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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Idatech | LSE:IDA | London | Ordinary Share | GB00B1WTNQ84 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 6.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jun 2019 to Jun 2024
TIDMIDA
RNS Number : 4349D
IdaTech PLC
23 March 2011
Immediate Release 23 March 2011
IdaTech plc
Preliminary Results
IdaTech plc (AIM: IDA) a global leader in the development and manufacture of clean and reliable PEM fuel cell products for critical power markets, today announces its Preliminary Results for the 12 months ended 31 December 2010.
Operational highlights
-- 2010 was a significant turning point for the Group
-- Focus on path to profitability progressing well - Shipped 350 systems, 280 profitable (2009; 445 and 9 respectively)
-- New product launches achieved - Launched ElectraGen(TM) ME
o Profitable and competitive with diesel generators on price
o Reduced size and footprint
o Improved durability
o Reduced complexity, simplified maintenance
-- Growing order book - Entered 2011 with backlog of orders of US$1.6m (2009 US$0.8m)
-- Acquired Plug Power Inc.'s LPG fueled off grid fuel cell product line.
o Commenced design testing of system
o Re-branded iGen(TM) LP
-- Expanded Mexico production facility to support new ElectraGen(TM) ME unit production with US$ 0.5 million invested
Financial Highlights
-- Revenue from product sales US$4.0million (2009 US$4.5 million)
o Limited sales of loss making earlier generation products
-- Total revenue US$4.5 million (2009 US$6.6 million)
-- Gross loss reduced substantially by 34% as a result of shift to profitable product sales (2009 US$5.0 million loss) despite costs of expansion of facility in Mexico.
-- 22.5% improvement in EBITDA loss of US$20.0 million (2009 US$25.3 million), in line with market expectations
-- Continued financial support of the Investec Group, major shareholder
-- Cash usage, excluding funding for the acquisition of the Plug Power Inc. assets and IP license, fell by 10.6% to US$22.8m (2009 US$24.9 million) despite investment in working capital
Commenting on the outlook, Hal Koyama, CEO said:
2010 was a significant turning point for IdaTech with the launch of its profitable products that are price comparable with diesel generators. This price competitiveness is expected to stimulate sales growth and further improve the gross margin. Progress towards this can already be seen in the results for 2010
This places the Group well for sustainable growth into 2011 and beyond with the objective to achieve a meaningful reduction in the cash burn rate in 2011 as volume from the new products increases.
During 2011 IdaTech will launch additional ElectraGen(TM) products and continue to develop the iGen(TM) LP so it is ready for a commercial deployments in 2012.
The Board believes IdaTech is well positioned to take advantage of the significant market opportunities that it sees for its next generation systems and is confident of achieving increased profitable sales.
For further information please contact:
IdaTech plc +1 541 383 3390 Harol Koyama, Chief Executive Officer James Cooke, Chief Financial Officer Numis Securities Limited +44 (0) 20 7260 1000 Michael Meade / Hugh Jonathan (Nominated Adviser) Buchanan Communications +44 (0) 20 7466 5000 Charles Ryland / Catherine Breen
Chairman's Statement
2010 was a successful year of transition for the Group as the new generation of ElectraGen(TM) products were introduced and older generation products began to be phased out. Of particular significance is that the new generation products are profitable at the gross margin contribution level (before overheads) and can still compete with diesel generators on price, whereas the older generation products were loss making even when sold at higher prices. IdaTech believes this is a game changing event, and this, together with increasing volumes will drive the business into sustainable cash generation.
An unexpected, yet very exciting opportunity for IdaTech, was the purchase from Plug Power Inc. ("Plug"), for a total consideration of US$5 million, of its off grid liquid petroleum fueled product line, including most of the assets of the business and license to all relevant intellectual property. This enables IdaTech to develop the off grid market much earlier than anticipated.
IdaTech will continue to release variants of its new generation ElectraGen(TM) product line throughout 2011.These are designed to meet its customers' specific needs in expanding geographies around the world, whilst maximising profit potential.
Financial Overview
Revenue for the year was US$4.5 million, with a significantly improved gross margin loss of US$3.2 million over the prior year. In 2009 revenue was US$6.6 million with a gross loss of $ 5.0 million. During 2010 IdaTech did not pursue any development projects, concentrating its activities on the profitable commercialisation of its products which is in line with IdaTech's Path to Profitability strategy as announced last year. This accounted for the decrease in revenue.
The operating loss before tax fell significantly to US$23.5 million from US$33.5 million in 2009. US$1.8 million of this decrease was due to the improved gross margin loss, US$2.7 million from reduced operating overheads and US$4.5 million was as a result of the decision in 2009 to cancel the development of the 250W fuel cell system which resulted in an accelerated write down of intangibles in the prior year.
Funding
As in previous years, IdaTech's majority shareholder, the Investec Group, has indicated its current intention to ensure that the Group is in a position to meet its debts as and when they fall due. The loan note funding provided by Investec together with further funding required during the current year, will be repayable on 31 March 2012. The Directors remain active in considering the options available to refinance these amounts ahead of the repayment date.
After due consideration, the Directors have concluded it is appropriate to continue to prepare the financial statements on a going concern basis.
People
2010 was the first full year of execution of IdaTech's Path to Profitability strategy to achieve sustainable cash generation. This has required a great deal of hard work, commitment and tenacity from its employees, the result of which is a portfolio of truly commercial profitable products.
On behalf of the Board, I would like to thank everyone at IdaTech for their contribution during the year.
Sir John Jennings
Chairman
22 March 2011
Chief Executive's Business Review
Overview of 2010 and Path to Profitability strategy
IdaTech commenced shipments of its new generation methanol/water fueled product, the ElectraGen(TM) ME, in December 2010. This is the second of the new generation ElectraGen(TM) products to be launched and is an exciting and important development for IdaTech as it provides the cornerstone in its Path to Profitability strategy to cash breakeven and profitable growth.
The new generation ElectraGen(TM) family of products incorporates substantial cost and performance improvements which can be sold profitably in significantly higher volumes than earlier versions. These improvements offer customers a compelling value proposition against diesel generators whilst yielding positive margins for IdaTech.
As mentioned in the Chairman's Statement, in October 2010, IdaTech completed the purchase of Plug Power Inc's ("Plug") off grid liquid petroleum fueled product line (now called the iGen(TM) LP) together with a worldwide, royalty free, perpetual license to all relevant intellectual property ("IP"). Under the terms of the agreement, IdaTech is able to leverage the Plug IP with its own IP and future inventions, creating one of the largest portfolios of commercial fuel cell related technology in the world. This puts IdaTech in a unique position to serve both the on grid market with its ElectraGen(TM) range of backup power systems and the off grid market with the iGen(TM) LP. This acquisition doubles the Company's effective potential market and opens the door to a substantially larger non-telecom market for off grid products, as discussed below. Additionally, the acquisition provides IdaTech with state of the art, core fuel cell stack technology that has been proven for over a decade and which can be used in all of IdaTech's markets.
As announced last year, IdaTech's Path to Profitability strategy has four key elements. These remain unchanged, although the addition of the iGen(TM) LP product accelerates the Group's entry into new products.
-- Seeding the market: Prepare the worldwide customer base for rapid adoption of IdaTech's fuel cell products by the sale of profitable and reliable systems.
-- New product development: Identify and pursue next generation fuel cell products that can compete directly in the diesel generator market and simultaneously derive attractive gross margins for the Group.
-- Lean production: Establishing and validating flexible, low cost and high quality production capabilities.
-- Focusing on execution: Eliminate or de-emphasise activities that distract the Group from its primary path to profitability and align resources to ensure success.
IdaTech successfully executed against this plan during the year, continuing to move towards profitable growth, achieving a substantially reduced gross margin loss and overall operating loss.
Seeding the market
IdaTech's initial commercial focus is on the critical power backup market for the telecommunication industry. This market has been estimated to be worth around US$ 2 billion per annum, covering around 3 million sites globally. Geographically, the Group is targeting the key markets of Asia, India and the Americas. IdaTech believes that the new ElectraGen(TM)ME pricing point expands its accessible market by about six fold to around 1.8 million base stations.
During 2010, IdaTech increased the number of distribution partners to 38, using this extensive network to cost effectively expand across wide geographies and gain access to the key decision markets within its target customer base. To date, the Group has achieved certification for its products with 27 telecommunications companies, including 5 of the top 10 telecommunications companies worldwide by revenue.
During the year, IdaTech sold over 350 systems, 280 of which (the new generation ElectraGen(TM) H2 and ElectraGen(TM) ME products) were sold at a positive gross contribution margin (2009 9 units).
In order to manage its cash resources, IdaTech restricted the number of loss making earlier generation ElectraGen(TM) products and targeted the systems it sold to new and existing key customers that are able to support material volume growth in the future. This reduced the number of system sales and revenue compared to 2009.
The sales order pipeline at the end of the year had doubled to US$ 1.6 million (2009 US$ 0.8 million).
New Product Development
IdaTech's intensive development and testing of the ElectraGen(TM)ME ensured the launch of the new product in December 2010. This system currently represents the core product supporting the Group's drive to profitable growth. The ElectraGen(TM)ME cost base is significantly less than that of its predecessor system and is profitable at the gross margin level. Additionally, the durability of key components will increase while reducing its size by approximately 30%. The Group believes this product successfully competes directly with diesel generator systems.
With the addition of the iGen(TM) LP product line, IdaTech can now enter the off grid market much earlier than previously expected. This is of particular significance as the global off grid market is very large. Around 1.6 billion people have no access to on grid electricity and the need for electricity is expected to double by 2030. Additionally, around 95%, or 10,000 MW (2 million 5kWe equivalents) of the off grid power requirement is served by diesel generators. Initially IdaTech's iGen(TM) LP will be targeted at telecommunications applications as many of its customers have no satisfactory off grid product. The estimated market size of this market is approximately US$ 3 billion, with over 100,000 potential sites worldwide. IdaTech believes that the iGen(TM) LP could provide a reliable and cost effective solution for such customers and displace a large number of inefficient, polluting and noisy diesel generators with the iGen(TM) LP. The Company will continue testing the iGen(TM)LP and incorporating technical and cost saving synergies through most of 2011.
The Group's product cost and performance objectives are being met through the following specific initiatives:
-- proprietary technological advances;
-- product design simplification;
-- increased use of off the shelf parts; and
-- establishment of a global supply chain, taking advantage of lower cost jurisdictions.
Lean Production
During 2010, IdaTech expanded the capacity of its production plant in Tijuana, Mexico adding key technical fabrication capabilities. This improved facility and manufacturing line gives the Group a flexible, low cost volume manufacturing operation without the need for large capital investment.
These improvements enable the facility to produce all lines of the ElectraGen(TM) range in an efficient and flexible manner with a capacity to build up to approximately 5,000 units. In early 2010, the Tijuana facility was awarded ISO 9001 certification.
Focusing on Execution
A key element to IdaTech's successful completion and launch of the ElectraGen(TM) ME during the year was the decision in 2009 to focus purely on product development for its core market in providing power for telecommunication applications. This approach was also instrumental in preparing production and conducting a smooth transition with key customers from the older products to the new ElectraGen(TM) products.
Financial Overview
Revenue for 2010 was US$4.5 million, of which US $4.0 million was from the sale of products. In 2009 revenue was US$6.6 million in total, US$4.5 million from product sales and US$ 2.1 million relating to projects.
During 2010, IdaTech sold over 350 systems, 280 of which were sold at a positive gross contribution margin (2009 445 and 9 units respectively). IdaTech's next generation systems, the ElectraGenTM H2 and the ElectraGenTM ME, accounted for 280 of the 2010 unit sales. The remainder of the sales consisted of now discontinued, earlier generations of its products.
This occurred because of the decisions taken in 2009 as part of IdaTech's Path to Profitability strategy.
- To restrict the sales of older, loss making products during 2010 in order to manage the Group's resources; and
- Not to pursue development projects but to focus on new generation products.
A significant development during the year as a result of these decisions was the significant improvement in the gross loss of US$ 1.8 million which fell to US$3.2 million from US$ 5.0 million in 2009. This was despite the large fall in revenue from projects which typically have a much higher gross margin than product sales. Excluding the gross margin from projects, the gross loss from products improved from US$ 6.2 million to US$3.2 million.
In total, operating expenses fell by US$ 8.0 million to US$20.5 million compared with 2009. Research and development costs in the year were US$11.5 million (2009 US$17.7 million). Allowing for the US$4.5 million impact in 2009 of the write off of IP relating to the IdaTech's 250W product, recurring expenses fell by US$1.7 million year on year due to the refocusing of the development team solely on the ElectraGen(TM) ME product range.
Sales, general and administrative expenses were also lower at US$9.0 million (2008 US$10.8 million). Overall administrative expenses fell by US$1.6 million versus 2009 mainly due to reduced share based payment charges in relation to the Groups employee equity plans and reduced legal and professional fees. Sales related expenses also fell US$0.2 million compared with the prior year despite the addition of extra sales resources in Asia Pacific due to lower travel, trade shows and advertising expenditures.
EBITDA(earnings before interest, taxes, depreciation and amortization) loss decreased significantly by US$5.3 million to US$20.0 million (2009 US$25.3 million) as a result of the lower gross margin loss of US$1.8 million and lower operating overheads of US$ 3.5 million (excluding of the write off of IP relating to the IdaTech's 250W product in 2009).
There was also a material decrease in the operating loss for 2010 compared with 2009 of US$9.8 million, falling from US$33.5 million in 2009 to US$23.7 million as explained above.
Finance costs increased to US$3.6 million (2009 US$1.6 million) as the business was debt funded by its principal shareholder, the Investec Group. The loan is unsecured and interest is charged at 8% per annum.
The income tax credit decreased to US$0.5 million (2009 US$2.6m) due to the impact in 2009 of the write back of the deferred tax credit no longer required following the write down in the carrying value of the intangible assets relating to the 250W product line.
Cash outflow utilised by operations decreased to US$20.5 million in the year (2009 US$23.1 million). This occurred because of a lower operational loss of US$5.5 million (using the EBITDA measure which discounts the impact of non-cash charges), a decrease in accounts receivable of US$1.4m, offset by an increase in inventories of US$2.5 million. These movements are explained below.
There was a large increase in the level of inventories of US$2.2 million at the end of 2010 compared to 2009. There were three main reasons for this increase; the acquisition of materials relating to the off grid iGen(TM) LP product line acquired from Plug of US$0.7million, the purchase of components for the newer generation products of $0.8 million and a buildup of work in progress of prior versions of the ElectraGen(TM) ,XTIs of US$0.4million ahead of shipment in early 2011 which had been delayed from 2010.
Accounts receivable decreased by US$1.4 million to US$2.4 million. This was due to two factors: the delayed shipment of ElectraGenTM XTIs and a lower concentration of sales in the last quarter of the year compared to 2009.
Trade and other payables increased to US$9.3 million from US$6.0 million in 2009. US$2.0 million is as a result of the increase in interest payable under the loan to Investec. The balance relates to extended credit from suppliers.
Investment in tangible assets of US$0.9 million was more than double the amount spent in the prior year of US$ 0.4 million. This was due to the consolidation and expansion of the production plant in Tijuana of US$ 0.5 million and the purchase of certain equipment and tooling relating to the assets acquired from Plug for iGen(TM) LP of US$0.4million.
There was a significant increase in expenditure on intangible assets of US$ 6.2million (2009 US$ 1.3 million). Of this, US$1.5 million was internally generated intellectual property relating to the development of the new generation ElectraGen(TM) products (2009 US$ 0.8 million), US$0.5 million (2009 US$0.5 million) of new IdaTech patents, reflecting the technological breakthroughs made in the new generation products and US$4.1 million related to the IP acquired as part of the acquisition from Plug.
During the year, IdaTech drew upon its loan facility with the Investec Group, its principal shareholder. During 2010, IdaTech drew down $28 million including funding for the purchase of the assets and IP from Plug. At the end of the year the balance was $60 million. The loan is due for repayment on 31 March 2012.
Funding and going concern
These financial statements have been prepared on a going concern basis as the Investec Group, IdaTech's main shareholder, has indicated its willingness to continue to fund the business. Current funding is via debt. Although the timing is yet to be finalised, the Board believes it would be desirable to raise additional equity funding,
Outlook
2010 was a significant turning point for IdaTech with the launch of its profitable products that are price comparable with diesel generators. This price competitiveness is expected to stimulate sales growth and further improve the gross margin. Progress towards this can already be seen in the results for 2010, which show a reduction in the gross loss from US$ 5.0 million to US$ 3.2 million in 2009 and the increase in the sale of profitable systems of 280 in the year compared to just 9 in 2009.This positions the Group well for sustainable growth into 2011.
During 2011 IdaTech will launch additional ElectraGen(TM) products and continue to develop the iGen(TM) LP so it is ready for commercial deployments in 2012.
The Board believes IdaTech is well positioned to take advantage of the significant market opportunities that it sees for its next generation systems and is confident of achieving increased profitable sales.
Hal Koyama
Chief Executive Officer
22 March 2011
Consolidated statement of comprehensive income for the year ended 31 December 2010
Hot Features
Premium
Year ended Year ended
31 December 31 December
2010 2009
US$'000 US$'000
Revenue 4,465.4 6,550.6
Cost of sales (7,704.8) (11,537.2)
Gross loss (3,239.4) (4,986.6)
Research and development costs (11,493.1) (17,708.8)
Sales, general and administrative
expenses (9,032.0) (10,797.6)
Other expense 17.9 (3.7)
---------------------------------------- ------------- -------------
Operating loss (23,746.6) (33,496.7)
Operating loss before exceptional
cost (23,746.6) (28,989.7)
Research & development exceptional
cost - (4,507.0)
Operating loss (23,746.6) (33,496.7)
---------------------------------------- ------------- -------------
Finance income 1.1 6.3
Finance costs (3,648.7) (1,595.1)
---------------------------------------- ------------- -------------
Finance costs - net (3,647.6) (1,588.8)
---------------------------------------- ------------- -------------
Loss before income tax (27,394.2) (35,085.5)
Income tax credit 493.5 2,571.6
---------------------------------------- ------------- -------------
Loss for the year (26,900.7) (32,513.9)
---------------------------------------- ------------- -------------
Other comprehensive income
Gains/losses recognised directly in
equity
Other 484.0 409.8
Currency translation differences 6.5 (3.4)
------------- -------------
Other comprehensive loss for the year 490.5 406.4
---------------------------------------- ------------- -------------
Total comprehensive loss for the year (26,410.2) (32,107.5)
---------------------------------------- ------------- -------------
Basic and diluted loss per share (US$) (0.52) (0.63)
---------------------------------------- ------------- -------------
Consolidated statement of changes in shareholders' equity for the year ended 31 December 2010
Employee
Benefit Total
Share Share Trust Retained Reverse Share-
Capital Premium Reserve Earnings Acquisition holders'
Reserve Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 31
December
2008 991.2 57,754.8 (2,371.8) (34,071.0) 9,477.7 31,780.9
Comprehensive
income - - - - -
Loss for the
year - - - (32,513.9) - (32,513.9)
Other - 346.7 - - - 346.7
Currency
exchange
differences - - - (3.4) - (3.4)
Share based
payments - - - 2,906.6 - 2,906.6
Treasury
shares - - (1,037.3) - - (1,037.3)
Shares sold by
employee
benefit
trust - - 1,319.7 - - 1,319.7
Share based
payments
utilised - - - (1,729.5) - (1,729.5)
Issuance of
shares to
employee
benefit
trust 28.4 - - - - 28.4
As at 31
December
2009 1,019.6 58,101.5 (2,089.4) (65,411.2) 9,477.7 1,098.2
======== ========= ========== =========== ============ ===========
Comprehensive
income
Loss for the
year - - - (26,900.7) - (26,900.7)
Other - - - 484.0 - 484.0
Currency
exchange
differences - - - 6.5 - 6.5
Share based
payments - - - 1,600.0 - 1,600.0
Purchase of
treasury
shares - - - 73.4 - 73.4
Shares sold by
employee
benefit
trust - - 442.4 - - 442.4
Share based
payments
utilised - - - (200.8) - (200.8)
Issuance of
shares to
employee
benefit trust - - - - - -
As at 31
December
2010 1,019.6 58,101.5 (1,647.0) (90,348.8) 9,477.7 (23,397.0)
======== ========= ========== =========== ============ ===========
Reverse acquisition reserve: The reverse acquisition reserve arose as a result of the share for share exchange undertaken in advance of the initial public offering. This reserve comprises the excess of the market value of the IdaTech plc shares issued to the IdaTech UK Limited shareholders over and above the nominal value of these shares.
Consolidated balance sheet as at 31 December 2010
As at 31 December As at 31 December
2010 2009
US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 1,703.2 1,102.5
Goodwill 18,001.2 18,001.2
Intangible assets 22,350.7 18,098.2
Trade and other receivables 100.0 100.0
----------------- -----------------
42,155.1 37,301.9
----------------- -----------------
Current assets
Inventories 4,956.1 2,506.4
Trade and other receivables 2,381.7 3,910.4
Cash and cash equivalents 1,140.7 756.9
----------------- -----------------
8,478.5 7,173.7
----------------- -----------------
Total assets 50,633.6 44,475.6
LIABILITIES
Current liabilities
Trade and other payables (9,062.1) (5,972.1)
Provisions for other liabilities and
charges (396.6) (35.3)
----------------- -----------------
(9,458.7) (6,007.4)
----------------- -----------------
Net current (liabilities)/ assets (980.2) 1,166.3
================= =================
Non-current liabilities
Borrowings (60,000.0) (32,000.0)
Provisions for other liabilities and
charges (384.4) (688.9)
Deferred tax (4,187.5) (4,681.1)
----------------- -----------------
(64,571.9) (37,370.0)
Total liabilities (74,030.6) (43,377.4)
----------------- -----------------
Total net (liabilities)/ assets (23,397.0) 1,098.2
================= =================
EQUITY
Capital and reserves
Share capital 1,019.6 1,019.6
Share premium 58,101.5 58,101.5
Retained earnings - deficit (91,995.8) (67,500.6)
Reverse acquisition reserve 9,477.7 9,477.7
----------------- -----------------
Total shareholders' (deficit)/ equity (23,397.0) 1,098.2
================= =================
Consolidated cash flow statement for the year ended 31 December 2010
Year ended Year ended
31 December 31 December
2010 2009
US$'000 US$'000
Cash outflows from operating activities
Cash outflows from operations (20,467.2) (23,104.4)
Interest paid (37.3) (25.1)
Net cash outflow from operating activities (20,504.5) (23,129.5)
------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (932.2) (409.9)
Purchase of intangible assets (6,180.6) (1,272.4)
Interest received 1.1 6.3
Net cash outflow from investing activities (7,111.7) (1,676.0)
------------ ------------
Cash flows from financing activities
Proceeds from borrowings 28,000.0 24,997.7
Repayments of borrowings - (55.3)
Net cash inflow from financing activities 28,000.0 24,942.4
------------ ------------
Net (decrease) / increase in cash and
cash equivalents 383.8 136.9
Cash and cash equivalents at beginning
of the year 756.9 620.0
Cash and cash equivalents at end of
the year 1,140.7 756.9
============ ============
Notes to the preliminary statements
1. Authorisation of financial statements and statement of compliance with IFRSs The preliminary announcement for the year ended 31 December 2010 has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies adopted in this preliminary announcement are consistent with those used in the last published
annual financial statements.
These preliminary statements do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. They have, however, been extracted from the statutory accounts for the period ended 31 December 2010. The Auditors have reported on these financial statements; their reports were not modified , but did include reference to an emphasis of matter regarding the Group's ability to continue as a going concern (see below), and did not contain statements under Section 498(2) or 498(3) of the Companies Act 2006.. The 2009 statutory accounts have been filed with Registrar of Companies. The 2010 statutory accounts will be sent to shareholders on 23 May 2011 and will be filed with the Registrar of Companies following their adoption at the forthcoming Annual General Meeting.
2. General Information
IdaTech plc and its subsidiaries (together 'the Group') manufacture and distribute fuel cells both directly and through distribution partners. The group has manufacturing facilities in the US and Mexico. Our distribution network includes sales offices in the US, Germany, France and Malaysia. During the year, the Group expanded into India with possible manufacturing facilities in the near future.
IdaTech plc is a public limited company which is quoted on the Alternative Investment Market ('AIM') of the London Stock Exchange and is registered and domiciled in the UK.
IdaTech plc (the "Company") was incorporated on 25 May 2007. With effect from 7 June 2007, the Company became the legal parent company of IdaTech UK Limited and its subsidiary undertakings. This business combination, effected through an exchange of equity interests, has been accounted for as a reverse acquisition in accordance with IFRS 3 'Business Combinations'. IdaTech UK Limited was incorporated on 13 July 2006 and acquired IdaTech Technologies, Inc, ("ITI") IdaTech, LLC and IdaTech Fuel Cells GmbH on 20 July 2006.
3. Significant accounting policies
The accounting policies adopted in this preliminary announcement are consistent with those used in the last published annual financial statements. These policies have been consistently applied.
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC interpretations endorsed by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historic cost convention. They have been prepared under the going concern principle.
Going concern
These financial statements have been prepared on a going concern basis. As reported in the Chairman's Statement and Chief Executive's Business Review, IdaTech's main shareholder, the Investec Group has indicated its current intention to ensure the business is managed and/or appropriately funded so that it is in a position to meet its debts as and when they fall due. This has been provided as a current intention only and does not represent a legally binding obligation by the Investec Group. Whilst the Directors have a reasonable expectation that the shareholder will continue to support the Group, in view of the nature of the support, there can be no certainty in this matter.
Additionally the loan notes due to the Investec Group amounting to $60 million are repayable on 31 March 2012. The Directors will be working with the shareholder to refinance the existing loan notes and additional funding drawn down in the current financial year.
In view of the above, the Directors have concluded that a material uncertainty exists that may cast significant doubt upon the Group's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described above, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
The statement of comprehensive income and balance sheet show no intention or necessity to liquidate or curtail significantly the operations of the Group. Specifically, the assets of the Group have been valued and reported on the basis that they will be used for the purpose for which they were purchased in the ongoing operation of the business and no liabilities have been included that may arise on a significant curtailment of the Group's activities.
Application of new standards
(a) New and amended standards adopted by the group
The following new standards and amendments to standards
are mandatory for the first time for the financial
year beginning 1 January 2010.
-- IFRS 3 (revised), 'Business combinations', and
consequential amendments to IAS 27, 'Consolidated
and separate financial statements', IAS 28, 'Investments
in associates', and IAS 31, 'Interests in joint ventures',
are effective prospectively to business combinations
for which the acquisition date is on or after the
beginning of the first annual reporting period beginning
on or after 1 July 2009.
The revised standard continues to apply the acquisition
method to business combinations but with some significant
changes compared with IFRS 3. For example, all payments
to purchase a business are recorded at fair value
at the acquisition date, with contingent payments
classified as debt subsequently remeasured through
the statement of comprehensive income. There is a
choice on an acquisition-by-acquisition basis to measure
the non-controlling interest in the acquiree either
at fair value or at the non-controlling interest's
proportionate share of the acquiree's net assets.
All acquisition-related costs are expensed.
-- IAS 27 (revised) requires the effects of all transactions
with non-controlling interests to be recorded in equity
if there is no change in control and these transactions
will no longer result in goodwill or gains and losses.
The standard also specifies the accounting when control
is lost. Any remaining interest in the entity is re-measured
to fair value, and a gain or loss is recognised in
profit or loss. IAS 27 (revised) has had no impact
on the current period, as none of the non-controlling
interests have a deficit balance; there have been
no transactions whereby an interest in an entity is
retained after the loss of control of that entity,
and there have been no transactions with non-controlling
interests.
(b) New and amended standards, and interpretations
mandatory for the first time for the financial year
beginning 1 January 2010 but not currently relevant
to the group (although they may affect the accounting
for future transactions and events)
The following standards and amendments to existing
standards have been published and are mandatory for
the group's accounting periods beginning on or after
1 January 2010 or later periods, but the group has
not early adopted them.
-- IFRIC 17, 'Distribution of non-cash assets to owners'
(effective on or after 1 July 2009)
-- IFRIC 18, 'Transfers of assets from customers',
effective for transfer of assets received on or after
1 July 2009.
-- IFRIC 9, 'Reassessment of embedded derivatives
and IAS 39, Financial instruments: Recognition and
measurement', effective 1 July 2009
-- IFRIC 16, 'Hedges of a net investment in a foreign
operation' effective 1 July 2009
-- IAS 1 (amendment), 'Presentation of financial statements'
-- IAS 36 (amendment), 'Impairment of assets', effective
1 January 2010
-- IFRS 2 (amendments), 'Group cash-settled share-based
payment transactions', effective form 1 January 2010
-- IFRS 5 (amendment), 'Non-current assets held for
sale and discontinued operations'
(c) New standards, amendments and interpretations
issued but not effective for the financial year beginning
1 January 2010 and not early adopted The group's and
parent entity's assessment of the impact of these
new standards and interpretations is set out below.
-- IFRS 9, 'Financial instruments', issued in November
2009
-- Revised IAS 24 (revised), 'Related party disclosures'.
It supersedes IAS 24
-- 'Classification of rights issues' (amendment to
IAS 32), issued in October 2009
-- IFRIC 19, 'Extinguishing financial liabilities
with equity instruments', effective 1 July 2010
-- 'Prepayments of a minimum funding requirement'
(amendments to IFRIC 14). The amendments correct an
unintended consequence of IFRIC 14, 'IAS 19
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.
Warranty provision
At 31 December 2010, the Group has recorded a liability of US$569,300 (31 December 2009 US$724,200) for warranty and installation costs. As the Group and the industry in which it operates are in the development stage, there is little historical data upon which to establish a reserve for warranty and installation costs. The liability recorded represents management's best estimate of the potential future costs of warranty and repair, which is calculated as a percentage of product costs based on experience.
Share based payments
The Group operates a number of share based remuneration schemes. The valuation requires a number of estimates and assumptions to be made.
Impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment in accordance with the adopted accounting policy. Management's assumptions in performing this test are a source of estimation uncertainty.
Valuation of intangible assets on acquisition
Intangible assets that existed at the date of the acquisition were identified through an assessment of the economics of the transaction and split into core technology and intellectual property R&D attributable to the existing products. There are a number of assumptions underlying the valuation of these intangibles. Therefore this is a source of estimation uncertainty.
5. Called up share capital
As at 31 As at 31
December December
2010 2009
US$'000 US$'000
IdaTech plc
Authorised
100,000,000 Ordinary Shares of GBP0.01
each 2,002.4 2,002.4
========== ==========
51,405,524 (2009 51,405,524) allotted,
called up and fully paid 1,019.6 1,019.6
========== ==========
Begininning period 1,019.6 991.2
Issuance of shares See note e - 28.4
---------- ----------
As at 31 December 2009 1,019.6 1,019.6
========== ==========
IdaTech plc
IdaTech plc was incorporated with an authorised and issued share capital of GBP50,000 divided into 5,000,000 Ordinary Shares of GBP0.01 each.
The following changes have occurred in the share capital of the Company since its date of incorporation:
(a) On 7 June 2007, the Company issued 27,313,475 Ordinary Shares to the Investec Group in consideration for the transfer of all of the issued shares of IdaTech UK Limited;
(b) On 21 June 2007, the Company issued 2,686,525 Ordinary Shares to the trustee of the IdaTech Employee Trust;
(c) On 7 June 2007, the authorised share capital of the Company was increased from GBP50,000 to GBP1,000,000 by the creation of 95,000,000 Ordinary Shares of GBP0.01 each;
(d) On 7 August 2007, the Company issued a further 14,499,969 shares in connection with the Admission of the Company to AIM; and
(e) On 3 April 2009, the Company issued 1,905,825 Ordinary Shares to the trustee of the IdaTech Employee Trust for $28,400. The result was no increase in share premium.
All issued shares are fully paid.
6. Cash outflow from operations
Year ended Year ended
31 December 31 December
2010 2009
US$'000 US$'000
Loss before income tax (27,394.2) (35,085.5)
Adjustments for:
-Depreciation 313.4 302.7
-Amortisation 1,928.1 6,967.1
-Share based payment charge (net of
equity awards settled in cash) 1,600.0 2,906.6
-Loss on disposal of property, plant
and equipment 3.9 10.3
-Net finance costs - Note 20 3,647.6 1,588.8
-Inventories (2,548.0) 726.9
-Trade and other receivables 1,408.6 (95.9)
-Trade payables 1,901.6 (804.0)
-Other payables (1,328.2) 378.6
Net cash utilised by operating activities (20,467.2) (23,104.4)
============ ============
Net book amount of property, plant and
equipment disposed 18.1 10.3
Total proceeds from disposal of plant,
equipment and property - -
Loss on disposal 18.1 10.3
============ ============
7. Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.
Year ended Year ended
31 December 31 December
2010 2009
US$ US$
Loss attributable to the equity
holders of the Company (26,900,700) (32,513,900)
Weighted average number of ordinary
shares in issue 51,405,524 51,405,524
Basic loss per share (US$ per
share) (0.52) (0.63)
============ ============
December Year ended
31
(b) Diluted
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
The impact of the share options is anti-dilutive. Therefore the diluted loss per share is the same as the basic loss per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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