26 January 2017
Trading update for the six months ended 31 December 2016
SIGNIFICANT COMMERCIAL PROGRESS WITH TWO NEW INTERNATIONAL DEVELOPMENT PARTNERS
- New commercial partners: Two new development agreements signed, bringing total to four including with Honda, Nissan and Cummins; well on track to meet target of five by the end of 2017.
- Developing products for launch: First ‘go-to market’ agreement signed to develop and launch highly efficient combined heat and power (“CHP”) product to target the business sector using Ceres Power’s SteelCell technology.
- Rapidly expanding international footprint: Japan, US and Korea now account for approximately 90% of contracted revenues.
- Revenue streams accelerating: £1.5 million in revenue and other operating income for the first half, a threefold increase compared to first half last year.
- Strong pipeline: Order book of £4.8 million as at 31 December 2016 and three new evaluation agreements underway signed with potential future partners.
Ceres Power Holdings plc (AIM: CWR), a world leading developer of low cost, next generation steel fuel cell technology, is pleased to provide a trading update for the six month period to 31 December 2016 – a period in which the Company has rapidly accelerated its development, signing a further two commercial development partnerships (including its first agreement with a specific product launch under development) and expanded its international footprint. The Company expects to report half yearly results on 8 March 2017.
Phil Caldwell, Chief Executive Officer said:
“Ceres Power has significant momentum heading into the second half of the financial year. We have now successfully secured four development partners of international scale and credibility. We remain confident in our ability to meet our target of five partners by the end of 2017. Further technical developments mean we can target new end markets for our technology, including the fast growing Electric Vehicle and Data Centre sectors. We also signed our first ‘go-to market’ development agreement, bringing the prospect of product launches, and the associated revenue, ever closer. With 90% contracted revenues now generated in Japan, the US and Korea, Ceres Power is establishing itself as a truly international technology business. We look forward to the second half with enthusiasm and confidence.”
New development partners and commercial advancements
In the first half, Ceres Power built on the momentum from the previous financial year, signing up two new commercial partners in the period adding to the agreements with Honda and Nissan.
Firstly, with Cummins, a leading US developer of power generation equipment, to develop power applications for the fast growing Data Centre market, which already accounts for 3% of global power usage and is forecast to grow rapidly, representing a significant addressable market for Ceres Power.
Secondly, in December Ceres Power signed a global original equipment manufacturer (“OEM”) partner to develop and launch a CHP product to target the business sector using Ceres Power’s SteelCell technology. This is a core market for Ceres Power as Governments seek to find ways to effectively reduce CO2 emissions while increasing stability and security of supply: distributed power generation driven by steel cell technology is a proven solution to these challenges.
This was Ceres Power’s first ‘go-to market’ agreement highlighting the Company’s acceleration towards full scale product launch. The successful commercialisation of the CHP units has the potential to drive significant revenue growth through both royalty payments as well as fuel cell supply.
Ceres Power is in talks with a number of global OEMs and is confident of signing a fifth partner ahead of our 2017 year-end target.
The rapid commercial development of the Company has translated to a significant jump in revenue. Total contract order book as at 31 December 2016 was £4.8 million, reflecting Ceres Power’s development partnerships, while revenue and other operating income grew to £1.5 million for the half year, a threefold increase over the same period last year. The Company will provide further update at the half yearly results in March.
Following the successful raise in October 2016 the Company’s cash position at 31 December is expected to be c. £22 million. The Company’s equity free cash outflow* for the half year is expected to be £4.2 million (compared to £5.4 million cash outflow for the first half last year).
The outlook for the year ahead is positive as, in addition to the development contracts announced this year, the Company has also undertaken three new evaluation agreements in the past 6 months providing a healthy pipeline for future revenue growth. The combination of continued technological development and innovation, proven ability to sign new development partnerships with global OEMs, and financial resilience following a successful fund raise and a large increase in contracted revenues, puts Ceres Power in a very strong position to grow in the second half of the financial year and beyond.
*Equity free cash outflow is the net change in cash & cash equivalents in the period less cash generated from financing activities less the movement in short-term investments.
For further information please contact:
Ceres Power Holdings plc
Phil Caldwell, CEO
Richard Preston, Finance Director
Dan Caesar, Communications & Marketing Director
Tel: +44 (0)1403 273 463
Zeus Capital (Nominated Adviser and Broker)
Phil Walker/Andrew Jones
Tel: +44 (0) 20 3829 5000
Mike Bartlett/James Collins
Tel: +44 (0) 20 7920 3150
Notes to Editors:
About Ceres Power
Ceres Power is a world leader in low cost, next generation steel fuel cell technology for use in distributed power products that reduce operating costs, lower CO2, SOx and NOx emissions, increase efficiency and improve energy security. The Ceres Power unique patented SteelCell technology generates power from widely available fuels at high efficiency and is manufactured using standard processing equipment and conventional materials such as steel, meaning that it can be mass produced at an affordable price for domestic and business use.
Ceres Power offer its partners the opportunity to develop power systems and products using its unique SteelCell technology and know-how, combined with the opportunity to supply the SteelCell in volume through its manufacturing partners.
For further information please visit: http://www.cerespower.com