TIDMCAP
RNS Number : 8333L
Clean Air Power Limited
10 September 2012
Clean Air Power Limited
("Clean Air Power" or "Company")
Interim Results for the six month period ended 30 June 2012
10 September 2012
Clean Air Power Limited (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
2012.
Financial Highlights
-- Revenue for the period increased substantially by 86% to GBP3.9m (2011: GBP2.1m)
-- Revenue in Dual-Fuel(TM) increased by 136% to GBP3.3m (2011:
GBP1.4m) driven by vehicle system sales and product development
revenue
-- Gross profit for the period up 75% to GBP2.1m (2011: GBP1.2m)
-- Loss after tax for the period: GBP0.6m (2011: GBP1.3m)
-- Gross margin for the period: 54% (2011: 57%)
Operational Highlights
-- Major European Manufacturer commenced factory production of
Heavy Duty trucks incorporating Clean Air Power Dual-Fuel(TM)
technology
-- Order received for 27 Genesis-EDGE Dual-Fuel(TM) systems to a
major logistics company in the UK
-- Order received for 49 Genesis-EDGE Dual-Fuel(TM) systems to Sainsbury's supermarkets
-- Successful development and launch of Renault Magnum
Genesis-EDGE Dual-Fuel(TM) variant for the European market
-- Payment received from Navistar for $1.3m for work done in
2010 on the Concept Ready Phase of a Dual-Fuel(TM) development
project
Post Period End
-- Order received to deliver a minimum of 50 Renault Magnum Genesis-EDGE Dual-Fuel(TM) systems
-- Evaluation of Genesis-EDGE product for the North American
product produces positive results.
John Pettitt, Chief Executive of Clean Air Power said:
"The start of production of the European OEM product,
incorporating our Dual-Fuel(TM) technology is the most significant
commercial achievement in the history of Clean Air Power. We are
already seeing significant and growing interest and demand for the
European OEM product as well as for our own Genesis-EDGE branded
product. The success of our Genesis-EDGE product in Europe has
encouraged us to look to enter the exciting US market with initial
evaluation producing positive results. The programme is on schedule
for a Genesis-EDGE product with trucks in operation in late 2013
with trucks in production in early 2014.
For further information, please contact:
Clean Air Power Ltd 01772 624499
John Pettitt
Peter Rowse
Buchanan 020 7466 5000
Charles Ryland
Clare Akhurst
Seymour Pierce (Nominated Adviser) 020 7107 8000
Mark Percy/David Foreman
David Banks/Paul Jewell (Corporate Broking)
Chief Executive's Statement
In January 2012, our major European OEM customer commenced
factory production of a Dual-Fuel(TM) truck incorporating Clean Air
Power's technology. It has long been Clean Air Power's objective to
be incorporated on a major manufacturer's OEM platform. Traction in
the European market is increasing, driven by customer demand. The
order bank is growing, new product variants are being launched and
new markets are under consideration. Despite the successful launch
in January, there was a short term unavoidable break in production
during the spring. This was due to the need for product variants
for the Swedish and Dutch markets which have now been completed but
we are encouraged that production has now recommenced in our
customer's factory at an increased rate in order to address their
customers' demand.
Clean Air Power's 'Genesis-EDGE' product in Europe is also
gaining significant 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 have received and delivered 27 orders to
a major logistics company and also received orders from Sainsbury's
supermarkets for 49 systems during the first half of 2012. The
Company also developed and launched a new 'Genesis-EDGE' product
for a customer in Europe to meet demand using a Renault Magnum and
have taken 50 advance orders. We continue to work with and focus on
major fleet operators to demonstrate the benefits of Clean Air
Power's Dual-Fuel(TM) products.
In the US significant market demand has been publicly expressed
for a Dual-Fuel product with Clean Air Power, although OEM decision
making process continues to be very protracted. It was recently
announced that Navistar had changed their diesel strategy, has
instigated a major management restructure and the Chief Executive
has retired. The Directors of Clean Air Power can have no certainty
as to the outcome or effect of these changes.
Therefore following the success of our own Genesis-EDGE product
in Europe, and with a motivation to access the US market without
further undue delay, we have decided to launch a Genesis-EDGE
product in the US while in parallel continuing discussions with US
manufacturers. A technical feasibility study has been completed,
and a clear product development plan targeting a product first
production in early 2014 has been put in place. The 18 month
product development plan will require some updating of our test
cell facilities along with certain other investments. The US Class
8 market is larger than the whole of Europe and we are currently
evaluating distribution options. The relatively low cost of natural
gas in North America is a compelling factor driving customer demand
for natural gas vehicles and reduces the reliance on oil from the
Middle East, a key objective for the US Government.
Group Structure
Clean Air Power has three commercial divisions; Dual-Fuel(TM)
vehicle systems, Components and Emissions Reduction systems.
1) Dual-Fuel(TM) Vehicle Systems
Clean Air Power's patented Dual-Fuel(TM) system 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 OEM product, where Clean Air Power's technology is
incorporated into vehicles with the manufacturer's cooperation; and
the Genesis-EDGE product, where the technology is added as an after
market solution by Clean Air Power under its own brand.
There are three revenue streams derived from this division:
-- Sales of Dual-Fuel(TM) systems to manufacturers for installation on their production lines
-- Complete Dual-Fuel(TM) system conversions on a customer's
vehicle on an after market basis carried out by Clean Air Power or
its agents
-- Revenue from engineering services provided to manufacturers or third parties
The first half of this year has seen sales for this division
increase by 136% to GBP3.3m (2011: GBP1.4m). This increase is due
mainly to higher sales of our European OEM interfaced systems,
sales of Genesis-EDGE systems in the UK and engineering services
provided in the US.
Interfaced OEM Product
The Company's European OEM customers interfaced Euro 5 compliant
product incorporating Clean Air Power's Dual-Fuel(TM) technology
commenced factory production in January 2012, with initial markets
of UK, Sweden and the Netherlands. The vehicles are produced,
marketed and supported by the manufacturer.
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 approximately 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 infrastructure is
immature in most markets.
Euro 5 compliant vehicles will be sold throughout the European
Union until the end of 2013 when they will be superseded by Euro 6
compliant engines. Australia & the BRIC countries will be using
Euro 5 compliant trucks for several more years.
The Company has held discussions with manufacturers regarding
the development of a Dual-Fuel(TM) solution for vehicles compliant
with the Euro 6 emissions regulations.
Genesis-EDGE Vehicle System
The 'Genesis-EDGE' system was developed specifically as an after
market solution which can be installed without the need for formal
co-operation of the engine manufacturers. The solution does not
interface directly with the vehicle's engine management system and
up to 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 our target markets.
The Company has received orders from a major logistics company
for 27 systems and 49 systems for Sainsbury's during the first half
of 2012. The Company has also successfully developed a new variant
of the product, using a Renault Magnum 13 litre truck to meet
demand from a new customer in Spain.
Following the launch of the Genesis EDGE product in Australia
last year it has been necessary to carry out additional product
development to deal with the specific operational demands of the
market place which we anticipate will be completed in quarter 4 of
2012.
In total, 100 systems have been delivered in the first half of
2012 being a mixture of OEM and Genesis EDGE.
2) Components Division
This division designs and delivers innovative hydraulic valves,
natural gas injectors and filters for natural gas engines. These
components enable automotive and engine manufacturers to build
low-emission spark ignited natural gas vehicles that meet worldwide
emissions regulations.
This business is relatively mature and supplies manufacturers
with parts for their engine production. In addition there are
recurring revenues from maintenance and servicing requirements.
Sales for 2012 are in line with expectations at GBP0.5m, being
GBP0.1m lower than the same period last year to June 2011 which had
been anticipated. Orders already received for delivery in the
second half of 2012 are GBP0.4m.
3) Emissions Reduction Division
This division provides systems for large stationary engines
incorporating catalysed substrates supplied by specialist
manufacturers and can be integrated during the initial installation
or retro-fitted to older existing engines and plants.
This division also supplies catalytic converters for vehicles.
These units have been used on 7.6L natural gas engines to control
emissions to deliver sub EPA2010 emission levels for their truck
and bus operating customers.
The year to date sales are lower than expected due to
performance issues with the base spark ignited natural gas engine
which was manufactured by our customer. The Board does not expect
to receive any further orders for this product in the foreseeable
future.
Financial Review
Sales for the first six months in our key Dual-Fuel(TM) division
have significantly outperformed last year. Sales of our Components
Division are in line with expectations while the smaller Emissions
Reduction Division has seen sales lower than expected following
delays in obtaining orders from a key customer.
The six month period to 30 June 2012 has seen revenue increase
substantially to GBP3.9m from GBP2.1m for the same period in 2011.
This has been due mainly to a strong performance in our
Dual-Fuel(TM) vehicle systems division which includes revenue from
engineering development.
Gross profit increased to GBP2.1m from GBP1.2m in June 2011,
whilst gross margin fell slightly to 54% (2011:57%).
Operating loss reduced to GBP0.6m representing a GBP0.7m
improvement on the GBP1.3m loss for the same period in 2011. This
is due mainly to the increase in sales of Dual-Fuel(TM) vehicle
systems.
The net result after tax for the period was a loss of GBP0.6m, a
GBP0.7m decrease on the GBP1.3m loss for the same period in 2011.
The basic loss per share for the period was 0.44p (2011:
1.67p).
Investments in fixed assets were GBP0.7m for the period compared
with GBP1.0m in the first half of 2011. The majority of these
amounts relate to capitalisation of labour and expenses incurred in
developing new products.
The cash position as at 30 June 2012 was GBP1.5m compared with
GBP2.4m as at the end of 2011.
The cash position is lower than had been expected, mainly due to
slower sales of our Genesis-EDGE product in Australia and the break
in production with the European manufacturer as discussed above.
Consequently the Board are considering further financing options to
ensure that it can meet its future working capital requirements and
these are discussed in note 2.
Outlook
The first half of 2012 has been the most successful for the
Company since its IPO in 2006. The commencement of factory
production of the European OEM product, good sales of Genesis-EDGE
units in the UK market and successful development of Renault Magnum
product variant for the European market in our Dual-Fuel(TM)
division provide three strong revenue streams.
Orders in hand and indications from customers suggest that
performance in each of these areas will remain strong during the
second half of the year.
In the US the continuing delta between the price of diesel and
that of domestically produced natural gas is encouraging operators
and manufacturers to consider alternative options to fuel their
vehicles. Adoption of natural gas as a road fuel is rapidly
increasing driven by financial and energy security factors.
The decision to develop a variant of our Genesis-EDGE product
for the important US market puts the control and timing of a US
product launch back into the hands of the Company. Following the
conclusion of our initial evaluation study this development
activity will require the upgrading of some of our facilities and
is expected to take around 12 months.
In parallel to this internal product development we will
continue discussions with manufacturers and developers in relation
to future products compliant with Euro 6 and US2010 emissions
regulations.
Components sales are expected to remain in line with
expectations as the year progresses and management focus will be
maintained in these areas as the Dual-Fuel(TM) division sales
continue the excellent growth.
We are delighted to see the success of our Dual-Fuel(TM)
products validating the product development activity and the
strategy pursued in recent years. The Company's focus on OEM level
quality and cost control remain unchanged With our technology now
adopted by and proven with a major European truck manufacturer and
industry leading logistics operators in the UK, we have increased
confidence in our ability to access new markets, fully exploit
existing markets and develop new products in the future.
John Pettitt
Chief Executive
10 September 2012
INTERIM CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to Year to
Note 30 June 2012 30 June 2011 31 December 2011
GBP'000 GBP'000 GBP'000
Revenue 6 3,863 2,067 4,585
Cost of sales (1,775) (904) (2,022)
Gross profit 2,088 1,163 2,563
Administrative expenses (2,672) (2,448) (4,668)
Exceptional items 10 (77) - -
Share-based payments charge 8 (13) (58) (140)
Operating loss (674) (1,343) (2,245)
Finance revenue 2 4 5
Loss on ordinary activities before taxation 6 (672) (1,339) (2,240)
Tax expense 5 - - -
Loss for the period (672) (1,339) (2,240)
-------------- -------------- --------------------------------
Basic and diluted loss per share (0.50p) (1.67p) (2.13p)
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 2012 30 June 2011 31 December 2011
GBP'000 GBP'000 GBP'000
Loss for the period (672) (1,339) (2,240)
-------------- -------------- ----------------------------------
Exchange differences on translation of foreign
operations (19) (88) (9)
Total comprehensive loss for the period (691) (1,427) (2,249)
-------------- -------------- ----------------------------------
Attributable to:
-------------- -------------- ----------------------------------
Equity holders of the parent (691) (1,427) (2,249)
-------------- -------------- ----------------------------------
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
Note 30 June 2012 30 June 2011 31 December 2011
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Plant and equipment 7 191 232 190
Intangible assets 7 3,994 3,063 3,839
-------------- -------------- ----------------------------------
4,185 3,295 4,029
-------------- -------------- ----------------------------------
Current assets
Inventories 1,093 1,033 670
Trade and other receivables 1,082 1,139 816
Cash and cash equivalents 4 1,532 2,196 2,422
-------------- -------------- ----------------------------------
3,707 4,368 3,908
-------------- -------------- ----------------------------------
TOTAL ASSETS 7,892 7,663 7,937
-------------- -------------- ----------------------------------
Equity and liabilities
Equity attributable to equity holders of
the parent
Ordinary share capital 83 57 83
Share premium 19,160 17,677 19,160
Translation reserve 1,056 996 1,075
Other reserves 33,504 33,504 33,504
Accumulated loss (48,258) (46,780) (47,599)
-------------- -------------- ----------------------------------
Total equity 5,545 5,454 6,223
-------------- -------------- ----------------------------------
Non-current liabilities
Other payables 7 - -
-------------- -------------- ----------------------------------
7 - -
-------------- -------------- ----------------------------------
Current liabilities
Trade and other payables 1,929 1,264 1,027
Provisions 342 366 393
Deferred revenue 69 579 294
-------------- -------------- ----------------------------------
2,340 2,209 1,714
-------------- -------------- ----------------------------------
TOTAL LIABILITIES 2,347 2,209 1,714
-------------- -------------- ----------------------------------
TOTAL EQUITY AND LIABILITIES 7,892 7,663 7,937
-------------- -------------- ----------------------------------
Director
INTERIM CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Year to
6 months to 30 June 2012 6 months to 30 June 2011 31 December 2011
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (672) (1,339) (2,240)
Adjustments for:
Net finance income (2) (4) (5)
Depreciation of plant and equipment 55 59 119
Amortisation of intangibles 505 133 311
Impairment 8 - -
Share-based payments 13 58 140
(Increase)/decrease in trade and other
receivables (266) 203 526
Increase/(decrease) in trade and other
payables 902 132 (105)
(Increase)/decrease in inventories (424) (194) 169
Decrease in provisions (51) (95) (67)
(Decrease)/increase in deferred revenue (225) 422 137
Other non-cash movements 5 18 4
Net cash outflow from operating activities (152) (607) (1,011)
------------------------- ------------------------- ------------------
Investing activities
Interest received 2 4 5
Payments to acquire plant and equipment (52) (31) (49)
Disposal of plant and equipment - - 4
Payments to acquire intangible assets (699) (1,033) (1,915)
Net cash outflow from investing activities (749) (1,060) (1,955)
------------------------- ------------------------- ------------------
Financing activities
Proceeds from the issue of ordinary share
capital - 1,526 3,129
Share issue costs - (55) (149)
Net cash inflow from financing activities - 1,471 2,980
------------------------- ------------------------- ------------------
Decrease in cash and cash equivalents (901) (196) 14
Effect of exchange rates on cash and cash
equivalents 11 (18) (2)
Cash and cash equivalents at the beginning
of the period 2,422 2,410 2,410
Cash and cash equivalents at end of period 1,532 2,196 2,422
------------------------- ------------------------- ------------------
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2012
Translation Accumulated
Issued Capital Share Premium Reserve Other Reserves loss Total Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------------- -------------- ---------------- --------------- ---------------- -------------
Balance at 1
January 2011 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
--------------- -------------- ---------------- --------------- ---------------- -------------
Other
comprehensive
income - - 79 - - 79
Loss for the
period - - - - (901) (901)
--------------- -------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
income - - 79 - (901) (822)
Issue of share
capital 26 1,577 - - - 1,603
Share issuance
costs - (94) - - - (94)
Share-based
payments - - - - 82 82
--------------- -------------- ---------------- --------------- ---------------- -------------
Balance at 31
December 2011 83 19,160 1,075 33,504 (47,599) 6,223
--------------- -------------- ---------------- --------------- ---------------- -------------
Other
comprehensive
income - - (19) - - (19)
Loss for the
period - - - - (672) (672)
--------------- -------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
income - - (19) - (672) (691)
Share-based
payments - - - - 13 13
--------------- -------------- ---------------- --------------- ---------------- -------------
Balance at 30
June 2012 83 19,160 1,056 33,504 (48,258) 5,545
--------------- -------------- ---------------- --------------- ---------------- -------------
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 2012 were
authorised for issue in accordance with a resolution of the
directors on 10 September 2012. 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 2012 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.
The interim condensed consolidated financial statements are
unaudited and do not constitute statutory accounts and therefore do
not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with
the Group's financial statements as at 31 December 2011. The
financial information for the preceding year is based on the
Group's financial statements for the year ended 31 December 2011
upon which the auditors issued an unqualified opinion.
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 2011.
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 decisions of US OEMs and
lower sales for its Genesis-EDGE product in Australia due to
product application development issues. In the short to medium
term, the Group plans to develop its 'Genesis-EDGE' product to meet
the demand for the US market and is working towards completing the
product application development for the Australian market. The
Board recently announced the successful results of the US Genesis
product validation and will embark on a development program in the
next month. This will allow the Group to offer an after market
solution in the US whilst OEM discussions continue.
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. The
Company's business plan required funds to be generated from a US
product development contract or alternatively equity would be
required. It is unlikely that the issues giving rise to the delays
in OEM decisions will be resolved in the short term and therefore
the Company will require further funding. The directors have
prepared projections of the trading results for the foreseeable
future which they consider to be prudent. The directors will pursue
further short and medium term financing options and, following
discussions with Company's brokers and the recent commercial
successes, are confident that appropriate solutions can be
found.
In the absence of firm commitments in relation to these
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
2011 Annual Report and Accounts and all of them are monitored
closely by the Group's Management Board.
4. CASH AND CASH EQUIVALENTS
Unaudited Audited
as at as at
30 June 31 December
------------------ -------------
2012 2011 2011
GBP'000 GBP'000 GBP'000
1,532 2,196 2,422
Cash at bank and in hand 1,532 2,196 2,422
======== ======== =============
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
------------------ -------------
2012 2011 2011
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 2012 GBP'000
------------------------------- -----------------------------------------------------------------------------
Dual-Fuel(TM) Components Emissions Adjustments Total
Reduction and eliminations
------------------------------- -------------- ----------- ----------- ------------------ ---------------
Revenue
Third party sale of
goods (1)(8) 2,204 483 43 - 2,730
Third party rendering
of services (1)(8) 1,133 - - - 1,133
Inter-segment (2) 363 - - (363) -
Total revenue 3,700 483 43 (363) 3,863
============== =========== =========== ================== ===============
Results
Depreciation and amortisation
(3) (526) (46) - 12 (560)
Exceptional items - - (77) - (77)
Operating (loss) (4) (663) 69 (101) 21 (674)
Net finance income 2
Loss for the period (672)
============== =========== =========== ================== ===============
Assets
Operating assets (5) 3,357 219 178 (47) 3,707
============== =========== =========== ================== ===============
Provisions (6) 155 123 71 (7) 342
Operating liabilities
including provisions
(6) 1,945 351 51 (7) 2,340
Other disclosures
Capital expenditure
(7) 752 7 - - 759
============== =========== =========== ================== ===============
1. Dual-Fuel(TM) conversion segment includes revenue arising from
development activity
2. Inter-segment revenues are eliminated on consolidation (GBP363,000)
3. Deprecation eliminated (GBP12,566) following transfer of intangible
assets to Clean Air Power Inc.
4. Elimination of intragroup foreign exchange gains and losses
(GBP21,000)
5. Adjustment to profit in inventory (GBP47,000)
6. Adjustment to provisions of GBP7,000
7. Capital expenditure consists of additions to plant and equipment
and intangible assets
8. Revenue from one customer amounted to GBP1,089,228 (2011: GBP942,894),
arising from sales related to the Dual-Fuel(TM) and Components
segment.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
6. SEGMENTAL ANALYSIS - CONTINUED
Period ended 30 June 2011 GBP'000
------------------------ ----------------------------------------------------------------
Dual-Fuel(TM) Components Emissions Adjustments Total
Reduction and
eliminations
------------------------ -------------- ----------- ---------- ------------- --------
Revenue
Third party sale of
goods 1,053 618 63 - 2,067
Third party rendering
of services 333 - - - -
Inter-segment (1) 309 - - (309) -
Total revenue 1,695 618 63 (309) 2,067
============== =========== ========== ============= ========
Results
Depreciation and
amortisation
(3) (176) (16) (3) 3 (192)
Operating (loss) (4) (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 (2) 1,059 - 5 - 1,064
====== ======
1. Dual-Fuel(TM) conversion segment includes revenue arising from development activity
2. Inter-segment revenues are eliminated on consolidation (GBP309,000)
3. Deprecation eliminated (GBP3,000) following transfer of intangible assets to Clean
Air
Power Inc.
4. Elimination of intragroup foreign exchange gains and losses (GBP86,000).
Period ended 31 December 2011 GBP'000
------------------------ ----------------------------------------------------------------
Dual-Fuel(TM) Components Emissions Adjustments Total
Reduction and
eliminations
------------------------ -------------- ----------- ---------- ------------- --------
Revenue
Third party rendering
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)
Operating (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
(6) 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.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
7. PLANT, EQUIPMENT & INTANGIBLE ASSETS
During the six months ended 30 June 2012, the Group acquired
plant and equipment with a cost of GBP60,000 (30 June 2011:
GBP30,505) (31 December 2011: GBP49,000). Expenditure on product
development for the six months ended 30 June 2012 was GBP699,000
(30 June 2011: GBP1,033,354) (31 December 2011: GBP1,915,000). The
majority of the expenditure related to the European OEM development
project.
8. SHARE-BASED PAYMENT
During the period the Group recognised GBP12,534 (30 June 2011:
GBP58,292) (31 December 2011: GBP139,610) related to equity-settled
share-based payments transactions.
9. RELATED PARTY DISCLOSURES
The Group receives consultancy services from Karl Viktor
Schaller, 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.
Prof K V Schaller Unaudited Unaudited Audited
6 months 6 months year ended
to to 31 December
30 June 30 June
---------------------------------------- ---------- ---------- -------------
2012 2011 2011
---------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 2 5 9
Amounts owed to related parties - - -
Gary Ireson Unaudited Unaudited Audited
6 months 6 months year ended
to to 31 December
30 June 30 June
---------------------------------------- ---------- ---------- -------------
2012 2011 2011
---------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 6 10 19
Amounts owed to related parties 6 2 -
10. EXCEPTIONAL ITEMS
During the period the Group recognised GBP77,471 as a bad debt
provision in respect of a customer in its Emissions Reduction
Segment.
INTERIM REPORT
Copies of the interim results report for the Company for the
period ended 30 June 2012 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 Wöhr "*+#
* Member of the Audit Committee + Member of the Remuneration Committee # Member of the
Nomination
Committee " Independent
Secretary
Codan Services Limited
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
HCBC Bank plc
1 Forest Green Road
Fulwood
Preston
PR2 9LJ
Financial Public Relations
Buchanan
107 Cheapside
London
EC2V 6DN
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 Interim Results for the 6months
ended 30 June 2012 which comprises the Interim Consolidated Income
Statement, the Interim Consolidated Statement of Comprehensive
Income, the Interim Consolidated Statement of Financial Position,
the Interim Consolidated Cash Flow Statement, the Interim
Consolidated Statement of Changes in Equity and the related
explanatory notes 1 to 10. We have read the other information
contained in the Interim Results 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 Interim Results report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the Interim Results 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 Interim Results 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 Interim Results
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 Interim Results report for the 6 months ended 30 June 2012
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
Interim Results report do not include the adjustments that would
result if the company was unable to continue as a going
concern.
Ernst & Young LLP
Manchester
10 September 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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