H117 interims highlight the message that Ceres Power Holdings Plc (LON:CWR) is gaining commercialisation momentum and traction, led by a management team building a reputation for delivery. H117 total income of £1.5m is a 200% YoY increase, and is on target to comfortably meet our £2.8m FY17 forecast. Ceres signed 2 blue-chip OEM partner contracts in the period, bringing the total to 4, with Honda, Nissan, Cummins and a global OEM in several disruptive verticals, including stationary/back-up power, data-centres, automotive, residential micro combined heat and power (‘m-CHP’), and business m-CHP. With a £4.8m order book at Dec 31st 2016, and a strong and growing pipeline of potential OEM partners, including 3 signed evaluation agreements, Ceres is building revenues and reducing cash burn to be on a growth trajectory, which if maintained, takes it through breakeven, into increasing profitability and cash generation. At Dec 31st 2016, Ceres had £22m cash following a successful £20m equity raise in the period, providing runway and balance sheet strength.
Interim results show the company is in the early stages of executing its commercialisation strategy. For Ceres, ‘total income’ aggregates commercial revenue and technology commercialisation grants. A 200% YoY increase in total income for the period, a growing order book that stood at £4.8m as of Dec 31st 2016, and a growing pipeline of blue-chip OEM partners, including 3 signed evaluation agreements, are all evidence that Ceres is successfully executing the early stages of its platform commercialisation strategy. As existing OEM partnerships progress, and new ones are signed in new markets, we expect Ceres to build revenues and reduce cash burn through successive periods, taking the company on a growth profile into profitability and cash generation.
OEM joint development contracts with Honda, Nissan, Cummins and a global OEM in a number of disruptive verticals are testament to the core technology platform. Ceres continues to successfully build its contracted OEM commercialisation partner portfolio, both in and out of the public domain. The fact that large, global blue-chips of such stature are putting Ceres’s unique, proprietary steel-supported, solid oxide fuel-cell technology platform at the centre of their commercialisation strategies in some potentially very large global growth markets, is testament to the operational profile, performance and cost of the platform. Ceres has world-class core IP and a unique technology offering.
Successful £20m equity fundraise has provided balance sheet strength and cash runway. In October 2016 the company successfully executed a £20m equity fundraise, and the cash position at Dec 31st was circa £22m. The capital came from existing and new, blue-chip institutional investors. This was a key tenet of commercialisation, providing balance sheet strength for OEM partner contract negotiations, and funding Ceres through to a commercial position of strength.
Phil Caldwell, CEO of Ceres Power Holdings Plc said: “Ceres is on track for an excellent year, driven by new commercial partnerships, the rapid progress of our technology and our first ‘go-to market’ agreement bringing us closer to a first product launch. We said we would sign five partners by the end of 2017 and with four to date we are on track to do just that, plus we have three new evaluation agreements and a strong pipeline with a series of international prospective partners.
With a forward order book of £4.8 million and a successful fundraising secured, we are in a strong position to capitalise on significant market opportunities. As the world wrestles with the growing challenge of a decarbonising and decentralising energy system, our proven SteelCell™ technology, and our work with global power specialists, shows Ceres Power is capable of providing a cheaper, cleaner, distributed alternative to centralised power generation.”
