TIDMPPS
RNS Number : 8992A
Proton Motor Power Systems PLC
28 September 2022
28 September 2022
Proton Motor Power Systems plc
("Proton Motor" or the "Company")
Unaudited Interim Results for the six months to 30 June 2022
Proton Motor Power Systems plc (AIM: PPS), the designer,
developer and producer of fuel cells and fuel cell electric hybrid
systems with a zero-carbon footprint, announces its unaudited
interim results for the six months ended to 30 June 2022 (the
"Period" or "H1 2022").
Operational Highlights
- Successful installation of two marine HyShip(R)71 Fuel Cell systems for Fincantieri
- Successful Factory Acceptance Test (FAT) of a HyFrame(R) S36
Fuel Cell system with long-standing client Deutsche Bahnbau Group
GmbH (German Rail)
- In line with order intake for a series of standard products,
production labour has been restructured to include groups
specifically dedicated to the various standard product groupings,
thereby increasing production efficiency
- After the period end, launch of large power generator pack (90kW)
Financial Highlights
- Order intake of GBP1.5m (H1 2021: GBP1.8m) for a total order
book at the period end of GBP2.3m to be delivered by 2023,
including repeat orders from existing customers and income from
maintenance agreements
- Sales of GBP980k in H1 2022 (H1 2021: GBP922k)
- Generating a positive gross margin
- Increased existing loan facilities with principal shareholders by approximately EUR12.5m
Dr. Nahab, CEO of Proton, commented : "Although faced with
highly challenging trading conditions in 2022, the Company has made
further progress. In the year ahead, we are focused on further
progressing the maturity of the Group's technology offer, ramping
up production capacity and exploiting the current potential order
intake and sales pipeline.
"Furthermore, it is anticipated that the significant
strengthening of political commitment to hydrogen, continuing to be
evident in 2022, will contribute to further accentuating the demand
for hydrogen related products, such as the fuel cell."
For further information:
Proton Motor Power Systems Plc
Dr Faiz Nahab, CEO
Helmut Gierse, Chairman
Roman Kotlarzewski, CFO +49 (0) 173 189 0923
Antonio Bossi, Non-Executive Director
Investor relations: www.protonpowersystems.com
investor-relations@proton-motor.de
Allenby Capital Limited
Nominated Adviser & Broker +44 (0) 20 3328 5656
James Reeve / Vivek Bhardwaj
About Proton Motor Fuel Cell GmbH
Proton Motor has more than 20 years of experience in Power
Solutions using CleanTech technologies such as hydrogen fuel cells,
fuel cell and hybrid systems with a zero carbon footprint. Based in
Puchheim near Munich, Proton Motor offers complete fuel cell and
hybrid systems from a single source - from the development and
production through the implementation of customized solutions. The
focus of Proton Motor is on back-to-base, for example, for mobile,
marine and stationary solutions applications. The product portfolio
consists of base-fuel cell systems, standard complete systems, as
well as customized systems.
Proton Motor serves IT, Telecoms, public infrastructure and
healthcare customers in Germany, Europe and Middle East with power
supply solutions for DC and AC power demand. In addition to power
supply, SPower also offers solutions for Solar Systems as well as a
new product line for Solar Energy Storage.
Proton Motor Fuel Cell GmbH is a wholly owned subsidiary of
Proton Motor Power Systems plc. The Company has been quoted on the
AIM market of the London Stock Exchange since October 2006 (code:
PPS).
CHAIRMAN'S REPORT
We are pleased to report our unaudited results for the six
months ended 30 June 2022.
Overview
Proton Motor has strengthened its organisation in order to
continue to deliver complete zero emission power supply solutions
through the addition of new staff in the production and product
development teams.
Finance
Proton Motor received orders for GBP1.5m in the first half year
of the year including a number of repeat orders from existing
customers. Repeat orders allow better planning of production
material purchases on more favourable terms, which management
expects will lead to an improvement in margins.
Sales in H1 2022 were GBP980k (H1 2020: GBP922k), arising from
the 2021 and H1 2022 order intake. These sales were generated in
the stationary and maritime sectors, together with service and
engineering income. GBP1.5m was invested in the development
programme and our workforce has increased to 108 (H1 2021: 99) full
time employees. In line with demand, we added staff resources
predominantly in the areas of production and product
development.
During the Period, we generated a Gross Profit of GBP265k (H1
2021: GBP97k) representing a 173 per cent increase.
Excluding the impact of exchange losses, the operating loss in
the first half of 2022 was GBP4.9m (H1 2021: GBP3.9m). This was in
line with our budgeted expectations and resulted from further
investments in product development, production and staff in
addition to manufacturing infrastructure.
GBP213k was invested in equipment and infrastructure during the
period (H1 2021: GBP197k).
The "Fair value movements" in the H1 2021 financial results
related to the embedded derivative, which was a non-operating,
non-cash item, required by IFRS financial reporting, which was
based on gauging the potential effects of partial convertible
interest on loan financing. Due to the waiver of convertible
interest on loan financing at the end of 2021, there is no fair
value movement in H1 2022, as the embedded derivative associated
with the convertible interest has been eliminated. The
non-operating result in the first half of 2022 was negatively
affected by the movement of exchange rates between Pound Sterling
and the Euro.
Cash burn from operating activities increased during the Period
to GBP4.8m (H1 2021: GBP4.4m), reflecting the increased level of
activity to deliver our sales pipeline and from further investment.
Cash flow is our key financial performance target and our objective
is to achieve a positive cash flow in the shortest time possible.
Current contracts are quoted with up-front payments, reducing
reliance on working capital as we continue to invest in our
manufacturing capability. The cash position as at 30 June 2022 was
GBP2.2m (30 June 2021: GBP2.7m).
We were very pleased with the continued support of our principal
shareholders with whom we agreed to increase the existing financing
facilities by EUR12.5 million to ensure operational financing for
the Company into 2023. The principal and interest on these
additional facilities is not convertible and interest is charged at
EURIBOR+3%.
I personally would like to thank all our customers who believe
in us, our committed employees and our shareholders who have the
vision to invest in our mission.
Current trading and outlook
We are confident of our medium term prospects and are planning
to increase our production capacity to up to 30,000 stacks per
annum; this will also involve moving to new larger premises; the
Board and I look forward to updating you on our progress over the
next 12 months and further in the future.
Helmut Gierse
Non-Executive Chairman
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
Note to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Revenue 980 922 2,771
Cost of sales (715) (825) (2,346)
--------------- ---------------- -------------
Gross profit 265 97 425
Other operating income 211 234 501
Administrative expenses (5,454) (4,232) (10,047)
--------------- ---------------- -------------
Operating loss (4,978) (3,901) (9,121)
Finance income 1 1 3
Finance costs incl. exchange
(losses)/gains (3,064) 2,735 3,222
(Loss) for the period before
embedded derivatives (8,042) (1,165) (5,896)
--------------- ---------------- -------------
Fair value gain on embedded
derivatives - 212,739 609,201
--------------- ---------------- -------------
(Loss)/Gain for the period
attributable to shareholders (8,042) 211,574 603,305
--------------- ---------------- -------------
Gain/(Loss) / Profit per share
(expressed as pence per share)
Restated
Basic 7 (0.5) 27.3 77.5
Restated
Diluted 7 (0.5) 13.2 77.5
(Loss) / Profit per share (expressed
as pence per share) excluding
embedded derivative
Basic 7 (0.5) (0.2) (0.8)
Diluted 7 (0.5) (0.1) (0.8)
OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year ended
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
------------ ------------ -------------
(Loss)/ Profit for the period (8,042) 211,574 603,305
------------ ------------ -------------
Other comprehensive (expense)
/ income
------------ ------------ -------------
Items that may not be reclassified
to profit and loss
Exchange differences on translating
foreign operations (97) 186 (586)
------------ ------------ -------------
Total other comprehensive income
/ (expense) (97) 186 (586)
------------ ------------ -------------
Total comprehensive (expense)
for the period (8,139) 211,760 602,719
============ ============ =============
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
At 30 At 30 June At 31 December
June 2021 2021
2022
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 107 97 78
Property, plant and equipment 1,589 1,434 1,619
Right-of-use assets 13 210 111
Fixed asset investments 11 11 11
---------- ------------ ----------------
Total non-current assets 1,720 1,752 1,819
Current assets
Inventories 2,408 2,842 1,835
Trade and other receivables 1,242 699 1,624
Cash and cash equivalents 2,183 2,702 2,152
---------- ------------ ----------------
Total current assets 5,833 6,243 5,611
---------- ------------ ----------------
Total Assets 7,553 7,995 7,430
========== ============ ================
Current Liabilities
Trade and other payables (4,831) (5,019) (4,498)
Lease debt (14) (206) (111)
Borrowings (410) (615) (517)
---------- ------------ ----------------
Total current liabilities (5,255) (5,840) (5,126)
Non-current liabilities
Borrowings (91,859) (80,023) (83,956)
Lease debt (4) (15) (8)
Embedded derivatives on convertible - (396,462) -
interest
---------- ------------ ----------------
Total non-current liabilities (91,863) (476,500) (83,964)
---------- ------------ ----------------
Total Liabilities (97,118) (482,340) (89,090)
---------- ------------ ----------------
Net liabilities (89,565) (474,345) (81,660)
========== ============ ================
Equity
Capital and reserves attributable
to equity shareholders
Share capital 11,025 11,022 11,023
Share premium account 20,416 20,254 20,390
Merger reserve 15,656 15,656 15,656
Reverse acquisition reserve (13,861) (13,861) (13,861)
Share option reserve 2,393 961 2,187
Foreign translation reserve (10,682) 9,448 11,745
Capital contributions 1,171 1,215 1,143
Accumulated losses (115,683) (519,040) (129,943)
---------- ------------ ----------------
Total equity (89,565) (474,345) (81,660)
========== ============ ================
STATEMENT OF CHANGES IN EQUITY
Reverse Share Foreign Capital
Share Share Merger Acquisition Option Translation Contribution Accumulated Total
Capital Premium Reserve Reserve Reserve Reserve Reserves Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2021 10,598 19,574 15,656 (13,861) 949 11,038 1,215 (732,390) (687,221)
Share based
payments - - - - 12 - - - 12
Proceeds from
share issues 424 680 - - - - - - 1,104
Currency
translation
differences - - - - - - - -
Transactions
with owners 424 680 - - 12 - - - 1,116
Profit for the
period - - - - - - - 211,574 211,574
Other
comprehensive
income:
Currency
translation
differences - - - - - (1,590) - 1,776 186
Total
comprehensive
income for
the
year - - - - - (1.590) - 213,350 211,760
Balance at 30
June 2021 11,022 20,254 15,656 (13,861) 961 9,448 1,215 (519,040) (474,345)
Balance at 1
July 2021 11,022 20,254 15,656 (13,861) 961 9,448 1,215 (519,040) (474,345)
Share based
payments 4 284 - - 1,226 - - (272) 1,242
Proceeds from
share issues (3) (148) - - - - - - (151)
Currency
translation
differences - - - - - - - -
Transactions
with owners 1 136 - - 1,226 - - (272) 1,091
Profit for the
period - - - - - - - 391,731 391,731
Other
comprehensive
income:
Currency
translation
differences - - - - - 2,297 (72) (2,362) (137)
Total
comprehensive
income for
the
year - - - - - 2,297 (72) 389,369 391,594
Balance at 31
December 2021 11,023 20,390 15,656 (13,861) 2,187 11,745 1,143 (129,943) (81,660)
Balance at 1
January 2022 11,023 20,390 15,656 (13,861) 2,187 11,745 1,143 (129,943) (81,660)
Share based payments - - - - 206 - - - 206
Proceeds from
share issues 2 26 - - - - - - 28
Currency translation
differences - - - - - - - -
Transactions
with owners 2 26 - - 206 - - 234
Loss for the
period - - - - - - - (8,042) (8,042)
Other comprehensive
income:
Currency translation
differences - - - - - (22,427) 28 22,302 (97)
Total comprehensive
income for the
year - - - - - (22,427) 28 14,260 (8,139)
------ ------ ------ -------- ----- -------- ----- --------- --------
Balance at 30
June 2022 11,025 20,416 15,656 (13,861) 2,393 (10,682) 1,171 (115,683) (89,565)
====== ====== ====== ======== ===== ======== ===== ========= ========
Share premium account
Costs directly associated with the issue of the new shares have
been set off against the premium generated on issue of new
shares.
Merger reserve
The merger reserve of GBP15,656,000 arose as a result of the
acquisition of Proton Motor Fuel Cell GmbH during 2006. The merger
reserve represents the difference between the nominal value of the
share capital issued by the Company and their fair value at 31
October 2006, the date of the acquisition.
Reverse acquisition reserve
The reverse acquisition reserve arose as a result of the method
of accounting for the acquisition of Proton Motor Fuel Cell GmbH by
the Company. In accordance with IFRS 3 the acquisition has been
accounted for as a reverse acquisition.
Share option reserve
The Group operates an equity settled share-based compensation
scheme. The fair value of the employee services received for the
grant of the options is recognised as an expense. The total amount
to be expensed over the vesting period is determined by reference
to the fair value of the options granted. At each balance sheet
date the Company revises its estimate of the number of options that
are expected to vest. The original expense and revisions of the
original estimates are reflected in the income statement with a
corresponding adjustment to equity. The share option reserve
represents the balance of that equity.
CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June June 2021
2022 2021
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit / (Loss) for the period (8,042) 211,574 603,305
------------ ------------ -------------------------
Adjustments for:
Depreciation and amortisation 214 201 641
Loss on disposal of property, - - -
plant and equipment
Impairment of investment - - -
Interest income (1) (1) (3)
Interest expense 986 721 1,498
Share based payments (206) (12) 966
Movement in inventories (572) (1,052) (45)
Movement in trade and other
receivables 381 (351) (1,276)
Movement in trade and other
payables 333 630 109
Movement in fair value of embedded
derivatives - (212,739) (609,201)
Exchange rate movements 2,079 (3,456) (4,720)
------------ ------------ -------------------------
Net cash used in operations (4,827) (4,485) (8,726)
------------ ------------ -------------------------
Cash flows from investing
activities
Purchase of intangible assets (45) (45) (44)
Purchase of property, plant
and equipment (169) (152) (633)
Purchase value of leased assets - (21) -
Investment in associate company - - -
Interest received 1 2 3
------------ ------------ -------------------------
Net cash used in investing
activities (213) (216) (674)
------------ ------------ -------------------------
Cash flows from financing
activities
Proceeds from issue of loan
instruments 4,823 4,423 7,962
Proceeds from issue of new
shares 234 30 1,241
New obligations of lease debt - 21 (297)
Repayment of obligations under
lease debt (105) (106) 21
Repayment of short term borrowings (84) (175) (202)
------------ ------------ -------------------------
Net cash generated from financing
activities 4,868 4,193 8,725
------------ ------------ -------------------------
Net increase in cash and cash
equivalents (171) (508) (675)
Effect of foreign exchange
rates 203 471 88
Opening cash and cash equivalents 2,152 2,739 2,739
------------ ------------ -------------------------
Closing cash and cash equivalents 2,183 2,702 2,152
============ ============ =========================
Notes to the interim report
1. Basis of preparation
These interim consolidated financial statements of Proton Power
Systems plc were prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) as adopted by the European Union
and with those parts of the Companies Act 2006 applicable to those
companies under IFRS. They were also prepared under the historical
cost convention and in accordance with IFRS interpretations
(IFRICS) except for embedded derivatives which are carried at fair
value through the income statement and on the basis that the Group
continues to be a going concern. The condensed consolidated interim
financial statements have been prepared in accordance with the
accounting policies adopted in the 31 December 2021 statutory
audited financial statements. No new accounting standards have been
adopted by the group since preparing its last annual report.
The Group has chosen not to adopt IAS 34 (Interim Financial
Statements) in preparing these financial statements therefore the
interim financial information is not in full compliance with
IFRS.
The financial information for the half year ended 30 June 2022
set out in this interim report is unaudited and does not constitute
statutory accounts as defined in Section 434 of the Companies Act
2006. The Group's audited statutory financial statements for the
year ended 31 December 2020 have been filed with the Registrar of
Companies. The independent auditor's report on those financial
statements was unqualified and did not contain statements under
Section 498(2) or (3) of the Companies Act 2006.
Until such time as the Group achieves operational cash inflows
through becoming a volume producer of its products to a receptive
market it will remain dependent on its ability to raise cash to
fund its operations from existing and potential shareholders and
the debt market.
In preparing the consolidated financial information, Proton
Motor Fuel Cell GmbH has been deemed to be the acquirer and the
Company, the legal parent, has been deemed to be the acquiree.
Under IFRS 3 "Business Combinations", the acquisition of Proton
Motor Fuel Cell GmbH by the Company has been accounted for as a
reverse acquisition and the consolidated IFRS financial information
of the Company is therefore a continuation of the financial
information of Proton Motor Fuel Cell GmbH.
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group's interest in the fair value of
the identifiable assets and liabilities of a subsidiary, associate
or jointly controlled entity at the date of acquisition. The cost
of an acquisition is measured as the fair value of the assets
given, equity instruments issued and liabilities incurred or
assumed at the date of exchange. Goodwill is initially recognised
as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses. Goodwill is reviewed for impairment
at least annually, or more frequently where circumstances suggest
an impairment may have occurred. Any impairment is recognised
immediately in income statement and is not subsequently
reversed.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
2. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial period are discussed below.
Recognition of development costs
Self developed intangible assets are recognised where the Group
can estimate that it is probable that future economic benefits will
flow to the entity.
Impairment of goodwill
The carrying value of goodwill must be assessed for impairment
annually, or more frequently if there are indications that goodwill
might be impaired. This requires an estimation of the value in use
of the cash generating units to which goodwill is allocated. Value
in use is dependent on estimations of future cash flows from the
cash generating unit and the use of an appropriate discount rate to
discount those cash flows to their present value.
3. Segmental information
An operating segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other operating segments
for which discreet financial information is available and is
regularly reviewed by the Chief Operating Decision Maker
("CODM").
Based on an analysis of risks and returns, the Directors
consider that the Group has only one identifiable operating
segment, green energy.
All non-current assets are located in Germany.
4. Share based payments
The Group has incurred an expense in respect of share options
and shares issued to directors as follows:
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 31 December
30 June June 2021
2022 2021
GBP'000 GBP'000 GBP'000
Share options - 10 (64)
Share awards 206 - 1,318
Shares 28 65 65
------------ ------------ -------------
234 75 1,319
============ ============ =============
5. Finance costs including exchange differences
Unaudited Unaudited
Six months Six months Audited
ended 30 ended 30 Year ended
June June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Interest 985 721 1,498
Exchange (gain) on shareholder loans - (3,456) (4,720)
Exchange loss on shareholder loans 2,079 - -
----------- ----------- ------------
Net finance cost (gain)/loss 3,064 (2,735) (3,222)
=========== =========== ============
6. Taxation
Due to losses within the Group, no expenses for tax on income
were required in either the current or prior periods.
7. Profit / (Loss) per share
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Basic Diluted Basic Diluted Basic Diluted
(Loss) before
embedded derivative (8,042) (8,042) (1,165) (1,165) (5,896) (5,896)
Fair value gain
Embedded derivative - - 212,739 212,739 609,201 609,201
------------ ------------ ------------ ------------ ------------- ------------
(Loss) / Profit
attributable
to equity holders
of the company (8,042) (8,042) 211,574 211,574 603,305 603,305
------------ ------------ ------------ ------------ ------------- ------------
Weighted average
number of ordinary
shares (thousands) 1,549,553 1,549,553 774,285 1,597,816 778,571 778,571
------------ ------------ ------------ ------------ ------------- ------------
(Restated year
ended 31 December Pence Pence Pence Pence
2021) per share per share Pence Pence per share per share
per share per share
(Loss) / Profit
per share (pence
per share) (Restated (0.5) (0.5) 27.3 13.2 77.5 77.5
Year ended 31
December 2021)
(Loss) / Profit
per share (pence
per share) excluding
embedded derivative (0.5) (0.5) (0.2) (0.1) (0.8) (0.8)
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. The Company one category
of dilutive potential ordinary shares: share options, which have
not been included in the calculation of loss per share because they
are anti-dilutive for these periods. No interim dividend has been
proposed or paid in relation to the current or prior interim
period.
A copy of the interim report and the information required by AIM
Rule 26 is available from the Company's website at
www.protonmotor-powersystems.com
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IR QDLFLLKLFBBK
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