- 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.
- Revenue and other operating income for the 12-month period to 30 June 2020 will be around £20 million, 20-25% more than the prior 12-month period
- Cash and short-term investments were approximately £108million 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 £38 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 £11 million, maintaining its 20% shareholding
- Now investing in higher power applications and further development in electrolysis on the back of the £49 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
- Expect to sign new customer partnerships in the second half of the year as commercial demand remains strong
- Ceres plans to invest around £5 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 the strategic role of clean technologies in economic recovery
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.
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.
Ceres has a strong balance sheet, with no debt and approximately £108 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 £5 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.”
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