REG - Proton Motor Power - Half-year Report
18/09/2024 10:30
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RNS Number : 6961E Proton Motor Power Systems PLC 18 September 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
18 September 2024
Proton Motor Power Systems plc
("Proton Motor", the "Company" or the "Group")
Unaudited Interim Results for the six months to 30 June 2024
Proton Motor Power Systems plc (AIM: PPS), the designer, developer and
producer of fuel cells and fuel cell electric hybrid systems with a
zero-carbon footprint, announces its unaudited interim results for the six
months ended 30 June 2024 (the "Period" or "H1 2024") as well as an update on
the Company's financing.
Status on Financing
These results are unaudited and presented on the basis that the Company
remains a going concern. However, as noted in the Company's announcement
issued on 22 August 2024, the Company's principal lender has indicated that it
will not support the Company's working capital requirements beyond 31 December
2024, notwithstanding the €12m loan facility that was provided to the
Company by the lender, as announced on 28 June 2024 (the "2024 Facility").
Whilst the directors of Proton Motor ("Directors" or "Board") are
investigating alternative sources of finance there is no certainty that these
discussions will result in an investment which will allow the Company to fund
its working capital requirements beyond the end of the year. Since the Company
remains lossmaking, in the absence of securing any such financing or being
able to draw upon the 2024 Facility beyond the end of the year, there is a
very high risk that the Company will not be able to operate beyond 31 December
2024 and would need to initiate an orderly wind down of its operations before
then.
Operational Highlights
- Delivery of six systems (H1 2023: 19) to customers at varying
power levels from the Company´s HyModule® S8 and HyFrame® product range
- Granted serial and operational approval for rail application of
HyCabinet S24 and HyCabinet S48
- Customer handover of first HyCabinet S24 to DB Bahnbaugruppe under
the customer brand name EnerRail H024
- Progress in the delivery of the new production facility with
production planned to commence from the new facility in 2025
- A restructuring programme has been implemented to match the
business plan for the new year, based on a new total headcount of 93
Financial Highlights
- Order intake of £0.5m (H1 2023: £1.4m) for a total order book of
£2.2m at the period end (H1 2023: £3.7m), including repeat orders from
existing customers and income from maintenance agreements
- Sales of £624k in H1 2024 (H1 2023: £929k)
Antonio Bossi, Chairman of Proton Motor, commented
"Although we are seeing additional repeat orders from key customers post
testing our systems, together with multiple indications at the political and
market level that support and promote the massive potential of hydrogen
related applications, trading during H1 2024 proved to be extremely
challenging with potential customers being hesitant to make substantial
investments in hydrogen fuel cells, within the current market."
For further information:
Proton Motor Power Systems Plc
Dr Faiz Nahab, CEO
Antonio Bossi, Chairman
Roman Kotlarzewski, CFO +49 (0) 173 189 0923
Investor relations: www.protonpowersystems.com
investor-relations@proton-motor.de (mailto:investor-relations@proton-motor.de)
Allenby Capital Limited
Nominated Adviser & Broker +44 (0) 20 3328 5656
James Reeve / Vivek Bhardwaj
Celicourt Communications
PR Adviser
Mark Antelme / Philip Dennis +44 (0) 20 8434 2643
About Proton Motor Fuel Cell GmbH
Proton Motor has more than 20 years of experience in Power Solutions using
CleanTech technologies such as hydrogen fuel cells, fuel cell and hybrid
systems with a zero carbon footprint. Based in Puchheim near Munich, Proton
Motor offers complete fuel cell and hybrid systems from a single source - from
the development and production through the implementation of customized
solutions. The focus of Proton Motor is on back-to-base, for example, for
mobile, marine and stationary solutions applications. The product portfolio
consists of base-fuel cell systems, standard complete systems, as well as
customized systems.
Proton Motor serves IT, Telecoms, public infrastructure and healthcare
customers in Germany, Europe and Middle East with power supply solutions for
DC and AC power demand. In addition to power supply,
Proton Motor Fuel Cell GmbH is a wholly owned subsidiary of Proton Motor Power
Systems plc. The Company has been quoted on the AIM market of the London Stock
Exchange since October 2006 (code: PPS).
Chairman´s report
We are pleased to report our unaudited results for the six months ended 30
June 2024.
Overview
Though multiple indications are evident on a political and market level to
support and promote the massive potential of hydrogen related applications,
trading during H1 2024 proved to be extremely challenging, due to current
economic conditions.
Finance
Proton Motor received orders for £0.5m in the first half of the year,
including several repeat orders from existing customers. Repeat orders allow
better production planning, including purchasing materials on more favourable
terms, which is expected to support the sales margin.
Sales in H1 2024 were £624k (H1 2023: £929k), arising from 2023 and the H1
2024 order intake. 100% of system sales occurred in the stationary segment
(2023: 66%)
£2.1m (2023: £1.9m) was invested in development with the primary focus of
the development programme being an extension of the product life cycle and
design to cost.
To ensure the cost base remains in-line with current needs, Proton Motor
sought to reduce costs during the period, resulting in a decrease in the
headcount to 109 full time employees at the period end (H1 2023: 115). This
number is anticipated to further decrease to 93 in H2 2024, once the effects
of the restructuring programme implemented in H1 2024 have taken full effect.
Excluding the impact of exchange differences, the operating loss in the first
half of 2024 was £5.4m (H1 2023: £5.4m). The operating result was supported
by an increase in a German R&D tax credit received during the Period, as
reflected in the operating income. The funds from the tax credit are expected
to be received in H2 2024.
In October 2022, the Company announced that it had signed a fifteen-year lease
agreement for a modern premises, offering additional space for manufacturing,
testing and development, which will improve production efficiency and overall
capacity. This represents a key step in the Company strategy to reach
commercialisation, with unit costs expected to decrease in line with capacity.
£511k was invested in equipment and infrastructure during the period (H1
2023: £239k). This included equipment being installed in the new premises.
Subject to securing financing for the future of the business, as described
further below, the Company continues to expect production to commence from the
new facility in 2025.
The lease for the new facility has been capitalised in line with IFRS 16 and
is included in Right of Use Assets.
Cash burn from operating activities grew during the period to £7.3m (H1 2023:
£6.8m). Cash flow remains a key financial performance indicator, with the
objective of achieving positive cash flow as soon as possible. The cash
position as at 30 June 2024 was £2.5m (30 June 2023: £2.7m).
In June 2024, the Company agreed a new €12.0m financing facility with its
principal lenders to provide working capital for the Company up to June 2025
(the "2024 Facility"), as well as a €6.1m increase to an existing facility
to retrospectively cover additional drawdowns that had taken place between
February and June 2024. The principal and interest on these additional
facilities is not convertible and interest is charged at EURIBOR+3%.
Current trading and outlook
It remains evident that awareness of hydrogen as an energy source of the
future is increasing to a considerable extent, both amongst the public and
within industry, and that the demand for associated technologies, such as fuel
cells, is increasing substantially. Despite this, due to challenging current
economic conditions, customers have been reluctant to commit to additional
orders at this time, resulting in an extremely tough trading environment in H1
2024, which is expected to remain so, at least for the rest of H2 2024.
As noted in the announcement issued on 22 August 2024, the Company's principal
lender has indicated that it will not support the Company's working capital
requirements beyond 31 December 2024, notwithstanding the provision of the
2024 Facility. Whilst the Directors are investigating alternative sources of
finance, there is no certainty that these discussions will result in an
investment which will allow the Company to fund its working capital
requirements beyond the end of the year. Since the Company remains lossmaking,
in the absence of securing financing or being able to draw upon the 2024
Facility beyond the end of the year, there is a very high risk that the
Company will not be able to operate beyond 31 December 2024. The Directors
consider that in this scenario, they would have no option but to initiate an
orderly wind down of the business and its operations and seek the cancellation
of the admission of the Company's ordinary shares from trading on AIM. In
order that the Company and its subsidiaries could be wound down in an orderly
and solvent manner by the end of the year, the Board will start taking steps
to reduce the Company's overheads immediately, including a further significant
reduction in the headcount. Further updates will be provided in due course.
Antonio Bossi
Non-Executive Chairman
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Revenue 624 929 2,122
Cost of sales (765) (914) (1,654)
Gross profit (141) 15 468
Other operating income 1,063 98 2,071
Administrative expenses (6,306) (6,213) (12,907)
Operating loss (5,384) (6,100) (10,368)
Finance income 0 2 0
Finance costs incl. exchange gains((losses) (69) 554 (4,160)
(Loss) for the period attributable to shareholders (5,453) (5,544) (14,528)
(Loss) per share (expressed as pence per share)
Basic (0.3) (0.4) (0.9)
Diluted (0.3) (0.4) (0.9)
OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Profit/(Loss) for the period (5,453) (5,544) (14,528)
Othe comprehensive (expense) / income
Items that may not be reclassified to profit and loss
Exchange differences on translating foreign operations (1,299) (332) (1,301)
Total other comprehensive (expense) for the period (1,299) (332) (1,301)
Attributable to equity holders of the parent (6,752) (5,876) (15,829)
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Assets
Non-current assets
Intangible assets 78 110 95
Property, plant and equipment 3,682 1,970 3,483
Right of use assets 13,103 11,191 13,660
Finance investment - - -
16,863 13,271 17,238
Current assets
Inventories 3,651 2,469 2,760
Trade and other receivables 4,008 1,052 3,235
Cash and cash equivalents 2,502 2,662 2,741
Total current assets 10,161 6,183 8,736
Total assets 27,024 19,454 25,974
Current Liabilities
Trade and other payables (6,150) (4,072) (5,725)
Lease debt (914) (742) (828)
Borrowings (230) (432) (261)
(7,294) (5,246) (6,814)
Non-current liabilities
Borrowings (122,377) (108,415) (116,947)
Lease debt (13,435) (11,045) (13,921)
Total liabilities (143,106) (124,706) (137,682)
Net liabilities (116,082) (105,252) (111,708)
Equity
Capital and reserves attributable to equity shareholders
Share capital 11,588 11,049 11,235
Share premium account 24,764 20,963 22,816
Merger reserve 15,656 15,656 15,656
Reverse acquisition reserve (13,861) (13,861) (13,861)
Share option reserve 3,423 3,058 3,346
Foreign translation reserve 14,941 12,115 13,855
Capital contributions 289,434 289,434 289,470
Accumulated losses:
Opening balance (456,574) (438,122) (439,697)
Loss for the year attributable to the owners (5,453) (5,544) (14,528)
Other changes in retained earnings - - -
Total equity (116,082) (105,252) (111,708)
STATEMENT OF CHANGES IN EQUITY
Reverse Share Foreign Capital
Share Share Merger Acquisition Option Translation contribution Accumulated Total
Capital Premium Reserve Reserve Reserve Reserve Reserve Loss Equity
£´ 000 £´ 000 £´ 000 £´ 000 £´ 000 £´ 000 £´ 000 £´ 000 £´ 000
Balance at 1 January 2023 11,040 20,717 15,656 (13,861) 2,728 12,509 289,525 (438,277) (99,963)
Share based payments - - - - 330 - - - 330
Proceeds from share issues 10 246 - - - - - - 256
Currency translation differences - - - - - - - - -
Transactions with owners 10 246 0 0 330 0 0 0 586
Profit for the period - - - - - - - (5,543) (5,543)
Other comprehensive income: - - - - - - - 0
Currency translation differences - - - - - (394) (91) 153 (332)
Total comprehensive income for the year 0 0 0 0 0 (394) (91) (5,390) (5,875)
Balance at 30 June 2023 11,050 20,963 15,656 (13,861) 3,058 12,115 289,434 (443,667) (105,252)
Balance at 1 July 2023 11,050 20,963 15,656 (13,861) 3,058 12,115 289,434 (443,667) (105,252)
Share based payments 10 186 - - 288 - - (118) 366
Proceeds from share issues 175 1,667 - - - - - - 1,842
Currency translation differences - - - - - - - - -
Transactions with owners 11,235 22,816 15,656 (13,861) 3,346 12,115 289,434 (443,785) (103,044)
Profit for the period - - - - - - - (8,985) (8,985)
Other comprehensive income: - - - - - - - - 0
Currency translation differences - - - - - 1,740 36 (1,455) 321
Total comprehensive income for the year 0 0 0 0 0 1,740 36 (10,440) (8,664)
Balance at 31 December 2023 11,235 22,816 15,656 (13,861) 3,346 13,855 289,470 (454,225) (111,708)
Balance at 1 January 2024 11,235 22,816 15,656 (13,861) 3,346 13,855 289,470 (454,225) (111,708)
Share based payments - - - - 77 - - - 77
Proceeds from share issues 353 1,948 - - - - - - 2,301
Currency translation differences - - - - - - - - -
Transactions with owners 11,588 24,764 15,656 (13,861) 3,423 13,855 289,470 (454,225) (109,330)
Profit for the period - - - - - - - (5,453) (5,453)
Other comprehensive income: - - - - - - - - 0
Currency translation differences - - - - - 1,086 (36) (2,349) (1,299)
Total comprehensive income for the year 0 0 0 0 0 1,086 (36) (7,802) (6,752)
Balance at 30 June 2024 11,588 24,764 15,656 (13,861) 3,423 14,941 289,434 (462,027) (116,082)
Share premium account
Costs directly associated with the issue of the new ordinary shares have been
set off against the premium generated on issue of new ordinary shares.
Merger reserve
The merger reserve of £15,656,000 arose as a result of the acquisition of
Proton Motor Fuel Cell GmbH during 2006. The merger reserve represents the
difference between the nominal value of the share capital issued by the
Company and their fair value at 31 October 2006, the date of the acquisition.
Reverse acquisition reserve
The reverse acquisition reserve arose as a result of the method of accounting
for the acquisition of Proton Motor Fuel Cell GmbH by the Company. In
accordance with IFRS 3 the acquisition has been accounted for as a reverse
acquisition.
Share option reserve
The Group operates an equity settled share-based compensation scheme. The fair
value of the employee services received for the grant of the options is
recognised as an expense. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the options granted. At
each balance sheet date the Company revises its estimate of the number of
options that are expected to vest. The original expense and revisions of the
original estimates are reflected in the income statement with a corresponding
adjustment to equity. The share option reserve represents the balance of that
equity.
CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Cash flows from operating activities
Profit / (Loss) for the period (5,453) (5,544) (14,528)
Adjustments for
Depreciation and amortisation 246 278 1,472
Interest income 0 (2) -
Interest expense 2,597 3,006 6,350
Share based payments (121) (330) 618
Movement in inventories (1,182) (61) (459)
Movement in trade and other receivables (2,956) 190 (2,289)
Movement in trade and other payables 2,078 (759) 1,068
Exchange rate movements (2,528) (3,560) (2,191)
Net cash used in operations (7,318) (6,782) (9,959)
Cash flows from investing activities
Purchases of intangible assets (7) (8) (29)
Purchases of property, plant and equipment (504) (231) (1,982)
Purchase value of leased assets (16) (11,163) -
Interest received 0 2 -
Net cash used in investing activities (527) (11,400) (2,011)
Cash flows from financing activities
Proceeds from issue of loan instruments 7,214 6,186 12,311
Proceeds from issue of new shares 2,378 585 177
New obligations of lease debt 16 11,163 -
Repayment of obligations under lease debt (760) 155 (210)
Repayment of short term borrowings 0 0 (205)
Net cash generated from financing activities 8,848 18,089 12,073
Net (decrease ) / increase in cash and cash equivalents 1,244 (93) 103
Effect of foreign exchange rates (1,404) 572 (82)
Opening cash and cash equivalents 2,662 2,183 2,720
Closing cash and cash equivalents 2,502 2,662 2,741
Notes to the interim report
1. Basis of preparation
These interim consolidated financial statements of Proton Power Systems plc
were prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) as
adopted by the European Union and with those parts of the Companies Act 2006
applicable to those companies under IFRS. They were also prepared under the
historical cost convention and in accordance with IFRS interpretations
(IFRICS) except for embedded derivatives which are carried at fair value
through the income statement and on the basis that the Group continues to be a
going concern. The condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in the 31
December 2023 statutory audited financial statements. No new accounting
standards have been adopted by the group since preparing its last annual
report.
The Group has chosen not to adopt IAS 34 (Interim Financial Statements) in
preparing these financial statements therefore the interim financial
information is not in full compliance with IFRS.
The financial information for the half year ended 30 June 2024 set out in this
interim report is unaudited and does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The Group's audited
statutory financial statements for the year ended 31 December 2023 have been
filed with the Registrar of Companies. The independent auditor's report on
those financial statements was unqualified and did not contain statements
under Section 498(2) or (3) of the Companies Act 2006.
Until such time as the Group achieves operational cash inflows through
becoming a volume producer of its products to a receptive market it will
remain dependent on its ability to raise cash to fund its operations from
existing and potential shareholders and the debt market.
In preparing the consolidated financial information, Proton Motor Fuel Cell
GmbH has been deemed to be the acquirer and the Company, the legal parent, has
been deemed to be the acquiree. Under IFRS 3 "Business Combinations", the
acquisition of Proton Motor Fuel Cell GmbH by the Company has been accounted
for as a reverse acquisition and the consolidated IFRS financial information
of the Company is therefore a continuation of the financial information of
Proton Motor Fuel Cell GmbH.
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange. Goodwill is initially recognised as an
asset at cost and is subsequently measured at cost less any accumulated
impairment losses. Goodwill is reviewed for impairment at least annually, or
more frequently where circumstances suggest an impairment may have occurred.
Any impairment is recognised immediately in income statement and is not
subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
2. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The
estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next
financial period are discussed below.
Recognition of development costs
Self developed intangible assets are recognised where the Group can estimate
that it is probable that future economic benefits will flow to the entity.
Impairment of goodwill
The carrying value of goodwill must be assessed for impairment annually, or
more frequently if there are indications that goodwill might be impaired. This
requires an estimation of the value in use of the cash generating units to
which goodwill is allocated. Value in use is dependent on estimations of
future cash flows from the cash generating unit and the use of an appropriate
discount rate to discount those cash flows to their present value.
3. Segmental information
An operating segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other operating segments for which discreet financial
information is available and is regularly reviewed by the Chief Operating
Decision Maker ("CODM").
Based on an analysis of risks and returns, the Directors consider that the
Group has only one identifiable operating segment, green energy.
All non-current assets are located in Germany.
4. Share based payments
The Group has incurred an expense in respect of share options and shares
issued to directors as follows:
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Share options (59) - (10)
Share awards 142 352 704
Shares 38 58 114
121 410 808
5. Finance costs including exchange differences
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2024 2023 2023
£´ 000 £´ 000 £´ 000
Interest 2,597 3,006 6,350
Exchange (gain) on shareholder loans (2,528) (3,560) (2,190)
69 (554) 4,160
6. Taxation
Due to losses within the Group, no expenses for tax on income were required in
either the current or prior periods.
7. Profit / (Loss) per share
Unaudited Unaudited Audited
6 months 6 months year ended
ended 30 June ended 30 June 31 December
2024 2024 2023 2023 2023 2023
Basic Diluted Basic Diluted Basic Diluted
£´ 000 £´ 000 £´ 000 £´ 000 £´ 000 £´ 000
Loss attributable to equity holders of the Company (5,453) (5,453) (5,544) (5,544) (14,528) (14,528)
Weighted average number of Ordinary shares in issue (thousands) 1,591,086 1,591,086 1,551,459 1,551,459 1,556,287 1,556,287
Effect of dilutive potential Ordinary shares from share options
and stock awards (thousands) - - - - - -
Adjusted weighted average number of Ordinary shares 1,591,086 1,591,086 1,551,459 1,551,459 1,556,287 1,556,287
(Loss) per share (pence per share) (0.3) (0.3) (0.4) (0.4) (0.9) (0.9)
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period.
Diluted loss per share is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares. The Company one category of dilutive potential ordinary
shares: share options, which have not been included in the calculation of loss
per share because they are anti-dilutive for these periods. No interim
dividend has been proposed or paid in relation to the current or prior interim
period.
A copy of the interim report and the information required by AIM Rule 26 is
available from the Company's website at www.protonmotor-powersystems.com
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