REG - Invinity Energy Sys - 2025 Financial Results
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RNS Number : 4055G Invinity Energy Systems PLC 01 June 2026
1 June 2026
Invinity Energy Systems plc
("Invinity" or the "Company")
2025 Financial Results
Invinity Energy Systems plc (AIM: IES), a leading global manufacturer of
utility-grade energy storage, announces its Full Year Results for the year
ended 31 December 2025.
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 Wednesday 3 June 2026 at 4.00 p.m. (UK). Those wishing
to join the session can sign up to the Investor Meet Company platform for free
via this link
(https://www.investormeetcompany.com/invinity-energy-systems-plc/register-investor)
.
2025 Financial and Operational Highlights
· Revenue and Other Income of £8.7m and Project Grants(*) of
£9.1m, totalling £17.8m (256% increase YoY - 2024: £5.0m).
· Sales of 31.4 MWh (504% increase YoY - 2024: 5.2 MWh).
· Product shipments totalling 24.9 MWh (241% increase YoY - 2024:
7.3 MWh).
· Gross Loss of £2.9m (17% reduction YoY - 2024: £3.5m).
· Total cash as at 31 December 2025: £28.8m (2024: £32.4m).
· The Group remains debt free.
*For all references to "Project Grants", please refer to Note 31 in the notes
to the consolidated financial statements
Strategic Highlights
Cost - on target to achieve a forecast minimum 66% reduction in unit costs for
Endurium versus our VS3 product within two years. Aggressive cost reduction
achieved 18 months ahead of initial management expectations.
Customers - Tripled battery shipments from our factories against a backdrop of
high-quality service delivered to our customers as evidenced by numerous
public and private endorsements received.
Commercial - Six-fold increase in sales year-on-year, including the first sale
of our new Endurium Enterprise product, and expanding our partnership network
to gain access to some of the world's fastest growing markets (including India
and China). Endurium has been included in 16.7 GWh of UK LDES Cap & Floor
bids and our wider commercial opportunity pipeline also continues to grow,
driven by improved product costs and performance and now contains a number of
highly significant commercial, industrial and datacentre opportunities across
Europe, North America and Asia.
Track Record - 9 GWh of energy has been dispatched by our products globally to
date. Projects using our batteries are now increasingly backed by third party
lending and we have continued to improve our bankability credentials through
third-party technical studies and validation.
Scale - Manufacturing capabilities were expanded during the year as well as
enhancing our quality control and supply chain functions.
Post Period:
· Invinity selected to design a 1.5 GWh VFB system for FlexBase
Group (https://irtools.co.uk/88/story/2fb0858d-acb3-4131-beaf-167b33493148)
project in Switzerland. Engineering design phase of the project now underway.
· Delivery of all VFBs to Copwood VFB Energy Hub completed in May
2026 (https://irtools.co.uk/88/story/f3e9ade7-9ed8-4afd-81d8-01b6a2586ca4)
ahead of anticipated grid-connection and the commencement of operations later
in 2026.
· 2 MWh sale to a C&I project in Wisconsin, USA as part of a
U.S. Department of Energy-funded project.
The Company's 2025 Annual Report will soon be available to be downloaded from
the Investor section of the website
(https://invinity.com/investors/shareholder-documents/) .
Jonathan Marren, Chief Executive Officer at Invinity said:
"I am immensely proud of the progress delivered across Invinity during 2025
and into the current year. The results reflect a business that has
deliberately invested in its foundations and is now clearly entering a new
phase of accelerating growth.
"Over the past year, we have taken meaningful steps to remove the barriers to
scale - significantly reducing product costs, increasing unit shipments and
growing sales while expanding our reach through strategic partnerships into
some of the world's fastest growing energy storage markets. These efforts are
now translating into tangible commercial momentum, with a growing pipeline of
opportunities across multiple geographies and customer segments.
"At the same time, confidence in our technology continues to build, with a
growing base of satisfied customers and flagship projects such as the Copwood
VFB Energy Hub and FlexBase's Technology Centre Laufenburg increasingly
demonstrating Invinity's credentials as a trusted partner capable of
delivering at scale.
As the world demands cheaper, more secure energy, the opportunity ahead is
clear. With momentum building and strong foundations in place, I am incredibly
excited for what comes next."
Stay up to date with news from Invinity. Join the distribution list for the
Company's monthly investor newsletter here
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.
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 (Joint Broker) +44 (0)20 3005 5000
Andrew Monk / Andrew Raca
Notes to Editors
Invinity Energy Systems plc (AIM: IES) is a world-leading manufacturer of
vanadium flow batteries for energy storage. Built in our factories in the UK
and Canada, the Company's proven, commercialised, longer duration energy
storage technology has been deployed at scale and dispatched gigawatt-hours of
electricity for customers across the world.
Invinity's safe, scalable and durable battery technology is a trusted and
safer alternative to lithium-ion batteries. Endurium VFBs are engineered for
heavy-duty, high throughput applications, they don't wear out, cannot catch
fire and are designed to be operated for 30 years or more. Our products
address the challenges of our global energy system, unlocking the power of
renewable generation by delivering energy storage without limits.
To find out more, visit invinity.com (https://invinity.com/?utm_source=rns) ,
sign up to our monthly Investor Newsletter here
(https://invinity.us13.list-manage.com/subscribe?u=5b8cb168d806f615c67752bf8&id=26dd4280e1)
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 2025
Chair's Report
Powering the Future: Meeting the Needs of a Modern Network
The abundance of cheap, clean power in electric grids is breaking records
everywhere. 2025 saw renewables provide more than 50% of UK power generation
for the second year running and growth forecasts outline that the world will
get 50% of its power from renewables by 2030. This is undeniable proof that
the world wants clean, low-cost renewable power and the Invinity team remains
focused on providing an economic energy storage solution which will be a
critical part of our energy future.
I'm pleased to note that Invinity's core technology, capable of providing both
high-throughput and longer duration energy storage, is now increasingly a part
of modern power system infrastructure. The requirement for flexible,
dispatchable, low-carbon energy storage capacity in our electric grids has
shifted from aspiration to necessity.
Numerous policies across the UK, North America and Europe are actively
accelerating the deployment of long duration energy storage (LDES) batteries.
Securing energy sovereignty is a key foreign and domestic policy objective for
governments across the world, as is generating the electricity needed to power
the increasing electrification of industry and transport. It's beyond doubt
that both the deployment and use of low-cost, low-carbon, 24/7 renewable
energy powers growth in economies today and to this end, our team continues to
participate in strategic dialogues with governments in our key markets.
Importantly, there has been much commercial progress during the period.
Jonathan Marren's Chief Executive report gives greater detail but I would wish
to highlight the expansion of our existing Endurium product range, with the
launch of our Enterprise product in September, and the team's notable
achievements in product cost reductions. I am pleased to report that Jonathan,
the broader senior leadership group, and the entire Invinity team continue to
make important progress in achieving our long-term strategy.
Partnerships were a key feature of 2025 and the relationships Invinity has
developed over recent years have provided numerous benefits to the Company.
They have not only enhanced our reputation in the industry but augmented our
offering to customers. Our relationship with Gamesa Electric, now part of ABB
Renewable Energy, enabled the first deployment of our Endurium product at a
site where the product has met or exceeded our expectations in operation. The
backing of National Wealth Fund (NWF), alongside funding from the Department
of Energy Security and Net Zero (DESNZ), has enabled us to deploy the Copwood
VFB Energy Hub (formerly the LoDES project) - the UK's largest LDES battery
and an important strategic asset for the Company. Furthermore, the development
of our relationship with Atri Energy Transition (Atri Energy) has opened up
numerous opportunities in the Indian market and our growing partnerships in
China and Hong Kong with UESNT, C&D Inc. and International Resources
Limited (IRL) are supportive to key corporate objectives such as our product
cost reduction programme.
These local partners are key to our ability to scale to meet growing demand
for our product. Energy storage markets are inherently regional: regulatory
frameworks, grid requirements and customer expectations differ significantly
by country. To succeed at scale requires strong local presence and Invinity's
approach prioritises in-country partnerships to deliver competitive pricing,
secure supply chains and ensure best-in-class customer support. Local
production also reduces logistical risk, enhances eligibility for domestic
content incentives and demonstrates long-term commitment to host markets, all
of which is highly valued by governments, policymakers and above all else, our
customers.
Product leadership is core to our success. Our products are designed to
address the full spectrum of our customers' needs, from large-scale renewable
generators to energy intensive Commercial & Industrial (C&I)
applications and datacentres. I'm delighted that we recently reached 9 GWh of
electricity dispatched by our batteries in service for our customers. The
launch of our Endurium product has enabled us to sell into significantly
larger projects, including the recently announced GWh-scale VFB for our new
partner FlexBase Group in Switzerland, and at the same time open up major
opportunities in large-scale procurement schemes such as those we have been
selected for through the UK's LDES Cap & Floor Scheme. Furthermore, our
Enterprise product continues to gain traction in the C&I space, with our
first sale announced in late 2025 to a French aquaculture business.
These important steps were supported by the appointment of Dr. Margaret Amos
to Invinity's Board in June, who brings valuable financial and business
expertise. Additionally, the completion of the redomiciliation earlier in the
year has opened up a number of opportunities to streamline our corporate
structure and simplify our operations to better manage our long-term growth.
This move also enabled our long-standing Board member, Michael Farrow, to
retire in 2025. My sincere thanks go to him, on behalf of the Board and all
Invinity, for his guidance over his many years of service and we wish him the
very best in his retirement.
I firmly believe that Invinity remains on the right course towards success. We
are now better structured for long-term growth, have the support of strong
global and regional partners and have commercialised a technology which offers
a solution to one of the most pressing issues the global energy market is
facing. Our leadership in this industry has positioned us strongly for the
future. To succeed, we must continue to execute on the opportunity we have
created and I remain confident that under the leadership of Jonathan, Adam and
Matt, Invinity is ready not only to participate in the next phase of the
energy transition, but to help lead it.
Neil O'Brien
Non-Executive Chair
29 May 2026
CEO Report:
Charging Ahead: A Year of Progress Across Our Five Strategic Pillars
I am immensely proud of the progress made across the business throughout 2025
and into the current year. More important than any single metric or
achievement, however, is what that progress represents: a business that has
deliberately invested in its foundations and is now positioned for its next
phase of accelerated, sustainable growth.
Over the period and in the year to date, we have made significant reductions
to the cost of our flagship Endurium product, increased battery sales sixfold
year‑on‑year, more than tripled product shipments from our factories and
expanded our network of strategic partnerships to access some of the world's
fastest‑growing energy storage markets. These achievements reflect not just
operational progress, but evidence the focus we have placed on removing
constraints that limit our ability to scale.
At the same time, we continued to build an increasingly compelling commercial
pipeline, including opportunities across multiple geographies and customer
segments. Encouragingly, we are also seeing increased demand from existing
customers who return to Invinity because they trust us to deliver reliably,
competitively and at scale. For me, this trust, earned through performance, is
the strongest validation of both our technology and our people.
By combining world‑class flow battery technology, the highest standards of
customer service and aggressive cost reduction, we are positioning Invinity to
compete effectively, win more business and deliver long‑term value for all
stakeholders as the business grows and matures.
Our progress has been defined by relentless, disciplined focus across five
core strategic pillars. Our achievements in these areas, delivered across 2025
and during the current year to date, are driving Invinity's journey from a
niche market challenger that was constrained by product costs and capacity
towards a global leader within a fast growing and extremely exciting market
segment. There is still a long way to go, with significant challenges to
overcome, but I'm delighted to report on material steps forward achieved
during the year.
Our Strategic Pillars
Revenue and Project Grants(*)
Achieving consistent revenue growth remains critical at this stage of our
journey. I am therefore pleased that the team delivered a 256%
year‑on‑year increase in total revenue and Project Grants(*) to £17.8
million in 2025.
This performance reflects deliveries to customers across Europe and the USA,
in addition to continued progress on the Invinity Copwood VFB Energy Hub
("Copwood") project in the UK, our largest delivered to date. Supported by the
Department for Energy Security and Net Zero and the National Wealth Fund, we
began construction of Copwood during 2025 and with all batteries now on site,
we are incredibly excited to bring Europe's largest collocated vanadium flow
battery online later this year.
Beyond its financial contribution (both in terms of grant income for the year
in review and in terms of future cashflow for the business), Copwood is
strategically important: it strengthens our delivery credentials, enhances
bankability and provides a powerful reference asset. It will be a critical
source of real‑world operating data, enabling customers, investors and
policymakers to see Invinity's technology delivering value at scale.
Product
2025 marked an important year of external validation for our products. ABB
Renewable Energy's successful testing of our first Endurium VFB at La Plana
provided critical field‑level confirmation of Endurium's performance at a
time when long‑duration energy storage (LDES) is moving rapidly from concept
to deployment.
Our disciplined focus on operational and technical excellence is an important
strength of Invinity, the results of which include highly positive feedback
from customers and the consistent achievement of high technical scores in
competitive tendering processes. Further confidence was reinforced during the
year in review in the form of product validation reports from DNV, helping to
further underpin discussions with prospective partners and financiers as we
continue to grow and develop as a business.
The year also saw the launch of Endurium Enterprise, expanding our value
proposition for Commercial & Industrial (C&I) customers. Our first
Enterprise sale, to a French business in December 2025, was an important
milestone, validating our strategy and opening a meaningful new market segment
for future growth.
Commercial
Commercial momentum accelerated significantly during the year, with 31.4 MWh
of sales announced - a sixfold increase in booked orders year‑on‑year.
This significant improvement was achieved as a result of a number of factors
including improvements in cost and technical performance flowing through to
our commercial proposals, as well the investment we have made in our global
commercial team who are deepening our customer relationships and building a
significant commercial pipeline that includes a number of highly significant
commercial, industrial and datacentre opportunities in Europe, North America
and Asia. To this end, we were delighted to recently announce that Invinity
has been selected by FlexBase Group to design and deliver an up to 1.5 GWh
flow battery - the world's largest to date - for use at their Technology
Centre Laufenburg project in Switzerland, supporting an AI datacentre and
technology campus as well as providing stabilisation services for the local
grid. This project represents a significant step-change in the scale of
commercial opportunities for Invinity and is an important indicator for
growing demand in our sector.
This growing demand, combined with the launch of a number of large-scale
procurement schemes in the LDES space during the year, contributed to a 73%
year‑on‑year increase in average commercial deal size. The most notable
scheme that was launched was the UK's LDES Cap and Floor Scheme, through which
16.7 GWh of Invinity batteries across 21 bids secured eligibility status
through collaborations with partners including Frontier Power. This outcome
strongly reinforces our technology's suitability for large‑scale,
government‑backed projects - another key target market.
Cost
As prices continue to fall across the energy storage sector, cost
competitiveness remains fundamental to success. Under the leadership of our
President, Matt Harper, the team is on target to achieve a forecast minimum
66% reduction in unit costs for Endurium versus our VS3 product within two
years. Removing two-thirds of the cost from our product in less than two years
is an incredible achievement and is the product of a multi‑faceted strategy
encompassing value engineering, higher‑volume manufacturing processes and a
significantly strengthened supply chain.
The majority of the programme is now close to completion, roughly 18 months
ahead of our initial expectations, and has already materially reduced the sale
price of our products, helping to improve our commercial prospects by opening
up new markets.
Our strategic partnerships, including with UESNT, Atri and C&D Inc, which
continued to develop strongly throughout the year in review, will also support
our cost down efforts through the implementation of our relatively
low‑capex, partnership‑led manufacturing model. This approach allows
Invinity to access best‑cost regions, supports local content requirements
and enables us to scale efficiently as demand grows.
Capital
Maintaining financial discipline has been a consistent priority. Under CFO
Adam Howard's leadership, we continued to streamline our corporate structure
following the redomiciliation, reducing overheads and improving transparency.
The implementation of a new Enterprise Resource Planning ("ERP") system is
simplifying processes across supply chain, finance and customer‑facing
functions, while helping to identify further efficiencies as we scale.
In September, the £25 million Subscription from Atri Energy and Next Gen
Mobility strengthened our working capital position and opened significant
commercial and operational opportunities in India, a relationship we expect to
deepen over time.
Navigating the Age of Electricity
The world is entering what many describe as the "Age of Electricity".
Electrification across AI, air conditioning and electric vehicles is driving
unprecedented demand growth, while ongoing geopolitical events ensure that
energy security and sovereignty remain high on national agendas across the
world.
The defining challenge is no longer simply generation. It is aligning
abundant, variable renewable energy with increasingly complex demand profiles.
Invinity's technology sits at the centre of this challenge, enabling greater
energy security, unlocking renewable potential and helping to lower
long‑term system costs, which ultimately means lower energy bills for
households and businesses.
A Leading Voice in the LDES Industry
Invinity continues to play an active role in shaping the global LDES
conversation. Throughout the year, we engaged extensively with governments and
policymakers across the UK, Canada, China, India and the USA, reinforcing our
position as both a technology leader and a trusted delivery partner.
These engagements, from ministerial visits to our UK facilities to
collaborations with U.S. national laboratories, enhance our credibility and
influence, while supporting the broader development of the LDES market
globally.
Summary and Outlook
As outlined in the Strategy section of our Annual Report, we have a clear path
toward establishing Endurium as the de facto technology choice for stationary
energy storage globally.
The progress delivered during 2025 and into this year represents a step change
in Invinity's ability to deliver at scale. Cost barriers have come down,
delivery credibility has risen, technical bankability has been strengthened
and, critically, a substantial pipeline and value proposition have been built
behind the scenes.
Our primary challenge now is delivery at scale: converting preparation into
momentum, pipeline into revenue and capability into self-sustaining growth.
While there remains work ahead, particularly in driving manufacturing volumes,
further reducing costs and reaching cashflow break‑even, the foundations are
firmly in place.
My thanks go to Matt, Adam, the Board and the entire Invinity team for their
dedication, as well as to our partners and customers for their trust.
As the world demands cheaper, more secure energy, the opportunity ahead of us
is immense and we are moving faster than ever to stay at the forefront of this
transition and capture maximum value for our stakeholders. We have the
momentum, we have the foundation, and I am incredibly excited for what comes
next.
Jonathan Marren
Chief Executive Officer
29 May 2026
CFO Report:
Cost Down Supporting Margin Growth
The financial performance of the Group during 2025 reflected a period of
continued operational progress and financial transition as the Company
advanced the commercialisation of its Endurium product platform while
continuing to deliver against its project pipeline.
2025 2024 2023
Year to 31 December £m £m £m
Revenue 8.2 5.0 22.0
Other Items of Income 0.5 0.2 -
Project Grants(*) 9.1 0.3
Total Revenue & Project Grants(*) 17.8 5.2 22.3
Gross (Loss)/Profit (2.9) (3.5) (3.3)
Adjusted EBITDA (20.6) (19.3) (22.3)
Pre-tax Loss (24.1) (22.8) (23.2)
Property, Plant and Equipment 10.4 2.3 1.7
Total Inventory and Pre-paid Inventory 4.0 8.3 4.4
Net Cash 28.8 32.4 5.0
2025 2024 2023
Year to 31 December £m £m £m
Loss from operations (24.6) (24.1) (22.8)
Add back (deduct):
Depreciation and amortisation 1.2 1.3 1.1
Impairment of inventory and supplier deposits 0.5 0.4 0.3
Share based payment charges 0.8 0.6 0.7
Warranty and onerous contract provisions 1.5 2.1 (1.7)
Other Adjusting Items, net (1) - 0.4 0.2
Adjusted EBITDA (20.6) (19.3) (22.3)
1. Other Adjusting Items, net, includes gain and loss on disposal of
non-current assets and legal settlements, and redomiciliation costs.
Total Revenue and Project Grants(*) increased to £17.8 million in 2025 from
£5.2 million in 2024. This movement reflected increased activity across
customer projects, the contribution of royalty income recognised during the
year, and £9.1 million of Project Grants(*) from the Copwood VFB Energy Hub
project ("Copwood"). Gross profit margin improved from -70% to -35% and as a
result, the Group recorded an improvement in gross loss of £2.9 million, from
£3.5 million in 2024. The improvement in gross margin reflects early evidence
of improving product economics through cost down initiatives.
Administrative expenses increased to £21.9 million in 2025 from £20.3
million in 2024. The increase reflected continued investment in
commercialisation, product certification, supplier development and
organisational capability to support the Endurium product platform, together
with share-based payment charges reflecting equity incentives. Operating costs
remained an area of active management focus throughout the year.
Loss from operations of £24.6 million is a 2% increase over the prior year
loss of £24.1 million, and the bottom line loss for the year increased to
£24.1 million from £22.8 million largely reflecting the decrease in net
finance income of £0.5 million compared to £1.3 million in 2024.
The Group's key focus remains on further reducing the cost of its Endurium
product in order to expand its addressable commercial market. During 2025,
Endurium units shipped at a materially lower product cost than the previous
generation VS3 product.
2025 Cash Performance
Net Cash Outflow from Operating Activities improved from £24.9 million to
£17.2 million largely reflecting changes in working capital and the release
of inventory for the Copwood project.
Investing cash outflows increased to £9.5 million compared with £1.3 million
in 2024, primarily reflecting investment into Copwood and Invinity's
manufacturing capacity, including the purchase and commissioning of a
semi-automated stack production line. Capital and related prepaid expenditure
of £17.0 million was partly offset by the £7.5 million of grant income
received for Copwood in 2025.
During the year, the Group recorded £9.1 million of DESNZ Project Grants
relating to Copwood in addition to the £0.3m in 2023. Of this, £7.7 million
cash was received during the year and the remaining £2 million of the full
£10 million award was received in 2026. In accordance with the Group's
accounting policies, grant support has been recognised through a combination
of offsets against qualifying capital expenditure and deferred income
reflecting the timing and nature of the related project costs.
Financing cash inflows were £23.4 million in 2025 compared with £53.6
million in 2024, reflecting proceeds from the £25.0 million subscription
offset by transaction costs and lease payments.
Project Grants(*) £m
Grant income recognised against capital assets 6.7
Grant income recognised against other items of operating income 0.6
Grant income deferred 1.8
Total Project Grants(*) 9.1
(*) Project Grants means project grant funding received and claimed from
DESNZ. This includes a deferred liability of £1.8 million, because at the
year-end Invinity was still manufacturing the batteries and subsequent to the
year end the batteries were delivered. Refer to note 31 for details
Liquidity, Funding and Net Working Capital
The Group ended the year with cash and cash equivalents of £28.8 million at
31 December 2025 compared with £32.4 million at 31 December 2024. Management
continues to monitor downside risks closely and retains flexibility to reduce
discretionary capital expenditure and tightly manage operating costs should
project timing or revenue conversion be delayed.
2025 2024 2023
£m £m £m
Total inventory 2.6 5.8 3.3
Total pre-paid inventory 1.4 2.5 1.1
Total Inventory and Pre-paid Inventory 4.0 8.3 4.4
Amounts due from customer contracts 3.3 0.8 2.5
Receivable from supplier arrangement 1.9 - -
Government grant receivable (Copwood) 1.4 - -
Contract assets(3) 1.2 1.1 1.2
Contract liabilities(4) (0.6) (1.4) (1.3)
Trade payables (5.6) (3.0) (2.2)
Provision for contract losses (2.2) (1.9) (0.3)
Warranty provision (0.2) (0.1) (0.6)
Net Operating Position(5) 3.2 3.8 3.6
(3) Contract assets includes accrued income for work done not yet received
(4) Contract liabilities includes deferred revenue related to advances on
customer contracts
(5) Net Operating Position considers wider balance sheet items directly
relating to product sales including the Copwood project delivery.
Net Operating Position decreased from £3.8 million in 2024 to £3.2 million
in 2025 because of reduced inventory levels primarily reflecting Copwood and
increased trade payables of £2.6 million which reflected the timing of
supplier invoices received in the final weeks of the year. The decrease in net
position was offset largely by a £5.8 million increase in trade, supplier and
grant receivables.
Total provisions increased to £2.4 million in 2025 from £2.0 million in 2024
These warranty costs relate to provisions required to service legacy systems
and elevated logistics and shipping costs associated with specific project
delivery to two remote sites.
Going Concern
The Directors have made an assessment of going concern covering the period
from the date of approval of the financial statements to June 2027 and in
making this statement, 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.
The 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, expected costs of delivering the contracts, and cost mitigation
measures including the deferral of discretionary expenditure.
In order to fund expansion of the business, the Directors anticipate that
additional funding would be required. The Directors have considered the
availability of potential funding sources and the Group's track record in
accessing capital markets in forming this assessment.
Invinity has prepared a downside cash forecast for the purposes of the 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 without additional funding. 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
downside forecast. The outcome of this scenario is that the Company has
sufficient cash through the going concern period.
On the basis of this assessment, the Directors are satisfied that the Group
has sufficient resources to continue in operation for the going concern
period. Accordingly, the financial statements have been prepared on a going
concern basis.
Adam Howard
Chief Financial Officer
29 May 2026
President's Report:
Solving Our Customers' Energy Needs
It wasn't long ago that few of us questioned the reliable, low-cost supply of
electricity to our homes and businesses. Demand was flat, transmission and
distribution grids were reliable, and low-cost power from fuel-based
generating assets backed by robust supply chains were the cornerstone of our
generating fleet.
Contrast that with today, where energy costs are a major concern in everything
from family budgets to corporate strategies. In Great Britain, typical
household electricity bills remain on average 42% higher than the winter of
2022. Commercial electricity prices have similarly risen, and by late 2025
were current sitting around 75% above early-2021 averages, reinforcing the
need for solutions that improve security of supply and cost predictability.
This dramatic shift has its origins on both the supply and demand sides of our
electricity system. Input prices, particularly those tied to natural gas, are
increasing supply costs, while electricity demand is increasing even in mature
economies for the first time in a generation. But it isn't just average
prices, or average demand: Volatility is also on the rise. Geopolitical
tensions are triggering whipsaws within global fuels supply chains. The
lowest-cost source of new generation is fundamentally intermittent renewable
power. And the largest new loads of our modern economy, datacentres, are
exhibiting load profiles that are far more stochastic than the dark satanic
mills of old.
These trends seem unlikely to end soon. Electricity demand will continue to
rise as transport, heating, industry and digital infrastructure electrify. The
International Energy Agency expects global electricity demand to grow at least
~4% per year on average through 2030, with emerging markets driving the
majority of growth and advanced economies returning to expansion after decades
of stagnation.
Supply is an equal challenge. While low-cost solar and wind are scaling
quickly, their intermittent nature is stressing the grid as never before, with
flexibility and capacity now as critical as bulk electricity supply. Moreover,
these assets are often located away from major demand centres, and installing
new transmission and distribution build-out is costly and slow.
Together, these forces are leading participants both on the supply and demand
side of the industry to look to new solutions to ensure they continue to enjoy
reliable, safe, low-cost electricity. Increasingly, energy storage is viewed
as one of the most deployable, flexible and low-cost of those solutions.
On the front lines: Generators, Industry and Datacentres
Generators
The falling costs of renewable generation means it is increasingly the
dominant power source being built today. Whether projects are the result of
utility procurements targeted at specific generation types, or of developers
seeking to deliver electrons to wholesale markets at the lowest possible cost,
solar and wind power are leading an unprecedented shift. In the UK, sustained
wind and solar build-out means renewables now supply more than half of annual
electricity generation. As penetration rises, the need to firm variable
generation becomes a larger and more investable part of the value chain.
But limits are beginning to emerge; and at Invinity, we get to see first-hand
globally how regulators, utilities and generators are adapting. Renewable
generation now outstrips consumption in South Australia on a regular basis;
for example, the fourth quarter of 2025 saw negative electricity prices in
that state a staggering 47.4% of the time. This has significantly enhanced
revenues for our customer Yadlamalka Energy from their Spencer Energy
solar-plus-storage project.
In California, regulators have taken a different approach by requiring a
certain amount of storage to be installed by regulated utilities, with the
goal of absorbing excess solar generation then dispatching that energy into
evening peaks and so reducing dependence on expensive gas-fired peaking
generation. This requirement has led to a massive expansion of California's
battery fleet, from 1.3 GW in 2021 to over 17 GW at present. The results speak
for themselves: Peak electricity rates in 2022 exceeded $70/kWh over 14% of
the time, but by 2025 almost never reached that level. This served not only to
help cap electricity users' costs but put a floor under the price at which
solar generation was valued in wholesale markets.
Commercial & Industrial Customers
Increasing energy prices affects commercial and industrial users
significantly. With no real way to control grid electricity prices and having
the continued profitable operation of their businesses as by far their primary
focus, they've long been seen as important but passive players in the
electricity system.
The shift from a centralised to a more distributed paradigm within the
electricity system has changed that. Recent years have seen individual
companies participate either by engaging in demand reduction programmes, or by
building their own on-site generation capacity, often using solar PV
generation.
From Scottish Water's site at Perth, to the recently commissioned Viejas
Resort and Casino in Southern California, Invinity has long helped businesses
reduce their electricity costs. Many of our early deployments were intended to
enhance decarbonisation efforts; more recently, ever-cheaper solar panels have
enhanced how our batteries and PV together can significantly lower energy
costs and reduce exposure to volatile power markets. In parallel, resilience
has become a more prominent driver as many sites seek greater control over
critical power supply.
What we hear from all site operators is that no matter the economic impact,
safety is paramount. No amount of electricity savings will compensate for the
impact of a fire at site, or injury to personnel. Such concerns are leading
many of the facility operators we speak with to reconsider deploying
lithium-ion systems close to critical facilities or large workforces. These
concerns are further enhancing their interest in our storage solutions because
they enjoy significantly a lower operational risk profile.
Datacentres
Growth in AI, cloud computing and digital services is driving a step-change in
electricity demand from datacentres. AI learning workloads are already
creating larger and faster load swings than more traditional cloud computing
applications, since the tasks are synchronized to achieve maximum effect. This
means whole datacentre loads can fluctuate from zero to 100% of rated power
draw on a second-by-second basis. Batteries can help with this, but the duty
cycle is punishing. Frequent full charge-to-discharge swings will dramatically
accelerate degradation of conventional lithium batteries.
Source:
https://journal.uptimeinstitute.com/electrical-considerations-with-large-ai-compute/
Datacentre operators have consistently viewed securing reliable access to
low-cost power as a main driver for where these facilities can be located, and
how much computing power they can include. Connection queues and lead times
frequently shape deployment plans, with some projects unable to secure grid
capacity to match intended commissioning dates. As a result, many datacentre
developers and operators are evaluating on-site generation paired with storage
to improve certainty of supply, maintain resilience and reduce exposure to
peak pricing.
Different purposes, but common needs
There are common themes that emerge when talking with our existing and
potential customers about how they are, or expect to, make ever more valuable
use of our batteries. Broadly, those include the ability to cycle frequently,
dispatch flexibly, be easy to permit and install, and to reliably deliver
their intended use for years or even decades.
Cycling regularly enables energy storage assets to supply electricity when
generation is unavailable or insufficient and absorbs excess generation when
it is abundant. In many operating regimes, that means cycling more than once
per day to firm renewables and support grid and site-level flexibility. AI
datacentres are pushing this to the extreme, with cycle times in minutes and
ramp rates consistently measured in milliseconds.
Flexibility is equally important, as simply being able to charge and discharge
doesn't meet the needs of many users. From solar power generators looking to
absorb swings in PV output, to datacentre operators looking to manage shifting
loads, maximising operational flexibility without limiting performance or
durability irrespective of a battery's state of charge is key to maximising
the jobs a battery can do for its owners.
Permitting can be a gating factor for storage projects, influencing timelines,
cost and the ability to install in certain regions. Some technologies require
extensive safety mitigations to address fire risk and environmental concerns,
adding time, cost and complexity. Noise considerations can also influence
approvals, particularly near urban centres. And in some regions, local or
regional governments have adopted statues banning certain batteries outright,
citing fire safety concerns.
Longevity is critical as our electric grid depends on equipment designed to
operate for decades. As demand rises and systems rely more heavily on storage,
customers and investors place increasing value on solutions that can sustain
performance over long operating lives. Moreover, durable assets mean
predictable operating costs and avoided refurbishment or augmentation costs,
improving return-on-investment while minimising lifecycle environmental
impacts.
Storage capacity is the fundamental measure of any battery's performance, but
many grid-connected storage technologies capacity degrades significantly over
time. This can mean additional augmentation or replacement, especially when
customers need their batteries to cycle frequently. For multi-decade assets,
retaining usable capacity is a material decision factor. Technologies that
sustain capacity and performance can reduce lifetime cost and operational
uncertainty. Consistency supports underwriting and planning confidence for
operators and investors across long operating horizons.
Invinity's VFBs - The tie that binds
Invinity's VFBs are already serving customers all over the world. Our Endurium
and Endurium Enterprise products have proven their ability to cycle better
with fewer operating restrictions, be easier to permit and last longer than
the lithium-ion batteries being deployed into similar applications.
As long-duration storage moves from pilot activity to scaled procurement, we
know that our products combine durability, a strong safety profile and
predictable lifetime performance and can deliver a meaningful advantage to our
customers. Why?
· Because they're built for durability and flexibility, performing in
the most demanding applications while delivering limitless cycles over decades
of service;
· because they have materially better environmental credentials and
high recyclability while facilitating easier permitting;
· because they are scalable across a wide variety of project sizes,
sites and climatic conditions; and
· because over and over again, our customers tell us how our vanadium
flow batteries have outperformed expectations, delivering capabilities above
and beyond what they were originally intended to do.
Manufactured in Britain and Canada, Invinity's Endurium VFBs are ideally
positioned to support the grid by enhancing reliability, reduce reliance on
expensive fossil generation and unlock higher renewable penetration. Behind
the meter, they offer a uniquely capable solution for controlling loads from
factories and datacentres, without the unknowns around fire safety, permitting
and operating life that are lithium's hallmarks. As energy storage continues
to prove its place as the cornerstone of the future of electricity supply and
demand, Invinity's batteries are increasingly obvious as the right choice.
Matt Harper
President
29 May 2026
Financial Statements
Consolidated Statement of Profit and Loss
For the year ended 31 December 2025
2025 2024 (Unaudited)(1)
Note £000 £000
Revenue 4 8,182 5,015
Cost of Sales 5 (11,047) (8,528)
Gross Loss (2,865) (3,513)
Operating Costs
Administrative expenses 6 (21,895) (20,334)
Other items of operating income 10 1,092 236
Other items of operating expense 10 (950) (446)
Loss from Operations (24,618) (24,057)
Finance income 11 843 1,358
Finance costs 11 (147) (106)
(Loss)/Gain on foreign currency transactions 11 (172) 8
Net Finance Income 524 1,260
Loss Before Income Tax (24,094) (22,797)
Income tax expense 12 - -
Loss for the Year (24,094) (22,797)
Loss per Ordinary Share in Pence
Basic 13 (5.1) (6.7)
Diluted 13 (5.1) (6.7)
(1)Refer to note 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 2025
2025 2024 (Unaudited)(1)
£000 £000
Loss for the Year (24,094) (22,797)
Other Comprehensive Expense
Items that may be Reclassified Subsequently to Profit or Loss:
Exchange differences on the translation of foreign operations (96) (355)
Total Comprehensive Loss for the Year (24,190) (23,152)
(1)Refer to note 1
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 2025
2025 2024 (Unaudited)(1)
Note £000 £000
Non-Current Assets
Goodwill and other intangible assets 15 23,948 23,959
Property, plant and equipment 16 10,360 2,346
Right-of-use assets 17 1,640 1,526
Contract assets 21 225 -
Other non-current assets 19 191 -
Total Non-Current Assets 36,364 27,831
Current Assets
Inventory 20 2,636 5,753
Contract assets 21 978 1,149
Trade receivables 22 3,260 827
Other current assets 23 9,019 7,648
Cash and cash equivalents 24 28,789 32,352
Total Current Assets 44,682 47,729
Total Assets 81,046 75,560
Current Liabilities
Trade and other payables 25 (7,539) (4,525)
Derivative financial instruments 26 (135) (271)
Contract liabilities 21 (649) (1,392)
Lease liabilities 27 (643) (550)
Provisions 21 (946) (381)
Other liabilities 28 (1,812) -
Total Current Liabilities (11,724) (7,119)
Net Current Assets 32,958 40,610
Non-Current Liabilities
Lease liabilities 27 (1,352) (1,145)
Provisions 21 (1,493) (1,627)
Other liabilities (43) -
Total Non-Current Liabilities (2,888) (2,772)
Total Liabilities (14,612) (9,891)
Net Assets 66,434 65,669
Equity
Called up share capital 29 5,688 53,473
Share premium 29 22,872 215,121
Share-based payment reserve 29 8,129 7,328
Merger reserve 29 264,188 -
Accumulated losses 29 (232,164) (208,070)
Currency translation reserve 29 (2,318) (2,222)
Other reserves 29 39 39
Total Equity 66,434 65,669
(1)Refer to note 1
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 2026 and were signed on its behalf by:
Adam Howard
Director
Consolidated Statement of Changes in Equity
As at 31 December 2025
Called up Share Capital Share Premium Share-based Payment Reserve Accumulated Losses Currency Transla-tion Reserve Merger Reserve Other Reserves Total
£000 £000 £000 £000 £000 £000 £000 £000
At 1 January 2025 53,473 215,121 7,328 (208,070) (2,222) - 39 65,669
Loss for the year - - - (24,094) - - - (24,094)
Other Comprehensive Income
Foreign currency translation differences - - - - (96) - - (96)
Total Comprehensive Loss for the Year - - - (24,094) (96) - - (24,190)
Transactions with Owners in their Capacity as Owners
Group reorganisation adjustment (53,473) (215,121) - - - 268,594 - -
Shares issued on redomiciliation 61,679 (61,679) -
Reduction of share capital (57,273) - 57,273 -
Investment funding arrangement, net of transaction costs 1,282 22,872 - - - - - 24,154
Share-based payments - - 801 - - - - 801
Total Contributions by Owners (47,785) (192,249) 801 - - 264,188 - 24,955
At 31 December 2025 5,688 22,872 8,129 (232,164) (2,318) 264,188 39 66,434
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
As at 31 December 2024 (Unaudited)(1)
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
(1)Refer to note 1
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 2025
2025 2024 (Unaudited)(1)
Note £000 £000
Cash Flows from Operating Activities
Cash used in operations 14 (17,682) (26,147)
Interest received 475 1,222
Interest paid (1) (13)
Net Cash Outflow from Operating Activities (17,208) (24,938)
Cash Flows from Investing Activities
Acquisition of property, plant and equipment 16 (1,507) (1,294)
Acquisition of property, plant and equipment for battery project under 16 (13,938) -
construction
Prepayments of property, plant and equipment for battery project under (1,558)
construction
Grant income received against capital projects 31 7,499 -
Deposit on right-of use assets - (7)
Net Cash Outflows from Investing Activities (9,504) (1,301)
Cash Flows from Financing Activities
Payment of lease liabilities 27 (870) (768)
Sublease deposit received 43 -
Sublease payments received 19 94 44
Proceeds from the issue of share capital 25,000 57,383
Proceeds from the exercise of share options and warrants - 4
Payment of transaction costs for the issue of share capital (846) (3,001)
Net Cash Inflow from Financing Activities 23,421 53,662
Net increase/(decrease) in cash and cash equivalents (3,291) 27,423
Cash and cash equivalents at the beginning of the year 32,352 5,014
Effects of exchange rate changes on cash and cash equivalents (272) (85)
Cash and Cash Equivalents at the End of the Year 28,789 32,352
(1)Refer to note 1
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 the UK. The registered office address is
Room 3.03, 24 Chiswell Street, London, EC1Y 4TY.
The Company is quoted on the AIM Market of the London Stock Exchange with the
ticker symbol IES.L.
During the year, the Group undertook a corporate reorganisation to redomicile
the parent company from Jersey to the UK. As part of this reorganisation, a
new UK-incorporated parent entity, Invinity Energy Systems plc, was inserted
at the top of the Group through a share-for-share exchange. The transaction
resulted in the Company becoming the ultimate parent of the Group. The
reorganisation did not result in a change in the underlying business,
operations, or economic substance of the Group and has been accounted for as a
group reconstruction.
The comparative information presented has been derived from the consolidated
financial statements previously audited for the predecessor group. While those
financial statements related to a different legal entity, the underlying
business and operations are unchanged. Accordingly, the Directors consider the
comparative information to be representative of the Group's financial
performance. The auditor's report on the current period financial statements
does not extend to the comparative information in respect of the prior period.
Therefore, the comparative information, including the notes, is presented as
unaudited.
The prior year comparatives are unchanged from the previously published
audited consolidated financial statements of the Group.
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').
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.
Basis of Consolidation
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.
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.
Refer to note 35 - Group entities
Going Concern
The Directors have made an assessment of going concern covering the period
from the date of approval of the financial statements to June 2027 and in
making this statement, 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.
The 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, expected costs of delivering the contracts, and cost mitigation
measures including the deferral of discretionary expenditure.
In order to fund expansion of the business, the Directors anticipate that
additional funding would be required. The Directors have considered the
availability of potential funding sources and the Group's track record in
accessing capital markets in forming this assessment.
Invinity has prepared a downside cash forecast for the purposes of the 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 without additional funding. 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
downside forecast. The outcome of this scenario is that the Company has
sufficient cash through the going concern period.
On the basis of this assessment, the Directors are satisfied that the Group
has sufficient resources to continue in operation for the going concern
period. Accordingly, the financial statements have been prepared on a going
concern basis.
New Standards, Amendments and Interpretations Effective and Adopted by the
Group in 2025
Amendments to existing standards previously issued by the IASB with effective
dates during the year ended 31 December 2025 are summarised below. There was
no effect on the Group's consolidated financial statements for the year ended
31 December 2025 as a result of the adoption of these amendments.
Amendments to 'IAS 21 The Effects of Changes in Foreign Exchange Rates - Lack
of Exchangeability'
The Group has adopted the amendments to IAS 21 for the first time in the
current year. The amendment clarifies the assessment of exchangeability and
the determination of an exchange rate when exchangeability is lacking. The
adoption of the amendment did not have a material impact on the Group's
financial statements.
New Standards and Interpretations Not Yet Adopted
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2025 reporting periods and have not been
early adopted by the Company.
Applicable Standard Key requirements or changes in accounting policy
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - In May 2024, the International Accounting Standards Board (IASB) amended IFRS
Classification and measurement of financial instruments 7 and IFRS 9, which includes clarifications on recognition and derecognition
dates of certain financial assets and liabilities, including exceptions for
liabilities settled through electronic cash transfer systems.
Effective for periods beginning on or after 1 January 2026
Annual Improvements to IFRS Accounting Standards - Volume 11 - IFRS 1 First-time Adoption of International Financial Reporting
Standards - Hedge accounting by a first-time adopter;
- IFRS 7 Financial Instruments: Disclosures - Gain or loss on
Effective for periods beginning on or after 1 January 2026 derecognition
- IFRS 7 Financial Instruments: Disclosures - Deferred difference
between fair value and transaction price;
- IFRS 7 Financial Instruments: Disclosures - Credit risk disclosures
- IFRS 9 Financial Instruments - Lessee derecognition of lease
liabilities;
- IFRS 9 Financial Instruments - Transaction price;
- IFRS 10 Consolidated Financial Statements - Determination of a De
Facto Agent; and
- IAS 7 Statement of Cash flows - Cost method.
IFRS 18 Presentation and Disclosure in Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements. The amendment
impacts presentation and disclosure of the consolidated income statement with
new defined categories being operating, investing and financing to provide a
consistent structure.
Effective for periods beginning on or after 1 January 2027
Disclosures about Management-defined Performance Measures (i.e. certain
non-GAAP measures) will have to be disclosed in the financial statement with
reconciliations to GAAP measures. The new standard will also provide guidance
on grouping of information (aggregation/disaggregation).
The standard will be applied from its mandatory effective date of 1 January
2027. Final impact assessment and transition activities will take place during
2026 and with the main impacts expected on the presentation of the
consolidated statement of profit and loss.
IFRS 19 Subsidiaries without Public Accountability: Disclosures In May 2024, the Board issued IFRS 19 Subsidiaries without Public
Accountability: Disclosures, which allows eligible entities to elect to apply
reduced disclosure requirements while still applying the recognition,
measurement and presentation requirements in other IFRS accounting standards.
Effective for periods beginning on or after 1 January 2027 Unless otherwise specified, eligible entities that elect to apply IFRS 19 will
not need to apply the disclosure requirements in other IFRS accounting
standards.
The Directors are evaluating the impact that these standards will have on the
financial information of the Group.
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).
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.
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.
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 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 for certain standalone
products or services. For other performance obligations, stand-alone selling
price is estimated based on established processes, including budgeting tools,
market labour rates and third-party quotes.
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
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.
The Group may also enter into arrangements to license its intellectual
property and associated technical know-how. Royalty revenue from licences that
provide a right to use intellectual property is recognised at the point in
time when the customer obtains control of the licence. This occurs when the
customer obtains the ability to direct the use of and derive substantially all
of the remaining benefits from the licensed intellectual property without
further substantive ongoing obligations from the Group.
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.
Grants relating to income are recognised in profit or loss on a systematic
basis over the periods in which the Group recognises the related costs. Such
grants are presented as a reduction of the related expense line or as other
items of operating income.
Grants relating to the acquisition or construction of assets are recognised by
deducting the grant from the carrying amount of the asset, resulting in a
reduced depreciation charge over the asset's useful life.
Grant income received in advance of the associated expenditure is presented as
deferred income within other liabilities. Amounts are recognised in profit and
loss as the associated expenditure is incurred or, where applicable, deducted
from the carrying amount of the related capital expenditures.
Grant income receivable is presented within other 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 recoverable amount based on the higher of
its value in use and fair value less costs of disposal. 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.
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.
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
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
Assets under construction To be determined once operational Administrative expenses / Cost of sales
Software and purchased domain names 3 - 10 Administrative expenses
Patents and certifications 5 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 participate in lease contracts as the lessee and where sublease
arrangements are entered into, the Group entities act as an intermediate
lessor. 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 as a finance or
operating sublease is assessed with reference to the right-of-use asset
arising from the head lease, rather than the underlying asset. For subleases
classified as finance leases, the Group derecognises the related portion of
the right-of-use asset and recognises a net investment in the sub-lease. The
net investment is measured as the present value of future lease payments
receivable and is subsequently accounted for using the interest rate implicit
in the lease or the incremental borrowing rate if it is not readily
determinable. Finance income is recognised over the lease term.
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
Other assets 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.
Goodwill Impairment
Determining whether goodwill is impaired requires an estimation of recoverable
amount based on the higher of its value in use and fair value less costs of
disposal. The key estimates are therefore the selection of the suitable fair
value basis, 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.
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 £49,852 (2024:
£22,895). 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 £99,705
(2024: £45,791).
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 £864,555
(2024: £693,122). A 40% increase in unavoidable costs would increase the
provision by £1,803,026 (2024: £1,386,244).
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 2025 were derived from continuing operations.
2025 2024
Revenue from Contracts with Customers £000 £000
Battery systems and associated control systems 6,369 4,008
Integration hardware 350 443
Installation and commissioning 174 23
Royalty revenue 963 -
Other services 326 541
Total Revenue in the Consolidated Statement of Profit and Loss 8,182 5,015
Analysed as:
Revenue recognised at a point in time 8,113 5,000
Revenue recognised over time 69 15
Total Revenue in the Consolidated Statement of Profit and Loss 8,182 5,015
Geographic Analysis of Revenue
The Group's revenue from contracts with customers was derived from the
following geographic regions:
2025 2024
Geographic Analysis of Revenue £000 £000
Asia 963 62
Australia 44 19
Europe 6,179 503
North America 996 4,431
Total Revenue in the Consolidated Statement of Profit and Loss 8,182 5,015
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 four (2024: two)
customers who each accounted for more than 10% of total revenue as follows:
2025 2024
Significant Customers and Concentration of Revenue £000 £000
Customer A 4,225 -
Customer B 963 -
Customer C 917 -
Customer D 917 -
Customer E - 2,661
Customer F - 1,387
Grant Income
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:
2025 2024
Grant Income Recognized £000 £000
Grants for research and development 984 106
Grants for product deployment 6,724 67
Economic and social development - 2
Total Government Grants 7,708 175
6,724 -
Disclosed as:
Grant income against capital assets
Grant income against other items of operating income and expense 623 -
Grant income against administrative expenses 361 175
The Company was awarded a £10.0 million government grant from the Department
for Energy Security and Net Zero ("DESNZ") to support product deployment
activities in relation to the LoDES program. Of this, £7.3 million was
recognised in the year, comprising amounts deducted from the cost of the
related property, plant and equipment and amounts recognised within other
items of operating income.
The remaining amount of the DESNZ grant expected to be recognized in 2026 is
£1.8 million.
Refer to note 6, Administrative expenses and note 10, Other Items of Operating
Income.
Amounts deducted from capitalised asset costs will be recognised in profit or
loss through reduced depreciation charges once the assets are available for
use.
Refer to note 16, Property, Plant and Equipment.
5 Cost of Sales
2025 2024
£000 £000
Cost of inventories of finished battery systems recognised as expense 9,505 6,434
Movement in provisions for warranty and warranty costs 1,214 524
Movement in provisions for sales contracts 328 1,570
Total Cost of Sales 11,047 8,528
6 Administrative Expenses
2025 2024
£000 £000
Staff costs 14,424 12,866
Research and development costs 1,783 2,421
Research and development recoveries, tax credits and grants (1,415) (1,150)
Professional fees 795 755
Sales and marketing costs 716 847
Facilities and office costs 417 345
Depreciation and amortisation 1,220 1,314
IT and other administrative costs 3,955 2,936
Total Administrative Expenses 21,895 20,334
No development costs were capitalised in the period (2024: £nil).
7 Auditors' Remuneration
2025 2024
£000 £000
Fees payable to the Company's auditors for the audit of the consolidated
financial statements
332 328
Audit of financial statements of subsidiaries pursuant to legislation 5 18
Fees payable to the Company's auditor for other services:
· Tax compliance services 14 19
351 365
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
2025 2024
Staff Costs £000 £000
Wages and salaries 12,052 11,010
Employer payroll taxes 1,057 905
Contributions to defined contribution plans 161 143
Other benefits 1,261 969
Equity settled share-based payments 801 622
Total Staff Costs 15,332 13,649
Administrative staff costs in the year were £14,423,792 (2024: £12,865,615)
and staff costs included in cost of sales were £907,959 (2024: £783,333).
2025 2024
Average Headcount Number Number
Canada 87 82
United Kingdom 66 54
United States of America 9 9
Total 162 145
Key Management Compensation
The key management of the Group comprises the members of the senior leadership
team.
2025 2024
Key Management Compensation £000 £000
Short-term employee benefits 2,409 2,110
Post-employment benefits 29 22
Termination benefits 88 82
Equity settled share-based payment 481 386
Total Key Management Compensation 3,007 2,600
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 2025.
Standard Grant date Final Expiry date Exercise price 2025 2024
redT 2018 plan 18 May 2018 18 May 2026 352.50 p - 3,888
Invinity Energy 2025 ESOP 01 Apr 2020 12 Mar 2030 82.50 p 407,714 424,571
Invinity Energy 2025 Consultant SOP 01 Apr 2020 12 Mar 2030 82.50 p 378,000 378,000
Invinity Energy 2025 ESOP 01 Apr 2020 21 Nov 2029 4.34 p 1,052,134 1,052,134
Invinity Energy 2025 ESOP 01 Apr 2020 08 May 2029 6.84 p 628,358 628,358
Invinity Energy 2025 ESOP 26 Aug 2020 26 Aug 2030 113.00 p 1,318,000 1,360,000
Invinity Energy 2025 ESOP 28 Jan 2021 28 Jan 2031 204.00 p 258,000 258,000
Invinity Energy 2025 ESOP 04 Mar 2021 04 Mar 2031 152.00 p 150,000 150,000
Invinity Energy 2025 ESOP 15 Apr 2021 15 Apr 2031 151.00 p 39,000 84,000
Invinity Energy 2025 ESOP 03 Aug 2021 03 Aug 2031 134.50 p 275,000 275,000
Invinity Energy 2025 ESOP 29 Oct 2021 29 Oct 2031 111.50 p 236,000 251,000
Invinity Energy 2025 ESOP 20 Dec 2021 20 Dec 2031 91.00 p 135,000 135,000
Invinity Energy 2025 ESOP 03 Feb 2022 03 Feb 2032 64.50 p 72,000 112,000
Invinity Energy 2025 ESOP 02 Mar 2022 02 Mar 2032 93.50 p 45,000 45,000
Invinity Energy 2025 ESOP 11 Apr 2022 11 Apr 2032 90.00 p 60,000 60,000
Invinity Energy 2025 ESOP 11 Jul 2022 11 Jul 2032 45.50 p 500,000 500,000
Invinity Energy 2025 ESOP 08 Dec 2022 08 Dec 2032 38.00 p 311,000 311,000
Invinity Energy 2025 ESOP 27 Jan 2023 27 Jan 2033 42.00 p 2,186,466 2,334,400
Invinity Energy 2025 ESOP 20 Apr 2023 20 Apr 2033 43.50 p 43,000 62,000
Invinity Energy 2025 ESOP 19 Jul 2023 19 Jul 2033 51.20 p 2,643,000 3,278,000
Invinity Energy 2025 ESOP 26 Oct 2023 26 Oct 2033 38.00 p 214,000 339,000
Invinity Energy 2025 ESOP 07 Dec 2023 07 Dec 2033 29.50 p 30,000 30,000
Invinity Energy 2025 ESOP 22 Jan 2024 22 Jan 2034 24.00 p 102,000 102,000
Invinity Energy 2025 ESOP 13 Mar 2024 14 Mar 2034 30.50 p 3,000 33,000
Invinity Energy 2025 ESOP 9 Jan 2025 9 Jan 2035 17.25 p 723,000 -
Invinity Energy 2025 ESOP 30 Jan 2025 30 Jan 2035 23.00 p 18,720,001 -
Invinity Energy 2025 ESOP 8 May 2025 8 May 2035 12.13 p 204,000 -
Invinity Energy 2025 ESOP 3 Jun 2025 3 Jun 2030 16.00 p 5,350,083 -
Total 36,083,756 12,206,351
Weighted average remaining contractual life of options outstanding at the end 7.45 7.12
of the year
No employee options were exercised during the year (2024: nil).
The grant-date fair value of share options issued with non-market vesting
conditions 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 expected life of the option, the share price
volatility (by reference to historical 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 nil, reflective of the
development-stage nature of the Group.
The expected life of the options reflects management's estimate of the period
the awards are expected to remain outstanding and incorporates the contractual
term, vesting conditions and limited historical exercise behaviour.
During the year, the Group also granted share options with market‑based
vesting conditions. The fair value of these awards was determined at the grant
date using a Monte Carlo simulation model, which incorporates the probability
of achieving the market-based vesting conditions. The assumptions used in the
model are consistent with those applied to non-market awards and include the
share price at the date of grant, the option exercise price, the expected
life, the share price volatility, the risk-free interest rate and the expected
dividend yield rate.
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 2025 5,393,250 47.12p 6,813,101 70.24p
Granted 25,234,303 21.20p - -
Forfeited (461,487) 27.73p (895,411) 61.15p
Vested (1,746,693) 45.57p 1,746,693 45.57p
Exercised - - - -
At 31 December 2025 28,419,373 24.51p 7,664,383 65.68p
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
The grants issued in the period used the following valuation assumptions:
2025 2024
Volatility 74.9% - 89.1% 61.4% - 84.2%
Risk-free rate 3.7%-4.4% 3.3% - 4.2%
Dividend yield 0% 0%
Weighted average expected life 2.2 years 2.4 years
The weighted average grant-date fair value of options granted during the year
was £4.1 p per option (2024: £14.8 p).
Plans with Standard Performance Conditions
The primary share plan outstanding at 31 December 2025 is the 2025 Employee
Share Option Plan. Following the redomiciliation of the parent company to the
UK, all outstanding options held in the 2018 plan were exchanged for
equivalent options granted under the 2025 plan, such that the underlying
awards now relate to shares in the UK parent company. Other than the change in
issuing entity, no other changes were made to the terms of the awards.
The 2025 plan was adopted by the Board on 8 January 2025 and introduced HMRC
scheme rules related to certain non-taxable option grants. The plan contains a
provision to issue options as CSOP, EMI, ISO or unapproved awards.
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 subsidiary previously owned by Siemens
Gamesa Renewable Energy S.A. and acquired by ABB Ltd (Renewable Energy) in
2025. 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.
Subsequent to the reporting period, on 30 April 2026, the Directors approved a
further extension of the option term by up to three years. The formal
amendment to give effect to this extension has not yet been executed as at the
date of authorisation of these financial statements.
Warrants Issued in the Period or Outstanding
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:
2025 2024
£000 £000
Income
Project grant income (623) -
Reversal of impairment of inventory to net realisable value (361) (47)
Gain on remeasurement and curtailment of right-of-use asset (26) (2)
Partial reversal of impairment of loan receivable (55) -
Sublease income (27) (18)
Gain on legal settlement - (169)
Total Other Operating Income (1,092) (236)
Expense
Impairment of supplier deposits 489 -
Impairment of inventory to net realisable value 222 376
Obsolete inventory 191 70
Loss on disposal of property, plant and equipment 48 -
Total Other Operating Expenses 950 446
11 Net Finance Income and Costs
2025 2024
£000 £000
Finance Income
Interest on bank deposits and money market funds (692) (1,221)
Interest on sublease income (16) (2)
Amortisation of financial instrument (135) (135)
Total Finance income (843) (1,358)
Finance Costs
Finance charges for lease liabilities 146 92
Finance charges for liabilities held at amortised cost 1 14
Total Finance costs 147 (106)
Foreign currency
Gain on realised foreign currency transactions (70) (100)
Loss on unrealised foreign currency transactions 242 92
Net Loss (Gain) on Foreign Currency Transactions 172 (8)
Net Finance Income (524) (1,260)
12 Income Tax Expense
2025 2024
£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
2025 2024
£000 £000
Loss before tax (24,094) (22,797)
Tax at the applicable statutory rate of 19% (2024 - nil) (4,578) -
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Non-taxable gains and expenses not deductible for tax (57) 2
Differences in overseas tax rates (781) (5,266)
Unrelieved tax losses carried forward 5,178 4,852
Origination and reversal of timing differences not recognised 238 412
Total Income Tax Expense - -
Following the redomiciliation to a UK parent, the 2025 effective tax rate
reconciliation is based on the UK statutory tax rate of 19% applied to the
loss before tax, compared to the Jersey statutory tax rate of 0% in prior
periods. Notwithstanding this change in parent jurisdiction, no current tax
charge arises due to current year losses and the Company's full valuation
recorded on deferred tax assets.
13 Loss per Share
2025 2024
Basic Loss per Share In pence In pence
From operations (5.1) (6.7)
2025 2024
Diluted Loss per Share In pence In pence
From operations (5.1) (6.7)
2025 2024
Loss Used in Calculation of Basic and Diluted Loss per Share £000 £000
From operations (24,094) (22,797)
2025 2024
Weighted Average Number of Shares Used in Calculation Number Number
Basic 472,876,613 342,812,364
Diluted 482,722,665 344,057,635
Additional potential shares used in the calculation of diluted earnings per
share primarily relate to potential shares outstanding at 31 December 2025
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.
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
4,028,921 (2024: nil).
2025 2024
Weighted Average Number of Shares Used in Loss per Share Calculation - Basic
and Diluted
Number Number
In issue at 1 January 440,561,896 191,067,464
Shares issued in the year - weighted average 32,314,717 151,744,900
Weighted average shares in issue 31 December 472,876,613 342,812,364
Effect of employee share options and other warrants not exercised 9,846,052 1,245,271
Weighted average number of diluted shares in issue 31 December 482,722,665 344,057,635
14 Cash Flows from Operating Activities
2025 2024
£000 £000
Loss After Income Tax (24,094) (22,797)
Adjustments for:
Depreciation and amortisation 1,362 1,383
Loss on disposal of property, plant and equipment 48 -
Net gain on right-of-use asset remeasurement and curtailment (26) (2)
Reversal of impairment of inventory (361) -
Impairment of inventory 222 329
Obsolete inventory 191 70
Impairment of trade receivables 492 -
Impairment of contract assets 63 -
Other impairment charges 489 -
Share-based payments charge 801 622
Net finance income (696) (43)
Loss on unrealised foreign currency transactions 242 19
(21,267) (20,419)
Change in Operating Assets & Liabilities
Increase in other non-cash operating working capital (25) -
Decrease/(increase) in inventory 2,992 (2,971)
(Increase)/decrease in contract assets (159) 28
(Increase)/decrease in trade receivables and other receivables (2,998) 1,610
Decrease/(increase) in other current assets and prepaid inventory 899 (6,169)
Increase in trade and other payables 3,078 624
Increase in other liabilities 13 -
Increase/(decrease) in warranty provision 135 (481)
Increase in onerous contract provision 296 1,567
(Decrease)/increase in contract liabilities (646) 64
3,585 (5,728)
Cash Used in Operations (17,682) (26,147)
15 Goodwill and Other Intangible Assets
Goodwill Patents and Certifications Software and Domain Names Total
£000 £000 £000 £000
Cost
At 1 January 2025 23,944 203 32 24,179
Disposals - - (2) (2)
Foreign currency exchange differences - - (1) (1)
At 31 December 2025 23,944 203 29 24,176
Accumulated amortisation
At 1 January 2025 - (193) (27) (220)
Amortisation charge - (10) (1) (11)
Disposals - - 2 2
Foreign currency exchange differences - - 1 1
At 31 December 2025 - (203) (25) (228)
Net book value
At 1 January 2025 23,944 10 5 23,959
At 31 December 2025 23,944 - 4 23,948
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
For impairment testing, goodwill acquired through business combinations and
patents and certifications with indefinite useful lives are allocated to the
single CGU.
Goodwill
Goodwill is tested annually for impairment. At 31 December 2025, goodwill was
tested for impairment using the fair value less cost of disposal method.
On 29 September 2025, the Company announced the results of a subscription
raising total proceeds of £25 million through the issuance of 128,205,128 new
ordinary shares at 19.5 pence per share with a recoverable amount in excess of
the Company's net asset value at that date. No impairment loss was identified
in relation to goodwill.
Management assessed factors affecting the recoverable amount from the
valuation date (29 September 2025) to 31 December 2026 and concluded that no
significant adverse factors were identified during this period. Management
notes that the closing share price on 31 December 2025 was 18.75 pence giving
a market capitalisation of £106.6 million which is more than £40.2 million
higher than the Net Assets value less cost of disposal of the Company on this
date.
Post Balance Sheet events: Since 31 December 2025 the share price has traded
across a high-low range of 33.0 pence to 16.0 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
2025.
16 Property, Plant and Equipment
Battery Project Under Construction Computer and Office Equipment Leasehold Improvements Vehicles and Equipment Total
£000 £000 £000 £000 £000
Cost
At 1 January 2025 - 655 1,257 2,866 4,778
Additions(1) 14,072 102 46 1,316 15,536
Grant income applied to additions(2) (6,282) - - (442) (6,724)
Disposals - (49) (181) (364) (594)
Transfers - - 8 (8) -
Foreign currency exchange differences (10) (23) (56) (89)
At 31 December 2025 7,790 698 1,107 3,312 12,907
Accumulated Depreciation
At 1 January 2025 - (504) (623) (1,305) (2,432)
Depreciation charge - (81) (217) (407) (705)
Disposals - 47 181 309 537
Transfers - - (1) 1 -
Foreign currency exchange differences - 7 17 29 53
At 31 December 2025 - (531) (643) (1,373) (2,547)
Net book value
At 1 January 2025 - 151 634 1,561 2,346
At 31 December 2025 7,790 167 464 1,939 10,360
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
(1. ) In 2025, the acquisition of
Uckfield resulted in the allocation of the purchase consideration totalling
£0.3 million to battery project under construction. Refer to note 30, Asset
acquisition
(2. ) During the year, government
grants recognized in respect of capital expenditures totalling £6.7 million
were deducted from the cost of assets under construction. These assets will be
depreciated from the date they are available for use, at which point the
effect of the grants will be reflected through reduced depreciation charges
over the useful economic lives of the assets. Refer to note 31, LoDES Project
Grants
17 Right-of-use Assets
Land Offices and Facilities Total
£000 £000 £000
Cost
At 1 January 2025 - 2,804 2,804
Additions 741 474 1,215
Curtailments and disposals(1) - (459) (459)
Foreign currency exchange differences - (69) (69)
At 31 December 2025 741 2,750 3,491
Accumulated Depreciation
At 1 January 2025 - (1,278) (1,278)
Depreciation charge (20) (626) (646)
Curtailments and disposals(1) - 42 42
Foreign currency exchange differences - 31 31
At 31 December 2025 (20) (1,831) (1,851)
Net book value
At 1 January 2025 - 1,526 1,526
At 31 December 2025 721 919 1,640
(1. ) During the year, the Group entered into a sublease
arrangement in respect of a leased property in the US, resulting in the
derecognition of the related right‑of‑use asset with net book value of
£270,729 and recognition of a net investment in the sublease.
( )
Offices and Facilities Total
£000 £000
Cost
At 1 January 2024 3,046 3,046
Additions 893 893
Adjustments(2) (126) (126)
Transfers(3) (58) (58)
Curtailments and disposals (815) (815)
Foreign currency exchange differences (136) (136)
At 31 December 2024 2,804 2,804
Accumulated Depreciation
At 1 January 2024 (1,489) (1,489)
Depreciation charge (728) (728)
Adjustments(2) 126 126
Transfers(3) 27 27
Curtailments and disposals 710 710
Foreign currency exchange differences 76 76
At 31 December 2024 (1,278) (1,278)
Net book value
At 1 January 2024 1,558 1,558
At 31 December 2024 1,526 1,526
(2. ) Non-material adjustment to reflect opening balance
difference for both cost and accumulated depreciation with no impact to profit
& loss in 2024.
(3. ) In 2024, right-of-use assets were transferred to
property, plant and equipment upon completion of lease terms.
Right-of-use assets relate to buildings and land 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 and land 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:
2025 2024
£000 £000
Deferred tax relates to the following:
Accelerated capital allowances 1,185 1,707
Share options 102 46
Accrued liabilities 15 53
Reserves and other 315 277
Tax losses 32,861 29,224
Total Net Deferred Tax Assets 34,478 31,307
Gross Deferred Tax Assets Not Recognised:
2025 2024
£000 £000
Deferred tax relates to the following:
Accelerated capital allowances 4,055 6,493
Share options 398 169
Accrued liabilities 70 199
Reserves and other 1,540 1,207
Tax losses 147,435 130,759
Total Gross Deferred Tax Assets 153,498 138,827
Tax Losses Available for Use in Future Periods
At 31 December 2025, the Group had the following tax losses carried forward
available for use in future periods:
2025 2024
£000 £000
United Kingdom 67,456 58,376
Canada 53,574 49,290
United States 20,149 18,628
Ireland 6,256 4,465
Total Potential Tax Benefit 147,435 130,759
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 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 Other Non-current Assets
During the year, the Group has entered into a sublease agreement in respect of
a property in the US for which it acts as an intermediate lessor under an
existing head lease. Subleasing is incidental to the Group's operations and is
not part of the Group's ordinary trading activities.
The sublease has been classified as a finance sublease and accordingly the
Group has recognized a net investment in the sublease.
The current portion of the net investment, representing amounts receivable
within 12 months is presented within note 23, Other Current Assets.
2025 2024
£000 £000
Net investment in sublease 191 -
Total Other Non-current Assets 191 -
The Group's net investment in subleases is presented as follows:
2025 2024
At 31 December £000 £000
Current - receivable within 12 months 60 65
Non-current - receivable after 12 months 191 -
Total net investment in sublease 251 65
Cash receipts from subleases in the period were:
2025 2024
At 31 December £000 £000
Receipt of principal 78 42
Receipt of interest 16 2
Total cash inflows from subleases 94 44
The contractual undiscounted payments receivable under sublease agreements at
each period end were:
2025 2024
At 31 December £000 £000
Less than one year 77 66
One to five years 211 -
Total undiscounted sublease receivable 288 66
20 Inventory
2025 2024
£000 £000
Raw materials and consumables 1,474 3,377
Work in progress 866 2,285
Finished goods 296 91
Total Inventory 2,636 5,753
Inventory recognised as an expense within cost of sales during the current
year amounted to £9,504,343 (2024: £6,433,679).
At 31 December 2025, inventory impairment to net realisable value totalled
£222,443 (2024: £376,000). Net reversal of inventory write-downs during the
current year amounted to £361,906 (2024: £46,626).
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:
2025 2024
£000 £000
Amounts due from customer contracts included in trade receivables 3,260 827
Contract assets (accrued income for work done not yet invoiced) 978 1,149
Non-current contract assets 225 -
Contract liabilities (deferred revenue related to advances on customer (649) (1,392)
contracts)
Net Position of Sales Contracts 3,814 584
The amount of revenue recognised in the year that was included in contract
liabilities at the end of the prior year was £1,029,577 (2024: £876,586).
The amount of expected credit losses recognised on contract assets during the
year was £63,313 (2024: £nil), with contract assets presented net of
expected credit losses.
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 2025 114 1,894 2,008
Charges to profit or loss:
· Provided in the year 259 1,692 1,951
· Unused amounts reversed (53) (88) (141)
Amounts used in the year (70) (1,274) (1,344)
Foreign exchange (1) (34) (35)
At 31 December 2025 249 2,190 2,439
Current 145 801 946
Non-current 104 1,389 1,493
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
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.
Provisions in respect of contract losses relate to contracts which are
expected to be delivered in 2026 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
2025 2024
£000 £000
Total Trade Receivables 3,260 827
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.
Expected credit losses on trade receivables are assessed with reference to
historical loss experience, current conditions and forward-looking
information. An allowance for potential credit losses of £492,130 (2024:
£nil) has been recognised and balance has been presented net of this
allowance.
23 Other Current Assets
2025 2024
£000 £000
Prepayments and deposits 2,239 736
Receivable from supplier arrangement 1,884 -
Tax credits - recoverable 1,770 856
Government grant receivable 1,448 -
Prepaid inventory 1,361 2,469
Sublease net investment 60 65
Other receivables 257 522
Short-term investments - 3,000
Total Other Current Assets 9,019 7,648
Prepaid inventory is recognised on inventory payments where physical delivery
of that inventory has not yet been taken by the Group.
Included within government grant receivables is £1.4 million relating to
DESNZ funding, which was received subsequent to the reporting period in 2026.
24 Cash and Cash Equivalents
2025 2024
£000 £000
Cash 3,789 3,352
Term deposits 25,000 29,000
Total Cash and Cash Equivalents 28,789 32,352
Term deposits up to 6 months are presented as cash equivalents if they are
highly liquid, readily convertible to a known amount of cash and are subject
to an insignificant amount of risk of change in value.
Subsequent to the year-end, a 6-month term deposit in the amount of £15
million matured in April 2026 and was reclassified to cash.
25 Trade and Other Payables
2025 2024
£000 £000
Trade payables 5,568 2,967
Accrued liabilities 811 891
Accrued employee compensation 1,128 571
Government remittances payable 32 38
Other payables - 58
Total Trade and Other Payables 7,539 4,525
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.
26 Derivative Financial Instruments
2025 2024
£000 £000
Derivative value of warrants issued 135 271
Total Derivative Financial Instruments 135 271
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 33.
27 Lease Liabilities
The Group's obligations under lease contracts are presented as follows:
2025 2024
At 31 December £000 £000
Current - due within 12 months 643 550
Non-current - due after 12 months 1,352 1,145
Total Lease Liabilities 1,995 1,695
Payments of lease principal and interest in the period to 31 December were:
2025 2024
At 31 December £000 £000
Payments of lease principal 723 676
Payments of interest 147 92
Total Payments under Leases 870 768
The contractual undiscounted cash flows for lease obligations at each period
end were:
2025 2024
At 31 December £000 £000
Less than one year 761 638
One to five years 912 1,266
More than five years 1,371 -
Total Lease Liabilities 3,044 1,904
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:
2025 2024
£000 £000
Variable lease payments 316 298
Expenses relating to short-term leases 180 73
Expenses relating to leases of low-value assets 15 15
28 Other Non-current Liabilities
2025 2024
£000 £000
Deferred grant income 1,799 -
Other liabilities 13 -
Total Other Non-current Liabilities 1,812 -
Approximately £1.8 million of approved funding receipts had been received in
respect of project inventory and manufacturing activity associated with
materials in production at the reporting date. These amounts were recognized
as deferred income liabilities pending completion of the related manufacturing
and delivery milestones subsequent to year-end.
29 Issued Share Capital and Reserves
2025 2024
No: 000 £000 No: 000 £000
Authorised at 31 December 1,000,000 - 1,000,000 -
Issued and fully paid
At 1 January 440,561 53,473 191,067 51,348
Group reorganisation adjustment (440,561) (53,473) - -
Shares issued on redomiciliation 440,561 61,679 - -
Reduction of share capital - (57,273) - -
Issued in the year 128,205 1,282 249,494 2,125
At 31 December 568,766 5,688 440,561 53,473
On 9 January 2025, the Group completed a redomiciliation of its parent company
to the UK, as a result of which a new UK parent company became the holding
company of the Group. The redomiciliation was effected through a one-for-one
exchange of shares in the former parent company for shares in the UK parent
company and represented a reorganisation of the Group's legal and corporate
structure, resulting in the transfer of the share capital and share premium of
the former parent company to a merger reserve.
The Company also completed a court-approved reduction of capital pursuant to
the Companies Act 2006, resulting in the creation of distributable reserves.
On 30 September 2025, the Company issued 128,205,128 new ordinary shares with
a nominal value of £1,282,051. The total gross proceeds were £25,000,000
with the balance of £23,717,948 credited to the share premium account. Total
costs of issuance were £846,403 and these costs were charged directly to the
share premium account.
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.
30 Asset Acquisition
On 28 March 2026, the Group completed the acquisition of Uckfield Energy
Centre Ltd. and Uckfield Solar Electric Forecourt Ltd. In determining whether
Uckfield's set of activities was a business, the Group assessed whether it had
inputs and substantive processes which together contribute to the ability to
create outputs. Based on this assessment, the Group concluded that Uckfield
did not meet the definition of a business as defined by IFRS 3 Business
Combinations and therefore the purchase was treated as an asset acquisition
and no goodwill was recorded.
The total consideration transferred was £300,000. This amount was allocated
to the identifiable assets acquired and liabilities assumed based on their
relative fair values at the acquisition date. The total consideration was
allocated to property, plant, and equipment, and is disclosed as "Battery
Project Under Construction". Refer to note 16, property, plant and equipment.
Transaction costs of £40,102 were expensed in the period.
31 LoDES Project Grants
The Company was awarded a £10.0 million government grant from the DESNZ to
support product deployment activities in relation to the LoDES funding
program.
The project grants from DESNZ were recognized as follows:
2025 2024
Note £000 £000
Grant income against capital assets 16 5,700 -
Grant income accrued against capital assets 16 1,024 -
Grant income against other items of operating income 10 623 -
Grant income deferred 28 1,799 -
Total Project Grants 9,146 -
Total approved grant funding relating to 2025 project execution amounted to
£9.1 million, comprised of funding recognised within the current year,
deferred funding associated with manufacturing and delivery milestones
completed subsequent to year end and approved receivables contractually
committed by DESNZ at the reporting date.
In addition to the £9.1 million recognised or deferred in the year, £0.3
million was recognised in 2023, with a further £0.6 million recognised in
2026 following the reporting date.
The related funding has been recognized in line with qualifying project
expenditures and the achievement of applicable project milestones under the
relevant grant arrangement.
32 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 2025, 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 2025 (2024: 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.
33 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 operates internationally and is therefore exposed to foreign
currency transaction risk arising from sales and purchases denominated in
currencies other than the entities' functional currencies. The Group's
presentational currency is the pound Sterling, therefore the Group is also
exposed to foreign currency translation risks due to movements in foreign
exchange rates on the translation of non-sterling assets and liabilities.
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 on monetary items at the end of
the reporting period, expressed in GBP, was as follows:
Sterling Euro Canadian Dollar US Australian Dollar Total
Dollar
31 December 2025 £000 £000 £000 £000 £000 £000
Cash and cash equivalents 26,298 1,006 779 703 3 28,789
Trade receivables 3,157 - - 103 - 3,260
Contract assets 1,028 - 27 148 - 1,203
Other assets 3,677 21 1,778 280 - 5,756
Derivative financial instruments (135) - - - - (135)
Trade and other payables (4,298) (81) (2,704) (456) - (7,539)
Lease liabilities (1,236) - (467) (292) - (1,995)
Net Exposure 28,491 946 (587) 486 3 29,339
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
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.
2025 2024
At 31 December +/- 5% £000 £000
Euro 47 13
Canadian dollar (29) (65)
US dollar 24 32
42 (20)
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 between a quarter to a third 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.
At the reporting date, the Group's cash and cash equivalents and deposits were
held at financial institutions that met the Groups credit-rating requirements.
The Group considers a financial institution to be in default where there is
evidence of insolvency, regulatory intervention, or a significant
deterioration in credit quality below the Group's minimum rating thresholds.
The Group does not consider there to be any significant concentration of
credit risks in respect of its cash and deposit balances and does not expect
any material losses arising from non-performance by its banking
counterparties. Accordingly, no impairment has been recognized in respect of
these balances.
Credit Risk - Trade Receivables and Contract Assets
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 or at
delivery.
The Group assesses impairment of trade receivables and contract assets in
accordance with the expected credit loss model and applies the simplified
approach to recognize lifetime expected credit losses. Credit risk is managed
through ongoing monitoring of customer balances and ageing profiles or where
there is objective evidence that the customer or counter party may be a
default risk. Expected credit losses are recognised using a forward-looking
assessment that reflects historical experience, current conditions and
relevant economic factors.
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:
2025 2024
At 31 December £000 £000
Current 3,130 670
Past due - less than 30 days 60 20
Past due - more than 30 days 70 137
Total Trade Receivables 3,260 827
Past due amounts at 31 December 2025, related to 6 customers (2024: four
customers) and £492,130 (2024: £nil) was considered to be impaired.
The expected credit loss recognised on contract assets was £63,313 (2024:
£nil). Contract assets are presented net of the impairment.
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 2025 £000 £000 £000 £000 £000 £000
Trade and other payables 7,539 - - - 7,539 7,539
Derivative financial instrument 135 - - - 135 135
Lease liabilities 761 385 527 1,371 3,044 1,995
Total Financial Liabilities 8,435 385 527 1,371 10,718 9,669
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
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 26 May 2026, the Group had £15.0 million of cash on hand.
34 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.
35 Group Entities
Ownership %
Direct Subsidiary Undertakings Country of Incorporation Registered Office Principal Activity 2025 2024
Invinity Energy Systems Limited Jersey IFC5 Castle Street, St Helier, JE2 3BY Jersey Holding company 100% 100%
Indirect Subsidiary Undertakings
Camco Holdings UK Limited England 128 City Road, London, EC1V 2NX, United Kingdom Holding company 100% 100%
Invinity Asia Limited (formerly Invinity Energy Group Services 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 Nexus Limited England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 100% 100%
Invinity Energy Systems (U.S.) Corporation United States of America 1201 Orange St. #600 Energy storage 100% 100%
Wilmington, DE
USA 19899
Invinity Energy Systems (Canada) Corporation Canada 2900-550 Burrard Street Energy storage 100% 100%
Vancouver, BC
Canada V6C 0A3
redT Energy Holdings (UK) Limited England 128 City Road, London, EC1V 2NX, United Kingdom Holding Company 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 3.03, 24 Chiswell Street, London, England, EC1Y 4TY Energy storage 99% 99%
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 BESS Holdings Ltd England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 99% -
Uckfield BESS Ltd England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 99% -
Uckfield Energy Centre Limited England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 99% -
Uckfield Solar Electric Forecourt Ltd England 128 City Road, London, EC1V 2NX, United Kingdom Energy storage 99% -
Associates
Vanadium Electrolyte Rental Limited England 128 City Road, London, EC1V 2NX, United Kingdom Vanadium procurement 50% 50%
Invinity (HK) Limited Hong Kong 7/F Strand 71, 69-71 Bonham Strand West Sheung Wan, Energy storage and product development 20% -
Hong Kong
36 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 £763k. 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 by the Group for which
contracts had been placed but not provided in the financial statements at 31
December 2025 is estimated at £1.2m in relation to the LoDES funding program.
37 Events Occurring After the Report Period
In March 2026, DESNZ approved the final milestone payment for the LoDES
funding program following acceptance of the project's final report. All
Invinity VS3 battery units have been delivered to the project site and the
Company has now fulfilled its battery equipment supply obligations under the
DESNZ grant funding arrangement. The outstanding funding balance under the
program of £1,950,000 was received in 2026.
On 26 May 2026, the Group entered into a capital commitment for the purchase
of a conveyor system in the US with a total value of £576k.
Company Financial Statements
Invinity Energy Systems plc
Company Statement of Financial Position
As at 31 December 2025
Period to 31 December 2025
Note £000
Non-Current Assets
Investment in subsidiaries 2 66,527
Total Non-Current Assets 66,527
Current Assets
Other current assets 13
Trade and other receivables 3 11,364
Cash and cash equivalents 4 25,903
Total Current Assets 37,280
Total Assets 103,807
Current Liabilities
Trade and other payables 5 (13,821)
Other current liabilities (13)
Total Current Liabilities (13,834)
Net Current Assets 23,446
Net Assets 89,973
Equity
Called up share capital 6 5,688
Share premium 6 22,872
Distributable reserve 6 57,273
Share-based payment reserve 6 4,848
Accumulated losses (644)
Currency translation reserve 6 (64)
Total Equity 89,973
As permitted by section 408 of the Companies Act 2006, a separate income
statement for the Company has not been included in these Financial Statements.
The loss for the financial period is disclosed within the statement of changes
in equity.
The above company statement of financial position should be read in
conjunction with the accompanying notes.
The results of the year show a loss after taxation of £644k.
The Company financial statements were authorised by the Board of Directors and
authorised for issue on 29 May 2026 and were signed on its behalf by:
Adam Howard
Director
Invinity Energy Systems plc Registered Company number: 15892542
Invinity Energy Systems plc
Company Statement of Changes in Equity
For the 17 months ended 31 December 2025
Called up Share Capital Share Premium Distributable Reserve Share-based Payment Reserve Accumul-ated Losses Currency Transla-tion Reserve Total
£000 £000 £000 £000 £000 £000 £000
At incorporation (12 August 2024) - - - - - - -
Loss for the year - - - - (644) - (644)
Other Comprehensive Income
Foreign currency translation differences - - - - - (64) (64)
Total Comprehensive Loss for the Year - - - - (644) (64) (708)
Transactions with Owners in their Capacity as Owners
Shares issued on redomiciliation 61,679 - - - - 61,679
Reduction of capital (57,273) - 57,273 -
Investment funding arrangement, net of transaction costs 1,282 22,872 - - - - 24,154
Transfer of share-based payment reserve on redomiciliation - - - 4,047 - - 4,047
Share-based payments - - 801 - - 801
Total Contributions by Owners 5,688 22,872 57,273 4,848 - - 90,681
At 31 December 2025 5,688 22,872 57,273 4,848 (644) (64) 89,973
The above company statement of changes in equity should be read in conjunction
with the accompanying notes.
1 Accounting policies
Statement of compliance
Invinity Energy Systems plc meets the definition of a qualifying entity under
Financial Reporting Standard 100 (FRS 100) issued by the Financial Reporting
Council. The Company's financial statements have been prepared in accordance
with FRS 102, the Financial Reporting Standard applicable in the United
Kingdom and the Republic of Ireland
Basis of preparation
In preparing the Company's financial statements, advantage has been taken of
the following disclosure exemptions available in FRS 102:
- only one reconciliation of the number of shares outstanding at the beginning
and end of the period has been presented as the reconciliations for the group
and the parent company would be identical. Refer to note 29 to the Group
financial statements.
- no cash flow statement has been presented for the parent company
- disclosures in respect of the parent company's income, expense, net gains
and net losses on financial instruments measured at amortised cost have not
been presented as equivalent disclosures have been provided in respect of the
group as a whole
- no disclosure has been given for the aggregate remuneration of the key
management personnel of the parent company as their remuneration is included
in the totals for the group as a whole. Refer to note 8 to the Group
financials statements.
Where required equivalent disclosures are given in the consolidated financial
statements.
The financial statements cover the 17-month period from 12 August 2024 (date
of incorporation) to 31 December 2025. Accordingly, the amounts presented are
not directly comparable to those that would be presented for a standard
12-month period. As this is the Company's first reporting period, no
comparative information has been presented.
Subsidiary companies exempt from audit
For the year ended 31 December 2025, the following subsidiary undertakings
have taken advantage of the exemption from audit under section 479C of the
Companies Act 2006:
Camco Holdings UK Limited (03952061)
Invinity Energy Nexus Limited (13366462)
redT Energy Holdings (UK) Limited (05649251)
Re‑Fuel Technology Limited (03955925)
Invinity Energy (UK) Limited (07640710)
Invinity Energy BESS Holdings Ltd (16357834)
Uckfield BESS Ltd (16357809)
Uckfield Energy Centre Limited (16331420)
Uckfield Solar Electric Forecourt Ltd (10268743)
The Company has, at the date of approval of these financial statements,
provided guarantees under section 479C of the Companies Act 2006 in respect of
the above UK-incorporated subsidiary undertakings.
The guarantees cover all outstanding liabilities to which each subsidiary was
subject at the end of the financial year and which remain outstanding at the
date of approval of the Company's consolidated financial statements.
The parental guarantee statements will be filed with the Registrar of
Companies in accordance with the requirements of the Companies Act 2006.
Significant accounting judgements, estimates and assumptions
In preparing the Company's financial statements, the Directors have applied
judgement in assessing the carrying value of investments in subsidiary
undertakings.
The key judgement relates to the assessment of whether there are any
indicators of impairment in respect of these investments. In making this
assessment, the Directors consider a range of factors, including the financial
position, performance and prospects of the relevant subsidiary.
Where indicators of impairment are identified, the carrying amount of the
investment is compared with its recoverable amount and an impairment charge is
recognised where the carrying value exceeds the recoverable amount. In
determining the recoverable amount, the Directors consider the net asset value
of the underlying subsidiary entities to be an appropriate proxy for fair
value less costs to sell.
Going concern
The Company's financial statements have been prepared on a going concern
basis. The Directors have assessed the Company's ability to continue as a
going concern and consider that it remains appropriate to adopt this basis of
preparation. Further details are included in the Group financial statements.
Investments in subsidiary undertakings
Investments included in assets are investments in subsidiary companies and
these are stated at cost less accumulated impairments losses. The carrying
value is reviewed for impairment where indicators exist.
Financial instruments
Financial assets and financial liabilities are recognised when the Company
becomes party to the contractual provisions of the instrument and are
initially measured at transaction price.
Financial assets, including trade and other receivables, are subsequently
measured at amortised cost using the effective interest method, less any
impairment.
Financial liabilities, including trade and other payables, are subsequently
measured at amortised cost using the effective interest method.
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
Ordinary shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity instruments. The cost of issuing
ordinary shares is charged to the share premium account.
Share-based payments
In the Company financial statements, the cost of equity-settled share-based
payments relating to employees of subsidiary undertakings is recognised as an
increase in the investment in subsidiaries.
2 Investment in subsidiary undertakings
The movement in the year was as follows:
2025
£000
Opening balance -
Additions
- Shares issued on redomiciliation 61,679
- Share-based payment capital contributions 801
- Share-based payment reserve transfer 4,047
Closing balance as at 31 December 2025 66,527
The additions in the year represent the investment in Invinity Energy Systems
Jersey after the redomiciliation of the parent company to the UK. Refer to
note 29, Issued Share Capital and Reserves.
On 9 January 2025, the Company became the ultimate parent undertaking of the
Group following a redomiciliation to the UK. This was effected through a
one-for-one exchange of shares with the former parent company and has been
recorded at the carrying value of the net assets acquired.
Note 35 in the Group financial statements provides a comprehensive list of all
subsidiaries of the Company.
3 Trade and Other Receivables
2025
£000
Intercompany receivables 11,052
Prepayments and deposits 83
Tax credits - recoverable 42
Other receivables 187
Total Trade and Other Receivables 11,364
4 Cash and Cash Equivalents
2025
£000
Cash 903
Term deposits 25,000
Total Cash and Cash Equivalents 25,903
Term deposits up to 6 months are presented as cash equivalents if they are
highly liquid, readily convertible to a known amount of cash and are subject
to an insignificant amount of risk of change in value.
Subsequent to the year-end, a 6-month term deposit in the amount of £15
million matured in April 2026 and was reclassified to cash.
5 Trade and Other Payables
2025
£000
Intercompany payable 13,256
Trade payables 251
Accrued liabilities 314
Total Trade and Other Payables 13,821
Trade payables are unsecured and are usually paid within 30 days.
6 Issued Share Capital and Reserves
2025
No: 000 £000
Authorised at 31 December 1,000,000 -
At incorporation (12 August 2024) - -
Shares issued on redomiciliation 440,561 61,679
Reduction of share capital - (57,273)
Issued in the year 128,205 1,282
At 31 December 568,766 5,688
Share Capital and Share Premium
The share capital represents the issued capital in respect of issued and
paid-up shares, at their par value. The Company has one class of ordinary
shares with a nominal value of £0.01 per share. The share premium represents
the surplus of the gross proceeds of share issues over the nominal value of
the shares, net of the direct costs of equity issues.
Distributable reserves
During the year, the Company completed a court approved reduction of capital
which resulted in the creation of distributable reserves. No dividends were
declared or paid by the Company during the year ended 31 December 2025.
Share-based payments
The share-based payment reserve represents the recognition of the value of
services from employees in exchange for its own equity instruments.
Note 9 of the Group financial statements provides details of share-based
payments of the Group. The amounts disclosed are the same as those of the
Company. The only difference to that policy is that the costs relating to
share-based payments are capitalized in the parent as part of the investment
in the Group's subsidiaries, as they relate to employees of those
subsidiaries.
Accumulated Losses
The accumulated losses represent cumulative net gains and losses recognised in
the statement of comprehensive income.
Currency Translation Reserve
The currency translation reserve represents foreign currency differences
arising from the revaluation of intercompany loans with foreign operations.
7 Auditors' Remuneration
Note 7 of the Group financial statements provides details of the remuneration
of the Company's auditors on a Group basis.
8 Related Parties
The Company's immediate and ultimate parent undertaking is Invinity Energy
Systems Limited, incorporated in Jersey.
The Company has taken advantage of the exemption under Chapter 33 - Related
party disclosures of FRS 102 not to disclose transactions with wholly owned
subsidiaries.
The remuneration of the key management personnel and close members of their
family is disclosed in the Group financial statements.
9 Events Occurring After the Report Period
Note 37 of the Group financial statements provides details of events occurring
after the reporting period for the Group and Company.
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