TIDMCAP
RNS Number : 1167A
Clean Air Power Limited
27 March 2012
For immediate release 27 March 2012
Clean Air Power Limited
("Clean Air Power" or "the Company")
Preliminary Announcement of Results for the year ended 31
December 2011
Clean Air Power Limited (AIM:CAP) the developer of Dual-Fuel(TM)
combustion technology for heavy-duty diesel engines today announces
its Preliminary Results for the 12 month period ended 31 December
2011.
Financial Highlights
-- Revenue from Dual-Fuel(TM) increased by 20% to GBP3.30m, (2010: GBP2.76m)
-- Gross profit margin improved to 56%, (2010: 52%), driven by
Dual-Fuel(TM) systems and development revenue
-- Group revenue was GBP4.59m, (2010: GBP5.79m)
-- GBP2.42m in cash at 31 December 2011, (GBP2.41m as at 31 December 2010)
-- GBP3.13m (before expenses) successfully raised during the year through equity issues
Operational Highlights
-- Launch of Major European Manufacturer's interfaced product
incorporating Clean Air Power Dual-Fuel(TM) technology
-- Deliverables under Navistar Concept Development Agreement successfully achieved
-- Order delivered for eleven Dual-Fuel(TM) systems to a European OEM Bus Corporation
-- Order delivered for ten Genesis EDGE Dual-Fuel(TM) systems to ARLA foods
-- Genesis EDGE Dual-Fuel(TM) Euro 5 product successfully launched in Australia
-- Order received for fifteen Dual-Fuel(TM) systems in Australia
-- Order received for sixteen Dual-Fuel(TM) systems in the US for Bestway Express
Post Period End
-- Good progress has continued, an excellent start to 2012
-- Production commenced of Volvo FM13 MethaneDiesel truck
incorporating Clean Air Power Dual-Fuel(TM) technology
-- Order received to deliver twenty seven Genesis EDGE
Dual-Fuel(TM) systems for a major logistics organisation in the
UK
-- Order received to deliver fourteen Genesis EDGE Dual-Fuel(TM) systems to Sainsbury's
Financial Headline Results
Year Ended Year Ended
31 December 2011 31 December 2010
GBP'000 GBP'000
---------------------------- ----------------- -----------------
Group Revenue 4,585 5,788
Operating Loss (2,245) (1,837)
Loss after tax (2,240) (1,820)
Basic and diluted loss per
share (2.13p) (3.00p)
Commenting on Clean Air Power's full year results, John Pettitt,
CEO said:
"Production with our European OEM (Original Equipment
Manufacturer) partner and the progress towards a Navistar agreement
represent major achievements for the Company. These achievements
demonstrate the success of the strategy to target global truck
manufacturers set out by Clean Air Power at its admission to AIM in
2006.
The Dual-Fuel(TM) division's sales increased by 20% during 2011,
which was helped partly by revenue from the European OEM relating
to product development activity and early OEM trial sales. The
Company also benefited from the increasing demand and interest in
our Genesis EDGE Dual-Fuel(TM) products following sales to ARLA
Foods and HAM Criogenica S.L. during 2011. Strong margins have been
maintained despite difficult trading conditions."
For further details please contact
Clean Air Power Tel: +44 (0)1772 624 499
John Pettitt, Chief Executive
Peter Rowse, Finance Director
Buchanan Tel: +44 (0)20 7466 5000,
Charles Ryland
Ben Romney
Clare Akhurst
Tel: +44 (0)20 7107 8000
Seymour Pierce
Freddy Crossley/
Mark Percy
David Banks (Corporate Broking)
Notes to Editors:
About Clean Air Power
Clean Air Power is a developer and supplier of Dual-Fuel(TM)
combustion technology for heavy duty diesel engines. Dual-Fuel(TM)
engines enable heavy duty trucks to run primarily on natural gas,
which provides many benefits to an operator. Due to the lower cost
of natural gas Dual-Fuel(TM) engines significantly cut fuel
expenses. Furthermore, by burning up to 85% natural gas, carbon
emissions produced by heavy goods and commercial vehicles are
substantially reduced. This is done without sacrificing the
original diesel engine's characteristic efficiency or reliability.
Rising oil prices and an increasing availability of natural gas in
many markets have positioned Clean Air Power well for the future.
These factors enable Clean Air Power to assist corporations and
governments to deliver on their environmental commitments, while
still reducing overheads.
Almost GBP50m has been invested in the Company to develop the
technology since 1991 with the result that 66 patents are currently
held or pending. The Company operates from facilities in the UK, US
and Australia with the holding Company of the Group based in
Bermuda. The Group was admitted to the AIM market of the London
Stock Exchange in February 2006.
Further information on Clean Air Power is available at
www.cleanairpower.com
Chairman's Statement
Clean Air Power is a supplier of market leading technology that
delivers proven reductions in carbon emissions, along with
significant fuel cost savings to operators of trucks and other
vehicles.
The January 2012 commencement of production of the major
European OEM product which integrates Clean Air Power's
Dual-Fuel(TM) technology within its engine represents a great
success for Clean Air Power and validates the Company's clear OEM
focused strategy.
It also marks a significant milestone for Clean Air Power
following three years of close cooperation with the manufacturer
and provides Clean Air Power with its first new OEM product since
the Company's relaunch in 2006.
Having successfully entered the European market with an OEM
partnership and a Euro 5 emissions compliant product, the next
priority is to access the important North American market by
applying the same business model. North America has abundant
domestic natural gas resources and powerful economic, environmental
and energy security drivers.
Significant good progress was made with Navistar, a US
Manufacturer, during 2011. In December 2010, Clean Air Power
announced the successful completion of the objectives under a phase
1 Concept Development program with Navistar, one of the largest
truck manufacturers in North America. Navistar has exhibited the
Dual-Fuel(TM) demonstration truck at two major truck shows in North
America; negotiations are currently ongoing with regard to a
product development agreement with Navistar.
Our Dual-Fuel(TM) division made good overall progress during the
period. However, revenue from the Components and Emissions
divisions reduced due to the anticipated loss of a major Components
customer and production delays experienced by an important OEM
customer in our Emissions division during 2011.
Equity raised during the year demonstrated continuing investor
confidence in our technology and commercial progress; we raised a
further GBP3.13m before expenses.
We have made an excellent start to 2012. While 2011 did not
yield the financial results we were initially expecting, much of
the work done during 2011 on our product development activity with
manufacturers is starting to result in orders and provides the
opportunity for growth in future revenues.
Factory production of our European OEM product has commenced. We
have received significant orders for forty-six Euro 5 Genesis EDGE
Dual-Fuel(TM) installations and we have made good progress with
other potential Genesis EDGE customers. Our system is primarily
used by major, blue chip logistics companies. In the US we have
made significant strides towards a US product with the recent
Navistar progress.
While many opportunities exist for our technology the core
strategy of the Company is to continue to focus on progressing its
cooperation relationships with major OEM manufacturers.
I would like to thank John Pettitt and the team for making 2011
such a successful year in achieving the OEM support and contracts
to generate significant future growth opportunities for Clean Air
Power.
Financial Results
The Group made good progress in the year towards its long-term
objective to secure future revenue streams from global
manufacturers and the European OEM product is now in
production.
The Company benefited from a stronger performance from our
flagship Dual-Fuel(TM) division, following increased sales of
vehicle systems and revenue from product development. However,
overall 2011 group revenue was disappointing, held back to GBP4.59m
(2010: GBP5.79m) due largely to deficits in the sales of our
Components and Emissions Divisions.
The gross profit margin for the Group for the year improved to
56% (2010: 52%) whilst gross profit reduced to GBP2.56m (2010:
GBP3.03m) following reduction in sales.
Operating losses for the year increased to GBP2.24m (2010:
GBP1.84m).
Loss per share reduced to 2.13p (2010: 3.00p), following the
issue of new capital.
Cash on hand at 31 December 2011 was GBP2.42m (2010: GBP2.41m).
This reflects the proceeds of the Placing of new ordinary shares in
May and November which raised approximately 3.13m before expenses.
The net assets of the Group at the year end totalled GBP6.22m
(2010: GBP5.35m). Net current assets at the year end amounted to
GBP2.20m (2010: GBP2.84m) of which GBP2.42m relates to cash
balances (2010: GBP2.41m).
Business Review
Clean Air Power has three commercial divisions: Dual-Fuel(TM)
vehicle systems, Components and Emissions Reduction systems and
operates from locations in the UK, the USA and in Australia.
Dual-Fuel(TM) Division
There are three revenue streams derived from this division:
sales of Dual Fuel(TM) systems to manufacturers for installation on
their production lines, complete conversions of customers' vehicles
on a retro fit basis carried out by Clean Air Power and revenue
from engineering services provided to manufacturers or third
parties.
2011 was a successful year for the division as revenues
increased to GBP3.30m compared with GBP2.76m in 2010. This 20%
increase is due mainly to revenue from engineering development
activity from our OEM partners and increased Dual-Fuel(TM) vehicle
systems sales.
2012 sales are currently on target following the start of
production with our European OEM partner, and recent order wins for
both our Genesis EDGE product in the UK and our legacy Caterpillar
product in the US. There are positive signs from the markets in the
UK, US and Australia.
Components Division
In 2011 sales reduced by 52% to GBP1.00m from GBP2.11m in 2010,
which was in line with expectations. 2012 has begun positively and
the combination of 2012 sales and forward orders in hand already
totals approximately GBP0.54m
Emissions Reduction Division
In 2011 revenues decreased by 70% with sales of GBP0.28m
compared with GBP0.92m in the previous year, following the initial
success of the 7.6L Natural Gas Engine to which Clean Air Power's
catalyst is fitted on a tier 2 basis. However, production delays
within the OEM customer meant that volumes of the OEM engine were
dramatically reduced. These issues were unrelated to Clean Air
Power but had a significant adverse effect on our sales. This no
longer being the case, in 2012 we expect an uplift in sales. During
the year, the production for the Division was relocated from
Houston in Texas to the Company's US production facility in San
Diego, California.
Outlook
Our key objective in 2011 was to ensure factory production with
our European OEM partner was initiated and this has now been
achieved.
A key objective for 2012 will be to deliver a Product
Development Agreement with a US OEM and discussions aimed at
achieving that goal have commenced.
We have a strong team with excellent experience that ensures
that the Company is well placed to deliver on these projects and
capitalise on other opportunities for the year ahead.
While we are delighted to have made such good progress with our
European OEM partner, we continue to discuss cooperation
opportunities with other potential partners and engine developers.
A second key objective will be to develop a solution in partnership
with an OEM that is compliant with the future Euro 6 emissions
regulations.
In addition to the activity with manufacturers, Clean Air Power
also derives revenue from sales of our proprietary 'Genesis EDGE'
system, a retro-fit version of the Dual-Fuel(TM) technology. This
revenue stream provides a useful complement to the income from
initially limited OEM production levels.
We have already been successful in 2012 in addressing market
demand for Dual-Fuel(TM) systems. Following orders received in
January and February 2012 the Company will deliver 27 Dual-Fuel(TM)
Genesis EDGE systems to a major logistics company and 14
Dual-Fuel(TM) Genesis EDGE systems to Sainsbury's.
Our focus remains very clearly on delivering high quality
product, service and expertise to our OEM customers in order that
they are well placed to capitalise on the exciting growth in the
markets for natural gas vehicles.
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
Notes 31 December 2011 31 December 2010
----------------------------------------------------------------- ------ ----------------- -----------------
GBP'000 GBP'000
Revenue 1 4,585 5,788
Cost of Sales (2,022) (2,754)
Gross profit 2,563 3,034
Administrative expenses (4,668) (4,761)
Share-based payments charge (140) (110)
Operating loss (2,245) (1,837)
Loss on ordinary activities before finance revenue and taxation (2,245) (1,837)
Finance revenue 5 17
Loss on ordinary activities before taxation (2,240) (1,820)
Tax expense - -
Loss for the period (2,240) (1,820)
----------------- -----------------
Basic and diluted loss per share 2 (2.13p) (3.00p)
----------------- -----------------
All items dealt with in arriving at operating loss above relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 December 2011 31 December 2010
----------------------------------------------------------- ----------------- -----------------
GBP'000 GBP'000
Loss for the period (2,240) (1,820)
----------------- -----------------
Exchange differences on translation of foreign operations (9) 101
Total comprehensive loss for the period (2,249) (1,719)
----------------- -----------------
Attributable to:
----------------- -----------------
Equity holders of the parent (2,249) (1,719)
----------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Year ended Year ended
31 December 2011 31 December 2010
----------------------------------------------------- ------------------ ------------------
GBP'000 GBP'000
Assets
Non-current assets
Plant and equipment 190 269
Intangible assets 3,839 2,241
------------------ ------------------
4,029 2,510
------------------ ------------------
Current assets
Inventories 670 839
Trade and other receivables 816 1,342
Cash and cash equivalents 2,422 2,410
------------------ ------------------
3,908 4,591
------------------ ------------------
TOTAL ASSETS 7,937 7,101
------------------ ------------------
Equity and liabilities
Equity attributable to equity holders of the parent
Ordinary share capital 83 44
Share premium 19,160 16,219
Translation reserve 1,075 1,084
Other reserves 33,504 33,504
Accumulated loss (47,599) (45,499)
------------------ ------------------
Total equity 6,223 5,352
------------------ ------------------
Current liabilities
Trade and other payables 1,027 1,132
Provisions 393 460
Deferred revenue 294 157
------------------ ------------------
1,714 1,749
------------------ ------------------
TOTAL LIABILITIES 1,714 1,749
------------------ ------------------
TOTAL EQUITY AND LIABILITIES 7,937 7,101
------------------ ------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Year ended
31 December 2011 31 December 2010
--------------------------------------------- --- ----------------- -----------------
GBP'000 GBP'000
Cash flows from operating activities
Loss on ordinary activities before taxation (2,240) (1,820)
Adjustments for:
Finance revenue (5) (17)
Depreciation of plant and equipment 119 139
Amortisation of intangibles 311 332
Share-based payments 140 110
Decrease in trade and other receivables 526 197
Decrease in trade and other payables (105) (46)
Decrease in inventories 169 145
(Decrease)/increase in provisions (67) 68
Increase/(decrease) in deferred revenue 137 (432)
Other non-cash movements 4 (24)
Net cash outflow from operating activities (1,011) (1,348)
----------------- -----------------
Investing activities
Interest received 5 17
Payments to acquire plant and equipment (49) (62)
Sale of plant and equipment 4 -
Payments to acquire intangible assets (1,915) (1,397)
Net cash outflow from investing activities (1,955) (1,442)
----------------- -----------------
Financing activities
Proceeds from the issue of ordinary share capital 3,129 2,285
Share issue costs (149) (103)
Net cash inflow from financing activities 2,980 2,182
----------------- -----------------
Net increase/(decrease) in cash and cash
equivalents 14 (608)
Net foreign exchange differences (2) 80
Cash and cash equivalents at 1 January 2,410 2,938
Cash and cash equivalents at 31 December 2,422 2,410
----------------- -----------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share Share premium Translation Other reserves Accumulated Total equity
capital reserve loss
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
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
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
Comprehensive
loss for the
period - - 101 - - 101
Loss for the
year - - - - (1,820) (1,820)
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
loss for the
period - - 101 - (1,820) (1,719)
Share-based
payments - - - - 110 110
On issue of new
shares 11 2,274 - - - 2,285
Share issuance
costs - (103) - - - (103)
Balance at 31
December 2010 44 16,219 1,084 33,504 (45,499) 5,352
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
Comprehensive
loss for the
period - - (9) - - (9)
Loss for the
year - - - - (2,240) (2,240)
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
loss for the
period - - (9) - (2,240) (2,249)
Share-based
payments - - - - 140 140
On issue of new
shares 39 3,090 - - - 3,129
Share issuance
costs - (149) - - - (149)
Balance at 31
December 2011 83 19,160 1,075 33,504 (47,599) 6,223
---------------- ---------------- -------------- ---------------- --------------- ---------------- -------------
NOTES :
1. Segment information
For management purposes the Group is organised into business units based on their products
and services, and has three reportable segments.
Year ended 31 December 2011 GBP'000
------------------------------------------- -------------------------------------------------------------------------
Dual-Fuel(TM) Components Emissions Adjustments and Total
Reduction Eliminations
------------------------------------------- -------------- ----------- ---------------- ---------------- --------
Revenue
Third party sale of goods (1)(8) 2,474 1,006 275 - 3,755
Third party rendering of services (1)(8) 830 - - - 830
Inter-segment (2) 516 - - (516) -
Total revenue 3,820 1,006 275 (516) 4,585
============== =========== ================ ================ ========
Results
Depreciation and amortisation (3) (399) (33) (4) 6 (430)
Segment (loss)(4) (1,717) (56) (338) (134) (2,245)
Net finance income 5
Loss for the period (2,240)
========
Assets
Operating assets (5) 2,306 1,248 397 (43) 3,908
============== =========== ================ ================ ========
Provisions (6) 216 103 83 (9) 393
Operating liabilities including provisions 1,256 296 171 (9) 1,714
============== =========== ================ ================ ========
Other disclosures
Capital expenditure
(7) 1,939 23 2 - 1,964
======= ======== ======= ======= ======
1. Dual-Fuel(TM) conversion segment includes revenue arising from
development activity
2. Inter-segment revenues are eliminated on consolidation (GBP516,000)
3. Deprecation eliminated (GBP6,367) following transfer of intangible
assets to Clean Air Power Inc.
4. Elimination of intragroup management charges (GBP77,000) and
intragroup foreign exchange gains and losses (GBP53,027)
5. Adjustment to profit in inventory (GBP42,602)
6. Adjustment to provisions of GBP9,244.
7. Capital expenditure consists of additions to plant and equipment
and intangible assets
8. Revenue from one customer amounted to GBP1,843,953 (2010: GBP1,167,322),
arising from sales related to the Dual-Fuel(TM) and Components
segment.
Year ended 31 December 2010 GBP'000
------------------------------------ --------------------------------------------------------------------------------
Dual-Fuel(TM) Components Emissions Reduction Adjustments and Total
eliminations
------------------------------------ -------------- ----------- -------------------- ------------------- --------
Revenue
Third party 1,737 2,108 918 - 4,763
Third party rendering of services 1,025 - - - 1,025
Inter-segment (1) 980 - - (980) -
Total revenue 3,742 2,108 918 (980) 5,788
============== =========== ==================== =================== ========
Results
Depreciation and amortisation (403) (72) (6) 10 (471)
Segment (loss)/profit (4) (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 139 275 88 (9) 493
Operating liabilities including
provisions 767 715 302 (9) 1,775
============== =========== ==================== =================== ========
Other disclosures
Capital expenditure
(2) 1,468 25 13 (47) 1,459
======= ======== ======= ======= ======
1. Dual-Fuel(TM) conversion segment includes revenue arising from
development activity
2. Inter-segment revenues are eliminated on consolidation (GBP980,000)
3. Deprecation eliminated (GBP9,611) following transfer of intangible
assets to Clean Air Power Inc.
4. Elimination of intragroup management charges (GBP223,000) and
intragroup foreign exchange gains and losses (GBP142,000)
Geographical Information
Year ended Year ended
31 December 2011 31 December 2010
Revenues from external customers: GBP'000 GBP'000
UK 385 266
USA 965 1,812
Australia 1,072 1,074
Rest of Europe 1,996 1,754
Rest of World 167 882
----------------- -----------------
4,585 5,788
----------------- -----------------
The revenue information is based on the location of the customer.
Non-current assets
Year ended Year ended
31 December 2011 31 December 2010
GBP'000 GBP'000
UK 1,338 61
USA 2,685 2,443
Australia 6 6
4,029 2,510
----------------- -----------------
Non-current assets for this purpose consist of plant and
equipment and intangible assets.
2. Loss per Share
Basic
Basic loss per share is calculated by dividing net loss for the year attributable to equity
holders of the parent by the weighted average number of Common Shares in issue during the
year.
2011 2010
Loss for the period (2,240) (1,820)
Weighted average number of shares 104,983,416 60,709,907
Basic and diluted loss per share (2.13p) (3.00p)
The loss for the period and the weighted average number of ordinary
shares for calculating the diluted earnings per share for the period
to 31 December 2011 are identical to those used for the basic earnings
per share. This is because the outstanding share options would
have the effect of reducing the loss per ordinary share and would
therefore not be dilutive.
3. Dividend Policy
In accordance with the Company's policy as set out in its
admission document the Company does not propose to declare a
dividend.
4. Accounting Polices
The preliminary results have been prepared on the same basis as
the Group and Company's annual financial statements which were
prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU as they apply to the
financial statements of the Group for the year ended 31 December
2011. There have been no changes in accounting policies during the
year.
The preliminary results for the year ended 31 December 2011 have
been approved by the Directors on 26 March 2012. Our auditors have
issued an unqualified audit report on the results for the year
ended 31 December 2011.
5. Annual Report and Accounts
Copies of the Annual Report will be posted to shareholders
shortly and together with this document will be available on the
Company's website, www.cleanairpower.com and from the Company's
registered office at Clarendon House, 2 Church Street, Hamilton HM
11, Bermuda and from the Company's UK office at Aston Way, Leyland,
Lancashire, PR26 7UX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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