Ceramic Fuel Cells Limited Half Year Accounts

TIDMCFU

RNS Number : 7589Y

27 February 2013

Wednesday 27 February 2013

Ceramic Fuel Cells Limited [AIM / ASX: CFU] - a leading developer of high efficiency and low emission power products for homes and other buildings - today released its interim financial results for the six months ended 31 December 2012 along with its Directors' report and review of operations.

Highlights of the Half-Year

   --           Strong political support in Germany & the UK 

-- North-Rhine Westphalia (NRW) introduces a capital subsidy scheme - the Company expects this to reduce the installed cost of a BlueGen unit to commercial customers in NRW by around EUR 10,000. Confirmation from NRW expected within the next 4 weeks

-- UK Government increases the feed-in tariffs applying to mCHP units like BlueGen from December 2012

-- The Company targets the significant UK social housing market- appoints the energy services company iPower as distribution channel for this market.

   --           Sales of 90 units completed - 34% increase over the equivalent period in 2011. 

-- Total cumulative orders received exceed 600 units. The Company is expanding its sales resources in Europe whilst also realigning its operational activities to reduce overhead costs.

-- Investment in marketing is being increased to support projected sales growth in Germany, UK and Benelux.

   --           BlueGen receives a number of prestigious awards in Germany 
   --           Unrestricted cash balance at 31 December 2012 was AUD 8.6 million  (GBP 5.8 million) 

During the first half of the fiscal year the company has made a number of significant changes to realign its corporate structure and operating activities to reduce overhead costs and to focus on the German, UK and Benelux markets. Sales volumes were up by 34% compared to the equivalent period in 2011. Revenue in the current period was AUD 2.6 million (GBP 1.7 million).

Ceramic Fuel Cells CEO Bob Kennett said "We see both strong political support for our technology and considerable market opportunities in our key European markets. We are positioning the Company to take advantage of the capital subsidy scheme for mCHP announced in the German state of North Rhine Westphalia, and the increase in the feed-in tariff in Britain which are both expected to be strong drivers of sales".

BlueGen delivers an electrical efficiency of up to 60 percent - the highest in the world. When the heat from BlueGen is used to produce hot water, total efficiency increases to up to 85 percent. The BlueGen product is the first and currently the only fuel cell m-CHP product to receive certification under the Microgeneration Certification Scheme (MCS) and be eligible for the UK feed in tariff.

Financial Results

 
         Six month period 
                      to:    31 Dec 2012      31 Dec 2011 
                           ---------------  --------------- 
                               AUD     GBP      AUD     GBP 
                                 m       m        m       m 
 Revenue from operations       2.6     1.7      3.3     2.2 
 Net operating cash 
  outflow                    (9.1)   (6.1)   (12.4)   (8.4) 
 Net loss                   (12.6)   (8.5)   (12.5)   (8.4) 
 Cash balance at 
  31 December                  8.6     5.8     19.5    13.1 
 

The Directors' Report and Financial Report for the half year are available at www.cfcl.com.au.

ENDS

AFC Energy PLC Interim Results

AFC Energy Plc Interim Results

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TIDMAFC RNS Number : 9604G AFC Energy Plc 05 July 2012 5 July 2012 Embargoed until 07:00 AFC Energy PLC AFC Energy PLC Interim Results AFC Energy (AIM: AFC), the industrial fuel cell power company, is pleased to announce its interim results for the six month period ended 30 April 2012. Key Highlights: - Installed two Beta systems, AFC Energy's second generation fuel cell technology, at AkzoNobel's chlor-alkali plant in Bitterfeld, Germany, and generating power. - Beta+ system, engineered and optimised for volume production, commissioned and now installed for testing at Bitterfeld - Technical and manufacturing teams strengthened - Loan repaid by Waste2Tricity ("W2T") and received first fee instalment of commercialisation agreement - Awarded grant as lead partner in prestigious EU-funded Project LaserCell - Cash outflow of GBP1.5million ( H1 2011: GBP1.7 million) - Cash balance at 30 April 2012: GBP4.49 million (30 April 2011: GBP3.65 million) - Board strengthened by addition of Ian Williamson as chief executive and Sir John Sunderland as a non-executive director Post Period achievements: - Electrode life extended past three months for the first time, a major milestone for commercialisation of fuel cells for industrial applications - Implemented Production Unit investment in preparation of increased production of fuel cells - In June 2012 announced intention with Industrial Chemicals Limited ("ICL") to build UK's largest industrial fuel cell facility at ICL in Essex Tim Yeo, Chairman of AFC Energy, commented: "The year to date has been a period of very significant progress for the Company on its road to commercialisation under our new chief executive Ian Williamson. From generating industrial power using the Beta system and extending the life of our electrodes we have moved rapidly to deploy our commercial Beta+ system for trialling on-site with AkzoNobel, our long-standing partner. The recent agreement with ICL is testament both to that evolution as well as the attractiveness of AFC Energy's commercial model. We are working with a number of high quality partners who recognise the potential that AFC Energy's fuel cell offers their businesses. We are fully focused on achieving our goal as quickly as possible and the Board continues to look to the future with increasing confidence". For further information, please contact: AFC Energy plc Ian Williamson, Chief Executive Ian Balchin, Deputy Chairman +44 (0)1483 276726 Luther Pendragon - Media PR Neil Thapar Leigh Marshall Alexis Gore +44 (0)20 7618 9100 MC Peat & Co. - Broker Charlie Peat +44 (0)20 7104 2334 Allenby Capital - Nominated Adviser Jeremy Porter James Reeve +44 (0)20 3328 5656 About AFC Energy Founded in 2006, AFC Energy plc is re-engineering proven alkaline fuel cell technology to reduce the cost of electricity. Alkaline fuel cells have been used on US and Russian manned space missions for decades to provide electrical power and drinking water. By using modern materials, design tools and manufacturing processes at scale, AFC Energy is developing fuel cells that will compete with conventional technologies such as turbines for electrical power generation. Today, AFC Energy is pursuing opportunities in several sectors where hydrogen is readily available including the chlorine, clean coal and waste-to-energy industries as well as applications for distributed/back-up power. For further information, please visit our website: www.afcenergy.com. Chairman's Statement Overview The year to date has been a period of very significant progress for the Company on its road to commercialisation. In late 2011 we installed two Beta Systems at our partner AkzoNobel's chlor-alkali production facility in Bitterfeld, Germany and began to produce electricity from them as part of a rigorous trial programme. In addition, we were able to obtain detailed data about the performance of our electrodes and systems to understand what design improvements would need to be incorporated into the commercial iteration of our system. We were also delighted, therefore, when the electrodes designated for that commercial system - the Beta+ - passed through the barrier of three months continuous operation in May. The results of these laboratory trials were seamlessly incorporated into our industrial development programme and have been rapidly deployed at Bitterfeld. We have been able to integrate all our latest developments into the Beta+ system, commission them at Dunsfold and install two units at Bitterfeld in accordance with the timescale agreed with AkzoNobel, whose continued support and encouragement we are grateful for. This has been a period when our technical team have excelled themselves and we have further strengthened it with a small number of key recruits who have already had a positive impact. In March, we announced that we would be investing in an additional production facility at Dunsfold, Surrey. We have employed a skilled team who will use this facility to begin to manufacture units in much higher volumes. Our assessment of appropriate automated equipment and systems for future scale-up continues to gather pace. Our Partners Waste2Tricity ("W2T") has been a partner since 2009 and in April exercised its right to exclusively represent AFC Energy in the UK until 2022 for the integration of fuel cells with hydrogen derived from the plasma gasification of municipal solid waste. W2T is involved in developing a number of projects, the largest of which has been its involvement with the 49MW Tees Valley Renewable Energy Facility, a project led by Air Products. The exercise of this right means AFC Energy receives a fee of GBP1 million, payable over four years of which GBP150,000 was received within the half-year. AFC Energy is also the leader of a consortium of European companies on Project LaserCell, which is being supported under the EU's research funding scheme, FP7. This project is designed to develop innovative technologies to enhance high-volume production of alkaline fuel cells. AFC Energy's share of the non-refundable grant is EUR405,600. AFC Energy remains in discussion with a number of other organisations in relation to future capacity, but there were no significant developments to report during the period. Our work with AkzoNobel continues apace, as I have already mentioned. However, we have consistently stated our view that the chlor-alkali industry represents a very substantial opportunity for AFC Energy, so we were especially pleased to announce in late June, the project with ICL for a 1MW fuel cell facility at its new plant in Essex. This is a tremendous validation of AFC Energy's technology and also confirms the potential economics of the ESCO (Energy Service Company) model which the Company proposes to follow, whereby ICL will provide its hydrogen and purchase power under a long term power purchase agreement and AFC Energy will own, operate and maintain the fuel cell system. Intellectual Property To date, 16 families of patents have been filed by the Company and are actively proceeding towards grant decision, which can take several years in each case. The Board is pleased to report that it has been awarded the grant of its first patent and is confident that it will secure the grant of additional patents relating to its core technology in due course. The Company regularly reviews its technical developments to determine whether it has made patentable inventions. Summary and Outlook The year to date has been a period of very significant progress for the Company on its road to commercialisation. From generating industrial power using the Beta System and extending the life of our electrodes we have moved rapidly to deploy our commercial Beta+ system for trialling on-site with AkzoNobel, our long-standing partner. Under the direction of our new CEO, Ian Williamson, the technical and commercial teams at AFC Energy have done a great job. We have continued to strengthen and broaden the technical team with the highest quality personnel. The commercial team continue to open up markets and specific opportunities for the deployment of our fuel cell systems, in readiness for the availability of our large-scale product. We also took the opportunity to further strengthen our Board with the appointment of Sir John Sunderland. We were delighted that the Centre for Process Innovation (CPI), a respected British technology innovation centre serving the chemicals, pharmaceutical, biotechnology and energy markets, once again independently verified the Company's progress and the recent agreement with ICL is testament both to that evolution as well as the attractiveness of AFC Energy's commercial model. We are fortunate to be working with a number of high quality partners who recognise the potential that AFC Energy's fuel cell offers their businesses. We are fully focused on achieving our goal as quickly as possible and the Board continues to look to the future with increasing confidence. Tim Yeo Chairman 5 July 2012 FINANCIAL REVIEW In the period, the Company received its first income from the commercialisation agreement with Waste2Tricity ("W2T") and also recorded grant income under the European Framework Programme 7 for Project LaserCell. These revenues almost wholly offset a modest rise in R&D costs, arising from the further strengthening of the Company's technical team. During the six months to 30 April 2012, post-tax losses were GBP1.90 million (30 April 2011: GBP1.83 million). Included within the post-tax loss is an accounting (non-cash) profit charge for options and warrants previously issued. On a like-for-like basis, excluding this charge, the post-tax loss was GBP1.50 million (30 April 2010: GBP1.46 million). The net cash outflow from operating and investing activities in the six months to 30 April 2012 was GBP1.48 million (30 April 2011: GBP1.69 million). This reduced outflow reflects the receipt of GBP152,000 from W2T in full repayment of an outstanding loan, with interest, and a continuing focus on the effective use of the Company's cash. The Company's cash balance at 30 April 2012 was GBP4.49 million (30 April 2011: GBP3.65 million). The Board of AFC Energy does not intend to declare a dividend in respect of this period. Statement of Comprehensive Income For the six months ended 30 April 2012 Six months Six months Year to 31 to 30 April to 30 April October Note 2012 2011 2011 Re-stated GBP GBP GBP Unaudited Unaudited Audited Revenue 180,498 7,970 35,468 Cost of sales 28,500 - 27,498 Gross profit/(loss) 151,998 7,970 7,970 Other Income - - 3,996 Administrative expenses (2,296,936) (2,007,774) (4,402,158) Analysed as: Administrative expenses (1,898,844) (1,645,092) (3,711,686) Equity-settled share-based payments (398,092) (362,682) (690,472) Operating loss (2,144,938) (1,999,804) (4,390,192) Financial income 44,575 12,358 44,930 Share of profit/(loss) of - - - Associate ------------- ------------- ------------ Loss before taxation (2,100,363) (1,987,446) (4,345,262) Taxation 3 201,457 156,995 354,822 Loss for the period and total comprehensive loss attributable to owners of the Company (1,898,906) (1,830,451) (3,990,440) ------------- ------------- ------------ Basic loss per share 4 (1.04)p (1.06)p (2.26)p ------------- ------------- ------------ All amounts relate to continuing operations. Statement of Financial Position As at 30 April 2012 Note 30 April 30 April 31 October 2012 2011 2011 Re-stated Non-current assets GBP GBP GBP Unaudited Unaudited Audited Intangible assets 5 181,246 332,225 149,498 Property, plant and equipment 6 595,604 755,915 824,264 Investment in associate 2,500 2,500 2,500 ------------- ------------- ------------- 779,350 1,090,640 976,262 ------------- ------------- ------------- Current assets Work in progress 96,242 123,740 96,242 Trade and other receivables 7 786,485 771,299 734,684 Cash and cash equivalents 4,485,558 3,652,599 5,968,429 ------------- 5,368,285 4,547,638 6,799,355 ------------- ------------- ------------- Total assets 6,147,635 5,638,278 7,775,617 ------------- ------------- ------------- Equity and liabilities Equity attributable to shareholders Share capital 8 183,339 173,339 183,339 Share premium 18,966,789 15,044,217 18,966,789 Other reserves 2,218,577 1,492,695 1,820,485 Retained loss (15,620,011) (11,561,117) (13,721,105) ------------- ------------- ------------- Total equity 5,748,694 5,149,134 7,249,508 ------------- ------------- ------------- Current liabilities Trade and other payables 9 398,941 489,144 526,109 Total equity and liabilities 6,147,635 5,638,278 7,775,617 ------------- ------------- ------------- Cash flow statement For the six months ended 30 April 2012 Six months Six months Year to to 30 April to 30 April 31 October 2012 2011 2011 Re-stated Cash flows from operating activities GBP GBP GBP Unaudited Unaudited Audited Loss before tax for the period (2,100,363) (1,987,446) (4,345,262) Adjustments for: Depreciation and amortisation 254,800 181,302 377,258 Loss on disposal of plant and equipment - - - Impairment of plant and equipment - - 30,000 Impairment of intangible assets - - 191,379 Equity-settled share-based payment expenses 398,092 362,682 690,472 Finance income (44,575) (12,358) (44,930) Share of (profit)/loss of Associate - - - ------------- ------------- ------------ Cash flows from operating activities before changes in working capital and provisions (1,492,046) (1,455,821) (3,101,083) Corporation tax received - - 258,076 Decrease/(increase) in trade and other receivables 149,657 (44,380) (40,516) (Decrease)/increase in trade and other payables (127,168) 112,660 149,625 ------------- ------------ Cash absorbed by operating activities (1,469,557) (1,387,542) (2,733,898) ------------- ------------- ------------ Cash flows from investing activities Purchase of plant and equipment (14,664) (294,299) (577,796) Acquisition of patents (43,225) (23,635) (43,094) Interest received 44,575 12,358 44,930 ------------- ------------- ------------ Net cash absorbed by investing activities (13,314) (305,575) (575,960) ------------- ------------- ------------ Cash flows from financing activities Proceeds from the issue of share capital - - 3,999,822 Share issue costs - - (67,250) Net cash from financing activities - - 3,932,572 ------------- ------------- ------------ Net (decrease)/increase in cash and cash equivalents (1,482,871) (1,693,117) 622,713 Cash and cash equivalents at the beginning of the period 5,968,429 5,345,716 5,345,716 ------------- ------------- ------------ Cash and cash equivalents at the end of the period 4,485,558 3,652,599 5,968,429 ------------- ------------- ------------ Statement of Changes in Equity As at 30 April 2012 Share Share Other Retained Total capital premium reserve loss GBP GBP GBP GBP GBP Audited Audited Audited Audited Audited Balance at 1 November 2010 173,339 15,044,217 1,130,013 (9,730,665) 6,616,904 Loss after tax for the period - - - (3,990,440) (3,990,440) --------- ----------- ---------- ------------- ------------ Total recognised income and expense for the period - - - (3,990,440) (3,990,440) Issue of equity shares 10,000 3,989,822 - - 3,999,822 Share issue expenses - (67,250) - - (67,250) Equity-settled share-based payments - - 690,472 - 690,472 --------- ----------- ---------- ------------- ------------ Balance at 31 October 2011 183,339 18,966,789 1,820,485 (13,721,105) 7,249,508 --------- ----------- ---------- ------------- ------------ Share Share Other Retained Total capital premium reserve loss GBP GBP GBP GBP GBP Unaudited Unaudited Unaudited Unaudited Unaudited Balance at 1 November 2011 183,339 18,966,789 1,820,485 (13,721,105) 7,249,508 Loss after tax for the period - - - (1,898,906) (1,898,906) ---------- ----------- ---------- --------------- ------------ Total recognised income and expense for the period - - - (1,898,906) (1,898,906) Equity-settled share-based payments - - 398,092 - 398,092 ---------- ----------- ---------- --------------- ------------ Balance at 30 April 2012 183,339 18,966,789 2,218,577 (15,620,011)11 5,748,694 ---------- ----------- ---------- --------------- ------------ Share Share Other Retained Total capital premium reserve loss GBP GBP GBP GBP GBP Unaudited Unaudited Unaudited Unaudited Unaudited Balance at 1 November 2010 173,339 15,044,217 1,130,013 (9,730,665) 6,616,904 Loss after tax for the period - - - (1,830,451) (1,830,451) ---------- ----------- ---------- ------------- ------------ Total recognised income and expense for the period - - - (1,830,451) (1,830,451) Equity-settled share-based payments - - 362,682 - 362,682 ---------- ----------- ---------- ------------- ------------ Balance at 30 April 2011 173,339 15,044,217 1,492,695 (11,561,116) 5,149,134 ---------- ----------- ---------- ------------- ------------ Share capital is the amount subscribed for shares at their nominal value. Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses. Other reserve represents the credit to equity in respect of equity-settled share-based payments. Retained loss represents the cumulative loss of the Company attributable to equity shareholders. Notes forming part of the interim financial statements 1 Significant accounting policies Details of the significant accounting policies are set out below: a Basis of preparation The interim results for the six months ended 30 April 2012 are unaudited. The interim results have been drawn up using the accounting policies and presentation consistent with those disclosed and applied in the annual report and accounts for the year ended 31 October 2011. The comparative information contained in the report does not constitute the accounts within the meaning of S240 of the Companies Act 1985 and section 435 of the Companies Act 2006. The accounting policies used in the interim statement are consistent with those used in the financial statements for the year ended 31 October 2011 and are in accordance with International Financial Reporting Standards. The comparative period from 1 November 2010 to 30 April 2011 has been restated to reverse the previous equity accounting treatment in W2T. This has increased the prior year loss after tax by GBP4,580. b Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and other sales taxes or duty. Revenue arising from the provision of services is recognised when and to the extent that the Company obtains the right to consideration in exchange for the performance of its contractual obligations. c Development costs Development expenditure does not meet the strict criteria for capitalization under IAS38 and has been recognised as an expense. d Intangible assets Expenditure on research activities is recognised in the income statement as an expense as incurred. Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and impairment losses. Amortisation of intangible assets is charged using the straight-line method to administrative expenses over the following period: Patents 20 years e Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment charges. Depreciation is charged to the income statement within cost of sales and administrative expenses on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows: * Leasehold improvements 1 to 3 years * Fixtures, fittings and equipment 1 to 3 years * Vehicles 3 to 4 years f Leases Finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are reflected in profit or loss. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term. Operating lease rentals are charged to income in equal annual amounts over the lease term. g Taxation Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or recoverable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date together with any adjustment to tax payable in respect of previous years. Deferred tax assets are not recognised due to the uncertainty of the period over which they will be recovered. h Equity-settled share-based payments Certain employees (including Directors and senior executives) of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ('equity-settled transactions'). The fair value is determined by an external valuer using an appropriate pricing model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('the vesting date'). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied. Where the terms of an equity-settled award are modified, the minimum expense recognised is the expense as if the terms had not been modified. An additional expense is recognised for any modification, which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. i Financial Assets All of the Company's financial assets are loans and receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets at fair value and comprise trade and other receivables and cash and cash equivalents. 2 Segmental Analysis The Company operated in the period in one operating segment, the development of fuel cells, and in two principal geographic areas, the United Kingdom and Europe. Revenue was derived from a customer in the UK and from European grant. Six months Six months Year to 3 Taxation to 30 April to 30 April 31 October 2012 2011 2011 Re-stated GBP GBP GBP Recognised in the income statement: Unaudited Unaudited Audited Research and development tax credit - current year 201,457 156,995 354,822 Research and development credit - prior year adjustment - - - ------------- ------------- ------------ Total tax credit 201,457 156,995 354,822 Reconciliation of effective tax rates Loss before tax (2,100,363) (1,987,446) (4,345,262) ------------- ------------- ------------ Domestic rate of corporation tax 24.8% 27.7% 26.7% Tax using domestic rates of corporation tax 521,590 550,523 1,160,185 Effect of: Expenses not deductible for tax purposes 172,133 102,793 186,110 Research and development allowance (200,113) (133,126) (348,630) Research and development tax credit 201,457 156,995 354,822 Depreciation in excess of capital allowances 14,271 1,421 72,090 Losses surrendered for research and development 400,227 310,626 730,217 Other adjustments - - - Unutilised losses carried forward 135,072 267,547 520,398 ------------- ------------- ------------ Total tax credit for the period 201,457 156,995 354,822 ------------- ------------- ------------ 4 Loss per share Six months Six months Year to to 30 April to 30 April 31 October 2012 2011 2011 Re-stated Unaudited Unaudited Audited The calculation of the basic loss per share is based on the net loss after tax attributable to the ordinary shareholders of GBP1,898,906 (30 April 2011: loss of GBP1,830,451; 31 October 2011: loss of GBP3,990,440) and a weighted average number of shares in issue for the period 1 November 2011 to 30 April 2012 of 183,338,672 (six months to 30 April 2011: 173,339,207; year to 31 October 2011: 176,559,336). Loss per share (1.04)p (1.06)p (2.26)p ------------- ------------- ------------ Diluted loss per share The diluted loss per share is the same as the basic loss per share, as the loss for the six months ended 30 April 2012 has an anti-dilutive effect. 5 Intangible assets Patents GBP Unaudited Cost At 31 October 2010 397,711 Additions 23,635 ---------- At 30 April 2011 421,346 Additions 19,460 ---------- At 31 October 2011 440,806 Additions 43,225 ---------- At 30 April 2012 484,031 Amortisation At 31 October 2010 78,860 Charge for the period 10,261 ---------- At 30 April 2011 89,121 Charge for the period 10,808 ---------- Impairment 191,379 At 31 October 2011 291,308 Charge for the period 11,476 ---------- At 30 April 2012 302,784 Net book value At 30 April 2012 181,246 ---------- At 30 April 2011 332,225 ---------- At 31 October 2011 149,498 ---------- 6 Property, plant and equipment Leasehold Fixtures, Total improvements fittings and equipment GBP GBP GBP Unaudited Unaudited Unaudited Cost At 31 October 2010 184,009 1,254,278 1,438,286 Additions 26,025 268,274 294,299 At 30 April 2011 210,033 1,522,552 1,732,585 Additions 6,164 277,334 283,498 Re-classification - - - Disposals - - - -------------- --------------- ---------- At 31 October 2011 216,197 1,799,886 2,016,083 Additions - 14,664 14,664 At 30 April 2012 216,197 1,814,552 2,030,749 Depreciation At 31 October 2010 157,070 648,560 805,630 Charge for the period 10,542 160,499 171,041 At 30 April 2011 167,612 809,059 976,672 Charge for the period 10,725 174,422 185,147 Impairment - 30,000 30,000 At 31 October 2011 178,337 1,013,481 1,191,819 Charge for the period 9,574 233,750 243,324 At 30 April 2012 187,911 1,247,233 1,435,144 -------------- --------------- ---------- Net book value At 30 April 2012 28,286 567,318 595,604 -------------- --------------- ---------- At 30 April 2011 42,422 713,493 755,915 -------------- --------------- ---------- At 31 October 2011 37,860 786,404 824,264 -------------- --------------- ---------- 7 Trade and other receivables 30 April 30 April 31 October 2012 2011 2011 GBP GBP GBP Unaudited Unaudited Audited Trade receivables - 400 - Corporation Tax receivable 556,279 415,071 354,822 Other receivables 93,342 257,266 306,121 Prepayments 136,864 98,562 73,741 ---------- ---------- ----------- 786,485 771,299 734,684 8 Share capital 30 April 30 April 31 October 2012 2011 2011 GBP GBP GBP Unaudited Unaudited Audited Issued 183,338,762 Ordinary shares of 0.1p each 183,339 173,339 183,339 ---------- ---------- ----------- 9 Trade and other payables 30 April 30 April 31 October 2012 2011 2011 GBP GBP GBP Unaudited Unaudited Audited Trade payables 154,701 221,265 322,241 Deferred income 96,242 123,740 96,242 Other payables 115,074 63,562 36,075 Accruals 32,924 80,577 71,550 398,941 489,144 526,109 ---------- ---------- ----------- Post Balance Sheet Events On 1 May 2012, the Company received a further GBP35,995 as the result of the exercise of 715,000 options and 400,000 warrants at a price of 3.13 pence per share. The new shares were admitted for trading on 1 May 2012. Related-party Transactions During the six months ended 30 April 2012: - GBP23,496 (plus VAT) was invoiced by Cornerstone Capital Ltd (a company registered in England & Wales) for services of Simon Hunt as a Director of AFC Energy plc (April 2011: GBP12,623). Mr Hunt is also a Director and shareholder of Cornerstone Capital Ltd. At 30 April 2012, the sum owing to Cornerstone Capital Ltd was nil (April 2011: GBP nil). - GBP12,500 (plus VAT) was invoiced by Richards & Appleby Ltd (a company registered in England & Wales) for services of Mitchell Field as a Director of AFC Energy plc (April 2011: GBP2,083). Mr Field is also a Director and shareholder of Richards & Appleby Ltd. At 30 April 2012, the sum owing to Richards & Appleby Ltd was GBP2,083 (April 2011: GBP2.083). - GBP40,379 (plus VAT) was invoiced by Hudson Raine Ltd (a company registered in England & Wales) for services including David Marson as a Director of AFC Energy plc (April 2011: GBP46,826). Mr Marson is also a Director and shareholder of Hudson Raine Ltd. At 30 April 2012, the sum owing to Hudson Raine Ltd was GBP7,742 (April 2011: GBP14,263). - GBP62,000 (plus VAT) was invoiced by Cranwood Management Ltd (a company registered in England & Wales) for consultancy services (April 2011: GBP89,000). The company is owned by Adam White. Members of Mr White's family are nominated beneficiaries of the Age of Reason Foundation, which is a major shareholder in the Company. At 30 April 2012, the sum owing to Cranwood Ltd was nil (April 2011: GBP19,000) - GBP13,400 (ex VAT) was invoiced by Locana Corporation Ltd (a company registered in England & Wales) for consultancy services (April 2011: GBP nil). Mr Tim Yeo is a Director and shareholder of Locana Corporation Ltd. At 30 April 2012, the sum owing to Locana Corporation Ltd was nil (April 2011: GBPnil). - GBP152,500 was received from Waste2Tricity (a company registered in England & Wales)in full repayment, with associated interest, of a loan made to Waste2Tricity Ltd ("W2T") in 2009. A further GBP150,000 was received as the first instalment of a non-refundable appointment fee of GBP1 million payable under the terms of a Commercialisation Agreement with W2T announced on 11 April 2012. The Company owns a 25% share of Waste2Tricity. The Shareholders in Waste2Tricity include Adam White, Eturab Corporation and Ian Balchin. Members of the White family are nominated beneficiaries of the Age of Reason Foundation. Both the Age of Reason Foundation and Eturab Corporation are substantial Shareholders in AFC Energy. Ian Balchin's shareholding in Waste2Tricity was granted in lieu of payment for work done for Waste2Tricity before he was employed by AFC Energy. Publication of Non-Statutory Accounts The financial information contained in this interim statement does not constitute accounts as defined by the Companies Act 2006. The financial information for the preceding period is based on the statutory accounts for the year ended 31 October 2011. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. Copies of the interim statement may be obtained from the Company Secretary, AFC Energy PLC, Unit 71.4 Dunsfold Park, Cranleigh, Surrey GU6 8TB, and can be accessed from the company's website at www.afcenergy.com. This information is provided by RNS

3rd Quarter Results Ceramic Fuel Cells Limited

RNS Number : 8295B

Ceramic Fuel Cells Limited

23 April 2012

Monday 23 April 2012

Cashflow Report and Trading Update for the March Quarter

Ceramic Fuel Cells Limited (AIM / ASX: CFU) a leading developer of high efficiency and low emission power products for homes and other buildings, today released its quarterly cashflow report for the period ended 31 March 2012.

The cashflow report is available at www.cfcl.com.au.

Highlights

   --      Total order book of 619 units at 23 April 2012 
   --      58 percent increase in units installed at customer sites - up to 193 units at 23 April 
   --      Receipts from customers of AUD 2.7m, an increase of 85 percent from the December quarter 
   --      Twenty six units delivered during the quarter 
   --      Active marketing and sales, with focus on Germany, Netherlands, UK 
   --      Strong and increasing policy support for fuel cell mCHP in Germany and UK 

Operational Review

Orders and Deliveries

The Company currently has an order book of 619 units made up of 264 integrated mCHP products and 355 BlueGen(R) products.

At the end of the December quarter the Company's open order book (meaning units ordered but not recognised in revenue) was 477 units, spread between Germany, The Netherlands and the United Kingdom.

During the quarter the Company delivered 26 units, reducing its open order book (meaning units ordered but not recognised in revenue) to 451 units. The bulk of these deliveries were BlueGen units delivered to sanevo in Germany and EON in the UK, and integrated mCHP units delivered to EWE in Germany.

These orders will be recognised in revenue, and will deliver cashflow to the Company, as the units are delivered to Customers over the coming year.

The number of units installed and operating at customer sites increased strongly, up from 121 units at the start of the quarter to 193 at 23 April. (This number is updated and reported on www.bluegen.net.) The pace of installations is increasing, reflecting the Company's work in the previous quarters to select and train appropriately skilled local installation and service partners.

Germany

In January the Company's first distributor in Germany, sanevo Blue Energy, confirmed that it has received customer commitments for its first order of 100 BlueGen units, which are expected to be delivered within the first 12 months of their distributorship (by the end of July 2012). sanevo has a target minimum of 500 units for delivery in its second year and a target of 2,000 BlueGens over years three and four.

In the March quarter sanevo blue energy received its first order for a BlueGen unit in Austria, as well as a follow-on order to the Swiss regional utility Cosvegaz near Lausanne.

Approximately 30 of sanevo blue energy's sales partners are now offering BlueGen to customers across Germany.

During the quarter the Company continued to work with EWE, Germany's fifth largest utility, and its external contractors as they installed integrated mCHP systems. During the March quarter six units were delivered to EWE. A further 19 units are expected to be installed early in the June quarter, under the first phase of EWE's 'Lighthouse Project'. In the second phase of the project a further 145 units are planned to be deployed.

Market settings in Germany continue to provide strong support for fuel-cell based micro CHP systems.

Late last year the federal state of Saxony announced a '1,000 Basement Programme' to provide financial incentives for installing fuel cell based micro CHP units. In February 2012 the state of Hesse announced funding of EUR 600,000 to support early deployment of mCHP products. The state of North Rhine Westphalia has also announced plans to increase the share of CHP electricity production to 25 percent, by providing funding of EUR 250 million over several years to support the deployment of local CHP systems.

The German Federal Government is also providing support for the Company's products. In February 2012 the "Bundesrat" (the upper house of the German Federal Parliament) proposed an increase in the current feed in tariff for mCHP units with high electrical efficiency - ideally suited to the Company's BlueGen and mCHP products.

From 1 April 2012, the German Federal Government also introduced a capital subsidy for eligible mCHP products which generate up to 20 kilowatts of electricity and meet demanding performance requirements, including a total efficiency of at least 85 percent. Ceramic Fuel Cells' BlueGen and integrated mCHP products will receive a subsidy of 1,800 Euros per unit.

This program is in addition to the existing German CHP Law, which requires that 25 percent of Germany's electricity generation comes from combined heat and power (small and large scale) by 2020.

Netherlands

The Company's first BlueGen distributor in The Netherlands, BlueGeneration, is actively marketing BlueGen to smallcommercial and Government customers. In September 2011 BlueGeneration placed an order for 100 units for delivery over 12 months. The units will be installed and maintained by the service company of the large Dutch energy company Eneco.

During the quarter BlueGeneration received their first customer order, and the first three BlueGen units were delivered and installed.

BlueGeneration is also working with several large Dutch energy companies on larger scale projects for BlueGen deployment.

United Kingdom

In the United Kingdom the Company is working with E.ON, one of the UK's largest energy retailers. In this partnership, CFCL and E.ON are working to launch integrated power and heating products for the UK market. In November 2011 E.ON placed an order for 105 units. Of these, 40 BlueGen generators will be deployed under the European Union Fuel Cell and Hydrogen Joint Undertaking's Joint Technology Initiative ("JTI") fuel cell demonstration programme. A further five BlueGen units will be deployed by E.ON in demonstration and commercial customer sites outside of this programme. CFCL and the UK heating company Ideal Boilers ("Ideal") will also develop up to 60 integrated mCHP units to be installed in homes in the UK, Benelux and Germany under the JTI project from late 2012.

As at 23 April, 30 BlueGen units have been delivered to E.ON. The remaining 15 BlueGen units are planned to be delivered during the June quarter.

In February 2012 the UK Government proposed an increase in the feed in tariff for mCHP products, including BlueGen. The Government plans to increase the mCHP feed in tariff from October 2012, from a maximum of 14.2 pence to 15.7 pence, comprising a generation tariff, increased from 11 pence to 12.5 pence for every kilowatt hour of electricity generated on-site, plus an export tariff of 3.2 pence for every kilowatt hour of electricity exported to the grid.

In April the Company finalised the installation of the first BlueGen unit in a low energy new build home in the UK. The BlueGen installation, in a home built by Crest Nicholson to very high efficiency standards, provides the power, hot water and heating requirements for the property and was specifically designed for low energy homes. This installation represents a significant step towards the achievement of Zero Carbon Homes in the UK, a level which will be required for all new homes in the UK from 2016. Historically the new home market in the UK has totalled between 100,000 and 200,000 dwellings per year.

Australia

During the quarter five BlueGen units were installed at the 'Quins' commercial building redevelopment in Port Adelaide. These units are now operating and generating low emission power for the building.

In April the Company sold two BlueGen units to an energy and mining services company based in Brisbane which provides consulting and project services to clients in the fast growing coal seam gas (CSG) sector.

Twenty five BlueGen units are installed and operating in homes in Newcastle, New South Wales, as part of the 'Smart Grid, Smart City' project led by Ausgrid.

In the Victorian Government Office of Housing project, 30 BlueGen units are installed in homes in Victoria (20 in Melbourne and 10 in Shepparton). Twenty-four units are operating, generating low emission power and hot water for the social housing tenants. The six other sites are awaiting final formalities of tenants signing up with Origin Energy as the energy retailer for the project, and the local electricity distribution company providing the appropriate electricity metering.

In Australia there is currently no feed in tariff for fuel cell units. In January 2012 the Victorian Government announced a Victorian Competition and Efficiency Commission (VCEC) review of feed in tariffs. In its submission to this review, which is available at www.vcec.vic.gov.au, the Company has argued that:

-- Feed in tariffs are an effective and necessary policy tool to enable homeowners, businesses and community groups to sell excess electricity into the energy market - regardless of whether or not there is a price on carbon emissions.

-- Ceramic Fuel Cells believes the current Victorian standard feed in tariff regime should be extended to require electricity retailers to offer a fair and reasonable tariff to any distributed generator which is small scale (100kW or less) and less emissions intensive than the current power grid.

-- We believe a fair and reasonable rate is the retail price for electricity less an allowance of 20 percent for the retailer's costs and margin.

-- Low emission distributed generation products like BlueGen can help meet the increasing demand for electricity whilst taking the pressure of the electricity distribution network, and minimising network upgrade costs. The large investment required to upgrade the power network is one of the main reasons why electricity prices are rising sharply.

A final report from the VCEC review is due in June 2012.

Australia Clean Energy Finance Corporation

On 17 April 2012 the Australian Federal Government released the report of the Expert Review Panel into the Clean Energy Finance Corporation (CEFC). The CEFC will be a AUD 10 billion fund dedicated to investing in clean energy, as part of the Federal Government's Clean Energy Future Plan.

Ceramic Fuel Cells welcomes the report by the Expert Review Panel, and the confirmation by the Federal Government that it supports all the recommendations of the report. Ceramic Fuel Cells made a submission to the Expert Review Panel and met with panel members and Government advisors during the consultation process.

Ceramic Fuel Cells believe a large scale deployment of the company's BlueGen product ideally matches the CEFC's objectives and funding guidelines. The report provides clear support for low-emission distributed generation technologies, specifically citing fuel cells as an eligible technology.

The CEFC will focus its investments in renewable energy, low-emissions and energy efficiency technologies that are principally located in Australia, in order to "assist the development of the Australian industry to transition our economy towards cleaner energy and expand real options for Australia's energy future."

CEFC will have funding of AUD 2 billion per year for five years, beginning in July 2013. These funds will be allocated to two streams: 50 per cent or more of funds to a renewable energy stream and up to 50 per cent to a low-emissions and energy efficiency stream. (Although investing 50 per cent or more in the renewable energy stream is a goal rather than a binding constraint.)

We are pleased that the CEFC will adopt Ceramic Fuel Cells' recommendation, and set the eligibility threshold for low-emissions technology at 50 per cent of the emissions intensity of electricity generation in Australia. This threshold is currently 0.416 tonnes of carbon dioxide equivalent per megawatt hour of electricity generated. Ceramic Fuel Cells' products are below this threshold and are therefore eligible.

Commenting on this threshold, the report notes:

This threshold is substantially less than the current intensity of the grid and represents a fair and appropriate cut off for low-emissions technology. The rationale for setting the threshold at 50 per cent is to encompass fuel cells, distributed electricity generation, cogeneration and trigeneration using gas. Where distributed generation produces both heat and power (cogeneration and trigeneration) an allowance will be made for the usable heat that is produced when calculating the emissions intensity. Alternatively, these could be funded as an energy efficiency project. [Expert Review Panel report, page 7, emphasis added]

We also welcome the confirmation that the CEFC will focus on projects and technologies at the later stages of development: "not at the research and development stage where significant grant funding is focused, but those projects ready for commercialisation and deployment. At these later stages of development, the technology should have a track record of technical performance and projects should have the capacity to generate a financial return."

The report also comments specifically on feed in tariffs for residential distributed generation:

Distributed low-emissions generation, such as cogeneration and trigeneration, has the potential to reduce peak demand on the grid because it is located near to energy users and its power output can be controlled by the owner of the unit. To deliver this outcome distributed generation must be able to export to the grid. The electrical capability of the grid and the lack of appropriate feed-in tariffs for distributed generation are inhibitors to the generation of electricity from these sources.

The Garnaut Climate Change Review -Update 2011 observed that 'when the network company can profit from investing less rather than more, then it will seek ways to foster distributed generation and to set economically efficient tariffs.'

Without the ability to export to the grid, smaller scale distributed low-emissions generation is limited to owners of buildings and businesses that can use the heat and power that these units generate on their own premises. The CEFC will be open to proposals from these parties.

However, for those parties that require the ability to export to the grid to make their projects economically viable, a price for this generation would need to be secured as economic viability is a prerequisite for CEFC funding. [Expert Review Panel report, page 34, emphasis added]

Importantly, the CEFC Board will operate and make its investment decisions independently of the Government of the day.

The full report and submissions to the Expert Review panel, including Ceramic Fuel Cells' submission, are available at www.cefcexpertreview.gov.au.

Marketing

Ceramic Fuel Cells continues to increase its sales and marketing activities in many global markets, including at the following industry events:

E-world, Germany, February 2012

Ceramic Fuel Cells displayed a demonstration BlueGen unit at E-world 2012, held in Essen, Germany. E-world is the largest Specialist Energy trade fair in Germany, with more than 20,000 visitors. The BlueGen demonstration unit was retrofitted with a window which displayed the Gennex module, the heart of the BlueGen product.

FC Expo, Japan, March 2012

With more than 300 exhibitors and 120,000 industry professionals, FC Expo is the world's largest business to business exhibition and conference on fuel cells. As part of the technical conference, Ceramic Fuel Cells' Chief Technology Officer Dr. Karl Foger gave a presentation on the Company's technology and progress in Europe.

Green Cities, Australia, March 2012

Ceramic Fuel Cells exhibited BlueGen for the first time at Green Cities in Sydney, the largest green building conference in Asia-Pacific. During this exhibition visitors included small and large construction companies, local councils, leading architects and sustainability consultants/engineers.

Ecobuild, UK, March 2012

Ceramic Fuel Cells showcased a BlueGen unit at the E.ON stand at Ecobuild in London, with many visitors showing considerable interest in BlueGen's role as the backbone of a community energy scheme. As part of the conference Mr Paddy Thompson, General Manager Business Development, delivered a presentation on Power led applications for domestic, commercial or community installations. A copy of this presentation is available at www.cfcl.com.au.

Cleantech Forum, USA, March 2012

Ceramic Fuel Cells participated in the 10(th) annual Cleantech Forum as part of an Australian delegation, covering the themes of strategic partnerships across several industries including; utilities, energy efficiency and smart grids. BlueGen was included in these discussions as a component of modernising the energy industry towards a low carbon future.

H2FC 2012, UK, March 2012

The 8th international conference, Smart Hydrogen & Fuel Cell Power - Hydrogen & Fuel Cell Products for a Low Carbon Future, is the UK's premier showcase for the latest in hydrogen and fuel cell products. Ceramic Fuel Cells showcased a BlueGen at this exhibition in Birmingham.

Hannover Messe, Germany, April 2012

The Hannover Messe is one of the world's most important technology events, showcasing groundbreaking innovations at eight international flagship fairs. 2012 also sees the premiere of IndustrialGreenTec, the new trade fair for environmental technology. Ceramic Fuel Cells will be exhibiting within the Group Exhibit Hydrogen + Fuel Cells 2012 in Hall 27 alongside companies such as E.ON Ruhrgas, EWE and EnBW.

In February the Company's BlueGen product was featured on the first episode of the new UK Channel 4 series, Home of the Future. This five-part Channel 4 series, co-funded by one of the UK's leading energy companies E.ON and produced by Twofour, transforms the lives of a family, filling their home from top-to-bottom with futuristic technology and gadgets.

The Company is confident that these sales and marketing initiatives will continue to raise the profile of the Company's world leading clean energy products, and maintain the momentum in sales growth.

Manufacturing

The Company continues to manufacture fuel cell stacks and complete BlueGen units at its manufacturing plant in Heinsberg, Germany. During the quarter the Company recruited additional staff to continue to increase production volumes. The Company and its supplier are also continuing work to increase production volumes of the large furnaces at the site. This work is expected to be completed in the June quarter. In the meantime the smaller furnaces at the site continue to meet our requirements for fuel cell stacks.

As previously announced, to assist in moving into higher volume production and to further reduce unit costs, in November 2011 the Company entered into a memorandum of understanding with Jabil Circuit Inc (Jabil). Jabil is a global electronic manufacturing service provider with 55 factories in 22 countries and annual turnover of USD 16 billion. The first phase of co-operation is for CFCL to source selected components from Jabil's manufacturing operations. Jabil is actively working on the supply of the first components as part of this collaboration. We are also working with Jabil on improvements to component design in order to reduce costs.

Financial Review

Quarterly Cashflow

Net operating cash outflow for the March quarter was AUD 4.9m (GBP 3.2m) which was lower than last quarter principally due to higher receipts.

Receipts from customers for the March quarter were AUD 2.7m (GBP 1.8m) which was up by AUD 1.2m (GBP 0.8m) from the December quarter. The Group also received a government grant of AUD 0.7m (GBP 0.5m) in relation to work to be undertaken for the E.ON UK led JTI project discussed above.

The overall net cashflow for the March quarter after investing and financing activities was an outflow of AUD 5.7m (GBP 3.7m). This included AUD 0.6m (GBP 0.4m) for capital expenditure payments in relation to work on the large scale furnaces in Germany.

Cash at 31 March 2012 was AUD 17.0 m (GBP 11.0m).

The quarterly report is also available on the Company's website at www.cfcl.com.au

 
For more information please contact: 
  Ceramic Fuel Cells Limited 
    Andrew Neilson  Mobile  : +61 (0) 419 950 
                     Email   771 
                             : investor@cfcl.com.au 
  Nomura Code Securities (AIM Nomad) 
    Chris Golden    Tel.    : +44 (0) 207 776 
                             1200 
 
 
 
Australian media enquiries 
  Richard Allen       Tel.    : +61 (0) 3 9915 
   Oxygen Financial    Email   6341 
   Public Relations            : richard@oxygenpr.com.au 
UK media enquiries 
  Mark Way            Tel.    : +44 (0) 7786 116 
   MW Research PR      Email   991 
                               : mark.w@harvardamerica.com 
German media enquiries 
  Alex Seiler         Tel.    : +49 (0) 69 9218 
   Hering Schuppener   Email   7454 
   Consulting                  : aseiler@heringschuppener.com 
 
 

About Ceramic Fuel Cells Limited:

Ceramic Fuel Cells is a world leader in developing fuel cell technology to generate highly efficient and low-emission electricity from widely available natural gas. Ceramic Fuel Cells has sold its BlueGen gas-to-electricity generator to major utilities and other foundation customers in Germany, the United Kingdom, Switzerland, The Netherlands, Italy, Japan, Australia, and the USA. Ceramic Fuel Cells is also developing fully integrated power and heating products with leading energy companies E.ON UK in the United Kingdom, GdF Suez in France and EWE in Germany.

The company is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU).

www.cfcl.com.au