"Household batteries rely on chemical reactions to generate power, we are doing that on an industrial scale continuously," said chief executive Ian Williamson. The other trick that fuel cell technology company
The company has installed the first commercial-scale fuel cells at Dunsfold in the UK and has generated the first industrial power from the Akzo system in Germany. Management hope that the data collected will prove the viability of this technology to potential customers. Two further fuel cell systems have been installed at a pilot scheme with industrial giant AkzoNobel, in Bitterfeld, Germany. These create electricity from hydrogen which is a by-product at a chloro-alkali plant there.
A successful fund-raising last July raised net cash of £3.93m at 40p a share, and was supported by Australian partner Linc Energy, which increased its holding in AFC to 12 per cent.
|AFC ENERGY (AFC)|
|ORD PRICE:||29p||MARKET VALUE:||£53m|
|TOUCH:||28-30p||12-MONTH HIGH:||75p||LOW: 24p|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||4p||NET CASH:||£5.97m|
|Year to 31 Oct||Turnover (£m)||Loss before tax (£m)||Earnings per share (p)||Dividend per share (p)|
The technology isn't in doubt, the difficulty is scaling it up and lengthening the life of the batteries. In this respect AFC is making good progress, and the recent funding round shows it has the support of investors. The share price volatility reflects the early stage of this company and any investment remains highly speculative. Hold.
Last IC view: Hold, 69p, 10 November 2010