REG - Powerhouse Energy Gp - Audited Results for Year Ended 31 December 2024
10/06/2025 07:00
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RNS Number : 0917M Powerhouse Energy Group PLC 10 June 2025
10 June 2025
Powerhouse Energy Group plc
("Powerhouse" or the "Company")
Audited Results for the Year Ended 31 December 2024
Powerhouse Energy Group plc (AIM: PHE), a company pioneering integrated
technology that converts non-recyclable waste into low carbon energy, is
pleased to announce its audited results for the year ended 31 December 2024.
Summary:
Corporate:
· Strategy focused on delivering licensing fees, royalties and
engineering services revenues, together with select project development
· During the period the Company prioritised and, more importantly,
validated projects to be progressed, both where Powerhouse would act as
developer and those where it would licence technology
Commercial development:
· National Hydrogen (NH2), Australia - framework agreement signed in
2024
· Completion of Powerhouse Technology Centre in Bridgend, with the
2.5 tonne per day kiln for the Feedstock Testing Unit (FTU).
Technology and Innovation:
· Key patents granted in a number of regions expected to become key
markets for the Company
· Eight patents granted to date with further patents pending within
the UK, Europe and rest of the world
Financial:
· Revenue for 2024 was £499k (2023: £181k).
· The Group reported an operating loss of £4,705,025 (Included
£2,300,000 Goodwill Impairment) in 2024 (2023: £1,427,647).
· Cash at bank of £ 1.31m (2023: £4.34m).
· In 2024 Engsolve grew its annual revenues (including inter-company
revenue) from £0.8 million to £1.38 million
· Fundraise of £1.375m completed post the year end
Outlook:
· Group goals of delivering first projects and creating a qualified
pipeline
· NH2 FEED expected to be completed by the end of June.
· Ballymena which progressed slowly during 2024, expected to be back
on schedule H2 2025
· Engsolve secured contracts worth just over £1 million in the first
four months of 2025 - contracts gained are made up of both new and returning
clients - with a good funnel of work via Engsolve going forward
· Focus on marketing the FTU in 2025
· Long term pipeline of promising projects in the UK and overseas, with
a significant increase in enquiries for services post completion of FTU
David Hitchcock, Non-Executive Chairman, commented:
"The period under review has seen us consolidate our position whilst
continuing to re-assess the focus of our business and strategy in order to
ensure we provide the best potential returns for our shareholders in the
future.
The highlight of the year was undoubtedly the completion of the FTU which now
sits proudly at our head office. We all knew that this was a hugely
significant milestone for the Company and in the few months since it has been
in place it has already proven to be that. The FTU enables us to show off
why our technology is so innovative whilst also proving up our process. The
responses and feedback that we have already seen since March this year have
been amazing.
2025 is already shaping up to be another strong year for the Company. We are
financially secure, we have a very strong pipeline of projects and future
projects, Engslove is performing very well and we have a stable board with the
right expertise to deliver our strategy.
I would also like to take this opportunity to thank our shareholders for their
continued support during the year and look forward to welcoming you all again
to our head office to see if FTU if you have not already done so."
Paul Emmitt, Chief Executive Officer, commented:
"2024 saw the Company continue to put the building blocks that were needed to
grow the Company. Whilst we have continued to progress some of our key
projects in the period the highlight of the year was the delivery of the FTU
to Bridgend and its implementation and completion. Delivery of this on
schedule and on budget was a testament to the hard work of all our staff and I
would like to take this opportunity to thank them for all their continued
efforts.
We now have something tangible with which we can showcase our technology.
What I have been most delighted by is the responses and enquiries that we
have already seen. We are very confident that a number of these will
transpire into tangible new business opportunities for Powerhouse going
forward.
We believe that the year ahead is already promising to be another good one for
the Company and are looking forward to achieving our goal of delivering our
first project."
A full copy of the Company's Report and Accounts for the year ended 31
December 2024 will be sent to shareholders shortly and available on the
Company's website www.phegroup.com (http://www.phegroup.com) together with the
Notice of Annual General Meeting to be held on 10 July 2025 at 12.00pm at the
Company's registered office at Unit 3/3a Garth Drive, Brackla Industrial
Estate, Bridgend, Wales, CF31 2AQ.
For more information, contact:
Powerhouse Energy Group Plc +44 (0) 203 368 6399
Paul Emmitt, CEO
Strand Hanson Limited (Nominated & Financial Adviser) +44 (0) 207 409 3494
Ritchie Balmer / Rob Patrick / James Harris
SP Angel Corporate Finance LLP (Broker) +44 (0) 20 3470 0470
Stuart Gledhill / Adam Cowl
Tavistock (Financial PR) +44 (0) 207 920 3150
Simon Hudson / Nick Elwes powerhouse@tavistock.co.uk (mailto:powerhouse@tavistock.co.uk)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended.
About Powerhouse Energy Group Plc
Powerhouse has developed a process technology which can utilise waste plastic,
end-of-life-tyres, and other waste streams to convert them efficiently and
economically into syngas from which valuable products such as chemical
precursors, hydrogen, electricity, heat and other industrial products may be
derived. PHE's process produces low levels of safe residues and requires a
small operating footprint, making it suitable for deployment at enterprise and
community level.
PHE also incorporates Engsolve Ltd, which is a revenue generating business
offering Engineering Services across all sectors, with speciality services in
the development of new technologies and clean energy.
For more information, see www.phegroup.com (http://www.phegroup.com) and
www.engsolve.com (http://www.engsolve.com)
CHAIRMAN'S STATEMENT
I became the interim Chairman of Powerhouse Energy ('PHE') in January 2024
after the departure of the previous Chairman Antony Gardner Hillman. On
3 June 2024 I was honoured to be confirmed as the Chairman and wish to
thank my fellow Board members for their confidence and on going support as I
lead the Company to achieve its growth goals.
The Board's strategy for 2024 was to plan for a year of consolidation,
stability, strategic implementation and financial prudence. I am pleased to be
able to report to you that sound progress has been made and explain what that
means for 2025.
Our Board for the first time in many years has seen no changes of personnel.
We now have a highly experienced group of Directors with long careers in
Engineering or Finance which is vital for decision making. I would like to
thank them for all their efforts and wise counsel as we have worked through
the implementation of the "new" corporate strategy.
This strategy was designed and implemented during 2024. It includes a series
of joint venture arrangements with project development partners. We are
particularly excited, for example, by progress on our projects in Ballymena,
Northern Ireland and with National Hydrogen in Australia and Asia. Both these
projects offer potentially excellent returns for our shareholders on a costed
basis as do the other projects in our pipeline.
We have looked carefully at all opportunities including historic ones. The
Protos project which I inherited was terminated in March 2025 as we have
concluded that the original deal makes no economic sense to Powerhouse
shareholders. We see no upside in extending the lease on the terms offered by
our then partners Peel Group.
The building of our new Technology Centre in Bridgend is hugely important. It
was designed and planned as a platform to establish a leading position for us
in the waste-to-energy sector. We saw the mechanical completion of the
Feedstock Testing Unit ('FTU') which is central to the development of PHE as a
technology developer in December 2024 which subsequent to the year end is now
fully tested, operational and provides a showcase for the Company's DMG
Technology. We have held a series of Open Days for shareholders and industrial
customers alike throughout February with very good feedback. The completion
of the Technology Centre generated significant interest from a number of
global stakeholders, a number of which the Board are following up in H2 2025.
In 2024 and into the start of 2025, we were granted new patents strengthening
our technology position with other patents likely to be awarded in H2 2025.
We are also now exploring the right mix of equity and project finance options,
given our growing list of project opportunities, to be ready on a case-by-case
basis. The Company is secure financially after our recent raise which enables
us to plan ahead.
The Board expects to see Powerhouse prove its viability in a commercial
context in late 2025, whilst we develop our working relationships with third
parties and maintain their confidence in order to deliver our projects
economically.
Finally, I wish especially to thank the Executive Directors CEO Paul Emmitt
and CFO Ben Brier for the work they have done across the Group. Through this
hard work we have entered 2025 on a sound technical, commercial and financial
footing. The year ahead promises to be an exciting one as we implement our
business plan for growth and progress our vision for Powerhouse.
David Hitchcock OBE
Non-Executive Chairman
Date 9 June 2025
CHIEF EXECUTIVE OFFICER'S REVIEW
The year under review was the most productive in recent years for Powerhouse,
it has not always been plain sailing and it has been beneficial to the
executive team that we have had a full year of stability on our Board bringing
their extensive experience in support of the management across Finance,
Infrastructure Project Management and Technology and has shown they have moved
the Group towards its goal of trading profitably and being at the forefront of
the waste-to-energy sector.
My objective in 2024 and 2025 is and was to refocus the Group on the goals of
delivering its first projects and create a qualified pipeline. These are
projects that have met important criteria that includes, but is not limited
to, planning permissions, a feedstock agreement detailing what and how much
feedstock is available, an offtake agreement, an agreement that details what
the required output is (Syngas, heat, hydrogen). This enables the Powerhouse
team to assess technical commercial and financial viability of a project
before we invest time and capital developing them to progress the Group
towards becoming a profitable enterprise. We caried out a full project review
and have prioritised certain projects as detailed below and this review has
also seen others terminated including the former flagship project Protos with
Peel which was terminated fully at the end of March 2025 as the terms that
have been offered are not in the Company's best interest to accept.
Pipeline Highlights
The prioritised and more importantly validated projects that progressed in
2024 and will remain the focus of operations are:
National Hydrogen, Australia
Whilst progressing more slowly than anticipated and as part of the five-year
framework agreement signed in November 2024, we received an order for the
Front-End Engineering Design (FEED) from National Hydrogen (NH2), This work
commenced in January 2025 by Engsolve and should be completed by the end of
June 2025.
The next phase of this project will be under NH2 control, which will be
obtaining the planning and permitting for the facility along with them
securing full funding.
Ballymena, Northern Ireland
As with NH2, Ballymena is a validated project but it met some head winds with
regards the site during H2 2024 that slowed projected progression. These have
now been successfully dealt with and we are back on track to progress the
project in Q3 2025.
• The proposed facility is a single train 40 Tonne Per Day (TPD)
plant, taking in 40 Tonne Per Day of non-recyclable feedstock, and has been
designed to produce approximately 3 tonnes of Hydrogen per day, along with
approximately 1.3 MW (e) exportable power. The location is ideal in that it
has most of the required infrastructure in place, is a flat rectangular site,
on an industrial zoned larger site. It has good transport links, with a number
of potential Hydrogen offtakers in a small radius of the proposed facility.
• Next steps include the submission of a planning application in
conjunction with the landlord, scheduled to take place in H2 2025. Once we
have the first response on planning, if positive, we will commence the permit
application for the facility.
• We have instructed lawyers on drafting an Agreement to lease.
• We have commenced the planning application utilising local
consultants.
• We have met with both the Michelin fund legacy fund manager
and invest NI concerning potential funding.
• We have an indicative feedstock agreement in place but are
also speaking to an alternative supplier to ensure supply. Both of these
alternatives are local to the site.
• We have engaged with Hydrogen offtakers and discussions are
ongoing.
• We have the full support of Mid and East Antrim Council where
the project is situated.
• The strategy for the facility is PHE will take the development
through FEED to Financial Investment Decision and look to raise project
finance either alone or with a partner to construct the facility.
Longford, Ireland
On agreement with HUI this project is on hold and PHE is spending no further
monies on its development in the short term.
Plastics to Hydrogen No1 (Protos)
The previously agreed option agreement on the plot at Protos (1b) was due to
be renewed at the end of March 2025. PEEL indicated that there would be no
extension to the option, and we would have to take on the 25 year lease for
the site. This was not a viable option, despite the planning and draft permit
being in place. To this end we have terminated the agreement with PEEL and
let the lease go. This not only saves £150k of annual cost but based on the
Ballymena lease being a third of the cost we believe the right decision
economically for PHE.
With the Feedstock Testing Unit (FTU) in place and something tangible and
impressive to show potential clients we have renewed our focus on marketing
and have been encouraged by the interest shown by the market and potential
partners.
Corporate and Operational Highlights
Patents
This year has seen PHE get approval for our patents in a number of different
regions, and the current patent position is outlined below.
Patent Family
Fuel Mix Temperature zones Steam Ratio
Australia Pending Pending Pending
Canada Pending Pending Pending
Europe Granted Granted Pending
GCC Pending Pending Pending
Hong Kong Granted Not filed Not filed
Indonesia Pending Pending Pending
Japan Granted Granted Dropped
USA Pending Granted Allowed
UK Granted Under Europe Under Europe
Technology Centre
The technology centre including the FTU was completed on time and under
budget, a Capital Markets Day was held on the 4th of March 2025.
The Pilot plant - or as we refer to it the FTU, has a capacity of up to 2.5
Tonne per day of feedstock. This is fed via a screw feed into the DMG unit,
where temperatures can reach 1100 °C, the sequestrated carbon is then fed out
of the bottom of the DMG unit and the generated hot Syngas from the top of the
DMG unit into a purpose-built quench and gas cleaning system. From the Gas
clean-up system, the now cold and cleaned Syngas runs through a
state-of-the-art gas analyser before exiting to the external ground flare. The
FTU was designed to showcase the DMG technology on a pre commercial scale.
The FTU also allows PHE to demonstrate its IP, provide testing for future
clients and to further develop its offerings. It was designed, built and
commissioned by Engsolve, and will be operated by PHE. The PHE research and
development team will utilise the system for development, process optimisation
and for the development of future IP.
We are offering testing packages for those with non-recyclable waste, and have
the capacity to allow third parties to test their downstream processes by
utilising the syngas output from the FTU.
Engsolve
The full acquisition of Engsolve in the prior year has proved extremely
beneficial to the PHE Group. Engsolve has provided the group with critical
engineering services enabling us to design and build out the Technology Centre
as well as providing much needed revenue.
In 2024 Engsolve grew its annual revenues from £0.8 million to £1.38
million, this came from both new and existing customers and saw Engsolve move
into the development of pilot plant facilities from lab-based designs. With
the design and build of a pilot plant for TrimTabs Ltd, and the build of the
Feedstock Testing Unit for PHE.
2025 is looking like a strong year for Engsolve with approximately £1m of
revenue secured for the year by the beginning of Q2.
Financial Highlights
The highlights from the financial report are as follows. Further information
is covered in the strategic report.
The Group reported an overall loss in 2024 of £4,705,025 (Included
£2,300,000 Goodwill Impairment) as it continued to develop the technology and
pipeline. This was compared to a loss in 2023 of £1,427,647.
Revenue for 2024 was £499,414 (2023 £180,959) which was derived from
Engsolve Limited which became part of the Group in June 2023. This revenue was
generated through Engsolve providing Engineering Services to third party
customers. The Group will be looking to continue providing third party
Engineering Services through Engsolve Ltd and to further develop this revenue
stream, both through internal and external work. Non engineering revenues will
be generated by Powerhouse Energy as laid out in the business strategy below.
Business strategy
Our business strategy as laid out in Q4 of 2023 has been the at the centre of
our business through 2024 and we have had little recourse to move away from
the strategy of building a focussed waste to energy business based on syngas
as our initial output. The successful and profitable production of hydrogen
still relies heavily on the growth of demand to ensure offtake. Demand is
growing, and we continue to field several opportunities but we also need to be
wary of investing ahead of market adoption. The Board has every confidence
this demand will continue to increase and by the end of this decade, the use
of hydrogen as both a heavy transport fuel and industrial natural gas
substitute will be common. Powerhouse is in an excellent position to take
advantage of this and, in parallel will leverage other sources of revenue. The
recent full integration of Engsolve into the Group provides this opportunity
and in the Strategic Report we set out the role Engsolve will play.
Our strategy is now one focussed on Licensing fees, Royalties and Engineering
Services revenues which include potentially providing third party testing of
waste streams at the Brackla Technology centre. This concentrates funding
needs to that of costs of operations, further research and development to
prove our technological capabilities and reduces the need for substantial
project based capital investment. This accordingly de-risking the financial
position of the business, until such time that revenues generate sufficient
free cash flow to self-fund operations.
In summary, following a few years of instability, Powerhouse now has an
established and experienced Board with a focussed strategy. Projects that do
not meet the strict criteria set by the Board are declined and we have a
pipeline of exciting project opportunities that are commercially and
financially suitable. In addition, we have a good funnel of work via Engsolve
from which we can grow our revenue, and the integration of Engsolve with the
wider Group continues to strengthen our technical capabilities and improve
efficiency in the business.
Paul Emmitt
Chief Executive Officer
9 June 2025
STRATEGIC REPORT
This strategic report presents the Directors' opinion regarding the future
direction of the Group and contains certain forward-looking statements. These
statements are made by the Directors in good faith, based on the information
available to them at the time of writing and such statements should be treated
with caution as they address uncertainties.
Path to revenue profit and valuation strategy
Revenue
During 2024 the Group received £499,414 (2023: £180,959) of revenue from
Engsolve Ltd
Profit and Loss
The board focused on cost cutting alongside project development in 2024
(Administrative expenses figures in 2023 included a credit of £712k for fair
value adjustment). This streamlined the company, made the company more
efficient and enabled more focus on developing future projects.
Goodwill
The Directors reviewed last year's key assumptions and came to the conclusion
that the Goodwill acquired by the Group in 2020 arising on the acquisition of
Waste to Tricity Limited of £2,300,000 should be impaired in full at the year
ended 31 December 2024. The Group acquired £573k of Goodwill in 2023 due to
the acquisition of Engsolve Ltd. The Group completed an impairment review and
fair value review of Engsolve Ltd as part of our year end Accounts FY 2024.
The outcome of this impairment review was that we believe the Goodwill
valuation at £573,581 should not be impaired at the year-end Dec 2024. The
Key assumptions and sensitivities of the above are set out in Note 10
intangible assets and 1.2 Judgements and estimates.
The Vision and the Mission
Powerhouse's vision remains to be a leader in technology solutions that
utilise non-recyclable wastes to produce sustainable energy whilst mitigating
climate change impacts.
The Group's mission is to provide flexible, innovative solutions to global
pollution and adverse environmental impacts by converting such non-recyclable
wastes into valuable end-products, including low carbon energy. We will work
with clients and partners to evaluate, design and develop facilities and will
license third party developers to deliver similar facilities that reduce
environmental impact.
The Commercial Offering
The commercial offering of Powerhouse is to apply its expertise in engineering
and technology delivery to the development of facilities that can generate
continuous profit streams for the Group through design consultancy and client
management fees, licensing and royalty agreements. It specialises in low
carbon energy production from waste materials but is able to apply its
know-how and expertise to any application that reduces the impacts to the
environment, both pollution and climate change.
The Group has developed as its core technology in pyrolysis/gasification and
proprietary control system, based upon the Powerhouse Energy Rapid Modelling
System that can process organic or fossil-based carbonaceous materials using
pyrolysis and gasification. This produces a synthetic gas (or syngas) that can
produce a range of products including:
· Gaseous fuels
· Electrical power
· Heat
· Chemical feedstocks
· Char
· Liquid fuels
Sources of Revenue
Our revenue generation will be derived from:
· Licensing our technology to developers globally
· Royalties - revenue sharing from output of Powerhouse designed
solutions
· Engineering design
· Project and client engineer fees
Project Development
To develop an operating waste-to-energy facility based on the Powerhouse
solution requires a construction and commissioning programme of at least 18
months. Specialist materials are required for some of the equipment due to the
high operating temperatures, especially with hydrogen as the required output.
This means that some of the equipment can only come from specialist
manufacturers and the delivery periods are currently longer than historically
due to ongoing supply chain issues. Prior to construction, it is necessary to
obtain planning permission and the necessary environmental permits, so the
typical project cycle time from conception to reality of a Powerhouse
technical solution is around four years. With other configurations - for
example, an electricity generation only facility - it can be a few months
less, but not substantially shorter. Whatever the period of development,
construction and setting to work, the Group previously earned no revenue
during that period whatever business model was adopted. The current strategy
will include payment for feasibility and engineering designs before financial
close. Therefore, it is increasingly important that projects are validated
more stringently before heavy costs are incurred.
Prior to implementing the present strategy, shareholder funds have financed
the Group's working capital. This will remain the case until greater revenues
are earned from design fees and long term licensing and profit share. As
mentioned, Powerhouse will not actively look to engage in developing projects,
whether in partnership or alone given the difficulty of a Group of our size
being able to raise project capital. This position could potentially change in
the event of the right project with the right partner who would give the
markets sufficient confidence that Powerhouse could go to the market and raise
the additional capital funding, The Ballymena project may be one such a
project where Powerhouse does take a larger role in the development but it
is too early to make such a decision.
It was anticipated that Engsolve, which is now fully integrated within the
Powerhouse Group and bringing with it a history of providing engineering
services to third party clients, would contribute to revenue. This has been
successful in 2024 and will continue to contribute greater to the Group's
revenue as we look to grow Engsolve's client and sector base. It has formed a
more stable and less risky base on which the Group can build a revenue stream,
both internally and externally, whilst the capital projects are developed. In
order to grow Engolve's contribution we foresaw the requirement to recruit
some new personnel and a deliberate drive to sell these services as the
business grows. Engsolve has an existing base and a successful track record.
With positioning of the Group within its specialist areas, it will be possible
to build the client base rapidly, producing income from engineering services
to reduce the cash requirement from shareholder funds.
Research & Development (R&D)
Powerhouse initially tested its technological capabilities in practice using
the Demonstrator Unit in Thornton to convert feedstock into syngas, at a
relatively small scale but which provided the Group with significant data and
information on the process. As the new Technology progressed the decision was
taken to close down Thornton. The purpose-designed FTU has now been fully
commissioned and is operating in our head office in Bridgend. The FTU will
have a capacity of 2.5 tonne per day of waste.
The FTU is essentially a much larger version of the Demonstrator Unit and is a
scaled version of the proposed commercial Thermal Conversion Chamber (TCC)
which will allow testing of the commercial operating plant to be carried out
under controlled conditions. The commercial TCCs are expected to have
capacities in the range of 40 tonne per day. It is anticipated that this will
enable the Powerhouse technology to be demonstrated in practice, independent
of building the commercial unit and hence give comfort to potential investors
that the technical risk can be mitigated.
It is the directors' firm belief that the use of thermal processes such as
pyrolysis and gasification will grow in forthcoming years as chemical
recycling develops and overtakes, and possibly replaces for some materials,
physical recycling. Building the Group's expertise and knowledge in this field
will allow Powerhouse to be at the forefront of this transition. The ambition
is for the Group to be the go-to Group in the UK for these thermal treatments
and associated materials behaviour, and for the Powerhouse Technology Centre
to become a profit centre in its own right.
Road to Revenue
Following this year's Capital Markets Day and a concerted effort to raise
marketing visibility, Powerhouse has seen a significant increase in interest
from global stakeholders. Enquiries have come from a broad spectrum, including
blue-chip companies and environmental NGOs. This surge in engagement has
provided PHE with valuable insight into market requirements and the specific
challenges clients face, such as reducing landfill dependency, replacing
fossil fuels, and progressing toward Net Zero targets. These insights have
shaped a focused revenue strategy.
PHE is concentrating its efforts on a defined group of potential clients who
are best aligned with its technological offerings. These include large waste
producers and handlers, local councils and municipalities seeking sustainable
waste solutions, current incinerator operators exploring alternative
technologies, and heavy industries that are significant energy users looking
to decarbonise.
What differentiates PHE in the marketplace is its unique set of advantages.
The DMG technology is proven and demonstrable through an operational pilot
plant. Its ability to support carbon sequestration initiatives makes it
particularly attractive in a climate-conscious market. The modular design of
the technology allows for adaptable outputs tailored to different client
needs, whilst its flexible feedstock capabilities enable processing of a wide
variety of waste types. In terms of market positioning, PHE effectively
bridges the gap between conventional landfill solutions and large-scale
energy-from-waste facilities.
PHE has established three core commercial offerings to cater to a wide range
of client requirements and financial scenarios.
The first model is the turnkey delivery of a 2.5 tonne per day unit (which is
the equivalent to the scale of the FTU). This solution is being positioned as
a standalone product with the potential for rapid deployment. Clients benefit
from a streamlined process from order to operation, typically completed within
8 to 12 months. In addition to the core product, clients receive service and
maintenance support, as well as access to PHE's licensed technology. This
model provides PHE with a fast-track revenue stream and offers clients a
low-barrier entry point.
The second offering follows a technology provision model, like that used in
the National Hydrogen project. Under this arrangement, PHE delivers a paid for
FEED through its engineering partner Engsolve. Engsolve then supports the
client's team throughout the detailed design phase. PHE retains intellectual
property rights, which are licensed annually, and collects royalties from the
facility's product output. Although this model provides less control over the
project timeline, it is a low-risk and a long-term revenue generator. For a
typical 40 tonne per day hydrogen-generating facility, annual royalty revenues
are estimated to be around £1 million. Revenue usually begins between 24 to
30 months after completion of the FEED.
The third model involves the full design, build, and operation or sale of a
facility. This approach allows PHE to maintain control from inception to
completion, including the planning, permitting, and funding stages. While this
strategy involves higher risk and longer timelines, it also promises
significantly higher returns, reflecting the increased project ownership and
associated investment-grade internal rates of return. Once all permits and
funding are secured, construction is expected to take between 18 to 20 months.
PHE is actively engaged in several projects aligned with these three
offerings.
The National Hydrogen project, following the technology provision model, is
currently in the FEED phase, which is scheduled for completion in June 2025.
Planning and permitting applications will follow shortly thereafter. The
onboarding of the engineering, procurement, and construction (EPC) contractor
is still pending, and build start dates remain undetermined. PHE expects to
begin receiving revenue from this project approximately 30 months after the
start of construction.
The Ballymena project falls under the design, build, and operate/sell model.
The site has been secured and cleared, with the pre-FEED phase completed.
Planning and permit applications are scheduled for submission in July 2025,
alongside the signing of the agreement to lease. One feedstock agreement has
been finalised, and negotiations are ongoing for additional contracts and
hydrogen offtake agreements. Debt and project finance discussions are also
underway, and decisions are currently being made regarding the EPC versus EPCm
route. Assuming funding is secured, and project timelines are met as expected,
revenue generation from this project is estimated to begin in the first
quarter of 2028.
In Thailand, PHE is working with Altec Energy on development plans to deploy a
2.5 tonne per day plant. Engagement with the client has been ongoing for
several months. Waste feedstock is available, and the focus is now on sourcing
local equipment, obtaining finance and accelerating the construction timeline.
Whilst revenue forecasts are still being confirmed, the current strategy is to
market this model as a packaged product. A brochure is being developed to
detail the turnkey solution, with the goal of securing a contract within 2025.
Engsolve, the 100% subsidiary and engineering arm of PHE, continues to play a
crucial role in project delivery and revenue generation. In 2024, Engsolve
achieved a turnover of £1.38 million (including Intercompany revenue). In the
first four months of 2025 alone, it has secured just over £1 million in new
orders. Two of these are long-term contracts for emerging technologies, with
potential for continued growth into 2026.
To support the rollout of DMG facilities and expand third-party service
offerings, Engsolve plans to establish a local presence near each site. This
approach will not only facilitate operational support but also contribute to
broader revenue streams for the group.
Powerhouse will strategically grow both its own team and the Engsolve team
over the next 12-18 months to allow us to meet market demands and offer a
wider service to clients.
Powerhouse is well-positioned to transition from demonstration to
commercialisation. By deploying its proven technology through a structured and
diversified revenue model, the Company is prepared to meet global demand for
its sustainable waste-to-energy solutions.
The strategic alignment of offerings, client targeting, and project execution
will serve as the foundation for long-term growth and value creation.
PRINCIPAL RISKS AND MITIGATIONS
The Board of Directors is responsible for ensuring that the risk register is
maintained and updated. This ensures a reasonable, but not absolute, assurance
that significant risks are mitigated and managed to an acceptable level.
The Executive Directors are responsible for establishing and maintaining the
risk register on all capital projects. This identifies risks and assesses
their potential impact using quantification techniques. Mitigations are then
considered, and the residual risk identified.
Significant risks are those which if materialise will have material impact on
the Group's long-term performance and delivery of its business strategy. These
are summarised in the following table.
Risk Description Mitigation
Operations Greater than anticipated increases in global pricing and pressures on supply All suppliers to be pre-qualified for their relevant experience and stability.
chain adversely impact financial viability of capital projects.
Regular review of supply chain and maintain competitive tension.
Supply chain manufacturing capacity is constrained and cannot meet required
delivery times.
General cost-side inflation will be reflected in offtake price escalation.
Longer development timescales than anticipated.
Contract security and performance requirements to be included in all major
supplier contracts, where possible.
Key contractors/suppliers are unwilling to provide required performance
guarantees.
In-house team to be strengthened with competent personnel, whilst also working
with experienced partners.
Technical Risk Risk that the technical solution chosen does not perform to the standards Pyrolysis and gasification are well established technologies, widely reported
anticipated. in research literature.
Substantial testing of the feedstock conversion to syngas process has been
carried out by PHE using the Demonstrator Unit at Thornton.
Powerhouse works with academia to deploy latest computer-aided tools.
Independent due diligence on the process will be carried out prior to
implementation.
The new FTU installed at Bridgend will have the capability of simulating the
commercial kiln to enable predictive testing to be performed.
Intellectual Property Patent applications may not be granted. Patents give Powerhouse unique control over its technology, but knowhow and
expertise is considered to be more important and can mitigate against copying.
Patents may be contested.
Align Patent maintenance with strategic business needs. Ref: Page7 Chief
Executive Officers Overview
Maintaining patents is costly and cannot cover the whole world.
Government Policy Drivers of demand for pollution reduction, recycling and climate change Maintain presence and communicate with government departments on Low Carbon
avoidance rely on support from Government policy. Fuels Standards.
Policy supports for reducing CO(2) emissions and counterfactuals are important Currently counterfactuals are not recognised within UK policy.
to provide Powerhouse with competitive advantage.
Competition Competition may depress revenues or even act as a barrier to Powerhouse's The evidence to establish and deliver commercial projects acts as a high
entry to the market. barrier to entry, which deters competition. Powerhouse is not aware of any
significant competitor within its business strategic area.
Once access to land is established, competitive pressures lie with waste gate
fees and offtake sales. PHE strategy now is to target waste streams that can
command adequate gate fees and adapt offtakes to match market demand - hence
the broadening of offering beyond plastics and hydrogen.
Funding of working capital/cash flow Cost of development significantly above ability of shareholder equity to fund. All capital projects are programmed, budgeted and the spend controlled.
Cash position inadequate to fund project development. Cash flow is managed and reviewed monthly.
New business strategy of providing engineering services through Engsolve will
improve cash flow.
The Group considers various forms of funding at a Group and project specific
level.
Financing of capital projects Shareholder equity cannot finance capital projects. Project finance approach to be followed. Powerhouse will de-risk each element
required to achieve an investable project.
Move away from high capex projects to partnership or licensing models.
Engineering design completed. Specifications available for plant &
equipment to be contracted using model form contracts.
Cost of capital projects increase and depress IRR below investment level.
Projects value engineered to minimise cost prior to design freeze.
Capital costs to be fixed as early as possible. Currency risk to be hedged.
Feedstock supply risk Feedstock unavailable or only at negative gate fees. Feedstock supply risk will be held by developer / client. Powerhouse will only
validate projects that have feedstock supply agreements in place.
Offtake market risk Offtake market at different price point than anticipated. Offtake agreements will be outside scope of Powerhouse, other than when
Powerhouse carries out commercial feasibility study on behalf of a client. Off
take agreements will be required for validation. These studies will be paid
for by the client.
Lack of demand for offtake.
Regulatory and Compliance Risk Regulations may change. Projects designed to meet existing regulations. Change in law provisions
included in project contracts.
Key Performance Indicators (KPIs)
The Group now has 16 full time equivalent employees and has high level KPIs
across all aspects of the business, including business development, operations
and finance.
The top level KPIs
· Deliver fully functional FTU facility at Bridgend
· Sign and commence first licensed commercial project
· Develop and maintain technically and commercially qualified
project pipeline that will have five projects in design within the next six
years
Financial measures
· Underlying profit and loss to measure the Group's profitability
for the year attributable to equity shareholders of the Group. It will exclude
exceptional items, remeasurements, timing and force majeure incidents from the
calculation;
· Research and Development spend. This will measure expenditure
invested in the development of decarbonisation of energy systems and will
provide a transparent view of the Group's compatibility with reduction in
contamination, pollution and climate change mitigation.
· Return on capital employed (ROCE). The Group will provide a target
and forecast on the potential ROE of its capital investments to provide an
indication of its performance in generating value for shareholders.
Non-Financial Measures
· Contamination & Pollution Reduction. This is a projected measure
of the reduction the Group's projects will have on reducing contamination and
pollution by the waste products processed by the Group's capital projects and
engineering services provided to others.
· Business Development metrics such as a rolling pipeline of
opportunities being taken through from viability studies to FEED, financial
close and into build.
· Climate change mitigation. This is a projected measure of the
reduction the Group's projects and engineering services will have on reducing
climate change impacts.
· Stakeholder satisfaction. Customer and stakeholder satisfaction will
be measured with a view to maintaining engagement with these groups and
improving service levels.
· Employee Engagement. The Group will measure how engaged our employees
feel, based on the percentage of favorable responses to questions repeated
annually in our employee engagement survey. The target will be to increase
engagement compared with the previous year. A review of diversity within the
workforce will also be carried out with a view to increasing diversity as the
workforce grows.
Statement of Directors' Duties to Stakeholders under s.172 Companies Act 2006
The Directors acted in good faith throughout the year with a view to promoting
the long-term success of the Group for the benefit of its members as a whole,
with due regard to stakeholders and the matters set out in section 172 of the
Companies Act 2006.
The Board recognises its responsibilities to each of the Group's stakeholders
and to society and have endeavoured to ascertain the interests and views of
its stakeholders and consider these when making decisions. The Board
acknowledges its responsibility for setting and monitoring the culture, values
and reputation of the Powerhouse Energy Group, and seeks to live by its
values.
When making decisions, the Directors have regard to all stakeholders but
acknowledge that not every decision will result in a preferred outcome for
all. The Group regards its shareholders, employees, customers, contractors,
consultants and advisors, business partners and suppliers as forming part of
the wider stakeholder group. The Board strives to balance the different and
competing priorities and interests of our stakeholders in a way compatible
with the long-term, sustainable success of the business and which maintains a
standard of business conduct aligned to our values and purpose.
The Directors are aware of their duty under section 172 of the Companies Act
2006 to act in the way which they consider, in good faith, would be most
likely to promote the success of the Group for the benefit of its members as a
whole and, in doing so, to have regards (amongst other matters) to:
· The likely consequences of any decision in the long term;
· The interests of the Group's employees;
· The need to foster the Group's business relationships with
suppliers, customers and others;
· The impact of the Group's operations on the community and the
environment;
· The desirability of the Group maintaining a reputation for high
standards of business conduct; and
· The need to act fairly between members of the Group.
The Board recognises that the long-term success of the Group requires positive
interaction with its stakeholders. Positive engagement with stakeholders will
enable our stakeholders to better understand the activities, needs and
challenges of the business and enable the Board to better understand and
address relevant stakeholder views which will assist the Board in its decision
making and to discharge its duties under Section 172 of the Companies Act
2006.
We reproduce here the Code of Conduct of the Group for easy reference, which
the directors believe meet the requirements of s172 of the Companies Act 2006.
Group's Code of Conduct
1. Introduction
This Powerhouse Energy Group (Powerhouse) Code of Conduct is a steering
document that defines how the Group will act towards its employees, towards
its clients, business partners, suppliers, competitors, and other
organisations in all situations related to our business. The Code of Conduct
is an integral part of the Group's Environmental, Social and Governance (ESG)
Strategy and defines our corporate responsibility in society.
It is mandatory that this Code of Conduct is understood and complied with by
all personnel working for the Group and its subsidiaries or on their behalf,
including Representatives.
The Powerhouse Board of Directors are ultimately responsible for the Code and
its implementation. The Board will monitor its compliance through annual
performance reviews, annual employee surveys and internal and external audits.
All Powerhouse officers, employees and those representing the Group represent
the Group's brand and reputation through the solutions and value we create and
through our behaviour.
2. Our People
Powerhouse will maintain a structured recruitment process with a structured
performance appraisal and talent management process. We will create
development opportunities and continuous learning for our employees. By
encouraging a feedback culture and working with the insights from our
employees, we increase their engagement.
It is the responsibility of each employee to look after their own personal and
professional development, but at all times supported by the Group. Employees
will be given equal opportunities for professional development both within
their existing fields and in new areas.
The Group believes that diversity is an important asset within the Group and
in our relationships with clients and stakeholders. We promote equal rights
and opportunities of employees in the workplace regardless of their gender
identity, age, ethnicity, religion or other belief, disability, or sexual
orientation.
3. Social Responsibility
The Group accepts continuing responsibility for its services to its clients
and thereby to society. The Group will permanently contribute to the benefit
of its clients and society through sustained technological development and
personnel training aimed at improving its performance.
Sustainability is a permanent goal in every project. The largest contribution
to sustainability lies in the projects Powerhouse develops and has three
facets:
1. Our projects must contribute to sustainable development;
2. We will strive to increase the sustainability performance of our
clients' projects; and
3. We will act sustainably in our own operations and performance.
Powerhouse is committed to improving the lives of people and to respect human
rights. We aim to always act in a socially and ethically responsible way,
within the laws of the countries in which we operate. We support and respect
human rights, as defined by the UN in the Universal Declaration of Human
Rights.
4. Quality of Service
The Group will only undertake project assignments in its areas of expertise
where it has the capabilities to deliver efficient and effective service to
its clients. We are committed to providing high quality services to clients
and will focus on quality management as a working methodology and on permanent
improvement as a means to improve that quality of service. It is our intent to
be certified in Quality, Environment and Health & Safety in accordance
with ISO 9001, ISO 14001 and ISO 45001 and we are committed to continuously
improve our management system. We should note that the integration of Engsolve
brings with it full ISO 9001 and 14001 accreditation and a robust management
system that can be adopted by Powerhouse.
Health and safety is a top priority for the Group, with a zero-incident
target. We are committed to eliminate hazards, reduce risk and ensure that
health and safety information, instruction, training, and supervision is
provided to all.
The Group is committed to the continual improvement of its knowledge base,
abilities and tools in the area of its expertise. The Group will focus on
technology management as a working methodology and shall extend to its clients
the benefits of its professional achievements.
5. Objectivity
Powerhouse will be loyal to its clients and will maintain the confidentiality
of any information from the client that is obtained in the process of
performing services. The Group will also keep confidential the documents and
reports prepared for the client.
The Group will avoid any conflict of interest and will inform a client
beforehand of any potential conflict of interest that could emerged during the
execution of its services.
The Group will only offer its services under contracting terms that do not
interfere with its independence, integrity and objectivity.
Powerhouse will not accept any remuneration that could encourage the offering
of a biased opinion.
6. Corporate integrity
Powerhouse complies with all applicable laws, regulations, and other
requirements applicable to operations in the countries where Powerhouse is
active. This Code applies to all parts of the organisation, irrespective of
where we are based, or where our projects are performed.
The Group will operate and compete in accordance with the legislation of each
territory in which it operates and will not accept fraud, corruption, bribes,
or unpermitted competition-restricting practices. We are committed to
supporting international and local efforts to eliminate corruption and
financial crime. We will not commit to activities that we cannot defend or
account for, and we must not make decisions based on improper relationships or
personal relationships. We also undertake to maintain correct and accurate
accounting and reporting in accordance with the accounting rules in each
territory in which we operate.
The Group will act at all times for the benefit of clients, and will carry out
services with professional integrity, whilst not jeopardising the interests of
society.
The promotional activity of the Group and its services will uphold the dignity
and reputation of the industry. Brochures and other formal documents
describing resources, experience, work and reputation will reflect the Group's
actual circumstances in a truthful manner.
The Group will manage with integrity its internal and external clients. It
will focus on business integrity management as a working methodology.
We respect the privacy of individuals and recognise the importance of personal
data entrusted to us by our employees, clients, and other parties.
Confidential information received by Powerhouse from clients and other
external parties must as a minimum be treated and protected in the same way as
the Group's own confidential information. It is the responsibility of every
employee and representative to process and protect all personal data compliant
with the applicable privacy legislation in a relevant and proper manner.
Employees and representatives must report any violations of business ethics or
human rights that arise in their course of work, even if the Group is not
directly involved or party to it. In addition, employees should report
incidents which could be a breach of business ethics and may remain anonymous
if they so wish.
7. Communications
Powerhouse employees are encouraged to communicate and share information but
must at the same time ensure that the Powerhouse brand is strengthened and not
weakened.
Our communications must always reflect, protect and develop the Group's
position in the market as well as show that we are available to our
stakeholders. Every Powerhouse employee and representative is an ambassador
for the Group. Communications must support the Group's business goals and
profitable growth strategy while securing a cohesive brand identity in the
market. All managers are responsible for ensuring that they and their
employees comply with the guidance documents that apply for communication
within and from Powerhouse.
As a Group quoted on the AIM Market of the London Stock Exchange, we are
obliged to communicate anything related to, inter alia, the Powerhouse
business, financial condition and results in line with the laws and rules that
apply to such companies. We report transactions correctly and in a true and
fair way.
8. Competition
The Group will only solicit work and participate in private and public
competitive tendering under a high standard of corporate ethics and
competitive practices, and with total integrity in its transactions. The Group
will not participate in prohibited anti-competitive activities, illegal
price-fixing agreements, market sharing or abuse of dominant position.
The Group favours quality-based selection for the contracting of services.
If solicited to review the work performed by another Group, the Group will act
in accordance with its business integrity and objectivity policies.
The Group will not endorse compensation or contribution arrangements destined
to influence or secure work, nor seek commissions from suppliers of equipment
and services recommend it to the client as part of the Group's services.
The Group will not take part in activities that could damage the reputation of
its business or the business of others.
Paul Emmitt
Chief Executive Officer
9 June 2025
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF POWERHOUSE ENERGY GROUP PLC
Opinion
We have audited the financial statements of Powerhouse Energy Group PLC (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2024, which comprise the group Statement of comprehensive income, the
group and company Balance sheets, the group Statement of cash flows, the group
and company Statement of changes in equity and the related notes, including a
summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and United
Kingdom Accounting Standards, including UK adopted International Accounting
Standards applicable in the UK and Republic of Ireland' (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 31 December 2024 and
of the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted International Accounting Standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted International Accounting Standards and
as applied in accordance with the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditors' responsibilities for the
audit of the financial statements section of our report. We are independent of
the group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the United Kingdom, including the
Financial Reporting Council's Ethical Standard and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Summary of our audit approach
Key audit matters Group
· Going concern basis of preparation
· Carrying value of goodwill
· Fixed assets under construction
Materiality Group
· Overall materiality: £120,000 (2023: £100,000)
· Performance materiality: £90,000 (2023: £75,000)
Parent Company
· Overall materiality: £100,000 (2023: £95,000)
· Performance materiality: £75,000 (2023: £72,500)
Scope Our audit procedures covered 100% of revenue, 100% of total assets and 100% of
loss before tax.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the group financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the group financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit addressed the key audit matter
Going concern basis of preparation Our audit procedures:
A key focus of our audit was to assess whether the financial statements have We assessed the group's available cash resources, the impact of the reduction
been appropriately prepared on a going concern basis. in reserves during the year, and management's cash flow forecasts. We also
considered the assumptions used in these forecasts and whether they remained
reasonable in light of current operations and future funding plans.
The parent company remains pre-revenue and is therefore primarily reliant on
continued external funding to meet its liabilities as they fall due. We also
noted that the group's reserves have decreased during the year, from £8.5 Our procedures included:
million to £4.4million, which further emphasises the importance of evaluating
the group's ability to continue as a going concern. · Reviewing management's going concern assessment, including
forecast cash flows and underlying assumptions
In addition, we note that the group had a cash balance of £1.3 million as at
31 December 2024, and forecasted cash outflows of approximately £1.6 million · Assessing the availability and terms of financial support from
over the next 12 months. the wider group
The directors have assessed the group's ability to continue in operational · Considering whether post-balance sheet events suggested any
existence for the foreseeable future, being a period of at least 12 months material uncertainty
from the date of approval of these financial statements, and are of the
opinion that it is appropriate to prepare the financial statements on a going
concern basis.
· Performing sensitivity analysis on key assumptions such as costs
and timing of funding
· Evaluating whether the group's existing cash reserves, in
combination with expected future funding, appeared sufficient to meet forecast
liabilities as they fall due over the 12-month period from the signing date.
Based on the evidence obtained, we found management's use of the going concern
basis to be reasonable and consistent with our understanding of the group's
financial position and funding arrangements.
Carrying value of goodwill Our audit procedures:
A key balance on the statement of financial position is intangible fixed Parent Company Goodwill
assets of £Nil (2023: £2,300,000) at 31 December 2024 in the parent's single
company accounts as detailed in note 10. We evaluated management's impairment assessment, including the model and key
assumptions used.
In addition to the above there is additional goodwill generated on
consolidation with total consolidated goodwill amounting to £573,581 (2023: We evaluated critically the assumptions by reworking the calculations and
£2,873,581) as at 31 December 2024. challenged the management by:
· Comparing the model to the actual performance for the year ended
31 December 2024 noting that income was still not being generated
The carrying value of goodwill in accordance with IAS36 is required to be
tested for annual impairment along with whether there is any indication of · Comparing the assumptions of the prior year to the actual
impairment of the other intangibles. The measurement of the recoverable amount performance of the year ended 31 December 2024 again noting that projects have
requires the preparation of detailed cash flow forecasts that are subject to a been delayed
number of highly sensitive assumptions surrounding the future trade of the
Group. · Comparing the assumptions used in the prior year to the current
year to identify any changes and obtaining explanations from management
· Recalculating the WACC and comparing the rates used
During the year, the directors have assessed the valuation of goodwill
internally. · Comparison of the outcome to reports prepared by external
advisors
Valuation of Goodwill was deemed to be compliant with IAS 36 Impairment of
Assets.
Goodwill was impaired in the financial statements due to the non-viability of
the project's recovery, in accordance with IAS 36. The Group entered into a
purchase agreement securing full control of a Protos SPV with an option to
lease the site at Protos. However, this lease option was terminated in April
2025, as the Group no longer had the ability to extend the lease. The only
remaining option was to commit to a long-term lease, which the Group decided
not to pursue.
As a result, the Group impaired the goodwill value of £2.3 million in the
2024 accounts, reflecting the lack of future economic benefits from the
project and the termination of the lease.
Consolidated Goodwill
Other than the above, the remaining goodwill arose as part of the acquisition
of Engsolve Limited. Management has prepared an impairment review of the
goodwill totalling £573,581.
The method of ensuring no impairment was required was a review of the cash
generation of the entity. The judgements and assumptions have been reviewed
with management and challenged.
No indications of impairment were identified upon review.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which
help us to determine the nature, timing and extent of our audit procedures.
When evaluating whether the effects of misstatements, both individually and on
the financial statements as a whole, could reasonably influence the economic
decisions of the users we take into account the qualitative nature and the
size of the misstatements. Based on our professional judgement, we determined
materiality as follows:
Group materiality Parent company materiality
Overall materiality £120,000 (2023: £100,000) £100,000 (2023: £95,000)
Basis for determining overall materiality 120% of single company materiality 5% of operating loss
Rationale for benchmark applied Whilst the Statement of Financial Position has material elements included, we Whilst the Statement of Financial Position has material elements included,
do not feel a materiality that is based on the Statement of Financial Position we do not feel a materiality that is based on the Statement of Financial
totals is appropriate as it is though that the shareholders will consider the Position totals is appropriate as it is though that the shareholders will
operating loss of utmost importance to ascertain how long the company can consider the operating loss of utmost importance to ascertain how long the
continue to trade. company can continue to trade.
Performance materiality £90,000 (2023: £75,000) £75,000 (2023: £72,500)
Basis for determining performance materiality 75% of overall materiality 75% of overall materiality
Reporting of misstatements to the Audit Committee Misstatements in excess of £6,000 and misstatements below that threshold Misstatements in excess of £5,000 and misstatements below that threshold
that, in our view, warranted reporting on qualitative grounds. that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The group consists of the parent company, two trading companies and 5 other
entities which were dormant or non-trading. All entities are based in the UK
The coverage achieved by our audit procedures was:
Number of components Revenue Total assets Profit/Loss before tax
Full scope audit 1 0% 86% 92%
Specific audit procedures* 2 100% 14% 8%
Total 3 100% 100% 100%
* Specific audit procedures were performed in order to obtain sufficient and
appropriate coverage over the group's loss before tax and borrowings.
A full scope audit was performed for the parent company, with specific audit
procedures being performed for the subsidiary company. The subsidiary
companies were exempt from audit in their own right under section 479A of the
Companies Act 2006.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included:
· obtaining an understanding of management's going concern
evaluation and reviewing cashflow forecasts;
· evaluating management's ability to accurately forecast
performance through comparison of historic performance against forecast;
· performing sensitivity analysis to understand the impact of
reasonably possible outcomes, or changes to assumptions; and
· testing the integrity and mechanical accuracy of the forecast
model.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or the parent
company's ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic Report and the Directors'
Report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the Strategic Report and the Directors' Report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic Report or the Directors'
Report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 37, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
The extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations.
The objectives of our audit are to obtain sufficient appropriate audit
evidence regarding compliance with laws and regulations that have a direct
effect on the determination of material amounts and disclosures in the
financial statements, to perform audit procedures to help identify instances
of non-compliance with other laws and regulations that may have a material
effect on the financial statements, and to respond appropriately to identified
or suspected non-compliance with laws and regulations identified during the
audit.
In relation to fraud, the objectives of our audit are to identify and assess
the risk of material misstatement of the financial statements due to fraud, to
obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud through designing and implementing
appropriate responses and to respond appropriately to fraud or suspected fraud
identified during the audit.
However, it is the primary responsibility of management, with the oversight of
those charged with governance, to ensure that the entity's operations are
conducted in accordance with the provisions of laws and regulations and for
the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud, the group audit engagement team:
· obtained an understanding of the nature of the industry and
sector, including the legal and regulatory framework that the group and parent
company operate in and how the group and parent company are complying with the
legal and regulatory framework;
· inquired of management, and those charged with governance, about
their own identification and assessment of the risks of irregularities,
including any known actual, suspected or alleged instances of fraud;
· discussed matters about non-compliance with laws and regulations
and how fraud might occur including assessment of how and where the financial
statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation / Regulation Additional audit procedures performed by the Group audit engagement team
included:
UK-adopted IAS and Companies Act 2006 including IFRS, Companies Act 2006 and Review of the financial statement disclosures and testing to supporting
AIM Rules documentation;
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance regulations Inspection of advice received from external tax advisors specifically
surrounding the application of the Research and Development Tax Credit scheme.
The areas that we identified as being susceptible to material misstatement due
to fraud were:
Risk Audit procedures performed by the audit engagement team:
Revenue A sample of bank receipts have been reviewed and challenged with management to
identify if the group has received any revenue in the year.
In addition the underlying contracts have been reviewed regarding the ongoing
projects of the group to ensure these are still pre revenue.
Management override of controls Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are
indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are
unusual or outside the normal course of business.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
http://www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Mario Cientanni (Senior Statutory Auditor)
for and on behalf of
Barnes Roffe Audit Limited
Chartered Accountants
Charles Lake House
Claire Causeway
Crossways Business Park
Dartford
Kent
DA2 6QA
Date:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For The Year Ended 31 December 2024
31 December 31 December
Note 2024 2023
£ £
Revenue 2 499,414 180,959
Cost of sales (210,548) (118,294)
Gross Profit 288,866 62,665
Engineering costs (762,729) (799,909)
Administrative expenses 4 (2,025,663) (1,109,150)
Acquisition costs - (31,457)
Share of associate 5 - 76,206
Operating loss (pre-exceptional items) (2,499,526) (1,801,645)
Exceptional Items
Goodwill Impairment 6 (2,300,000) -
Fair Value Gain on Associate (Engsolve Limited) 12 - 270,381
Operating Loss (post exceptional items) (4,799,526) (1,531,264)
Net finance income/(cost) 7 (11,252) (6,200)
Loss before taxation (4,810,778) (1,537,464)
Income tax credit 8 105,753 109,817
Total comprehensive loss (4,705,025) (1,427,647)
Loss per share (pence) 9 (0.11) (0.04)
All activities are in respect of continuing operations and there are no other
items of comprehensive income.
The notes numbered 1 to 30 are an integral part of the financial information.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Note 2024 2023
£ £
ASSETS
Non-current assets
Intangible fixed assets 10 844,972 3,106,865
Tangible fixed assets 11 2,231,643 1,159,636
Total non-current assets 3,076,615 4,266,501
Current Assets
Trade and other receivables 13 272,487 325,834
Corporation tax recoverable 14 274,277 168,527
Cash and cash equivalents 15 1,308,392 4,348,887
Total current assets 1,855,156 4,843,248
Total assets 4,931,771 9,109,749
LIABILITIES
Current liabilities
Creditors: amounts falling due within one year 16 (372,101) (506,258)
Total current liabilities (372,101) (506,258)
Total assets less current liabilities 4,559,670 8,603,491
Creditors: amounts falling due after more than one year 17 (162,134) (122,475)
Net assets 4,397,536 8,481,016
EQUITY
Share capital 20 24,097,059 23,940,856
Share premium 21 61,220,809 61,220,809
Share based payment reserve 23 465,342 -
Accumulated deficit 22 (81,385,674) (76,680,649)
Total surplus 4,397,536 8,481,016
The Company made a loss of £5.0 million in the year ended 31 December 2024
(2023: Loss 2.2 million) and in accordance with s408 of the Companies Act 2006
has not presented a company statement of comprehensive income. The financial
statements of Powerhouse Energy Group Plc, Company number 03934451, were
approved by the Board of Directors and authorised for issue on 9 June 2025 and
signed on its behalf by:
Paul Emmitt
Director
The notes numbered 1 to 30 are an integral part of the financial information.
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Note 2024 2023
£ £
ASSETS
Non-current assets
Intangible fixed assets 10 271,391 2,533,284
Tangible fixed assets 11 1,851,027 816,244
Investments in subsidiary undertakings 12 1,109,987 1,109,987
Total non-current assets 3,232,405 4,459,515
Current Assets
Trade and other receivables 13 223,480 454,087
Corporation tax recoverable 14 274,280 168,527
Cash and cash equivalents 15 576,805 3,775,250
Total current assets 1,074,565 4,397,864
Total assets 4,306,970 8,857,379
LIABILITIES
Current liabilities
Creditors: amounts falling due within one year 16 (888,029) (1,056,183)
Total current liabilities (888,029) (1,056,183)
Total assets less current liabilities 3,418,941 7,801,196
Creditors: amounts falling due after more than one year 17 (162,134) (122,475)
Net assets 3,256,807 7,678,721
EQUITY
Share capital 20 24,097,059 23,940,856
Share premium 21 61,220,809 61,220,809
Share based payment reserve 23 465,342 -
Accumulated deficit 22 (82,526,403) (77,482,944)
Total surplus 3,256,807 7,678,721
The financial statements of Powerhouse Energy Group Plc, Company number
03934451, were approved by the Board of Directors and authorised for issue on
9 June 2025 and signed on its behalf by:
Paul Emmitt
Director
The notes numbered 1 to 30 are an integral part of the financial information.
CONSOLIDATED STATEMENT OF CASHFLOWS
For The Year Ended 31 December 2024
Note 2024 2023
£ £
Cash flows from operating activities
Operating Loss (4,799,526) (1,531,265)
Adjustments for:
Share based payments 465,342 40,000
Amortisation 22,333 16,997
Depreciation 57,983 41,885
Goodwill & Exclusivity impairment 2,300,000 (712,751)
Share of associate result - (76,206)
Fair value gain on Associate - (270,381)
Tax Paid (85,949) (58,710)
-Changes in working capital:
(Increase)/Decrease in trade and other receivables (141,710) 646,745
Increase in trade and other payables 132,608 62,514
Tax credits received - 166,318
Net cash used in operations (2,048,919) (1,674,854)
Cash flows from investing activities
Cash paid for investment in subsidiary 25 - (575,761)
Cash acquired on acquisition of subsidiary 25 - 472,580
Purchase of intangible fixed assets 10 (60,440) (48,207)
Purchase of tangible fixed assets 11 (1,039,903) (671,415)
Net cash flows from investing activities (1,100,343) (822,803)
Cash flows from financing activities
Proceeds from issue of shares 156,203 1,000,000
Payments of principal under leases 19.3 (36,184) (30,153)
Net finance costs 7 (11,252) (6,200)
Net cash flows from financing activities 108,767 963,647
Net increase/(decrease) in cash and cash equivalents (3,040,495) (1,534,010)
Cash and cash equivalents at beginning of year 4,348,887 5,882,897
Cash and cash equivalents at end of year 1,308,392 4,348,887
The notes numbered 1 to 30 are an integral part of the financial information.
COMPANY STATEMENT OF CASHFLOWS
For The Year Ended 31 December 2024
Note 2024 2023
£ £
Cash flows from operating activities
Operating Loss (5,137,960) (2,386,537)
Adjustments for:
Share based payments 465,342 40,000
Amortisation 22,333 16,997
Depreciation 52,625 41,885
Goodwill & Exclusivity impairment 2,300,000 -
Share of associate result - (76,206)
Fair Value Gain on Associate - (270,381)
Decrease/(Increase) in trade and other receivables 35,313 (50,840)
Increase/(Decrease) in trade and other payables 12,895 748,586
Tax credits received - 166,318
Net cash used in operations (2,249,452) (1,770,178)
Cash flows from investing activities
Purchase of interest in associate 12 - (575,761)
Purchase of intangible fixed assets 10 (60,440) (48,207)
Purchase of tangible fixed assets 11 (997,320) (671,416)
Net cash flows from investing activities (1,057,760) (1,295,384)
Cash flows from financing activities
Proceeds from issue of shares 156,203 1,000,000
Payments of principal under leases 19.3 (36,184) (30,153)
Net finance costs 7 (11,252) (11,932)
Net cash flows from financing activities 108,767 957,915
Net increase/(decrease) in cash and cash equivalents (3,198,445) (2,107,647)
Cash and cash equivalents at beginning of year 3,775,250 5,882,897
Cash and cash equivalents at end of year 576,805 3,775,250
The notes numbered 1 to 30 are an integral part of the financial information.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For The Year Ended 31 December 2024
Ordinary share capital Share premium Share based payment reserve Accumulated deficit
£ Deferred shares £ £ £ Total
£ £
Balance at 1 January 2023 19,787,071 3,113,785 61,291,710 - (75,323,903) 8,868,663
Transactions with equity parties:
- Share issues on exercise warrants - - - - - -
- Share issues to exercise options - - - - - -
- Share issues in year 1,040,000 - - - - 1,040,000
Share based payments - - (70,901) - 70,901 -
Share issue costs - - - - - -
Reserve transfer- goodwill impairment - - - - - -
Total comprehensive loss - - - - (1,427,647) (1,427,647)
Balance at 31 December 2023 20,827,071 3,113,785 61,220,809 - (76,680,649) 8,481,016
Transactions with equity parties:
- Share issues on exercise warrants - - - -
- Share issues to exercise options - - - - - -
- Share issues in year 156,203 - - - - 156,203
Share based payments - - - 465,342 - 465,342
Share Issue costs - - - - - -
Total comprehensive loss - - - - (4,705,025) (4,705,025)
Balance at 31 December 2024 20,983,274 3,113,785 61,229,809 465,342 (81,385,674) 4,397,536
The following describes the nature and purpose of each reserve within equity:
Deferred shares:
Represents the combined total of all
deferred shares (0.5p, 4p and 4.5p)
Share premium:
Amount subscribed for share capital in
excess of nominal value
Share based payment reserve:: Represents share based
payment expense at fair value
Accumulated deficit:
Accumulated deficit represents the cumulative losses of the Group and all
other net gains and losses and transactions with shareholders not recognised
elsewhere
The notes 1 to 30 are an integral part of the financial information.
COMPANY STATEMENT OF CHANGES IN EQUITY
For The Year Ended 31 December 2024
Ordinary share capital Share premium Share based payment Accumulated deficit
£ Deferred shares £ reserve £ Total
£ £ £
Balance at 1 January 2023 19,787,071 3,113,785 61,291,710 - (75,323,903) 8,868,663
Transactions with equity parties:
- Share issues on exercise warrants - - - - - -
- Share issues to exercise options - - - - - -
- Share issues in year 1,040,000 - - - - 1,040,000
Share based payments - - (70,901) - 70,901 -
Share issue costs - - - - - -
Reserve transfer- goodwill impairment - - - - - -
Total comprehensive loss - - - - (2,229,942) (2,229,942)
Balance at 31 December 2023 20,827,071 3,113,785 61,220,809 - (77,482,944) 7,678,721
Transactions with equity parties:
- Share issues on exercise warrants - - - - -
- Share issues to exercise options - - - - - -
- Share issues in year 156,203 - - - - 156,203
Share based payments - - - 465,342 - 465,342
Share Issue costs - - - - - -
Total comprehensive loss - - - - (5,043,459) (5,043,459)
Balance at 31 December 2024 20,983,274 3,113,785 61,220,809 465,342 (82,526,403) 3,256,807
The following describes the nature and purpose of each reserve within equity:
Deferred shares:
Represents the combined total of all deferred shares (0.5p, 4p and 4.5p)
Share premium: Amount
subscribed for share capital in excess of nominal value
Share based payment reserve: Represents share based
payment expense at fair value
Accumulated deficit: Accumulated
deficit represents the cumulative losses of the company and all other net
gains and losses and transactions with shareholders not recognised elsewhere
The notes 1 to 30 are an integral part of the financial information.
NOTES TO THE ACCOUNTS
For The Year Ended 31 December 2024
1. Accounting Policies
Powerhouse Energy Group Plc is a company incorporated in England and Wales.
The Group is a public limited company quoted on the AIM market of the London
Stock Exchange. The address of the registered office is Unit 3/3a Garth Drive,
Brackla Industrial Estate, Bridgend, Wales, CF31 2AQ. The principal activity
of the Group is to continue the development of its technology and to support
its customers in order to achieve its full commercial roll-out. The Principal
activity of the group also includes the provision of Engineering services by a
subsidiary company. The following accounting policies have been applied
consistently in dealing with items which are considered material in relation
to the financial information.
1.1. Basis of consolidation
The consolidated and parent company financial statements for the year ended 31
December 2024 have been prepared in accordance with International Financial
Reporting Standards ("IFRS") issued by the International Accounting Standards
Board (IASB), as adopted for use in the United Kingdom (UK) and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS
(except as otherwise stated). These accounting policies and methods of
computation are consistent with the prior year, unless otherwise stated.
The consolidated group financial statements consist of the financial
statements of the parent company Powerhouse Energy Group PLC together with all
other entities controlled by the parent company (its subsidiaries) and the
groups share of its interests in joint ventures and associates. Control is
achieved where the Group is exposed to, or has the rights to, variable returns
from its investments with the entity and has the ability to affect those
returns through its power over the entity. The Group obtains and exercised
control through voting rights.
All financial statements are made up to 31 December 2024. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provided evidence of an impairment of
the asset transferred.
Subsidiaries are consolidated in the Groups financial statements from the date
the control commences until the date that control ceases. Acquisitions of
subsidiaries are dealt with using the acquisition method. The acquisition
method involves the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at the
acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. On initial
recognition, the assets and liabilities of the subsidiary are included in the
Consolidated Statement of Financial Position at their fair values, which are
also used as the cost bases for subsequent measurement in accordance with the
Group accounting policies.
Goodwill is stated after separating out identifiable intangible assets.
Goodwill represents the excess of acquisition costs over the fair value of the
Group's share of the identifiable net assets of the acquired subsidiary at the
date of acquisition.
Entities in which the group holds an interest and which are jointly controlled
by the Group and one or more other ventures under a contractual arrangement
are treated as joint ventures. Entities other than subsidiary undertakings or
joint ventures, in which the group has a participating interest and over whose
operating and financial policies the Group exercises a significant influence,
are treated as associates.
Investments in joint ventures and associates are carried in the group
statement of financial position at cost plus post-acquisition changes in the
Groups share of the net assets of the entity, less any impairment in value.
The carrying value of investments in joint ventures and associates include
acquired goodwill.
If the Groups share of losses in a joint venture or associate equals or
exceeds its investment in the joint venture or associate, the group does not
recognise further loses unless it has incurred obligations to do so or has
made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates
are eliminated to the extent of the groups interest in the entity.
The Group's UK subsidiaries are both trading and non-trading. There are
long-term restrictions on the operations of the Group's subsidiaries in the US
and Switzerland. With these restrictions in place, the Group is also unable to
exert control over the subsidiaries. As such the Group has claimed exemptions
applicable to it under Companies Act section 405 (2) and 405 (3b) and IFRS 10
to not include these subsidiaries located in the US and Switzerland in the
Consolidated Financial statements for the year ended 31 December 2024.
Investments in subsidiaries that are not consolidated are carried at cost less
any provision for impairment.
Under the equity method of accounting, investments are initially recognised at
cost and adjusted thereafter to recognise the Group's share of the
post-acquisition profits or losses of the investee in the Income statement.
Dividends received or receivable from associates and joint ventures are
recognised as a reduction in the carrying value of the investment.
Accounting policies of the equity accounted investees are changed where
necessary to ensure consistency with the policies adopted by the Group. The
carrying value of equity accounted investments is tested for impairment in
accordance with the policy described in Note 1.20 (ii).
As of 31 December 2024, the Group has two subsidiaries included in the Groups
consolidated accounts, Engsolve Limited, the balance of the interest in which
was acquired on 20 June 2023 and Protos Plastics to Hydrogen No.1 Limited that
was acquired on 30 April 2023.
Other investments, which are not publicly traded, are initially measured at
cost and subsequently measured at cost less accumulated losses.
1.2. Judgements and estimates
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements.
Areas involving a higher degree of judgements or complexity, or areas where
assumptions or estimates are significant to the financial statements such as
the exercise to assess the fair value of goodwill, share based payments (share
options and warrants) and going concern are disclosed within the relevant
notes.
1.3. Going concern
The financial statements have been prepared on a Going Concern basis. The
Directors' views are based upon working capital projections which take into
account the intended use of the funds in hand over the next 12 months.
As at 31 December 2024 the Group is pursuing a business strategy of selling
licences and receiving royalty fees for use of its technology. As at 31
December 2024, the Group had one project under development - Ballymena in
Northern Ireland - with others still in prospect.
In looking forward to determine the Going Concern status, the business
planning of the Group post the current reporting period, is based on the
following:
· Engsolve give the Group the ability to earn revenues from
engineering services. Engsolve had an existing client base when acquired which
is now being expanded post year end to provide an increased ongoing revenue
stream to the Group, extending its positive cash position;
· The development of a series of capital projects addressing
contamination, pollution and climate change mitigation and deploying where
possible, but not exclusively, the Group's proprietary technology. The Group
will focus on a business strategy of selling licenses and receiving royalty
fees for the use of its technology.
Adopting this approach:
· The Group will have an ongoing revenue stream that is increasing;
· Investment in the development of the capital projects will be via
shareholder loans to the SPV, repayable at financial close; and
· In the event development of the project does not look viable (for
example, failing to obtain the necessary permissions), expenditure will be
curtailed and a replacement project identified.
The Directors consider therefore that other than fixed costs, the cash spend
looking forward can be managed within the 13-month cashflow projection (June
2025 - June 2026)
It was noted in FY22 accounts that there were loans totalling £3.34m due from
the Protos SPV, a company now under PHE's control. On review of the projects
at acquisition it was determined that the projects were not expected to
progress and as a result the amounts capitalised relating to these projects
were fair valued to £330k - being materials transferred to stock for either
sale or use in future projects - and the corresponding loan amounts which had
been used to fund the project development and were repayable on the success of
the projects were fair valued to £nil. This aligns with PHE's assessment of
the recoverability of the loan in FY22 where it was deemed irrecoverable and
written down to £nil also.
It is the view of the Directors, however, that should Protos generate future
cash inflows from similar projects that they reserve the right to reinstate
the loans and demand repayment.
1.4. Foreign currency translation
The financial information is presented in sterling which is the Group's
functional currency.
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies are revalued to the
exchange rate at date of settlement or at reporting dates (as appropriate).
Exchange gains and losses resulting from such revaluations are recognised in
the Statement of Comprehensive Income.
Foreign exchange gains and losses are presented in the Statement of
Comprehensive Income within administrative expenses.
1.5. Revenue
(i) Engineering services
The Group has provided engineering services to various third-party customers.
Revenue from providing services is recognised in the accounting period in
which services are rendered. For fixed-price contracts, revenue is recognised
based on the actual service provided to the end of the reporting period as a
proportion of the total services to be provided to the extent to which the
customer receives the benefits. This is determined based on the actual labour
hours spent relative to the total expected labour hours.
Where contracts include multiple performance obligations as specified by the
work scope, the transaction price will be allocated to each performance
obligation based on estimated expected cost-plus margin.
Estimates of revenues, costs or extent of progress toward completion of
services are revised if circumstances change. Any resulting increases or
decreases in estimated revenues or costs are reflected in profit or loss in
the period in which the circumstances that give rise to the revision become
known by management.
In case of fixed-price contracts, the customer pays the fixed amount based on
a payment schedule. If the services rendered by the Group exceed the payment,
a contract asset is recognised. If the payments exceed the services rendered,
a contract liability is recognised.
If a contract includes an hourly fee, revenue is recognised in the amount to
which the Group has a right to invoice.
(ii) Exclusivity fees
Where the Group grants a developer exclusive rights to utilise its technology
in a particular territory for an exclusivity fee, the fee is recognised in the
income statement over the agreed exclusivity period.
1.6. Leases
For any new contracts entered into, the Group considers whether a contract is,
or contains, a lease. A lease is defined as 'a contract, or part of a
contract, that conveys the right to use an asset for a period of time in
exchange for consideration'. To apply this definition the Group assesses
whether the contract meets three key evaluations which are whether:
(i) the contract contains an identified asset which is either explicitly
defined in the contract or implicitly specified by being identified at the
time the asset is made available to the Group;
(ii) the Group has the right to obtain substantially all of the economic
benefits from use of the asset throughout the period of use, considering its
rights within the defined scope of the contract;
(iii) the Group has the right to direct the use of the identified asset
throughout the period of use.
Where the above evaluations are met, at lease commencement date, the Group
recognises a right of use asset and a lease liability on the balance sheet.
The right of use asset is measured at cost, which is made up of the
measurement of the initial lease liability, any direct initial costs incurred
by the Group, an estimate of any costs to dismantle and remove the asset at
the end of the lease, and any lease payments made in advance of the lease
commencement date.
The Group depreciates right of use assets on a straight-line basis from the
lease commencement date to the earlier of the end of the useful life of the
right of use asset or the end of the lease term. The Group assesses the right
of use asset for impairment when such indicators exist.
At the commencement date the Group measured the lease liability at the present
value of the lease payments unpaid at that date, discounted using the interest
rate implicit in the lease if that rate is readily available or the Group's
incremental borrowing rate. For the assessment of the lease entered into in
2020 the Group applied a rate of 7.5%.
Subsequent to initial measurement the liability will be reduced for payments
and increased for interest. It is remeasured to reflect any reassessment or
modification or if there are any changes to the repayment schedule.
1.7. Finance income and expenses
(i) Income
Interest income is calculated by applying the effective interest rate to the
gross carrying amount of a financial asset except for financial assets that
subsequently become credit impaired. For credit impaired financial assets, the
effective interest rate is applied to the net carrying amount of the financial
asset (after deduction of the loss allowance).
(ii) Expense
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period, to the net carrying amount
on initial recognition.
1.8. Income tax expense
The tax expense for the period comprises current and deferred tax.
UK corporation tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right
to pay less tax in the future have occurred at the balance sheet date.
Temporary differences are differences between the Group's taxable profits and
its results as stated in the financial statements that arise from the
inclusion of gains and losses in tax assessments in periods different from
those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only to the extent that, on the basis of all available evidence, it can be
regarded as more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying temporary differences can be
deducted.
Deferred tax is measured at the average tax rates that are expected to apply
in the periods in which the temporary differences are expected to reverse,
based on tax rates and laws that have been enacted or substantively enacted by
the balance sheet date. Deferred tax is measured on a non-discounted basis.
1.9. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation.
Cost represents the cost of acquisition or construction, including the direct
cost of financing the acquisition or construction until the asset comes into
use.
Depreciation on property, plant and equipment is provided to allocate the cost
less the residual value by equal instalments over their estimated useful
economic lives of 3 years, once the asset is complete.
The expected useful lives and residual values of property, plant and equipment
are reviewed on an annual basis and, if necessary, changes in useful life or
residual value are accounted for prospectively.
1.10. Assets under construction
Assets under construction are stated at cost. Cost represents the cost of
acquisition or construction, including the direct cost of financing the
acquisition or construction until the asset comes into use.
Depreciation is not charged until the asset is complete and bought into use at
which point it is transferred into a distinct category of property plant and
equipment.
1.11. Right of Use Assets
At inception, the Group assesses whether a contract is, or contains a lease
within the scope of IFRS 16. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Where a tangible asset is
acquired through a lease, the group recognises a right-of-use asset and lease
liability at the lease commencement date. Right of use assets are included
within property, plant and equipment, apart from those that meet the
definition of investment property.
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received and any
initial direct costs incurred.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The group has elected not to recognise right-of-use assets and lease
liabilities for short term leases of machinery that have a lease term of 12
months or less, or for leases of low value assets including IT equipment. The
payments associated with these leases are recognised in profit or loss on a
straight line basis over a lease term.
1.12. Intangible assets
Goodwill represents the future economic benefits arising from a business
combination that are not individually identified and separately recognised.
Goodwill is carried at cost less accumulated impairment losses. Refer to note
1.20 for impairment testing procedures. Goodwill impairment losses are not
reversible as explained in note 1.20 (iii).
Goodwill on acquisitions has been calculated by taking the cost less the fair
value of the assets and liabilities at acquisition. The Group will review the
value of goodwill on their financial statements at least once a year and
record any impairments. Where the goodwill generated results on a gain on
bargain purchase this is credited to the Statement of Comprehensive Income in
the year of recognition.
Exclusivity rights acquired in a business combination that qualify for
separate recognition are recognised as intangible assets at their fair value
and subsequently assessed for impairment loss.
Costs associated with patent applications are capitalised in the year of spend
and amortised over their estimated useful lives of 20 years on a straight-line
basis commencing from the date of patent application. Any cost associated with
the upkeep of a patent is amortised over the remaining useful life of that
patent.
An internally generated intangible asset arising from development is only
recognised where all of the following have been demonstrated: (i) the
technical feasibility of completing the asset; (ii) the intention to complete
the asset and the ability to use or sell it; (iii) the availability of
resources to complete the asset; and (iv) the ability to reliably measure the
cost attributable to the asset during its development.
Research and development
In all other instances research and development expenditure is recognised as
an expense as incurred. Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.
1.13. Other non-current assets
Other non-current assets represent investments in subsidiaries. The
investments are carried at cost less accumulated impairment. Where a step
acquisition occurs and control of a subsidiary company is achieved in stages
the initial investment in associate is treated as being disposed of and
reacquired at the considered fair value with any gain or loss arising being
allocated to the Statement of Comprehensive Income. This is then treated as
the deemed cost. Subsequently the Investment is held at deemed cost less
impairment.
Financial assets
The Group classifies financial assets as loans and receivables within current
assets, except for maturities greater than 12 months after the balance sheet
date. These are classified as noncurrent assets. Assets are initially
recognised at fair value plus transaction costs. Loans and receivables are
subsequently carried at amortised cost using the effective interest rate
method.
1.14. Contract costs
The Group recognises costs incurred in fulfilling contracts with customers
that are directly associated with the contract as an asset if those costs are
expected to be recoverable. Contract costs are amortised on a basis consistent
with the transfer of goods and services to which the asset relates.
1.15. Trade and other receivables
Trade receivables are initially recognised at fair value. Subsequently they
are carried at amortised cost less any provision for impairment.
1.16. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits and are
recognised and subsequently carried at fair value. For the purpose of
presentation in the statement of cashflows, cash and cash equivalents include
cash on hand, deposits held at call with financial institutions, other short
term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities in the
balance sheet.
1.17. Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Trade and other
payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
1.18. Financial assets and liabilities
i) Financial assets
Loans receivable, where forward receivables comprise solely of payments of
principal and interest, are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective
interest rate method.
ii) Financial liabilities
Loans payable are financial obligations arising from funding received and used
to support the operational costs of the Group. These are initially recognised
at fair value. Loans are subsequently carried at amortised cost using the
effective interest method.
1.19. Adoption of new and revised standards
i) New and amended standards adopted by the Group
For the purposes of the preparation of these consolidated financial
statements, the Group has applied all standards and interpretations that are
effective for accounting periods beginning on or after 1 January 2024. There
was no significant impact of new standards and interpretations adopted in the
year.
ii) Standards issued but not yet effective
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2024 reporting periods and have not been
adopted early by the Group. These standards are not expected to have a
material impact on the entity in the current or future reporting periods and
on foreseeable future transactions.
1.20. Impairment
(i) Goodwill
Goodwill and intangible assets that have an indefinite useful life are not
subject to amortisation and are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they might be
impaired. This is detailed in note 1.12 above.
(ii) Other assets
At each balance sheet date, the carrying amounts of assets are reviewed to
determine whether there is any indication that those assets have suffered an
impairment loss. An impairment loss is recognised whenever the carrying amount
of an asset or its cash generating unit exceeds its recoverable amount.
Impairment losses recognised in respect of cash generating units are allocated
first to reduce the carrying amount of any goodwill allocated to cash
generating units and then to reduce the carrying amount of the other assets in
the unit on a pro-rata basis. A cash generating unit is the group of assets
identified on acquisition that generate cash inflows that are largely
independent of the cash inflows from other assets or groups of assets. The
recoverable amount of assets or cash generating units is the greater of their
fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash generating unit to which the asset belongs.
(iii) Reversals of impairments
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been
recognised.
1.21. Share based payments
Share based payments are made to employees and third parties and all are
equity settled.
(i) Third party provision of services
a) Via issue of shares
Contractors receive remuneration in the form of share-based payments, whereby
services are provided and settled by the issue of shares. The cost of equity
settled transactions is determined at the fair value of the services provided,
based upon invoiced amounts or formal agreements in place with suppliers.
b) Via issues of share warrants
The Group also issues share warrants to third parties in relation to services
provided by suppliers. The cost of equity settled transactions is determined
at the fair value of the services provided, based upon invoiced amounts or
formal agreements in place with suppliers. Where no fair value of services can
be directly obtained, the fair value at the grant date is determined using the
Black Scholes valuation model. At each reporting date the Group revises its
estimates of the number of options that are likely to be exercised with any
adjustment recognised in the income statement.
(ii) Directors and employees
c) Via issues of share options
The Group has issued share options to Directors and employees through approved
and unapproved option plans. The fair value of options issued is determined at
the date of grant and is recognised as an expense in the Income Statement over
the vesting period with a corresponding entry going to Share based Payment
Reserve.. The fair value at the grant date is determined using the Black and
Scholes valuation model. At each reporting date the Group revises its
estimates of the number of options that are likely to be exercised with any
adjustment recognised in the income statement.
Where share-based payments give rise to the issue of new share capital, the
proceeds received by the Group are credited to share capital and share premium
when the share entitlements are exercised.
1.22. Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual
leave and accumulating sick leave that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the
related service are recognised in respect of employees' services up to the end
of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are included within
creditors in the balance sheet.
For defined contribution pension plans, the Group pays contributions to
publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as
employee benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the
future payments is available.
The Group does not contribute to any defined benefit pension plans.
1.23. Segmental reporting
An operating segment is a component of the Group:
• that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions
with other components of the Group);
• whose operating results are reviewed regularly by the Group's chief
decision maker to make decisions about resources to be allocated to the
segment and assess its performance; and
• for which discrete financial information is available.
The Group considers it has two business segments, being a UK based technology
company intending to license its technology to projects in the UK and
internationally and a UK based multi disciplined Engineering Consultancy with
significant experience in undertaking engineering design and support for third
party customers.
The Engineering segment, Engsolve Limited, generated all of the Group
£499,414 Revenue in 2024 (2023: £180,959). Engsolve became part of the Group
in June 2023. This revenue was generated through Engsolve providing
Engineering Services to third party customers. The Group will be looking to
continue providing third party Engineering Services through Engsolve Limited
and to further develop this revenue stream, both through internal and external
work.
The Technology/Licensing segment (The Company) did not generate any licence
income in 2024. The Group is focusing on developing this license revenue
stream in future years.
2. Revenue
Group Company
2024 2023 2024 2023
£ £ £ £
Engineering and related services 499,414 180,959 - -
Exclusivity fees - - - -
Other - - - -
499,414 180,959 - -
During the year, the Group billed for engineering work carried out on
projects. All revenue generated has arisen in the UK.
3. Employee costs
Group Company
2024 2023 2024 2023
£ £ £ £
Directors' fees 453,788 474,671 453,788 419,671
Wages and salaries 489,538 316,128 152,263 135,625
Social security costs 92,773 50,012 56,588 31,990
Pensions 127,989 71,655 30,263 23,207
1,164,088 912,466 692,602 610,493
Highest Paid Director - refer to note 27
The number of average monthly employees (including Directors) are as follows:
Group Company
2024 2023 2024 2023
Management 7 7 6 6
Operations 10 4 2 1
17 11 8 7
The figures in the table above includes the average number of employees
throughout the year. The total number of employees as at 31 December 2024
(including Directors) was 17 (2023: 11) comprising 7 in management and 10 in
operations (2023: 7 in management, 4 in operations). All Directors are classed
as management
4. Administrative expenses
Included in administrative expenses are: 2024 2023
£ £
Research and development costs 673,200 561,474
Amortisation 22,333 16,997
Depreciation 21,799 11,732
Depreciation - right of use asset 36,184 30,153
Gain on bargain purchase (see note 24) - (712,751)
Share based payments 465,342 40,000
Foreign exchange (gains)/losses - -
Auditor's remuneration for audit services:
Fees payable to the group's auditor for the audit of the group's annual 43,500 43,500
financial statements
Fees payable to the group's auditor and their associates for other services:
Non-audit fees paid to auditors
R & D Taxation advisory and compliance services - -
5. Share of associate
2024 2023
£ £
Share of profits - 76,206
- 76,206
The Group acquired a 48.39% stake in Engsolve on 12 August 2021 as explained
in note 11. The Group acquired the balance of 51.61% stake in Engsolve on 20
June 2023. The above result represents both the Group and Companies share of
the associate's profits arising post-acquisition.
6. Goodwill & Exclusivity impairment
2024 2023
£ £
Goodwill Impairment 2,300,000 -
2,300,000 -
In 2020, Goodwill of £57,152,699 was recognised on the acquisition and hive
up of Waste2tricity Limited. An independent fair value assessment is
commissioned by the Directors on the carrying value at each balance sheet date
as explained in note 11. Impairments are made based upon the results of those
assessments plus input from the Board. No impairment was made in relation to
the goodwill carrying value at 31 December 2023. At the year-end 31 December
2024 the directors impaired the Goodwill to £nil.
7. Net finance income/(cost)
Group Company
2024 2023 2024 2023
£ £ £ £
Loan interest receivable - - - -
Lease Interest (10,805) (10,867) (10,805) (10,867)
Other interest receivable - 6,184 - -
Bank and other interest payable (447) (1,517) (447) (1,065)
(11,252) (6,200) (11,252) (11,932)
8. Income tax and deferred tax
As the Group incurred a loss, no current tax is payable (2023: £nil). In
addition, as there is no certainty about future profits from which accumulated
tax losses could be utilised, accordingly no deferred tax asset has been
recognised. The Group submitted a claim for research and development tax
credits (relating to financial year 2023) during the year amounting to
£105,753 (2023: £168,527, relating to financial year 2022) which has been
recognised in the accounts. The Group has not submitted a claim for research
and development tax credits for financial year 2024. This claim will be
submitted during 2025. Accumulated tax losses in the Group amount to an
estimated £27.2 million, and Group £27.2 million (2023: £24.3 million) and
reflect tax losses submitted in tax returns and arising during the period less
any relief taken for research and development credits. The tax credit rate is
lower (2022: lower) than the standard rate of tax. Differences are explained
below.
Group
Current tax 2024 2023
£
£
Loss before taxation 4,810,778 1,537,464
Tax credit at standard UK corporation tax rate of 25% (2023: 23.5%) 1,202,695 361,304
Effects of:
Goodwill impairment not deductible for tax purposes (575,000) -
Expenses not deductible for tax purposes (58) (14,411)
Capital allowances in excess of depreciation 7,779 350,121
Non-allowable deduction on share option expense (116,336) -
Research and development tax credits claimed 105,753 (146,681)
Deferred tax asset not recognised (519,080) (440,516)
Income tax credit 105,753 109,817
Company
Current tax 2024 2023
£
£
Loss before taxation 5,149,212 2,398,469
Tax credit at standard UK corporation tax rate of 25% (2023: 23.5%) 1,287,303 563,640
Effects of:
Goodwill impairment not deductible for tax purposes (575,000) -
Expenses not deductible for tax purposes (58) (13,845)
Additions - 211,628
Non-allowable deduction on share option expense (116,336) -
Research and development tax credits claimed 105,753 (146,681)
Deferred tax asset not recognised (595,909) (446,215)
Income tax credit 105,753 168,527
9. Loss per share
Group Company
2024 2023 2024 2023
Total comprehensive loss (£) (4,705,025) (1,427,647) (5,043,459) (2,229,942)
Weighted average number of shares 4,194,201,141 4,025,227,834 4,194,201,141 4,025,227,834
Loss per share in pence (0.11) (0.04) (0.12) (0.06)
Diluted loss per share in pence (0.11) (0.04) (0.12) (0.06)
For the year ended 31 December 2024, 153,000,000 of the options in issue and
16,000,000 of the warrants in issue were excluded from the diluted loss per
share calculation due to being anti-dilutive.
There were 31,240,606 new ordinary shares issued in the year to 31 December
2024 following the exercise of warrants on 6 June 2024 with an exercise price
of 0.5p.
10. Intangible fixed assets
Group Goodwill Exclusivity rights Patent costs Website Total
£ £ £ £ £
Cost
At 1 January 2023 57,152,699 500,000 219,555 - 57,872,254
Additions 573,581 - 31,574 16,634 621,789
Disposals - (500,000) - - (500,000)
At 31 December 2023 57,726,280 - 251,129 16,634 57,994,043
Accumulated amortisation & impairment
At 1 January 2023 54,852,699 500,000 17,482 - 55,370,181
Amortisation charge for the year - - 13,130 3,867 16,997
Disposals - (500,000) - - (500,000)
At 31 December 2023 54,852,699 - 30,612 3,867 54,887,178
Carrying amount
At 31 December 2023 2,873,581 - 220,517 12,767 3,106,865
Cost
At 1 January 2024 57,726,280 - 251,129 16,634 57,944,043
Additions - - 55,440 5,000 60,440
Disposals - - - -
At 31 December 2024 57,726,280 - 306,569 21,634 58,054,483
Accumulated amortisation & impairment
At 1 January 2024 54,852,699 - 30,612 3,867 54,887,178
Amortisation charge for the year - - 16,372 5,961 22,333
Impairment loss 2,300,000 - - - 2,300,000
At 31 December 2024 57,152,699 - 46,984 9,828 57,209,511
Carrying amount
At 31 December 2024 573,581 - 259,585 11,806 844,972
Company Goodwill Exclusivity rights Patent costs Website Total
£ £ £ £ £
Cost
At 1 January 2023 57,152,699 500,000 219,555 - 57,872,254
Additions - - 31,574 16,634 48,208
Disposals - (500,000) - - (500,000)
At 31 December 2023 57,152,699 - 251,129 16,634 57,420,462
Accumulated amortisation & impairment
At 1 January 2023 54,852,699 500,000 17,482 - 55,370,181
Amortisation charge for the year - - 13,130 3,867 16,997
Disposals - (500,000) - - (500,000)
At 31 December 2023 54,852,699 - 30,612 3,867 54,887,178
Carrying amount
At 31 December 2024 2,300,000 - 220,517 12,767 2,533,284
Cost
At 1 January 2024 57,152,699 - 251,129 16,634 57,420,462
Additions - - 55,440 5,000 60,440
Disposals - - - - -
At 31 December 2024 57,152,699 - 306,569 21,634 57,480,902
Accumulated amortisation & impairment
At 1 January 2024 54,852,699 - 30,612 3,867 54,887,178
Amortisation charge for the year - - 16,372 5,961 22,333
Impairment loss 2,300,000 - - - 2,300,000
At 31 December 2024 57,152,699 - 46,984 9,828 57,209,511
Carrying amount
At 31 December 2024 - - 259,585 11,806 271,391
Goodwill acquired by the Group in 2020 arose on the acquisition and hive up of
Waste2Tricity Limited. It was considered attributable to the Group's DMG™
technology, which is intended to be licensed on a project-by-project basis to
generate income to the Group over the lifetime of each project.
The recoverable amount of goodwill at the balance sheet date was assessed as a
directors' valuation and subsequently impaired (2023: directors' valuation).
The directors (2023: directors) assessed impairment of £2,300,000 to goodwill
in 2024 (2023: £nil). The directors (2023: directors) took note of the ICAEW
Corporate Finance Faculty Best Practice Guideline April 2008 and applied a
discounted cashflow approach, supported by the International Private Equity
and Venture Capital Guidelines of December 2018.
Goodwill additions in the Group in 2023 relates entirely to the acquisitions
of Engsolve Limited and Protos Limited as set out in Note 12 and Note 25. The
goodwill generated on the acquisition of Protos Plastics to Hydrogen No 1 Ltd
was calculated as a Gain on Bargain Purchase which has been expensed to the
Statement of Comprehensive Income in accordance with the Group's accounting
policies.
The key assumptions made by the directors in both years were:
· the expected roll out of the technology over 5 years following the
delivery of the Protos project (2023: same assumption);
· that the roll out will not be significantly impacted by competing
technologies (2023: same assumption);
· that the Group and roll out developer construct 5 projects (2023:
same assumption);
· the expected operating life of projects from which the Group will
earn license revenues (2023: same assumption);
· the expected license fees arising per project based upon agreements
with Peel NRE (2023: same assumption);
· the expected cost of services to support annual license fee income
estimated by the Group based upon current draft project agreements (2023: same
assumption);
· applying a discount rate to cashflow of 35% (2023: 35%) assessed by
review of market survey reports of discount rates for projects within similar
and competing sectors which was considered to provide a reasonable estimate of
a weighted average cost of capital for a group benefiting from the assumed
roll out.
Changes to the above assumptions would impact the valuation assessment.
The Directors believe that key sensitivities in the 2023 valuation were as
follows:
(i) The Directors have assumed a fixed number of 5 projects and 6
systems to be rolled out.
(ii) The discount rate applied to the cashflows. Sensitivity workings
with a discount rate 5% higher at 40% would decrease the valuation by c£0.5m
to £1.8m.
The Directors have not accounted for the possibility of any onerous
obligations arising within the service contracts from which licence fees will
be earnt as there is no reason to expect that these will arise at this stage
in the business life cycle.
The Group completed an impairment review and fair value review of Engsolve
Limited as part of our year end Accounts FY 2024. As part of the exercise we
reviewed fixed and current assets, liabilities and the future forecast of the
business. The outcome of this impairment review was that we believe the
Goodwill valuation at £573k should not be impaired.
The Group acquired the full ownership of Protos Plastics to Hydrogen No. 1 Ltd
(also known as "Protos SPV") as an indirect subsidiary into Powerhouse Energy
UK Limited from Peel NRE Ltd for a nominal payment of £1 on 28 April 2023.
During the year to 31 December 2022, the Group had been in discussions with
Peel NRE to enter into a 50/50 Joint Venture arrangement with Peel NRE.
However, this did not materialise and Peel NRE continued to own 100% of Protos
SPV until the Group finally purchased 100% of the share capital of Protos SPV
on 28 April 2023. The purchase agreement by the Group secures full control of
Protos SPV with an option to lease on the site at Protos. This option to lease
was terminated in April 2025 as the Group did not have the option to extend
the lease. The only option available was to sign and commit to a long term
lease, of which the group decided not to commit to therefore proceeded to
impair the Goodwill value of £2.3m in the 2024 accounts.
Refer to the CEO section of the Annual Report for further details.
11. Tangible fixed assets
Group
Right of use asset Property, plant and equipment Fixtures and Assets under construction Total
Land and buildings fittings
£ £ £ £ £
Cost
At 1 January 2023 49,250 20,413 1,876 - 71,539
Additions 180,919 32,349 10,726 958,340 1,182,334
Additions on acquisition - 16,959 15,839 - 32,798
Disposals (49,250) - - - (49,250)
At 31 December 2023 180,919 69,721 28,441 958,340 1,237,421
Accumulated depreciation
At 1 January 2023 49,250 15,570 924 - 65,744
Charge for the year 30,153 9,614 2,118 - 41,885
Charges on acquisition - 13,464 5,942 - 19,406
Disposals (49,250) - - - (49,250)
At 31 December 2023 30,153 38,648 8,984 - 77,785
Carrying amount
At 31 December 2023 150,766 31,073 19,457 958,340 1,159,636
Cost
At 1 January 2024 180,919 69,721 28,441 958,340 1,237,421
Additions - 32,832 13,842 1,083,317 1,129,991
Additions on acquisition - - - - -
Transfer to stock - - - - -
At 31 December 2024 180,919 102,553 42,283 2,041,657 2,367,412
Accumulated depreciation
At 1 January 2024 30,153 38,648 8,985 - 77,786
Charge for the year 36,184 15,448 6,351 - 57,983
Charges on acquisition - - - -
Disposals - - -
At 31 December 2024 66,337 54,096 15,336 - 135,769
Carrying amount
At 31 December 2024 114,582 48,457 26,947 2,041,657 2,231,643
Company
Right of use asset Property, plant and equipment Fixtures and Assets under construction Total
Land and buildings fittings
£ £ £ £ £
Cost
At 1 January 2023 49,250 20,413 1,876 - 71,539
Additions 180,919 32,349 10,726 *628,340 852,334
Disposals (49,250) - - - (49,250)
At 31 December 2023 180,919 52,762 12,602 628,340 874,623
Accumulated depreciation
At 1 January 2023 49,250 15,570 924 - 65,744
Charge for the year 30,153 9,614 2,118 - 41,885
Disposals (49,250) - - (49,250)
At 31 December 2023 30,153 25,184 3,042 - 58,379
Carrying amount
At 31 December 2023 150,766 27,578 9,560 628,340 816,244
Cost
At 1 January 2024 180,919 52,762 12,602 *628,340 874,623
Additions - 3,752 339 *1,083,317 1,087,408
Disposals - - - - -
At 31 December 2024 180,919 56,514 12,941 1,711,657 1,962,031
Accumulated depreciation
At 1 January 2024 30,153 25,184 3,042 - 58,379
Charge for the year 36,184 12,519 3,922 - 52,625
Disposals - - - - -
At 31 December 2024 66,337 37,703 6,964 - 111,004
Carrying amount
At 31 December 2024 114,582 18,811 5,977 1,711,657 1,851.027
*Included with fixed assets is the amount of £1,711,657 relating to assets
under construction. As per the accounting policy, no depreciation will be
charged until such a time as the asset is in use.
12. Investments
2024 2024 2024 2023 2023 2023
£ £ £ £ £ £
Subsidiaries Associates Other Subsidiaries Associates Other
Cost or carrying value at 1 January 50,057,141 - - 48,947,155 187,638 -
Additions - - - 846,145 - -
Goodwill recognised - - - - - -
Dividends - - - - - -
Share of associate's net result - - - - 76,203 -
Transfers - - - 263,841 (263,841) -
Disposals - - - - - -
Cost or carrying value 31 December 50,057,141 - - 50,057,141 - -
Provision at 1 January (48,947,154) - - (48,947,154) - -
Additions - - - - - -
Disposals - - - - - -
Accumulated impairment (48,947,154) - (48,947,154) -
Carrying value 1,109,987 - - 1,109,987 - -
(i) Subsidiaries
Investments relate to costs of investments in subsidiary undertakings, namely
in Powerhouse Energy, Inc, Pyromex AG and Powerhouse Energy UK Limited.
Powerhouse Energy, Inc is incorporated in California in the United States of
America and the Group holds 100 per cent of the common stock and voting rights
of the subsidiary. Pyromex AG is based in Zug, Switzerland and the Group holds
100 per cent of the shares and voting rights of the subsidiary. Powerhouse
Energy UK Limited is a wholly owned UK based dormant company. Powerhouse
Energy International Limited is a wholly owned UK based dormant company.
The subsidiaries included in the consolidated accounts are Engsolve Ltd and
Protos Plastics to Hydrogen No.1 Limited.
The registered address of Powerhouse Energy Inc is 145 N Sierra Madre Blvd,
Pasadena, CA 91107, USA.
The registered address of Pyromex AG is Chollerstrasse 3, CH-6300, Zug,
Switzerland.
The registered address of Powerhouse Energy UK Limited, Powerhouse Energy
International Limited, Engsolve Limited and Protos to Plastics Hydrogen No. 1
Limited is Unit 3/3A Garth Road, Brackla Industrial Estate, Bridgend CF31 2AQ.
Engsolve Ltd and Protos Plastics to Hydrogen No.1 Limited are exempt from the
requirements of the Companies Act relating to the audit of individual accounts
by virtue of Section 479A and the parent has guaranteed all their liabilities
at the reporting date.
(ii) Acquisition of interest in Engsolve Limited
On 21 June 2023, the Group acquired the remaining 51.61% of the share capital
of Engsolve Limited for cash consideration of £572,896. Engsolve Limited is
incorporated and operates in the UK. Summary financial information of Engsolve
Limited at acquisition and balance sheet dates is provided below:
31 Dec 2023 21 June 2023 31 Dec 2023
£ £ £
Summarised balance sheet
Fixed assets 13,391 11,694 13,391
Cash and cash equivalents 570,693 466,793 570,693
Other current assets 141,788 150,492 141,788
Current liabilities (135,564) (106,419) (135,564)
Net assets 590,308 522,560 590,308
Group share 100% 100% 100%
Share of net assets 590,308 522,560 590,308
Summarised Income statement - post acquisition
Revenue 1,120,144 596,860 1,120,144
Profit from continuing operations 206,840 152,936 206,840
Profit from discontinued operations - -
Other comprehensive income - -
Total comprehensive income 206,840 152,936 206,840
Group Share of pre-tax profit/(loss) 206,840 83,066 206,840
Group share of tax (44,534) (6,860) (44,534)
Dividends received - - -
The Group incurred advisory costs associated with the acquisition which were
expensed in 2023.
(iii) Acquisition of interest in Protos Plastics Limited
On 21 June 2023, the Group acquired 100% of the share capital of Protos
Plastics to Hydrogen No.1 Limited as an indirect subsidiary though Powerhouse
Energy UK Limited for cash consideration of £1. Protos Plastics to Hydrogen
No.1 Limited is incorporated and operates in the UK. Summary financial
information of Protos Plastics to Hydrogen No.1 Limited at acquisition and
balance sheet date is provided below:
31 Dec 2023
£
Summarised balance sheet
Cash and cash equivalents 5
Other current assets 945,715
Current liabilities (197,324)
Net assets 748,391
Group share 100%
Share of net assets 748,391
Summarised Income statement - post acquisition
Revenue -
Profit/Loss from continuing operations 35,639
Profit from discontinued operations -
Other comprehensive income -
Total comprehensive income 35,639
The Group incurred advisory costs associated with the acquisition which were
expensed in 2023.
13. Trade and other receivables
Group Company
2024 2023 2024 2023
£ £ £ £
Trade receivables 14,572 79,078 - -
Other receivables 168,335 157,094 147,420 375,864
Prepayments and accrued income 89,580 89,662 76,060 78,223
272,487 325,834 223,480 454,087
14. Corporation tax
Group Company
2024 2023 2024 2023
£ £ £ £
Corporation tax recoverable 274,277 168,527 274,280 168,527
274,277 168,527 274,280 168,527
15. Cash and cash equivalents
Group Company
2024 2023 2024 2023
£ £ £ £
Cash balances 1,308,392 4,348,887 576,805 3,775,250
1,308,392 4,348,887 576,805 3,775,250
16. Trade and other payables: amounts falling due within one year
Group Company
2024 2023 2024 2023
£ £ £ £
Trade payables 207,370 110,673 170,103 79,308
Lease liability 44,035 32,921 44,035 32,921
Other creditors and accruals 111,692 341,202 649,051 922,582
Other taxes - 19,774 15,836 19,684
Pensions payable 9,004 1,688 9,004 1,688
372,101 506,258 888,029 1,056,183
17. Trade and other payables: amounts falling due more than one year
Group Company
2024 2023 2024 2023
£ £ £ £
Lease liability 162,134 122,475 162,134 122,475
162,134 122,475 162,134 122,475
18. Financial assets and financial liabilities
Financial assets Group Company
2024 2023 2024 2023
£ £ £ £
Financial assets at amortised cost:
- Trade receivables 14,572 79,078 - 79,078
- Other Debtors 168,335 157,094 342,714 375,864
- Cash and cash equivalents 1,308,392 4,348,887 576,805 3,775,250
1,491,299 4,585,059 919,519 4,230,192
Financial liabilities Group Company
2024 2023 2024 2023
£ £ £ £
Liabilities at amortised cost::
- Trade payables 207,370 110,673 170,103 79,308
- Other creditors 111,692 341,172 941,813 922,582
-Taxes - VAT & payroll - 19,744 15,836 19,684
- Pensions payable 9,004 1,688 9,004 1,688
-Lease liabilities 206,169 32,981 206,169 32,921
534,235 506,258 1,342,985 1,056,183
19. Leases
The Group has leased offices at the location of its research facility for a
duration less than one year. The lease is reflected in the accounts as an
expense on the income statement.
19.1 Amounts recognised in the balance sheet
Right of use assets relate to leased properties that do not meet the
definition of investment property and are presented within tangible fixed
assets per Note 11.
2024 2023
£ £
Right of use assets
Balance at 1 January 150,766 -
Additions to right of use assets - 180,919
Depreciation charge for the year (36,184) (30,153)
Balance at 31 December 114,582 150,766
2024 2023
Future minimum rentals payable are as follows: £ £
Amounts payable:
Within one year 85,424 46,000
Later than one year and not later than five years 163,910 135,570
Total gross payments 249,334 181,570
Impact of finance expenses (43,165) (26,174)
Carrying value of liability 206,169 155,396
19.2 Amounts recognised in income statement
2024 2023
£ £
Depreciation charge 36,184 30,153
Interest on lease liabilities 11,252 10,867
Expenses relating to short term leases - 3,844
47,436 44,864
19.3 Amounts recognised in statement of cashflows
2024 2023
£ £
Interest on lease liabilities 11,252 10,867
Repayment of lease principal 36,184 30,153
Total cash outflow for leases 47,436 41,020
20. Share capital
Group and Company
(i) Number of shares
0.5 p Ordinary 0.5 p Deferred shares 4.5 p Deferred 4.0 p Deferred
shares shares shares
Shares at 1 January 2022 3,957,414,135 388,496,747 17,373,523 9,737,353
Issue of shares 208,000,000 - - -
Shares at 31 December 2023 4,165,414,135 388,496,747 17,373,523 9,737,353
Issue of shares 31,240,606 - - -
Shares at 31 December 2024 4,196,654,741 388,496,747 17,373,523 9,737,353
(ii) Value in £
0.5 p Ordinary shares 0.5 p Deferred shares 4.5 p Deferred shares 4.0 p Deferred shares Share Capital
£ £ £ £ £
At 1 January 2023 19,787,071 1,942,483 781,808 389,494 22,900,856
Issue of shares 1,040,000 - - - 1,040,000
At 31 December 2023 20,827,071 1,942,483 781,808 389,494 23,940,856
Issue of shares 156,203 - - - 156,203
At 31 December 2024 20,983,274 1,942,483 781,808 389,494 24,097,059
All ordinary shares of the Company rank pari-passu in all respects.
The deferred shares do not carry any voting rights or any entitlement to
attend general meetings of the Company. They carry only a right to participate
in any return of capital once an amount of £100 has been paid in respect of
each ordinary share.
On 6 June 2024, the Company issued 31,240,606 new ordinary shares of 0.5p each
("Ordinary shares") in the Company at a price of 0.5p each following the
exercise of warrants which generated gross proceeds of £156,203 for the
Company.
21. Other reserves
Group
Merger relief Share premium account
reserve £
£
As at 1 January 2023 61,291,710
Share based payments (70,901)
At 31 December 2023 - 61,220,809
Share based payments -
Share issue costs - -
At 31 December 2024 - 61,220,809
Company
Merger relief Share premium account
reserve £
£
As at 1 January 2023 61,291,710
Share based payment (70,901)
At 31 December 2023 - 61,220,809
Share based payments -
Share based payment - -
At 31 December 2024 - 61,220,809
22. Accumulated deficit
Group
2024 2023
£ £
As at 1 January (76,680,649) (75,323,903)
Loss for the year (4,705,025) (1,427,647)
Share based payments - 70,901
At 31 December (81,385,674) (76,680,649)
Company
2024 2023
£ £
As at 1 January (77,482,944) (75,323,903)
Loss for the year (5,043,459) (2,229,942)
Share based payments - 70,901
At 31 December (82,526,403) (77,482,944)
23. Share based payments
The expense recognised for share-based payments during the year is shown in
the following table:
2024 2023
£ £
Share based payment charge recognised in Income Statement
Expense arising from equity-settled share-based payment transactions:
- Share options for Directors and employees 465,342 -
- Shares issued for third party services - 40,000
Total share-based payment charge in Income Statement 465,342 40,000
Share based payment charge recognised in Share Premium Account
Warrants for third party services - 78,735
Warrants exercised in 2024 - (7,834)
Total share-based payment charge in Share Premium Account - 70,901
Total share-based payment charges recognised - -
Other share-based payment movement
Exercise of share options by Directors and employees - -
Exercise of warrants for third party services 156,203 -
Shares option lapsed in Jan 22 -
-Total shares issued for warrants exercised 156,203 -
There were no liabilities recognised in relation to share based payment
transactions.
23.1 Share options for Directors and employees
The Group has put in place various options schemes for Directors and employees
as follows:
On 8 December 2014, the Group granted 11,000,000 options over ordinary shares
to the Board. The options may be exercised between the grant date and the
tenth anniversary of the grant date and will lapse if not exercised during
that period.
On 6 March 2018, the Group granted 32,100,000 options over ordinary shares to
employees, including a Board member, under the Powerhouse Energy Group PLC
2018 EMI Option Scheme. The options vest to the employees over a period of 24
months and are exercisable between the relevant vesting dates and the tenth
anniversary of the grant date and will lapse if not exercised during that
period. These options had all been exercised or forfeited by 31 December 2019.
On 6 March 2018, the Group granted 60,000,000 options over ordinary shares to
Board members under the Powerhouse Energy Group PLC 2018 non-employee Share
Option Plan. The options vested to the Board members over a period of 24
months and were exercisable between the relevant vesting dates and 31 December
2024. These options have all been exercised or forfeited by 31 December 2024.
On 23 April 2021, the Group granted 1,773,239 share options in ordinary shares
of 0.5p each in the Group to two Directors of the Group in lieu of part or all
of their fees to which they are entitled. The options had an exercise price of
6.3p each and lapse 3 years from the date of grant. These options had all
been exercised or forfeited by 31 December 2024.
The movement of share options in the year are as follows:
2024 2024 2023 2023
Number WAEP (pence) Number WAEP (pence)
Outstanding at 1 January 15,581,355 1.13 15,581,355 1.13
Granted during the year 153,000,000 1.1 - -
Forfeited during the year (15,581,355)
Exercised during the year - - - -
Outstanding at 31 December 153,000,000 1.12 15,581,355 1.13
Exercisable at 31 December - 1.13 15,581,355 1.13
The weighted average remaining contractual life for the share options
outstanding as at 31 December 2023 was 0.9 years (2022: 0.9 years).
153,000,000 share options were granted during the year (2023: nil). The range
of exercise prices for options outstanding at the year-end was 0.6p to 6.3p
(2023: 0.6p to 6.3p). The number of options outstanding at 31 December 2024
and the movements in the year are as follows:
Date of Granted Share price on grant Forfeited At 31 Dec Exercise price Exercise period Vesting period
grant 2024
8 Dec 3,000,000 1.875p (3,000,000) - 2.5p 9 Dec 2014 until 8 Dec 2024 Forfeited
2014
6 Mar 12,000,000 0.57p (12,000,000) - 0.6p 7 Mar 2018 until Forfeited
2018 8 Dec 24*
22 Apr 581,355 5.58p (581,355) - 6.3p 23 Apr 2021 until Forfeited
2021 22 April 2024
25 Oct 153,000,000 1.075p - 153,000,000 1.1p 24 Oct 2024 until 25 Oct 2024 to 1 May 2025-
2024 23 Oct 2029
25 Total 168,581,355 (15,581,355) 153,000,000
*The expiry date of the option granted on 6 March 2018 was adjusted by the
board due to a director leaving the Group in June 2022. On 29 September 2022
the board agreed to align the termination/expiry dates for both sets of
options for James Greenstreet to 8 December 2024.
The estimated fair value of the options issued was calculated by applying the
Black-Scholes option pricing model. The assumptions used in the calculation
were as follows:
Options in issue 31 December 2024 25 October 2024 8 December 2014 6 March 2018 22 April 2021
Exercise price
Expected volatility 153,000,000 3,000,000 12,000,000 581,355
Contractual life
Risk free rate 1.1p 2.5p 0.6p 6.30
Estimated fair value of each option
117.7% 127.56% 70.00%** 214.8%**
5 years 10 years 10 years 3 years
3.91% 2% 1.49% 0.15%
0.91p 1.79p 0.32p* 3.87p*
25 October 2024
153,000,000
1.1p
117.7%
5 years
3.91%
0.91p
8 December 2014
3,000,000
2.5p
127.56%
10 years
2%
1.79p
6 March 2018
12,000,000
0.6p
70.00%**
10 years
1.49%
0.32p*
22 April 2021
581,355
6.30
214.8%**
3 years
0.15%
3.87p*
* the calculation applies a 25% discount for small companies
** expected volatility based on historic volatility at the point of grant.
23.2 Warrants for third party services
The Group has issued warrants in respect of services provided by consultants
as part of their service arrangements. It has also issued warrants to
participating shareholders in respect of certain fund raises. No share-based
payment charge is recognised for warrants issued to participating shareholders
as they are outside of the scope of IFRS 2.
Details of warrants which have been issued are as follows:
On 15 September 2020, the Group granted 5,395,260 warrants to the Group's
broker as part of its service arrangement in relation to the fund raise
arising on that date. The options may be exercised between the grant date and
the third anniversary of the grant date and will lapse of not exercised during
that period. At the date of grant the share price was 3.3p and the warrants
have an exercise price of 2.5p per share.
On 21 January 2021, the Group granted 9,090,910 warrants to the Group's broker
as part of its service arrangement in relation to the fund raise arising on
that date. The options may be exercised between the grant date and the third
anniversary of the grant date and will lapse of not exercised during that
period. At the date of grant the share price was 8.6p and the warrants have an
exercise price of 5.5p per share.
On 1 September 2023, the Group granted 16,000,000 warrants to the Group's
broker as part of its service arrangement in relation to the fund raise
arising on that date. The options may be exercised between the grant date and
the third anniversary of the grant date and will lapse of not exercised during
that period. At the date of grant the share price was 0.55p and the warrants
have an exercise price of 0.5p per share.
On 31 January 2024, the Group granted 31,240,606 warrants to the Group's Nomad
as part of its service arrangement in relation to acting as Nomad to the
Group. The warrants may be exercised between the grant date and the third
anniversary of the grant date and will lapse if not exercised during that
period. At the date of grant the share price was 0.31p and the warrants have
an exercise price of 0.5p per share. These warrants were exercised in the
period.
Warrants in respect of services provided:
The movement of warrants issued for share-based payments in the year are as
follows:
2024 2024 2023 2023
Number WAEP (pence) Number WAEP (pence)
Outstanding at 1 January 25,090,910 2.3 9,590,910 5.3
Granted during the year 31,240,606 - 16,000,000 0.5
Forfeited during the year (9,090,910) 2.3 (500,000) 2.5
Exercised during the year (31,240,606) - -
Outstanding at 31 December 16,000,000 2.3 25,090,910 2.3
Exercisable at 31 December 16,000,000 2.3 25,090,910 2.3
The weighted average remaining contractual life for the share warrants
outstanding as at 31 December 2024 was 0.7 years (2023: 1.7 years)
The range of exercise prices for warrants outstanding at the year-end was 0.5p
(2023: 0.5p to 5.5p).
The number of warrants, which have been included for share-based payment
purposes, outstanding at 31 December 2024 and the movements in the year are as
follows:
Date of grant Granted Share price Exercised Forfeited At 31 Dec Exercise Exercise
on grant 2023 Price period
21 Jan 2021 9,090,910 8.6p - (9,090,910) - 5.5p 22 Jan 2021 until 21 Jan 2024
01 Sep 2023 16,000,000 0.6p - - 16,000,000 0.5p 02 Sep 2023 until
01 Sep 2026
31 Jan 2024 31,240,606 0.29p (31,240,606) - - 0.5p 01 Feb 2024 until
31 Jan 2029
Total 56,331,516 - (31,240,606) (9,090,910) 16,000,000
The Group is required to assess the fair value of instruments issued in
respect of services received, with such value charged to the Income Statement.
The estimated fair value of the warrants issued during the year was calculated
by applying the Black-Scholes option pricing model. The assumptions used in
the calculation were as follows:
Warrants issued for services 21 Jan 2021 01 Sep 2023
In issue 31 December 2024 9,090,910 16,000,000
Exercise price 5.5p 0.5p
Expected volatility* 161.6% 275.58%
Contractual life 3 years 3 years
Risk free rate (0.07%) 4.82%
Estimated fair value of each option 4.6p 0.49p
* expected volatility based on historic volatility at the point of grant.
All warrants
The number of all warrants outstanding at 31 December 2024 and the movements
in the year are as follows:
Date of Granted Share price on grant As at 1 Jan 2023 Exercised Forfeited At 31 Dec 2024 Exercise price Exercise period
grant
21 Jan 2021 9,090,910 8.6p 9,090,910 - (9,090,910) - 5.5p 22 Jan 2021 until
21 Jan 2024
01 Sep 2023 16,000,000 0.6p 16,000,000 - - 16,000,000 0.5p 01 Sep 2023 until
01 Sep 2026
Total 25,090,910 25,090,910 - (9,090,910) 16,000,000
24. Material risks
The Group is subject to various risks relating to political, economic, legal,
social, industry, business and financial conditions. Risk assessment and
evaluation is an essential part of the Group's planning and an important
aspect of the Group's internal control system. The Group's approach to these
risks is detailed in the Strategic Report.
25. Business Combinations - Prior Year
In April 2023 the Group acquired Protos Plastics to Hydrogen No.1 Limited for
£1 and on 20 June 2023 the Group acquired Engsolve Limited for a total
consideration of £572,896 as set out in the notes below:
Acquisition of Protos Plastics to Hydrogen No.1 Limited
Recognised amounts of identifiable assets acquired and liabilities assumed:
Book Value Adjustment Fair Value
£ £ £
Fixed Assets
Tangible 2,362,649 (2,362,649) -
Asset under Construction 330,000 330,000
Current Assets
Debtors 615,709 (209,015) 406,694
Cash at bank and in hand 5,787 - 5,787
Total Assets 3,314,145 (2,571,664) 742,481
Creditors
Due within one year (3,361,853) 3,332,124 (29,729)
Total identifiable net assets (47,708) 760,460 712,752
Goodwill (712,751)
Total Purchase Consideration 1
Cash (Outflow)/Inflow on Acquisition 5,786
As part of the Fair Value adjustments it was identified that Fixed Assets held
were impaired and had no sales value. In addition to this the Group took the
decision that the loan between Powerhouse Energy Group PLC and Protos Plastics
to Hydrogen No 1 Limited is not expected to be recovered and due to there
being control the loan owed in the books of Protos Plastics to Hydrogen No 1
Limited was impaired to £nil.
The goodwill arising on acquisition is attributable to the acquisition of
Protos Plastics to Hydrogen No.1 Limited. The goodwill generated from the
Acquisition of Protos Plastic to Hydrogen No.1 Limited is included in the
Group profit and loss account. The results of Protos Plastics to Hydrogen No.1
Limited since acquisition are as follows.
Current Period since acquisition
£
Turnover -
Profit for the period since acquisition 35,639
Acquisition of Engsolve Limited
Recognised amounts of identifiable assets acquired and liabilities assumed:
Book Value Fair Value
£ £
Fixed Assets
Tangible 11,694 11,694
Current Assets
Debtors 150,492 150,492
Cash at bank and in hand 466,793 466,793
Total Assets 628,979 628,979
Creditors
Due within one year (106,419) (106,419)
Total identifiable net assets 522,560 522,560
Goodwill (See note 11) (573,581)
Total Purchase Consideration 1,109,986
Cash (Outflow)/Inflow on Acquisition (108,967)
The goodwill arising on acquisition is attributable to the acquisition of
Engsolve Limited. The results of Engsolve Limited since acquisition to 31
December 2023 are as follows:
Current Period since acquisition
£
Turnover 180,559
Profit for the period since acquisition 53,904
Cash Acquired on Acquisition Cash acquired Cash Paid Cash (Outflow)/Inflow on Acquisition £
£
£
Protos Plastics to Hydrogen No.1 Limited 5,787 (1) 5,786
Engsolve Limited 466,793 (575,760) (108,967)
Total 472,580 (575,761) (103,181)
26. Pension Costs
*Group Company
£ £
Pension Creditor Year end 2023 4,159 1,687
Pension liability in the year 127,989 30,263
Pension paid out in the year 123,144 22,946
Pension Creditor Year end 2024 9,004 9,004
*Please note the Group pension scheme figures includes Engsolve pension scheme
27. Directors' remuneration and share interests
The Directors who held office at 31 December 2024 had the following interests,
including any interests of a connected party in the ordinary shares of the
Group:
Number of ordinary shares Percentage of
of 0.5p each voting rights
Paul Emmitt 4,538,292 0.10
Ben Brier 6,533,007 0.15
The remuneration of the Directors of the Group paid or payable for the year or
since date of appointment, if later, to 31 December 2024 is:
2024 2024 2024 2024 2024 2023
£ £ £ £ £ £
Salary/Fee Pension Share based payments Other Total Total
Antony Royston Gardner-Hillman - - - - - 82,500
Anthony Clive Gale 30,000 - 36,497 - 66,497 30,000
Paul Emmitt 160,000 15,000 152,073 - 327,073 110,250
James John Pryn Greenstreet - - - -
Hugh McAlister 30,000 - 36,497 - 66,497 30,000
Paul Drennan-Durose - - -
Gillian Weeks - - - -
Russell Ward - - - -
Myles Howard Kitcher - - - -
Allan Vlah - - - -
David John Hitchcock 60,000 - 45,622 - 105,622 32,500
Karol Kacprzak 30,000 - 36,497 - 66.497 26,518
Keith Riley 31,288 - - - 31,288 157,528
Ben Brier 112,500 9,000 121,658 - 243,158 10,125
Total 453,788 24,000 428,844 906,632 479,421
The Board did not receive pay increases in 2024 (Paul Emmitts remuneration was
split between Powerhouse and Engsolve in 2023).Total remuneration includes
share-based payments arising from the issue of options amounting to
153,000,000 in 2024 (2022: nil). There have been no awards of shares to
Directors under long term incentive plans during the year.
The Directors' social security costs for the year amounted to £40,469 (2023:
£25,192) resulting in a total remuneration expense of £518,257 (2023:
£504,613).
Prior to their resignations from the Board, Tim Yeo, James John Pryn
Greenstreet, Allan Vlah, Antony Royston Gardner-Hillman and Keith Riley had
service contracts that could be terminated by the provision of three months'
notice.
There are share options for directors who served during the year. See note
23.1.
Highest Paid Director
Paul Emmitt was the highest paid Director in the year. Paul did not receive a
pay rise in 2024 (Pauls remuneration was split between Powerhouse and Engsolve
in 2023). There were no shares received or receivable by him in respect of
qualifying services under long term incentive schemes.
28. Related parties
Engsolve Limited, an engineering solutions company, was a related party until
30 June 2021 due to a Paul Emmitt's family member being part of its key
management personnel and Paul Emmitt being a controlling shareholder, and from
12 August 2021 when the Group acquired 48.39% of its share capital. On the 21
June 2023 the Group acquired the remaining 51.61% of shares of Engsolve
Limited for a consideration of £572,896, the majority of the shares of which,
came from Paul Emmitt who was COO of Powerhouse at the time. Engsolve provided
engineering services to the Group during the year amounting to £880,642
(2023: £666,739). Amounts outstanding at year end for services provided and
included in these accounts amounted to £126,564 (2023: £51,269). All amounts
post-acquisition have been eliminated in accordance with the accounting
policies in the Consolidated Financial Statements
Keith Riley was appointed as a non-executive director of the Group on 27
September 2021. Mr Riley was Interim Chairman and acting Chief Executive
Officer of the Group in 2023 and resigned on 5 September 2023. Mr Riley was
also an active director in Engsolve Limited from 8 March 2023 to 5 September
2023. Keith Riley joined Hydrogen Utopia International PLC as Technical
Director on 6 January 2022 and resigned on 26 May 2023. Keith Riley was also a
director of HU2021 International UK Ltd from 18 January 2022 until 31 May
2023.
Hugh McAlister was a Non-Executive Director of the Group during 2023 and also
owned shares in Hydrogen Utopia International.
29. Events after the reporting period
On 14 March 2025 the Group announced that it has raised £1.25 million,
before expenses, through a placing of 250,000,000 new ordinary shares of 0.5p
each in the capital of the Company at a price of 0.5p per share. The Group
also provided a retail offering to its current shareholders of 25,000,000 new
Ordinary Shares, on the same terms as the Placing to raise up to a
further £125,000. The Retail offering raised the full £125,000 and was
significantly over subscribed.
On 25 April 2025, Louise Emmitt the wife of Paul Emmitt the Groups Chief
Executive Officer acquired 1,933,679 ordinary shares of 0.5p in the Company at
0.519p per Ordinary Share. Further to this transaction, Mr Emmitt and his
wife are beneficially interested in 6,471,971 Ordinary Shares, which
represents 0.14% of the Company's issued ordinary share capital.
30. Ultimate controlling party
There is no single controlling party of the Group.
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