TIDMPHE
RNS Number : 8756N
Powerhouse Energy Group PLC
27 September 2019
27 September 2019
PowerHouse Energy Group plc
("PowerHouse" or the "Company")
Interim results for the six months ended 30 June 2019
PowerHouse Energy Group plc (AIM: PHE), the UK technology
company commercialising hydrogen production from waste plastic,
announces its unaudited interim results for the six months ended 30
June 2019.
H1 2019 Highlights
Operational
-- Signature of agreement for Peel/W2T to develop a site on
Peel's Protos Energy park in Cheshire as a 35 tonnes per day
facility generating electricity and hydrogen.
-- Initiation of engineering and development design on Protos
site for planning and permit submission in readiness for next stage
of engineering leading to financial close.
-- Engagement in successful community engagement and council
briefings for Peel Environmental, Protos' site owners.
-- The laboratory scale unit became operational and added to
Research Demonstrator capability. Company commenced offering third
party feedstock testing, laboratory services and consulting
services with a short-term plan for operations to become cash
positive.
-- Appointment of David Ryan as CEO, providing strong leadership
and clear direction for Company to secure sales, provide
engineering and delivery and operational services.
Financial
-- Expenditure in R&D now significantly reduced and other
costs brought under tighter control
-- Management focussed on project activities associated with
first application and other early commercial delivery
priorities.
-- Funding engagement for pipeline of projects being led by Peel
Environmental and Waste2Tricity (W2T).
-- Company started first paid engineering consultancy work. The
revenue is expected to be recognised in forthcoming accounting
period.
Post- Period Highlights
-- Signature of collaboration contract with Peel to develop ten
further sites.
-- Pipeline of opportunities now being developed to mature
second and third project to planning stage.
-- Waste regeneration design capacity at Protos upgraded:
- regenerating 35 tonnes per day of waste plastics
- producing 3.8MWe on site and exporting 3.4MWe; and
- up to 2 tonnes of hydrogen per day, with some reduction in exported power
-- Planning submission completed by Peel for Protos site.
-- Efforts now moving on to identification, planning and
permitting for follow on sites
-- In negotiation with overseas entities for exclusive regional
representation.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
For more information, contact:
PowerHouse Energy Group plc Tel: +44 (0) 203
368 6399
David Ryan, Chief Executive
Officer
WH Ireland Limited (Nominated Tel: +44 (0) 207
Adviser) 220 1666
James Joyce /Chris Savidge
Turner Pope Investments (TPI) Tel: +44 (0) 203
Ltd 657 0050
Zoe Alexander/Andy Thacker
Ikon Associates (Media enquiries) Tel: +44 (0) 1483
271291
Adrian Shaw Mob: +44 (0) 7979
900733
About PowerHouse Energy Group plc
PowerHouse has developed a proprietary process technology -
DMG(R) (Distributed Modular Generation) - which can utilise waste
plastic, end-of-life-tyres, and other waste streams to efficiently
and economically convert them into syngas from which valuable
products such as chemical precursors, hydrogen, electricity and
other industrial products may be derived. The PowerHouse technology
is one of the world's first proven, modular, hydrogen from waste
processes.
The PowerHouse DMG(R) process can generate in excess of 1 tonne
of road-fuel quality hydrogen, and more than 81MWh of exportable
electricity per day.
The PowerHouse process produces low levels of safe residues and
requires a small operating footprint, making it suitable for
deployment at enterprise and community level.
PowerHouse is quoted on the London Stock Exchange's AIM Market
under the ticker: PHE and is incorporated in the United
Kingdom.
For more information see www.powerhouseenergy.net
Interim Results for the six months to 30 June 2019
Chairman's Statement
Introduction
PowerHouse Energy has made further significant progress to
commercial operation with the announcement of the proposed
development on the Peel Environmental Protos Energy Park and the
submission by Peel of the planning permission application.
Our strategy
PowerHouse Energy (PHE) strategy is the design, delivery and
licensing of plastic regeneration processes to generate clean low
emission energy. The Company's process, Distributed Modular
Generation (DMG(R)), regenerates non-recyclable waste plastic to
produce clean syngas for use as:
-- replacement for natural gas
-- source of hydrogen for fuel cell powered road transport
-- in community based distributed power generation
-- feedstock in other applications in the chemicals and plastics industries
PHE will sell the process modules, with associated paid services
for engineering, licensing and operational support. In addition to
DMG(R) sales and licensing, revenues will be generated by the
delivery of technical services, through consulting, pre-sales and
support of operations. Furthermore, the company offers customers
testing, analysis of different waste feedstocks and also
engineering development of solutions in low-carbon energy using the
Research Demonstrator and laboratory analysis equipment located at
the University of Chester's Thornton Science Park.
Our customers will include project developers and asset owners,
waste management companies, material recovery facilities, and
community and council operations worldwide.
The Company's principal assets are the design, chemical
engineering models and intellectual property defining the key
elements of our DMG(R) technology, augmented by the Research
Demonstrator and laboratory testing equipment currently located at
Thornton Science Park.
Contract Sales
During the period, Peel Environmental and W2T announced the
development of the first commercial operation at the Peel
Environmental Protos Energy Park development. The site is at the
heart of the North West Hydrogen Hub and Peel envisions more
developments with W2T to roll out the technology in the region.
The Protos site has near term potential for taking plastic from
local users and supplying them with electricity and this factor has
driven W2T and Peel to give precedence in developing this site.
Subsequent to the period end PHE, W2T and Peel have agreed to
collaborate to build a further ten projects to follow on the first
site.
The initial contract for PHE was to commence design, planning
and permitting activities and, subject to financial close, the
design, supply and licence of the first operational DMG(R)
process.
Business Development and Sales Pipeline
The Company is in discussions with customers in the UK and
internationally to sell its DMG(R) process with capacities between
25 and 40 tonnes per day of non-recyclable plastic and tyre waste
and to generate energy in the form of hydrogen, syngas for
industrial consumption and community power.
The pipeline of UK sales opportunities has been augmented by the
signature of the 10 site collaboration contract with Peel. The
pipeline of other opportunities includes waste management
companies, local councils and now industrial users who want to
replace the natural gas currently used in their processes with
syngas generated from their waste.
With completion of the initial stage work for the Protos site,
the application engineering will now focus on moving other
customers through to a commitment to engineering development.
International interest in the DMG(R) technology continues to
grow, aided by media engagement, such as recent documentary
features on BBC and CNN. The Company is currently negotiating with
several overseas parties to act as regional technical licensing
partners for DMG(R) technology.
Technology Development
During the period, the Company has worked on the technology
development programme agreed with DNV-GL, the technology
certification company, and this has helped design engineering and
modelling. As a result of this design, and consulting assignments
in Spain producing new empirical data, the Company upgraded
production design capacity at the Protos site to 35 tonnes per day
waste to produce up to 3.8MWe on site and produce up to 2 tonnes of
hydrogen gas for fuel cell vehicles. This 40% increase in
production was achieved with only a marginal cost increase to
customers' installation costs.
The Intellectual Property protection programme continued through
the half year and an initial development of the family of patents
is now complete, with statements of invention and claims submitted
to the Patent Office and under scrutiny. The Company will
incorporate more specific IP arising from the detailed design into
further depth in the family of patents.
Financial
The Engineering Design Services contract for Protos, signed in
the period, has initiated the first revenue generation for the
Company, with income recognition and contract payments to follow
later in the year. The Company intends to raise further revenues
from feedstock testing for other customers.
The Company is carefully managing expenditures and is budgeting
to match expenditures against expected revenues. There is no
material effect on the advancement of development projects as these
are being funded by customers and the bulk of technology definition
has been accomplished with the design completion work in 2018.
Subsequent to the reporting period, the Company received research
and development tax reimbursements for 2017 and will expect similar
refunds for 2018.
We note that the Company's share price has not changed markedly
in the period. However, the Board is confident that the Company's
recent engagement in paid engineering and external research and
testing for customers is leading to a position where a significant
proportion of the operational costs and Company overhead will be
covered. The financial situation is eased by consultants and
service providers having agreed to payments in equity. The funding
of the first DMG process, and initiation of development work on
customer sites in the coming months, together with agreements with
international partners for DMG(R) technology will have a positive
effect on the value in PowerHouse. The Board is confident in the
future of the Company and its members have all made financial
commitments in waiving fees to achieve this vision.
The Board appreciates the continued support of PHE's
shareholders and is making every effort to repay your confidence in
the Company and its future.
Dr. Cameron Davies
Non-Executive Chairman
Statement of Comprehensive Income
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Note 2019 2018 2018
GBP GBP GBP
Administrative expenses (865,189) (1,164,126) (2,495,256)
Operating loss (865,189) (1,164,126) (2,495,256)
Finance costs (219) (545) (178)
Loss before taxation (865,408) (1,164,671) (2,495,434)
Income tax credit - - 144,796
Loss after taxation (865,408) (1,164,671) (2,350,638)
Total comprehensive loss (865,408) (1,164,671) (2,350,638)
----------- ----------- -----------
Total comprehensive loss attributable
to:
Owners of the Company (865,408) (1,164,671) (2,350,638)
Non-controlling interests - - -
----------- ----------- -----------
Loss per share from continuing
operations (pence) 3 (0.05) (0.08) (0.15)
The notes numbered 1 to 4 are an integral part of the interim
financial information.
Statement of Changes in Equity
Share Accumulated
Share capital premium losses Total
GBP GBP GBP GBP
Balance at 1 January 2018 (audited) 8,798,142 48,681,792 (58,281,622) (801,688)
Transactions with equity participants:
- Shares issued in lieu of services 89,476 20,526 - 110,002
- Shares issued 1,978,432 - - 1,978,432
Share based payment - - 26,953 26,953
Total comprehensive loss - - (1,164,671) (1,164,671)
Balance at 30 June 2018 (unaudited) 10,866,050 48,702,318 (59,419,340) 149,028
Transactions with equity participants:
- Shares issued in lieu of services 122,525 1,475 - 124,000
- Shares issued exercise of
options 83,333 69,717 - 153,050
- Share issue 1,324,035 - - 1,324,035
Share based payment - - 239,956 239,956
Total comprehensive loss - - (1,185,967) (1,185,967)
Balance at 31 December 2018
(audited) (GBP) 12,395,943 48,773,510 (60,365,351) 804,102
Transactions with equity participants:
* Shares issued in lieu of services 145,695 1,874 - 147,569
Share based payment - - 98,116 98,116
Total comprehensive loss - - (865,408) (865,408)
Balance at 30 June 2019 (unaudited) 12,541,638 48,775,384 (61,132,643) 184,379
------------- ---------- ------------ -----------
The following describes the nature and purpose of each reserve
within equity:
Share premium Amount subscribed for share capital in excess of
nominal value
Accumulated deficit Accumulated deficit represents the
cumulative losses of the company and all other net gains and losses
and transactions with shareholders not recognised elsewhere
The notes numbered 1 to 4 are an integral part of the interim
financial information.
Statement of Financial Position
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 June 30 June 31 December
Note 2019 2018 2018
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 954 2,290 1,679
Investments 1 1 1
Total non-current assets 955 2,291 1,680
Current Assets
Trade and other receivables 123,997 238,994 63,996
Contract costs 71,575 - -
Corporation tax recoverable 144,796 - 144,796
Cash and cash equivalents 139,868 252,628 840,692
------------ ------------ ------------
Total current assets 480,236 491,622 1,049,484
Total assets 481,191 493,913 1,051,164
LIABILITIES
Current liabilities
Trade and other payables (296,812) (344,885) (247,062)
Total current liabilities (296,812) (344,885) (247,062)
Net assets 184,379 149,028 804,102
------------ ------------ ------------
EQUITY
Shares and stock 2 12,541,638 10,866,050 12,395,943
Share premium 48,775,384 48,702,318 48,773,510
Accumulated losses (61,132,643) (59,419,340) (60,365,351)
Total surplus 184,379 149,028 804,102
------------ ------------ ------------
The notes numbered 1 to 4 are an integral part of the interim
financial information.
Statement of Cash Flows
(Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
ended ended 31
Note 30 June 30 June December
2019 2018 2018
GBP GBP GBP
Cash flows from operating activities
Operating loss (865,189) (1,164,126) (2,495,256)
Adjustments for:
* Share based payment 245,685 136,955 553,959
* Depreciation 725 568 1,179
Changes in working capital:
* (Increase) / decrease in trade and other receivables (60,001) (150,499) 24,499
* (Increase) / decrease in contract costs (71,575) - -
* Increase / (decrease) in trade and other payables 49,750 104,029 6,206
Net cash used in operations (700,605) (1,073,073) (1,909,413)
----------- ----------- -----------
Cash flows from investing activities
Purchase of fixed assets - (257) (257)
----------- ----------- -----------
Cash flows from financing activities
Share issues - 1,978,432 3,402,469
Finance costs (219) (545) (178)
Loans repaid - (1,402,155) (1,402,155)
Net cash flows from financing activities (219) 575,732 2,000,136
----------- ----------- -----------
Net (decrease) / increase in cash and
cash equivalents (700,824) (497,598) 90,466
Cash and cash equivalents at beginning
of period 840,692 750,226 750,226
Cash and cash equivalents at end
of period 139,868 252,628 840,692
----------- ----------- -----------
The notes numbered 1 to 4 are an integral part of the interim
financial information.
Notes (forming part of the interim financial information)
1. Summary of significant accounting policies
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the financial information.
1.1. Basis of preparation
This interim financial information is for the six months ended
30 June 2019 and has been prepared in accordance with International
Accounting Standard 34 "Interim Financial Statements". The
accounting policies applied are consistent with International
Financial Reporting Standards ("IFRS") adopted for use by the
European Union. The accounting policies and methods of computation
used in the interim financial information are consistent with those
of the previous financial year and corresponding interim reporting
period and with those expected to be applied for the year ending 31
December 2019.
The Company does not consider any new and amended standards that
became applicable for the current reporting period to have any
impact on the Company's results.
The unaudited results for period ended 30 June 2019 do not
constitute statutory accounts within the meaning of Section 435 of
the Companies Act 2006. The comparative figures for the period
ended 31 December 2018 for the company are extracted from the
audited financial statements which contained an unqualified audit
report and did not contain statements under Sections 498 to 502 of
the Companies Act 2006.
This interim financial statement will be, in accordance with the
AIM Rules for Companies, available shortly on the Company's
website.
1.2. Going concern
The Directors have considered all available information about
the future events when considering going concern. The Directors
have reviewed cash flow forecasts for 12 months following the date
of these Financial Statements.
The Directors have prepared working capital projections which
show that, along with cash balances in hand at 30 June 2019, the
agreements for all Directors to waive any future remuneration or
fees for themselves for the time being, and indicated support from
one of its shareholders (who is also a Director of the Company),
the Company will have sufficient funding to be able to continue as
a going concern.
In relation to the support of one of its shareholders, the
Directors have been provided with a letter of support, where the
said shareholder has indicated to the Directors that he intends,
for at least 12 months from the date of the approval of the
December 2018 financial statements, to make available a maximum sum
of GBP300,000. In addition, the Directors are also of the opinion
that they can raise further funds as and when required.
The Directors consider that these should enable the Company to
continue in operational existence for the foreseeable future by
meeting its liabilities as they fall due for payment. If the
support of shareholders ceased or the Company was unable to raise
further funds it would need to seek alternative finance in order to
be able to remain as a going concern.
The Company is historically and currently loss making as it
continues its development stage and seeks the commercialisation of
its technology. Until such time as the Company becomes self-
sustaining with positive operational cashflows management will look
to maintain maximum flexibility in the management of its working
capital. This will include potentially issuing shares in lieu of
cash payments to suppliers and for director's fees.
The interim financial statements do not include the adjustments
that would result if the Company is unable to continue as a going
concern.
1.3. Functional and presentational currency
This interim financial information is presented in GBP sterling
which is the Group's functional currency.
1.4. Contract costs
The Company recognises costs incurred in fulfilling contracts
with customers that are directly associated with the contract as an
asset if those costs are expected to be recoverable. Contract costs
are amortised on a basis consistent with the transfer of goods and
services to which the asset relates.
2. SHARE CAPITAL
0.5 p Ordinary 0.5p Deferred 4.5 p Deferred 4.0 p Deferred
shares shares shares shares
Balance at 1 January
2019 1,856,431,621 388,496,747 17,373,523 9,737,353
Shares issued 29,138,885 - - -
---------------- ------------------ -------------- --------------
Balance at 30 June
2019 1,885,570,506 388,496,747 17,373,523 9,737,353
---------------- ------------------ -------------- --------------
The deferred shares have no voting rights and do not carry any
entitlement to attend general meetings of the Company. They carry
only a right to participate in any return of capital once an amount
of GBP100 has been paid in respect of each ordinary share. The
Company is authorised at any time to affect a transfer of the
deferred shares without reference to the holders thereof and for no
consideration.
On 1(st) April 2019 the Company issued 24,146,802 ordinary
shares of 0.5p each in the Company to various service providers for
the settlement of fees. Of these new Ordinary Shares, 19,840,000
were issued at 0.5p and 4,306,802 were issued at 0.5015p in
accordance with the terms of the relevant service agreements. In
addition, the Company issued 1,808,333 Ordinary Shares in lieu of
fees to its Chief Executive Officer, David Ryan, at a price of 0.6p
per share and 3,183,750 Ordinary Shares to Christopher Vanezis,
Chief Financial Officer, at 0.5p per share. Following this issue of
Ordinary Shares, David Ryan held 7,808,333 Ordinary Shares and
Christopher Vanezis held 3,183,750 Ordinary Shares in the Company,
which represented 0.41% and 0.17% respectively of the Company's
enlarged issued ordinary share capital and voting rights.
On 28(th) June 2019 the company issued 33,040,000 ordinary
shares of 0.5p each at a price of 0.5p in settlement of services
provided. In addition, the Company issued 3,266,667 Ordinary Shares
in lieu of fees to its Chief Executive Officer, David Ryan, at a
price of 0.6p per share and 2,175,000 Ordinary Shares to
Christopher Vanezis, Chief Financial Officer, at 0.5p per share.
Following this issue of Ordinary Shares, David Ryan held 11,075,000
Ordinary Shares and Christopher Vanezis held 5,358,750 Ordinary
Shares in the Company, which represents 0.58% and 0.28%
respectively of the Company's enlarged issued ordinary share
capital and voting rights.
3. Loss per share
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Total comprehensive loss (GBP
GBP) (865,408) (1,164,671) (2,350,638)
Weighted average number of
shares 1,871,001,064 1,388,586,432 1,541,719,887
Basic Loss per share in pence (0.05) (0.08) (0.15)
Share options and warrants in issue are not considered to have
any dilutive effect in accordance with IAS 33.
4. SHARE BASED PAYMENT
The expense recognised for share based payments during the year
is shown in the following table:
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 June 30 June 31 December
2019 2018 2018
GBP GBP GBP
Share based payment charge recognised
in Profit or Loss
Expense arising from equity-settled share-based
payment transactions:
- Share options for Directors and employees 20,116 21,875 168,399
- Warrants for third party services - 5,078 33,885
- Shares issue for third party services 225,569 110,002 351,675
-----------
Total share based payment charge in Income
Statement 245,685 136,955 553,959
Other share based payment movement
Exercise of share options for Directors
and employees - - (53,050)
Shares issued for third party services (147,569) (110,002) (234,000)
----------- ----------- ------------
Total share based payment 98,116 26,953 266,909
----------- ----------- ------------
The were no liabilities recognised in relation to share based
payment transactions.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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