TIDMCAP
RNS Number : 2635N
Clean Air Power Limited
05 September 2013
Clean Air Power Limited
("Clean Air Power" or "Company")
Interim Results for the six month period ended 30 June 2013
5 September 2013
Clean Air Power Limited (AIM:CAP), the developer and global
leader in Dual-Fuel(TM) engine management software for heavy-duty
vehicles, today announces its results for the six month period
ended 30 June 2013.
Financial Highlights
-- Group revenue for the period increased 7% to GBP4.1m
(H1-2012: GBP3.9m which included a GBP0.8m one-off item from
Navistar)
-- Revenue from Dual-Fuel(TM) system sales increased 23% to GBP2.7m (H1-2012: GBP2.2m)
-- Gross profit for the period of GBP2.0m (H1-2012: GBP2.1m)
-- Gross margin for the period of 48% (H1-2012: 54%)
-- Loss after tax for the period of GBP0.9m (H1-2012: GBP0.7m
which included a GBP0.8m one-off item from Navistar)
Operational Highlights
-- Orders received for more than 350 Dual-Fuel(TM) systems to date
-- 172 systems delivered in H1-2013 being a mixture of OEM and
Genesis-EDGE product, an increase of 48% compared to 116 for the
same period last year
-- Exhibited Prototype Vehicle fitted with Genesis-EDGE
Dual-Fuel(TM) technology at the Alternative Clean Transportation
EXPO in Washington DC, the largest Alternative Fuels EXPO in the
world
-- Significant US development contract confirmed for
approximately GBP1.7m to support US Genesis-EDGE development -
funds provided by the California Energy Commission ('CEC')
-- Euro 6 prototype R&D funding awarded by Niche Vehicle
Network for after-treatment packaging development in partnership
with Eminox Limited
-- Two year funded research project agreed in partnership with
Brunel University aimed at developing the next generation of
advanced Dual-Fuel combustion systems using natural gas and diesel.
The project will be carried out at Brunel University's Centre for
Advanced Powertrains and Fuels
Post Period End
-- Agreement with a global parcel company to support fleet
trials for the US Genesis-EDGE product. They will provide 10
tractor units which will be installed with the Genesis-EDGE
Dual-Fuel(TM) system
-- Order received for 40 Genesis-EDGE Dual-Fuel(TM) systems from
a major logistics organisation in the UK
-- GBP5m equity fundraising (gross) successfully completed in
August guaranteed by two new strategic investors: Ervington
Investments Ltd, the ultimate beneficial owner of which is Roman
Abramovich, and Ms Zara Shvidler
John Pettitt, Chief Executive of Clean Air Power said:
"I am pleased that our 2013 system orders exceed the 300 units
sold in the full year in 2012. In the US, the exhibition of our
first prototype Dual-Fuel(TM) vehicle was an important milestone
for the company ahead of the expected Q1 2014 launch. The trend
towards the adoption of natural gas vehicles in important world
markets continues, and increasing investment in infrastructure by
major gas supply companies signals a recognition that natural gas
vehicles will play an important part in the future of road
transport. Our plans to develop markets in Europe, US and Russia
means Clean Air Power is well positioned to benefit from this
global trend."
For further information, please contact:
Clean Air Power Citigate Dewe Cantor Fitzgerald Europe Peat & Co (Joint
Ltd Rogerson (Nominated Adviser & Joint Broker)
Broker)
---------------- ------------------ -------------------------------- -----------------
John Pettitt Chris Gardner Mark Percy/David Foreman Charlie Peat
(Corporate Finance)
---------------- ------------------ -------------------------------- -----------------
Peter Rowse Malcolm Robertson David Banks (Corporate Broking) Andy Cuthill
---------------- ------------------ -------------------------------- -----------------
Tel: +44 1772 Tel : +44 20 Tel: +44 20 7894 7000 Tel: +44 20
624499 7282 2867 3540 1721
---------------- ------------------ -------------------------------- -----------------
Chief Executive's Statement
Clean Air Power has made a good start to 2013. Like for like
revenue for Dual-Fuel(TM) systems increased by 23% for the period
to 30 June 2013, and the total of current orders delivered and
those in hand, with either Clean Air Power or our European OEM
partner, already exceeds the 2012 total of 300 systems. In June we
announced that increased production of standard diesel Euro 5
compliant vehicles ahead of the introduction of Euro 6 emissions
standards in Europe had affected the expected production levels of
methane-diesel vehicles by our European partner. However, since
late June we have seen an encouraging uplift in the level of orders
received for delivery in the second half of the year. The increased
production of Euro 5 diesel vehicles in 2013 will also increase the
number of target vehicles in the market available to retrofit with
our Genesis-EDGE product in 2014.
In the US, we have made significant progress during the period
developing a US Genesis-EDGE retro fit product for the North
American market. In June, we drove the first prototype vehicle
coast-to-coast from San Diego to Washington DC where it was
exhibited at the Alternative Clean Transportation (ACT), the
largest Alternative Fuels EXPO in North America. In the US the
refuelling infrastructure, although rapidly growing, was
insufficient to support an unbroken journey using gas and therefore
more than half of the journey was completed in diesel mode. This
very helpfully demonstrated the flexibility and robustness of our
Dual-Fuel(TM) product to potential OEM and fleet customers in North
America. The ACT exhibition marked a major achievement for the
Company. During and following the show, we received positive
feedback from potential partners interested in our Genesis-EDGE
Dual-Fuel(TM) system.
In April 2013 we announced that GBP1.7m would be received from
the California Energy Commission (CEC) managed via a subcontract
with the Gas Technology Institute, to support the development of
the US Genesis product.
In August 2013 we announced that a global parcel company would
be the first trial customer of our US Genesis-EDGE Dual-Fuel(TM)
product. Trials will commence in October 2013 and the parcel
company will provide 10 tractor units to be installed with Clean
Air Power's Dual-Fuel(TM) system and each will travel approximately
10,000 miles per month. Clean Air Power has a good relationship
with this parcel company which has operated 9 Caterpillar C12
tractor units fitted with Clean Air Power's Dual-Fuel(TM) system
since 2002, with each having completed over 1 million miles.
In the last 12 months, this customer has made public
announcements regarding their intentions to build four natural gas
refuelling stations and to purchase in excess of 700 natural-gas
powered trucks in 2014. Whilst we have experienced some delays with
the development of our US Dual-Fuel(TM) system, mainly due to
commissioning issues with a sub contractor's test cells, we expect
to launch our US Genesis product on target in the first quarter of
2014. We also continue to talk to other major fleet operators
regarding further trial vehicles for the North American market and
we hope to make further announcements soon.
Our clear medium term strategy remains to develop more OEM
relationships and we continue discussions with major manufacturers
and other partners to develop OEM products for markets in North
America, Europe and Asia. However, in the shorter term our
Genesis-EDGE retro fit product allows the Company to generate
revenues and exert greater control over the speed to market. It
also helps validate and promote the technology with future
manufacturing partners and major fleet customers.
We were very encouraged with the successful GBP5m equity
fundraising (gross) with strong support from existing and new
shareholders. The strategic investment by Ervington Investments and
Ms Shvidler confirms the traction to date and the potential of our
Dual-Fuel(TM) technology and endorses our strategy to further
develop markets in Europe, US and Russia.
Group Structure
Clean Air Power has two commercial divisions; Dual-Fuel(TM)
vehicle systems and Components.
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 co-operation;
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 four 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
-- Sales of Dual-Fuel(TM) system kits sold direct to approved installation partners
-- Revenue from engineering services provided to manufacturers or third parties
The first half of this year has seen sales for the division
overall decrease to GBP3.1m (H1-2012: GBP3.3m). The decrease is
mainly due to the one-off amount received and recognised in the
same period last year from Navistar for GBP0.8m for engineering
services completed during 2010, while GBP0.3k was recognised in
2013 under a development agreement relating to the US Genesis
program with funds provided by CEC. Like for like sales of our
Dual-Fuel(TM) systems showed an increase of 23% to GBP2.7m (2012:
GBP2.2m).
Interfaced OEM Product
The Company's European OEM customer's 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 and are now
being sold into other European territories.
Incorporating Clean Air Power's Dual-Fuel(TM) technology into
these truck engines delivers significant greenhouse gas emission
reductions and fuel cost savings compared with standard diesel
engines. A Dual-Fuel(TM) 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 can no longer be sold in the European
Union after the first quarter of 2014 when new Euro 6 regulations
will apply. Australia & the BRIC countries will continue to use
Euro 5 compliant trucks. Therefore, these will be key target
markets for the Company, particularly Russia, where we have
invested in additional sales resources. In May 2013, the Russian
Government set out ambitious plans to encourage the use of natural
gas as a road fuel throughout the country.
Euro 6 compliant trucks are considerably more expensive than
Euro 5 trucks and this has created increased demand from operators
keen to buy their diesel trucks before the switch to Euro 6
regulations. This strong demand has lengthened lead times and
created production constraints which adversely affected the supply
of vehicles from our European OEM partner.
The Company continues to discuss with manufacturers regarding
the development of a Dual-Fuel(TM) solution for vehicles compliant
with Euro 6 emissions. We also completed a project in partnership
with Eminox Limited, funded by the the Niche Vehicle Network, to
develop a Euro 6 after-treatment packaging solution. However, the
short term priority is to access the potentially higher volumes
from the exciting US market by completing our US Genesis-EDGE
product. In the US gas infrastructure is more developed than in
Europe and there is a higher level of awareness of natural gas as a
road fuel.
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 reductions 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 is currently developing a Genesis-EDGE product for
the North American market and the first trial vehicles are expected
to be operating in the fourth quarter of 2013.
The Euro 5 Genesis-EDGE product will continue to be sold in
European Union markets as a retro fit product to operators with
Euro 5 compliant trucks. We also intend to sell the Euro 5
Genesis-EDGE product in the Russian and Australian markets to
customers with either new or existing vehicles.
In the first half of the year sales opportunities of
Genesis-EDGE in the UK market have taken longer to develop than
previously anticipated and with some expected orders being sold as
the OEM product. However the Company delivered 20 Genesis-EDGE
systems of the Renault Magnum 13 litre truck variant, this follows
an order for 62 systems from the same customer during 2012. The
Company has received orders to be delivered in the second half of
2013 for 41 Genesis-EDGE systems from a major logistics company
demonstrating recent improved order inflow.
In total, 172 systems have been delivered in the first half of
2013 being a mixture of OEM and Genesis-EDGE, compared to 116 for
the same period last year, an increase of 48%.
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.
Sales for 2013 are slightly ahead of expectations at GBP1.0m,
GBP0.5m higher than the same period last year to June 2012. The
second half of 2013 remains positive as the segment has forward
orders in hand for approximately GBP0.4m.
Financial Review
The six month period to 30 June 2013 has seen revenue increase
to GBP4.1m from GBP3.9m for the same period in 2012. This has been
due mainly to higher vehicle systems sales in 2013 and a strong
performance in our Components division.
The Dual-Fuel(TM) division sales decreased slightly to GBP3.1m
(2012: GBP3.3m) as sales in 2012 were significantly supported by
engineering services sales to Navistar of GBP0.8m which impacted
the profitability metrics to a similar level. In 2013 to 30 June
around GBP0.3m of revenue has been received under an engineering
development agreement with funds provided by CEC.
Gross profit was slightly lower at GBP2.0m compared to GBP2.1m
in the first six months of 2012, although the 2012 figure included
the effect of the Navistar income.
Operating loss increased to GBP1.1m from GBP0.7m in 2012 and
included a GBP0.1m increase in the amortisation charge and
increased sales and staff costs versus 2012. Normalising our
results to exclude the exceptional GBP0.8m Navistar income in 2012
then the net improvement demonstrates Clean Air Power's progress
towards profitability.
The net result after tax for the period was a loss of GBP0.9m, a
GBP0.2m increase on the GBP0.7m loss for the same period in 2012.
The basic loss per share for the period was 0.53p (2012:
0.50p).
Capital expenditure amounted to GBP1.0m for the period compared
with GBP0.7m in the first half of 2012. The majority of this amount
relates to capitalisation of labour and expenses incurred in
developing new products.
The cash position as at 30 June 2013 was GBP2.0m compared with
GBP1.5m as at the end of 2012.
Outlook
In the first half of 2013, the Group made significant progress
in a number of areas with its Dual-Fuel(TM) technology. Following
the start of factory production of our European OEM product in 2012
it is encouraging to see orders now being received regularly and
our progress in the US market and the potential in Russia is
encouraging.
The ACT EXPO in the US increased our confidence in the potential
for the US market. We are continuing to develop customer interest
in the Genesis-EDGE development program and we were also encouraged
by the level of interest in our legacy product for Caterpillar
engines. As in most markets, the compelling driver is an economic
one due to the difference between the price of diesel and that of
domestically produced natural gas. Clean Energy, Shell and Blu Inc.
have all commenced installations of public natural gas refuelling
stations and have published ambitious plans to roll out many more
stations across the US.
Some delays to our US Genesis development project have consumed
the budgeted contingency but we expect to launch the product on
time in the first quarter of 2014.
We are excited by the initial feedback from our early sales
development activity in Russia. We intend to increase the marketing
and planning activity in the second half of the year and launch our
existing Genesis-EDGE product in Russia early in 2014.
Our Genesis-EDGE retro fit product remains an important part of
our short term product offering in that it generates revenue and
can facilitate a faster market entry than is typically possible
when partnered with a large global manufacturer. However, our core
strategic aim remains to develop agreements with such manufacturers
on an OEM basis.
Under this OEM strategy we will need to develop more
relationships with manufacturers and Tier One suppliers to
commercialise the technology on a larger number of products in a
variety of markets. While we recognise the need to accelerate our
product development activity to capitalise on the growing demand
for natural gas products, we also recognise our existing resource
limitations. Therefore, in order to leverage our expertise, IP and
technology without incurring prohibitive fixed costs we intend to
enter a partnership with an organisation that is able to provide
skilled engineering resources and facilities on a project by
project basis.
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 remains 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.
The recent successful placing, which included a strategic
investment by Roman Abramovich, provided funds that will be used to
strengthen the Group's balance sheet ahead of future partnerships,
to supplement working capital and to support marketing and sales
activities in Russia and the US.
John Pettitt
Chief Executive
5 September 2012
INTERIM CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to Year to
Note 30 June 2013 30 June 2012 31 December 2012
GBP'000 GBP'000 GBP'000
Revenue 6 4,121 3,863 7,942
Cost of sales (2,135) (1,775) (4,424)
Gross profit 1,986 2,088 3,518
Administrative expenses (3,084) (2,749) (5,710)
Share-based payments charge 8 (12) (13) (29)
Operating loss / loss on ordinary activities
before finance revenue, finance costs and
taxation (1,110) (674) (2,221)
Finance revenue 1 2 2
Finance costs - - (1)
Loss on ordinary activities before taxation 6 (1,109) (672) (2,220)
Tax credit for the period 5 162 - -
Loss for the period attributable to Equity
holders of the parent (947) (672) (2,220)
-------------- -------------- --------------------------------
Basic and diluted loss per share (0.53p) (0.50p) (1.53p)
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 2013 30 June 2012 31 December 2012
GBP'000 GBP'000 GBP'000
Loss for the period (947) (672) (2,220)
-------------- -------------- ----------------------------------
Exchange differences on translation of foreign
operations - may be reclassified subsequently
to profit or loss 172 (19) (113)
Other comprehensive income/(loss) for the period 172 (19) (113)
Total comprehensive loss for the period (775) (691) (2,333)
-------------- -------------- ----------------------------------
Attributable to:
-------------- -------------- ----------------------------------
Equity holders of the parent (775) (691) (2,333)
-------------- -------------- ----------------------------------
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
Note 30 June 2013 30 June 2012 31 December 2012
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Plant and equipment 7 298 191 235
Intangible assets 7 4,088 3,994 3,658
-------------- -------------- ----------------------------------
4,386 4,185 3,893
-------------- -------------- ----------------------------------
Current assets
Inventories 1,387 1,093 1,208
Trade and other receivables 1,153 1,082 1,102
Cash and cash equivalents 4 2,007 1,532 3,204
-------------- -------------- ----------------------------------
4,547 3,707 5,514
-------------- -------------- ----------------------------------
TOTAL ASSETS 8,933 7,892 9,407
-------------- -------------- ----------------------------------
Equity and liabilities
Equity attributable to equity holders of
the parent
Ordinary share capital 109 83 109
Share premium 22,344 19,160 22,346
Translation reserve 1,134 1,056 962
Other reserves 33,504 33,504 33,504
Accumulated loss (50,725) (48,258) (49,790)
-------------- -------------- ----------------------------------
Total equity 6,366 5,545 7,131
-------------- -------------- ----------------------------------
Non-current liabilities
Trade and other payables 10 7 11
Provisions 43 - 43
-------------- -------------- ----------------------------------
53 7 54
-------------- -------------- ----------------------------------
Current liabilities
Trade and other payables 1,876 1,929 1,715
Provisions 560 342 425
Deferred revenue 78 69 82
-------------- -------------- ----------------------------------
2,514 2,340 2,222
-------------- -------------- ----------------------------------
TOTAL LIABILITIES 2,567 2,347 2,276
-------------- -------------- ----------------------------------
TOTAL EQUITY AND LIABILITIES 8,933 7,892 9,407
-------------- -------------- ----------------------------------
INTERIM CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Year to
6 months to 6 months to 31 December
30 June 2013 30 June 2012 2012
GBP'000 GBP'000 GBP'000
Cash flows used in operating activities
Loss ordinary activities before
taxation (947) (672) (2,210)
Adjustments for:
Net finance revenue (1) (2) (1)
Depreciation of plant and equipment 59 55 111
Amortisation of intangibles 599 505 1,019
Impairment - 8 -
Share-based payments 12 13 29
Increase in trade and other receivables (51) (266) (286)
Increase in trade and other payables 161 902 665
Increase in inventories (179) (424) (538)
Increase/(decrease) in provisions 135 (51) 75
Decrease in deferred revenue (4) (225) (212)
Other non-cash movements 21 5 14
Net cash outflow from operating
activities (195) (152) (1,344)
-------------- -------------- --------------
Investing activities
Interest received 1 2 2
Payments to acquire plant and equipment (105) (52) (141)
Disposal of plant and equipment - - (6)
Payments to acquire intangible assets (902) (699) (954)
Net cash outflow from investing
activities (1,006) (749) (1,099)
-------------- -------------- --------------
Financing activities
Interest expense - - (1)
Proceeds from the issue of ordinary
share capital - - 3,357
Share issue costs - - (145)
Net cash inflow from financing
activities - - 3,211
-------------- -------------- --------------
Net (decrease)/increase in cash and
cash equivalents (1,201) (901) 768
Effect of exchange rates on cash and
cash equivalents 4 11 14
Cash and cash equivalents at the
beginning of the period 3,204 2,422 2,422
--------------
Cash and cash equivalents at end of
period 2,007 1,532 3,204
-------------- -------------- --------------
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2013
Ordinary
Share 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 2012 83 19,160 1,075 33,504 (47,599) 6,223
--------- --------- ------------ --------- ------------ ----------
Comprehensive
income
Loss for the
period - - - - (672) (672)
--------- --------- ------------ --------- ------------ ----------
Other
comprehensive
income
Exchange
differences
on
translation - - (19) - - (19)
of overseas
operations
--------- --------- ------------ --------- ------------ ----------
Total
comprehensive
loss for the
period - - (19) - (672) (691)
--------- --------- ------------ --------- ------------ ----------
Share-based
payments - - - - 13 13
On issue of - - - - - -
new shares
Share issuance - - - - - -
costs
--------- --------- ------------ --------- ------------ ----------
Balance at 30
June 2012 83 19,160 1,056 33,504 (48,258) 5,545
--------- --------- ------------ --------- ------------ ----------
Comprehensive
income
Loss for the
period - - - - (1,548) (1,548)
--------- --------- ------------ --------- ------------ ----------
Other
comprehensive
income
Exchange
differences
on
translation - - (94) - - (94)
of overseas
operations
--------- --------- ------------ --------- ------------ ----------
Total
comprehensive
loss for the
period - - (94) - (1,548) (1,642)
--------- --------- ------------ --------- ------------ ----------
Share-based
payments - - - - 16 16
On issue of
new shares 26 3,331 - - - 3,357
Share issuance
costs - (145) - - - (145)
--------- --------- ------------ --------- ------------ ----------
Balance at 31
December 2012 109 22,346 962 33,504 (49,790) 7,131
--------- --------- ------------ --------- ------------ ----------
Comprehensive
income
Loss for the
period - - - - (947) (947)
--------- --------- ------------ --------- ------------ ----------
Other
comprehensive
income
Exchange
differences
on
translation - - 172 - - 172
of overseas
operations
--------- --------- ------------ --------- ------------ ----------
Total
comprehensive
loss for the
period - - 172 - (947) (775)
--------- --------- ------------ --------- ------------ ----------
Share-based
payments - - - - 12 12
On issue of - - - - - -
new shares
Share issuance
costs - (2) - - - (2)
--------- --------- ------------ --------- ------------ ----------
Balance at 30
June 2013 109 22,344 1,134 33,504 (50,725) 6,366
--------- --------- ------------ --------- ------------ ----------
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 2013 were
authorised for issue in accordance with a resolution of the
directors on 5 September 2013. Clean Air Power Limited is a public
limited Company incorporated in Bermuda whose shares are publicly
traded on the AIM market of the London Stock Exchange.
All of the revenues and operating assets relate to the Group's
principal business activities, being vehicle conversion sales and
sales of components. 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 2013 have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted in the European
Union; 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 2012. The
financial information for the preceding year is based on the
Group's financial statements for the year ended 31 December 2012
upon which the auditors issued an unqualified opinion. The Group's
financial statements for the year ended 31 December 2012 were
prepared in accordance with International Financial Reporting
Standards as adopted in the European Union.
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 2012.
The following standard adopted at 1 January 2013 did not have
any impact on the interim results of the Group:
-- IFRS 1 Government Loans - Amendments to IFRS 1
-- IFRS 7 Financial Instruments: Disclosures - Offsetting
Financial Assets and Financial Liabilities (Amendment)
-- IFRS 13 Fair Value Measurement
-- IAS 19 Employee Benefits (Revised)
-- IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine
-- Improvements to IFRSs 2009-2011
The Group has not early adopted any standard, interpretation or
amendment that was issued but not yet effective.
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.
The Group has relationships and opportunities with a number of
customers and suppliers in different countries which support the
prospects for different areas of the business and proven products.
However, it is acknowledged that, in the current economic climate,
it is difficult to predict the timing and extent of future revenues
with certainty for a company at this stage of potentially rapid
growth.
After making enquiries, and preparing forecasts of trading
results which consider the potential effect on cash of reasonably
foreseeable sales variances, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the half yearly 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; engine maintenance software/product development;
adaptation of core engine management software; gas supply and fuel
volatility; 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 2012 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 31
30 June December
------------------ ----------
2013 2012 2012
GBP'000 GBP'000 GBP'000
2,007 1,532 3,204
Cash at bank and in hand 2,007 1,532 3,204
======== ======== ==========
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 year ended
to 30 June 31 December
------------------ -------------
2013 2012 2012
GBP'000 GBP'000 GBP'000
Current taxation
UK Tax
Research and development tax repayment (162) - -
- - -
Tax credit for the period (162) - -
======== ======== =============
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 two 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.
Period ended 30 June 2013 GBP'000
Dual-Fuel(TM) Components Adjustments Total
and eliminations
------------------------------- -------------- ----------- ------------------ --------
Revenue
Third party sale of
goods (1)(8) 2,701 982 - 3,683
Third party rendering
of services (1)(8) 438 - - 438
Inter-segment (2) 466 - (466) -
Total revenue 3,605 982 (466) 4,121
============== =========== ================== ========
Results
Depreciation and amortisation
(3) (493) (173) 8 (658)
Operating (loss) (4) (1,331) 213 8 (1,110)
Net finance income 1
Taxation 162
Loss for the period (947)
============== =========== ================== ========
Assets
Operating assets (5) 3,848 745 (46) 4,547
============== =========== ================== ========
Provisions (6) 536 73 (6) 603
Operating liabilities
including provisions
(6) 2,334 229 (6) 2,557
============== =========== ================== ========
Other disclosures
Capital expenditure
(7) 965 42 - 1,007
============== =========== ================== ========
1. Dual-Fuel(TM) conversion segment includes revenue arising from
development activity
2. Inter-segment revenues are eliminated on consolidation (GBP466,000)
3. Depreciation eliminated (GBP8,000) following transfer of intangible
assets to Clean Air Power Inc.
4. Elimination of intragroup depreciation (GBP8,000)
5. Adjustment to profit in inventory (GBP46,000)
6. Adjustment to provisions of GBP6,000
7. Capital expenditure consists of additions to plant and equipment
and intangible assets
8. Revenue from one customer amounted to GBP2,261,780 (2012: GBP1,089,228),
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 2012 GBP'000
Dual-Fuel(TM) Components Adjustments Total
and
eliminations
------------------------ -------------- ----------- ------------- -------------
Revenue
Third party sale of
goods (1)(8) 2,204 526 - 2,730
Third party rendering
of services (1)(8) 1,133 - - 1,133
Inter-segment (2) 363 - (363) -
Total revenue 3,700 526 (363) 3,863
============== =========== ============= =============
Results
Depreciation and
amortisation
(3) (526) (46) 12 (560)
Operating (loss) (4) (663) (32) 21 (674)
Net finance income 2
Loss for the period (672)
============== =========== ============= =============
Assets
Operating assets (5) 3,357 397 (47) 3,707
============== =========== ============= =============
Provisions (6) 155 194 (7) 342
Operating liabilities
including provisions
(6) 1,945 402 (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. Depreciation 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 (GBP46,943)
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.
Year ended 31 December 2012 GBP'000
Dual-Fuel(TM) Components Adjustments Total
and eliminations
------------------------------- -------------- ----------- ------------------ --------
Revenue
Third party sale of
goods (1)(8) 5,400 1,305 - 6,705
Third party rendering
of services (1)(8) 1,237 - - 1,237
Inter-segment (2) 918 - (918) -
Total revenue 7,555 1,305 (918) 7,942
============== =========== ================== ========
Results
Depreciation and amortisation
(3) (1,125) (24) 19 (1,130)
Operating (loss) (4) (2,381) 196 (36) (2,221)
Net finance income 1
Loss for the period (2,220)
============== =========== ================== ========
Assets
Operating assets (5) 5,329 234 (49) 5,514
============== =========== ================== ========
Provisions (6) 400 75 (7) 468
Operating liabilities
including provisions
(6) 1,988 284 (7) 2,265
============== =========== ================== ========
Other disclosures
Capital expenditure
(7) 1,064 31 - 1,095
============== =========== ================== ========
1. Dual-Fuel(TM) conversion segment includes revenue arising from
development activity
2. Inter-segment revenues are eliminated on consolidation (GBP918,000)
3. Depreciation eliminated (GBP19,446) following transfer of intangible
assets to Clean Air Power Inc.
4. Elimination of intragroup management charges (GBP63,759) and
intragroup foreign exchange gains and losses (GBP22,094)
5. Adjustment to profit in inventory (GBP48,536)
6. Adjustment to provisions of (GBP7,210)
7. Capital expenditure consists of additions to plant and equipment
and intangible assets
8. Revenue from one customer amounted to GBP2,265,108 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 2013, the Group acquired
plant and equipment with a cost of GBP105,000 (30 June 2012:
GBP60,000) (31 December 2012: GBP141,000). Expenditure on product
development for the six months ended 30 June 2013 was GBP902,000
(30 June 2012: GBP699,000) (31 December 2012: GBP954,000). The
majority of the expenditure related to the US Genesis-EDGE
development project.
8. SHARE-BASED PAYMENT
During the period the Group recognised GBP12,000 (30 June 2012:
GBP13,000) (31 December 2012: GBP29,000) 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 the Company and Gary Ireson,
the Director of Clean Air Power Pty Ltd, a wholly owned
subsidiary.
The following table provides the total amount of transactions, which
have been entered into with related parties for the relevant financial
period.
Prof K V Schaller Unaudited Unaudited Audited
6 months 6 months year ended
to to 31 December
30 June 30 June
---------------------------------------- ---------- ---------- -------------
2013 2012 2012
---------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 2 2 5
Amounts owed to related parties - - -
Gary Ireson Unaudited Unaudited Audited
6 months 6 months year ended
to to 31 December
30 June 30 June
---------------------------------------- ---------- ---------- -------------
2013 2012 2012
---------------------------------------- ---------- ---------- -------------
GBP'000 GBP'000 GBP'000
Services received from related parties 10 6 20
Amounts owed to related parties 2 6 3
INTERIM REPORT
Copies of the interim results report for the Company for the
period ended 30 June 2013 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
Pilsbury Winthrop Shaw Pittman LLP
Tower 42, Level 23
25 Old Broad Street
London
EC2N 1HQ
Nominated Advisor and Joint Broker
Cantor Fitzgerald Europe
One America Square
17 Crosswall
EC3N 2LS
Joint Broker
Peat & Co
118 Piccadilly
London
W1J 7NW
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
Citegate Dewe Rogerson
3 London Wall Buildings
London Wall
London
EC2M 5SY
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 2013 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 9. 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 in 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. 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.
.
Ernst & Young LLP
Manchester
5 September 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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