Last checked at 22 Sep 2022 07:00
CWR.L 22 September 2022 Ceres Power Holdings plc Interim results for the six months ended 30 June 2022 Continuing investment to enable multi-gigawatt manufacturing capacity globally
Horsham, UK: Ceres Power Holdings plc ("Ceres", the "Company") (AIM: CWR.L), a global leader in fuel cell and electrochemical technology, announces its interim results for the six months ended 30 June 2022.
Financial update · Revenue and other operating income £9.9 million (H1 2021: £17.4 million) · Gross profit of £5.3 million (H1 2021: £12.2 million) with gross margin at 55% (H1 2021: 72%) · Cash and investments of £221.6 million as at 30 June 2022 (31 December 2021: £249.6 million) · Increased investment in research and development by 46% including electrolysis technology for green hydrogen
Operational update · Heads of Terms signed with Weichai and Bosch to establish a third manufacturing facility for Ceres' solid oxide fuel cell (SOFC) technology in China, worth £30 million to Ceres in near term license fees plus future royalties · Partnership established with Shell to utilise solid oxide electrolyser cell (SOEC) technology to deliver high-efficiency, low-cost green hydrogen · Strong progress on the SOEC development programme with first electrolyser cell module (ECM) on test · Continued expansion of Ceres' highly skilled workforce to 523 employees at 30 June 2022 (31 December 2021: 489) including the arrival of Eric Lakin as Chief Financial Officer and Deborah Grimason as General Counsel and Company Secretary
Current trading and outlook · Signature of definitive China joint venture agreements is expected in Q4 this year. Establishment of the JV entities will follow regulatory approvals in China and Europe, which are anticipated in early 2023 · Most of the £30 million licence fee revenue associated with the China JVs will be recognised on establishment of the new JV entities in early 2023, whereas we had previously expected to recognise around half of these fees in 2022. Based on this expected timing of JV signing and regulatory clearances, it is now expected that revenue in the second half of 2022 will be at similar levels to those in the first half, leading to full-year 2022 revenue lower than 2021 levels · Correspondingly, H1 2023 revenue is expected to be at significantly higher levels based on the expected recognition of most of the £30 million licence fee revenue on establishment of the JV entities in early 2023 · In July, the stationary SOFC system being developed by our partner Bosch was approved by the European Commission as one of the first Important Projects of Common European Interest (IPCEI) aimed at developing an integrated hydrogen economy in Europe, and is now eligible for state funding · In August, Doosan Fuel Cell ("Doosan") raised further capital confirming that half of the KRW70 billion (GBP 44 million) would be used to build its plant in South Korea for the mass production of Ceres' SOFCs in 2024, to meet the rising demand from the hydrogen-energy market · The Board remains committed to transition from the AIM market to the Premium listing segment of the Main Market of the London Stock Exchange, which is expected to follow signing of the China JV agreements.
Phil Caldwell, Chief Executive Officer of Ceres, said: "Energy security and the transition to cleaner energy have never been so important to the way we live. Ceres' role as a leading developer of clean energy technology, enabling companies to decarbonise at scale and pace, means we are well-positioned to play our part." "The China joint ventures represent an important milestone in our ambitions for Ceres' technology, not only in its mass deployment in systems and products for the significant Chinese market, but also accelerating the delivery of global manufacturing capacity. "We are also growing the opportunity for Ceres with the investment in SOEC for green hydrogen and our first commercial opportunity for SOEC was announced in our partnership with Shell. These are steps towards our aim of establishing multiple mass manufacturing facilities and generating significant royalty revenue with multi-gigawatts of Ceres technology in production." |
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Financial Summary:
| Six months ended 30 June 2022 Unaudited | Six months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |
£'000 | £'000 | £'000 | ||
Total revenue and other operating income, comprising: | 9,854 | 17,436 | 31,700 | |
Licence fees | 3,404 | 10,682 | 16,646 | |
Engineering services revenue | 4,206 | 2,669 | 6,777 | |
Provision of technology hardware | 2,077 | 3,759 | 7,353 | |
Other operating income | 167 | 326 | 924 | |
Gross margin % | 55% | 72% | 66% | |
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Adjusted EBITDA loss1 - Power SOFC2 | (10,216) | (371) | (4,492) | |
Adjusted EBITDA loss1 - Hydrogen SOEC2 | (10,279) | (4,144) | (12,183) | |
Adjusted EBITDA loss1 - total Group | (20,495) | (4,515) | (16,675) | |
Operating loss | (25,203) | (7,602) | (23,430) | |
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Net cash used in operating activities | (20,599) | (13,170) | (20,342) | |
Net cash and investments | 221,625 | 262,889 | 249,584 | |
1. Adjusted EBITDA loss is an Alternative Performance Measure, as defined and reconciled to operating loss in the non-GAAP section at the end of this report. 2. Adjusted EBITDA by segment is reconciled to operating loss in Note 3. |
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CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30 June 2022 |
| 6 months ended 30 June 2022 Unaudited |
| 6 months ended 30 June 2021 Unaudited |
| 12 months ended 31 December 2021 Audited | ||
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Note |
| £'000 |
| £'000 |
| £'000 | |
Revenue | 2 | 9,687 | 17,110 | 30,776 | |||
Cost of sales | (4,342) | (4,866) | (10,427) | ||||
Gross profit |
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| 5,345 |
| 12,244 |
| 20,349 |
Other operating income1 | 167 | 326 | 924 | ||||
Operating costs | 4 | (30,715) | (20,172) | (44,703) | |||
Operating loss |
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| (25,203) |
| (7,602) |
| (23,430) |
Finance income | 5 | 1,153 | 243 | 438 | |||
Finance expense | 5 | (143) | (352) | (380) | |||
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Loss before taxation |
| (24,193) |
| (7,711) |
| (23,372) | |
Taxation credit | 6 | 896 | 1,166 | 1,970 | |||
Loss for the financial period and total comprehensive loss |
| (23,297) |
| (6,545) |
| (21,402) | |
Loss per £0.10 ordinary share expressed in pence per share: | |||||||
Basic and diluted loss per share | 7 | (12.20)p | (3.62)p | (11.53)p | |||
The accompanying notes are an integral part of these consolidated financial statements.
1 Other operating income relates to grant income. |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2022 |
30 June 2022 Unaudited |
| 30 June 2021 Unaudited |
| 31 December 2021 Audited | |||
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Note | £'000 |
| £'000 |
| £'000 | ||
Assets | |||||||
Non-current assets | |||||||
Property, plant and equipment | 8 | 21,092 | 16,688 | 18,141 | |||
Right-of-use assets | 9 | 2,167 | 2,714 | 2,438 | |||
Intangible assets | 10 | 10,882 | 5,939 | 8,478 | |||
Long-term investments | 14 | ꟷ | 2,000 | 5,000 | |||
Investment in associate | 460 | ꟷ | 500 | ||||
Other receivables | 12 | 741 | 741 | 741 | |||
Total non-current assets |
| 35,342 |
| 28,082 |
| 35,298 | |
Current assets | |||||||
Inventories | 11 | 7,149 | 2,988 | 3,145 | |||
Contract assets | 2 | 5,314 | 5,626 | 7,331 | |||
Other current assets | 13 | 1,024 | 975 | 1,133 | |||
Derivative financial instruments | 17 | 703 | 845 | 1,073 | |||
Current tax receivable | 4,416 | 4,659 | 3,531 | ||||
Trade and other receivables | 12 | 8,154 | 7,159 | 4,865 | |||
Short-term investments | 14 | 114,177 | 95,733 | 93,129 | |||
Cash and cash equivalents | 14 | 107,448 | 165,156 | 151,455 | |||
Total current assets | 248,385 | 283,141 |
| 265,662 | |||
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Liabilities | |||||||
Current liabilities | |||||||
Trade and other payables | 15 | (4,857) | (2,502) | (2,783) | |||
Contract liabilities | 2 | (5,004) | (3,773) | (4,290) | |||
Other current liabilities | 16 | (7,660) | (3,959) | (5,818) | |||
Derivative financial instruments | 17 | (5) | ꟷ | ꟷ | |||
Lease liabilities | 18 | (655) | (622) | (754) | |||
Provisions | 19 | (1,495) | (1,112) | (1,579) | |||
Total current liabilities | (19,676) | (11,968) |
| (15,224) | |||
Net current assets |
| 228,709 |
| 271,173 |
| 250,438 | |
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Non-current liabilities | |||||||
Lease liabilities | 18 | (1,971) | (2,616) | (2,285) | |||
Provisions | 19 | (1,910) | (1,642) | (1,828) | |||
Total non-current liabilities | (3,881) | (4,258) |
| (4,113) | |||
Net assets |
| 260,170 |
| 294,997 |
| 281,623 | |
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Equity attributable to the owners of the parent | |||||||
Share capital | 20 | 19,157 | 19,041 | 19,073 | |||
Share premium | 405,272 | 404,788 | 404,726 | ||||
Capital redemption reserve | 3,449 | 3,449 | 3,449 | ||||
Merger reserve | 7,463 | 7,463 | 7,463 | ||||
Accumulated losses | (175,171) | (139,744) | (153,088) | ||||
Total equity | 260,170 | 294,997 | 281,623 |
The accompanying notes are an integral part of these consolidated financial statements. |
CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30 June 2022 |
Note | 6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |
| £'000 | £'000 | £'000 | |
Cash flows from operating activities |
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Loss before taxation |
| (24,193) | (7,711) | (23,372) |
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Adjustments for: |
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Finance income |
| (1,153) | (243) | (438) |
Finance expense |
| 143 | 352 | 380 |
Depreciation of property, plant and equipment | 2,578 | 1,930 | 4,215 | |
Depreciation of right-of-use assets | 271 | 265 | 541 | |
Amortisation of intangible assets | 542 | 556 | 1,004 | |
Net foreign exchange losses/(gains) | 153 | 63 | (563) | |
Net change in fair value of financial instruments | 375 | (829) | (1,057) | |
Share-based payments charge | 1,214 | 1,102 | 2,615 | |
Operating cash flows before movements in working capital |
| (20,070) | (4,515) | (16,675) |
(Increase)/decrease in trade and other receivables | (3,117) | (1,944) | 22 | |
Increase in inventories | (4,004) | (881) | (1,038) | |
Increase in trade and other payables | 3,900 | 2,164 | 2,832 | |
Decrease/(increase) in contract assets | 2,017 | (4,762) | (6,467) | |
Increase/(decrease) in contract liabilities | 714 | (3,732) | (3,215) | |
(Decrease)/increase in provisions | (39) | 500 | 1,121 | |
Net cash used in operations |
| (20,599) | (13,170) | (23,420) |
Taxation received | ꟷ | ꟷ | 3,078 | |
Net cash used in operating activities |
| (20,599) | (13,170) | (20,342) |
Investing activities | ||||
Purchase of property, plant and equipment | (5,529) | (3,639) | (7,377) | |
Capitalised development expenditure | (2,946) | (1,586) | (4,573) | |
Repayment of long-term investments | 5,000 | 6,000 | 3,000 | |
Acquisition of short-term investments | (70,998) | (52,502) | (62,898) | |
Repayment of short-term investments | 49,950 | 26,000 | 39,000 | |
Finance income received | 730 | 243 | 438 | |
Net cash used in investing activities |
| (23,793) | (25,484) | (32,410) |
Financing activities | ||||
Proceeds from issuance of ordinary shares | 630 | 181,502 | 181,472 | |
Net expenses from issuance of ordinary shares | ꟷ | (2,572) | (2,572) | |
Cash paid on behalf of employees on the sale of share options | ꟷ | (7,490) | (7,490) | |
Repayment of lease liabilities | (413) | (207) | (405) | |
Interest paid | (103) | (315) | (316) | |
Net cash generated from financing activities |
| 114 | 170,918 | 170,689 |
Net (decrease)/increase in cash and cash equivalents |
| (44,278) | 132,264 | 117,937 |
Exchange gains/(losses) on cash and cash equivalents | 271 | (63) | 563 | |
Cash and cash equivalents at beginning of period | 151,455 | 32,955 | 32,955 | |
Cash and cash equivalents at end of period | 14 | 107,448 | 165,156 | 151,455 |
The accompanying notes are an integral part of these consolidated financial statements. |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2022 |
| Share capital | Share premium | Capital redemption reserve | Merger reserve | Accumulated losses | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2021 (audited) | 17,217 | 227,682 | 3,449 | 7,463 | (134,301) | 121,510 | |
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Comprehensive income |
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Loss for the financial year | ꟷ | ꟷ | ꟷ | ꟷ | (21,402) | (21,402) | |
Total comprehensive loss | (21,402) | (21,402) | |||||
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Transactions with owners |
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Issue of shares, net of costs | 1,856 | 177,044 | ꟷ | ꟷ | ꟷ | 178,900 | |
Share-based payments charge | ꟷ | ꟷ | ꟷ | ꟷ | 2,615 | 2,615 | |
Total transactions with owners | 1,856 | 177,044 | ꟷ | ꟷ | 2,615 | 181,515 | |
At 31 December 2021 (audited) |
| 19,073 | 404,726 | 3,449 | 7,463 | (153,088) | 281,623 |
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Comprehensive income |
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Loss for the financial period | ꟷ | ꟷ | ꟷ | ꟷ | (23,297) | (23,297) | |
Total comprehensive loss | ꟷ | ꟷ | ꟷ | ꟷ | (23,297) | (23,297) | |
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Transactions with owners |
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Issue of shares, net of costs | 84 | 546 | ꟷ | ꟷ | ꟷ | 630 | |
Share-based payments charge | ꟷ | ꟷ | ꟷ | ꟷ | 1,214 | 1,214 | |
Total transactions with owners |
| 84 | 546 | ꟷ | ꟷ | 1,214 | 1,844 |
At 30 June 2022 (Unaudited) | 19,157 | 405,272 | 3,449 | 7,463 | (175,171) | 260,170 |
Comparatives for the six months ended 30 June 2021 are provided separately below: |
| Share capital | Share premium | Capital redemption reserve | Merger reserve | Accumulated losses | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2021 (audited) | 17,217 | 227,682 | 3,449 | 7,463 | (134,301) | 121,510 | |
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Comprehensive income |
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Loss for the financial period | ꟷ | ꟷ | ꟷ | ꟷ | (6,545) | (6,545) | |
Total comprehensive loss | (6,545) | (6,545) | |||||
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Transactions with owners |
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Issue of shares, net of costs | 1,824 | 177,106 | ꟷ | ꟷ | ꟷ | 178,930 | |
Share-based payments charge | ꟷ | ꟷ | ꟷ | ꟷ | 1,102 | 1,102 | |
Total transactions with owners | 1,824 | 177,106 | ꟷ | ꟷ | 1,102 | 180,032 | |
At 30 June 2021 (unaudited) |
| 19,041 | 404,788 | 3,449 | 7,463 | (139,744) | 294,997 |
Notes to the financial statements for the six months ended 30 June 2022
1. Basis of preparation The interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. They do not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statements for the year ended 31 December 2021 which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The interim financial statements have been prepared on a historical cost basis except that derivative financial instruments, which are stated at their fair value.
The interim financial information has been prepared in accordance with the recognition and measurement requirements of UK adopted international accounting standards and applicable law and regulations. The same accounting policies, presentation and methods of computation are followed in the interim financial statements as were applied in the Group's latest annual audited financial statements. While the financial figures included in this half-yearly report have been computed in accordance with international accounting standards applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.
The financial information contained in the interim financial statements is unaudited and does not constitute statutory financial statements as defined by in Section 434 of the Companies Act 2006. The financial statements for the year ended 31 December 2021, on which the auditors gave an unqualified audit opinion, and did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006, have been filed with the Registrar of Companies.
The consolidated interim financial information for the six months ended 30 June 2022 has been reviewed by the Company's Auditor, BDO LLP in accordance with International Standard of Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. Going Concern The Group has reported a loss after tax for the six months period ended 30 June 2022 of £23.3m (six months ended 30 June 2021: £6.5m) and net cash used in operating activities of £20.6m (six months ended 30 June 2021: £13.2m). At 30 June 2022, the Group held cash and cash equivalents and investments of £221.6m (31 December 2021: £249.6m). The directors have prepared annual budgets and cash flow projections that extend 15 months from the date of approval of this report. These projections include management's expectations of the cash flows associated with the Group's future investment in R&D projects and expansion of manufacturing and testing capacity, together with contracted and anticipated customer contracts and the planned investment in the China collaboration with Bosch and Weichai. The projections were stress tested by applying different scenarios including the loss of significant future revenue and continued adverse macroeconomic factors. In each case the projections demonstrated that the Group would have sufficient cash reserves to meet its liabilities as they fall due and to continue as a going concern. For the above reasons, the directors continue to adopt the going concern basis in preparing the financial statements. Critical accounting judgements and key sources of estimation uncertainty In the application of the Group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
In preparing the interim consolidated financial statements, the areas where judgement has been exercised remain consistent with those applied to the annual report and accounts for the year ended 31 December 2021.
New standards and amendments applicable for the reporting period The Group has adopted all standards, interpretations amended or newly issued by the IASB that were effective in the period. Their adoption has not had any material effect on the consolidated financial statements. |
2. Revenue The Group's revenue is disaggregated by geographical market, major product/service lines, and timing of revenue recognition: Geographical market |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
| £'000 |
| £'000 |
| £'000 |
Europe | 4,051 | 3,855 | 7,676 | ||
Asia | 5,404 | 12,995 | 22,748 | ||
North America | 211 |
| 20 | 109 | |
Rest of World | 21 |
| 240 | 243 | |
| 9,687 |
| 17,110 | 30,776 |
For the six months ended 30 June 2022, the Group has identified two major customers (defined as customers that individually contributed more than 10% of the Group's total revenue) that accounted for approximately 44% and 39% of the Group's total revenue recognised in the period (6 months ended 30 June 2021: two major customers that accounted for approximately 65% and 23% of the Group's total revenue for that period and 12 months ended 31 December 2021: three major customers that accounted for approximately 59%, 25% and 11% of the Group's total revenue recognised for that year). Major product/service lines |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
| £'000 |
| £'000 |
| £'000 |
Engineering services | 4,206 | 2,669 | 6,777 | ||
Provision of technology hardware | 2,077 | 3,759 | 7,353 | ||
Licenses | 3,404 |
| 10,682 | 16,646 | |
| 9,687 |
| 17,110 | 30,776 |
Timing of transfer of goods and services |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
Products and services transferred at a point in time | 1,887 | 11,732 | 15,326 | ||
Products and services transferred over time | 7,800 | 5,378 | 15,450 | ||
9,687 | 17,110 | 30,776 |
2. Revenue (continued) Amounts transferred at a point in time during the prior periods included the recognition of significant license income in the first half of 2021 related to a major contract. The contract-related assets and liabilities are as follows: |
| 30 June 2022 Unaudited | 30 June 2021 Unaudited |
| 31 December 2021 Audited | |||
| £'000 |
| £'000 |
| £'000 | ||
Trade receivables | 12 | 4,651 | 3,618 | 2,612 | |||
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Contract assets - accrued income | 5,314 | 5,626 | 7,010 | ||||
Contract assets - deferred costs |
| ꟷ | ꟷ | 321 | |||
Total contract assets |
| 5,314 | 5,626 | 7,331 | |||
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Contract liabilities - deferred income |
| (5,004) | (3,773) | (4,290) |
3. Segmental analysis In accordance with IFRS 8 the method applied to identify reporting segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker, which the Group considers to be the Executive team. The Group's internal segmental reporting continues to separately reflect results down to adjusted EBITDA level from its Power (SOFC) and Hydrogen (SOEC) divisions. |
Power - SOFC |
| Hydrogen - SOEC |
| Consolidated | |
Six months ended 30 June 2022 (Unaudited) | £'000 |
| £'000 |
| £'000 |
Revenue (external) | 9,687 | ꟷ | 9,687 | ||
Cost of sales | (4,342) | ꟷ | (4,342) | ||
Gross profit | 5,345 |
| ꟷ |
| 5,345 |
Other operating income | 167 | ꟷ | 167 | ||
Operating costs (excluding adjusting items) | (15,728) | (10,279) | (26,007) | ||
Adjusted EBITDA1 | (10,216) | (10,279) | (20,495) | ||
Adjusting items: | |||||
Depreciation & amortisation | (3,391) | ||||
Share-based payment charge | (1,214) | ||||
Unrealised foreign exchange losses | 271 | ||||
Fair value adjustment | (374) | ||||
Operating loss |
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| (25,203) |
Finance income | 1,153 | ||||
Finance expense | (143) | ||||
Loss before taxation |
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| (24,193) |
Taxation credit | 896 | ||||
Loss for the financial period |
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| (23,297) |
3. Segmental analysis (continued)
| Power - SOFC |
| Hydrogen - SOEC |
| Consolidated |
Six months ended 30 June 2021 (unaudited) | £'000 |
| £'000 |
| £'000 |
Revenue (external) | 17,110 | ꟷ | 17,110 | ||
Cost of sales | (4,866) | ꟷ | (4,866) | ||
Gross profit | 12,244 |
| ꟷ |
| 12,244 |
Other operating income | 326 | ꟷ | 326 | ||
Operating costs (excluding adjusting items) | (12,941) | (4,144) | (17,085) | ||
Adjusted EBITDA1 | (371) | (4,144) | (4,515) | ||
Adjusting items: | |||||
Depreciation & amortisation | (2,751) | ||||
Share-based payment charge | (1,102) | ||||
Unrealised foreign exchange losses | (63) | ||||
Fair value adjustment | 829 | ||||
Operating loss |
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| (7,602) |
Finance income | 243 | ||||
Finance expense | (352) | ||||
Loss before taxation |
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| (7,711) |
Taxation credit | 1,166 | ||||
Loss for the financial period |
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| (6,545) |
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Power - SOFC |
| Hydrogen - SOEC |
| Consolidated | |
12 months ended 31 December 2021 (audited) | £'000 |
| £'000 |
| £'000 |
Revenue (external) | 30,776 | ꟷ | 30,776 | ||
Cost of sales | (10,427) | ꟷ | (10,427) | ||
Gross profit | 20,349 |
| ꟷ |
| 20,349 |
Other operating income | 924 | ꟷ | 924 | ||
Operating costs (excluding adjusting items) | (25,765) | (12,183) | (37,948) | ||
Adjusted EBITDA1 | (4,492) | (12,183) | (16,675) | ||
Adjusting items: | |||||
Depreciation & amortisation | (5,760) | ||||
Share-based payment charge | (2,615) | ||||
Unrealised foreign exchange losses | 563 | ||||
Fair value adjustment | 1,057 | ||||
Operating loss |
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| (23,430) |
Finance income | 438 | ||||
Finance expense | (380) | ||||
Loss before taxation |
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| (23,372) |
Taxation credit | 1,970 | ||||
Loss for the financial period |
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| (21,402) |
1Adjusted EBITDA is an alternative performance measure, as defined at the end of this report. |
4. Operating costs |
Operating costs can be analysed as follows: |
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6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
Research and development costs | 20,997 | 14,402 | 31,290 | ||
Administrative expenses | 7,695 | 4,775 | 11,245 | ||
Commercial | 2,023 | 995 | 2,168 | ||
30,715 | 20,172 | 44,703 |
5. Finance income and expenses |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
Interest received | 730 | 243 |
| 438 | |
Foreign exchange gain on cash, cash equivalents and short-term deposits | 423 |
ꟷ |
| ꟷ | |
Finance income | 1,153 | 243 | 438 | ||
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Interest on lease liability | (103) | (204) | (316) | ||
Unwinding of discount on provisions | (37) | (32) | (64) | ||
Other finance costs | (3) | (5) | ꟷ | ||
Foreign exchange loss on cash, cash equivalents and short-term deposits | ꟷ | (111) | ꟷ | ||
Interest expense | (143) | (352) | (380) |
6. Taxation No corporation tax liability has arisen during the period (6 months ended 30 June 2021 and 12 months ended 31 December 2021: £nil) due to the losses incurred. A tax credit has arisen as a result of the tax losses being surrendered in respect of research and development expenditure. |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
UK corporation tax | (2,022) | (1,535) | (2,917) | ||
Foreign tax suffered | 240 | 369 | 973 | ||
Adjustment in respect of prior periods | 886 | ꟷ | (26) | ||
(896) | (1,166) | (1,970) |
7. Loss per share |
6 months ended 30 June 2022 Unaudited | 6 months ended 30 June 2021 Unaudited | 12 months ended 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
| |||||
Loss for the financial period attributable to shareholders | (23,297) | (6,545) | (21,402) | ||
| |||||
Weighted average number of shares in issue | 190,972,969 | 180,783,345 | 185,689,432 | ||
|
| ||||
Loss per £0.10 ordinary share (basic and diluted) | (12.20)p | (3.62)p | (11.53)p | ||
|
|
|
8. Property, plant and equipment |
Leasehold improvements £'000 |
Plant and machinery£'000 |
Computer equipment£'000 |
Fixtures and fittings £'000 | Assets under construction £'000 |
Motor vehicles £'000 |
Total £'000 | |
Cost | |||||||
At 1 January 2021 | 5,883 | 21,409 | 2,061 | 314 | 756 | 12 | 30,435 |
Additions | 1,529 | 3,521 | 502 | 34 | 1,791 | ꟷ | 7,377 |
Transfers | ꟷ | 572 | ꟷ | ꟷ | (572) | ꟷ | ꟷ |
At 31 December 2021 (audited) | 7,412 | 25,502 | 2,563 | 348 | 1,975 | 12 | 37,812 |
Additions | 238 | 2,437 | 169 | ꟷ | 2,685 | ꟷ | 5,529 |
Transfers | 22 | 264 | ꟷ | ꟷ | (286) | ꟷ | ꟷ |
At 30 June 2022 (unaudited) | 7,672 | 28,203 | 2,732 | 348 | 4,374 | 12 | 43,341 |
| |||||||
| |||||||
Accumulated depreciation | |||||||
At 1 January 2021 | 2,712 | 11,196 | 1,398 | 149 | ꟷ | 1 | 15,456 |
Charge for the year | 646 | 3,089 | 392 | 83 | ꟷ | 5 | 4,215 |
At 31 December 2021 (audited) | 3,358 | 14,285 | 1,790 | 232 | ꟷ | 6 | 19,671 |
Charge for the period | 442 | 1,872 | 226 | 37 | ꟷ | 1 | 2,578 |
At 30 June 2022 (unaudited) | 3,800 | 16,157 | 2,016 | 269 | ꟷ | 7 | 22,249 |
| |||||||
Net book value | |||||||
At 30 June 2022 (unaudited) | 3,872 | 12,046 | 716 | 79 | 4,374 | 5 | 21,092 |
At 31 December 2021 (audited) | 4,054 | 11,217 | 773 | 116 | 1,975 | 6 | 18,141 |
'Assets under construction' represents the cost of purchasing, constructing and installing property, plant and equipment ahead of their productive use. The category is temporary, pending completion of the assets and their transfer to the appropriate and permanent category of property, plant and equipment. As such, no depreciation is charged on assets under construction. Assets under construction consist entirely of plant and machinery that will be used in the manufacturing, development and testing of fuel cells. |
8. Property, plant and equipment (continued) Comparatives for the six months ended 30 June 2021 are provided separately below: |
Unaudited | Leasehold improvements £'000 |
Plant and machinery£'000 |
Computer equipment£'000 |
Fixtures and fittings £'000 | Assets under construction £'000 |
Motor vehicles £'000 |
Total £'000 |
Cost | |||||||
At 1 January 2021 | 5,883 | 21,409 | 2,061 | 314 | 756 | 12 | 30,435 |
Additions | 863 | 1,466 | 316 | 28 | 966 | ꟷ | 3,639 |
Transfers | ꟷ | 572 | ꟷ | ꟷ | (572) | ꟷ | ꟷ |
At 30 June 2021 | 6,746 | 23,447 | 2,377 | 342 | 1,150 | 12 | 34,074 |
Accumulated depreciation | |||||||
At 1 January 2021 | 2,712 | 11,196 | 1,398 | 149 | ꟷ | 1 | 15,456 |
Charge for the period | 268 | 1,444 | 169 | 46 | ꟷ | 3 | 1,930 |
At 30 June 2021 | 2,980 | 12,640 | 1,567 | 195 | ꟷ | 4 | 17,386 |
Net book value | |||||||
At 30 June 2021 | 3,766 | 10,807 | 810 | 147 | 1,150 | 8 | 16,688 |
9. Right of use assets |
Land and Buildings |
| Computer equipment |
| Total | |
£'000 | £'000 |
| £'000 | ||
Cost |
| ||||
| |||||
At 1 January 2021 | 4,729 | 18 | 4,747 | ||
Additions | ꟷ | 43 | 43 | ||
Adjustment to lease term | (1,035) | ꟷ | (1,035) | ||
Disposals | ꟷ | (18) | (18) | ||
At 31 December 2021 (audited) | 3,694 |
| 43 |
| 3,737 |
At 30 June 2022 (unaudited) | 3,694 | 43 | 3,737 | ||
|
| ||||
Accumulated depreciation |
|
| |||
|
| ||||
At 1 January 2021 | 766 | 10 | 776 | ||
Charge for the year | 523 | 18 | 541 | ||
Disposals | ꟷ | (18) | (18) | ||
At 31 December 2021 (audited) | 1,289 |
| 10 |
| 1,299 |
Charge for the period | 264 | 7 | 271 | ||
At 30 June 2022 (unaudited) | 1,553 | 17 | 1,570 | ||
| |||||
Net book value |
| ||||
At 30 June 2022 (unaudited) | 2,141 | 26 | 2,167 | ||
At 31 December 2021 (audited) | 2,405 | 33 | 2,438 |
9. Right of use assets (continued) Comparatives for the six months ended 30 June 2021 are provided separately below: |
Unaudited | Land and Buildings |
| Computer equipment |
| Total |
£'000 | £'000 |
| £'000 | ||
Cost |
| ||||
| |||||
At 1 January 2021 | 4,729 | 18 | 4,747 | ||
Additions | ꟷ | 43 | 43 | ||
Adjustment of lease term | (1,035) | ꟷ | (1,035) | ||
Disposals | ꟷ | (18) | (18) | ||
At 30 June 2021 | 3,694 | 43 | 3,737 | ||
| |||||
Accumulated depreciation |
| ||||
| |||||
At 1 January 2021 | 766 | 10 | 776 | ||
Charge for the period | 254 | 11 | 265 | ||
Disposals | ꟷ | (18) | (18) | ||
At 30 June 2021 | 1,020 | 3 | 1,023 | ||
| |||||
Net book value |
| ||||
At 30 June 2021 | 2,674 | 40 | 2,714 |
During the six-month period ended 30 June 2021, the Group revised the expected term on one of its property leases, recognising an adjustment of £1,035,000 to reduce the right of use asset. |
10. Intangible assets |
Internal developments in relation to manufacturing site £'000 | Customer and internal development programmes £'000 |
Perpetual software licences £'000 | Patent costs£'000 |
Total £'000 | |
Cost | |||||
At 1 January 2021 | 411 | 4,424 | ꟷ | 295 | 5,130 |
Additions | ꟷ | 3,983 | 252 | 338 | 4,573 |
At 31 December 2021 (audited) | 411 | 8,407 | 252 | 633 | 9,703 |
Additions | ꟷ | 2,709 | 151 | 86 | 2,946 |
At 30 June 2022 (unaudited) | 411 | 11,116 | 403 | 719 | 12,649 |
Accumulated amortisation | |||||
At 1 January 2021 | 82 | 139 | ꟷ | ꟷ | 221 |
Charge for the year | 82 | 899 | 23 | ꟷ | 1,004 |
At 31 December 2021 (audited) | 164 | 1,038 | 23 | ꟷ | 1,225 |
Charge for the period | 41 | 377 | 56 | 68 | 542 |
At 30 June 2022 (unaudited) | 205 | 1,415 | 79 | 68 | 1,767 |
Net book value | |||||
At 30 June 2022 (unaudited) | 206 | 9,701 | 324 | 651 | 10,882 |
At 31 December 2021 (audited) | 247 | 7,369 | 229 | 633 | 8,478 |
The customer and internal development intangible primarily relates to the design, development and configuration of the Company's core fuel cell and system technology. Amortisation of capitalised development commences once the development is complete and is available for use. Comparatives for the six months ended 30 June 2021 are provided separately below: |
Unaudited | Internal developments in relation to manufacturing site £'000 | Customer and internal development programmes £'000 |
Patent costs£'000 |
Total £'000 |
Cost | ||||
At 1 January 2021 | 411 | 4,424 | 295 | 5,130 |
Additions | ꟷ | 1,403 | 183 | 1,586 |
At 30 June 2021 | 411 | 5,827 | 478 | 6,716 |
Accumulated amortisation | ||||
At 1 January 2021 | 82 | 139 | ꟷ | 211 |
Charge for the period | 41 | 515 | ꟷ | 566 |
At 30 June 2021 | 123 | 654 | ꟷ | 777 |
Net book value | ||||
At 30 June 2021 | 288 | 5,173 | 478 | 5,939 |
11. Inventories |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
Raw materials | 1,381 | 1,162 | 1,299 | ||
Work in progress | 1,186 | 977 | 969 | ||
Finished goods | 4,582 | 849 | 877 | ||
Total inventory | 7,149 | 2,988 | 3,145 |
Inventories have increased in line with the continued improvement in manufacturing capacity in the period and to ensure the Group can satisfy existing and anticipated customer demand for technology hardware. |
12. Trade and other receivables |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
Current: | £'000 | £'000 |
| £'000 | |
Trade receivables | 4,651 | 3,618 | 2,612 | ||
Other receivables | 3,503 | 3,541 | 2,253 | ||
8,154 | 7,159 | 4,865 | |||
Non-current: |
| ||||
Other receivables | 741 | 741 | 741 |
Included within other current receivables is the research and development tax credit of £1,551,000 (30 June 2021: £502,000; 31 December 2021: £1,304,000). |
13. Other current assets |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
| £'000 | £'000 |
| £'000 | |
Prepayments | 880 | 651 | 673 | ||
Accrued interest | ꟷ | 232 | 322 | ||
Accrued grant income | 144 | 92 | 138 | ||
1,024 | 975 | 1,133 |
14. Net cash and cash equivalents, short-term and long-term investments |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
£'000 | £'000 |
| £'000 | ||
Cash at bank and in hand | 6,601 | 3,424 | 4,957 | ||
Money market funds | 100,847 | 161,732 | 146,498 | ||
Cash and cash equivalents | 107,448 | 165,156 | 151,455 | ||
| |||||
Short-term investments1 | 114,177 | 95,733 | 93,129 | ||
Long-term investments | ꟷ | 2,000 | 5,000 | ||
Cash and cash equivalents and investments | 221,625 | 262,889 | 249,584 |
1 Short-term investments comprise bank deposits with a maturity greater than 3 months but less than 12 months.
The Group typically places surplus funds into pooled money market funds with same day access and bank deposits with durations of up to 24 months. The Group's treasury policy restricts investments in short-term sterling money market funds to those which carry short-term credit ratings of at least two of AAAm (Standard & Poor's), Aaa-mf (Moody's) and AAAmmf (Fitch) and deposits with banks with minimum long-term rating of A-/A3/A and short-term rating of A-2/P-2/F-1 for banks which the UK Government holds less than 10% ordinary equity. |
15. Trade and other payables |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
Current: | £'000 | £'000 |
| £'000 | |
Trade payables | 4,537 | 2,334 | 2,425 | ||
Other payables | 320 | 168 | 358 | ||
4,857 | 2,502 | 2,783 |
16. Other current liabilities |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
| £'000 | £'000 |
| £'000 | |
Accruals | 6,767 | 2,822 | 4,803 | ||
Deferred grant income | 893 | 1,137 | 1,015 | ||
7,660 | 3,959 | 5,818 |
17. Derivative financial instruments |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | |||
£'000 | £'000 | £'000 | |||
Financial assets measured at fair value through profit or loss |
|
|
| ||
Forward exchange contracts | 241 | 230 | 321 | ||
Non-deliverable forward contracts | 462 | 615 | 752 | ||
Total derivative assets | 703 | 845 | 1,073 | ||
|
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | ||||
£'000 | £'000 | £'000 | ||||
Financial liabilities measured at fair value through profit or loss |
|
|
| |||
Forward exchange contracts | (5) | ꟷ | ꟷ | |||
Total derivative liabilities | (5) | ꟷ | ꟷ | |||
| ||||||
| ||||||
In 2020, the Group entered into a non-deliverable forward (NDF) to hedge its exposure to Korean Won (KRW) with respect to a major customer contract. As at 30 June 2022, the unrealised fair value gain was £462,000 (31 December 2021: £752,000). The Group also had a number of forward exchange contracts in place to hedge expected transactions in other currencies including EUR and CAD, with an unrealised total gain of £236,000 as at 30 June 2022 (31 December 2021: £321,000). All derivative financial instruments are measured using techniques consistent with level 2 of the fair value hierarchy. |
| |||||
18. Lease liabilities |
30 June 2022 Unaudited | 30 June 2021 Unaudited | 31 December 2021 Audited | ||
£'000 | £'000 | £'000 | ||
|
|
| ||
At the start of the period | 3,039 | 4,445 | 4,445 | |
New finance leases recognised | ꟷ | 42 | 41 | |
Lease payments | (516) | (411) | (721) | |
Interest expense | 103 | 204 | 316 | |
Early settlement | ꟷ | (7) | ꟷ | |
Adjustment to lease term | ꟷ | (1,035) | (1,042) | |
At the end of the period |
| 2,626 | 3,238 | 3,039 |
| ||||
Current | 655 | 622 | 754 | |
Non-current | 1,971 | 2,616 | 2,285 | |
Total at the end of the period | 2,626 | 3,238 | 3,039 |
19. Provisions |
| ||||||||
| Property Dilapidations |
|
Warranties |
|
Contract Losses |
| Total | ||
| £'000 | £'000 |
| £'000 |
| £'000 | |||
At 1 January 2021 |
| 1,610 | 418 | 194 | 2,222 | ||||
Movements in the Consolidated Statement of Profit and Loss: |
| ||||||||
Amounts used |
| ꟷ | (404) | (175) | (579) | ||||
Unwinding of discount |
| 64 | ꟷ | ꟷ | 64 | ||||
Increase in provision |
| 154 | 1,239 | 307 | 1,700 | ||||
At 31 December 2021 (audited) |
| 1,828 | 1,253 | 326 | 3,407 | ||||
Movements in the Consolidated Statement of Profit and Loss: |
| ||||||||
Amounts used |
| ꟷ | ꟷ | (138) | (138) | ||||
Unused amounts reversed |
| ꟷ | ꟷ | (124) | (124) | ||||
Unwinding of discount |
| 37 | ꟷ | ꟷ | 37 | ||||
Increase in provision |
| 45 | 178 | ꟷ | 223 | ||||
At 30 June 2022 (unaudited) |
| 1,910 |
| 1,431 |
| 64 |
| 3,405 | |
|
| ||||||||
Current |
| ꟷ | 1,431 | 64 | 1,495 | ||||
Non-current |
| 1,910 | ꟷ | ꟷ | 1,910 | ||||
At 30 June 2022 (unaudited) |
| 1,910 |
| 1,431 |
| 64 |
| 3,405 | |
|
|
|
|
|
|
|
|
| |
Current |
| ꟷ | 1,253 | 326 | 1,579 | ||||
Non-current |
| 1,828 | ꟷ | ꟷ | 1,828 | ||||
At 31 December 2021 (audited) |
| 1,828 | 1,253 | 326 | 3,407 | ||||
Comparatives for the six months ended 30 June 2021 are provided separately below: |
| ||||||||
Unaudited |
| Property Dilapidations |
|
Warranties |
|
Contract Losses |
| Total | |
| £'000 | £'000 |
| £'000 |
| £'000 | |||
At 1 January 2021 |
| 1,610 | 418 | 194 | 2,222 | ||||
Movements in the Consolidated Statement of Profit and Loss: |
| ||||||||
Amounts used |
| ꟷ | (13) | (75) | (88) | ||||
Unwinding of the discount |
| 32 | ꟷ | ꟷ | 32 | ||||
Increase in provision |
| ꟷ | 371 | 217 | 588 | ||||
At 30 June 2021 |
| 1,642 | 776 | 336 | 2,754 | ||||
|
| ||||||||
Current |
| ꟷ | 776 | 336 | 1,112 | ||||
Non-current |
| 1,642 | ꟷ | ꟷ | 1,642 | ||||
At 30 June 2021 |
| 1,642 | 776 | 336 | 2,754 | ||||
20. Share capital |
| 2022 (unaudited) |
| 2021 (audited) | |||
| Number of £0.10Ordinaryshares | £'000 |
| Number of £0.10Ordinaryshares |
£'000 | |
Allotted and fully paid | ||||||
At 1 January 2022 / 1 January 2021 | 190,729,638 | 19,073 | 172,171,527 | 17,217 | ||
Allotted £0.10 Ordinary shares on exercise of employee share options | 844,978 | 84 | 1,490,531 | 149 | ||
Allotted £0.10 Ordinary shares on cash placing (see below) | ꟷ | ꟷ | 17,067,580 | 1,707 | ||
At 30 June 2022 / 31 December 2021 |
| 191,574,616 | 19,157 |
| 190,729,638 | 19,073 |
On 17 March 2021 the Group announced a fundraise that would allot 17,067,580 new ordinary shares of £0.10 each in the Company, for a total gross cash consideration of £180,916,340. In conjunction with the placing, 12,967,629 shares were allotted on 17 March 2021 which included Bosch and certain Directors of the Company subscribing for 3,649,150 and 24,376 shares respectively. On 19 May 2021 Weichai subscribed for and were allotted the remaining 4,099,951 shares. During the six months ended 30 June 2022, 844,978 ordinary £0.10 shares were allotted for cash consideration of £627,427 on the exercise of employee share options (six months ended 30 June 2021: 1,172,153 ordinary £0.10 shares were allotted for cash consideration of £585,762; year ended 31 December 2021: 1,490,531 ordinary £0.10 shares were allotted for cash consideration of £705,636). Comparatives for the six months ended 30 June 2021 are provided separately below: |
|
| 2021 (unaudited) | ||
|
| Number of £0.10Ordinaryshares |
£'000 | |
Allotted and fully paid | ||||
At 1 January 2021 | 172,171,527 | 17,217 | ||
Allotted £0.10 Ordinary shares on exercise of employee share options | 1,172,153 | 117 | ||
Allotted £0.10 Ordinary shares on cash placing | 17,067,580 | 1,707 | ||
At 30 June 2021 |
|
| 190,411,260 | 19,041 |
Reserves The Consolidated Statement of Financial Position includes a merger reserve and a capital redemption reserve. The merger reserve represents a reserve arising on consolidation using book value accounting for the acquisition of Ceres Power Limited at 1 July 2004. The reserve represents the difference between the book value and the nominal value of the shares issued by the Company to acquire Ceres Power Limited. The capital redemption reserve was created in the year ended 30 June 2014 when 86,215,662 deferred ordinary shares of £0.04 each were cancelled.
21. Capital commitments Capital expenditure that has been contracted for but has not been provided for in the financial statements amounts to £8,131,000 as at 30 June 2022 (as at 30 June 2021: £1,232,000 and as at 31 December 2021: £8,086,000), in respect of the acquisition of property, plant and equipment.
|
22. Related party transactions As at 30 June 2022 and as at 31 December 2021, the Group's related parties were its Directors and RFC Power Ltd. As at 30 June 2021, the Group's related parties were its Directors. During the six months ended 30 June 2022, one Director exercised and retained 7,109 share options under the Company's employee share save scheme and one Director exercised and sold 14,218 share options under the Company's employee share save scheme. There were no other transactions between the Company and the Directors during the period. During the year ended 31 December 2021 and period ending 30 June 2021 one Director exercised and retained 8,491 share options under the Company's employee share save scheme. There were no other transactions between the Company and the Directors during the year ended 31 December 2021. Transactions between the Group and RFC Power Ltd, being an associated entity of the Group, comprised engineering consultancy services provided by the Group to RFC Power for the value of £0.3m (12 months ended 31 December 2021: £0.1m) in return for equity share capital. |
Non-GAAP Alternative Performance Measures (unaudited)
Reconciliation between operating loss and Adjusted EBITDA Management believes that presenting Adjusted EBITDA loss allows for a more direct comparison of the Group's performance against its peers and provides a better understanding of the underlying performance of the Group by excluding non-recurring, irregular and one-off costs. The Group currently defines Adjusted EBITDA loss as the operating loss for the period excluding depreciation and amortisation charges, share-based payment charges, unrealised losses on forward contracts and exchange gains/losses. |
6 months ended 30 June 2022 £'000 | 6 months ended 30 June 2022 £'000 | 12 months ended 31 Dec 2021 £'000 | ||
Operating loss | (25,203) | (7,602) | (23,430) | |
Depreciation and amortisation | 3,391 | 2,751 | 5,760 | |
Share-based payment charges | 1,214 | 1,102 | 2,615 | |
Unrealised losses/(gains) on forward contracts | 374 | (829) | (1,057) | |
Exchange (gains)/losses | (271) | 63 | (563) | |
Adjusted EBITDA | (20,495) | (4,515) | (16,675) | |
|
Reconciliation between net cash from operating activities and equity-free cash flow The Group defines equity-free cash flow as net cash from operating activities plus capital expenditure and adjusted for interest payments and receipts and exchange rate movements. The table below reconciles net cash from operating activities to equity-free cash flow for each period. |
6 months ended 30 June 2022 £'000 | 6 months ended 30 June 2022 £'000 | 12 months ended 31 Dec 2021 £'000 | ||
Net cash from operating activities | (20,599) | (13,170) | (20,342) | |
Capital expenditure (total) | (8,475) | (5,225) | (11,950) | |
Interest and lease payments (net) | 214 | (279) | (283) | |
Exchange rate movements | 271 | (63) | 563 | |
Equity-free cash flow | (28,589) | (18,737) | (32,012) |
INDEPENDENT REVIEW REPORT TO Ceres power holdings plc Conclusion Based on our review, nothing has come to our attention that causes us to believe that interim financial statements in the half-yearly financial report for the six months ended 30 June 2022 is not prepared, in all material respects, in accordance with the requirements of the London Stock Exchange AIM Rules for Companies. We have been engaged by the company to review the interim financial statements in the half-yearly financial report for the six months ended 30 June 2022 which comprises the Consolidated Statement of Profit and Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity and the Notes to the financial statements for the six months ended 30 June 2022. Basis for conclusion We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). 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 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. As disclosed in note one, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The interim financial statements included in this half-yearly financial report has been prepared in accordance with the requirements of the London Stock Exchange AIM Rules for Companies. Conclusions relating to going concern Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the Group to cease to continue as a going concern. Responsibilities of directors The directors are responsible for preparing the half-yearly financial report in accordance with the requirements of the London Stock Exchange AIM Rules for Companies which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts. In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the review of the financial information In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the interim financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report. Use of our report Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange AIM Rules for Companies for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
BDO LLP Chartered Accountants Guildford, UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). |