ACTA.L Regulatory News (ACTA)

21 Sep 2006 07:01

Acta S.p.A.21 September 2006 21 September 2006 Acta S.p.A Interim Results for the six months ended 30 June 2006 About Acta: Acta is a manufacturer of platinum-free catalysts for fuel cells and otherindustrial applications. Acta uses a patented manufacturing process to makenano-scale base metal catalysts which are uniquely active and which are able toperform as effectively as expensive platinum catalysts. Acta's catalysts offercustomers technical benefits in use, enormous potential cost savings, and allowfor the first time the use of ethanol, a safe and environmentally friendly fuel. Highlights: • Significant commercial progress in all areas: • Sumitomo Corporation contract extended • 17 new commercial Non Disclosure Agreements signed, making a total of 28 • High level of sampling activity: 28 new customers gained, making a total of 34 • Increased revenue • Positive feedback from major customers• Continued technical progress: • Unique ability to break the carbon-carbon bond of ethanol demonstrated using two external technical institutes • 500 hour and 1,500 hour durability tests published • Cathode performance doubled and metal loading increased • New industrial applications identified and being investigated further• Appointed Dr Xiaoming Ren, credited with over 25 patent applications and many publications, to drive development programme.• Two new patents filed• Management team significantly enhanced• Cash utilisation and operating costs well controlled and in line with plan Outlook Robert Drummond, Chairman, said today: "Acta continues to make excellent progress in 2006. Feedback from samplessupplied to major fuel cell and electronics OEMs has been very positive, asevidenced by the extension to our marketing agreement with Sumitomo Corporation.We believe that continued commercial engagement will be supported by theappointment of Dr Ren to lead our fuel cell technology team. We have delivered on all our milestones for the first half of the year. Theoutlook for the second half remains encouraging and I am confident that we willdeliver further positive progress." For further information please contact: Acta S.p.A 020 7067 0700Toby Woolrych Weber Shandwick Square Mile 020 7067 0700Kirsty Raper / Nick Dibden / Charlotte Hooper Chairman's Statement I am delighted to report that Acta has made excellent progress in the first sixmonths of 2006, achieving all of its milestones. The recruitment of high qualitystaff and the investment in further analytical equipment has supported anincreasingly sophisticated development programme in support of our customers.Very encouraging progress in the commercial field has seen widespread samplingto, and positive feedback from, fuel cell customers and the identification of anumber of new potential applications. The second half is expected to see furthertechnical advances and commercial progress. Commercial Progress Acta's strategy is to continue the commercial development of its core HYPERMECcatalysts for ethanol-powered fuel cells, whilst developing further fuel cellapplications and breakthrough products for industrial applications in othermarkets. Progress in the fuel cell market was very encouraging in the first six months ofthe year with an increase in the Company's customer base from six to thirtyfour. Most of these customers are world-leading portable electronicsmanufacturers, fuel cell developers, or technical institutes through whom we areencouraging global awareness of the potential of ethanol-powered fuel cells.Sample sizes are now up to 300g compared to 5-10g last year. The market is proving very receptive to the unique capabilities of HYPERMEC -the ability to use ethanol fuel and the solution of the fuel crossover technicalproblem are both of great value to users, in addition to the potential costsavings through the replacement of platinum Our rapid penetration of the Asianmarket has led us to deepen and renew our contract with Sumitomo Corporation,which reflects our appreciation of their professional approach to the complexJapanese market and their confidence that we will generate very significantrevenues in the region. New Energy Finance reported on 12th September that: "Affordable mass-producedfuel cells have been on the brink of full commercial production for years, andmany investors have grown tired of waiting. The cost barriers remain high andthe problem of convenient fuel distribution will not be cheaply solved. Despitethis, the potential rewards for success are still attracting investors." Acta isdelighted that it is able to offer its customers a solution for both the fueland the cost issues. The Company has also made early progress in sampling its products to other fuelcell sectors and hydrogen generation applications. Samples have been sold fortesting in the automotive market, for alkaline fuel cells for stationary power,for ethanol reforming and for electrolysers. The installation of new testingequipment in the third quarter will allow the generation of data using hydrogenfuel for PEM fuel cells. Feedback in all these areas will drive furtheroptimisation of the catalyst for each application, making use of HYPERMEC'sunique ability to use a mix of different metals in varying proportions. The Company has also made important progress in identifying new markets forHYPERMEC. A market and technology study by management has identified up to adozen potential new market opportunities. Market entry plans are being finalisedto start exploring and evaluating the most promising of these in the comingmonths. The most advanced of these opportunities, the disposable fuel cell, hasachieved proof of concept in Acta's laboratory. A prototype is now underdevelopment for completion by March 2007. A further potential new catalystapplication is expected to receive grant funding in the second half. Technical Progress Acta continues to make good progress in developing both its breakthroughHYPERMEC technology and the applications capability required to optimiseperformance in fuel cells. In April Acta demonstrated that its fuel cells can run on glycerol, an idealfuel for consumer applications that is now in increasing surplus due to thegrowth of bio-diesel production. In May two external institutes demonstrated that HYPERMEC catalysts broke thestrong carbon-carbon bond in ethanol, something never before achieved even usingplatinum catalysts. This unique achievement demonstrates the ability to consumeall the hydrogen atoms in the chemical structure of ethanol, so maximising theenergy output from the fuel. In June Acta announced that it had run its fuel cell catalysts for over 500hours at room temperature and at high power. The Company has also made good progress in improving its cathode. Metal loadingshave been increased as planned, and initial trials have been very encouraging.Significant advances have been made in the construction of electrodes usingHYPERMEC and in the Membrane Electrode Assembly (MEA), which is the heart of thefuel cell. Electrical resistance on the cathode electrode has been more thanhalved, and transport of water within the cell greatly improved, both of whichincrease the cell efficiency and power output. Since the half year end the Company announced the appointment of Dr Xiaoming Renas Vice President, Fuel Cell Technologies. Dr Ren is a globally recognisedleader in direct alcohol fuel cell development, and he brings invaluableexperience and knowledge of how catalyst performance can be optimised in fuelcells. He has already developed an ambitious and exciting plan for furtherimprovements to HYPERMEC performance in fuel cells and for securing valuableintellectual property in the coming months. Intellectual Property Development Acta is committed to securing its future through the effective management of itsintellectual property portfolio. Acta entered 2006 with 12 patent applicationsand with worldwide protection for its Acta and HYPERMEC brands. Acta has filedtwo further patents in the first six months of the year. The first patentapplication extended its platinum-free technology to include electrolysers,which are expected to play a role in the supply of hydrogen to PEM fuel cells.The second patent application concerns the use of reducing additives in the fuelto enhance performance. In the second half, Acta expects to announce the grant of its core patent inEurope and additionally expects to file several additional patent applicationsfor the fuel cell sectors. Operational Progress Acta continued to grow and mature as an organisation in the first six months.Full time headcount increased by four to 30, including the addition of Dr Ren,Paul Barritt as Chief Financial Officer and the recruitment of two commercialmanagers. These additions to our highly experienced management team have greatlyaccelerated our ability to grow effectively. Further investment in test and analytical equipment has greatly enhanced thecapability of the Company. The number of testing stations has increased from oneto eight in the first six months and will increase to forty next month. Actawill also be able to undertake larger scale testing at different temperaturesand using hydrogen fuel. Financial Performance Revenues from the sale of product samples increased to €14,000 during the sixmonths to 30 June 2006, compared to €1,000 in the same period last year. Therevenues, albeit small, are in line with our expectations as set out at the timeof our Admission to the AIM market in October last year. Grant income of €48,000was recognised against costs in relation to the FISR project. No grant incomehas yet been recognised on a €2.1 million FIT project which has been commenced. Operating losses, including non-cash accruals for stock option costs, amountedto €2.3 million (€1.4 million in the first half, 2005). This reflects theincreased operational structure of the Company which has been built since thebeginning of last year, including new technical and office facilities atLavoria, Tuscany, additional technical and commercial staff, recruitment ofsenior management, and strengthening of financial procedures and administration.The loss was comfortably within budget, and is expected to rise modestly duringthe second half of the year as our commercial and technical activities continueto grow, while remaining within budget for the year as a whole. Net cash utilisation for the period, at €2.0 million, was well within operatinglosses, and cash and short term investments stood at €9.3 million as at 30 June2006. No cash was received in relation to grants during the period, whileinvestments in technical equipment, patents and other capital items amounted to€195,000. Investment in capital equipment will continue during the second halfof 2006, particularly in relation to the FIT project. Since the half year end, and therefore not reported in the six month statement,the Company completed the purchase of technical and office facilities at Lavoriaat a cost of €565,000, this facility having been previously rented on a shortterm arrangement. The purchase was financed through a long term mortgagefacility, and delivers a significant unrecognised capital gain together with amodest saving in net establishment costs. Outlook and milestones The outlook for the Group in the second half and beyond remains veryencouraging. Positive customer feedback has reinforced our belief that thesafety and availability of ethanol makes it a highly desirable fuel for consumerfuel cells and that the elimination of scarce and costly platinum from fuelcells is a strategic priority for fuel cell developers. We expect to continue toship increasing quantities of product in the second half for further trials withcustomers and to initiate discussions for further collaborations. We expect to file several important patent applications in the coming months andto continue to improve our catalyst performance for fuel cells. Our coretechnology is also expected to be subject to a patent grant. We expect to make progress developing new applications in fuel cells and otherindustrial sectors and this is likely to include a grant to investigate anexciting carbon reduction technology and the development of a prototype low costdisposable fuel cell. Robert DrummondNon Executive Chairman Consolidated Profit and Loss Accountfor the six months ended 30 June 2006 Six months Year ended Six months Notes 31 December 30 June 30 June 2006 2005 2005 unaudited audited unaudited •'000 •'000 •'000 Revenue 14 11 1 Other operating revenue 1 - - _____________________________________ 15 11 1 Raw materials and consumables used (46) (84) (16)Personnel expense (934) (1,394) (468)Depreciation and amortisation expense (112) (190) (85)Other operating expenses (1,254) (1,532) (784) _____________________________________Loss from operations (2,331) (3,189) (1,352) Financial income 132 84 -Financial expenses (4) (39) (30) _____________________________________Loss before tax (2,203) (3,144) (1,382) Income tax expense 2 (15) (32) _____________________________________Loss for the period (2,201) (3,159) (1,414) _____________________________________ Attributable to:Shareholders of the parent (2,195) (3,159) (1,413)Minority interest (6) - (1) _____________________________________ (2,201) (3,159) (1,414) _____________________________________ Basic earnings per share (euro) 3 (0.06) (0.11) (0.06)Diluted earnings per share (euro) 3 (0.06) (0.11) Consolidated Balance Sheetas at 30 June 2006 Six months Year ended Six months Notes 30 June 31 December 30 June 2006 2005 2005 unaudited audited unauditedASSETS •'000 •'000 •'000Non-current assetsShare capital proceeds to be received - - 1Property, plant and equipment 1,010 886 341Goodwill 11 11 11Other intangible assets 825 865 924 _____________________________________Total non-current assets 1,846 1,762 1,277 _____________________________________ Current assetsInventories 36 14 -Trade receivables 8 10 -Non-trade receivables 664 691 397Cash and cash equivalents 9,289 11,284 692 _____________________________________Total current assets 9,998 11,999 1,089 =====================================Total assets 11,843 13,761 2,366 _____________________________________ EQUITY AND LIABILITIESEquity attributable to shareholders ofthe parentShare capital 216 216 147Capital reserve 16,225 15,854 3,064Retained earnings (5,720) (3,524) (1,778)Minority interest 95 100 (2) _____________________________________Total equity 4 10,815 12,646 1,431 _____________________________________ Non-current liabilitiesEmployee benefits 23 10 7Provisions 89 89 -Interest bearing loans and borrowings 80 88 -Deferred government grants - - 86 _____________________________________Total non-current liabilities 192 187 93 _____________________________________ Current liabilitiesOther financial liabilities 57 57 -Interest bearing loans and borrowings 22 22 59Trade and other payables 744 787 783Deferred government grants - 47 -Current tax payables 12 15 - _____________________________________Total current liabilities 836 928 842 =====================================Total liabilities 1,028 1,115 935 =====================================Total equity and liabilities 11,843 13,761 2,366 _____________________________________ Consolidated Cash Flow Statementfor the six months ended 30 June 2006 Six months Year ended Six months 30 June 2006 31 December 2005 30 June 2005 unaudited audited unauditedCash flows from operating activities •'000 •'000 •'000 Loss from operations (2,201) (3,159) (1,414)Adjustments for:Depreciation, amortisation 112 190 85Movement in provision for employees' 13 8 5benefits (TFR)Bonus accrual 174 90 -Income taxes (1) 15 -Stock option expenses 371 225 - ___________________________________________Cash outflow before changes in working (1,532) (2,631) (1,324)capital and provisions ___________________________________________ Decrease / (increase) in trade and other 28 (562) (258)receivables(Increase) in inventories (22) (14) 0(Decrease) / increase in trade and other (265) (247) 321payablesIncrease in deferred government grants - 47 -Increase in provisions - 89 - ___________________________________________Cash outflow from operations (1,791) (3,318) (1,261) ___________________________________________Cash flows from investing activities Acquisition of property, plant and (183) (810) (67)equipment net of finance leasesAcquisition of intangible assets (13) (92) (888) ___________________________________________Net cash used in investing activities (195) (902) (955) ___________________________________________ Cash flows from financing activities Proceeds from the issue of share capital - 17,740 25Share capital issue expenses - (2,445) -Proceeds from minorities in Idea Lab - 101 -Payment of lease finance (8) - -Government grant received - - 126Government grant recognised as income - - (40)Increase in capital reserve - - 2,636 ___________________________________________Net cash inflows from financing activities (8) 15,396 2,747 ___________________________________________ Net increase in cash and cash equivalents (1,994) 11,176 531Cash and cash equivalents at 1 January 11,284 161 161Effect of exchange rate fluctuations on (1) (53) -cash held ___________________________________________Cash and cash equivalents at 30 June 9,289 11,284 692 ___________________________________________ Notes to the Interim Financial Statementsfor the six months ended 30 June 2006 1. Basis of preparation These interim financial statements have been prepared in accordance withInternational Accounting Standard (IAS) 34, Interim Financial Reporting. Resultsfor the six month periods ended 30 June 2006 and 30 June 2005 have not beenaudited. The results for the year ended 31 December 2005 have been extractedfrom the statutory financial statements of Acta upon which the auditors reportedwithout qualification. 2. Principal accounting policies These interim financial statements for the six months ended 30 June 2006 havebeen prepared in accordance with the accounting policies set out in thestatutory financial statements of Acta for the year ended 31 December 2005. 3. Loss per share The calculation is based on information in thetable shown below: Six months Six months Year ended ended 30 ended 30 31 December June 2006 June 2005 2005 (unaudited) (unaudited) (audited) Loss (thousands of euro) (2,201) (1,414) (3,159) __________________________________ Weighted average number of shares 33,768,035 22,181,000 26,999,788 __________________________________ 4. Statement of changes in equity Share Capital Retained Minority capital Reserve earnings Interest Total •'000 •'000 •'000 •'000 •'000 Balance at 1 January 122 428 (365) (1) 1842005 Paid in capital 25 2,636 2,661Loss for the period (1,413) (1) (1,414) ________________________________________________Balance at 30 June 2005 147 3,064 (1,778) (2) 1,431 ________________________________________________ Balance at 1 January 216 15,854 (3,524) 100 12,6462006 Stock options 371 371Loss for the period (2,195) (6) (2,201) ________________________________________________Balance at 30 June 2006 216 16,225 (5,719) 94 10,815 ________________________________________________ Balance at 1 January 122 428 (365) (1) 1842005 New shares subscribed 94 17,646 17,740forShare issue expenses (2,445) (2,445)Share based payment 225 225Loss for the period (3,159) (3,159)New shares issued in 101 101Idea Lab ________________________________________________Balance at 31 December 216 15,854 (3,524) 100 12,646 2005 5. Board The financial information for the period 1 January 2006 to 30 June 2006 isunaudited although it has been reviewed by the Company's audit committee. In theopinion of the Directors the financial information for this period representsfairly the position, results of operations and cash flows for the period. Theinterim report for the six months ended 30 June 2006 was approved by theDirectors on 19th September 2006. This information is provided by RNS The company news service from the London Stock Exchange