Half-year Report

Pod Point Group Holdings PLC

31 July 2023

 

31 July 2023

Pod Point Group Holdings PLC (Symbol: PODP)

Unaudited half-year results for the six months ended 30 June 2023

New team addressing the challenges to capture long term opportunities

Pod Point Group Holdings plc (the "Company") and its subsidiaries (the "Group"), one of the UK's market leading providers of Electric Vehicle ("EV") charging solutions, announces its unaudited half-year results for the period ended 30 June 2023 and begins its transformation plan to address performance issues.

Key Financials	Six months to 30.06.23	Six months to 30.06.22	Change
Total Revenue	£30.6m	£41.6m	-26%
Adjusted EBITDA(1)	£(6.8)m	£(1.4)m	£(5.4)m
EBITDA Loss	£(9.4)m	£(4.0)m	£(5.4)m
Loss Before Tax	£(32.8)m	£(7.5)m	£(25.3)m
Closing cash and cash equivalents	£58.8m	£82.1m	£(23.3)m

⁽¹⁾  See Notes below for definition of Adjusted EBITDA

Group Highlights

·      Compared to a very strong H1 2022, Revenue at £30.6m, down by 26% against a very strong prior year comparison that benefitted from pull forward demand from ending of OZEV grant.

·      Overall Gross Margin up 500bps to 30% from 25%, driven by improved supply chain, product savings, pricing and margin mix improvement.

·      Growth of communicating units to 212k, up by 21% across all customers, strengthening the foundations of future recurring revenue and leading to first Grid Load Management revenue expected in FY2023 from UK Power Networks.

·      Continued strong growth in Owned Asset revenue up 172% and Recurring revenue up 87%.

·      Home revenue, a key focus for the transformation plan, down 54%, reflecting a more challenging market with reduced market penetration.

·      Adjusted EBITDA loss of £6.8m below expectations on lower revenues, but with continued investment in future growth.

·      Non-cash goodwill impairment charge of £18.6m drives Loss Before Tax to £32.8m.

·      Strong balance sheet with £58.8m cash.

·      Following the appointment of interim CEO Andy Palmer, the Board is focused on delivering near term operational performance improvement and strengthening the Group's foundations to deliver long term shareholder value creation.  The Group will host a Capital Markets Event during Q4 2023 to provide an update on its refined strategy and transformation plan.

·      The Board has appointed a search firm to recruit a new CEO for the Group.  Updates will be provided in due course.

Strategic and Operational Summary

·      First Grid Load Management contract signed with UK Power Networks, leading to first consumer-related recurring revenue expected in 2023 financial year.

·      Large contract wins with three of the major UK Housebuilders - Barratt Development, Bellway and Taylor Wimpey, opening significant growth pipeline in this large segment.

·      Significant growth in network usage, with electricity transferred across our network up 26% at 215 GWh, helping to avoid 163k tonnes of CO2e⁽¹⁾, up 26% on 2022.

·      Excellent levels of customer service maintained with a 4.3 out of 5 rating on Trustpilot and a 4.6 out of 5 rating on reviews.io with a 91% recommendation rate.

·      Home charge Average Basket Spend increased by 7% to £800.

·      Headline Home Market Penetration⁽²⁾ down by 15ppt% from 22% to 7%, with the conclusion of OZEV grant that caused customers to pull forward home charge purchases resulting in an overweight 2022 penetration, combined with a weaker 2023 charge point demand market.

·      Owned Asset site expansion in Tesco deal near end of rollout: increased to 593 sites with 1334 charging points including 140 DC rapid units.

·      Improving of supply chain dynamics and good start to Celestica relationship.

⁽¹⁾  Consistent methodology with 2022 reporting

⁽²⁾ Home installation units (excluding wholesale units) as a % of reported SMMT PIV registrations in same period

Andy Palmer, Interim Chief Executive Officer of Pod Point, said:

The first half of 2023 has been complex, and we have faced numerous challenges, both internally and externally, including the well documented inflationary pressures and cost of living crisis.  Pod Point has lots of reasons to be pleased with progress made during the period, including several high-profile contract wins with large UK housebuilders and our first grid load management contract, significant improvements in our supply chain and a big step-up in our recurring revenues.  Our connected charging network has increased to 212,000 and remains by far the largest in the UK.  Following my appointment as Interim CEO, we are reviewing areas of improvement that will strengthen our foundations for long-term future success and growth.

Financial Summary	Six months to 30.06.23 £'000	Six months to 30.06.22 £'000	Period on period change
Total revenue	30,614	41,552	-26%
Home	12,415	27,219	-54%
Commercial	12,722	12,084	5%
Owned Assets	4,052	1,489	172%
Recurring Revenue	1,425	760	87%
Gross profit	9,239	10,388	-11%
Gross margin	30%	25%	+5ppt%
Home gross profit	3,426	6,285	-45%
Home gross margin	28%	23%	+5ppt%
Commercial gross profit	3,746	2,776	35%
Commercial gross margin	29%	23%	+6ppt%
Adjusted EBITDA(1)	(6,778)	(1,414)	(5,364)
EBITDA Loss	(9,381)	(3,992)	(5,389)
Loss before tax	(32,815)	(7,546)	(25,269)
Closing cash and cash equivalents	58,766	82,086	(23,320)

Headline KPIs	Six months to 30.06.23	Six months to 30.06.22	Period on period change
Total UK new PiV(2) sales	215,120	166,512	29%
Home units installed	15,525	36,576	-58%
Commercial units installed and shipped	9,668	8,844	9%
Home market penetration	7%	22%	-15ppt%
Total Home units installed and able to communicate at period end	188,158	156,398	20%
Total Commercial units installed and able to communicate at period end	23,771	18,732	27%
Average recurring revenue per unit(3)	£60	£41	46%
Total Owned Asset sites at period end	593	500	19%
Total Owned Asset Charge Points at period end	1,334	1,109	20%
Total Owned Asset Rapid/DC Charge Points at period end	140	101	39%

Notes

⁽¹⁾Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortisation and also excluding both amounts charged to the income statement in respect of the Group's share based payments arrangements and adjusting for large corporate transaction and restructuring costs.  These have been separately identified by the Directors and adjusted to provide an underlying measure of financial performance.  The reconciliation is set out on the income statement and Note 5 provides a summary of the amounts arising from the large corporate transactions and restructuring costs.

⁽²⁾ PiV defined as "Plug-in Vehicles"

⁽³⁾Average recurring revenue per unit is calculated as recurring revenue divided by the total number of Commercial units installed and able to communicate at a period end. Commercial units shipped but not installed by Pod Point are not included in this statistic.

Current trading and outlook

2023 has proven volatile during the first half, with weaker revenue trends being partially offset by significantly higher gross margin. Headline market data suggests strong growth in the PIV market, but trends between private customers and fleet customers have been divergent.  While inflation has eased slightly in the most recent data, cost of living pressures remains and are likely to continue to weigh on consumer confidence.

Consequently, the Group has updated revenue guidance for 2023 to be at least £60m.  Adjusted EBITDA loss for 2023 is now expected to be no greater than £17m.  The updated adjusted EBITDA guidance includes the impact of lower revenues, and an expected £5m of costs related to transformation plan initiatives and growth investments identified as part of the ongoing strategy review and non-cash charges.  We expect the improvement in gross margin seen in H1 to continue in the second half on improved supply chain and actions taken by the Group. Our year-end cash position is expected to be between £40-45 million.

Webcast presentation

There will be a webcast presentation for investors and analysts this morning at 09:00 am. Please contact [e-mail] if you would like to attend.

Enquiries: 

Pod Point Plc                                                                  

Andy Palmer, interim Chief Executive Officer                                                    

David Wolffe, Chief Financial Officer

Phil Clark, Investor Relations                                                                           [e-mail]

Numis (Joint Corporate Broker)

Jonathan Wilcox / Andrew Coates                                                                    [phone]

BofA Securities (Joint Corporate Broker)

Marcus Jackson / Mitchell Evans                                                                     [phone]

Media

Mark Burgess / Matt Low / Arthur Rogers  (Teneo)                                               [phone] [e-mail]

About Pod Point Group Holdings plc

Pod Point was founded in 2009 by entrepreneur Erik Fairbairn. Driven by a belief that travel shouldn't damage the earth, Pod Point has 212k smart communicating charge points on its network and is an official charge point supplier for major car brands.

Pod Point installs a broad range of products from smart domestic charge points to high power rapid chargers and load balancing systems. Pod Point works with a broad range of organisations and customers to offer home and commercial charging solutions with customers including major retailers, hotels, restaurants and leisure venues. 

Pod Point is admitted to trading on the London Stock Exchange under the ticker symbol "PODP."

For more information, visit https://pod-point.com/

Chief Executive's Review

The first half of 2023 has been another dynamic period for the Group with lots of successes, lots of challenges and most recently a period of transition with the departure of the Group's Founder and CEO.  When taking on the role of interim CEO, I promised to provide an update on key priorities for the Group.  The Board remains extremely confident in the long-term future for Pod Point and its core mission and plan.  The Group has made a strong start in capturing the opportunities created by the transition to electric vehicles and our long-term shareholder value creation potential remains huge.  However, it is clear there are certain areas that we need to improve on, particularly around operational processes and moving towards profitability as quickly as possible.

Alongside the Executive team and the Board, I have conducted a rapid initial review of our business.  We have identified three critical areas that need strategic and operational review.

1.     Growth. 

While the Group had a strong track record of delivering rapid growth for several years, the performance in the last 12 months has been very disappointing and we have lost market share in an increasingly competitive market.  We are acting quickly to re-establish our market leading position on new installations, focusing on product innovation and operational excellence.  The Board is in no doubt that the Group has significant growth potential, and we need to reassess our strategic priorities to ensure we fully leverage our competitive advantages of brand awareness, existing installed base, strong OEM and Commercial relationships and emerging recurring revenue streams.

Pod Point is positioned well to take advantage of strong relationships with OEM partners and of the OZEV scheme to sell charging points.  However, this has been done at the detriment of building internal sales capabilities and at this time these remain insufficient to drive growth.  With the shifts in the market and the end of the OZEV scheme, our sales have slowed.  We are therefore re-focusing on re-establishing greater internal sales capabilities and resources.

2.     Product innovation. 

Pod Point had a clear early lead in charge point technology. Our products are reliable, robust, easy to use and offer great value. However, while we still have a strong product set, we have failed to maintain our leadership position and been slow to anticipate the market evolution to open architecture technology.  We are re-establishing a clear product innovation roadmap that keeps pace with customer requirements in a cost-effective way.  The introduction of OCPP (Open Charge Point Protocol) and OCPI (Open Charge Point Interface) capabilities in our product is a key priority, unlocking new growth opportunities.

3.     Cost and ROI discipline. 

The Group has not had a consistent and disciplined enough approach to capital allocation and investment in our cost base.  Consequently, we have not prioritised investments into those areas that will deliver break-even in our core charging business.  We need to ensure greater operational control across the business, and we will implement a clearer investment criteria framework and return on capital hurdle rates for our investment decisions. Accelerating our path to profitability and careful deployment of our cash will be a key focus for the Group.

A transformation programme is in development, with further details and a strategy update in Q4 at a CMD.

Immediate priorities for H2 2023

For the balance of 2023, the Board and Executive team will focus on refining our tactical and strategic response to each of these areas, including the engagement of external consultants to support a strategic and operational review of the Group.  This work, combined with core workstreams identified by the management team will create the Group's transformation plan, Powering Up.

The intent of this work and our response to current company-specific challenges is to ensure that Pod Point is well placed to take advantage of our key strengths to (1) move to break-even as quickly as possible in our core charging business and (2) capture the long-term structural growth opportunities created by the decarbonisation of the economy. 

·     Brand.  Pod Point has strong brand awareness and is well regarded by consumers.  A recent YouGov survey showed Pod Point has the leading brand consideration in the sector.

·    Network.  Our installed network of charging points is now 212,000, up 9% compared to 31 December 2022.  Pod Point has the largest home charging network in the UK.

·    Partnerships.  The Group has established significant partnerships with many of the largest OEMs in Europe as well as being a strong partner for home electric charging points for 13 of the largest 15 homebuilders in the UK.

·    Routes to market.  Pod Point has a range of routes to market for its charge points: Direct to Consumer, OEM referral, Leasing, Wholesale, Housebuilders, and B2B Commercial across retail, leisure, logistics and others.  This provides us with diversification and leverages our partnerships.

·     ESG credentials.  Our mission is unchanged, to provide travel that doesn't damage the Earth.  We have a strong ESG mindset and will provide an update of our ESG programme at our preliminary results.

·     Balance sheet strength.  Pod Point is well capitalised.  Our £58.8 million of cash at the end of H1 2023 means we have sufficient financial resources to deliver on our medium-term plan.

By doing this, we are creating a significant installed base of connected charge points that will unlock our grid load management potential, with its high margin and recurring revenue streams.

The Group will host a capital markets event during Q4 2023 to provide more detail of our transformation plan, key initiatives and updated strategic plan.  We will provide more detail on the grid management and recurring revenue opportunity for Pod Point.  At the event, financial and operational targets will be provided.

Overview of results:

Performance in H1 reflects a significant degree of challenge. Although a key highlight is gross margin progression, revenue growth has been disappointing.

Like many other companies, we are seeing how a poor macroeconomic environment with low consumer confidence is currently constraining both consumer and commercial demand.

Despite challenging conditions in 2023, we continued to invest in our business, because we see a strong industry growth trajectory over the next decade as the UK navigates the journey to all vehicles being electric.  We have an opportunity to cement a leading position in the market.

In H1 2023, we shipped and installed 25,193 charge points, with the commercial sector leading with 9% increase year on year.

During the year, we also made significant steps towards improving our gross margin, avoiding additional supply chain costs, having full production of our highest volume products with leading global manufacturer, Celestica, and by growing our average basket spend in our home charge sector from £746 to £800.

We saw exceptional growth in our small but vitally important recurring revenue sector, specifically growing our average recurring revenue per commercial unit from £41 to £60 and growing our overall recurring revenue by 87% year on year.

Furthermore, we saw 172% growth in our revenues from our Owned Assets, predominantly driven by our relationship with Tesco and introduction of increased charging tariffs.

Overall, we ended the year with circa 212k communicating charge points, which is a significant step toward our plans to enable grid load management functionality across our network.

The recent announcement of the deal with UK Power Networks is a significant marker of our progress towards the beginning of a new stream of recurring revenues relating to consumers and the value of our network in terms of grid load management. We expect to recognise our first revenues in this financial year 2023.

Pod Point's mission is to enable travel that doesn't damage the Earth, so we were also very pleased to see strong growth in the energy transferred across our network, (215GWh HY23 vs 171GWh HY22) and the corresponding growth in the amount of carbon avoided by our customers (163k tonnes HY23 vs 129k tonnes HY22).

We recognise that performance in the last 6 months has been disappointing, and we are committed to addressing the underlying issues, and know we can build on some core strengths of the business.

We continue to be very excited by the growth prospects for charging underpinned by the government's 2030 internal combustion engine ban. The opportunity from Grid services is even more exciting.

I would like to thank the whole team at Pod Point for the hard work of the last 6 months, the warm welcome to my new role, and the clear commitment to the revitalisation of the business.

Sector Review

In the Home business segment:

·      Revenue of £12.4 million was 54% down compared to of £27.2 million in H1 2022.

·      New plug-in vehicle registrations increased 29% to 215,120 in H1 2023 from 166,512 in H1 2022. This continued growth reflects continued demand for EVs, but it is important to note that the retail/consumer side of the market showed significant weakness. The number of Pod Point Home units installed fell to 15,525 versus 36,576 in H1 2022.

·      Our headline market penetration of new plug-in vehicle registrations therefore decreased to 7% from 22% in H1 2022. There are a range of factors that we believe contributed to this including:

o  Increased consumer cost of home charge units as a result of the end of the OZEV grant, and the cost-of-living crisis may have reduced the average ratio of home charge units to plug-in vehicles.

o  Shifting market mix in 2023 away from private EV sales towards fleet, with the private market showing weak demand for charge points, and fleet sales showing increased vehicle renewals where no charge point is required.

·      Percentage gross margin in H1 2023 increased 500 basis points to 28% compared to H1 2022 at 23%, driven by the avoidance of component sourcing costs, improved Average revenue per unit, and a full period of improved Bill of Material (BoM) costs. Average revenue per unit increased to £800 from £746 in H1 2022.

·      The lower revenue growth drove total gross margin lower in H1 2023, falling to £3.4 million compared to £6.3 million in H1 2022.

In the Commercial business segment:

·      We delivered a steady performance, with revenue of £12.7 million compared to H1 2022 of £12.1 million, an increase of 5% on average, with higher growth in our supply only segment.

·      Number of units installed decreased to 1,890 from 2,112 in H1 2022 and the number of units sold directly to customers increased to 7,778, compared to 6,732 in H1 2022. This represents a direct sale increase of 16%.

·      The increased revenues helped to increase total gross margin in H1 2023 to £3.7 million, compared to H1 2022 at £2.8 million, an increase of 35%.

·      Percentage gross margin increased by 600 basis points to 29% in H1 2023 from 23% in H1 2022, due to a shift in the mix of installations toward higher margin direct sale units.

In the Recurring Revenue business segment:

·      We delivered excellent growth in our recurring revenue segment, albeit from a low base, with revenue of £1.4 million in H1 2023 compared to H1 2022 of £0.8 million, an increase of 87%. Network revenues in H1 2023 grew by 18% to £0.542 million compared to H1 2022 of £0.460 million.

·      This increase in revenues helped to increase gross margin in H1 2023 to £0.9 million, compared to H1 2022 of £0.4 million, an increase of 108%.

·      Percentage gross margin in H1 2023 increased to 62% compared to 56% in H1 2022, an increase of 6 percentage points, with the average recurring revenue per commercial unit installed and able to communicate increasing to £60, compared to £41 in H1 2022.

·      The number of Commercial units installed and able to communicate at the period end increased to 23,771 from 21,342 at the end of 2022. All recurring revenues in both 2023 and 2022 were derived from these units.

·      The number of Home units installed and able to communicate at the period end increased to 188,158 from 173,754 at the end of 2022. This growth is strategically significant as we seek to expand our recurring revenue products across these units.

In the Owned Asset business segment:

·      We delivered a strong performance with revenue of £4.1 million in H1 2023 compared to H1 2022 of £1.5 million, an increase of 172%.

·      The total number of sites installed at the period end increased to 593 from 564 at the end of 2022 and 500 at June 2022. The total number of units installed at the period end increased to 1,334 from 1,259 at the end of 2022, including 140 DC rapid units at 30 June 2023 compared to 117 at the end of 2022.

·      This increase in revenues and units helped to increase gross margin in H1 2023 to £1.2 million compared to H1 2022 at £0.9 million, an increase of 31%.

·      Percentage gross margin in H1 2023 decreased to 29% compared to H1 2022 of 61%, a decrease of 32 percentage points, due to revenue mix.

·      Gross capital deployed on assets increased to £6.9 million at the end of H1 2023, compared to £6.3 million at the end of 2022. 

Financial Performance

It was a disappointing performance by the business in H1 2023 with total revenue of £30.6 million (H1 2022: £41.6 million), a decrease of 26%. Better growth came from our Commercial business segment, and we also saw very high growth in Recurring Revenue and Owned Assets.

Reduced revenue, mitigated by significant margin improvement, moderated the decrease in total gross profit in H1 2023 of £9.2 million (H1 2022: £10.4 million) to a period on period decrease of 11%.

Compared to H1 2022 and its additional costs of sourcing components in the spot market, with improvements in the sales mix, and underlying BoM improvements, as well as pricing changes, percentage gross margin in H1 2023 increased to 30% (H1 2022: 25%), a period-on-period increase of 5 percentage points.

The reduced revenues and gross profit combined with increased overhead spend to invest in driving future growth, focussed on sales and marketing, customer service and team development. This moved the business to an adjusted EBITDA loss of £6.8 million in H1 2023 (H1 2022: £1.4 million).

After further investment of £6.0 million in software and product development and controlled investment in Owned Assets, H1 2023 period end cash and short-term investments were £58.8 compared to £74.1 million at the end of 2022.

Unadjusted losses after tax increased to £33.0 million in H1 2023 (H1 2022: £7.5 million).  EBITDA losses increased in H1 2023 with losses of £9.4 million (H1 2022: £4.0 million).  There were increased depreciation and amortisation costs of £5.1 million in H1 2023 (H1 2022: £3.5 million), while net financing income was £0.3 million (H1 2022: net finance costs of £0.1 million).

Total administrative expenses increased to £43.0 million in H1 2023 (H1 2022: £17.9 million), an increase of 140%.  This increase was due to a goodwill impairment loss recognised in H1 2023 of £18.6m (H1 2022: nil), additional staff to deliver future growth, additional depreciation and amortisation costs as a result of increased funds being invested in Owned Assets and intangible asset development. Looking at these individually:

·      Administrative expenses excluding restructuring costs, share based payments, depreciation and amortisation and goodwill impairment costs increased to £16.6 million in H1 2023 (H1 2022: £11.8 million) an increase of 41%.  This increase was due to additional staff and overheads to drive future growth, albeit that growth in 2023 has been short of expectations.

·      Depreciation and amortisation costs increased in H1 2023 to £5.1 million (H1 2022: £3.5 million) as a result of additional funds being invested in product and software development and other assets.

·      A goodwill impairment charge recognised in H1 2023 of £18.6m (H1 2022: nil).

·      Following the listing in November 2021, Pod Point incurred share based payment charges relating to a number of share awards that were implemented at or soon after listing, resulting in an H1 2023 charge to the P&L of £2 million (H1 2022: £2.6 million) and national insurance accrued on share based payment charges of £0.3 million (H1 2022: £0.3 million).

·      In H1 2023, £0.4 million of restructuring costs were incurred (H1 2022: £nil).

Net finance income increased to £0.3 million in H1 2023 (H1 2022: net finance costs of £0.1 million).

Our balance sheet remains strong. Working capital movements have been limited across trade and other receivables, inventory and trade and other payables. Fixed assets grew as we continue to build the software platforms that will drive future growth.  

Closing cash and cash equivalents were £58.8 million at 30 June 2023 (31 December 2022: £74.1 million). Closing net assets were £152.8 million (31 December 2022: £184.2 million)

Cash outflow from operating activities in H1 2023 increased by £0.2 million to £8.9 million (H1 2022: £8.7 million). This was primarily due to a larger operating loss.

Cash flow from investing activities had outflows of £6.3 million in H1 2023 (H1 2022: inflows of £44.3 million). This swing is primarily the result of a £50m investment in bank deposits in 2021 that was redeemed in 2022. Aside from this, the business in H1 2023 invested £6.0 million in capitalised software development to drive future recurring revenues.

Cash flow from financing activities were an outflow of £0.1 million in H1 2023 (H1 2022: inflow of £0.3 million).  

During H1 2023, transactions with related parties included sale of goods of £0.1 million (H1 2022: £43k) and purchase of goods of £0.1 million (H1 2022: £0.3 million). These transactions were undertaken with the shareholders EDF Energy Customers Limited and its subsidiaries and related parties.

Principal Risks and Uncertainties

Effective risk management is essential to the achievement of our strategic objectives and driving sustainable

business growth. We aim to maintain an appropriate balance between protecting the company against specific

risks while being able to encourage appropriate and monitored risk-taking and innovation that allows us to take advantage of business opportunities.

The Board, as part of its half year processes, considered reports from management reviewing the principal risks and uncertainties and how these might evolve during the second half of 2023.

Following this review the Board is satisfied that the Group's principal risks remain unchanged from those contained in our 2022 Annual Report to bring to your attention. These are listed below:

1. Dependency on the continuing adoption of and demand for EVs

2. Competition in the industry and market segment

3. Delays to Product Development

4. Ongoing and potential future disruptions to the global supply chain

5. Government and regulatory initiatives with unknown outcomes

6. Health and safety risks related to our products, installation, maintenance and operation of electrical equipment

7. Potential undetected defects, errors or bugs in hardware or software

8. Deterioration of economic conditions in the UK, the UK's economic relationship with the EU and the      possibility of a future health pandemic

9. Disruptions to our network and IT systems

10. Ability to hire and retain key management and other skilled employees

Further details of the Group's principal risks and uncertainties can be found on pages 64-73 of the 2022 Annual Report, which is available on https://investors.pod-point.com/

Director's Responsibilities Statement

We confirm that to the best of our knowledge:

a) The condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting"

b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risk and uncertainties for the remaining six months of the year); and

c) The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

D Wolffe

Director

31 July 2023

Basis of Preparation and General Information

The condensed consolidated interim financial statements for Pod Point Group Holdings Plc (the Company) and its subsidiaries (together, the Group) have been prepared using accounting policies consistent with IFRS as adopted by the UK and in accordance with IAS 34 "Interim Financial Reporting". The same accounting policies and methods of computation are followed in this set of condensed consolidated interim financial statements as compared with  the most recent Annual Report. A copy of the statutory accounts for the year ended 31 December 2022 has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The condensed consolidated interim financial statements do not constitute the full financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and have been prepared on a going concern basis.

The condensed consolidated interim financial statements was approved by the Board of directors on 30 July 2023.

Consolidated Income Statement

	Notes	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year ended 31 December 2022
		£'000	£'000	£'000
Revenue (including OZEV revenues)	2,3	30,614	41,552	71,409
Cost of sales		(21,375)	(31,164)	(54,820)
Gross profit		9,239	10,388	16,589
Other income		600	-	1,461
Administrative expenses		(42,991)	(17,857)	(38,065)
Operating loss		(33,152)	(7,469)	(20,015)
Analysed as:
Adjusted EBITDA(1)		(6,778)	(1,414)	(7,040)
Restructuring costs(2)	5	(359)	-	(57)
Share-based payments	14	(2,244)	(2,578)	(5,175)
EBITDA(1)		(9,381)	(3,992)	(12,272)
Amortisation and depreciation		(5,126)	(3,477)	(7,743)
Goodwill impairment	7	(18,645)	-	-
Group operating loss		(33,152)	(7,469)	(20,015)
Finance income	6	542	75	457
Finance costs	6	(205)	(152)	(366)
Loss before tax		(32,815)	(7,546)	(19,924)
Income tax expense		(138)	-	(287)
Loss after tax		(32,953)	(7,546)	(20,211)
Basic and diluted loss per ordinary share	15	£(0.22)	£(0.05)	£(0.13)

Notes:

(1)        EBITDA is defined as earnings before interest, tax, depreciation and amortisation, and is considered by the Directors to be a key measure of financial performance. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortisation and excluding both amounts charged to the income statement in respect of the Group's share based payments arrangements and also adjusting for restructuring costs.  These have been separately identified by the Directors and adjusted to provide an underlying measure of financial performance.  The reconciliation is set out on the income statement and Note 6 provides a summary of the amounts arising from the restructuring costs.

(2)        See Note 5

(3)        All amounts relate to continuing activities.

(4)        All realised gains and losses are recognised in the consolidated income statement and there is no other comprehensive income.

(5)        The notes on pages 20 to 31 form part of the Condensed consolidated interim financial statements.

(6)        There is no other comprehensive income in the years presented and therefore no separate statement of other comprehensive income is presented.

Consolidated Statement of Financial Position

	Notes	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
		£'000	£'000	£'000
Non-current assets
Goodwill	7	58,994	77,639	77,639
Intangible assets	7	35,231	31,440	33,236
Property, plant and equipment	8	5,619	5,009	5,498
Deferred tax asset		5,471	7,309	5,670
Right of use assets		2,949	2,655	2,914
		108,264	124,052	124,957
Current assets
Inventories	9	8,012	7,631	7,342
Trade and other receivables	10	28,572	26,381	26,882
Cash and cash equivalents		58,766	82,086	74,103
		95,350	116,098	108,327
Total assets		203,614	240,150	233,284
Current liabilities
Trade and other payables	11	(37,504)	(30,843)	(36,419)
Loans and borrowings	12	(1,271)	(1,343)	(2,842)
Lease liabilities		(1,466)	(1,212)	(1,634)
Provisions		(290)	(238)	(265)
		(40,531)	(33,636)	(41,160)
Net current assets		54,819	82,462	67,167
Total assets less current liabilities		163,083	206,514	192,124
Non-current liabilities
Loans and borrowings	12	(2,821)	(2,657)	(481)
Lease liabilities		(1,700)	(1,681)	(1,515)
Deferred tax liability		(5,471)	(7,309)	(5,670)
Provisions		(302)	(314)	(301)
		(10,294)	(11,961)	(7,967)
Total liabilities		(50,825)	(45,597)	(49,127)
Net assets		152,789	194,553	184,157
Equity
Share capital		154	154	154
Share premium		140,203	140,045	140,203
Other reserves		8,236	4,540	6,651
ESOP reserve		(1,318)	(1,318)	(1,318)
Retained earnings		5,514	51,132	38,467
		152,789	194,553	184,157

Consolidated Statement of Changes in Equity

	Share Capital	Share Premium	Other Reserves	ESOP Reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance As at 1 January 2022	154	140,057	2,264	(1,318)	58,678	199,835
Loss after tax	-	-	-	-	(7,546)	(7,546)
Share issuance costs finalisation	-	(12)	-	-	-	(12)
Share based payments	-	-	2,276	-	-	2,276
Balance As at 30 June 2022  (unaudited)	154	140,045	4,540	(1,318)	51,132	194,553
Loss after tax	-	-	-	-	(12,665)	(12,665)
Issue of shares	-	158	(158)	-	-	-
Share-based payments	-	-	2,269	-	-	2,269
Balance as at 31 December 2022	154	140,203	6,651	(1,318)	38,467	184,157
Loss after tax	-	-	-	-	(32,953)	(32,953)
Share-based payments	-	-	1,585	-	-	1,585
Balance as at 30 June 2023 (unaudited)	154	140,203	8,236	(1,318)	5,514	152,789

Consolidated Statement of Cash Flow

	Notes	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year ended 31 December 2022
		£'000	£'000	£'000
Cash flows from operating activities
Operating loss		(33,152)	(7,469)	(20,015)
Adjustment for non-cash items:
Amortisation of intangible assets	7	3,792	2,466	5,484
Depreciation of tangible assets	8	656	534	1,123
Depreciation of right of use assets		679	477	1,136
Tax		(138)	-	(287)
Loss on impairment of intangible assets	7	235	-	604
Loss on impairment of goodwill	7	18,645	-	-
Loss on disposal of tangible assets	8	-	4	4
Share based payment charges		1,683	2,276	4,545
		(7,600)	(1,712)	(7,406)
Changes in working capital
(Increase)/Decrease in inventories		(670)	583	872
(Increase) in trade and other receivables		(1,689)	(2,340)	(2,841)
Increase/(Decrease) in trade and other payables		971	(5,330)	246
Increase in provisions		25	148	162
		(1,363)	(6,939)	(1,561)
Net cash flow (used in) operating activities		(8,963)	(8,651)	(8,967)
Cash flows from investing activities
Purchase of tangible assets	8	(777)	(1,270)	(2,348)
Cost of intangible assets	7	(6,023)	(4,485)	(9,902)
Redemption of short-term investments		-	50,000	50,000
Interest received		542	75	458
Net cash flow generated from/(used in) investing activities		(6,258)	44,320	38,208
Cash flows from financing activities
Proceeds from new borrowings	12	1,466	1,317	1,243
Loan repayment	12	(666)	(351)	(990)
Payment of principal of lease liabilities		(711)	(509)	(1,129)
Payment of lease interest		(121)	(76)	(216)
Other Interest paid		(84)	(76)	(158)
Net cash flows generated by financing activities		(116)	305	(1,250)
Net increase/(decrease) in cash and cash equivalents		(15,337)	35,974	27,991
Cash and cash equivalents at beginning of the period		74,103	46,112	46,112
Closing cash and cash equivalents		58,766	82,086	74,103

Consolidated Notes to the financial statements

1.         General information

Pod Point Group Holdings plc (referred to as the "Company") is a public limited company incorporated in the United Kingdom under the Companies Act 2006 and registered in England. Its registration number is 12431376. The registered address is 28-42 Banner Street, London EC1Y 8QE.

The principal activity of the Company and its subsidiary undertakings (the "Group") during the periods presented is that of development and supply of equipment and systems for recharging electric vehicles. The entire issued share capital of the Company was admitted to trading on the Main Market of the London Stock Exchange on 9 November 2021. All figures presented in this unaudited preliminary announcement are in £ sterling.

When considering the basis of Going Concern, the Directors have made enquiries and reviewed cash flow forecasts and available facilities for at least the next 12 months (including subsequent events). Taking these into account the Directors have formed a judgement, at the time of approving the unaudited preliminary announcement, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. This judgement has been formed taking into account the principal risks and uncertainties that the Group faces.

2.         Segment reporting

             The Group has four operating and reportable segments which are considered:

Reportable Segment	Operations
Home	Activities generated by the sale of charging units to domestic customers for installation in homes.
Commercial	Activities generated by the sale and installation of charging units in commercial settings, such as the destination, workplace and en-route routes to market.
Owned Assets	Operating activities relating to customer contracts, in which Pod Point owns the charging point assets but charges end customers for the use of these assets and, at some sites, charges a fee for provision of media screens on the units for advertising purposes.
Recurring	Operating activities relating to the recurring revenue generated on charging units, relating to fees charged from the ongoing use of the Pod Point software and information generated from the management information system.

There are no transactions with a single external customer amounting to 10 per cent. or more of the Group's revenues.

Work, destination and en-route revenues are routes to market within the Commercial segment, rather than individual business segments with the types of installations being similar in all three.

Revenue has been further split into OZEV and non-OZEV revenues for each segment. OZEV revenues are the portion of revenue generated from an install, which are claimed from the DVLA by the Group on behalf of customers who are eligible for the EVHS government grant.

A breakdown of revenues and non-current assets by geographical area is included in Note 3. Assets and liabilities are not reviewed on a segmental basis and therefore have not been included in this disclosure.

Segmental Analysis for the six months ended 30 June 2023 (unaudited):

	UK Home	UK Commercial	Owned Assets	Recurring	Total Group
	£'000	£'000	£'000	£'000	£'000
Revenue, non-OZEV	12,342	12,496	4,052	1,425	30,315
OZEV revenue	73	226	-	-	299
Revenue	12,415	12,722	4,052	1,425	30,614
Cost of sales	(8,989)	(8,976)	(2,869)	(541)	(21,375)
Gross Margin	3,426	3,746	1,183	884	9,239
Other income					600
Administrative Expenses					(42,991)
Operating Loss					(33,152)
Finance income					542
Finance costs					(205)
Loss before tax					(32,815)

Segmental Analysis for the six months ended 30 June 2022 (unaudited):

	UK Home	UK Commercial	Owned Assets	Recurring	Total Group
	£'000	£'000	£'000	£'000	£'000
Revenue, non-OZEV	20,817	11,728	1,489	760	34,794
OZEV revenue	6,402	356	-	-	6,758
Revenue	27,219	12,084	1,489	760	41,552
Cost of sales	(20,934)	(9,308)	(587)	(335)	(31,164)
Gross Margin...	6,285	2,776	902	425	10,388
Administrative Expenses					(17,857)
Operating Loss					(7,469)
Finance income					75
Finance costs					(152)
Loss before tax					(7,546)

Segmental Analysis for the year ended 31 December 2022:

	UK Home	UK Commercial	Owned Assets	Recurring	Total Group
	£'000	£'000	£'000	£'000	£'000
Revenue, non-OZEV	34,891	23,257	4,233	1,896	64,277
OZEV revenue	6,495	637	-	-	7,132
Revenue	41,386	23,894	4,233	1,896	71,409
Cost of sales	(33,304)	(18,721)	(1,992)	(803)	(54,820)
Gross Margin...	8,082	5,173	2,241	1,093	16,589
Other income					1,461
Administrative Expenses					(38,065)
Operating Loss					(20,015)
Finance income					457
Finance costs					(366)
Loss before tax					(19,924)

3.         Revenue and non-current assets

             Revenue, analysed geographically between markets, was as follows:

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year Ended 31 December 2022
	£'000	£'000	£'000
United Kingdom	30,592	41,463	71,277
Ireland	21	-	-
Norway	1	89	132
	30,614	41,552	71,409

The geographical analysis of revenue and net revenue is on the basis of the country of origin in which the client is invoiced.

Revenue, split between OZEV revenues and non-OZEV revenues was as follows:

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year Ended 31 December 2022
	£'000	£'000	£'000
Non-OZEV revenue	30,315	34,794	64,277
OZEV revenue	299	6,758	7,132
	30,614	41,552	71,409

All OZEV revenue was earned in the UK. Non-current assets are all held within the UK for all periods presented.

Other income represents grant income relating to the R&D expenditure credit for relief on the Group's research and development costs.

4.         Directors and employees

            The table below presents the staff costs of these persons, including those in respect of the Directors, recognised in the income statement.

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year Ended 31 December 2022
	£'000	£'000	£'000
Wages and salaries	15,956	9,602	20,699
Social security costs	1,843	1,086	3,118
Costs of defined contribution scheme	639	660	266
Net share-based payment expense	2,244	2,275	4,545
	20,682	13,623	28,628

Staff costs presented in this note reflect the total wage, tax and pension cost relating to employees of the Group. These costs are allocated between administrative expenses, cost of sales or capitalised where appropriate as part of Software Development intangible assets. The allocation between these areas is dependent on the area of business the employee works in and the activities they have undertaken.

During the 6 months ended 30 June 2023, £4.2 million of staff costs were capitalised (H1 2022: £2.8 million, year ended 31 December 2022: £6.7 million).

5.         Restructuring costs

Restructuring costs, for the purposes of presenting non-IFRS measure of adjusted EBITDA are as follows:

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year Ended 31 December 2022
	£'000	£'000	£'000
Restructuring costs	359	-	57

Restructuring costs in 2023 related to changes within the senior management team. Restructuring costs in 2022 related to the closure of the Norway branch.

6.         Finance income and finance costs

Net financing costs comprise bank interest income and interest expense on borrowings, and interest expense on lease liabilities.

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year Ended 31 December 2022
	£'000	£'000	£'000
Interest on bank deposits	542	75	457
Finance Income	542	75	457
Interest on loans and bonds	(84)	(92)	(150)
Interest on lease liabilities	(121)	(60)	(216)
Finance Costs	(205)	(152)	(366)
Net finance income/(costs) recognised in the income statement	337	(77)	91

7.         Intangible assets

Intangible assets as at 30 June 2023 (unaudited):

	Development	Brand	Customer Relationships	Goodwill	Total
	£'000	£'000	£'000	£'000	£'000
Cost:
At 1 January 2023	20,702	13,940	13,371	77,639	125,652
Additions	6,023	-	-	-	6,023
At 30 June 2023	26,725	13,940	13,371	77,639	131,675
Accumulated amortisation and impairment:
At 1 January 2023	10,146	2,033	2,599	-	14,778
Amortisation	2,997	349	446	-	3,792
Impairment	235	-	-	18,645	18,880
At 30 June 2023	13,378	2,382	3,045	18,645	37,450
Carrying amounts:
At 30 June 2023	13,347	11,558	10,326	58,994	94,225

Intangible assets as at 30 June 2022 (unaudited):

	Development	Brand	Customer Relationships	Goodwill	Total
	£'000	£'000	£'000	£'000	£'000
Cost:
At 1 January 2022	10,800	13,940	13,371	77,639	115,750
Additions	4,485	-	-	-	4,485
At 30 June 2022	15,285	13,940	13,371	77,639	120,235
Accumulated amortisation:
At 1 January 2022	5,646	1,336	1,708	-	8,690
Amortisation	1,671	349	446	-	2,466
At 30 June 2022	7,317	1,685	2,154	-	11,156
Carrying amounts:
At 30 June 2022	7,968	12,255	11,217	77,639	109,079

Intangible assets as at 31 December 2022:

	Development	Brand	Customer Relationships	Goodwill	Total
	£'000	£'000	£'000	£'000	£'000
Cost:
At 1 January 2022	10,800	13,940	13,371	77,639	115,750
Additions	9,902	-	-	-	9,902
At 31 December 2022	20,702	13,940	13,371	77,639	125,652
Accumulated amortisation and impairment:
At 1 January 2022	5,646	1,336	1,708	-	8,690
Amortisation	3,896	697	891	-	5,484
Impairment	604	-	-	-	604
At 31 December 2022	10,146	2,033	2,599	-	14,778
Carrying amounts:
At 31 December 2022	10,556	11,907	10,772	77,639	110,874

In accordance with the provisions of IAS36 'Impairment of Assets' the allocation to the individual cash generating unit ("CGU") of the goodwill recognised on the purchase of PPH was completed during the year ended 31st December 2021, being the end of the first annual period beginning after the relevant acquisition date of PPH by the Company. An impairment loss of £18.6m has been recognised during H1 2023.

An impairment review has been performed comparing book values (including goodwill) to value in use of the CGU at 30 June 2023. The recoverable amount of the CGU was determined from value in use calculations based on a discounted cash flow model. Key assumptions in which management has based its determination of value in use include the number of forecasted car registrations used to project revenue growth and estimated market penetration for the home and commercial markets. Car registration forecasts are based upon external data from the Society of Motor Manufacturers and Traders ("SMMT") and the Government ban on new internal combustion cars from 2030, while market share assumptions are determined using historical data and experience.

Management projected cash flows to 2030, a period longer than 5 years. This was considered appropriate as it represents the period to the Government's committed date of the ban on the sale of new petrol and diesel cars. A weighted average cost of capital (WACC) of 13% has been applied.

Given decreases in home market penetration in H1 2023 and other macro-economic factors, sensitivities have been performed around home and commercial penetration, sales price and overheads inflation which resulted in the carrying value exceeding the value in use by £18.6m and therefore an impairment loss has been recognised. No other reasonably possible changes in assumptions would cause the carrying amount to further exceed the recoverable amount.

8.         Property, Plant and Equipment

Property Plant and Equipment as at 30 June 2023 (unaudited):

	Other Property, Plant and Equipment	Owned Assets	Total
	£'000	£'000	£'000
Cost:
At 1 January 2023	1,659	6,496	8,155
Additions	183	594	777
At 30 June 2023	1,842	7,090	8,932
Accumulated depreciation:
At 1 January 2023	1,081	1,576	2,657
Depreciation	178	478	656
At 30 June 2023	1,259	2,054	3,313
Carrying amounts:
At 30 June 2023	583	5,036	5,619

Property Plant and Equipment as at 30 June 2022 (unaudited):

	Other Property, Plant and Equipment	Owned Assets	Total
	£'000	£'000	£'000
Cost:
At 1 January 2022	1,116	4,698	5,814
Additions	395	875	1,270
Disposals	-	(7)	(7)
At 30 June 2022	1,511	5,566	7,077
Accumulated depreciation:
At 1 January 2022	756	781	1,537
Depreciation	154	380	534
Disposals	-	(3)	(3)
At 30 June 2022	910	1,158	2,068
Carrying amounts:
At 30 June 2022	601	4,408	5,009

Property Plant and Equipment as at 31 December 2022:

	Other Property, Plant and Equipment	Owned Assets	Total
	£'000	£'000	£'000
Cost:
At 1 January 2022	1,116	4,698	5,814
Additions	543	1,805	2,348
Disposals	-	(7)	(7)
At 31 December 2022	1,659	6,496	8,155
Accumulated depreciation:
At 1 January 2022	756	781	1,537
Depreciation	325	798	1,123
Disposals	-	(3)	(3)
At 31 December 2022	1,081	1,576	2,657
Carrying amounts:
At 31 December 2022	578	4,920	5,498

9.         Inventories

	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
	£'000	£'000	£'000
Finished goods	6,733	5,127	5,523
Work in progress	1,279	2,504	1,819
	8,012	7,631	7,342

The cost of inventories recognised as an expense during H1 2023 in respect of continuing operations was £10.1m (H1 2022: £15.8 million, year ended 31 December 2022: £28.8m).

Included within work in progress is hardware purchased for installation in progress but not yet complete, time spent on installations in progress but not yet complete and invoices received against installations in progress but not yet complete.

10.       Trade and other receivables

	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
	£'000	£'000	£'000
Trade receivables	18,293	17,691	18,841
Loss allowance	(912)	(369)	(507)
	17,381	17,322	18,334
Other receivables	1,818	447	940
R&D tax credit receivable	1,090	-	1,174
Prepayments and accrued income	8,283	8,612	6,434
	28,572	26,381	26,882

11.       Trade and other payables

	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
	£'000	£'000	£'000
Trade payables	6,513	7,099	9,096
Other taxation and social security	1,575	2,212	3,098
Accruals and deferred revenue	24,320	20,012	21,163
Other payables	5,096	1,520	3,062
	37,504	30,843	36,419

   There is no material difference between the carrying value and fair value of trade and other payables presented.

12.       Loans and borrowings

	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
		£'000	£'000
Current liabilities
Secured bank loan	1,271	1,343	2,842
Non-current liabilities
Secured bank loan	2,821	2,657	481
Total loans and borrowings	4,092	4,000	3,323

             During the 11 months ended 31 December 2020, the Group entered into £3.5 million facility agreement with Triodos Bank UK Limited for a period of 5 years, to fund charging units owned by the Group and installed at customer sites. The facility is structured as a construction facility while the assets are being installed, at which point the outstanding balance will become an operating facility. The interest rate is fixed at 3.5 per cent. The loan is repayable in eighteen quarterly instalments starting one quarter after the start of the operating facility.

An additional loan was entered into with Triodos Bank UK Limited during the year ended 31 December 2022, for £1.25 million under the same facility agreement. The interest rate is fixed at 4.969 per cent. The loan is repayable in eighteen quarterly instalments starting from the first payment date.

No changes in liabilities arising from financing activities has been identified during the period ended 30 June 2023 or are expected in the near future

13.       Financial Instruments

The Group had the following financial assets and liabilities. The amounts below are contractual undiscounted cash flows and include both interest and principal amounts.

Categorisation within the hierarchy, measured or disclosed at fair value, has been determined based on the lowest level of input that is significant to the fair value measurement as follows:

·      Level 1 - valued using quoted prices in active markets for identical assets or liabilities

·      Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1

·      Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data

	As at 30 June 2023 (unaudited)	As at 30 June 2022 (unaudited)	As at 31 December 2022
	£'000	£'000	£'000
Cash and cash equivalents	58,766	82,086	74,103
Trade and other receivables	19,199	17,769	19,274
Accrued Income	6,740	7,345	5,195
Total financial assets	84,705	107,200	98,572
Trade and other payables	11,609	8,619	12,158
Accruals	11,081	9,076	9,210
Leases	3,166	2,893	3,149
Loans and borrowings	4,092	4,000	3,323
Total financial liabilities	29,948	24,588	27,840

All financial assets and financial liabilities shown above, and loans and borrowings, are valued at carrying amount or at fair value using Level 2 measurements. There have been no transfers between levels in any of the years.

   Financial assets

The Group classifies its financial assets into the following categories: cash and cash equivalents, trade and other receivables and accrued income. The classification depends on the purpose for which the assets are held. The classification is first performed at initial recognition and then re-evaluated at every reporting date for financial assets other than those held at fair value through the income statement.

   Financial liabilities

The Group classifies its financial liabilities into the following categories: trade and other payables, loans and borrowings and other non-current liabilities.

The Directors consider that the carrying amount for all financial assets and liabilities which are not held at fair value through profit or loss approximates to their fair value.

14.       Share based payments

             Charge to the income statement:
             The charge to the income statement is set out below:

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year ended 31 December 2022
	£'000	£'000	£'000
IPO restricted share award	448	1,457	2,238
IPO performance share award	392	468	759
Share incentive plan	191	179	360
Long-term incentive plan	553	474	611
Deferred share bonus plan	392	-	577
Total share-based payment expense	1,976	2,578	4,545

National insurance on share based payment awards of £0.3 million (H1 2022: £0.3 million, year ended 31 December 2022: £0.6 million) has also been charged to the income statement.

15.       Loss per share

Basic earnings per share is calculated by dividing the loss attributable to the equity holders of the Group by the weighted average number of shares in issue during the year.

The group has dilutive ordinary shares for H1 2023, H1 2022 and the year ended 31 December 2022, these being share options granted to employees. As the Group has incurred a loss in all periods, the diluted loss per share is the same as the basic earnings per share as the loss has an anti-dilutive effect.

	Six months ended 30 June 2023 (unaudited)	Six months ended 30 June 2022 (unaudited)	Year ended 31 December 2022
	£	£	£
Loss for the period attributable to equity holders	32,952,930	7,546,564	20,211,814
Basic and diluted weighted average number of shares in issue	153,473,724	153,403,537	153,405,628
Earnings/(Loss) per share (Basic and Diluted)	(0.22)	(0.05)	(0.13)

   16.      Related Parties

Transactions with Shareholders

During the six months ended 30 June 2023, the Group had the following transactions with group companies part of the EDF Group (unaudited):

Group Company	Sales of goods '£000	Purchase of goods '£000
EDF Energy Limited	138	-
EDF Energy Customers Limited	-	143

During the six months ended 30 June 2022, the Group had the following transactions with group companies part of the EDF Group (unaudited):

Group Company	Sales of goods '£000	Purchase of goods '£000
EDF Energy Limited	43	-
EDF Energy Customers Limited	-	273

During the year ending 31 December 2022, the Group had the following transactions with group companies part of the EDF Group:

Group Company	Sales of goods '£000	Purchase of goods '£000
EDF Energy Limited	335	-
EDF Energy Customers Limited	-	390

             Transactions with related parties who are not members of the Group

             During the H1 2023, the Group had the following transactions with a related party who is not a member of the Group. Imtech Inviron Limited is a related party by virtue of their ultimate parent and controlling party being Électricité de France S.A. (see note 18):

•           Sale of goods of £0.2 million (H1 2022: £0.1 million, year ended 31 December 2022: £0.2 million)

17.       Post balance sheet events

On 6 July 2023, Erik Fairbairn stepped down as Chief Executive Officer ("CEO"). Andy Palmer, who at the time was acting as Senior Independent Director of the Group, has been appointed as interim CEO.

18.       Ultimate parent undertaking and controlling party

The immediate parent company of the Company and its subsidiaries is EDF Energy Customers Limited, a company registered in the United Kingdom.

The immediate parent company of EDF Energy Customers Limited is EDF Energy Limited, a company registered in the United Kingdom.

In all periods presented, Électricité de France SA, a company incorporated in France, is regarded by the Directors as the Company's ultimate parent company and controlling party. This is the largest group for which consolidated financial statements are prepared. Copies of that company's consolidated financial statements may be obtained from the registered office at Électricité de France SA, 22-30 Avenue de Wagram, 75382, Paris, Cedex 08, France.

 

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