TIDMCWR
RNS Number : 4662S
Ceres Power Holdings plc
09 July 2020
Ceres Power Holdings plc
Trading Update
CONTINUED FINANCIAL GROWTH AND OPERATIONAL PROGRESS DESPITE
COVID-19
CLEAN TECHNOLOGIES TO PLAY A STRATEGIC ROLE IN ECONOMIC
RECOVERY
Horsham, UK: Ceres Power Holdings plc ("Ceres", the "Company")
(AIM: CWR.L), a global leader in fuel cell technology, is pleased
to provide a post period end trading update ahead of the
announcement of its interim results for the 12 months ended 30 June
2020, which will be released on Monday 28 September.
The Group has recorded another period of significant growth
across all areas of the business alongside continued commercial and
operational progress.
Highlights
-- Revenue and other operating income for the 12-month period to
30 June 2020 will be around GBP20 million, 20-25% more than the
prior 12-month period
-- Cash and short-term investments were approximately GBP108million at 30 June 2020
-- Bosch has commenced manufacturing of Ceres' cell technology
at its pilot facility in Germany and increased its shareholding in
Ceres to c.18%, generating gross proceeds for the Company of GBP38
million
-- Weichai relationship is making good progress and both parties
remain committed to the joint venture in China, but Covid delays
are likely to impact the timeline for JV formation. Weichai also
invested a further GBP11 million, maintaining its 20%
shareholding
-- Now investing in higher power applications and further
development in electrolysis on the back of the GBP49 million gross
equity proceeds from the Bosch and Weichai subscriptions
-- Commissioning of the new Redhill manufacturing site began in
January. Despite a slower than anticipated ramp up, Ceres' team
delivered record production levels in June
-- Work is progressing well with new and existing customer
programmes despite some initial disruption during Covid-19
Outlook
-- Expect to sign new customer partnerships in the second half
of the year as commercial demand remains strong
-- Ceres plans to invest around GBP5 million in the development
of solid oxide electrolysis for hydrogen and potential synthetic
fuels over the next 18 months
-- Further investment in additional capacity at Redhill
underway, ramping output up from 2MW to 3MW during 2021
-- Ceres well placed to benefit from strategic role of clean technologies in economic recovery
Covid-19
Employee wellbeing has remained our main priority and we have
supported our people with choices around working hours to fit
within their personal circumstances. The company has not made use
of the government furlough scheme and has continued to recruit over
the past few months to support increased demand for Ceres'
technology.
Around 60% of Ceres' 300 employees have successfully worked
remotely during the lockdown period. The resultant reduction in
numbers at our premises has allowed the remaining 40% of our staff,
who must be onsite some or part of the time to perform their roles,
to do so safely, and to ensure that, as a business, we are able to
continue to progress customer projects and programmes, a
significant achievement and testament to the dedication of our
people.
Current trading
Notwithstanding current restrictions on travel, we continue to
find ways to work effectively with commercial partners and to
progress new and existing programmes. We have maintained a smaller
team onsite throughout the period and have continued to deliver
fuel cells to support our customers globally.
The disruption from Covid-19, coinciding with the commissioning
of our new facility at Redhill, has meant that some revenues have
been deferred from this reporting period due to delays in customer
programmes but results remain in line with market expectations. The
full onsite team returned in early May and cell manufacturing
output is ramping up with a record number of cells and stacks being
produced and shipped to customers in June.
There has been some impact on the supply chain due to market
disruption stemming from Covid-19 related issues and the speed at
which Ceres and our customers are able to work. However, we are
managing these well and continue to hire new employees and our
business remains strong.
Financial Strength
Ceres has a strong balance sheet, with no debt and approximately
GBP108 million of cash as at 30 June 2020.
Hydrogen and Electrolysis
There has been increased interest in the role that innovative
clean energy technologies can play in the post-Covid economic
recovery, and the opportunities for Ceres' technology to support
the decarbonisation of the energy system remain substantial.
Ceres has a unique, solid oxide electrochemical technology that
delivers distinct advantages of robustness, efficiency, cost and as
a fuel cell works on multiple fuels including natural gas and
hydrogen. Over the past 18 months Ceres has established an industry
leading position in solid oxide fuel cells for power generation. We
have now demonstrated that our core technology can also be adapted
to electrolysis, with encouraging results. This strengthens our
view that Ceres' core technology will have many of the same
advantages when used in reverse as a solid oxide electrolyser
(SOEC) to produce hydrogen and as a pathway to synthetic fuels and,
in time, green chemicals for industry.
In the period to 2021, Ceres will invest around GBP5 million in
research and development for solid oxide electrolysis for hydrogen
and synthetic fuels. This will be accompanied by the creation of
around 20 new jobs, across test and wider research, as well as an
expansion of cell manufacturing capacity at Redhill to support SOEC
development programmes.
Continued momentum in hydrogen and electrolysis, strong targets
and stimulus packages set at a State level in our key markets of
China, South Korea and Europe, and funding and capital raisings
across the industry, all signal strong interest and demand for the
hydrogen and fuel cell sector as a whole.
Phil Caldwell, Chief Executive Officer of Ceres commented:
"I would like to thank the commitment shown by everyone at Ceres
over the past few months and the support shown to us by our
partners and suppliers. I am incredibly proud to work with a team
of people who have continued to innovate in every aspect of our
business; from progressing our customer products and programmes and
commissioning new manufacturing output to applying rigorous R&D
to new applications for our technology.
"If anything, the current pandemic has only intensified the
urgency for climate action and I believe Ceres has a no-regrets
fuel cell technology for power generation that is highly
complementary to today's energy infrastructure, is hydrogen ready
for the future, and can form a critical building block in achieving
a net zero carbon future. The research and development we are
undertaking today, to prove the technology as a solid oxide
electrolyser, has been incredibly positive. We remain committed to
maximising the future potential value for Ceres both in our
existing power business and building our capability in hydrogen and
synthetic fuels."
Financial year end
The Group intends to publish its interim results for the period
ending 30 June 2020 on Monday 28 September 2020.
Further to the announcement on 2 April 2020, Ceres has changed
its financial year end reporting date from 30 June to 31 December.
Therefore, the Company's next sets of results will be issued as
follows:
-- unaudited interim results for the 12 months to 30 June 2020 on 28 September 2020
-- audited final results for the 18-month period ended 31 December 2020 by the end of March 2021
-- unaudited interim results for the six months to 30 June 2021 in late September 2021
-- audited final results for the year ended 31 December 2021 by the end of March 2022
Ends
For further information visit www.ceres.tech or contact:
Ceres Power Holdings plc Tel: +44 (0)7932 023
Elizabeth Skerritt 283
Investec Bank PLC (NOMAD & Joint Tel: +44 (0)207 597 5970
Broker)
Jeremy Ellis / Patrick Robb
Berenberg (Joint Broker) Tel: +44 (0)203 207 7800
Ben Wright / Mark Whitmore
Powerscourt Tel: +44 (0)20 7250 1446
Peter Ogden / James White
About Ceres Power
Ceres is a world-leading developer of next generation solid
oxide fuel cell (SOFC) and electrochemical technology. Its
asset-light, licensing model has seen it establish partnerships
with some of the world's largest engineering and technology
companies, such as Weichai in China, Bosch in Germany, Miura in
Japan, and Doosan in South Korea, to develop systems and products
that address climate change and air quality challenges for
transportation, industry, data centres and everyday living. Ceres
is listed on the AIM market of the London Stock Exchange ("LSE")
(AIM: CWR) and is classified by the LSE Green Economy Mark, which
recognises listed companies that derive more than 50% of their
activity from the green economy.
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END
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