure to credit risk at the end of the reporting period is the
carrying amount of each class of financial asset presented above. The carrying
value of the financial assets approximate their fair values due to the
short-term maturities of these instruments.
The Group does not currently use derivative instruments for managing financial
risk. All financial liabilities are held at amortised cost.
Recognised Fair Value Measurements
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and trading securities)
is based on quoted market prices at the end of the reporting period.
The battery systems manufactured by the Company use vanadium metal as a key
component in the electrolyte. Vanadium is an actively traded commodity for
which quoted market prices are available.
The Company does not currently hold inventories of vanadium. Vanadium
purchased from third parties is solely for the use in electrolyte and open
purchase contracts are not accounted for as derivatives.
Level 2: The fair value of financial instruments that are
not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques that maximise the use of observable
market data and rely as little as possible on entity-specific estimates. If
all significant inputs required to fair value instrument are observable, the
instrument is included in Level 2.
At 31 December 2024, the Company held warrants issued to Riverfort Global
Opportunities and YA II PN Ltd as part of the December 2022 financing event.
The warrants are valued using Level 2 inputs as they do not represent a
fixed-for-fixed equity instrument and are valued using observable market
factors such as the share price at the date of the grant, the term of the
award, the share price volatility and the risk-free interest rate.
Level 3: If one or more of the significant inputs is not
based on observable market data the instrument is included in Level 3.
The Group did not hold any financial assets or liabilities that were required
to be valued using Level 3 inputs at 31 December 2024 (2023: none).
No other financial instruments were outstanding at the period end that
required to be valued using a methodology that uses Level 1, 2 or 3 inputs.
29 Financial Risk Management
This note explains the Group's exposure to financial risks and how these risks
could affect the Group's future financial performance. Current year profit and
loss information has been included where relevant to add further context.
Risk Exposure arising from Measurement Management
Market risk - foreign exchange Future commercial transactions Cash flow forecasting Cash is held in GBP until non-GBP requirements for up to the next six-months
are established, at which point the GBP is sold in favour of the required
Sensitivity analysis currency, which is then remitted to the relevant Group entity
Recognised financial assets and liabilities not denominated in GBP
Market risk - commodity price risk Price of vanadium to be used in the battery electrolyte Quoted market prices for vanadium Strategic supply arrangements with multiple pre-qualified suppliers
Credit risk Cash and cash equivalents, short-term investments, trade receivables and Ageing analysis Monitoring accumulation of bank balances.
contract assets
Credit ratings Credit risk assessment for customers and pre-agreed deposits and interim
payments within customer contracts
Liquidity risk Borrowings and other liabilities Rolling cash flow forecasts Access to capital markets for equity or debt funding
Market risk - Foreign Exchange Risk
The Group is primarily exposed to foreign exchange risk related to bank
deposits, receivables or payables balances and other monetary working capital
items that are denominated in a currency other than the Company's functional
currency which has been determined to be GBP.
The Group does not speculate on foreign exchange and aims to mitigate its
overall foreign exchange risk by holding currency in line with forecast
regional operating expenses, providing an element of natural hedge against
adverse foreign exchange movement.
The Group's exposure to foreign exchange risk at the end of the reporting
period, expressed in GBP, was as follows:
Sterling Euro Canadian Dollar US Australian Dollar Total
Dollar
31 December 2024 £000 £000 £000 £000 £000 £000
Cash and cash equivalents 30,710 54 934 650 4 32,352
Trade receivables 14 - 27 786 - 827
Contract assets 472 283 235 159 - 1,149
Derivative financial instruments (271) - - - - (271)
Trade and other payables (2,022) (77) (1,890) (536) - (4,525)
Lease liabilities (682) - (603) (410) - (1,695)
Net exposure 28,221 260 (1,297) 649 4 27,837
Sterling Euro Canadian Dollar US Australian Dollar Total
Dollar
31 December 2023 £000 £000 £000 £000 £000 £000
Cash and cash equivalents 3,284 696 346 444 244 5,014
Trade receivables 747 1,350 11 388 - 2,496
Contract assets 626 307 166 93 - 1,192
Trade and other payables (1,799) (178) (1,466) (505) - (3,948)
Derivative financial instruments (406) - - - - (406)
Lease liabilities (254) - (1,169) (133) - (1,556)
Net exposure 2,198 2,175 (2,112) 287 244 2,792
In the prior year management did not disclose contract assets (accrued
revenue) in relation to revenue contracts in the above note relating to
balances denominated in foreign currency balances. The balance excluded
totalled £1.2 million which is now included in the comparative. This affects
only the disclosure of the balances in this note and does not have a current
and prior period accounting impact.
Sensitivity - Exchange Rates
The sensitivity of profit or loss to changes in quoted exchange rates for
currencies to which the Group is exposed is as follows, based on each relevant
exchange rate strengthening (or weakening) by 5%.
There is no impact on other components of equity as the Group is not party to
any derivative financial instruments, such as hedging instruments, where
currency gains and losses would be recognised in other comprehensive loss.
2024 2023
At 31 December +/- 5% £000 £000
Euro 13 93
Canadian dollar (65) (114)
US dollar 32 10
Australian dollar - 12
(20) 1
Market Risk - Commodity Price Risk
The Group's batteries use an electrolyte incorporating vanadium. Vanadium is
an elemental metal and is used primarily to strengthen steel, particularly for
the construction industry.
Whilst it is not a mature market traded commodity, such that one can buy
forward or derivative contracts, market prices for vanadium pentoxide (V2O5)
at 98% purity are quoted in US dollars per pound.
Vanadium forms about two-thirds of the value of the electrolyte, which in turn
forms about a quarter of the landed cost of a battery, and so a fluctuation in
the price of vanadium will impact the profitability of battery sales. An
increase or decrease in the market price of vanadium of 5% could cause the
value of the electrolyte component of a battery to increase or decrease by
approximately 3%.
Credit Risk - Cash Held on Deposit with Banks
Credit risk arises from cash and cash equivalents and deposits with banks and
other financial institutions.
Credit risk related to holdings with financial institutions is managed by only
maintaining bank accounts with reputable financial institutions. The Group
aims only to place funds on deposit with institutions with a minimum credit
rating of B2 Moody's.
The Group's cash at bank and short-term deposits are held with institutions
with credit ratings as follows:
2024 2023
At 31 December £000 £000
Aa1 194 220
Aa2 1,192 566
A1 30,966 4,228
32,352 5,014
Credit Risk - Trade and Other Receivables
Past Due but not Impaired
The Group's credit risk from receivables encompasses the default risk of its
customers and other counterparties. Its exposure to credit risk is influenced
mainly by the individual characteristics of each customer or counterparty. The
creditworthiness of potential and existing customers is assessed prior to
entering each new transaction. A credit analysis is performed, and appropriate
payment terms implemented that may include increased level of upfront deposits
for the purchase of battery units. The Group's standard terms of trade provide
that up to 90% of the sales price of a battery unit is paid prior to delivery.
Receivables are considered for impairment on a case-by-case basis when they
are past due or where there is objective evidence that the customer or counter
party may be a default risk. The Group takes into consideration the customer
or counter party payment history, its credit worthiness together with the
prevailing economic environment in which it operates to assess the potential
impairment of receivables. The assessment reflects the probability-weighted
outcome, the time value of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions
and forecasts of future economic conditions.
On an ongoing basis, receivable balances attributable to each customer or
other counterparty are monitored and appropriate action is taken when the
relevant balance becomes or is considered likely to become overdue. The
maximum exposure to loss arising from receivables is equal to invoiced value.
The ageing of trade receivable balances was:
2024 2023
At 31 December £000 £000
Current 670 1,940
Past due - less than 30 days 20 339
Past due - more than 30 days 137 217
Total trade receivables 827 2,496
Past due amounts at 31 December 2024, related to four customers (2023: six
customers) and £nil (2023: £139,639) was considered to be impaired.
Liquidity Risk
Liquidity risk relates to the Group's ability to meet its obligations as they
fall due.
The Group generates cash from its operations that are principally related to
the manufacture and installation of vanadium flow batteries. The market for
reliable and flexible grid-scale storage solutions for energy generated from
renewable sources is growing and the technology continues to develop.
The development of new and enhanced storage technologies can be capital
intensive and the Group has historically funded development and early-stage
commercial activity primarily from equity investment but also using cash from
operations and loan funding.
The Group forecasts cash generation using a comprehensive company financial
model and monitors the timing and amount of its payment obligations.
The following table shows the Group's financial liabilities by relevant
maturity grouping based on contractual maturities. The amounts included in the
analysis are contractual, undiscounted cashflows.
Less than One Year One to Two to Over Five Years Total Contracted Cash Flows Carrying Amount
Two Years
Five Years
31 December 2024 £000 £000 £000 £000 £000 £000
Trade and other payables 4,525 - - - 4,525 4,525
Derivative financial instrument 271 - - - 271 271
Lease liabilities 638 465 801 - 1,904 1,695
Total financial liabilities 5,434 465 801 - 6,700 6,491
Less than One Year One to Two to Over Five Years Total Contracted Cash Flows Carrying Amount
Two Years
Five Years
31 December 2023 £000 £000 £000 £000 £000 £000
Trade and other payables 3,948 - - - 3,948 3,948
Derivative financial instruments 406 - - - 406 406
Lease liabilities 784 422 462 - 1,668 1,556
Total financial liabilities 5,138 422 462 - 6,022 5,910
Capital Management
The Group currently has no external debt outstanding and is funded by proceeds
raised through equity placings.
The Board regularly reviews the Group's cash requirements and future
projections to monitor cash usage and assess the need for additional funding.
At 31 March 2025, the Group had £21.9 million of cash on hand.
30 Related Parties
The only related parties of the Group are the key management and close members
of their family. Key management has been determined as the CEO and his direct
reports.
During the period, no related party transactions were entered other than
through key management personnel compensation and benefits.
Key management compensation is disclosed in note 8, Staff costs and headcount.
31 Group Entities
Ownership %
Direct Subsidiary Undertakings Country of Incorporation Registered Office Principal Activity 2024 2023
Camco Holdings UK Limited England 128 City Road, London, EC1V 2NX, United Kingdom Holding company 100% 100%
Invinity Energy Group Services Limited (formerly Camco Services (UK) Limited) England 128 City Road, London, EC1V 2NX, United Kingdom Support services 100% 100%
Camco (Mauritius) Limited Mauritius 24 Dr Joseph Rivière Street Holding company 100% 100%
1st Floor, Felix House
Port Lewis, Mauritius
Invinity Energy Systems (U.S.) Corporation United States of America 1201 Orange St. #600 Energy storage 100% 100%
Wilmington, DE
USA 19899
Invinity Energy Nexus Limited England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 100% 100%
Indirect Subsidiary Undertakings
redT Energy Holdings (UK) Limited England 128 City Road, London, EC1V 2NX, United Kingdom Research and consultancy 100% 100%
Re-Fuel Technology Limited England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 99% 99%
Invinity Energy (UK) Limited England Office 207 New Broad Street House, 35 New Broad Street, London, England, EC2M Energy storage 99% 99%
1NH
United Kingdom
redT Energy Holdings (Ireland) Limited Ireland 22 Northumberland Road Energy storage 99% 99%
Ballsbridge, Dublin 4
Invinity Energy Systems (Ireland) Limited Ireland 22 Northumberland Road Energy storage 99% 99%
Ballsbridge, Dublin 4
redT energy (Australia) (Pty) Ltd Australia RSK Advisory, Energy storage 99% 99%
Level 2, Suite 7
66 Victoria Crescent
Narre Warren, Victoria 3805
Australia
Invinity Energy (South Africa) (Pty) Ltd South Africa 1st Floor, Kiepersol House Business Services 100% 100%
Stonemill Office Park
300 Acacia Road
Darrenwood
Randburg 2194
Invinity Energy Systems (Canada) Corporation Canada 2900-550 Burrard Street Energy storage 100% 100%
Vancouver, BC
Canada V6C 0A3
Suzhou Avalon Battery Company Limited The People's Republic of China 1809 Building 4 no.11888 East Taihu Avenue, Songling Town, Wujiang District, Business Services 100% 100%
Suzhou City
Associates
Vanadium Electrolyte Rental Limited England 128 City Road, London, EC1V 2NX, United Kingdom Vanadium procurement 50% 50%
32 Contingent Liabilities and Capital Commitments
The Group is involved in legal proceeding with a landlord with a received
claim which has a possible range from £nil to £693k. While the outcome and
timing of this matter is uncertain and difficult to predict, management
believes that, based on the information currently available, the ultimate
resolution of these matters will not have a material adverse effect on the
Group's financial position.
Authorised and contracted future capital expenditure (excluding right-of-use
assets) by the Group for which contracts had been placed but not provided in
the financial statements at 31 December 2024 is estimated at £475k for the
assembly of a conveyor system.
33 Events Occurring After the Report Period
Redomiciliation
On 9 January 2025, the Company announced that the scheme to redomicile the
Company from Jersey to the UK by putting in place a new England and Wales
incorporated parent company was effective. The ordinary shares of the new
parent Company were admitted and are trading on AIM. Pursuant to the
redomiciliation, the new 2025 Employee Share Option Plan was adopted to hold
employee options in the new UK parent company.
Furthermore, the English Courts sanctioned the Reduction of Capital which had
the effect of reducing the nominal value of the Company's ordinary shares from
14 pence per ordinary share to 1 pence per ordinary share and generated
distributable reserves of £57,273,026.07 to support the payment of future
dividends. The Company, however, does not plan on making dividend payments in
the foreseeable future and there can be no assurance as to the level of future
dividends. The number of shares admitted to trading were unchanged by the
Reduction of Capital and has no impact on the Company's cash balance. The
change to the nominal value is not expected to have any impact on the market
value of the Company's ordinary shares. Following the redomiciliation, the
former Jersey parent company was re-registered as a private company and
changed its name from Invinity Energy Systems plc to Invinity Energy Systems
Limited (Jersey).
Grant of Performance Based Options
On 30 January 2025, the Company granted performance-based options to the
Executive Directors with an exercise price of 23.0 pence in two tranches with
the following vesting conditions:
§ Tranche 1 will vest 1/3 per annum over 3 years, conditional on the
Company's share price being at or above 16.0 pence at the time of vesting.
§ Tranche 2 will vest on 30 January 2028 conditional on the Company's share
price being at or above 100.0 pence.
Lease Extension
On 30 January 2025, the Company signed a two year-extension agreement on a
lease in Canada which will result in undiscounted cash outflow of
approximately £713k over the term.
Corporate Re-organisation for LoDES Project
The Company announced on 31 March 2025, that it had reached an agreement to
proceed with the Longer Duration Energy Storage ("LoDES") project on a site in
the South East of England. Costs are expected to be up to £20 million
including site acquisition, development costs and contingency, of which
between £7 million-£10 million will be funded by the Department for Energy
Security and Net Zero ("DESNZ") through the LoDES Demonstration Programme.
This funding will be recognised as grant income by the Company. DESNZ has
formally confirmed to Invinity that it can proceed with the project, which is
planned to enter construction phase in H2 2025 ahead of operation in 2026.
Invinity has acquired a special purpose vehicle which owns a 25-year lease
over the site and which is capable of being extended by 15 years at its
option.
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