TIDMCAP
RNS Number : 2498P
Clean Air Power Limited
30 September 2011
For immediate release 30 September 2011
Clean Air Power Limited
("Clean Air Power" or "Company")
Interim Results for six month period ended 30 June 2011
Clean Air Power Ltd (AIM:CAP), the developer of Dual-Fuel(TM)
combustion technology for heavy-duty diesel engines, today
announces its results for the six month period ended 30 June
2011.
Financial Highlights
-- Revenue for the period: GBP2.1m (2010: GBP2.3m)
-- Revenue in Dual-Fuel(TM) increased by 56% to GBP1.4m (2010:
GBP0.9m), driven by sales in Dual-Fuel(TM) and development
revenue
-- Gross profit for the period: GBP1.2m (2010: GBP1.3m)
-- Losses after tax for the period: GBP1.3m (2010: GBP1.2m)
-- Gross margin for the period: 57% (2010: 56 %)
-- Successful GBP1.5m equity raise in May 2011
Operational Highlights
-- Launch of European Manufacturer's Interfaced product
incorporating CAP Dual-Fuel(TM) technology
-- Order for eleven Dual-Fuel(TM) systems delivered to Volvo Bus
Corporation
-- Genesis EDGE Dual-Fuel(TM) Euro 5 product launched in
Australia
-- Order received for fifteen Dual-Fuel(TM) units in Australia
with an order value of GBP0.5m
Post Period End
-- Order received to deliver ten Genesis EDGE units to Arla
Foods in 2011
John Pettitt, Chief Executive of Clean Air Power said:
"The launch of the European OEM product, incorporating our
Dual-Fuel(TM) technology within its engine, follows the Supply and
Development Agreement signed in July 2010. This represents a major
achievement by the Company and a key milestone set out within our
objectives at admission to AIM. We are confident that subject to
the resumption of factory production for the European OEM product,
all technical criteria are met and there are no further delays, the
expected commencement of sales will provide us with a springboard
from which the Company can begin to realise the full potential of
our exciting technology, although timing and visibility of these
sales continues to be difficult to predict.'
For further information, please contact:
Clean Air Power Ltd 01772 624499
John Pettitt
Peter Rowse
Buchanan 020 7466 5000
Charles Ryland
Ben Romney
Seymour Pierce 020 7107 8000
(Nominated Adviser)
Freddy Crossley/ Mark Percy
David Banks (Corporate Broking)
Chief Executive's Statement
The launch of a European factory produced Dual-Fuel(TM)truck
incorporating Clean Air Power's technology was the key achievement
for the Company during the first half of the year. The commencement
of sales has been delayed by technical issues arising during fleet
trials as announced on 15 September 2011. Although solutions have
now been identified they are still subject to validation by the
manufacturer. However, the Board is confident that these solutions
will allow factory production to start and return to the original
plan although we cannot yet confirm the timing of this resumption
of factory production. We continue to work very closely with our
European OEM partner to minimise any further delays and look
forward to updating shareholders shortly with further clarification
of production timing.
Our progress with a US OEM brings the opportunity of a product
for the important US market closer and we continue to work towards
a Product Development contract.
In May 2011 we launched our 'Genesis EDGE' Dual-Fuel(TM) Euro 5
product in Australia. The launch has been successful and the
product is starting to gain traction with customers in Tasmania and
Victoria with orders for nine units already received.
Clean Air Power's 'Genesis EDGE' product in Europe is gaining
momentum due to the compelling drivers in the market place. The
price of oil and the continued focus on reducing emissions is
contributing to an increased focus and interest in the
Dual-Fuel(TM) product. We recently received an order from Arla
Foods to supply ten units and we have made further sales into
European markets. However, the general uncertain economic climate
is likely to affect total sales in the second half of the year.
Sales for the first six months in our key Dual-Fuel(TM) division
have significantly outperformed last year, although they have
fallen short of our expectations. Sales of our Components Division,
as expected, have been lower than 2010 due to the loss of a major
customer in 2010 as previously reported and the Emissions Reduction
Division has seen lower sales following a delay in obtaining orders
from a key customer.
Clean Air Power has three commercial divisions; Dual-Fuel(TM)
Vehicle Installations, Components and Emissions Reduction
systems.
1) Dual-Fuel(TM) Vehicle Installations
The core technology of the Group gives rise to Clean Air Power's
patented Dual-Fuel(TM) system which allows a diesel engine to run
on a combination of diesel and natural gas, thereby generating
significant reductions in NOx, particulate matter and CO(2)
emissions as well as generating fuel cost savings for the
operator.
The technology is currently available in two main variants; the
interfaced product, where Clean Air Power's technology is
incorporated into vehicles with the manufacturers' cooperation; and
the Genesis product, where the technology is adapted and
retro-fitted solely by Clean Air Power under its own brand.
The first half of the year has seen sales for this division
increase by 56% to GBP1.4m (2010: GBP0.9m) compared to the period
to 30 June 2010. This increase is due to the sale of early
interfaced systems to the European OEM, improved Dual-Fuel(TM)
sales in the Australian market and revenue derived from product
development activity with our European OEM customer.
Genesis EDGE Vehicle System
The 'Genesis' system was developed specifically to be a
retro-fitted solution which can be installed without the need for
formal co-operation of the engine manufacturers. The solution does
not interface directly with the vehicles own engine management
system and around 50% - 60% of the diesel normally used by the
vehicle is substituted with natural gas. The emissions and fuel
savings are therefore lower than would be expected on a fully
interfaced system, but still economically attractive in the target
markets.
The agreement with the European OEM partner allowed Clean Air
Power to develop its 'own brand' Genesis solution for a Euro 5
compliant vehicle. The newly improved 'Genesis EDGE' variant was
introduced in June 2010. The Company has had product interest and
enquiries from several countries in Europe and Australia. Since the
launch of the product in Australia, the Company has received orders
for nine 'Genesis EDGE' systems that will be retrofitted to Euro 5
compliant trucks. The Company recently received orders for its
product in the UK from Arla Foods for ten units. Arla Foods is an
existing customer that has been trialling our product for a period
and further discussions give the Board confidence that this
relationship will potentially result in significant further orders
for Dual-Fuel(TM) vehicles next year.
Manufacturer Developments: Interfaced vehicle system
In this solution our Dual-Fuel(TM) technology is interfaced with
the manufacturer's electronic engine management system and
therefore requires their cooperation and maximises the reduction of
emissions and fuel cost savings. We expect around 70% - 90% of the
diesel normally used by the vehicle to be substituted for gas on an
interfaced product.
Clean Air Power's first interfaced products were developed with
Caterpillar in the US. These products have largely reached the end
of their life cycle although some are still sold in Australia where
we have received orders in 2011. The Company has also recently sold
a unit to a US based customer which will potentially lead to
further sales if performance milestones are reached.
Following the European launch of a Dual-Fuel(TM) truck
incorporating Clean Air Power's technology our immediate focus will
switch to the US where our goal is to sign an agreement to develop
a similar interfaced OEM product for heavy goods vehicles for the
US market.
The Company's main strategic goal remains to work with vehicle
or engine manufacturers on fully funded projects whereby our
Dual-Fuel(TM) technology is incorporated on their vehicles as a
standard option and to develop it further with their full
cooperation. In this way the benefits of our technology and routes
to market can be maximised. The Company is in discussions with
several manufacturers.
European OEM:
The Company's European OEM customer's interfaced product
incorporating Clean Air Power's Dual-Fuel(TM) technology was
launched in May 2011 with the initial markets determined as UK,
Sweden and Netherlands. Euro 5 compliant vehicles are sold
throughout the European Union, Australia and certain other markets
across the world.
The launch of this product in May 2011 follows the signing of
the Supply and Development Agreements in July 2010, initially for
five years. The vehicle will be produced, marketed and supported by
the manufacturer. The commencement of sales has been delayed by
technical issues arising during fleet trials as announced on 15
September 2011. Although solutions have now been identified they
are still subject to validation by the manufacturer. However the
Board is confident that these solutions will allow factory
production to start and return to the original plan, although we
cannot yet confirm the timing of this resumption of factory
production. We continue to work very closely with our European OEM
partner to minimise any further delays and look forward to updating
shareholders shortly with further details of production timing.
Incorporating Clean Air Power's Dual-Fuel(TM) technology into
these truck engines will deliver significant greenhouse gas
emission reductions and fuel cost savings compared with standard
diesel engines. Additionally these Dual-Fuel(TM) trucks are
expected to be around 30% more energy efficient than equivalent
spark ignited natural gas engines. The engines can use natural or
bio-gas as the main fuel and can also operate solely on diesel, an
important feature as gas distribution systems face many years of
development.
Navistar:
In February 2010 Clean Air Power entered into a concept
development agreement with Navistar, Inc. ("Navistar") to develop a
MaxxForce 13 Natural Gas/Diesel Engine Program for the North
American market.
The purpose of the development program is to utilise Clean Air
Power's Dual-Fuel(TM) combustion technology to deliver an engine
that achieves the US Environmental Protection Agency (EPA) 2010
emissions standard.
The Concept Ready Phase was successfully delivered during 2010.
The product has been shown to a number of trade shows including the
Mid-America trucking show in March 2011 and is gaining considerable
market interest and discussions continue towards a formal
development contract.
Focus in North America on using natural gas as a road fuel for
heavy goods vehicles is increasing. The determination of the US to
reduce reliance on imported oil and to utilise the domestically
available natural gas reserves, including shale gas, is a strong
driver for Dual-Fuel(TM) along with the strong economic case.
2) Components Division
Clean Air Power manufactures a number of the components that are
used in the Group's Dual-Fuel(TM) technology. The Group sells these
components for spark ignited gas engines and certain other
applications. Global demand for these engines is increasing as
customers are increasingly aware of the social and economic drivers
towards alternative fuels. With global sales, strong margins and a
customer base including international automotive manufacturers,
this is an important contributor to the overall Clean Air Power
business.
This business is relatively mature and tends to operate with
long initial order lead times but thereafter receives regular
recurring revenues from maintenance and servicing requirements in
addition to the initial demand for production. The Company lost an
important customer in 2010 which has resulted in the sales for the
period to 30 June 2011 being lower than the same period in 2010.
However sales are in line with expectations at the half year
although conditions remain challenging.
3) Emissions Reduction Division
This division provides systems incorporating catalysed
substrates supplied by specialist manufacturers and can be
integrated during the initial installation or retro-fitted to older
existing engines and plants.
Historically this has been mainly a project based business with
a few large scale contracts generating the majority of the revenue.
While the core business remains, the division expanded its market
in 2010 by winning a significant order to supply Catalytic
Converters for vehicles. These units are used on 7.6L Natural Gas
Engines to control emissions to deliver sub EPA '10 emission levels
for their truck and bus operating customers and provided the
Company with an entry into a potentially very significant
market.
Revenue has been delayed during 2011 following the initial
success of the 7.6L Natural Gas Engine to which Clean Air Power's
catalyst is fitted. The high level of demand for the engine
resulted in the product being switched from a retro-fit to a
factory-fit product and as a consequence has delayed sales for
Clean Air Power in the first half of the year.
The year to date sales of GBP0.1m are lower than the GBP0.3m
achieved for the same period to June 2010. During the first half,
the production for this Division has been relocated from Houston in
Texas to the production facility in San Diego, California.
Financial Review
The six month period to 30 June 2011 has seen revenue decrease
to GBP2.1m. This has been due mainly to a weaker performance in our
Components and Emissions Reduction Division.
Gross profit reduced to GBP1.2m from GBP1.3m in June 2010.
Operating loss increased to GBP1.3m representing a GBP0.1m
increase on the GBP1.2m loss for the same period in 2010. This has
been mainly due to the delay in factory production of the European
OEM product within our Dual-Fuel(TM) segment.
The net result after tax for the period was a loss of GBP1.3m, a
GBP0.1m increase on the GBP1.2m loss for the same period in 2010.
The basic loss per share for the period was 1.67p (2010:
2.14p).
Gross receipts from the recent fundraising during May 2011 were
GBP1.5m. The cash position as at 30 June 2011 is GBP2.2m compared
to GBP1.3m as at the end of 2010.
Investments in fixed assets were GBP1.0m for the period compared
with GBP0.6m in the first half of 2010. The majority of these
amounts relate to capitalisation of labour and expenses incurred in
developing new products.
The current cash position is GBP1.0m which has been adversely
effected by delays to the OEM production. Consequently the Board
are actively considering further short and medium term financing
options and these are discussed in note 2.
Outlook
The delayed factory production of the European OEM product,
while improving the visibility of our future revenues, will
adversely affect 2011 sales expectations and consequently the Board
are actively considering further short and medium term financing
options. Although solutions have now been identified they are still
subject to validation by the manufacturer. However the Board is
confident that these solutions will allow factory production to
start and return to the original plan, although we cannot yet
confirm the timing of this resumption of factory production. We
continue to work very closely with our European OEM partner to
minimise any further delays and look forward to updating
shareholders shortly with further details of production timing.
The company is encouraged by the level of interest in the
product which continues to benefit from the difference between the
price of natural gas and diesel in Europe.
Our progress with a US OEM brings the opportunity of a product
for the important US market closer and we continue to work towards
a Product Development contract.
In the US the continuing delta between natural gas and diesel
prices and natural gas initiatives are encouraging operators to
consider alternative options to fuel their fleets of vehicles.
These drivers coincide with the desire within many organisations to
reduce emissions from their transport operations. The Company's
existing and new product offerings mean that we are well placed to
capitalise on the opportunities that arise as a result of these
factors.
The launch of Genesis EDGE Dual-Fuel(TM) product and the
commissioning of the LNG plant in Tasmania which, although later
than anticipated, is expected to provide the opportunity for an
uplift in Australian sales. However, due to procurement leadtimes
we now expect the majority of this demand to be met in 2012. Some
orders have been received already and interest is growing. A degree
of adaptation of the local product is required to capitalise on
these opportunities in 2012.
Genesis EDGE in the UK and Europe should facilitate improvements
in sales of our Dual-Fuel(TM) products; we had hoped to accelerate
revenues in the second half of 2011 following the receipt of the
order from Arla Foods however concluding orders is taking longer
than anticipated.
Components and Emissions sales are expected to remain relatively
steady but under more challenging market conditions, which also
seem to be affecting the other divisions.
We look forward to updating shareholders shortly with further
details of production timing of the European OEM product.
John Pettitt
Chief Executive
30 September 2011
INTERIM CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2011
Unaudited Unaudited Audited
------------------- ----- -------------- -------------- ------------------
6 months to 6 months to Year to
Note 30 June 2011 30 June 2010 31 December 2010
------------------- ----- -------------- -------------- ------------------
GBP'000 GBP'000 GBP'000
Revenue 6 2,067 2,317 5,788
Cost of sales (904) (1,009) (2,754)
Gross profit 1,163 1,308 3,034
Administrative
expenses (2,448) (2,466) (4,761)
Share-based
payments charge 8 (58) (46) (110)
Operating loss (1,343) (1,204) (1,837)
Finance revenue 4 11 17
Finance costs - - -
Loss on ordinary
activities before
taxation 6 (1,339) (1,193) (1,820)
Tax expense 5 - - -
Loss for the
period (1,339) (1,193) (1,820)
-------------- -------------- ------------------
Basic and diluted
loss per share (1.67p) (2.14p) (3.00p)
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2011
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 2011 30 June 2010 31 December 2010
GBP'000 GBP'000 GBP'000
Loss for the period (1,339) (1,193) (1,820)
-------------- -------------- ------------------
Exchange differences on
translation of foreign
operations (88) 139 101
Total comprehensive loss
for the period (1,427) (1,054) (1,719)
-------------- -------------- ------------------
Attributable to:
-------------- -------------- ------------------
Equity holders of the
parent (1,427) (1,054) (1,719)
-------------- -------------- ------------------
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2011
Unaudited Unaudited Audited
6 months to 6 months to Year to
Note 30 June 2011 30 June 2010 31 December 2010
------------------- ----- -------------- -------------- ------------------
GBP'000 GBP'000 GBP'000
------------------- ----- -------------- -------------- ------------------
Assets
Non-current assets
Plant and
equipment 7 232 305 269
Intangible assets 7 3,063 1,560 2,241
-------------- -------------- ------------------
3,295 1,865 2,510
-------------- -------------- ------------------
Current assets
Inventories 1,033 1,128 839
Trade and other
receivables 1,139 1,211 1,342
Cash and cash
equivalents 4 2,196 1,290 2,410
-------------- -------------- ------------------
4,368 3,629 4,591
-------------- -------------- ------------------
TOTAL ASSETS 7,663 5,494 7,101
-------------- -------------- ------------------
Equity and
liabilities
Equity
attributable to
equity holders of
the parent
Ordinary share
capital 9 57 33 44
Share premium 9 17,677 14,083 16,219
Translation
reserve 996 1,103 1,084
Other reserves 33,504 33,504 33,504
Accumulated loss (46,780) (44,917) (45,499)
-------------- -------------- ------------------
Total equity 5,454 3,806 5,352
-------------- -------------- ------------------
Non-current
liabilities
Other payables - 1 -
-------------- -------------- ------------------
- 1 -
-------------- -------------- ------------------
Current
liabilities
Trade and other
payables 1,264 1,009 1,132
Provisions 366 388 460
Deferred revenue 579 290 157
-------------- -------------- ------------------
2,209 1,687 1,749
-------------- -------------- ------------------
Total liabilities 2,209 1,688 1,749
-------------- -------------- ------------------
TOTAL EQUITY AND
LIABILITIES 7,663 5,494 7,101
-------------- -------------- ------------------
Director
INTERIM CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2011
Unaudited Unaudited Audited
6 months to 30 6 months to 30 Year to 31
June 2011 June 2010 December 2010
--------------------- ----------------- ----------------- -----------------
GBP'000 GBP'000 GBP'000
--------------------- ----------------- ----------------- -----------------
Cash flows from
operating
activities
Loss before taxation (1,339) (1,193) (1,820)
Adjustments for:
Net finance income (4) (11) (17)
Depreciation of
plant and
equipment 59 75 139
Amortisation of
intangibles 133 243 332
Share-based payments 58 46 110
Decrease in trade
and other
receivables 203 329 197
Increase/(decrease)
in trade and other
payables 132 (169) (46)
(Increase)/decrease
in inventories (194) (145) 145
(Decrease)/increase
in provisions (95) (4) 68
Increase/(decrease)
in deferred
revenue 422 (299) (432)
Other non-cash
movements 18 26 (24)
Net cash outflow
from operating
activities (607) (1,102) (1,348)
----------------- ----------------- -----------------
Investing activities
Interest received 4 11 17
Payments to acquire
plant and
equipment (31) (27) (62)
Payments to acquire
intangible assets (1,033) (594) (1,397)
Net cash outflow
from investing
activities (1,060) (610) (1,442)
----------------- ----------------- -----------------
Financing activities
Proceeds from the
issue of ordinary
share capital 1,526 - 2,285
Share issue costs (55) - (103)
Net cash inflow from
financing
activities 1,471 - 2,182
----------------- ----------------- -----------------
Decrease in cash and
cash equivalents (196) (1,712) (608)
Effect of exchange
rates on cash and
cash equivalents (18) 64 80
Cash and cash
equivalents at the
beginning of the
period 2,410 2,938 2,938
Cash and cash
equivalents at end
of period 2,196 1,290 2,410
----------------- ----------------- -----------------
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2011
Issued Share Translation Other Accumulated Total
Capital Premium Reserve Reserves loss Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- ------------ --------- ------------ --------
Balance at 1
January 2010 33 14,048 983 33,504 (43,789) 4,779
-------- -------- ------------ --------- ------------ --------
Other
comprehensive
income - - 139 - - 139
Loss for the
period - - - - (1,193) (1,193)
-------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - 139 - (1,193) (1,054)
Issue of share
capital - 35 - - - 35
Share issuance
costs - - - - - -
Share-based
payments - - - - 46 46
-------- -------- ------------ --------- ------------ --------
Balance at 30
June 2010 33 14,083 1,122 33,504 (44,936) 3,806
-------- -------- ------------ --------- ------------ --------
Other
comprehensive
income - - (38) - - (38)
Loss for the
period - - - - (627) (627)
-------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - (38) - (627) (665)
Issue of share
capital 11 2,239 - - - 2,250
Share issuance
costs - (103) - - - (103)
Share-based
payments - - - - 64 64
-------- -------- ------------ --------- ------------ --------
Balance at 31
December
2010 44 16,219 1,084 33,504 (45,499) 5,352
-------- -------- ------------ --------- ------------ --------
Other
comprehensive
income - - (88) - - (88)
Loss for the
period - - - - (1,339) (1,339)
-------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - (88) - (1,339) (1,427)
Issue of share
capital 13 1,513 - - - 1,526
Share issuance
costs - (55) - - - (55)
Share-based
payments - - - - 58 58
-------- -------- ------------ --------- ------------ --------
Balance at 30
June 2011 57 17,677 996 33,504 (46,780) 5,454
-------- -------- ------------ --------- ------------ --------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The interim condensed consolidated financial statements of Clean
Air Power Limited for the six months ended 30 June 2011 were
authorised for issue in accordance with a resolution of the
directors on 30 September 2011. Clean Air Power Limited is a public
limited Company incorporated in Bermuda whose shares are publicly
traded.
All of the revenues and operating assets relate to the Group's
principal business activities, being vehicle conversion sales,
sales of components and an emissions reduction business. Revenue is
stated net of value added tax.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
These interim condensed consolidated financial statements for
the six months ended 30 June 2011 have been prepared in accordance
with IAS 34 Interim Financial Reporting; and using the recognition
and measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations
adopted for use in the European Union (collectively 'Adopted
IFRS').
The interim condensed consolidated financial statements are
presented in sterling and all values are rounded to the nearest
thousand (GBP'000) except when otherwise indicated.
Accounting Policies
The accounting policies adopted in preparation of the interim
condensed financial statements are consistent with those followed
in preparation of the Group's annual financial statements for the
year ended 31 December 2010.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chief Executive's Statement and the financial
position of the Group is described within the Statement of
Financial Position. As described in the Chief Executive's review,
the Company has experienced delays in factory production of its
European OEM product. Although solutions have now been identified
they are still subject to validation by the OEM partner. However
the Board is confident that these solutions will allow factory
production to start and return to the original plan although we
cannot yet confirm the timing of this resumption of factory
production.
The Company's ability to meet its future working capital
requirements is dependent on it being able to generate significant
revenues and/or successfully conclude financing options. Assuming
the issues giving rise to the delays in factory production are
resolved, this OEM contract provides the opportunity for increased
sales and further funding. The Company also has a number of sales
opportunities pending which, if successful, will provide additional
cash resources. Given the nature of the Company's development
activities and in light of the current economic climate, it is very
difficult to predict with any certainty the timing and extent of
future revenues. The directors have prepared projections of the
trading results for the foreseeable future which they consider to
be prudent. The directors are actively considering further short
and medium term financing options. However there is uncertainty as
to whether the necessary funds will be raised as this is dependent
on the ability of the Company to resolve the technical issues with
the OEM partner.
In the absence of firm commitments in relation to these sales
opportunities or financing options the Directors have concluded
that these circumstances represent a material uncertainty that
casts doubt upon the Company's ability to continue as a going
concern and therefore the Company may be unable to realise its
assets and discharge its liabilities in the normal course of
business. Nevertheless the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they
continue to adopt the going concern basis of accounting in
preparing the condensed set of financial statements in the
half-yearly financial report.
3. RISKS AND UNCERTAINTIES
Management identify and assess risks to the business using a
common model. The Group has a number of exposures which can be
summarised as follows: manufacturer co-operation; in house product
development; adaptation of core technology; gas supply; regulatory
framework; competition/intellectual property; additional capital
requirements; employees and trading risks. These risks and
uncertainties facing our business were reported in detail in the
2010 Annual Report and Accounts and all of them are monitored
closely by the Group's Management Board.
4. Cash and cash equivalents
Unaudited Audited
6 months to year ended
30 June 31 December
------------------ -------------
2011 2010 2010
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 2,196 1,290 2,410
2,196 1,290 2,410
======== ======== =============
NOTES TO THE INTERIM FINANCIAL STATEMENTS
5. Income tax
The major components of income tax expense in the interim consolidated
income statement are:
Unaudited Audited
6 months to year ended
30 June 31 December
------------------ -------------
2011 2010 2010
GBP'000 GBP'000 GBP'000
Current taxation
Overseas tax - - -
Income tax expense - - -
======== ======== =============
6. Segmental analysis
Revenue by business segment:
For management purposes the Group is organised into
business units based on their products and services,
and has three reportable
operating segments as follows:
The Dual-Fuel(TM) segment allows a standard diesel engine to operate
on natural gas without any major changes to the engine.
The components segment designs and delivers innovative hydraulic
valves and natural gas injector components for natural gas engines
that enable automotive and truck manufacturers to build low-emission
gasoline, natural gas and diesel vehicles that meet worldwide emissions
regulations.
The emissions reduction segment offers emissions reduction solutions
that reduce regulated engine emissions by post combustion after-treatment
of an engine's exhaust gasses.
Period ended 30 June 2011 GBP'000
--------------------- -----------------------------------------------------------------------
Adjustments
Emissions and
Dual-Fuel(TM) Components Reduction eliminations Total
--------------------- -------------- ----------- ---------- ------------- ---------------
Revenue
Third party 1,386 618 63 - 2,067
Inter-segment 309 - - (309) -
Total revenue 1,695 618 63 (309) 2,067
============== =========== ========== ============= ===============
Results
Depreciation and
amortisation (176) (16) (3) 3 (192)
Segment loss (996) - (261) (86) (1,343)
Net finance income - - - - 4
Loss for the period - - - - (1,339)
============== =========== ========== ============= ===============
Assets
Operating assets 2,731 1,478 172 (13) 4,368
============== =========== ========== ============= ===============
Provisions 126 166 79 (5) 366
Operating liabilities
including provisions 1,627 417 170 (5) 2,209
Other disclosures
Capital expenditure 1,059 - 5 - 1,064
============== =========== ========== ============= ===============
NOTES TO THE INTERIM FINANCIAL STATEMENTS
6. Segmental analysis - Continued
Period ended 30 June 2010 GBP'000
--------------- ----------------------------------------------------------------
Adjustments
Emissions and
Dual-Fuel(TM) Components Reduction eliminations Total
--------------- -------------- ----------- ---------- ------------- --------
Revenue
Third party 930 1,120 267 - 2,317
Inter-segment 118 - - (118) -
Total revenue 1,048 1,120 267 (118) 2,317
============== =========== ========== ============= ========
Results
Depreciation
and
amortisation (282) (36) (2) 8 (312)
Segment loss (1,133) 34 (175) 70 (1,204)
Net finance
income - - - - 11
Loss for the
period - - - - (1,193)
============== =========== ========== ============= ========
Assets
Operating
assets 1,509 1,518 631 (29) 3,629
============== =========== ========== ============= ========
Provisions 246 44 106 (8) 388
Operating
liabilities
including
provisions 1,036 432 227 (8) 1,687
============== =========== ========== ============= ========
Other disclosures
Capital expenditure 600 12 9 - 621
==== === ====
Period ended 31 December 2010 GBP'000
--------------- ----------------------------------------------------------------
Adjustments
Emissions and
Dual-Fuel(TM) Components Reduction eliminations Total
--------------- -------------- ----------- ---------- ------------- --------
Revenue
Third party 2,762 2,108 918 - 5,788
Inter-segment 980 - - (980) -
Total revenue 3,742 2,108 918 (980) 5,788
============== =========== ========== ============= ========
Results
Depreciation
and
amortisation (403) (72) (6) 10 (471)
Segment loss (1,219) (9) (244) (365) (1,837)
Net finance
income - - - - 17
Loss for the
period - - - - (1,820)
============== =========== ========== ============= ========
Assets
Operating
assets 1,796 1,875 949 (29) 4,591
============== =========== ========== ============= ========
Provisions 139 242 88 (9) 460
Operating
liabilities
including
provisions 767 689 302 (9) 1,749
============== =========== ========== ============= ========
Other disclosures
Capital expenditure 1,468 25 13 (47) 1,459
======= ======== ======= ======= ======
NOTES TO THE INTERIM FINANCIAL STATEMENTS
7. Plant, equipment & intangible assets
During the six months ended 30 June 2011, the Group acquired
plant and equipment with a cost of GBP30,505 (30 June 2010:
GBP26,707) (31 December 2010: GBP62,000). Expenditure on product
development for the six months ended 30 June 2011 was GBP1,033,354
(30 June 2010: GBP594,323) (31 December 2010: GBP1,307,000). The
majority of the expenditure related to the European OEM development
project.
8. Share-based payment
During the period the Group recognised GBP58,292 (30 June 2010:
GBP45,734) (31 December 2010: GBP110,198) related to equity-settled
share-based payments transactions.
9. Share capital
In May 2011, the Company successfully raised GBP1.52m from a
combination of new and existing investors; this increased the share
capital to GBP57,162 by the creation of an additional 21,048,276
Ordinary Shares with a nominal value of $US0.001 each and a market
price of 7.25 pence per share. The difference between the
consideration received of GBP1.52m less costs of GBP0.054m, and the
nominal value of the shares GBP12,866 has been transferred to the
share premium account.
10. Related party disclosures
The Group receives consultancy services from Karl Viktor
Schaller and Hans Gunnar Folkesson, a Non-Executive Director of
Clean Air Power (Bermuda) Limited and Gary Ireson, the Director of
Clean Air Power Pty Ltd.
The following table provides the total amount of transactions, which
have been entered into with related parties for the relevant financial
year.
Unaudited Unaudited
6 months 6 months Audited
to to year ended
Hans Gunnar Folkesson 30 June 30 June 31 December
--------------------------------------- ---------- ---------- -------------
2011 2010 2010
--------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties - 6 21
Amounts owed to related parties - - -
Unaudited Unaudited
6 months 6 months Audited
to to year ended
Gary Ireson 30 June 30 June 31 December
--------------------------------------- ---------- ---------- -------------
2011 2010 2010
--------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 10 22 24
Amounts owed to related parties 2 - 13
Unaudited Unaudited
6 months 6 months Audited
to to year ended
Prof K V Schaller 30 June 30 June 31 December
--------------------------------------- ---------- ---------- -------------
2011 2010 2010
--------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 5 - -
Amounts owed to related parties - - -
Report and Financial Information
Copies of the interim report for the Company for the period
ended 30 June 2011 are to be made available on the Company's
website.
CORPORATE INFORMATION
Directors
Non-Executive Chairman - Rodney Westhead "#
Non-Executive Deputy Chairman - Bernard Lord
"*+#
President & Chief Executive - John Pettitt
Group Financial Director - Peter Rowse
Non-Executive Director - Prof Dr. Karl Viktor
Schaller *+#
Non-Executive Director - Dr. Ulrich Wohr "*+#
* Member of the Audit Committee + Member of the
Remuneration Committee # Member of the
Nomination Committee " Independent
Secretary
Codan Services Limited (appointed 9 August
2010)
Registered Office
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Auditors
Ernst & Young LLP
100 Barbirolli Square
Manchester
M2 3EY
Solicitors
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London
EC4R 9HA
Nominated Advisor and Stockbrokers
Seymour Pierce
20 Old Bailey
London
EC4M 7EN
Registrars and Transfer Office
Capita IRG (Offshore) Limited
Victoria Chambers, Liberation Square
1/3 The Esplanade
St Helier
Jersey
Principal Banker
Royal Bank of Scotland
8 South Parade
Nottingham
NG1 2JS
Financial Public Relations
Buchanan Communications
45 Moorfields
London
EC2Y 9AE
INDEPENDENT REVIEW REPORT TO CLEAN AIR POWER LIMITED
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
6 months ended 30 June 2011 which comprises the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income, the
Interim Consolidated Statement of Financial Position, the
Consolidated Cash Flow Statement, the Consolidated Statement of
Changes in Equity and the related explanatory notes 1 to 10. We
have read the other information contained in the half yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our work, for this report, or
for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
International Accounting Standard 34, "Interim Financial
Reporting," as adopted by the European Union.
As disclosed in note 2, the annual financial statements of the
company are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 6 months ended 30 June
2011 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union.
Emphasis of Matter - Going Concern
In reaching our conclusion, which is not qualified, we have also
considered the adequacy of the disclosures made in note 2 to the
interim financial statements concerning the company's ability to
continue as a going concern. The conditions described in note 2
indicate the existence of a material uncertainty which may cast
significant doubt about the company's ability to continue as a
going concern. The condensed set of financial statements in the
half-yearly financial report do not include the adjustments that
would result if the company was unable to continue as a going
concern.
Ernst & Young LLP
Manchester
30 September 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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