REG-Voller Energy Group Interim Results
Released: 22/02/2008
RNS Number:5172O
Voller Energy Group PLC
22 February 2008
22 February 2008
VOLLER ENERGY GROUP plc
("Voller "or "the Company")
Interim results for the six months ended 31 December 2007
Voller Energy Group PLC a leader in portable fuel cell systems and one of the
first companies in the world with deliverable technology announces its interim
results for the six months ended 31 December, 2007.
Operational Highlights
- Commercial version of the Emerald Fuel Cell to be supplied in accordance
with the plan
- Manufacturing facility established at Basingstoke
- Technical collaboration established with the University of Cambridge to
develop Diesel, Bio-diesel, Kerosene and JP-8 Fuel Reformer
- Grant secured from the Department for Business, Enterprise and Regulatory
Reform
Financial Highlights
- Cash balance of £3.330 million
- Net asset value 16p per share
- Operating loss of £1.401 million in line with budget
Business Highlights
- Deloitte Corporate Finance appointed to assist with a strategic review of
the Company's options to maximise shareholder value
- All 2007 milestones were achieved
- Emerald prototypes demonstrated successfully
- Further orders received for the Emerald unit for the leisure market,
supplementing those received for construction
- Additional distributors appointed
Commenting on the results, Stephen Voller, Chief Executive Officer, said:
"Voller's progress over the last six months has been very encouraging. We are
one of the first fuel cell companies worldwide to have products ready for
commercialisation and we remain on track for the delivery of our first
commercial units as planned. For the Voller team this represents the
culmination of all the effort that has been expended over the last three years.
Voller continues to look at opportunities and applications for the Emerald
system and remain excited by the prospects for 2008."
www.voller.com
For further information please contact:
Voller Energy Group Plc Telephone: 01256 813 900
Stephen Voller, CEO, Colin Bonsey, Finance Director
Hudson Sandler Telephone: 020 7796 4133
Nick Lyon / Wendy Baker / Amy Faulconbridge
Seymour Pierce Telephone: 020 7107 8000
John Depasquale
CHAIRMAN'S STATEMENT
I am pleased to report on the activities of Voller for the six months to 31
December 2007.
Growth and opportunity
Combating climate change is now being addressed as a serious issue by
governments all over the world. Targets for cutting carbon emissions and the
necessary plan of action required to achieve this are being prepared. Within
this global framework the UK has one of the most ambitious targets with
government aiming to reduce, by 2050, the UK's carbon emissions to at least 60%
below the 1990 level.
To achieve this target we will all need to make fundamental changes in the type
of energy we use and how we use it. This will have a major impact on how we
work, how we live, and how we travel. The 'hydrogen economy' may be an answer
but significant challenges remain, viz: hydrogen has a lower fuel density than
fossil fuels, creating practical usage and storage problems and the cost and
logistics of building an appropriate infrastructure for storage and
transportation remains an issue.
There is no one single solution to the challenge of reducing carbon emissions
but renewable and low carbon energy sources have a significant role to play in
meeting that challenge. The utilisation of existing fuels, such as commonly
available hydrocarbons - for example propane, butane, liquefied petroleum gas
(LPG) and diesel - in a more efficient manner will result in lower emissions.
Voller's strategy has been to develop a commercial Auxiliary Power Unit (APU)
based on fuel cell technology which uses as its base fuel commonly available
hydrocarbons. This will assist in the transition from today's high carbon
economy - high emissions, low efficiency - to the zero emission carbon economy
of the future.
Operational Review
I am delighted to report that the progress achieved since the publication of the
year end results on 14 September 2007 has been very encouraging. During 2007 the
three prototype units of the Emerald 1Kw APU system were demonstrated
successfully in each of our target markets, namely construction and the leisure
market, both for yachts and recreational vehicles. At the time of the
preliminary results the receipt of a maiden order from GenQuip for twenty
Emerald units was announced. Since then, orders for a further six units have
been received for the product from the leisure market both for yachting and
recreational vehicles.
I am particularly pleased to report that Voller's Beneteau Oceanis 411 yacht,
equipped with an Emerald unit, participated in the ARC (Atlantic Rally for
Cruisers) in November and December of 2007, a voyage from Gran Canaria to St
Lucia. The unit performed well despite experiencing greater stresses than
anticipated during the voyage, and provided auxiliary power which contributed to
the comfort and convenience of the crew during the crossing.
In September 2007 shareholders were advised of the appointment of Unipart
Leisure and Marine as the official UK distributor for Voller Energy's Emerald
fuel cell system. In November 2007 it was announced that Disvent Ingenieros SA,
based in Barcelona, had been appointed as the Company's distributor in the
construction and leisure markets for Spain, the Balearic and Canary Islands.
Voller continues to look at opportunities to expand its Emerald product line in
the future to offer customers both higher powered Emerald fuel cell units and a
choice of fuels. In September 2007 it was announced that the Company had
entered into an agreement with the University of Cambridge to develop diesel,
bio-diesel, kerosene and JP-8 reforming technology. Also during the period the
strategic relationship with Ballard was extended and an agreement concluded with
them for the supply of their mark 1030 fuel cell stack, which Ballard developed
for the Combined Heat & Power (CHP) market in Japan.
Through these relationships the Company sees an opportunity to develop products
which could have an application in a number of other alternative markets, such
as Uninterrupted Power Supply, Surveillance Monitoring, Road Transport and
longer term, Micro CHP. Micro CHP is the application of co-generation, which is
the simultaneous generation of electricity and useful heat on a small scale,
which would have an application in a residential home or the premises of a small
business. This could not only extend the commercial opportunities available to
the Company but assist in the reduction of carbon emissions.
In October 2007 a manufacturing unit was established at Basingstoke in order to
prepare for the delivery of the first commercial units in 2008. I am pleased to
tell you that delivery of these units remains on schedule and will commence as
planned.
In November 2007 Voller was awarded a £146,000 grant from the Department for
Business, Enterprise and Regulatory Reform (BERR) to develop an environmentally
friendly welfare cabin for the construction sector.
Financial review
Operating costs were in line with expectations. The increase over the
comparable period of the previous year reflects the additional development spend
on the completion of the prototype Emerald units and the creation of a
manufacturing facility in Basingstoke.
Capital expenditure in the period was £49,000 and was incurred primarily on
establishing the manufacturing capability.
Available cash at the end of the period amounts to £3.330 million and was in
line with the forecast.
Stock markets all around the world are in turmoil as a result of concerns raised
by lending into the 'sub prime' market and the level of consumer debt. These
concerns have had the impact of reducing valuations of many companies, even
those with well established products and a strong history of trading. At the end
of the period under review the net asset value per share of the Company was 16p
which is considerably in excess of the market price per share. However, Voller
continues to move towards the production of a commercial product and has
demonstrated to the market place the technical effectiveness of the development
programme.
Outlook
The year ahead offers a number of significant challenges in both development and
manufacture together with the exciting prospect of being one of the first fuel
cell companies in the world to deliver commercial product to the market place.
It is clear that in order to continue the excellent progress achieved to date
and to develop the product range to meet the challenges of the future,
significant additional funding will be required. To this end we have been
working with our NOMAD Seymour Pierce to encourage investment from the
traditional institutional investor base and as announced today have appointed
Deloitte Corporate Finance to assist in conducting a strategic review of the
business. This strategic review will explore a number of options, which may
include, but not be limited to, strategic alliances, mergers, refinancing or a
sale of the business.
The future is a very exciting one, one which offers us the opportunity of
playing an important and innovative part in the attack on global warming. The
progress that has been achieved in bringing fuel cell products to the market
would not have been achieved without the hard work and dedication of all of the
Company's employees, but particularly those in the development team. I would
like to thank all concerned for their efforts.
John Brown
Chairman
Voller Energy Group PLC
Consolidated income statement (IFRS)
for the six months ended 31 December 2007
Note (Unaudited) (Unaudited)
6 months to 6 months to Year to
31 Dec 31 Dec 30 June
2007 2006 2007
£'000 £'000 £'000
Revenue 3 19 25 42
Cost of sales (17) (24) (40)
Gross Profit 2 1 2
Administrative expenses 1,403 1,315 2,515
Total Administrative expenses 1,403 1,315 2,515
Operating Loss (1,401) (1,314) (2,513)
Investment Income 124 151 293
Loss on ordinary activities before taxation (1,277) (1,163) (2,220)
Taxation - - 238
Loss on ordinary activities after taxation and
retained loss for the period/year (1,277) (1,163) (1,982)
Basic and diluted loss per ordinary share 4 (5.55)p (5.06)p (8.62)p
All amounts relate to continuing activities.
Voller Energy Group PLC
Consolidated Balance Sheet as at 31 December 2007
(Unaudited) (Unaudited)
31 Dec 31 Dec 30 June
2007 2006 2007
£000 £000 £000
Non Current Assets
Property, Plant & Equipment 267 193 257
Current Assets
Inventories 31 54 30
Trade and other receivables 337 209 312
Cash and cash equivalents 3,330 5,667 4,732
3,698 5,930 5,074
Current Liabilities
Trade and other payables 237 305 317
Net Current Assets 3,461 5,625 4,757
Net Assets 3,728 5,818 5,014
Equity
Share Capital 459 459 459
Share Premium 8,884 8,884 8,884
Merger Reserve 161 161 161
Equity Reserve 18 2 27
Retained Loss (5,794) (3,698) (4,517)
Total Equity 3,728 5,818 5,014
Voller Energy Group PLC
Consolidated Cash Flow Statement
for the six months ended 30 December 2007
Note (Unaudited) (Unaudited)
6 months to 6 months to Year to
31 Dec 31 Dec 30 June
2007 2006 2007
£000 £000 £000
Net cash outflow from operating activities 5 (1,477) (1,254) (2,371)
Cash flows from investing activities
Interest received 124 151 293
Purchases of property, plant and equipment (49) (14) (114)
Net cash from investing activities 75 137 179
Taxation - - 140
Net decrease in cash and cash equivalents (1,402) (1117) (2,052)
Cash and cash equivalents at start of the period/year 4,732 6,784 6,784
Cash and cash equivalents at the end of the period/year 3,330 5,667 4,732
Voller Energy Group PLC
Notes to the interim statement for the six months ended 31 December 2007
1. Accounting Policies
Basis of preparation
Prior to 2007, the Group prepared its annual financial statements in accordance
with UK Generally Accepted Accounting Principles (UK GAAP). For the interim
accounts as at 31st December 2007 and continuing, the Group is required to
prepare its consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS), adopted for use in the European Union.
The Group is required to apply all relevant standards and accounting policies
that are in force at the first reporting date. However as some of these policies
are still subject to change, the directors have made assumptions about the
accounting policies expected to be applied when the first annual IFRS financial
statements are prepared for the year ended 30 June 2008. The key policies
applied are shown below, however these accounting policies may be subject to
changes due to interpretation, new standards and guidance.
The interim statement has been prepared in accordance with IFRS for the first
time. The disclosures required by IFRS 1 concerning the transition from
previously reported UK GAAP to IFRS is given in note 7.
The interim report is unaudited and does not constitute Statutory accounts as
defined in Section 240 of the Companies Act 1985. A copy of the Company's
statutory accounts for the year ended 30 June 2007 has been filed with the
Registrar of Companies. The audit report for the year to 30 June 2007 was
unqualified. The financial information for the period 1 July 2007 to 31 December
2007 is unaudited. In the opinion of the directors the financial information for
this period presents fairly the financial position, results of operations and
cash flows for the period in conformity with IFRS consistently applied. The
interim report for the six months ended 31 December 2007 was approved by the
Directors on 21 February 2008
Basis of preparation - Going concern
The Directors' reviews of the accounts, budgets, sales pipeline, costs and
forward plans and cash flow analysis, lead the directors to believe that the
Group has sufficient resources to continue in operation for at least the next
twelve months. The financial statements are therefore prepared on a going
concern basis.
Revenue Recognition
Revenue represents sales to external customers at invoiced amount less value
added tax or local taxes on sales and is recognised when goods are dispatched,
that is when title passes.
Property, Plant and Equipment
Tangible fixed assets are included at their original historic cost less any
subsequent accumulated depreciation and subsequent accumulated impairment
losses.
Depreciation is charged so as to write off the cost of assets down to their
residual value over their estimated useful lives, using straight-line method on
the following basis:
- Plant, machinery and vehicles
- (including demonstration boat) five years
- Leasehold improvements over the term of the lease
- Fixtures and equipment five years
- Computer equipment four years
Investments
Investments held as non current assets are stated at cost, less provisions for
any impairment.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is
calculated as follows:
Raw materials Cost of purchase on first in,
first out basis
Work in progress and finished goods Cost of raw materials and labour
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at
amounts expected to be paid or recovered using the tax rates and laws that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date, except that the
recognition of deferred tax assets is limited to the extent that the Company
anticipates to make sufficient taxable profits in the future to absorb the
reversal of underlying timing differences. Deferred tax is measured on a
non-discounted basis.
Share-based Payments
The Group has applied the requirements of IFRS 2, Share-based Payment. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of equity instruments after 1 February 2005 (being the date of
incorporation of the Company) that were unvested as of 1 July 2005 (being the
date of the adoption of the standard by the Company). The Group issues
equity-settled share-based payments to certain employees and directors.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period.
Fair value is measured by use of the Black Scholes model. The expected life used
in the model has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions and behavioural
considerations.
Foreign Currencies: Group
Transactions on foreign currencies are recorded at the rate ruling at the date
of the transactions. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date. Exchange differences arising on the settlement of monetary items, and on
the retranslation of monetary items, are included in profit or loss for the
period.
Research and Development
Research expenditure is charged to income in the year in which it is incurred.
Expenditure incurred in the development of products, and their related
intellectual property rights, is capitalised as an intangible asset only when:
> Technical feasibility has been demonstrated;
> Adequate technical, financial and other resources exist to complete the
development, which the Group intends to complete and use;
> Future economic benefits expected to arise are deemed probable; and
> The costs can be reliably measured.
Development costs not meeting these criteria are expensed in the income
statement as incurred. Capitalised development costs are amortised on a
straight-line basis over their useful economic lives once the related products
are available to use. No such costs have been capitalised because of the
uncertainty regarding adequate technical and financial resources to complete the
development and the difficulty in measuring future economic benefits.
Loss per share
IAS 33 requires presentation of diluted EPS when a company could be called upon
to issue its shares that would decrease net profit or increase net loss per
share. For a loss making company with outstanding share options, net loss would
only be increased by the exercise of out-of-the-money options. Since it seems
inappropriate to assume that the option holders would act irrationally, no
adjustment is to be made to diluted EPS for out-of-the-money share options.
2. Basis of consolidation
The consolidated Group financial statements incorporate the results of Voller
Energy Group Plc and its subsidiary undertaking Voller Energy Limited using the
merger method of accounting.
3. Revenue and Geographical analysis
Revenue is wholly attributable to the activity of the Company's single business
activity and one geographical segment and therefore no segmental reporting is
given.
4. Loss per ordinary share
The calculation of basic and diluted loss per ordinary share is based on the
loss for the period of £1,277,000 (31 December 2006: £1,163,000, 30 June 2007:
£1,982,000 and the average number of shares in issue of 23,000,513 (31 December
2006 and 30 June 2007: 23,000,513)
5. Reconciliation of Operating loss to net cash flow
6 months 6 months
to 31 to 31 Year to
December 2007 December 2006 30 June 2007
£000's £000's £000's
Operating loss (1,401) (1,314) (2,513)
Depreciation/Amortisation 39 15 60
Increase in stock (1) (25) (1)
Increase in debtors (25) (19) (24)
(Decrease)/ increase in creditors (80) 73 107
Taxation received - - 140
IFRS2 (Credit)/ charge (9) 7 -
Operating cash outflow (1,477) (1,254) (2,231)
6. Dividend
The Directors do not propose a dividend.
7. IFRS 1 - First Time Adoption of International Financial Reporting Standards
The Group has applied IFRS 1 First Time Adoption of International Financial
Reporting Standards as a starting point for reporting under IFRS. The Group's
date of transition is 1 July 2006 and there were no changes to the comparative
information.
IFRS 1 requires an entity to comply with each IFRS and IAS effective at the
reporting date for its first financial statements prepared under IFRS. As a
general rule IFRS 1 requires such standards to be applied retrospectively to
determine the IFRS opening balance sheet at the date of transition, 1 July 2006.
There has been no change to the income statement, cash flow statement or net
assets as a consequence of adopting IFRS in any of the periods shown in these
accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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