TIDMIES
RNS Number : 4434N
Invinity Energy Systems PLC
25 September 2023
25 September 2023
Invinity Energy Systems plc
("Invinity" or the "Company")
Interim Results
Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX:
IESVF), a leading global manufacturer of utility-grade energy
storage , is pleased to announce its unaudited consolidated results
for the six months ended 30 June 2023 (the "Period") and an update
on current trading.
The Company will hold a virtual meeting for analysts at 3pm (UK
time) today. Analysts wishing to attend are kindly asked to email
ir@invinity.com .
Invinity's management team will host a virtual results
presentation and interactive Q&A for all shareholders at 3pm
(UK time) on Thursday 28 September 2023. Those wishing to join the
session can sign up to Investor Meet Company for free via this
registration link .
HIGHLIGHTS
Financial
-- GBP14.8m total income including sales revenue and
project-related grant income, a 10x increase YoY (H1 2022:
GBP1.5m)
-- GBP3.3m gross loss reflecting previously disclosed and
accounted for contract losses on Canadian and Australian projects
(H1 2022: loss GBP2.1m)
-- 10 MWh California project delivered at positive project gross margin*
-- GBP12.6m loss from operating activities (H1 2022 loss: GBP12.1m)
-- GBP4.7m of total inventory and net related working capital (H1 2022: GBP1.2m)
-- GBP12.9m Period-end cash (H1 2022: GBP16.1m)
* Project gross margin excludes absorbed indirect overheads.
Operational performance and delivery
-- 26.5 MWh delivered during the Period, a 7x increase YoY (H1
2022: 3.4 MWh); the largest number of batteries the Company has
ever delivered in a 6-month period.
-- 15.6 MWh manufactured during the Period, a 2.6x increase YoY
(H1 2022: 5.94 MWh); the largest number of batteries the Company
has ever manufactured in a 6-month period.
Commercial (including Post Period)
-- Announced significant progress regarding the Company's
next-generation product, code-named "Mistral," as expected under
the programme's timelines.
-- 100 MWh of Mistral product have now either been ordered or
selected to receive funding. This includes:
o 72 MWh Mistral project portfolio selected for funding by U.S.
Department of Energy;
o 12 MWh 10-year Mistral demonstration project selected for
funding by U.S. Department of Energy;
o 14.4 MWh order from Everdura, via variation of existing VS3
sales contract;
o 1.2 MWh pilot project, funded by the B.C. Centre for
Innovation & Clean Energy.
-- Secured GBP11m of matched funding under Phase 2 of the UK
LODES project for a 30 MWh system, subject to final
contracting.
-- 5.38 MWh of closed VS3 sales during Period from 5 customers
(H1 2022: 8.4 MWh from 1 customer).
Board update
-- Jonathan Marren confirmed as permanent Chief Financial
Officer to continue alongside his existing role as Chief
Development Officer.
Larry Zulch, Chief Executive Officer at Invinity said:
"When we released our final results for 2022, I wrote that 2023
would be an inflection point and it appears I was correct. We saw
record income first half, up by ten times year over year. We made
significant progress on Mistral, our joint product development with
Gamesa Electric and Siemens Gamesa Renewable Energy. We achieved
positive product gross margin on the largest vanadium flow battery
in the United States. And then it got better just after the half
year with our first Mistral sale to Everdura, our partners in
Taiwan, followed by the U.S. Department of Energy's announcement
that they plan to fund 84 MWh of Mistral projects, more than we've
delivered in our history to date. Jonathan Marren's agreement to be
our CFO was another positive development. All of this, combined
with the increasing awareness in energy markets of the critical
role Invinity's vanadium flow batteries will play in the transition
to renewable energy, supports our belief that we are the leading
company in non-lithium stationary storage."
Stay up to date with news from Invinity. Join the distribution
list for the Company's monthly investor newsletter here .
Enquiries :
Invinity Energy Systems plc +44 (0)20 4551 0361
Jonathan Marren, CFO and Chief Development Officer
Joe Worthington, Director of Communications
Canaccord Genuity (Nominated Adviser and Joint Broker) +44 (0) 20 7523 8000
Henry Fitzgerald-O'Connor / Harry Pardoe / Gordon
Hamilton
VSA Capital (Financial Adviser and Joint Broker) +44 (0)20 3005 5000
Andrew Monk / Andrew Raca
Tavistock (Financial PR Advisor) +44 (0)20 7920 3150
Simon Hudson / Charles Baister invinity@tavistock.co.uk
Notes to Editors
Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX:
IESVF) manufactures vanadium flow batteries for large-scale,
high-throughput energy storage requirements of business, industry
and electrical networks.
Invinity's factory-built flow batteries run continually with no
degradation for over 25 years, making them suitable for the most
demanding applications in renewable energy production. Energy
storage systems based on Invinity's batteries are safe, reliable,
and economical, and range in size from less than 250 kilowatt-hours
to tens of megawatt-hours.
Invinity was created in April 2020 through the merger of two
flow battery industry leaders: redT energy plc and Avalon Battery
Corporation. With over 70 MWh of systems already deployed or
contracted for delivery across 79 sites in 15 countries, Invinity
is active in all major global energy storage markets and has
operations in the UK, Canada, USA, China and Australia. Invinity
Energy Systems plc is listed in the UK on AIM and AQSE and trades
in the USA on OTCQX.
To find out more, visit invinity.com , sign up to our monthly
Investor Newsletter here or contact Investor Relations on via +44
(0)20 4551 0361 or ir@invinity.com .
CEO Report
H1 2023 Financial Results
Total income including sales revenue and project related grant
income increased 10x to GBP14.8m in H1 2023 (H1 2022: GBP1.5m).
Revenue is recognised against projects when specific performance
obligations related to those projects have been satisfied. Grant
funding specific to customer projects has been presented alongside
the relevant project revenue and associated direct costs where that
funding is project specific and represents a direct subsidy against
project costs.
Almost all of the GBP14.8m was driven by successful deliveries
relating to the Company's three biggest projects to date,
being:
-- 8.4 MWh VFB to Elemental Energy for its Chappice Lake Solar
Storage project in Alberta, Canada;
-- 8 MWh VFB to Yadlamalka Energy for its Spencer Energy project in South Australia;
-- 10 MWh VFB to the Viejas Band of Kumeyaay Indians for its
solar-plus-storage microgrid project in Southern California, in
part funded by the California Energy Commission.
As previously disclosed in Company accounts, the Elemental
Energy and Yadlamalka Energy projects were both delivered at a
project gross margin loss as the Company chose to invest in the
deployment of its VS3 product into these two important reference
projects, the deployment of which has played an important part in
the Company signing more than 66 MWh of further orders. Some of
this loss was offset by the release of a provision for contract
losses.
The Company is pleased to report that the more recently
announced 10 MWh Viejas project, referenced in the section above,
was delivered at a small positive project gross margin. (Note
project gross margin excludes absorbed indirect overheads).
Administration costs increased marginally to GBP9.3m (H1 2022:
GBP8.9m). The Company continues to invest in its staff so as to
develop an operation capable of supporting the significant growth
potential available whilst also developing Mistral. Research and
Development costs are shown on a net basis after cost recoveries
from Gamesa Electric under our Joint Development and
Commercialisation Agreement with the decrease year-on-year partly a
result of increased recoveries under this agreement.
Finance income and finance costs are both impacted by the
unwinding of the associated balance sheet captions following the
repayment of the Riverfort Loan facility in March 2023. As part of
Finance income, interest was received of GBP0.1m on cash balances
held following the fundraising in March 2023.
Total inventory and net related working capital rose to GBP4.7m
at the end of the Period (H1 2022: GBP1.2m) as a result of
increased activity to deliver on the 2023 sales pipeline as
follows:
H1 2023 H1 2022
GBP GBP GBP
000 000 000 GBP 000
Total inventory 3,681 5,794
Pre-paid inventory 3,136 5,074
--------- ------
Total inventory and pre-paid inventory 6,817 10,868
Trade and other receivables 4,151 1,731
Accrued income 1,857 326
Deferred revenue (3,884) (4,988)
Trade payables (3,341) (2,262)
Onerous contract provision (856) (4,495)
-------- --------
Net position 4,744 1,180
During the Period the Company raised GBP23m from an equity
fundraising including securing a GBP2.5m strategic investment from
Taiwanese technology group Everbrite. Following the repayment of
the Riverfort Loan facility in March 2023 the Group is debt free,
excluding leases.
Commercial
The Company announced today that the United States Department of
Energy ("DOE") plans to fund six projects across the U.S. that
together will use 84 MWh of Invinity's next generation product,
code-named "Mistral".
This award marks important progress for Invinity in building a
robust orderbook for its next- generation product that is expected
to formally launch in 2024.
Post Period end, the Company also secured its first commercial
order for Mistral from strategic partner, Everdura, for a project
in central Taiwan to balance the island's electric grid. This
order, a varying of the original 15 MWh order announced 1 December
2022, does not change revenue forecasts but is expected to achieve
a greater gross margin than previously anticipated.
During the Period, the Company closed 5.38 MWh of sales from 5
customers (H1 2022: 8.4 MWh from 1 customer), each of which are
anticipated to contribute positive project gross margin. The
Company also secured GBP11m of matched funding under Phase 2 of the
UK LODES project for a 30 MWh system. Contracting for this project
is ongoing and further updates will be provided in due course.
Post Period, the Company also made a further 0.66 MWh of VS3
sales to 2 customers in the EU and Australia.
The Company also signed three reseller partnerships in North
America, covering Defense and Tribal Nations projects (Indian
Energy), the UK, covering battery rentals (Dawsongroup), and
Hungary (Ideona Group and STS Group).
Post the Period end, the Company entered into a memorandum of
understanding with Everdura proposing a strategic manufacturing
partnership for Invinity products in Taiwan that would
significantly expand the Company's total global manufacturing
capacity and provide greater access to Asian energy storage markets
in the future.
Finally, strong government and agency engagement occurred in the
year to date, with key post Period events including:
-- hosting Scottish Energy Minister, Gillian Martin MSP at the
Company's Bathgate facility (July 2023);
-- hosting Canada's Energy and Natural Resources Minister,
Jonathan Wilkinson, at the Company's Vancouver facility as he
launched Powering Canada Forward alongside B.C.'s Minister for
Jobs, Economic Development and Innovation, Brenda Bailey (August
2023);
-- Matt Harper, CCO, addressing the UK House of Lords Science
and Technology Committee on the benefits of VFBs for the Net Zero
grid (September 2023).
Next-Generation Product Development Progress
The Company continues to be pleased with the progress achieved
to date of the development program for its next-generation product
code-named Mistral. The securing of B.C. CICE funding support for
the pilot prototype, the first commercial order for the product
from Everdura, and the DOE's announcement that it plans to fund 84
MWh of Mistral projects are key milestones that continue to
underline the attractiveness and suitability of Invinity's durable
and flexible vanadium flow batteries to meet the growing global
requirement for energy storage.
Invinity continues to expect more contracts for a limited number
of initial Mistral projects to be announced later in 2023. The
expected full launch, including full product details, certification
and unrestricted sale of the product remains on track for
mid-2024.
Operational
During the Period the Company delivered a record 26.5 MWh of
vanadium flow batteries (H1 2022: 3.4 MWh) including deliveries
associated with the 10 MWh system for the Viejas project in
California, the 8.4 MWh system for the Chappice Lake project in
Canada and the 8 MWh system for the Spencer Energy project in
Australia. The Company also remains on track to deliver against its
customer commitments for 2023.
The deliveries were achieved from inventory held at the previous
year end plus the manufacture of a record 15.62 MWh of vanadium
flow batteries during the Period (H1 2022: 5.94 MWh). This
achievement is a direct result of continued investment in improving
the capacity of the Company's manufacturing facilities, including a
significant increase in the Vancouver facility achieved at minimal
cost.
The Company also made significant supply chain improvements to
further enhance operational efficiencies and margins and increase
manufacturing scale at lower cost as part of management's pathway
to profitability, including hiring a global Head of Supply
Chain.
Corporate & Strategic
Invinity continues to make important strategic developments
relating to its products, partners and corporate positioning,
including securing DTC Eligibility to allow real-time electronic
clearing and settlement in the United States for its OTCQX-listed
ordinary shares to provide increased liquidity for U.S.-based
investors.
Invinity sees strategic partnerships and investment as an
important pillar of its future corporate growth. As previously
disclosed, the Company confirms that discussions with a number of
potential strategic partners remain ongoing.
Post the Period end, following General Meetings of the
Short-Term and Long-Term Warrant holders, the Company secured
approval to amend the subscription prices of its Short- and
Long-Term Warrants and the exercise date of the Short-Term
Warrants.
Throughout the Period and beyond, the Company has continued to
focus on delivering its four-part strategy that is taking Invinity
forward on its pathway to profitability. These key tenets of 1)
delivering projects; 2) closing new and larger deals; 3)
progressing Mistral; and 4) advancing its operational excellence
are enabling the Company to maintain its growth trajectory and
adroitly address challenges as they appear.
Current Trading and Outlook
The Company's 2023 revenue backlog (defined as both contracted
orders already recognised in 2023 and contracted orders capable of
delivery over the remainder of 2023) was GBP24.9m as at 22
September 2023.
Invinity's current commercial pipeline as at 22 September 2023,
is detailed below:
Date Base (MWh) Advanced Qualified Qualified
(MWh) Near Term(1) Further Term(1)
(MWh) (MWh)
22-Sep-2022 22.8 63.5 405.8 --
(HY22 Results)
----------- --------- -------------- -----------------
24-May-2023 42.8 73.4 957.1 1,397
(FY22 Results)
----------- --------- -------------- -----------------
22-Sep-2023 43.1 137.3* 1,415.0 3,057.8
(Current Trading)
----------- --------- -------------- -----------------
% change vs.
FY22 +1% +87% +48% +119%
----------- --------- -------------- -----------------
(1) Near term dates in the Qualified categories are where
estimated delivery is within the next 24 months. Further term
reflects estimated deliveries that are beyond the next 24 months
and was not reported by the Company prior to January 2023.
* The 84 MWh of Mistral projects selected for funding by the DOE
are contained within the Advanced category of the commercial
pipeline.
The Company's total sales orders that have been contracted to
date are set out below:
Date Closed
(MWh)
22-Sep-2022 28.0
(HY22 Results)
-------
24-May-2023 64.3
(FY22 Results)
-------
22-Sep-2023 65.0
(Current Trading)
-------
% change vs.
FY22 +1%
-------
Invinity expects to make material progress during the remainder
of 2023 and beyond on the following key areas:
-- Deliver order backlog to customers, converting inventory into revenue;
-- Close new deals and progress existing commercial interest in
our products as reported in our growing pipeline; and
-- Progress the development of our next-generation product
towards expected commercial release alongside Gamesa Electric in
mid-2024.
Unaudited financial results for the period ended 30 June
2023
Unaudited consolidated statement of profit and loss
For the six months ended 30 June 2023
Six months Six months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022
(Restated)
Continuing operations Note GBP000 GBP000 GBP000
--------------------------------- ----- -------------- -------------- -------------
Revenue 3 14,812 1,416 2,944
Direct costs (18,143) (3,826) (2,927)
Grant income against direct
costs 3 11 141 647
--------------------------------- ----- -------------- -------------- -------------
Cost of sales 4 (18,132) (3,685) (2,280)
--------------------------------- ----- -------------- -------------- -------------
Gross loss (3,320) (2,269) 664
Operating costs
Administrative expenses 5 (9,259) (8,860) (19,042)
Other items of operating income
and expense 7 (9) (928) (604)
--------------------------------- ----- -------------- -------------- -------------
Loss from operations (12,588) (12,057) (18,982)
Finance income 467 14 62
Finance costs (1,134) (22) (65)
Gain/(loss) on foreign currency
transactions (69) 483 448
--------------------------------- ----- -------------- -------------- -------------
Net finance (costs)/ income (736) 475 445
--------------------------------- ----- -------------- -------------- -------------
Loss before income tax (13,324) (11,582) (18,537)
Income tax expense - - -
--------------------------------- ----- -------------- -------------- -------------
Loss from continuing operations (13,324) (11,582) (18,537)
--------------------------------- ----- -------------- -------------- -------------
Loss for the period/year (13,324) (11,582) (18,537)
Loss per ordinary share in
pence
Basic 8 (8.2) (10.0) (16.0)
Diluted 8 (8.2) (10.0) (16.0)
Grant income against direct costs was restated for the 30 June
2022 period to consistently reflect current period presentation. As
a result, GBP140,841 was reclassified to grant income.
The above unaudited consolidated statement of profit and loss
should be read in conjunction with the accompanying notes.
Unaudited consolidated statement of comprehensive income
For the six months ended 30 June 2023
Six months Six months Year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
Continuing operations Note GBP000 GBP000 GBP000
----------------------------------------- ------ -------------- -------------- -------------
Loss for the year (13,324) (11,582) (18,537)
Other comprehensive income/(expense)
Exchange differences on the translation
of foreign operations (85) 652 (137)
------------------------------------------------- -------------- -------------- -------------
Total comprehensive loss for
the period/year (13,409) (10,930) (18,674)
------------------------------------------------- -------------- -------------- -------------
The above unaudited consolidated statement of comprehensive
income should be read in conjunction with the accompanying
notes.
Unaudited consolidated statement of financial position
At 30 June 2023
Six months Six months Year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
Note GBP000 GBP000 GBP000
---------------------------------- ----- -------------- -------------- -------------
Non-current assets
Goodwill and other intangible
assets 10 24,025 24,075 24,050
Property, plant and equipment 11 1,111 1,045 1,208
Right-of-use assets 1,370 1,806 1,845
Total non-current assets 26,506 26,926 27,103
Current assets
Inventories 12 3,681 5,794 9,827
Other current assets 13 6,344 6,640 8,781
Contract assets 14 1,857 326 500
Trade receivables 15 4,151 1,731 1,737
Cash and cash equivalents 16 12,929 16,130 5,137
---------------------------------- ----- -------------- -------------- -------------
Total current assets 28,962 30,621 25,982
---------------------------------- ----- -------------- -------------- -------------
Total assets 55,468 57,547 53,085
---------------------------------- ----- -------------- -------------- -------------
Current liabilities
Trade and other payables 17 (4,481) (4,845) (4,935)
Derivative financial instruments 18 (474) - (769)
Contract liabilities 14 (3,884) (4,988) (8,375)
Lease liabilities (601) (1,075) (740)
Provisions 14 (2,109) (5,757) (2,907)
---------------------------------- ----- -------------- -------------- -------------
Total current liabilities (11,549) (16,665) (17,726)
---------------------------------- ----- -------------- -------------- -------------
Net current assets 17,413 13,956 8,256
---------------------------------- ----- -------------- -------------- -------------
Non-current liabilities
Lease liabilities (670) (582) (969)
---------------------------------- ----- -------------- -------------- -------------
Total non-current liabilities (670) (582) (969)
---------------------------------- ----- -------------- -------------- -------------
Total liabilities (12,219) (17,247) (18,695)
---------------------------------- ----- -------------- -------------- -------------
Net assets 43,249 40,300 34,390
---------------------------------- ----- -------------- -------------- -------------
Share capital 51,347 50,714 50,716
Share premium 162,852 140,459 141,579
Share based payment reserve 6,321 5,245 5,957
Accumulated losses (175,418) (155,139) (162,094)
Currency translation reserve (1,892) (1,018) (1,807)
Other reserves 39 39 39
---------------------------------- ----- -------------- -------------- -------------
Total equity 43,249 40,300 34,390
---------------------------------- ----- -------------- -------------- -------------
The above unaudited consolidated statement of financial position
should be read in conjunction with the accompanying notes.
Unaudited consolidated statement of changes in equity
For the six months ended 30 June 2023
Called Share-based Currency
up share Share payment Accum-ulated translation Other
capital premium reserve losses reserve reserves Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2023 50,716 141,579 5,957 (162,094) (1,807) 39 34,390
Loss for the period - - - (13,324) - - (13,324)
Other comprehensive
gain/(loss)
Foreign currency
translation
differences - - - - (85) (85)
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Total comprehensive
loss for the period - - - (13,324) (85) - (13,409)
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Transactions with
owners in their capacity
as owners
Investment funding
arrangement, net of
transaction costs 631 21,272 23 - - - 21,926
Exercise of share
options - 1 - - - - 1
Share-based payments - - 341 - - - 341
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Total contributions
by owners 631 21,273 364 - - - 22,268
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
At 30 June 2023 51,347 162,852 6,321 (175,418) (1,892) 39 43,249
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
For the six months ended 30 June 2022
Called Share-based Currency
up share Share payment Accum-ulated translation Other
capital premium reserve losses reserve reserves Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2022 50,690 140,445 5,293 (143,557) (1,670) 39 51,240
Loss for the period
Other comprehensive
gain/(loss) - - - (11,582) - - (11,582)
Foreign currency
translation
differences - - - - 652 - 652
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Total comprehensive
loss for the period - - - (11,582) 652 - (10,930)
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Transactions with owners
in their capacity as
owners
Transaction costs charged
directly to equity - (25) - - - - (25)
Exercise of share options 24 37 (48) - - - 13
Exercise of share warrants - 2 - - - - 2
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
Total contributions
by owners 24 14 (48) - - - (10)
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
At 30 June 2022 50,714 140,459 5,245 (155,139) (1,018) 39 40,300
---------------------------- ---------- --------- ------------ ------------- ------------- ---------- ---------
The above unaudited consolidated statements of changes in equity
should be read in conjunction with the accompanying note.
Unaudited consolidated statement of changes in equity
For the year ended 31 December 2022
Called Share-based Currency
up share Share payment Accumulated translation Other
capita premium reserve losses reserve reserves Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2022 50,690 140,445 5,293 (143,557) (1,670) 39 51,240
Loss for the year - - - (18,537) - - (18,537)
Other comprehensive
gain/(loss)
Foreign currency translation
differences - - - - (137) - (137)
----------------------------- ---------- --------- ------------ ------------ ------------- ---------- ---------
Total comprehensive
for the year - - - (18,537) (137) - (18,674)
----------------------------- ---------- --------- ------------ ------------ ------------- ---------- ---------
Transactions with owners
in their capacity as
owners
Investment funding
arrangement,
net of transaction costs 25 1,129 (23) - - - 1,131
Exercise of share options 1 5 - - - - 6
Share-based payments - - 681 - - - 681
Equity settled interest
on investment funding
arrangement - - 6 - - - 6
----------------------------- ---------- --------- ------------ ------------ ------------- ---------- ---------
Total contributions
by owners 26 1,134 664 - - - 1,824
----------------------------- ---------- --------- ------------ ------------ ------------- ---------- ---------
At 31 December 2022 50,716 141,579 5,957 (162,094) (1,807) 39 34,390
----------------------------- ---------- --------- ------------ ------------ ------------- ---------- ---------
The above unaudited consolidated statements of changes in equity
should be read in conjunction with the accompanying note.
Unaudited consolidated statement of cash flows
For the six months ended 30 June 2023
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
Note GBP000 GBP000 GBP000
-------------------------------------- ----- ----------- ----------- -------------
Cash flows from operating activities
Cash used in operations 9 (12,228) (9,938) (21,934)
Interest received 115 14 62
Interest paid (13) (22) (1)
Income taxes paid - - -
-------------------------------------- ----- ----------- ----------- -------------
Net cash outflow from operating
activities (12,126) (9,946) (21,873)
-------------------------------------- ----- ----------- ----------- -------------
Cash flows from investing activities
Acquisition of intangible assets 10 - - -
Acquisition of property, plant
and equipment 11 (191) (206) (708)
-------------------------------------- ----- ----------- ----------- -------------
Net cash outflow from investing
activities (191) (206) (708)
-------------------------------------- ----- ----------- ----------- -------------
Cash flows from financing activities
Payment of lease liabilities (403) (222) (591)
Interest paid on lease liabilities (36) - (58)
Financing charges on repayment
of derivative financial instrument (992) - -
Repayment of investment funding
arrangement (320) - -
Proceeds from the issue of share
capital, net of transaction costs 21,927 - 1,161
Proceeds from the investment funding
arrangement, net of transaction
costs - - 769
Transaction costs charged directly
to equity - (25) -
Proceeds from the exercise of share
options and warrants 1 62 6
-------------------------------------- ----- ----------- ----------- -------------
Net cash inflow from financing
activities 20,177 (185) 1,287
-------------------------------------- ----- ----------- ----------- -------------
Net increase/(decrease) in cash
and cash equivalents 7,860 (10,337) (21,294)
Cash and cash equivalents at the
start of the period/year 5,137 26,355 26,355
Effects of exchange rate changes
on cash and cash equivalents (68) 112 76
-------------------------------------- ----- ----------- ----------- -------------
Cash and cash equivalents at the
end of the period/year 12,929 16,130 5,137
-------------------------------------- ----- ----------- ----------- -------------
The above unaudited consolidated statement of cash flows should
be read in conjunction with the accompanying note.
Notes
(forming part of the unaudited consolidated historical financial
information)
1: General Information
Invinity Energy Systems plc (the 'Company') is a public company
limited by shares incorporated and domiciled in Jersey. The
registered office address is Third Floor, IFC5, Castle Street, St.
Helier, JE2 3BY, Jersey.
The Company is listed on the AIM Market of the London Stock
Exchange with the ticker symbol IES.L and on the Aquis Stock
Exchange (AQSE). The Company also trades in the USA on OTCQX Best
Market under the symbol "IESVF".
The principal activities of the Company and its subsidiaries
(together the 'Group') relate to the manufacture and sale of
vanadium flow battery systems and associated installation, warranty
and other services.
2: Summary of significant accounting policies
Basis of preparation
This unaudited condensed consolidated interim financial
information for the six-months ended 30 June 2023 (the 'interim
financial information') has been prepared in accordance with IAS
34, 'Interim financial reporting' as adopted by the European Union.
The financial information should be read in conjunction with the
Group's annual financial statements for the year ended 31 December
2022, that were prepared in accordance with International Financial
Reporting Standards as adopted by the European Union.
The annual report and financial statements for the year ended 31
December 2022 are available on the company's website (
www.invinity.com ).
This interim financial information has been prepared using the
historical cost basis of accounting. The accounting policies
applied across all the Group's subsidiaries when preparing the
financial information are consistent with those adopted and
disclosed in the annual financial statements for the year ended 31
December 2022. The accounting policies have been consistently
applied across all Group entities for the purpose of producing this
interim financial information.
The financial information included in this document does not
comprise statutory accounts within the meaning of Companies
(Jersey) Law 1991. The comparative figures for the financial year
ended 31 December 2022 are not the company's statutory accounts for
that financial year within the meaning of Companies (Jersey) Law
1991. Those accounts have been reported on by the company's
auditors and delivered to the Jersey Financial Services
Commission.
The report of the auditors included in the annual report and
financial statements for the year ended 31 December 2022 was
unqualified. However, the auditors' report did contain an emphasis
of matter related to the application of the going concern basis of
preparation.
The Group's business activities, together with factors likely to
affect its future development, performance and position, are set
out in the operations and financial review sections of this
report.
The financial position of the Group, its cash flows and
liquidity position are described in the financial review
section.
Going concern
In assessing whether the Group has the ability to continue as a
going concern the Directors have modelled a base cash flow forecast
for a period up to 31 December 2024. The Directors have prepared a
base case scenario that assumes the 14.5m Short-Term warrants
originally granted in 2021 ("Short-Term Warrants"), are exercised.
Under this scenario the Group would expect to remain cash positive
for the period up to 31 December 2024 assessed for going concern
purposes. The forecast does indicate that the Group would move into
negative cash shortly after the period assessed for going concern
as a result of working capital investment on future sales. The
Group would defer any working capital investment if it were to
result in exhausting all cash. This forecast is also based on
delivering existing signed sales contracts during 2023 as per
forecast gross margins and existing and future sales contracts
during 2024 at anticipated positive gross margins. The Directors
recognise there is a risk that the Short-Term Warrants will not be
exercised if they are not 'in the money' before the expiry date and
given it is not at the discretion of the Group.
In assessing going concern the Directors have also prepared a
severe but plausible downside scenario which forecasts delivery of
existing and future sales being made during 2024 being delayed
beyond June 2024 and forecasted margins not being achieved, and the
Short-Term warrants not being exercised. Under this scenario the
Group would exhaust all available cash by April 2024 and it will be
necessary to raise further funding within the next 12 months in
order to continue trading and deliver on the strategic
objectives.
The Directors are in the process of evaluating potential
additional funding options from potential strategic investors but
no such funding is committed as at the date of approval of these
financial statements. The Group has been, and continues in, active
discussions with a number of potential strategic investors and is
confident that it will be able to conclude an equity investment
from one or more of such parties within the period up to 31
December 2024 assessed for going concern purposes. The Directors
also note that the Company concluded an initial strategic
investment from Everbrite Technology Co., Ltd. for GBP2.5 million
in March 2023 which gives them confidence that the Company is
capable of attracting further strategic investment.
Due to the uncertainty in relation to obtaining additional
funding this indicates the existence of a material uncertainty that
may cast significant doubt about the Group's ability to continue as
a going concern.
The financial statements do not include the adjustments that
would result if the Group were unable to continue as a going
concern.
In addition to the issues discussed above, the directors have
also reviewed other varying, and wide-ranging information relating
to both present and future conditions when reaching their
conclusion regarding going concern. These included the:
-- operational performance of the Company's products delivered to customer sites to date;
-- value of contracts signed for delivery in 2023 and 2024;
-- growing sales pipeline of 4,653.2 MWh in September 2023 vs 2,470.3 MWh in May 2023;
-- growing opportunities presented by the emergent energy storage market;
-- growing levels of Government engagement and support in the three key markets; and
-- positive discussions with potential strategic partners
regarding making an equity investment into the Company.
Estimates and judgements
The preparation of interim financial information requires
management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of
assets and liabilities and of items of income and expense. Actual
results may differ from these estimates.
In preparing this interim financial information, the significant
judgments made by management in applying the Group's accounting
policies were the same as those that applied to the consolidated
financial statements for the year ended 31 December 2022.
Similarly, the key sources of estimation uncertainty related to the
financial information were the same as those encountered when
applying the Group's accounting policies in relation to the
preparation of the consolidated financial statements for the year
ended 31 December 2022.
Principal risks and uncertainties
In preparing the condensed consolidated financial information,
management is required to consider the principal risks and
uncertainties facing the Group. In management's opinion the
principal risks and uncertainties facing the Group are unchanged
since the preparation of the consolidated financial statements for
the year ended 31 December 2022. Those risks and uncertainties,
together with management's response to them are described in the
risk review section of the annual report and financial statements
for the year ended 31 December 2022.
Accounting policies
The accounting policies applied in this condensed consolidated
financial information are consistent with those applied in
preparing the financial statements for the year ended 31 December
2022.
3: Revenue from contracts with customers and income from
government grants
Segment information
The Group derives revenue from a single business segment, being
the manufacture and sale of vanadium flow battery systems and
related hardware together with the provision of services directly
related to battery systems sold to customers.
The Group is organised internally to report on its financial and
operational performance to its chief operating decision maker,
which has been identified as the three executive directors as a
group.
All revenues were derived from continuing operations.
Revenue from contracts with customers
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2022
2023 2022
GBP000 GBP000 GBP000
Battery systems and associated control
systems 13,653 1,412 2,548
Integration, commissioning and other
related services 705 - 254
Other services 454 4 142
---------------------------------------- ----------- ----------- -------------
Total revenue in the statement
of profit and loss 14,812 1,416 2,944
---------------------------------------- ----------- ----------- -------------
Grant income other than revenue
The Group receives grant income to help fund certain projects
that are eligible for support, typically in the form of innovation
grants. The Group also received grant income related to operating
costs under government subsidy programmes as part of national COVID
response efforts. The total grant income that was received in the
period was as follows:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2022
2023 2022
GBP000 GBP000 GBP000
Business support grants against
employee costs COVID-19 - - (11)
Grants for research and development 11 282 647
------------------------------------- ----------- ----------- -------------
Total government grants received 11 282 636
------------------------------------- ----------- ----------- -------------
4: Cost of sales
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Movement in inventories of finished
battery systems 16,404 1,679 3,356
Production costs 2,286 1,617 2,640
Depreciation of production facilities,
equipment and amortisation of intangibles 8 88 172
Movement in provisions for warranty
costs 142 301 763
Movement in provisions for sales
contracts (697) - (4,004)
-------------------------------------------- ----------- ----------- -------------
Total cost of sales 18,143 3,685 2,927
-------------------------------------------- ----------- ----------- -------------
5: Administrative expenses
Six months Six months Year ended
ended ended 31 December
30 June 2023 30 June 2022
2022
GBP000 GBP000 GBP000
Staff costs 6,205 4,378 10,322
Research and development costs 428 1,428 2,592
Professional fees 409 1,496 2,983
Sales and marketing costs 299 183 399
Facilities and office costs 154 210 385
Other administrative costs 1,764 1,165 2,361
-------------------------------- -------------- ----------- -------------
Total administrative expenses 9,259 8,860 19,042
-------------------------------- -------------- ----------- -------------
6: Staff costs
Six months Six months Year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
GBP000 GBP000 GBP000
Wages and salaries 5,511 5,239 9,280
Employer payroll taxes 477 530 840
Other benefits 186 534 919
Share-based payments 341 (281) 388
------------------------ -------------- -------------- -------------
Total staff costs 6,515 6,022 11,425
------------------------ -------------- -------------- -------------
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2022
2023 2022
Staff costs charged to cost of sales 310 1,644 1,103
Staff costs charged to cost of administrative
expenses 6,205 4,378 10,322
Total staff costs 6,515 6,022 11,425
----------------------------------------------- ----------- ----------- -------------
7: Other items of operating income and expense
Six months
Six months ended Year ended
ended 30 June 31 December
30 June 2023 2022 2022
GBP000 GBP000 GBP000
(Income)/expenses
Provision for onerous contracts, net
of amounts used - (364) 554
Transfer agreement - 1,240 -
Loss on disposal of property, plant
and equipment - - 33
Impairment of obsolete inventory and
disposal of scrap inventory 9 52 25
Gain on curtailment of right-of-use
asset - - (8)
-------------------------------------- -------------- ----------- -------------
Total other operating expenses (net) 9 928 604
-------------------------------------- -------------- ----------- -------------
8: Loss per share
The weighted average number of shares used to calculate basic
and diluted loss per share as presented in the consolidated
statement of comprehensive loss was as follows:
Six months
Six months ended Year ended
ended 30 June 31 December
30 June 2023 2022 2022
In issue at 1 January 119,007,846 116,048,604 116,048,761
Shares issued in the period - weighted
average 42,978,571 363 102,617
Weighted average shares in issue
at the end of the period 161,986,417 116,048,967 116,151,378
Effect of employee share options
and warrants not exercised 3,104,440 30,609,160 1,603,588
---------------------------------------- -------------- -------------- --------------
Weighted average number of diluted
shares at the period end 165,090,857 146,658,127 117,754,966
---------------------------------------- -------------- -------------- --------------
Additional potential shares used in the calculation of diluted
earnings per share primarily relate to potential shares outstanding
at 30 June 2023 that may be issued in satisfaction of
'in-the-money' employee share options. Potentially dilutive shares
related to 'in-the-money' outstanding warrants to subscribe for
ordinary shares in the Company are also included in calculating
diluted earnings per share.
Where additional potential shares have an anti-dilutive impact
on the calculation of loss per share calculation, such potential
shares are excluded from the weighted average number of shares used
in the calculation.
Additional potential shares are anti-dilutive where their
inclusion in the calculation of loss per share results in a lower
loss per share.
9: Cash flows from operating activities
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Loss after income tax (13,324) (11,582) (18,537)
Adjustments for:
Depreciation and amortisation 727 655 1,350
Loss on disposal of property, plant
and equipment - - 33
Gain on curtailment of right-of-use
asset - - (8)
Impairment of inventory - 51 24
Share-based payments charge 341 (48) 681
Equity settled interest and transaction
costs on investment funding agreement - - 6
Net finance costs/income 732 9 -
Net foreign exchange differences 126 562 (168)
--------------------------------------------- ----------- ----------- -------------
(11,398) (10,353) (16,619)
--------------------------------------------- ----------- ----------- -------------
Changes in operating assets and liabilities
(Increase)/decrease in inventory 5,945 260 (3,875)
(Increase)/decrease in contract assets (1,359) - (174)
(Increase) in trade receivables and
other receivables (2,559) (12) (88)
(Increase) in other assets and prepaid
inventory 2,513 (130) (2,354)
Increase in trade payables (342) 1,164 1,263
Increase/(decrease) in warranty provision (47) 46 183
Increase/(decrease) in onerous contract
provision (751) (622) (3,252)
Increase/(decrease) in contract liabilities (4,230) (291) 2,982
--------------------------------------------- ----------- ----------- -------------
(830) 415 (5,315)
--------------------------------------------- ----------- ----------- -------------
Cash used in operations (12,228) (9,938) (21,934)
--------------------------------------------- ----------- ----------- -------------
10: Goodwill and intangible assets
Software
Patents and and domain
Goodwill certifications names Total
GBP000 GBP000 GBP000 GBP000
--------------------------------- --------- ---------------- ------------- -------
Cost
At 1 January 2023 23,944 203 50 24,197
Additions - - - -
Disposals - - - -
Effects of movements in foreign
exchange - - (2) (2)
--------------------------------- --------- ---------------- ------------- -------
At 30 June 2023 23,944 203 48 24,195
--------------------------------- --------- ---------------- ------------- -------
Accumulated amortisation
At 1 January 2023 - (112) (35) (147)
Amortisation charge - (20) (4) (24)
Disposals - - - -
Effects of movements in foreign
exchange - - 1 1
--------------------------------- --------- ---------------- ------------- -------
At 30 June 2023 - (132) (38) (170)
--------------------------------- --------- ---------------- ------------- -------
Net book value
At 1 January 2023 23,944 91 15 24,050
--------------------------------- --------- ---------------- ------------- -------
At 30 June 2023 23,944 71 10 24,025
--------------------------------- --------- ---------------- ------------- -------
Software
Patents and and domain
Goodwill certifications names Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2022 23,944 203 47 24,194
Additions - - - -
Disposals - - - -
Effects of movements in foreign
exchange - - 5 5
--------------------------------- --------- ---------------- ------------- -------
At 30 June 2022 23,944 203 52 24,199
--------------------------------- --------- ---------------- ------------- -------
Accumulated amortisation
At 1 January 2022 - (71) (26) (97)
Amortisation charge - (20) (4) (24)
Disposals - - - -
Effects of movements in foreign
exchange - - (3) (3)
--------------------------------- --------- ---------------- ------------- -------
Amortisation at 30 June 2022 - (91) (33) (124)
--------------------------------- --------- ---------------- ------------- -------
Net book value
At 1 January 2022 23,944 132 21 24,097
--------------------------------- --------- ---------------- ------------- -------
At 30 June 2022 23,944 112 19 24,075
--------------------------------- --------- ---------------- ------------- -------
Software
Patents and domain
Goodwill and certifications names Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2022 23,944 203 47 24,194
Additions - - - -
Disposals - - - -
Effects of movements in foreign
exchange - - 3 3
--------------------------------- --------- -------------------- ------------ -------
At 31 December 2022 23,944 203 50 24,197
--------------------------------- --------- -------------------- ------------ -------
Accumulated amortisation
At 1 January 2022 - (71) (26) (97)
Amortisation charge - (41) (8) (49)
Disposals - - - -
Effects of movements in foreign
exchange - - (1) (1)
--------------------------------- --------- -------------------- ------------ -------
Amortisation at 31 December
2022 - (112) (35) (147)
--------------------------------- --------- -------------------- ------------ -------
Net book value
At 1 January 2022 23,944 132 21 24,097
--------------------------------- --------- -------------------- ------------ -------
At 31 December 2022 23,944 91 15 24,050
--------------------------------- --------- -------------------- ------------ -------
Goodwill
All goodwill is tested annually for impairment. At 31 December
2022, goodwill was tested for impairment using a fair value less
costs of disposal methodology by reference to the Company's quoted
market capitalisation using the price of 43.0 pence per share at
that date. No impairment loss was identified in relation to
goodwill.
The closing share price on 22 September 2023 was 44.0p, giving a
market capitalisation of GBP80.23m which does not indicate
impairment of goodwill.
Patents and certifications
There have been no events or circumstances that would indicate
that the carrying value of patents and certifications may be
impaired at 30 June 2023
11: Property, plant and equipment
Computer
and office Leasehold Vehicles
equipment improvements and equipment Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2023 699 1,119 1,402 3,220
Additions - 9 182 191
Disposals - - (44) (44)
Effects of movements in foreign
exchange (6) (16) (27) (49)
--------------------------------- ------------ -------------- --------------- --------
At 30 June 2023 693 1,112 1,513 3,318
--------------------------------- ------------ -------------- --------------- --------
Accumulated Depreciation
At 1 January 2023 (662) (635) (715) (2,012)
Depreciation charge (8) (152) (103) (263)
Disposals - - 44 44
Effects of movements in foreign
exchange 5 6 13 24
--------------------------------- ------------ -------------- --------------- --------
Depreciation at 30 June 2023 (665) (781) (761) (2,207)
--------------------------------- ------------ -------------- --------------- --------
Net book value
At 1 January 2023 37 484 687 1,208
--------------------------------- ------------ -------------- --------------- --------
At 30 June 2023 28 331 752 1,111
--------------------------------- ------------ -------------- --------------- --------
Computer
and office Leasehold Vehicles
equipment improvements and equipment Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2022 780 681 1,165 2,626
Additions 35 96 75 206
Disposals - - - -
Effects of movements in foreign
exchange 20 19 77 116
--------------------------------- ------------ -------------- --------------- --------
At 30 June 2022 835 796 1,317 2,948
--------------------------------- ------------ -------------- --------------- --------
Accumulated Depreciation
At 1 January 2022 (653) (427) (416) (1,496)
Depreciation charge (120) (78) (152) (350)
Disposals - - - -
Effects of movements in foreign
exchange (14) (11) (32) (57)
--------------------------------- ------------ -------------- --------------- --------
Depreciation at 30 June 2022 (787) (516) (600) (1,903)
--------------------------------- ------------ -------------- --------------- --------
Net book value
At 1 January 2022 127 254 749 1,130
--------------------------------- ------------ -------------- --------------- --------
At 30 June 2022 48 280 717 1,045
--------------------------------- ------------ -------------- --------------- --------
Computer
and office Leasehold Vehicles
equipment improvements and equipment Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2022 780 681 1,165 2,626
Additions 45 429 234 708
Disposals (136) (2) (37) (175)
Foreign currency exchange
differences (10) (11) 40 61
--------------------------------- ------------ -------------- --------------- --------
At 31 December 2022 699 1,119 1,402 3,220
--------------------------------- ------------ -------------- --------------- --------
Accumulated Depreciation
At 1 January 2022 (653) (427) (416) (1,496)
Depreciation charge (129) (204) (301) (634)
Disposals 125 1 16 142
Effects of movements in foreign
exchange (5) (5) (14) (24)
--------------------------------- ------------ -------------- --------------- --------
Depreciation at 31 December
2022 (662) (635) (715) (2,012)
--------------------------------- ------------ -------------- --------------- --------
Net book value
At 1 January 2022 127 254 749 1,130
--------------------------------- ------------ -------------- --------------- --------
At 31 December 2022 37 484 687 1,208
--------------------------------- ------------ -------------- --------------- --------
The Group has no assets pledged as security. No amounts of
interest have been capitalised within property, plant and equipment
at 30 June 2023 (2022: GBPnil).
12: Inventory
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Raw materials and consumables 1,421 695 1,815
Work in progress 1,503 5,099 6,370
Finished goods 756 - 1,642
------------------------------- -------- -------- ------------
Total inventory 3,681 5,794 9,827
------------------------------- -------- -------- ------------
13: Other current assets
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Prepayments and deposits 1,108 1,182 1,879
Prepaid inventory 3,136 5,074 5,102
Tax credits recoverable 1,179 345 551
Other receivables 921 39 1,249
---------------------------- -------- -------- ------------
Total other current assets 6,344 6,640 8,781
---------------------------- -------- -------- ------------
Prepaid inventory is recognised on inventory payments where
physical delivery of that inventory has not yet been taken by the
Group and is stated at the lower of cost and net realisable
value.
On 14 December 2022 the Company entered a US$ 10.0 million
Investment Agreement with Riverfort Global Opportunities PCC LTD
(Riverfort) and YA II PN, Ltd (Yorkville) (together, the
Noteholders). The Investment Agreement was intended to provide
additional working capital to the Company ahead of a planned
fundraise.
An initial amount of US$ 2.5 million was drawn by the Company on
inception of the facility (the First Advance). Amounts drawn under
the Investment Agreement were convertible to ordinary shares of the
Company at the option of each of Riverfort and Yorkville. To
facilitate the conversion of amounts drawn by the Company under the
Investment Agreement, a total of 2,700,038 ordinary shares (the
Initial Shares) were issued in advance to Riverfort and Yorkville
on a 50/ 50 basis.
Following the Company's successful fundraise in March 2023 the
Investment Agreement was redeemed in full. At the redemption date
1,779,640 of the Initial Shares remained outstanding and held by
the Noteholders.
To the extent that the Noteholders still held Initial Shares
after the Facility had been repaid in full, the shares will be sold
by the Noteholders with the relevant net proceeds remitted to the
Company. To ensure an orderly market, the Company and the
Noteholders agreed that, for a period of 24 months from the date of
the Repayment Agreement, these remaining shares may only be sold
following instruction from the Company, given an agreement that 97%
of the net proceeds are to be remitted to the Company.
Because the Company will receive 97% of the proceeds on any sale
of the Initial Shares that it instructs, the outstanding balance of
the Initial Shares represent a financial asset to the Company.
Accordingly, the outstanding Initial Shares have been designated
as Fair Value Through Profit and Loss in accordance with IFRS 9.
The outstanding Initial Shares were recognised as a receivable at
fair value based on the share price (32.5p) on the date of the
agreement to repay all amounts outstanding under the Investment
Agreement together with any relevant redemption charges.
At each reporting date going forward, any outstanding Initial
Shares will be revalued by reference to the Company's share price
(AIM:IES) and a fair value gain or loss based on the increase or
decrease in the aggregate fair value of the outstanding Initial
Shares will be recorded in profit and loss accordingly.
On 30 June 2023, the outstanding Initial Shares have been
revalued based on the Company's closing share price of 49.0p per
share at that date. A corresponding gain representing the
difference between the original valuation of the Initial Shares
that was calculated on redemption of the Investment Agreement that
closed in March 2023 and based on a share price of 32.5p.
The fair value of the outstanding Initial Shares on 30 June 2023
was GBP845,863 (2022: GBPnil).
14: Contract related balances
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Amounts due from customer contracts
included in trade receivables 4,151 1,731 1,737
Contract assets (accrued income
for work done not yet invoiced) 1,857 326 500
Contract liabilities (deferred revenue
related to advances on customer
contracts) (3,884) (4,988) (8,375)
---------------------------------------- ---------- ---------- --------------
Net position of sales contracts 2,124 (2,931) (6,138)
---------------------------------------- ---------- ---------- --------------
The amount of revenue recognised in the period that was included
in contract liabilities at the end of the prior year was
GBP5,504,212 (2022: GBP428,417).
Provisions related to contracts with customers
Provision
Warranty Legacy products for contract
provision provision losses Total
GBP000 GBP000 GBP000 GBP000
At 1 January 2023 284 1,016 1,607 2,907
Charges to profit or loss
* Provided in period 75 63 - 138
* Unused amounts reversed - - (697) (697)
Amounts used in period (75) (63) - (138)
Movement due to foreign exchange (1) (46) (54) (101)
At 30 June 2023 283 970 856 2,109
------------------------------------- ----------- ---------------- -------------- -------
Provision
Warranty Legacy products for contract
provision provision losses Total
GBP000 GBP000 GBP000 GBP000
At 1 January 2022 257 860 4,859 5,976
Charges to profit or loss
* Provided in period 46 - - 46
- - - -
* Unused amounts reversed
Amounts used in period (364) (364)
Movement due to foreign exchange 3 96 - 99
------------------------------------- ----------- ---------------- -------------- -------
At 30 June 2022 306 956 4,495 5,757
------------------------------------- ----------- ---------------- -------------- -------
Provision
Warranty Legacy products for contract
provision provision losses Total
GBP000 GBP000 GBP000 GBP000
At 1 January 2022 257 860 4,859 5,976
Charges to profit or loss
* Provided in period 204 578 565 1,347
* Unused amounts reversed (24) (16) (2,059) (2,099)
Amounts used in period (153) (406) (1,758) (2,317)
------------------------------------- ----------- ---------------- -------------- --------
At 31 December 2022 284 1,016 1,607 2,907
------------------------------------- ----------- ---------------- -------------- --------
Warranty provision
The warranty provision represents management's best estimate of
the costs anticipated to be incurred related to warranty claims,
both current and future, from customers in respect of goods and
services sold that remain within their warranty period. The
estimate of future warranty costs is updated periodically based on
the Company's actual experience of warranty claims from
customers.
The element of the provision related to potential future claims
is based on management's experience and is judgmental in nature. As
for any product warranty, there is an inherent uncertainty around
the likelihood and timing of a fault occurring that would cause
further work to be undertaken or the replacement of equipment
parts.
A standard warranty of up to two years from the date of
commissioning is provided to all customers on goods and services
sold and is included in the original cost of the product. Customers
are also able to purchase extended warranties that extend the
warranty period for up to a total of ten years.
Provision for legacy products
Where it is considered of commercial value, management has
elected to provide ongoing maintenance for certain legacy products
not otherwise covered under warranty. Management has determined
that it is necessary to provide for the costs of this ongoing
maintenance or to provide for outright decommissioning. The prior
year presentation has been re-stated to reflect this.
Provisions in respect of legacy products are expected to unwind
over the next two years when maintenance is either terminated or
the products are decommissioned.
Provision for contract losses
A provision is established for contract losses when it becomes
known that a contract has become onerous. A contract is onerous
when the unavoidable costs of fulfilling the Group's obligations
under a contract are greater than the revenue that will be earned
from it.
The unavoidable costs of fulfilling contract obligations will
include both direct and indirect costs.
The creation of an additional provision is recognised
immediately in profit and loss. The provision is used to offset
subsequent costs incurred as the contract moves to completion.
15: Trade and other receivables
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Trade receivables from contracts
with customers 4,210 1,754 1,761
Provision for doubtful receivables (59) (23) (24)
------------------------------------ -------- -------- ------------
Total trade and other receivables 4,151 1,731 1,737
------------------------------------ -------- -------- ------------
All trade and other receivables relate to receivables arising
from contracts with customers.
Trade receivables are amounts due from customers for sales of
vanadium flow battery systems in the ordinary course of business.
Trade receivables do not bear interest and generally have 30-day
payment terms and therefore are all classified as current.
16: Cash and cash equivalents
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Cash at bank and in hand 3,929 16,130 5,137
Short term investments 9,000 - -
--------------------------------- -------- -------- ------------
Total cash and cash equivalents 12,929 16,130 5,137
--------------------------------- -------- -------- ------------
Short term investments
Term deposits are presented as cash equivalents if they have a
maturity of three months or less from the date of acquisition and
are repayable with 24 hours' notice with no loss of interest.
17: Trade and other payables
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Trade payables 3,341 2,262 3,706
Other payables 89 371 78
Accrued liabilities 706 1,964 701
Accrued employee compensation 324 247 143
Government remittances payable 21 1 306
-------------------------------- -------- -------- ------------
Total trade and other payables 4,481 4,845 4,934
-------------------------------- -------- -------- ------------
Trade payables are unsecured and are usually paid within 30
days.
The carrying amounts of trade and other payables are the same as
their fair values due to the short-term nature of the underlying
obligation representing the liability to pay.
18: Derivative financial instruments
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
Derivative value of warrants issued 474 - 449
Other - - 320
Total trade and other payables 474 - 769
------------------------------------- -------- -------- ------------
19: Related parties
The only related parties of the Company are the key management
of the Group. Key management has been determined as the CEO and his
direct reports.
Invinity Energy Systems plc purchased a total of 70,312 shares
in the latest fundraise. 31,250 shares were purchased on behalf of
Larry Zulch, 15,625 shares were purchased on behalf of Matt Harper
and 23,437 shares were purchased on behalf of an additional member
of staff. At 30 June 2023, the amounts owed by the additional
member of staff and Matt Harper in respect of the shares had been
settled. The GBP10,000 owed by Larry Zulch is outstanding.
20: Events occurring after the reporting period
Short-Term Warrants
At the General Meeting of the holders of Short-Term Warrants
held on 19 July 2023, the company was authorised by way of
resolution to re-price the Short-Term Warrant Instrument to a
subscription price of 50p (previously 150p).
In addition, the subscription period for the Short-Term Warrants
was extended to 16 December 2023 (previously 15 September
2023).
Long-Term Warrants
At the General Meeting of the holders of Long-Term Warrants held
on 23 July 2023, the Company was authorised by way of resolution to
re-price the Long-Term Warrant Instrument to a subscription price
of 100p (previously 225p).
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(END) Dow Jones Newswires
September 25, 2023 02:01 ET (06:01 GMT)
Invinity Energy Systems (AQSE:IES)
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Invinity Energy Systems (AQSE:IES)
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From Dec 2023 to Dec 2024
