Commercial momentum remains positive in Ceres Power Holdings Plc (LON:CWR) at the interim. The team has delivered against many of its key targets over the past six months, including securing its fifth partner with a major European manufacturer. Excellent strides have also been made with customer milestones, particularly with Nissan’s EV range extender programme and Cummins, in the development of its larger format SteelCell®. Increasing repeat business has seen sales double to £3.1m and Ceres remains on track to deliver growth of 47% to £6m at FY. Cash of £13.2m results from a £4.1m FC outflow, including increased investment (£0.4m) in manufacturing capacity to meet demand. In this regard, the statement notes that the Board is aiming to secure additional funding by 2018 end. Elsewhere, engagement with potential new partners is very active and management continues to develop its leading technology to address new opportunities in its target sectors. We anticipate significant further headway in H2 and look to positive news flow to support this.
A growing customer base – Ceres recently secured its fifth development partner, an unnamed European OEM. This joins Cummins, Nissan and Honda, and another unnamed global partner. The pipeline of potential new customers is also strong, with two further OEMs now at the Technology Assessment stage, and management is confident in signing additional partners in FY2018.
Delivering against commercial milestones – Demonstrable headway has been made with Ceres’ partners in H1. Notably, it completed its technology transfer with a confidential customer to develop a multi-kW CHP product, and the Company also continues to meet milestones on the EV range extender programme (announced June 2016) that has led to follow-on agreements with Nissan. Successful field trials in the UK (supported by ene.field in Europe) concluded in September and these confirmed the efficiency, flexibility and reliability of SteelCell®, and more are targeted in CY2018. Ceres also continues to work closely with Cummins and the US Dept. of Energy, developing a 10kW power-only system, and developed its larger format 5kW stack in H1.
A doubling in sales – Ceres Power Holdings Plc Revenue has grown from £1.6m in the comparative period to £3.1m. This comprises over a doubling of revenue from customer programmes from £1m to £2.6m and unchanged grant income of £0.5m. An operating loss of £6.2m (unchanged) reflects increased investment in personnel.
Investment and additional funding – Product development has continued in H1, particularly in the higher power density areas such as data centres and automotive. There has also been a step up in manufacturing capacity capital investment to meet increasing customer demand. To support future progress, the Board is already considering sources of additional funding, likely in CY2018.
