Share Name Share Symbol Market Type Share ISIN Share Description
Afc Energy Plc LSE:AFC London Ordinary Share GB00B18S7B29 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.00 1.99% 51.30 51.00 51.20 51.50 48.40 50.50 4,937,099 16:35:28
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 0.0 -4.8 -0.8 - 377

AFC Energy Plc Half-year Report

23/06/2021 7:00am

UK Regulatory (RNS & others)

Afc Energy (LSE:AFC)
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From Apr 2021 to Oct 2021

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RNS Number : 7689C

AFC Energy Plc

23 June 2021

The information contained within this announcement is deemed by the company to constitute inside information as stipulated under the EU market abuse regulation (596/2014).

23 June 2021

AFC Energy plc

("AFC" or the "Company")

Interim Results

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to announce its interim results for the half year ended 30 April 2021. Highlights of those results are as follows.

Commercial and Financial Highlights

   --      Three new world class partners, strengthening global route to market: 

o ABB : high power EV charging infrastructure / data centres;

o Altaaqa Alternative Solutions : zero emission power solutions in Saudi Arabia and the Middle East & North Africa regions (MENA);

o Mace : hydrogen fuelled generators for construction sites.

-- Current book of over 50 qualified fuel cell deployment enquiries - the majority of which represent multiple order potential.

-- Revenue of GBP0.15 million (HY 2020: GBPnil) from initial recognition of Extreme E commercial revenue following completion of first race; under IFRS, additional Extreme E revenue to be recognised on completion of remaining races.

-- Strategic investment from ABB and Dutco cornerstoning an oversubscribed fundraise of GBP36m in April.

-- Stronger half year cash balance of GBP61.6m (HY 2020: GBP2.8m) with investment in product development and increased headcount resulting in an increased loss for the period of GBP3.3m (HY 2020: GBP1.8m).

Operating Highlights

   --      Successfully delivered first commercial fuel cell power system to Extreme E. 
   --      BK Gulf appointed as mass producer of fuel cell system balance of plant in Dubai. 

-- Executive team strengthened following recruitment of Dr David Harvey (Chief Technology Officer), Dr Mike Rendall (Chief Engineer and Product Officer) and Mark Bailey (Chief Commercial Officer) in 2021.

Technology Highlights

   --      Prototype design of high-density "S" series fuel cell stack completed. 

-- World class testing lab for high density AEM fuel cell in operation following launch in February 2021.


-- AFC Energy expects to announce multiple new system orders in the second half of this calendar year.

-- On track to complete design and system architecture of the integrated ABB / AFC Energy high power EV charger unit by the end of June.

-- On track to supply first fuel cell system to ABB site in Q3 for physical integration with high power EV charger.

-- Following COVID related delay, AFC Energy fuel cell system now on track for dispatch to ACCIONA in Q4 2021.

   --      Multiple new product releases expected for second half of this calendar year. 
   --      Juelich fuel cell system for German micro grid on schedule for completion in Q4 2021. 

-- Receipt of first commercial scale ammonia cracker for system integration next week that significantly advances competitive upstream fuelling strategy.

   --      Strategic collaboration in maritime sector under discussion. 

-- Assembly and commissioning facility at Dunsfold Park opens this week, incorporating office space for new engineering team.

-- Recruitment of new product engineers, manufacturing and field technicians, fuel cell and polymer scientists, and commercial staff expected to continue with on average of two new starters per week.

-- Commencement of scale up of manufacturing process for AlkaMem(R) anion exchange membrane ("AEM").

-- Preparation for delivery of full prototype high power dense AEM fuel cell by calendar year end.

Adam Bond, Chief Executive of AFC Energy, said:

"AFC Energy continues to make great strides as a leading clean energy business, now with the successful deployment of our hydrogen power technology, the signing of international deployment partnerships and the recruitment of a world class Executive Team all essential elements in positioning ourselves for future growth.

Our oversubscribed fundraising puts the business in a robust financial position, allowing us to increase investment during the remainder of the year in the people, technology and product development needed to grow our order book and commensurate revenue.

With carbon emissions now returning to pre-pandemic levels and the UN stating that 2021 is a 'make or break year' in the fight against climate change, the need and demand for our emissions-free energy solutions has never been greater. In the year of COP 26, our growth plans are central to the ongoing decarbonisation of key global industries."


For further information:

  AFC Energy plc 
   Adam Bond (Chief Executive Officer)             +44 (0) 14 8327 6726 
   Iain Thomson (Head of Communications and        investors@afcenergy.com 
   Stakeholder Management) 
   WH Ireland - Nominated Adviser and Joint 
   M ike Coe (Corporate Finance) 
   Jasper Berry (Corporate Broking)                +44 (0) 202 220 1666 
   M C Peat & Co LLP - Joint Broker 
   Charlie Peat                                    +44 (0) 20 7104 2334 
   Zeus Capital Limited - Joint Broker 
   Daniel Harris (Corporate Finance) 
   John Goold/Dominic King (Corporate Broking)     +44 (0) 203 829 5000 
   FTI Consulting - Financial PR Advisors          +44 (0) 203 727 1000 
   Sara Powell / Ben Brewerton                     afcenergy@fticonsulting.com 

About AFC Energy plc

AFC Energy plc is a leading provider of hydrogen fuel cell power systems to generate clean energy in support of the global energy transition.

Based in the UK, the Company's scalable systems provide off-grid, zero emission power that are already being deployed for rapid electric vehicle charging and the replacement of diesel generators for temporary power applications.

AFC Energy is also working with global partners in the deployment of products for the Maritime, Ports, Data Centres and Rail industries, emphasising the central role of its technology in the decarbonisation of global industry.

Operational review

AFC Energy continues to make excellent progress in developing and implementing its strategy for zero-emission hydrogen power solutions to meet the world's energy challenges. Despite the unprecedent social upheaval caused by the COVID-19 pandemic, we have been able to welcome several new strategic partners to accelerate the deployment of our systems across a host of global industries - one of which elected to invest into our business to highlight its commitment to our company, technology and target markets. At the same time, our work in powering Extreme E, the all-electric off-road race series, has shown the effectiveness of our technology in operating in some of the world's harshest climates.

The need for sustainable power generators such as ours to support industrial decarbonisation and address climate change is greater than ever. Whilst public demand to reduce carbon emissions and improve air quality is driving further public and private investment into the energy transition, any emission reduction as a result of pandemic lockdowns was temporary - with global CO 2 emissions rising again as economic activity recovers.

In this supportive environment, raising additional equity to accelerate our progress made absolute sense and we were delighted to complete a significantly oversubscribed fundraising in April which raised gross proceeds of GBP36m. This creates a robust cash position of GBP61.6m (HY 2020: GBP2.8m) at half-year end, giving the necessary financial headroom to accelerate our growth plans to build on the progress we made in the first half of the year.

Growing our partnership base for future sales and distribution

Our commercial strategy is predicated on entering world class partnerships and collaborations with key global companies to extend our footprint and to generate significant future sales. Our route to market is largely through these strategic collaborations, which have the potential to secure large multi-system sales to meet their customer demands for zero emission power generation.

The work we have completed in recent months in securing our initial distribution partners is key to the successful execution of our strategy and to date, we remain confident that this is the correct strategy to be taking forward. This includes working with these partners to further grow our commercial pipeline and in the case of ABB and ACCIONA, we will deploy systems to their sites in Europe this year to showcase the operability of our fuel cell system.

The Directors are working with advisors and partners to establish the best means by which the Company will be able to disclose details of its order book and its commercial pipeline in order to provide confidence to the market of the Company's prospects. Working through distribution partners requires us to be in full alignment with the deployment potential across each distribution channel and whilst many of these discussions remain confidential, we can confirm that at this time, we have a development book of more than 50 discrete, qualified deployment enquiries, many with multi-system order potential. The value of this book could be significant pending the quantum of final system orders; however, providing a value against this opportunity runs the risk of materially underestimating, or overestimating, the actual size of our pipeline. We believe however that the number of live opportunities currently under development objectively demonstrates the scale of opportunity which AFC Energy is presently generating through its distribution partners.

From this book, we expect to announce further system deployments in the second half of this calendar year.


The International Energy Agency's (IEA) recently published Global EV Outlook shows that whilst only 10m electric vehicles were on the road at the end of 2020, this could rise to anywhere between 145 million and 230 million worldwide by 2030 [1] . This exponential increase will put the existing grid under huge strain; we believe off-grid solutions will be required to support inevitable grid reinforcement to meet charging demand.

This drove our decision in December 2020 to enter into a global partnership with ABB, who are world leaders in electrification and high power EV charging.. This partnership gives ABB access to AFC Energy's leading fuel cell technologies for the rapid charging of electric vehicles, whilst providing AFC Energy with access to a global distribution network which has already sold rapid EV charging equipment in over 80 countries.

We have successfully worked with ABB over the past six months to design the requisite architecture that will enable the integration of their charge-point infrastructure with our fuel cells to provide an off-grid solution where the grid is constrained (or absent), and we remain on track to commence operation of the first integrated product in the second half of 2021. AFC Energy and ABB have also commenced work in developing a marketing strategy for the product to ABB customers worldwide.

The success of this work led to our partnership being strengthened and extended with ABB in April. ABB made a strategic equity investment into AFC Energy as part of our equity fundraise, whilst also entering into a new Development Agreement for the burgeoning global data centre market. ABB already works with many of the world's largest hyper data centre owners in their quest to achieve Net Zero emissions.

The scale of the hyperscale data centre market is enormous. Both Microsoft and Google have already signalled their intention to move beyond diesel generators in supplying back-up power for its millions of servers, with the former committed to ending its dependency on using diesel fuel in back-up generators by 2030, along with a broader promise to be carbon negative by that point. It is increasingly clear that rival fuel cell technologies such as PEM, which use high cost hydrogen with large storage footprints, and Solid Oxide, which is already being discarded as a technology by some data centre owners due to its reliance on natural gas as a feedstock (which does not achieve zero emission) and its slow response time, are now being challenged within the increasing drive towards a sustainable data centre market. This opens an enormous opportunity for AFC Energy's high energy dense S-series fuel cell which addresses both of these issues.


Momentum continues to build for the temporary power market to transition from diesel-driven equipment, with event operators, real estate developers, constructors and plant hire companies increasingly looking for clean energy alternatives. The liquid fuel with the highest energy density without a carbon footprint is ammonia. Ammonia, as a carrier of Hydrogen, therefore becomes an ideal fuel for off-grid power at a fraction of the cost of hydrogen. This plays to our technology's strength in its ability to be fuelled using hydrogen derived from cracked ammonia, something PEM fuel cells for example cannot do without the added high cost of hydrogen gas clean up.

We have long stated that our business model is not to be a global plant hire business, but instead to be a supplier of zero emission power solutions through adoption and sale of our alkaline fuel cell technology. For this reason, partnering with those businesses who have already established global footprints, customer bases, and local support capability in the temporary power market, is something we have focused on and continue to focus on as we bring our fuel cell to market. For the most part, this process comes with months of due diligence and business model framing of particular relevance to the plant hire businesses and end users used to operating fossil fuel premised gensets. We continue several of these discussions across multiple global locations with incumbent market leading operators who are seeking to address the increasing demand of their customer base to meet Net Zero GHG aspirations.

This commitment to provide a zero emission off-grid generator underpinned the signing in April of a non-binding Memorandum of Understanding with Altaaqa Alternative Solutions Company Limited ("Altaaqa"), a wholly owned member of the Zahid Group. Altaaqa owns and operates one of the world's largest rental fleets of mobile diesel power modules, with 2GW of capacity within its portfolio. It is aiming to complement its conventional diesel power module offering with sustainable, zero emission alternatives for sale and hire. We are currently working closely with Altaaqa in furthering this opportunity and hope to provide further updates to the market later this year with the ultimate intention to establish an exclusive dealership agreement for the distribution of the Company's fuel cell systems into Saudi Arabia and the Middle East & North Africa (MENA) regions.

The opportunity provided by the temporary power market was also reflected in the signing of our first UK Strategic Partnership Agreement with leading international consultancy and construction business, Mace Group ("Mace"). Mace has established itself as an industry leader through its adoption of highly ambitious sustainability commitments contained in its 2026 Business Strategy, including the removal of all diesel generators from its construction sites by 2026 as part of a corporate commitment to achieve a 10% year on year reduction in carbon emissions.

A small number of high-profile UK sites have already been identified by the partnership for the initial leasing of our hydrogen power systems for use from early 2022, with detailed feasibility work already undertaken to support their deployment. Joint promotion work will also be undertaken by the two companies in the second half of 2021 to influence incumbent plant hire businesses to invest in sustainable hydrogen power generator technologies for on-hire to construction sites.

The announcement of these partnerships has resulted in an increased number of real estate developers, principal contractors and plant hire companies entering into discussions with us and commencing diligence activities for similar deployments and I am confident that we will be able to announce further temporary power partnerships by the year end.


With the International Maritime Organisation (IMO) setting a 50% greenhouse gas emission reduction target by 2050 [2] and the rail sector recognising the need to decarbonise through energy efficiency, new power sources and modal shift, both markets provide an array of possibilities for our next generation high energy dense S-Series fuel cell.

This underpinned our decision to enter into a collaboration agreement with Ricardo plc in January for both companies to explore and engineer innovative, zero greenhouse emission products with a focus on transportation and stationary power generation.

With forecasts indicating up to 25% of global shipping will be decarbonised through the adoption of ammonia fuelling systems, the scale and size of this market for AFC Energy should not be underestimated. We believe there is likely to be strong backing for our S Series fuel cell technology once our first prototypes are ready later this year, and we are already in discussions with multiple ship designers, power providers and ship operators who are exploring the adoption of alkaline fuel cell systems onboard new and retrofitted ships as part of their commitment to achieving 50% greenhouse gas emission reductions by 2050.

Deploying our technology internationally

One of the key moments for AFC Energy this year was achieved in April, with one of our fuel cell systems charging Extreme E's ODYSSEY 21 race vehicles at its inaugural round in Saudi Arabia. Nine months of intensive work went into the design, build, commissioning and testing of the system to withstand extreme conditions and its deployment in such a high pressure, high-profile setting is an enormous tribute to all of our staff and partner organisations involved.

Our fuel cell and green hydrogen fuelling solution was also successfully deployed to Senegal for the second round of the Extreme E series in late May, prior to its further use at all three remaining 2021 rounds. Income from this contract has begun to be recognised in the first half, with further revenues to be booked by year-end.

Two further system builds are in progress. At the request of Acciona SA, our fuel cell system will now be deployed to a construction site in Spain in Quarter 4 2021; this work will explore logistics chains, fuelling strategy (with ammonia), regulatory compliance and the cost effectiveness of our system compared to diesel fuel in off-grid construction applications, forming part of Acciona SA's net-zero commitments and providing another reference point for the international temporary power market.

Similarly, the build of our 100kW system for Forschungzentrum Juelich is progressing well, with this deployment also planned for Quarter 4 2021. Our system will form part of an innovative microgrid programme, the first of its kind in Europe, providing a blueprint for sustainable, decentralised and integrated smart infrastructure away from the centralized grid with an emphasis on cutting-edge renewable and Hydrogen technologies. Revenue from this contract will be recognised upon the initial deployment of the system.

We continue to invest in our product lines and during the course of 2021, we expect to make further announcements on new product applications and configurations that we will be bringing to market. These products are in direct response to customer enquiries and we believe will further add to the value proposition of alkaline fuel cell technology and its key role, alongside other fuel cell technologies, in supporting a sustainable future.

Scaling up our manufacturing capability

The continued development of the Company's scalable manufacturing capacity remains a key area of focus for the business in order to address the expected future growth in system demand. Following five months of extensive fit-out works, I am pleased to say that our 30,000 sq. ft Assembly & Commissioning facility is now open. All engineering & manufacturing staff will from this month be working from this facility to assemble, commission and dispatch all current and future fuel cell systems.

Whilst assembly & commissioning remains internal to the business to protect our Intellectual Property, our manufacturing strategy remains capital-light with all key component manufacture being outsourced - allowing the business to flex to demand without creating unnecessary financial risk. Our long-term supply partnerships with De Nora (Electrodes), BK Gulf (containerised fuel cell balance of plant) and Advanced Plastics (flow plates) all remain in place to satisfy current and future contracts.

Investing in our technology and assets

Our three-pillar approach to technology development remains central to our investment case and an intensive amount of work has taken place on all three elements in the first half of 2021.

Work on developing our L-Series technology - used as the basis for all current contracts - remains focused on reducing cost to further reduce the gap in operating costs compared to the equivalent diesel generator use. Our current pipeline of projects, including delivery of the ABB integrated EV charger will see the adoption of this technology platform. Importantly, later this month, our first commercial scale ammonia cracker unit will arrive when we commence work to fully integrate controls and operating systems between these two technologies. We expect this work to take a couple of months.

Our next generation S-Series technology, incorporating our AlkaMem(R) anion exchange membrane (AEM), represent the other two pillars of our technology range and opens up a range of new markets for the business including for Maritime and Transportation applications as a result of its superior power density whilst being significantly cheaper to run versus commercially available Proton Exchange Membrane (PEM) fuel cells. The opening of our world-class AEM research and testing facility at Dunsfold in February directly supports our roadmap for demonstration of a pre-commercial prototype of our new S-Series fuel cell stack in the second half of 2021, prior to the release of the first commercial stacks by the end of 2022. We therefore continue to be on schedule for this important work package.

Alkamem(R) also represents a significant commercial opportunity in its own right, given its potential use in a number of non-fuel cell applications including fuel synthesis, desalination and electrodialysis. Development work on AlkaMem(R) in 2021 has focused on enhancing the membrane's mechanical strength and stability in order to improve its end performance and we are continuing to prepare the membrane for third party uses in 2021. AFC Energy is also exploring other internal applications for the membrane which we as a company could exploit in the Hydrogen space, opening further sizable markets not previously considered by the Company with the intention of further growing shareholder value in this emerging growth market.

The appointment in May 2021 of Dr David B. Harvey as our new Chief Technology Officer was a further significant milestone in accelerating the development of our technology. Dr Harvey is a world recognised expert in the field of fuel cell technology and electrochemical systems having spent over a decade as Group Leader and Senior Research Engineer at Ballard Power Systems and Head of Fuel Cell Development at Fuel Cell Powertrain GmbH. His understanding of catalysts, membranes, advanced materials and cell / stack development is essential in further accelerating the commercialisation of both the S-Series system and Alkamem(R) and his appointment is a reflection of the tremendous progress we're continuing to make as a business.

Growing our workforce

The final key element in positioning the business for sustained growth is the creation of an extremely strong Executive team, with three key appointments made in the first half of the year. Alongside the appointments of Dr David B Harvey and Dr Mike Rendall as Chief Engineer and Product Officer, we were also delighted in May 2021 to welcome Mark Bailey as our new Chief Commercial Officer. Mark has over two decades of energy sector expertise acquired through a series of high-profile roles at Engie and Connected Energy, developing an impressive track record in working with - and growing - innovative energy solutions businesses. Mark is now responsible for delivering our commercial strategy across each of our target markets.

To meet the growth in demand for our systems and to accelerate the development of all three of our technology pillars, we have also begun a significant recruitment programme to grow our workforce from the 40 staff in post today to around 100 by the end of 2021. A range of commercial, sales, design, manufacturing and commissioning engineers, alongside fuel cell scientists, testing and fabrication specialists and prototyping & assembly technicians are being hired and inducted into the business to drive the Company's development.


We stated in our July 2020 fundraising of GBP31.6 million that the proceeds would be used to support the continued development of the Company as it moves from the development phase of its products and technology into the manufacture and commercialisation of them. The scale up of our manufacturing capabilities, an increase in headcount and increased investment in our technology and assets resulted in an operating loss of GBP3.6 million (2020: GBP2.1 million). Investment in fixed assets of GBP1.8 million comprised the fit out of the assembly & commissioning facility, the build of the Extreme E system and additional AEM fuel cell test stands. Furthermore, GBP0.5 million has been invested in stock for systems to be delivered later this year.

The initial recognition of commercial revenue from Extreme E, representing completion of its first race in Saudi Arabia, contributed to initial booked revenue of GBP0.15m (HY 2020: GBPnil), with further payments to be made in 2021 following the completion of each remaining round.

At the end of April, we had a robust cash position of GBP61.6m (HY 2020: GBP2.8m) giving the necessary financial headroom to accelerate our growth plans.


As we reflected at our virtual Capital Markets Event on 5 May, our position is now one of strength. For the first time, we have the financial and organisational capacity to harness our market-leading technology to generate significant recurring commercial revenue streams.

We will therefore continue to use our strong balance sheet position to invest in our people, products and technology to effectively scale-up the business to drive revenue growth. This includes the assembly and testing of several new L-Series fuel cell systems ahead of future orders, alongside the significant increase in staffing headcount to accelerate system production and development. We therefore expect our investment to increase in the second half of 2021. This will be partly offset by an expected increase in customer revenues, successfully leveraging the value of our international partnerships and collaborations.

This confidence is supported by governmental policies and industry sentiment continuing to work in the Company's favour. The IEA's recently announced roadmap for realizing net-zero carbon dioxide (CO(2) ) emissions signalled a critical shift in its ambition, determining that a 38% emissions reduction must be achieved by 2030 to remain on-track for net-zero 2050. With carbon emissions on the rise again as the world recovers from the COVID-19 pandemic and COP26 later this year acting as a catalyst for action, we believe this stark scenario will drive further investment and regulation to ultimately support the deployment of our products.

AFC Energy has made enormous strides over the past six months and I want to express my thanks to our staff, partners and investors that have supported the business to become one of the world's leading hydrogen fuel cell businesses. We are poised to play a key role in addressing climate change as the most pressing issue facing the world today.

Adam Bond

Chief Executive Officer

23 June 2021


For the six months ended 30 April 2021

                                              Six-months      Six-months      Year ended 
                                                   ended           ended 
                                           30 April 2021        30 April      31 October 
                                                                    2020            2020 
                                                     GBP             GBP             GBP 
                                    Note       Unaudited       Unaudited         Audited 
---------------------------------  -----  --------------  --------------  -------------- 
 Revenue                               3         149,062               -               - 
 Cost of sales                                 (145,235)               -               - 
---------------------------------  -----  --------------  --------------  -------------- 
 Gross profit                                      3,827               -               - 
 Other income                                          -          28,187          32,892 
 Administrative expenses                     (3,589,960)     (2,161,300)     (4,639,104) 
---------------------------------  -----  --------------  --------------  -------------- 
 Operating loss                              (3,586,133)     (2,133,113)     (4,606,212) 
---------------------------------  -----  --------------  --------------  -------------- 
 Finance cost                          4        (12,136)         (8,709)       (178,407) 
---------------------------------  -----  --------------  --------------  -------------- 
 Loss before tax                             (3,598,269)     (2,141,822)     (4,784,619) 
---------------------------------  -----  --------------  --------------  -------------- 
 Taxation                              5         283,072         321,273         559,627 
---------------------------------  -----  --------------  --------------  -------------- 
 Loss for the financial 
  period and total comprehensive 
  loss attributable to owners 
  of the Company                             (3,315,197)     (1,820,549)     (4,224,992) 
---------------------------------  -----  --------------  --------------  -------------- 
 Basic loss per share                  6         (0.49)p         (0.40)p         (0.80)p 
 Diluted loss per share                6         (0.49)p         (0.40)p         (0.80)p 
---------------------------------  -----  --------------  --------------  -------------- 

All amounts relate to continuing operations.


As at 30 April 2021

                                                 30 April   30 April 2020     31 October 
                                                     2021                           2020 
                                                      GBP             GBP            GBP 
                                      Note      Unaudited       Unaudited        Audited 
-----------------------------------  -----  -------------  --------------  ------------- 
 Non-current assets 
 Intangible assets                       7        770,884         616,519        769,269 
 Right of use assets                     8      1,079,884         304,621        247,505 
 Property and equipment                  9      1,653,806         477,618        940,218 
 Long term receivable                                   -         100,000              - 
                                                3,504,574       1,498,758      1,956,992 
-----------------------------------  -----  -------------  --------------  ------------- 
 Current assets 
 Inventory                              10        759,596          95,423        249,370 
 Other receivables                      11      1,639,580       1,433,658      1,043,880 
 Cash and cash equivalents              12     61,292,135       2,514,326     31,301,467 
 Restricted cash                        12        260,772         261,165        270,027 
-----------------------------------  -----  -------------  --------------  ------------- 
                                               63,952,083       4,304,572     32,864,744 
-----------------------------------  -----  -------------  --------------  ------------- 
 Total assets                                  67,456,657       5,803,330     34,821,736 
-----------------------------------  -----  -------------  --------------  ------------- 
 Capital and reserves attributable 
  to owners of the Company 
 Share capital                          13        732,823         477,362        676,006 
 Share premium                          13    116,186,140      51,100,883     81,417,845 
 Other reserve                                  1,752,974       2,204,774      1,512,974 
 Retained deficit                            (53,898,053)    (49,005,806)   (50,582,856) 
-----------------------------------  -----  -------------  --------------  ------------- 
 Total equity attributable 
  to Shareholders                              64,773,884       4,777,213     33,023,969 
-----------------------------------  -----  -------------  --------------  ------------- 
 Current liabilities 
 Trade and other payables               14      1,286,753         407,935      1,236,796 
 Lease liabilities                      15        660,283         113,431        113,431 
-----------------------------------  -----  -------------  --------------  ------------- 
                                                1,947,036         521,366      1,350,227 
-----------------------------------  -----  -------------  --------------  ------------- 
 Non-current liabilities 
 Lease liabilities                      15        434,565         203,579        146,368 
 Provisions                             16        301,172         301,172        301,172 
-----------------------------------  -----  -------------  --------------  ------------- 
                                                  735,737         504,751        447,540 
-----------------------------------  -----  -------------  --------------  ------------- 
 Total liabilities                              2,682,773       1,026,117      1,797,767 
-----------------------------------  -----  -------------  --------------  ------------- 
 Total equity and liabilities                  67,456,657       5,803,330     34,821,736 
-----------------------------------  -----  -------------  --------------  ------------- 


For the six months ended 30 April 2021

                                   Share         Share       Other       Retained         Total 
                                 Capital       Premium     Reserve        Deficit        Equity 
                                     GBP           GBP         GBP            GBP           GBP 
                               Unaudited     Unaudited   Unaudited      Unaudited     Unaudited 
----------------------------  ----------  ------------  ----------  -------------  ------------ 
 Balance at 31 October 
  2020                           676,006    81,417,845   1,512,974   (50,582,856)    33,023,969 
 Comprehensive loss for 
  the period                           -             -           -    (3,315,197)   (3,315,197) 
 Issue of equity shares           56,260    34,631,901           -              -    34,688,161 
 Exercise of share options           557       136,394           -              -       136,951 
 Equity-settled share-based 
  payments                             -             -     240,000              -       240,000 
----------------------------  ----------  ------------  ----------  -------------  ------------ 
 Transactions with owners         56,817    34,768,295     240,000              -    35,065,112 
----------------------------  ----------  ------------  ----------  -------------  ------------ 
 Balance at 30 April 
  2021                           732,823   116,186,140   1,752,974   (53,898,053)    64,773,884 
----------------------------  ----------  ------------  ----------  -------------  ------------ 

For the six months ended 30 April 2020

                                   Share        Share       Other       Retained         Total 
                                 Capital      Premium     Reserve        Deficit        Equity 
                                     GBP          GBP         GBP            GBP           GBP 
                               Unaudited    Unaudited   Unaudited      Unaudited     Unaudited 
----------------------------  ----------  -----------  ----------  -------------  ------------ 
 Balance at 31 October 
  2019                           447,988   47,389,424   2,204,774   (47,185,257)     2,856,929 
 Comprehensive loss for 
  the period                           -            -           -    (1,820,549)   (1,820,549) 
 Issue of equity shares           29,374    3,744,792           -              -     3,774,166 
 Equity-settled share-based 
  payments                             -     (33,333)                          -      (33,333) 
----------------------------  ----------  -----------  ----------  -------------  ------------ 
 Transactions with owners         29,374    3,711,459           -              -     3,740,833 
----------------------------  ----------  -----------  ----------  -------------  ------------ 
 Balance at 30 April 
  2020                           477,362   51,100,883   2,204,774   (49,005,806)     4,777,213 
----------------------------  ----------  -----------  ----------  -------------  ------------ 

Share capital is the amount subscribed for shares at nominal value.

Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses.

Other reserve represents the charge to equity in respect of equity-settled share-based payments.

Retained deficit represents the cumulative loss of the Company attributable to equity shareholders.


For the six months ended 30 April 2021

                                            Six-months    Six-months    Year ended 
                                                 ended         ended 
                                         30 April 2021      30 April    31 October 
                                                                2020          2020 
                                                   GBP           GBP           GBP 
                                             Unaudited     Unaudited       Audited 
--------------------------------------  --------------  ------------  ------------ 
 Cash flows from operating activities 
 Loss before tax for the period            (3,598,269)   (2,141,822)   (4,784,619) 
 Adjustments for: 
 Amortisation of intangible 
  assets                                        54,621        29,740       108,014 
 Depreciation of right of use 
  asset                                        103,933        57,117       114,233 
 Depreciation of property and 
  equipment                                    121,778        67,568       143,758 
  Depreciation of decommissioning 
   asset                                        15,682        15,682        31,365 
 Equity-settled share-based 
  payment expenses                             240,000             -       135,593 
 Interest received                             (6,155)       (1,111)       (6,168) 
 Gain on disposal of investment                      -             -      (80,000) 
 Cash flows from operating activities 
  before changes in working capital 
  and provisions                           (3,068,410)   (1,972,826)   (4,337,824) 
 R&D tax credits received                            -             -       644,523 
 Increase/(Decrease) in restricted 
  cash                                           9,255       (2,093)      (10,955) 
 Increase in inventory                       (510,226)             -     (153,947) 
 (Increase)/Decrease in other 
  receivables                                (312,628)        39,613        23,222 
 Increase/(Decrease) in trade 
  and other payables                            49,957     (259,876)       568,985 
--------------------------------------  --------------  ------------  ------------ 
 Cash absorbed by operating 
  activities                               (3,832,052)   (2,195,182)   (3,265,996) 
--------------------------------------  --------------  ------------  ------------ 
 Cash flows from investing activities 
 Purchase of plant and equipment           (1,787,359)     (163,933)     (718,406) 
 Additions to intangible assets               (56,236)      (40,218)     (171,242) 
 Interest received                               6,155         1,111         6,168 
 Proceeds from disposal of investment                -             -        80,000 
--------------------------------------  --------------  ------------  ------------ 
 Net cash absorbed by investing 
  activities                               (1,837,440)     (203,040)     (803,480) 
--------------------------------------  --------------  ------------  ------------ 
 Cash flows from financing activities 
 Proceeds from the issue of 
  share capital                             36,424,451     3,958,667    35,558,667 
 Costs of issue of share capital           (1,599,339)     (317,834)   (1,633,505) 
 Proceeds from the exercise 
  of options                                         -             -       231,277 
 Leasing finance received/(repaid)             847,773      (49,688)     (101,359) 
 Interest paid                                (12,724)       (6,532)      (12,072) 
 Net cash from financing activities         35,660,161     3,584,613    34,043,008 
--------------------------------------  --------------  ------------  ------------ 
 Net (decrease)/increase in 
  cash and cash equivalents                 29,990,668     1,186,391    29,973,532 
 Cash and cash equivalents at 
  start of period                           31,301,467     1,327,935     1,327,935 
--------------------------------------  --------------  ------------  ------------ 
 Cash and cash equivalents at 
  end of period                             61,292,135     2,514,326    31,301,467 
--------------------------------------  --------------  ------------  ------------ 


1. Significant accounting policies

Details of the significant accounting policies are set out below.

   a)     Basis of preparation 

The interim results for the six-months ended 30 April 2021 are unaudited. They have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. The interim results have been drawn up using the accounting policies and presentation consistent with those disclosed and applied in the annual report and accounts for the year ended 31 October 2020. The comparative information contained in the report does not constitute the accounts within the meaning of section 240 of the Companies Act 1985 and section 435 of the Companies Act 2006.

The financial statements have been prepared on a going concern basis notwithstanding the trading losses being carried forward and the expectation that the trading losses will continue for the near future as the Company transitions from research and development to commercial operations.

The Company currently consumes cash resources and will continue to do so until sales revenues are sufficiently high enough to generate net cash inflows. Management have prepared and reviewed five-year financial projections aligned with ongoing technological, operational and commercial strategies. During the initial period of commercialisation there will be negative cash flows dependent upon the speed at which revenue grows. At 30 April 2021 unrestricted cash resources were GBP61.3 million. The Directors have reasonable expectation that sufficient funding exists to meet payment obligations as and when they fall due. The directors' having taken into account current cash resources, identified risks including the impact of Covid 19 and financial forecasts the Company has adequate resources to continue in operational existence for the foreseeable future (being a period of at least twelve months from the date of this report). Thus, the Directors believe that it is reasonable to continue to adopt the going concern basis in preparing the Annual Report and financial statements.

The accounting policies set out below have, unless otherwise stated, been applied consistently in these financial statements.

   b)     Capital Policy 

The Company manages its equity as capital. Equity comprises the items detailed within the principal accounting policy for equity and financial details can be found in the statement of financial position. The Company adheres to the capital maintenance requirements as set out in the Companies Act.

   c)     Revenue recognition 

To determine whether to recognise revenue, a 5-step process is followed:

   -       identifying the contract with a customer 
   -       identifying the performance obligations 
   -       determining the transaction price 
   -       allocating the transaction price to the performance obligations 
   -       recognising revenue as the performance obligations are satisfied. 

Revenue is generated from complex contracts covering the

   -       sale of goods and parts, 
   -       sale of services and maintenance, and 
   -       lease contracts 

and may be either a single or multiple contracts. Multiple contracts are accounted for as a single contract where one or more of the following criteria are met,

   -       the contracts were negotiated as a single commercial package, 
   -       consideration of one contract depends upon the other contract, and 
   -       some or all of the goods and services comprise a single performance obligation. 

Performance obligations of the contracts are analysed between either physical goods and services delivered or service level agreements. The transaction price of the performance obligations is based upon the contract terms considering both cash and non-cash consideration. Non-cash consideration is valued at fair value taking into consideration contract terms and known arm's length pricing where available.

Revenue is recognised either at a point in time or over time, as the performance obligations are satisfied by transferring the promised goods or services to its customers. Contract liabilities are recognised for consideration received in respect of unsatisfied performance obligations and reports these amounts as Contract and other liabilities in the statement of financial position. Similarly, if a performance obligation is satisfied before it receives the consideration, a contract asset or receivable is recognised in the statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

Sale (standard products) contracts - revenue from standard products will be recognised at a point of time only when the performance obligation has been fulfilled and ownership of the goods has transferred, which is typically at site or factory acceptance, which is the official handover of control of the goods to the customer.

- During the product build, deposits and progress payments will be reflected in the balance sheet as either accrued or deferred income.

- Costs incurred on projects to date will not be included in the statement of comprehensive income but will be accumulated on the balance sheet as work in progress (as they are considered recoverable) and transferred to cost of sales once the revenue applicable to those costs can be recognised in the accounts. Should costs exceed anticipated revenues, a provision will be recognised, and the surplus costs expensed with immediate effect.

Sale (customised products) contracts - revenues for customised contracts will be recognised over time according to how much of the performance obligation has been satisfied. This is measured using the input method, comparing the extent of inputs towards satisfying the performance obligation with the expected total inputs required. Any changes in expectation are reflected in the total inputs figure as they become known. The progress percentage obtained is then applied to the revenue associated with that performance obligation.

Lease and long-term service contracts - revenue is recognised over time based on outputs provided to the customer, because this is the most accurate measurement of the satisfaction of the performance obligation. Revenue can comprise a fixed rental charge and a variable charge related to the usage of assets or other services (including pass-through fuel).

   d)    Other Income 

Other income represents sales by the Company of waste materials.

   e)     Development Costs 

Identifiable non-recurring engineering and design costs and other prototype costs incurred to develop a technically and commercially feasible product are capitalised.

   f)      Foreign Currency 

The financial statements of the Company are presented in the currency of the primary economic environment in which it operates (the functional currency) which is pounds sterling. In accordance with IAS 21, transactions entered by the Company in a currency other than the functional currency are recorded at the rates ruling when the transactions occur. At each Statement of Financial Position date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the Statement of Financial Position date.

   g)    Inventory 

Inventory is recorded at the lower of cost and net realisable value.

   h)    Other Receivables 

These assets are initially recognised at fair value and are subsequently measured at amortized cost less any provision for impairment.

   i)      Tangible fixed assets 

Property and equipment are stated at cost less any subsequent accumulated depreciation and impairment losses.

Right-of-use assets are measured at either:

- Their carrying amount as if IFRS 16 has been applied since commencement, discounted using the lessee's incremental borrowing rate at the date of initial application.

- An amount equal to the lease liability, adjusted for any prepaid or accrued lease payments.

Where parts of an item of property and equipment have different useful lives, they are accounted for as separate items of property and equipment.

Depreciation is charged to the statement of comprehensive income within cost of sales and administrative expenses on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

   --     Right of use asset - building                     life of the lease 
   --     Leasehold improvements                          1 to 3 years 
   --     Decommissioning asset                            life of the lease 
   --     Fixtures, fittings and equipment               1 to 3 years 
   --     Motor vehicles                                            3 to 4 years 
   --     Demonstration equipment                         5 years 
   --     Rental fleet                                                  5 years 

Expenses incurred in respect of the maintenance and repair of property and equipment are charged against income when incurred. Refurbishment and improvement expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.

The useful economic lives of property, plant and equipment and the carrying value of tangible fixed assets are assessed annually and any impairment is charged to the statement of comprehensive income.

   j)      Intangible Assets 

Expenditure in establishing a patent is capitalised and written off over its useful life.

Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and impairment losses.

Amortisation of intangible assets is charged using the straight-line method to administrative expenses over the following period:

   --     Development costs                                    5 years 
   --     Patents                                                         20 years 

Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness and any impairment is charged to the statement of comprehensive income.

   k)     Impairment testing of intangible assets and property, plant and equipment 

At each statement of financial position date, the Group reviews the carrying amounts of the assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). In assessing whether an impairment is required, the carrying value of the asset is compared with its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal (FVLCD) and value in use (VIU).

   l)      Lease liabilities 

Measurement and recognition of leases as lessee

At lease commencement date, a right of use and lease liability are recognised on the Statement of Financial Position. The right of use asset is measured at cost, which comprises the initial measurement of the lease liability, any initial direct costs incurred, an estimate of costs to dismantle and remove the asset at the end of the lease term and any lease payments made in advance of the lease commencement date.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

After initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right of use asset, or profit and loss if the right of use asset is already reduced to zero.

Short term leases and low value assets have been accounted for using the practical expedients set out in IFRS 16 and the payments are recognised as an expense in profit or loss on a straight-line basis over the lease term.

   m)    Financial instruments 

Financial instruments are measured on initial recognition at fair value, plus, in the case of financial instruments other than those classified as fair value through profit or loss ("FVPL"), directly attributable transaction costs. Financial instruments are recognised when the Company becomes a party to the contracts that give rise to them and are classified as amortised cost, fair value through profit or loss or fair value through other comprehensive income, as appropriate. The Company considers whether a contract contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the host contract if the host contract is not measured at fair value through profit or loss and when the economic characteristics and risks are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

In the periods presented the Group does not have any financial assets categorised as FVPL or FVOCI.

Financial assets at amortized cost

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding and is not designated as FVPL. Financial assets classified as amortized cost are measured after initial recognition at amortized cost using the effective interest method. Cash, restricted cash, other receivables are classified as and measured at amortized cost.

Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.

Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in net earnings when the liabilities are derecognized as well as through the amortization process. Borrowing liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date. Accounts payable and accrued liabilities and finance leases are classified as and measured at amortized cost.

Impairment of financial assets

A loss allowance for expected credit losses is recognised in OCI for financial assets measured at amortised cost. At each balance sheet date, on a forward-looking basis, the Company assesses the expected credit losses associated with its financial assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The expected credit losses are required to be measured through a loss allowance at an amount equal to the 12-month expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date) or full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument). A loss allowance for full lifetime expected credit losses is required for a financial instrument if the credit risk of that financial instrument has increased significantly since initial recognition.

Derecognition of financial assets and liabilities

A financial asset is derecognised when either the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party. If neither the rights to receive cash flows from the asset have expired nor the Company has transferred its rights to receive cash flows from the asset, the Company will assess whether it has relinquished control of the asset or not. If the Company does not control the asset, then derecognition is appropriate. A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in net earnings.

   n)    Share-Based Payment Transactions 

The fair value of options and warrants granted is recognised as an employee expense with a corresponding increase in Other Reserve. The fair value of the expense is estimated at grant date using the Black-Scholes option valuation model considering the terms and conditions upon which they were granted and a Log normal Monte Carlo stochastic model for market conditions. The expense accrues from the grant date until the options and warrants have unconditionally vested. Where vesting is dependent upon market or non-market performance criteria the vesting period is estimated at the grant date and, in the case of non-market performance criteria, is revised annually. When an option or warrant is exercised, the balance is transferred to share capital with excess value going to the premium account whereas those that lapse are transferred to retained earnings. Where options or warrants are amended by the introduction of new schemes and the absorption of earlier schemes by agreement between the Company and the beneficiary the net difference in valuation is charged to earnings in the appropriate period.

   o)    Provisions 

Provisions are recognised when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the Statement of Financial Position date and are discounted to present value where the effect is material.

   p)    Taxation 

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable or recoverable on the taxable income for the year, using tax rates enacted or substantively enacted at the Statement of Financial Position date together with any adjustment to tax payable in respect of previous years.

Deferred tax assets are not recognised due to the uncertainty of their recovery.

   q)    R&D Tax Credits 

The Company's research and development activities allow it to claim R&D tax credits from HMRC in respect of qualifying expenditure; these credits are reflected in the statement of comprehensive income in administrative expenses or in the taxation line depending on the nature of the credit.

   r)     Pension Contributions 

The Company operates a defined contribution pension scheme which is open to all employees and makes monthly employer contributions to the scheme in respect of employees who join the scheme. These employer contributions are currently capped at 3% of the employee's salary and are reflected in the statement of comprehensive income in the period for which they are made.


In the preparation of the financial statements, management makes certain judgements and estimates that impact the financial statements. While these judgements are continually reviewed, the facts and circumstances underlying these judgements may change, resulting in a change to the estimates that could impact the results of the Company. In particular:

Significant management judgements:

The following are the judgements made by management in applying the accounting policies of the Company that have the most significant effect on the financial statements:

Customer contracts and revenue recognition

Customer contracts typically include the provision of

- engineering, manufacturing, installation, commissioning, and maintenance of standard and customised alkaline fuel cell systems and integrated auxiliary equipment, and

   -           access to or sale of technology. 

These performance obligations are provided for as either,

   -           Lease contract, or 
   -           Sale contract 

In accordance with IFRS 16 management defines a lease as "A contract, or part of a contract, that conveys the right to use an identified asset for a period of time in exchange for consideration". For such a contract to exist the user of the asset needs to have the right to:

   -           Obtain substantially all the economic benefits from the use of the asset. 
   -           The right to direct the use of the asset. 

All other contracts, or part of a contract, are treated as sale contracts. Sales contracts are analysed in accordance with the 5-step principle laid out by IFRS 15 and management distinguish between

   -           Standard products, 
   -           Customised products, and 
   -           Services. 

The distinction between standard and customised products arises from whether the products and auxiliary components up to the point of customer handover have alternative uses. Customised contracts by their nature do not create an asset with an alternative use as they are customised to the customers' requirements which cannot be easily converted for use on another project.

Customer agreements can be complex, involve multiple legal documents and have a duration covering multiple accounting periods including different performance obligations and payment terms designed to manage cash flow rather than the underlying arm's length transaction price. Management use judgement to identify the specific performance obligations and allocate the total expected revenue to the identified performance obligations. These judgements are made based on the interpretation of key clauses and conditions within each customer contract. Revenue is recognised when the performance obligation has been met. For standard products, the performance obligations are assumed to be met when the customer takes delivery usually evidenced by either a factory or site acceptance test depending upon the agreed delivery terms.

For customised products management consider that revenue can be recognised over time due to their status as custom builds. In accounting for their revenue under this method, management must take a view of the total costs required for each performance obligation together with the actual spend already recognised in cost of sales to be able to recognise an equivalent proportion of the revenue for that performance obligation.

As this relates to expense not yet incurred, the projections are largely based on budgeted costs or quotes for costs. Management view this as a much more reliable measure of progress towards completion of the performance obligation than the output method as, despite contracting with milestone payments, these are not reliable measures of progress or value to the customer but instead have been designed to aid cash flow. Project reviews covering cost forecasts and technical progress are monitored periodically to ensure that any potential losses are recognised immediately in the accounts in accordance with IAS 37.

Income Taxes and Withholding Taxes

The Company believes that its receivables for tax recoverable are adequate for all open audit years based on its assessment of many factors, including experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgements about future events. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact income tax expense in the period in which such determination is made.

Capitalisation of Development Expenditure

The Company uses the criteria of IAS 38 to determine whether development expenditure should be capitalised. Management identifies separately non-recurring engineering, design costs and prototype costs incurred to develop demonstration units used in marketing activities and customer trials. Management believes that the Development Expenditure will continue to support marketing and customer trials for the foreseeable future. This assessment relies upon judgements about future customer behaviour taking in to account the feedback received from prospective customers and future product improvements which influence the economic useful life and residual value of said assets. To the extent that customer demand or competing products enter the market the economic useful life and residual value of the Development Expenditure may change which will impact depreciation and amortisation expenses for the period in which such determination is made.

Estimates uncertainty:

Information about estimates and assumptions that may have the most significant effect on recognition and measurement on assets, liabilities and expenses is provided below.

Share-Based Payments

Certain employees (including Directors and senior Executives) of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ("equity-settled transactions").

The fair value is determined using either the Black-Scholes valuation model or a Log-normal Monte Carlo stochastic model for market conditions. Both are appropriate considering the effects of the vesting conditions, expected exercise period and the dividend policy of the Company.

The cost of equity-settled transactions is accrued, together with a corresponding increase in equity over the period the directors expect the performance criteria will be fulfilled. For market performance criteria this estimate is made at the time of grant considering historic share price performance and volatility. For non-market performance criteria an estimate is made at the time of grant and reviewed annually thereafter considering progress on the operational objectives set, plans and budgets.

Expected volatility has been based on the 3.5-year historical volatility of share price. Vesting requirements are three years for the exercise of warrants and options, except for 500,000 options granted which vest in two years. Certain options granted to Directors are also subject to performance conditions described in note 18.

Decommissioning Provision

The Company has set-up a decommissioning provision for the removal of the plant and equipment installed at the Stade site in Germany, the cost of which is based on estimates. Various scenarios have been considered which estimate the range of costs to be from GBP35,000 to GBP301,000 dependent upon agreements reached with lessor.


Operating segments are determined by the chief operating decision maker based on information used to allocate the Company's resources. The information as presented to internal management is consistent with the statement of comprehensive income. It has been determined that there is one operating segment, the development of fuel cells. In the period to 30 April 2021, the Company operated mainly in the United Kingdom and in Germany. All non-current assets are in the United Kingdom.

4. FINANCe cost

                             Six-months   Six-months   Year ended 
                                  ended        ended 
                               30 April     30 April   31 October 
                                   2021         2020         2020 
                                    GBP          GBP          GBP 
                              Unaudited    Unaudited      Audited 
--------------------------  -----------  -----------  ----------- 
 Lease interest                  12,724        6,532       12,072 
 Bank charges                     5,567        3,288      172,503 
 Bank interest receivable       (6,155)      (1,111)      (6,168) 
--------------------------  -----------  -----------  ----------- 
 Total finance cost              12,136        8,709      178,407 
--------------------------  -----------  -----------  ----------- 


                                    Six-months   Six-months   Year ended 
                                         ended        ended 
                                      30 April     30 April   31 October 
                                          2021         2020         2020 
                                           GBP          GBP          GBP 
 Recognised in the statement         Unaudited    Unaudited      Audited 
  of comprehensive income: 
---------------------------------  -----------  -----------  ----------- 
 R&D tax credit - current period     (283,072)    (321,273)    (518,099) 
 R&D tax credit - prior year                 -            -     (41,528) 
---------------------------------  -----------  -----------  ----------- 
 Total tax credit                    (283,072)    (321,273)    (559,627) 
---------------------------------  -----------  -----------  ----------- 


The calculation of the basic loss per share is based upon the net loss after tax attributable to ordinary Shareholders and a weighted average number of shares in issue for the period.

                                      Six-months      Six-months     Year ended 
                                           ended           ended 
                                   30 April 2021   30 April 2020     31 October 
                                       Unaudited       Unaudited        Audited 
--------------------------------  --------------  --------------  ------------- 
 Basic loss per share (pence)              0.49p           0.40p          0.80p 
 Diluted loss per share (pence)            0.49p           0.40p          0.80p 
 Loss attributable to equity        GBP3,315,197    GBP1,820,549   GBP4,224,992 
--------------------------------  --------------  --------------  ------------- 
 Weighted average number of 
  shares in issue                    674,707,843     460,105,587    528,865,765 
--------------------------------  --------------  --------------  ------------- 

Diluted earnings per share:

There are share options and warrants outstanding as at 30 April 2021 which, if exercised, would increase the number of shares in issue. However, the diluted loss per share is the same as the basic loss per share, as the loss for the period has an anti-dilutive effect.


                                 Development   Patents   Commercial       Total 
                                       costs                 rights 
                                         GBP       GBP          GBP         GBP 
------------------------------  ------------  --------  -----------  ---------- 
 At 31 October 2020                  229,043   799,705      121,350   1,150,098 
 Additions                                 -    56,236            -      56,236 
------------------------------  ------------  --------  -----------  ---------- 
 At 30 April 2021 (unaudited)        229,043   855,941      121,350   1,206,334 
------------------------------  ------------  --------  -----------  ---------- 
------------------------------  ------------  --------  -----------  ---------- 
 At 31 October 2020                   28,138   343,590        9,101     380,829 
 Charge for the period                22,905    19,581       12,135      54,621 
------------------------------  ------------  --------  -----------  ---------- 
 At 30 April 2021 (unaudited)         51,043   363,171       21,236     435,450 
------------------------------  ------------  --------  -----------  ---------- 
 Net Book Value: 
------------------------------  ------------  --------  -----------  ---------- 
 At 31 October 2020                  200,905   456,115      112,249     769,269 
------------------------------  ------------  --------  -----------  ---------- 
 At 30 April 2021 (unaudited)        178,000   492,770      100,114     770,884 
------------------------------  ------------  --------  -----------  ---------- 


 31 October 2020                475,971 
 Additions                      936,312 
 30 April 2021 (unaudited)    1,412,283 
---------------------------  ---------- 
 31 October 2020                228,466 
 Charge for the period          103,933 
 30 April 2021 (unaudited)      332,399 
---------------------------  ---------- 
 Net Book Value 
 30 April 2021 (unaudited)    1,079,884 
---------------------------  ---------- 
 31 October 2020                247,505 
---------------------------  ---------- 


                    Leasehold   Decommissioning    Fixtures,       Motor   Demonstration    Rental       Total 
                 improvements             Asset     fittings    vehicles       equipment     asset 
                          GBP               GBP          GBP         GBP             GBP       GBP           GBP 
--------------  -------------  ----------------  -----------  ----------  --------------  --------  ------------ 
 31 October 
  2020                221,512           301,172    1,486,488      17,994         326,975   423,138     2,777,279 
 Additions            409,117                 -      161,639           -               -   280,291       851,047 
 30 April 
  (unaudited)         630,629           301,172    1,648,127      17,994         326,975   703,429     3,628,326 
--------------  -------------  ----------------  -----------  ----------  --------------  --------  ------------ 
 31 October 
  2020                221,512           233,215    1,310,383      17,994          53,957         -     1,837,061 
 Charge for 
  the p er 
  iod                   6,723            15,682       47,206           -          32,698    35,150       137,459 
 30 April 
  (unaudited)         228,235           248,897    1,357,589      17,994          86,655    35,150     1,974,521 
--------------  -------------  ----------------  -----------  ----------  --------------  --------  ------------ 
 Net Book 
 30 April 
  (unaudited)         402,394            52,275      290,538           -         240,320   668,279     1,653,806 
--------------  -------------  ----------------  -----------  ----------  --------------  --------  ------------ 
 31 October 
  2020                      -            67,957      176,105           -         273,018   423,138       940,218 
--------------  -------------  ----------------  -----------  ----------  --------------  --------  ------------ 


               30 April    30 April   31 October 
                   2021        2020         2020 
                    GBP         GBP          GBP 
              Unaudited   Unaudited      Audited 
-----------  ----------  ----------  ----------- 
 Inventory      759,596      95,423      249,370 
-----------  ----------  ----------  ----------- 


                                30 April    30 April   31 October 
                                    2021        2020         2020 
                                     GBP         GBP          GBP 
                               Unaudited   Unaudited      Audited 
----------------------------  ----------  ----------  ----------- 
 Current : 
 R&D tax credits receivable      801,171     924,268      518,099 
 EU grants receivable            104,547     106,598      106,642 
 Other receivables               430,860     125,955      264,367 
 Prepayments                     303,002     276,837      154,772 
----------------------------  ----------  ----------  ----------- 
                               1,639,580   1,433,658    1,043,880 
----------------------------  ----------  ----------  ----------- 

There is no significant difference between the fair value of the receivables and the values stated above.


                    30 April    30 April   31 October 
                        2021        2020         2020 
                         GBP         GBP          GBP 
                   Unaudited   Unaudited      Audited 
---------------  -----------  ----------  ----------- 
 Cash at bank      1,001,020     430,728      286,578 
 Bank deposits    60,291,115   2,083,598   31,014,889 
---------------  -----------  ----------  ----------- 
                  61,292,135   2,514,326   31,301,467 
---------------  -----------  ----------  ----------- 

Cash at bank and bank deposits consist of cash. There is no material foreign exchange movement in respect of cash and cash equivalents. Restricted cash, not included in cash and cash equivalents, is EUR300,000 (30 April 2020: EUR300,000) held in escrow to support a bank guarantee in favour of Air Products GmbH relating to contractual obligations by the Company in relation to the Stade site in Germany.


                                            Ordinary   Share Capital   Share premium         Total 
                                              Number             GBP             GBP           GBP 
                                           Unaudited       Unaudited       Unaudited     Unaudited 
--------------------------------------  ------------  --------------  --------------  ------------ 
 At 31 October 2020                      676,006,310         676,006      81,417,845    82,093,851 
 Exercise of options 25 November 2020         55,000              55           4,785         4,840 
 Exercise of options 01 December 2020         90,000              90          13,770        13,860 
 Exercise of options 15 January 2021         114,500             115          17,519        17,634 
 Exercise of options 15 January 2021          25,000              25           2,175         2,200 
 Exercise of options 15 January 2021          35,000              35          12,478        12,513 
 Exercise of options 15 January 2021          15,000              15           5,085         5,100 
 Exercise of options 6 April 2021            150,000             150          61,350        61,500 
 Issue of shares 23 April 2021            56,259,690          56,260      34,631,901    34,688,161 
 Exercise of options 26 April 2021            32,500              32           4,972         5,004 
 Exercise of options 26 April 2021            40,000              40          14,260        14,300 
 At 30 April 2021                        732,823,000         732,823     116,186,140   116,918,963 
--------------------------------------  ------------  --------------  --------------  ------------ 

All issued shares are fully paid.


                          30 April    30 April   31 October 
                              2021        2020         2020 
                               GBP         GBP          GBP 
                         Unaudited   Unaudited      Audited 
----------------------  ----------  ----------  ----------- 
 Current liabilities: 
 Trade payables            396,171       2,486      347,167 
 Deferred income           112,500           -      150,000 
 Other payables            233,228     204,794      199,261 
 Accruals                  544,854     200,655      540,368 
----------------------  ----------  ----------  ----------- 
                         1,286,753     407,935    1,236,796 
----------------------  ----------  ----------  ----------- 


                                     30 April     30 April   31 October 
                                         2021         2020         2020 
                                          GBP          GBP          GBP 
                                    Unaudited    Unaudited      Audited 
 Lease liabilities less than 12 
  months                              660,283      113,431      113,431 
 Lease liabilities more than 12 
  months                              301,172      203,579      146,368 
--------------------------------  -----------  -----------  ----------- 
                                      961,455      317,010      259,799 
--------------------------------  -----------  -----------  ----------- 

16. Provisions

                               30 April    30 April   31 October 
                                   2021        2020         2020 
                                    GBP         GBP          GBP 
                              Unaudited   Unaudited      Audited 
---------------------------  ----------  ----------  ----------- 
 Decommissioning provision      301,172     301,172      301,172 

The Company has set up a decommissioning provision associated with a commitment to remove the plant and equipment installed at the Stade site in Germany at a future date and for dilapidations associated with the leasehold premises at Dunsfold in the UK.


There have been no events after the reporting period.


The financial information contained in this interim statement does not constitute accounts as defined by the Companies Act 2006. The financial information for the preceding period is based on the statutory accounts for the year ended 31 October 2020. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.

Copies of the interim statement may be obtained from the Company Secretary, AFC Energy PLC, Unit 71.4 Dunsfold Park, Cranleigh, Surrey GU6 8TB, and can be accessed from the Company's website at www.afcenergy.com.

[1] https://iea.blob.core.windows.net/assets/ed5f4484-f556-4110-8c5c-4ede8bcba637/GlobalEVOutlook2021.pdf

[2] Taken from https://www.imo.org/en/MediaCentre/HotTopics/Pages/Reducing-greenhouse-gas-emissions-from-ships.aspx

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(END) Dow Jones Newswires

June 23, 2021 02:00 ET (06:00 GMT)

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