Final Results

RNS Number : 1786I

AMTE Power PLC

01 December 2022

 

1 December 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

AMTE POWER PLC

Final Results

Year of investment in the commercialising of battery cell technology provides platform for accelerated growth

AMTE Power (AIM: AMTE) ("AMTE Power" or the "Company"), a leading developer and manufacturer of lithium-ion and sodium-ion battery cells for specialist markets, announces its final results for the year ended 30 June 2022.

Full year results reflect continued investment in commercialisation plans:

· Turnover up 12% to £2.2m (2021: £2.0m)

· Adjusted EBITDA loss of £6.2m (2021: loss £3.1m)

· Cash of £0.9m (2021: £9.3m) and a term deposit of £2m that expired and was released to cash on 7 July 2022

· Loss after taxation of £5.8m (2021: loss £3.7m)

· Growing pipeline of potential business with opportunities of circa £240 million across the AMTE Power product range

· Pathway to commercialisation supported by post year-end £5 million convertible bond facility

Alan Hollis, CEO of AMTE Power, commented:

"I am delighted to have joined AMTE Power at such an exciting stage of its growth trajectory. In our financial year ended June 2022, the company recorded a loss after tax of £5.8m, reflecting the investment needed to commercialise our battery cell technology. I am pleased to say that with demand expected to accelerate as the UK goes electric, we expect this investment to deliver significant returns going forward.

"In the short time I have been with the business I have met teams from across the Group and have been impressed by the depth of knowledge and experience of our highly skilled team.

"AMTE Power has achieved several important milestones during the year including a production contract with the UK Battery Industrialisation Centre, a consistent six-minute full charge time with our Ultra High Power automotive cell and entering into binding heads of terms for Dundee as the preferred site for our first MegaFactory. Together, this puts us in a highly competitive position.

"The business is well placed with high performance products and manufacturing expertise. I look forward to building on the achievements made to date to take the business forward on the next stage of its growth."

Key achievements

AMTE Power has been making batteries for almost 30 years and is one of the only companies manufacturing them in the UK today. The Company has continued to make good progress across its highly differentiated core products during the period: Ultra High Power, Ultra Safe and Ultra Prime.

· Automotive sector Ultra High Power cells:

o  Cells are performing well against the Company's target specification on commercial scale equipment at the UK Battery Industrialisation Centre ("UKBIC"), demonstrating AMTE Power's ability to manufacture these cells at high volume scale

o  Cells demonstrated a consistent six-minute full charge time in trials

o  Significant early interest from major automotive partners

o  Expected to commence commercial production in early 2023

· Energy storage sector Ultra Safe cells:

o  Cell development is nearing completion having reached its energy density specification of 140 Wh/kg

o  Planned to commence production at Thurso for delivery to customers for initial evaluation and project and supply validation

o  Initial order signed for 1000 Ultra Safe cells with AceOn - the first supply contract for this product - in a growing pipeline of opportunities which includes large household brands in the energy generation industry as well as smaller entities focussed on energy storage at the household level

· Specialist sector Ultra Prime cells:

o  Contracted supply agreement in place

o  Progressing to initial supply and trials in 2023, with scale up thereafter

o  Initial sales expected to commence in FY24, with production centred on Thurso

· Product development underpinned by commercial agreements

o  AMTE Power has non-binding memoranda of understanding in place with key automotive partners Cosworth, Viritech and MAHLE Powertrain, in addition to development agreements with Sprint Power, Eltrium and BMW

· Production contract signed with UKBIC

o  Key milestone to upscale production ahead of mass commercialisation, enabling the business to bring products to market quicker

o  To produce up to 60,000 Ultra High Power cells per year, over an initial term of 24 months, for the high power automotive and fuel cell electric vehicle markets

o  Contract starts in January 2023 for anticipated sales to customers in sufficient scale to allow them to progress to in-vehicle trials

· Binding heads of terms for Dundee, Scotland, as preferred site for first MegaFactory

o  Will enable AMTE Power to deliver high value cells to market more quickly and meet high levels of demand for battery technology

o  The facility will be capable of producing more than 8 million cells with a revenue stream in excess of £200m

o  AMTE Power plans to have its new, state of the art 0.5GWh MegaFactory in Dundee ready within three years

· Strengthened senior management team for next phase of growth

o  Alan Hollis and Anita Breslin appointed to the Board as Chief Executive Officer and Chief Financial Officer (Designate) respectively, bringing extensive combined experience to the business. Anita Breslin has today commenced her role as Chief Financial Officer

· £5 million convertible bond facility with Arena Investors announced post year end

o  Facility will enable the Company to secure and execute on production contracts for AMTE Power's core cells: Ultra High Power, Ultra Safe and Ultra Prime

Outlook

· Ultra High Power cell expected to commence commercial production at the UKBIC in early 2023

· Ultra Safe cell expected to commence commercial production at Thurso in 2023

· Ultra Prime cell expected to be produced for initial supply in 2023, with commercial production anticipated at Thurso in 2024

· Business is at an exciting stage of its growth trajectory and strategic plans for the next phase of growth to be outlined in early 2023

Posting of Annual Report and Notice of AGM

AMTE Power's Annual Report and Accounts for the year ended 30 June 2022 and Notice of Annual General Meeting ("AGM") will be posted to shareholders by Friday 2 December and will also be made available on the Company's website.  The AGM will be held at Bee House, 140 Eastern Avenue, Milton Park, Oxfordshire, OX14 4SB on Thursday 29 December 2022 at 10.00 am.

The person responsible for arranging the release of this announcement on behalf of the Company is Alan Hollis, Chief Executive Officer of the Company.

Enquiries

AMTE Power plc	[phone]
Alan Hollis (Chief Executive Officer)
Anita Breslin (Chief Financial Officer)
WH Ireland (NOMAD and Joint Broker)	[phone]
Chris Fielding / James Bavister / Megan Liddell (Corporate Finance)
Fraser Marshall (Corporate Broking)
Panmure Gordon (UK) Limited (Joint Broker)	[phone]
John Prior / James Sinclair-Ford (Corporate Finance)
Hugh Rich (Corporate Broking)
Camarco (Financial PR)	[phone]
Ginny Pulbrook / Tom Huddart / Rosie Driscoll

About AMTE Power

AMTE Power was founded in 2013 and is a leading developer and manufacturer of lithium-ion and sodium-ion battery cells for specialist markets. In March 2021, the Company was admitted to trading on the AIM market of the London Stock Exchange. The Company is focused on launching a series of next generation battery cells based on new chemistries and cell structures that are designed to solve key problems in power delivery, energy performance, and safety. These new products are targeted at a range of specialist markets including the electric vehicle industry and energy storage sector.

AMTE Power's purpose-built cell manufacturing facility in Thurso, Scotland has the second largest cell manufacturing capacity in the UK and the Company also has a product development team based in Oxford. AMTE's proposed state-of-the-art MegaFactory in Dundee, Scotland is expected to be operational and in production by Q3 2025 and will be capable of producing over 25,000 high added value batteries per day enabling the Company to rapidly scale up cell production.

For further information visit the Company's website:  www.amtepower.com

Chair's Statement

The business continues to operate at the heart of the UK's drive towards net zero carbon emissions and has a range of high-performance lithium and sodium ion cells along with an extensive IP portfolio. AMTE Power is currently focused on the delivery of high-performance cells into the energy storage, automotive and other specialist markets.

The business continues to follow a strategic direction that separates it from much of the competition, with highly differentiated cells supplied into substantial, but nonetheless specialised, markets. Key highlights throughout the reported period were the successful trials for our high-performance automotive cell, achieving full charging rates of 6 minutes, alongside a continuing shift in commercial engagements from development to supply, with the signing of a number of non-binding MoUs with well-known automotive marques and a pipeline of opportunities across our full portfolio of cells in excess of £240 million.

Strategic Direction on Track

2022 has been a landmark year for AMTE Power which has further established the Group as a leading high-performance battery cell developer and one of the only companies manufacturing battery cells in the UK today with established commercial partnerships in place.

In July this year we announced a key strategic step in our journey to gigafactory scale production as we entered into a binding letter of intent for a new, state of the art 0.5GWh MegaFactory located in Dundee which can be operational within three years. The facility will be capable of producing annually more than 8 million cells with a revenue stream in excess of £200m. The site in Dundee will significantly increase our cell production capacity, thereby allowing the Group to respond to the high levels of interest in its differentiated high added value cells.

Prior to the MegaFactory becoming operational, we have enhanced our near term capacity; on 6th October 2022 we announced we had signed a production agreement with the UKBIC Agreement which allows the Group to request the UKBIC to produce up to 60,000 of its Ultra High Power cells each year, over an initial term of 24 months. This, coupled with our existing Thurso production facility, will allow us to commence product supply in the near term, and generate first production revenue and ultimately underpin the MegaFactory with commercial arrangements ahead of finalising and securing funding to commence the build out.

Bond Issuance

Following on from our highly successful IPO in 2020, the Group has continued to utilise its funds for the intended purpose of developing its product range and client engagement prior to scaling up production. I am delighted to report that having now reached a point where the Group needs to move from development to supply, on 4th November we announced the outcome of a successful fund raise through an unsecured convertible bond facility to the Group for a total amount of up to £5 million, available for drawdown in three tranches:

£3 million on completion of the Proposed Facility and two further tranches of £1 million each at least 60 days following drawdown of the previous tranche.

I would like to thank all the shareholders who supported us at the EGM which allowed us to successfully close the funding. The net proceeds of the capital raising will be used to conclude the final development of each of our core battery cells; to finance capital expenditure at the Thurso factory in order to achieve commercial production volumes and to finance the costs of scaling up early commercial production.

Enhancing the management team:

In order to support the dynamic growth from within the Group and our requirement to skill up our manufacturing expertise, we announced on 6th September 2022 that Alan Hollis had been appointed an Executive Director of the Company and Chief Executive Officer Designate. He initially worked alongside the AMTE Power executive management team and took on the role of Chief Executive Officer on 31 October 2022, now leading the business in its growth strategy.

Alan Hollis has a 20-year public company track record of developing and executing profitable growth strategies within engineering and manufacturing businesses with turnovers ranging from £4 million to £200 million. In his last two roles he was a Divisional CEO in Videndum (Vitec) Group plc ("Videndum") from 2015 to 2021, and a Divisional President in the USA in a division of NYSE listed Crane Co. from 2014 to 2015. Previously, Alan held leadership roles within the automotive and aerospace component and system supply businesses Doncasters Group, Firth Rixson and the PFW Group, as well as in the materials businesses of Delloro Stellite and Weir plc.

At the same time we also announced that Kevin Brundish, who had founded the Company in 2013, would remain as a Board Director in the role of Strategy Director, allowing him to focus on the continuing development of AMTE Power's high performance battery cells, and it's relationships with its customers, suppliers and Government entities, in addition to playing a key part in co-ordinating the strategic direction of the Group. I would like to thank Kevin for his work in bringing the Company to this transitional stage where product development moves to product supply, and I would like to welcome Alan to the team.

Finally, it was announced on 5 September 2022 that James Hobson, Chief Financial Officer, had advised the Board of his intention to leave AMTE Power. It has been agreed that he will leave AMTE Power on 30 November 2022. The Board has recruited Anita Breslin as his replacement as announced on 17 November 2022. I would like to thank James for his support during this transitional phase of the business.

Outlook

AMTE Power is in a good position. There is a high level of commercial interest in our products. We remain on target with the plans to commercialise our highly differentiated products and we are seeing a growth in new opportunities arising which are now focussed on supply rather than product development. We have an immediately accessible production capacity which will allow us to convert market opportunity into product supply revenue. Near term revenue and commercial supply arrangements will underpin the demand and lead to our funding the expansion of our production capacity through our proposed MegaFactory in Dundee. As we transition into this phase of product manufacture and supply, I would like to extend my sincerest thanks to all the AMTE Power team during this highly active period and look forward to continuing on this exciting phase of the Group's development to full commercialisation of its highly specialised products.

David Morgan

Independent Non-Executive Chair

CEO Statement

Introduction

AMTE Power is a leading battery cell manufacturer in the UK - we have been making batteries for almost 30 years and are one of the only companies manufacturing them in the UK today. Focussed on highly differentiated products within the Automotive, Renewable Energy Storage and other specialised markets, we are at the forefront of the net-zero transition. This is why I welcomed the opportunity to join the Group as Chief Executive Officer in October this year, with the goal of driving the business' planned route to commercialisation, improving manufacturing execution, attracting battery cell technology expertise and engaging more closely with customers and stakeholders.

Since my arrival eight weeks ago, I have been on the road meeting all the teams and staff at Thurso in Scotland, Oxford and our office in London, learning about the business, gaining their feedback and crystallising my insight into how I can support AMTE Power's ambitious growth plans. In addition, I have attended industry events, forums, and met key stakeholders, all of whose views are crucial to formulating my future plans.

Once I have undertaken a deep review of the business, I intend to share my strategic vision for AMTE Power with the key stakeholders in early 2023, setting out a clear path for growth and execution thereon. These plans will give clarity on the launch plans of our three core high performance battery cell products, and how we will drive the strategic development of the proposed MegaFactory.

In my visits around the business I have been impressed by the highly skilled teams of world class electrochemists, technicians and engineers with years of experience in product development and production, gained from our 30 year heritage. Our people remain our best asset and I intend to continue to develop and grow our team as we scale the business, bringing in new blood and skills, both at the Board level and on the manufacturing production lines. Two such appointments have been the recent selection of Anita Breslin as our new Chief Financial Officer and the recruitment of a new Supply Chain Director.

AMTE Power is at an exciting stage of its corporate growth trajectory, with existing high margin, high performance products and manufacturing expertise. I look forward to working with my new colleagues on delivering my strategic vision for 2023-2025.

FY22 Overview

FY22 has been an important year for AMTE Power. The Group continued to develop its differentiated product range (Ultra High Power, Ultra Safe and Ultra Prime) in line with expectations. Of particular note was the progress made in trials for the Ultra High Power automotive cell, which has achieved a consistent full charge time of six minutes and these are now being manufactured at UK Battery Industrialisation Centre (UKBIC) on commercial scale equipment, demonstrating our ability to manufacture these cells at high volume scale. This achievement, combined with product performance and manufacturing maturity puts the Group in a highly competitive position with market leading products.

The use of UKBIC to manufacture cells will enable AMTE Power to upscale production ahead of mass commercialisation as the business progresses towards its first MegaFactory, with a proposed site identified in Dundee, Scotland.

Under the "road to net zero", the Government continues to provide significant support to its policy of switching the motor industry to electric vehicles by 2030, alongside decarbonising the grid, and Government backed funding is now in excess of £1 billion for the sector.

Commercial collaboration

Throughout the period the Group saw a move in commercial interest from product development to supply interest, and initial commercial arrangements (non-binding MoUs) were put in place around supply for the Ultra High Power cell, among others, Cosworth and MAHLE Powertrain, both well-established powertrain providers into the automotive market.

An important signal to the future demand for our battery cells is the involvement of original equipment manufacturers ("OEM") in key projects such as CELERITAS, a new government funded three-year project aimed at developing ultra-fast charging cells for the electric vehicle and fuel cell hybrid electric vehicles markets. AMTE Power is part of the consortium and our Ultra High Power cell development is an important part of this project. This demonstrates the high level of interest in our battery cells both from government and commercial partners. Vehicle OEM BMW a named development partner on this programme alongside BP and Sprint Electric.

The business has also signed an initial order for 1000 of our Ultra Safe cells with AceOn. This is the first supply contract for our Ultra Safe product, in a growing pipeline of opportunities which includes large household brands in the energy generation industry as well as smaller entities focussed on energy storage at the household level. Our objective is to develop this early supply interest into long-term engagements to sit alongside our existing seven year development and supply agreement we have for our Ultra Prime cell.

Operational review

AMTE Power continues to make good progress across its three core cells: Ultra High Power, Ultra Safe and Ultra Prime. These differentiated products are focused on High performance electric vehicles, hybrid vehicles and fuel cell electric vehicles and energy storage sectors and other specialist markets, with properties outpacing other cells currently in the market. The business currently has a number of key commercial opportunities for its products and a growing overall pipeline of potential business with opportunities of circa £240m.

Ultra High Power

These cells are ideally suited to key automotive sectors of high-performance electric vehicles, hybrid vehicles, and fuel cell electric vehicles, with an increasing number of automotive OEMs committing to fuel cell electric vehicle production. The Ultra High Power cells are currently being produced at the UKBIC, utilising our existing development agreement with the facility to scale up production to gigafactory rates. The cells are delivering exceptionally well against the Company's target specification, at ever increasing volumes. The cell has demonstrated its high power capability, with full charging times of six minutes in initial testing being consistently achieved. This high level of performance, coupled with the manufacturing maturity of the cell at UKBIC, puts the Ultra High Power cell in a very competitive position to move to initial product supply against the growing automotive market interest.

Ultra Safe

Given the continued challenges on pricing of key materials for batteries there has been significant interest in AMTE Power's sodium-ion cell, Ultra Safe, from major energy generators to home energy storage producers. This cell uses no lithium, cobalt or copper and is more cost effective, safer and more sustainable than lithium cells.

Our Ultra Safe cell is meeting its development targets, with cell development nearing completion having reached its energy density specification of 140 Wh/kg and cells made at our Thurso facility having met our target performance levels.

As we have increased production, we have seen steady progression towards manufacturing maturity.

In March 2022, the Company announced an initial order for 1000 cells from AceOn targeted for delivery in 2023, which we expect to be the first of a number of such orders as we enhance the manufacturing capacity at Thurso and prepare to invest in our first MegaFactory.

Ultra Prime

Ultra Prime is a non-rechargeable cell designed for use in some of the most difficult environments on earth, with very high energy density and high-temperature performance. This cell also has a low self-discharge, making it well suited for applications where temperature, access and long duration of charge retention are key considerations.

Our Ultra Prime product continues to meet our expectations and performance targets. AMTE Power has a contracted supply agreement in place for this cell and is progressing to initial supply and trials in 2023, with scale up thereafter in 2024/2025.

Industrialisation

As our core product development activities near conclusion, we have looked to ensure we have near term and longer term capacity in place to meet the growing demand for our cells. We have taken the first step in our plans to expand our production capabilities and in July 2022 announced AMTE Power's first proposed site for a MegaFactory in Dundee with a capacity of 0.5GWh/annum. This factory will enable AMTE Power to increase manufacturing volume capacity to over 8m of our Ultra High Power and Ultra Safe cells per annum and will be a massive step change in the production capacity of the Group. Based on current timings, this facility could be operational and in production by Q3 2025.

In the interim, our strategy is to utilise the existing and immediately accessible production capacity of the Group.

In October 2022 we announced a production contract with UKBIC to produce up to 60,000 Ultra High Power cells each year, over an initial term of 24 months. This will enable AMTE Power to deliver its first Ultra High Power cells in sufficient scale to allow customers to progress to in-vehicle trials, as the automotive industry transitions away from traditional fuels. Ramp up of existing production of the Ultra High Power cells at the UKBIC is due to start in January 2023, generating initial revenues for the Company and enabling the Company to meet growing demand from within the automotive sector, principally for high performance Electric Vehicles and Fuel Cell Electric Vehicles. AMTE Power has existing non-binding memoranda of understanding in place with key automotive partners Cosworth, Viritech and MAHLE Powertrain, in addition to collaboration agreements with Sprint Power and BMW.

Financial review

Whilst financial performance indicators are a key part in managing the Group's cash position, other financial indicators are less representative of the Group's performance as the product was still in development throughout the reported period. The Group made a conscious decision during the period to reduce focus on Commercial income and focus more acutely on taking its products to market.

As a Group we grew turnover 12% to £2.2m compared to £2.0m for the previous period. This was driven by an increase in grant income of 53% compared to the previous period. Grant income accounted for 91% of turnover in the year (up from 65% in 2021). The Group continues to invest in its product development, which resulted in operating losses of £5.8m for the year (2021: loss of £3.6m). As at 30 June 2022 the Group held cash and cash equivalents of £0.9m (2021: £9.3m) plus a 12 month term deposit of £2.0m which was released to cash on 7 July 2022.

Post period end, the £5m convertible bond facility will allow the Company to secure and execute on production contracts for the Ultra Safe and Ultra Prime cells at its existing Thurso facility.

Outlook

AMTE Power is at an exciting stage of its journey. We are in a structurally growing sector in a jurisdiction that is focused on the climate agenda. We are a specialist business, within a very large market, offering highly differentiated products to our customers. We have already achieved several significant milestones and the recently announced £5m convertible bond facility leaves the Group well placed for further progress in the year ahead.

Alan Hollis

Chief Executive Officer

Financial Review

The financial performance and position of the Group during the year ended 30 June 2022 reflects the Group's continued focus on the development of its cells with the aim of progressing towards commercialisation. Increased costs were incurred due to substantial work undertaken on cell development including at the UK Battery Industrialisation Centre, addressing and progressing through the continued challenges faced in achieving product milestones.

During the year the Group undertook a significant exercise to re-evaluate the medium term commercial strategy, resulting in the Group opting for a 0.5GW MegaFactory to manufacture its high value Ultra High Power and Ultra Safe cells. Focusing on high value cell manufacture in such a MegaFactory enables AMTE Power to generate good returns at a smaller scale with associated lower capital investment, and much quicker build and commissioning timeframes.

Trading performance

Revenue increased by 12% to £2.2m for the year ended 30 June 2022 (2021: £2.0m), which comprises of a 53% increase in Grant income to £2.0m (2021: £1.3m) and a 65% reduction in commercial income to £0.2m (2021: £0.7m). This swing from 2021 to 2022 reflects the Group's focus on developing its cells, progress towards completion and commercialisation.

The Gross margin for the year ended 30 June 2022 was a 14% loss compared to a 16% profit for the comparative year, a result of the change in revenue mix mentioned earlier.

Operating losses for the year ended 30 June 2022 increased to £5.8m (2021: loss of £3.6m), predominantly due to increased workforce costs, energy costs, and corporate expenditure relating to being listed on the London Stock Exchange AIM market.

Expensed net finance costs were £233k for the year ended 30 June 2022 (2021: £246k). The finance costs include interest recognised from lease liabilities over right-of-use assets as well as interest arising from licence obligations that have not been capitalised to cell development intangible asset.

Adjusted EBITDA moved to a loss of £6.2m (2021: loss of £3.1m). Adjusted EBITDA is defined as operating losses after all amortisation, depreciation, fair value movement in derivatives, movement in provisions and equity settled share-based payments have been added back and payments against licence obligations and liabilities for right-of-use property assets deducted.

The Group was a recipient of R&D tax claims, resulting in a positive tax charge of £159k for the year (2021: £105k). As the business is currently loss making, there is no corporation tax payable on earnings.

The basic and diluted loss per share for the year to 30 June 2021 was 16.33 pence (2021: 12.59 pence loss).

Cash movement

Our cash position at the end of the year was £0.9m and a 12 month term deposit of £2m which expired and was released to cash on 7 July 2022, which was not defined as Cash and Cash Equivalents under IFRS (2021: £9.3m). Operating activities resulted in £5.2m of cash outflow for the period to 30 June 2022 (2020: £2.5m). Investment in PPE was £0.4m (2021: £0.3m) and funding on intangible assets was £1.0m (2021: £0.7m). Financing of borrowings, asset financing and licence obligations totalled £1.0m (2021: £0.9m). The Group received proceeds from the issue of shares of £0.8m largely as a result the exercise of staff options during the year.

Research and development

Development formed a material part of the Group's activities this year, with a significant portion relating to the development of the Group's products. The Group capitalised development costs of £3.6m for the year (2021: £3.1m) in relation to its products where it believes there are suitable, near and mid-term sales opportunities.

The Group had qualifying research and development costs of £1.4m (2021: £1.6m) against which it secured both R&D tax credits (recognised as tax relief) and R&D expenditure credits (recognised as other income and taxed accordingly).

Capital Reduction

During the year the Group's share premium account was reduced by £21,130,392 as approved by shareholders at the AGM held on Wednesday 17 November 2021. The cancellation was to remedy an administrative oversight of not filing certain documents to Companies House within the required time frame prior to the Company listing on the London Stock Exchange AIM market.

Going concern

As at 30 June 2022 the Group had cash and cash equivalents of £0.9m and a term deposit of £2m which expired and was released to cash on 7 July 2022. On 4 November 2022 the Group agreed a £5m convertible bond facility with Arena Investors, LP subject to a maximum £4m principal being outstanding at any time. This funding will be drawn down over the period to March 2023 and is expected to amount to c. £3.9 after expenses and fees.

As detailed in Note 1 in Notes to the Group Financial Statements, the Directors have prepared a cash flow forecast for the period ending 31 December 2023, which shows that the Group will need to raise further funds to meet its obligations as and when they fall due, in order to continue meeting planned milestones within the production plans for the Group's key products.

Based on current forecasts, additional funding will need to be raised from third parties by April 2023 in order to meet current operating cost projections. The Group is currently in advanced discussions with a number of parties to secure further funding resources. which the Directors believe will be sufficient to continue operations with minimal disruption until June 2023. At this point the Directors plan to raise further finance which will be predicated on meeting the milestones within the production plans for each of the Group's three core cells. The Directors are confident of fundraising prospects at this point upon progress towards production milestones.

James Hobson

Chief Financial Officer (up to 30 November 2022)

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2022

		2022		2021
	Notes	£		£
Turnover	4	2,193,759		1,967,348
Cost of sales		(2,511,367)		(1,645,708)
Gross (loss) / profit		(317,608)		321,640
Other operating income	4	478,030		461,396
Administrative expenses		(5,916,772)		(4,374,028)
Operating loss	5	(5,756,350)		(3,590,992)
Investment revenues	10	7,345		3,952
Finance costs	11	(233,307)		(245,893)
Other gains and losses	12	(14,547)		23,624
Loss before taxation		(5,996,859)		(3,809,309)
Income tax income	13	158,749		104,794
Loss and total comprehensive income for the year		(5,838,110)		(3,704,515)

Loss for the financial year is all attributable to the owners of the parent company.

Total comprehensive income for the year is all attributable to the owners of the parent company.

Earnings per share	14
Basic (pence per share)		(16.33)		(12.59)
Diluted (pence per share)		(16.33)		(12.59)

All results were derived from continuing operations.

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

		2022		2021
	Notes	£		£
Non-current assets
Intangible assets	15	24,067,313		20,998,109
Property, plant and equipment	16	2,362,153		2,235,439
Investments	17	9,079		23,626
		26,438,545		23,257,174
Current assets
Inventories	20	714,668		280,666
Investments	17	2,000,000		-
Trade and other receivables	21	2,163,173		1,823,505
Current tax recoverable		379,077		240,000
Cash and cash equivalents		906,917		9,272,416
		6,163,835		11,616,587
Current liabilities
Borrowings	23	30,522		20,365
Lease liabilities	26	203,052		147,453
Licence liabilities	27	985,704		676,191
Provisions	28	9,927		-
Derivative financial instruments		3,538		11,466
Trade and other payables	25	2,222,108		957,540
Deferred revenue	29	28,564		28,564
		3,483,415		1,841,579
Net current assets		2,680,420		9,775,008
Non-current liabilities
Borrowings	23	45,681		75,636
Lease liabilities	26	778,183		853,465
Licence liabilities	27	17,368,390		16,188,357
Long term provisions	28	200,000		209,082
Deferred revenue	29	2,582,685		2,299,682
		20,974,939		19,626,222
Net assets		8,144,026		13,405,960
Equity
Called up share capital	32	179,943		176,223
Share premium account	33	200,485		20,808,951
Share option reserve		536,879		821,641
Retained earnings		7,226,719		(8,400,855)
Total equity		8,144,026		13,405,960

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2022

		Share capital	Share premium account	Share option reserve	Retained earnings	Total
	Notes	£	£	£	£	£
Balance at 1 July 2020		321	8,067,562	128,052	(4,733,051)	3,462,884
Period ended 30 June 2021:
Loss and total comprehensive income for the period		-	-	-	(3,704,515)	(3,704,515)
Transactions with owners in their capacity as owners:
Issue of share capital	32	38,461	13,812,062	-	-	13,850,523
Cost of share issues	33	-	(1,598,831)	-	-	(1,598,831)
Bonus issue	32	134,548	(134,548)	-	-	-
Warrant expense in the year	31	-	(36,928)	36,928	-	-
Share option expense in the year	31	-	-	979,384	-	979,384
Share option exercise	31	2,893	699,634	(286,012)	-	416,515
Share option forfeit	31	-	-	(36,711)	36,711	-
Balance at 30 June 2021		176,223	20,808,951	821,641	(8,400,855)	13,405,960
Year ended 30 June 2022:
Loss and total comprehensive income for the year		-	-	-	(5,838,110)	(5,838,110)
Transactions with owners in their capacity as owners:
Capital reduction	33	-	(21,130,392)	-	21,130,392	-
Share option expense in the year	31	-	-	50,530	-	50,530
Share option exercise	31	3,720	521,926	(331,693)	331,693	525,646
Share option forfeit	31	-	-	(3,599)	3,599	-
Balance at 30 June 2022		179,943	200,485	536,879	7,226,719	8,144,026

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2022

		2022		2021
	Notes	£	£	£	£
Cash flows from operating activities
Loss for the year after tax			(5,838,110)		(3,704,515)
Adjustments for:
Share of results of associates and joint ventures			14,547		-
Taxation credit and RDEC income	13		(371,613)		(277,128)
Finance costs	11		240,391		245,893
Investment income	10		(7,345)		27,576
Amortisation and impairment of intangible assets	15		152,553		140,562
Depreciation and impairment of property, plant and equipment	16		397,485		328,537
Equity settled share based payment expense	31		50,530		979,387
Deferred income released			(28,514)		-
Fair value movement on derivatives			(7,928)		7,743
Decrease in provisions	28		845		773
Movements in working capital:
Increase in inventories	20		(434,002)		61,533
Increase in trade and other receivables	21		(658,913)		462,456
Increase in trade and other payables	25		1,266,905		292,312
Cash absorbed by operations			(5,223,169)		(2,538,001)
Interest paid			(96,403)		(111,362)
Income taxes refunded			232,536		37,128
Net cash outflow from operating activities			(5,087,036)		(2,612,235)
Investing activities
Purchase of intangible assets	15	(964,481)		(712,215)
Purchase of property, plant and equipment	16	(368,542)		(252,174)
Purchase of investments		(2,000,000)		-
Government grants received		311,567		430,155
Interest received		7,345		3,952
Net cash used in investing activities			(3,014,111)		(530,282)
Financing activities
Proceeds from issue of shares (net of share issue costs)		839,173		12,325,120
Repayment of borrowings		(19,798)		(29,438)
Payment of lease liabilities	26	(175,727)		(106,703)
Payment of licence liabilities	27	(908,000)		(723,615)
Net cash (used in)/generated from financing activities			(264,352)		11,465,364
Net (decrease)/increase in cash and cash equivalents			(8,365,499)		8,322,847
Cash and cash equivalents at beginning of year			9,272,416		949,569
Cash and cash equivalents at end of year			906,917		9,272,416

General information

AMTE Power Plc is a public company limited by shares incorporated in England and Wales. The registered office is Suite 1, 3rd Floor, 11-12 St. James's Square, London, SW1Y 4LB. The company's principal activities and nature of its operations are disclosed in the directors' report.

The group consists of AMTE Power Plc and all of its subsidiaries.

Significant Accounting Policies

Accounting Convention

The financial statements have been prepared in accordance with international accounting standards (IFRS) in conformity with the requirements of the Companies Act 2006. These financial statements for the year ended 30 June 2022 are the first group financial statements of AMTE Power Plc prepared in accordance with IFRS.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.

Basis of Consolidation

The consolidated group financial statements consist of the financial statements of the parent company AMTE Power Plc together with all entities controlled by the parent company (its subsidiaries) and the group's share of its interests in joint ventures and associates.

All financial statements are made up to 30 June 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date that control ceases.

Entities in which the Group holds an interest and which are jointly controlled by the Group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the Group has a participating interest and over whose operating and financial policies the Group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the Group statement of financial position at cost plus post-acquisition changes in the Group's share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the Group's share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the Group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Going Concern

As at 30 June 2022 the Group had net assets of £8,144,026 and cash and cash equivalents of £906,917 and a term deposit of £2,000,000 which expired and was released to cash on 7 July 2022.

Subsequent to 30 June 2022, on 4 November 2022 the Group agreed a £5m convertible bond facility with Arena Investors, LP subject to a maximum £4m principal being outstanding at any time. This funding will be drawn down over the period to March 2023 and is expected to amount to c. £3.92m after expenses and fees.

The Directors have prepared a cash flow forecast for the period ending 31 December 2023, which shows that the Group will need to raise further funds to meet its obligations as and when they fall due, in order to continue meeting planned milestones within the production plans for the Group's key products. Based on current forecasts, additional funding will need to be raised from third parties by April 2023 in order to meet current operating cost projections. The Company is currently in advanced discussions with a number of parties to secure further funding resources which the Directors believe will be sufficient to continue operations with minimal disruption until June 2023. At this point the Directors plan to raise further finance which will be predicated on meeting the milestones within the production plans for each of the Group's three core cells. The Directors are confident of fundraising prospects at this point once the commercial viability of the products is proven.

While the Directors remain confident that necessary funds will be available as and when required, as at the date of this report the future required funding arrangements are not secured, and accordingly there is material uncertainty that may cast significant doubt over the Group's ability to continue as a going concern. The financial statements have been prepared on a going concern basis. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Turnover

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports of the Group that are regularly reviewed by the Group's chief operating decision maker, based on information used to allocate the Group'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 battery cells, and accordingly no segmental analysis is presented on the basis that this would replicate the Income Statement.

In the periods covered in the financial statements, the Group operated mainly in the United Kingdom. All non-current assets are located in the United Kingdom. The Group does not have any goodwill to allocate to its operating segment.

		Year Ended		Year Ended
		30 June 2022		30 June 2021
		£		£
Turnover analysed by class of business
Commercial contracts		238,084		687,287
Grant income		1,955,675		1,280,061
		2,193,759		1,967,348
		Year Ended		Year Ended
		30 June 2022		30 June 2021
		£		£
Turnover analysed by geographical market
United Kingdom		2,059,186		1,868,347
Rest of the World		134,573		99,001
		2,193,759		1,967,348

During the year three customers each accounted for over 10% of revenue, relating to commercial contracts, these customers accounted for £110,690, £30,000 and £25,000 (2021: £446,442 in total). All commercial contract revenues have arisen from contracts with customers, and has been disaggregated to provide revenue amounts for material categories in accordance with the disclosure requirements of IFRS 15 'Revenue from Contracts with Customers'. Although government grant income is not typically accounted for under IFRS 15, this has been presented within revenue as the Group's business model anticipates significant revenues from such grants in its current business lifecycle phase.

The Group deferred income of £311,569 (2021: £430,155) against product development costs that were capitalised. Such income is recognised on the performance model under IAS 20 'Accounting for Government Grants and Disclosures'.

CALCULATION OF ADJUSTED EBITDA

In reporting EBITDA, the Directors use an adjusted EBITDA metric to better reflect the performance of the business. This metric is calculated as follows:

		Year Ended		Year Ended
		30 June 2022		30 June 2021
		£		£
Operating Loss		(5,756,350)		(3,590,992)
Add back:
Equity settled share based payment expense		50,530		979,387
Amortisation of intangible assets		152,553		140,561
Depreciation of property, plant & equipment		397,485		328,537
Deduct:
Payment of licence obligations		(908,000)		(723,615)
Payment of liabilities for property right-of-use assets		(172,500)		(189,237)
EBITDA (ADJUSTED)		(6,236,282)		(3,055,359)

The Directors have opted to include the following cash payments as they believe that this better reflects a key performance indicator focused on the operating performance of the Group. The cash payments are: payments for the licence obligations which is effectively the annual payment for the use of the licences; and the payments for the right-of-use property assets reflects the rental payments made for the use of these assets reflected in the balance sheet as an asset and liability.

LOSS PER SHARE

		Year Ended		Year Ended
		30 June 2022		30 June 2021
		£		£
Number of shares
Weighted average number of ordinary shares for diluted earnings per share		35,755,700		29,422,110

In the current and comparative year the Group has incurred losses and as such has not presented any dilutive shares in accordance with IAS 33 'Earnings per share'. However, the Group does have a number of share options and warrants that would dilute the earnings per share should the Group become profitable.

Earnings (all attributable to equity shareholders of the company)
Continuing operations
Loss for the period from continued operations	(5,838,110)		(3,704,515)
Earnings per share for continuing operations
Basic earnings per share (pence per share)	(16.33)		(12.59)
Diluted earnings per share (pence per share)	(16.33)		(12.59)
Basic earnings per share
From continuing operations	(16.33)		(12.59)

All earnings per share are derived from continuing operations. If the prior year restatements were not recognised, the comparative basic and diluted earnings per share (pence per share) would be (9.41).

SHARE CAPITAL

		2022	2021	2022	2021
Ordinary share capital		Number	Number	£	£
Authorised, issued and fully paid
Ordinary shares of 0.5p each		35,988,580	35,244,670	179,943	176,223

Reconciliation of movements during the year:

	Number
At 1 July 2021	35,244,670
Exercise of share options	743,910
At 30 June 2022	35,988,580

 

END

 

 

FR DZMFMFGGGZZZ