This week started brightly for Aim journeyman Ceres Power (CWR), which saw its share price rocket 45 per cent in Monday trading. Investors were buoyed by the signing of a two-year joint venture with Honda’s energy division to develop fuel cell stacks using Ceres’ steel cell technology.
The deal – which will be used in “potential power equipment applications” – was light on financial details, and follows a similar 2014 agreement with a then-unnamed Honda. This time round, an anonymous third party will also “consider the future mass production scale-up of the steel cell technology”.
Chief executive Phil Caldwell hailed the agreement as a “huge endorsement…in the world’s most advanced fuel cell market”, and evidence that Ceres can “successfully [embed] our steel cell technology into a variety of different power products and markets with the world's leading companies”.
Trawl through the company’s announcements since its 2005 floatation, and it is clear Ceres has rarely been short of big name tie-ups. Yet despite previous deals with British Gas, KD Navien, Rolls Royce, Calor Gas, Cummins and EDF Energy, the company has consistently been the poster child for ‘jam tomorrow’ investment, with revenue passing the £1m mark only once, in 2014. The odd research grant or royalty payment notwithstanding, Ceres has also been burning cash year after year, posting an average pre-tax loss of £12.6m since 2009.
Despite the news, Edison left its forecasts unchanged. The brokerage expects adjusted pre-tax losses of £12.4m in the current financial year to June, narrowing to £12m in 2017 and giving a 1.4p loss per share in both.
