Interim Results
Proton Power Systems PLC
19 September 2007
Press Release 19 September 2007
Proton Power Systems plc
('Proton Power' or 'the Company')
Interim Results
Proton Power Systems plc (AIM:PPS), a leading designer, developer and producer
of fuel cells and fuel cell-electric hybrid systems for the 'back to base'
market, today announces its Interim Results for the six months to 30 June 2007.
Highlights
- Three new orders secured from:
- Bucher/EMPA (street cleaning vehicles, Switzerland)
- Skoda Electric (city bus project, Prague)
- Alster-Touristik (passenger ferry, Hamburg)
- Appointment of Achim Loecher as Chief Financial Officer of Proton Power's
subsidiary Proton Motor Fuel Cell GmbH ('PMFC')
- PMFC's new facility at Puchheim, Munich was officially opened on 13
September 2007
- Turnover was £295,000 compared with 2006: £718,000
- Loss of £951,000 compared with 2006: (£477,000).
Commenting on the results, Felix Heidelberg, CEO of Proton Power, said: 'The
launch of our new facility in Puchheim has enabled us to move fully into the
commercialisation stage and we are pleased to have secured three new orders in
key areas for Proton Power: ferries, buses and utilities. With government
initiatives continuously driving the market and supporting and endorsing Proton
Power's strategy, we look forward to the future and further orders with
confidence.'
- Ends -
For further information:
Proton Power Systems plc
Felix Heidelberg, CEO Tel: +49 (0) 89 1276265 0
f.heidelberg@proton-motor.de www.protonpowersystems.com
Noble & Company Limited
Graeme Bayley / John Llewellyn-Lloyd Tel: +44 (0) 20 7763 2200
www.noblegp.com
Media enquiries:
Abchurch Communications Limited
Justin Heath / Franziska Boehnke Tel: +44 (0) 20 7398 7700
franziska.boehnke@abchurch-group.com www.abchurch-group.com
Chairman's and CEO's statement
Financial overview
We are pleased to report our unaudited Interim Results for the half year ended
30 June 2007.
In the 6 months to 30 June 2007 turnover was £295,000 which was in line with
expectations and which compares with 2006: £142,000 (excluding the £576,000 'one
off' licence fee income from L3 Communications Corporation, USA). The out-turn
for the half year was a loss of £951,000 which was also in line with
expectations and compares on a like for like basis, with a loss in 2006 of
£1,053,000 (adjusting for the 'one off' £576,000 licence fee income from L3
Communications Corporation, USA).
Business development
Overall the rate of order intake was generally in line with expectations with
new orders received for our hybrid drive systems for:
- passenger ferry which will operate on Hamburg's Alster river
- utility (street cleaning) vehicle for Bucher/EMPA, Switzerland
- city bus for Skoda Electric which will operate in Prague
The half year under review also saw the extension to a Purchase and Co-operation
Agreement and commencement of initial deliveries of the first volume order for
fuel cell modules for auxiliary power units (APUs) to an international
technology leader.
Other milestones during the half year were the:
- appointment in June 2007 of Achim Loecher as Chief Financial Officer,
Proton Motor Fuel Cell GmbH ('PMFC')
- move of the Company's subsidiary to Puchheim, Munich to single site
premises in order to scale business and enter into volume automated
production, as well as to provide an important platform for increased
marketing of its fuel cell technology. The new headquarters also allows for
additional expansion and so meet the constant increase in demand for our
services
Outlook
PMFC's new facility at Puchheim, Munich was officially opened by a
representative of the Bavarian Ministry of Economic Affairs, Infrastructure,
Transport and Technology on 13 September 2007. The feedback from the many guests
who attended was most complimentary.
This single site facility, with the capability for modular expansion with
minimum disruption to ongoing production, forms the springboard for the
up-scaling of volume and the transition and transformation of the Company from
project (low volume/high cost) to series (high volume/low cost/high value added)
designer, developer and manufacturer of fuel cell hybrid systems for the, 'back
to base' applications market.
This new facility will enable us to invest upfront in facilities and people in
order to drive down unit costs and thereby deliver volume orders - a virtuous
circle which represents our next major challenge and focus.
Enquiries and expressions of interest in the Company's products are being
received from a wide variety of potential customers with varying application
requirements and with the benefit of our new facilities it is hoped to convert
some of these into firm orders during the course of the next few months.
Subsequent to the half year end, we appointed Noble & Company Limited as our new
Nomad and Broker and Abchurch Communications Limited as our new Financial Public
Relations Advisor.
Once again, on behalf of the Board we would take this opportunity to thank the
PMFC team and our advisors for their hard work and effort and our shareholders,
customers and suppliers for their continued confidence and support.
Bernard Robinson OBE DL Felix Heidelberg
Chairman Chief Executive
Independent review report by Grant Thornton UK LLP to Proton Power Systems plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 which comprises the income statement, balance
sheet, cash flow statement, statement of changes in equity and the related notes
1 to 6. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4: Review of Interim Financial Information. Our review has been
undertaken so that we might state to the company those matters we are required
to state to it in this report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company for our review work, for this report, or for the conclusions we have
reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the AIM
Rules which require that the interim report must 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.
Review work performed
We conducted our review having regard to the guidance contained in Bulletin 1999
/4: Review of Interim Financial Information issued by the Auditing Practices
Board for use in the UK. A review consists principally of making enquiries of
management and applying analytical procedures to the financial information and
underlying financial data and based thereon, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit performed in accordance with International Standards on
Auditing (UK and Ireland) and therefore provides a lower level of assurance than
an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Grant Thornton UK LLP) 18 September 2007
Chartered Accountants and Registered Auditors
Leeds, England
Consolidated income statement
Note Unaudited Unaudited Audited
6 months to 6 months to Year to 31
30 June 2007 30 June 2006 December 2006
£'000 £'000 £'000
Continuing operations
Revenue 295 718 1,057
Cost of sales (423) (680) (1,030)
Gross profit/(loss) (128) 38 27
Other operating income 25 - 12
Administrative expenses 2 (882) (501) (1,836)
Operating loss (985) (463) (1,797)
Finance income 50 - 8
Finance costs (16) (14) (11)
Loss for the year attributable to equity holders (951) (477) (1,800)
of the Company
Loss per share (expressed as pence per share)
Basic 4 (3.0) (1.9) (6.8)
Diluted 4 (3.0) (1.9) (6.8)
Consolidated balance sheet
Unaudited Unaudited Audited
6 months to 6 months to Year to 31
30 June 2007 30 June 2006 December 2006
£'000 £'000 £'000
Non-current assets
Intangible assets 244 5 99
Property, plant and equipment 54 69 55
298 74 154
Current assets
Inventories 15 - 21
Trade and other receivables 747 446 956
Cash and cash equivalents 2,025 1 1,886
2,787 447 2,863
Total assets 3,085 521 3,017
Capital and reserves
Ordinary shares 1,570 93 1,570
Share premium 4,735 3,171 4,735
Merger reserve 15,656 - 15,656
Reverse acquisition reserve (13,862) - (13,862)
Share based payment reserve 295 - 147
Foreign translation reserve 26 (3) 30
Capital contributions 916 940 916
Retained earnings (7,958) (5,772) (7,007)
Total equity 1,378 (1,571) 2,185
Non-current liabilities
Borrowings 677 - -
Current liabilities
Borrowings 299 666 -
Trade and other payables 731 1,426 832
1,030 2,092 832
Total liabilities 1,707 2,092 832
Total equity and liabilities 3,085 521 3,017
The total equity of the group at 30 June 2006 differs from that shown on the
Placing and Admission to AIM document by £213,000; this is due to provisions
recognised at 30 June 2006, no longer required when the annual accounts to 31
December 2006 were prepared.
Statement of changes in equity
Attributable to equity holders of the Company
Group Share Share Merger Reverse Share Translation Capital Retained Total
Capital Premium Reserves Acquisition Based reserve contri-bution Earnings Equity
Reserves Payment Reserves
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 93 3,158 - - - 23 936 (5,297) (1,087)
2006
Loss for the period - - - - - - - (477) (477)
Currency translation - 12 - - - - 3 (1) 14
differences
Total recognised income - 12 - - - - 3 (478) (463)
and expenses for the
period
Balance at 30 June 2006 93 3,170 - - - 23 939 (5,775) (1,550)
Balance at 1 July 2006 93 3,170 - - - 23 939 (5,775) (1,550)
Loss for the period - - - - - - - (1,323) (1,323)
Currency translation (2) (80) - - - 7 (23) 91 (7)
differences
Total recognised income (2) (80) - - - 7 (23) (1,232) (1,330)
and expenses for the
period
Share based payments - - - - 147 - - - 147
credit
Proceeds from share 329 4,924 - - - - - - 5,253
issues
Share issue costs - (335) - - - - - - (335)
Reverse acquisition (see 1,150 (2,944) 15,656 (13,862) - - - - -
below)
Balance at 31 December 1,570 4,735 15,656 (13,862) 147 30 916 (7,007) 2,185
2006
Balance at 1 January 1,570 4,735 15,656 (13,862) 147 30 916 (7,007) 2,185
2007
Loss for the period - - - - - - - (951) (951)
Currency translation - - - - - (4) - - (4)
differences
Total recognised income - - - - - (4) - (951) (955)
and expenses for the
period
Share based payments - - - - 148 - - - 148
credit
Balance at 30 June 2007 1,570 4,735 15,656 (13,862) 295 26 916 (7,958) 1,378
Share premium account
On Admission to the Alternative Investment Market of the London Stock Exchange
the Company issued 6,190,863 shares at 80p, generating £4,952,690. Costs
directly associated with the issue of the new shares totalled £335,000 and have
been set off against the premium generated on issue of new shares.
Merger reserve
The merger reserve of £15,656,000 arises 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 arises as a result of the method of accounting
for the acquisition of Proton Motor Fuel Cell GmbH by the Company. In accordance
with IFRSs the acquisition has been accounted for as a reverse acquisition.
Consolidated cash flow statement
Unaudited Unaudited Audited
6 months to 6 months to Year to 31
Note 30 June 2007 30 June 2006 December 2006
£'000 £'000 £'000
Cash flows from operating activities
Net cash used in operations 6 (705) (397) (2,299)
Interest received 50 1 6
Interest paid (10) (15) (60)
Net cash used in operating activities (665) (411) (2,353)
Cash flows from investing activities
Investment in subsidiary - - (138)
Purchase of intangible assets (149) - (98)
Purchase of tangible assets (23) (5) (9)
Net cash used in investing activities (172) (5) (245)
Cash flows from financing activities
Proceeds from issue of share capital - - 3,644
Increase in loan balances 1,000 591 1,195
Loan repayments (24) (172) (372)
Net cash generated from financing activities 976 419 4,467
Net increase/ (decrease) in cash and cash 139 (3) 1,869
equivalents
Opening cash and cash equivalents 1,886 17 17
Closing cash and cash equivalents 2,025 14 1,886
Notes to the interim report
1. Basis of preparation
The 31 December 2006 consolidated financial statements of Proton Power Systems
plc were prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union and with those parts of the Companies
Act 1985 applicable to those companies under IFRS under the historical cost
convention. There have been no changes to the accounting policies set out in the
2006 statutory accounts and these have been applied in preparing the interim
financial statements
Proton Power Systems plc was incorporated on 7 February 2006 and on 31 October
2006 acquired the entire share capital of Proton Motor Fuel Cell GmbH. As a
result of this transaction, the shareholders in Proton Motor Fuel Cell GmbH
received shares in the Company.
In preparing the consolidated financial statements, 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.
The interim financial statements are unaudited and do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
financial information for the year ended 31 December 2006 has been derived from
the published statutory accounts. A copy of the full accounts for that period,
on which the auditors issued an unqualified report that did not contain
statements under Section 237 (2) or (3) of the Companies Act 1985, has been
delivered to the Registrar of Companies.
2. Share based payments
The Group has incurred an expense in respect of share options and shares issued
to employees as follows:
Unaudited Unaudited Audited
6 months to 6 months to Year to 31
30 June 2007 30 June 2006 December 2006
£'000 £'000 £'000
Share options 109 - 31
Shares 39 - 116
148 - 147
3. Taxation
Due to losses within the Group, no expenses for tax on income were required in
either the current or prior periods.
4. Loss per share
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 year.
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 has one category of dilutive potential ordinary
shares, share options, however these have not been included in the calculation
of loss per share because they are anti dilutive for these periods.
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 2007 30 June 2006 31 December 2006
Basic Diluted Basic Diluted Basic Diluted
£'000 £'000 £'000 £'000 £'000 £'000
Loss attributable to equity holders of the (951) (951) (477) (477) (1,800) (1,800)
Company
Weighted average number of ordinary shares in 31,391 31,391 25,200 25,200 26,370 26,370
issue (thousands)
Shares issuable (weighted) - share options - 1,184 - - - 121
(thousands)
Adjustment - (1,184) - - - -
Adjusted weighted average number of ordinary 31,391 31,391 25,200 25,200 26,370 26,491
shares
Pence Pence Pence Pence Pence Pence
per per per per per per
share share share share share share
Loss per share (pence per share) (3.0) (3.0) (1.9) (1.9) (6.8) (6.8)
The adjustment to the weighted average number of shares used in the calculation
of diluted loss per share reflects share options in issue where the exercise
price exceeds the average market price of shares in the period.
5. Business combination
On 31 October 2006, the Company, acquired the entire share capital of Proton
Motor Fuel Cell GmbH by means of a share-for-share exchange whereby the
shareholders in Proton Motor Fuel Cell GmbH received shares in the Company. In
preparing the consolidated financial statements, Proton Motor Fuel Cell GmbH has
been deemed to be the acquirer and the Company, the legal parent, has been
deemed to be acquiree.
In accordance with IFRS 3 'Business Combinations', this transaction has been
accounted as a reverse acquisition. The key features of this basis of
consolidation are:
• The consolidated IFRS financial statement is a continuation of the
financial statement of Proton Motor Fuel Cell GmbH and the retained earnings
recognised are a continuation of those of Proton Motor Fuel Cell GmbH
immediately before the business combination.
• The consolidated income statement for the year ended 31 December 2006
includes the results of Proton Motor Fuel Cell GmbH for the year ended 31
December 2006 and of Proton Power Systems plc from 31 October 2006, the date
of the reverse acquisition.
• The assets and liabilities of Proton Motor Fuel Cell GmbH are measured based
on their pre-combination carrying amounts.
• The equity structure appearing in this consolidated financial statement
reflects the equity structure of the legal parent, Proton Power Systems plc.
However, the total issued equity instruments reflects that of the legal
subsidiary, Proton Motor Fuel Cell GmbH. To achieve this a reverse
acquisition reserve of £13.862 million has been created, being the
difference between the required Group equity instruments and the reported
equity of the parent.
• Proton Power Systems plc has been consolidated from the date of the reverse
acquisition using the fair value of its assets and liabilities at that date.
The cost of the acquisition was £nil and negative goodwill of £198,000
arose on the acquisition.
6. Cash generated from operating activities
Unaudited Unaudited Audited
6 months to 6 months to Year to 31
30 June 30 June December
2007 2006 2006
£'000 £'000 £'000
Loss for the period (951) (477) (1,800)
Adjustments for:
Depreciation and amortisation 24 25 44
Negative goodwill credit - - (198)
Interest income including loan waivers (50) (1) (57)
Interest expense 16 15 60
Share based payments 148 - 147
Operating loss before changes in net working capital (813) (438) (1,804)
Inventories 6 - (21)
Receivables 209 (402) (454)
Payables (107) 443 (20)
Net cash used in operations (705) (397) (2,299)
-Ends-
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