In previous years, Ceres Power’s (CWR) revenue has largely been derived from engineering services adapting its fuel cells for customers' specific applications. But chairman Alan Aubrey characterises 2019 as an “inflection point” – having signed agreements with four of the world’s largest engineering and power companies, licensing revenue now constitutes almost half of group sales, up from £0.9m a year earlier to £7.4m.
This was largely driven by a strategic partnership with Bosch that will see around £20m of staged revenue to the end of 2020. But future momentum is likely to come from Asia as the group develops a range of extender system for electric buses with Chinese manufacturer Weichai Power, and partners one of the world’s largest producers of fuel cell systems in South Korea. Higher-margin licensing activity boosted the gross margin to 75 per cent in 2019, translating to gross profit of £11.5m.
The next stage is to achieve full-scale commercialisation from which royalty payments can flow. The first commercial product launch is due to take place on a modest scale in Japan later this year, as boiler manufacturer Miura deploys the ‘SteelCell’ in its combined heat and power system.
Liberum anticipates pre-tax losses of £8.6m in 2020, giving a loss per share of 4.3p, narrowing to £5.8m and 3.8p in 2021.
| CERES POWER HOLDINGS (CWR) | ||||
| ORD PRICE: | 212p | MARKET VALUE: | £324m | |
| TOUCH: | 210-213p | 12-MONTH HIGH: | 220p | LOW: 125p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 55p | NET CASH: | £71.3m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.32 | -11.6 | -1.3 | nil |
| 2016 | 1.11 | -12.6 | -1.4 | nil |
| 2017 | 3.12 | -11.4 | -1.0 | nil |
| 2018 | 6.33 | -11.9 | -9.8 | nil |
| 2019 | 15.3 | -7.37 | -3.4 | nil |
| % change | +142 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
