Trading Update from the Company
Continued strong growth, some important operational developments made
Intelligent Energy ('IE'), the energy technology group, provides the following trading update for the year ended 30 September 2015.
Group financial summary
Revenue
We have seen the strong revenue growth of the business continue through the second half of the year. Consolidated revenue across the Distributed Power and Generation, Motive and Consumer Electronics divisions for the second half of the financial year 2014/15 is expected to exceed £50m.
This compares very positively with the first half of this year, where revenue was £27.4m, and last year where revenues were £10.1m in the second half of the year and £3.5m in the first half of the year.
Adjusted EBITDA
Adjusted EBITDA losses in H2 2014/15 are expected to be less than in H1 2014/15, and in line with the Board's expectations.
Net Cash
The consolidated net cash balance at 30 September 2015 is £24.5m. Following a management review of operations, there was a material reduction in the underlying cash-burn in H2 2014/15.
Operational summary
Distributed Power and Generation ('DP&G') division
DP&G is the source of the consolidated revenue growth, through the interim contract agreement for power management services with GTL in India, whose scope increased from April 2015. This agreement is now expected to transition to broader scope long term power supply contracts in 2015/16, following the expected closing of the announced transaction made today by RNS.
Motive division
Over the past few months, we have been encouraged by the sector backdrop that is becoming increasingly favourable to the application of fuel cell technology at scale. This broadening demand is reflected by the extension yesterday of our development programme with one of our existing Asian OEMs, which is worth £6.5m, over two and a half years. Motive is expected to show a revenue decline from the prior year's level of £8.6m due to the phasing of some JDA activity from H2 2014/15 to H1 2015/16.
Consumer Electronics
Industrial partnering discussions continue to progress favourably. In addition, and as reported in the press during late August, IE demonstrated its fuel cell technologies embedded in cell phone and tablet hardware. This was achieved without reducing any of the existing functionality or battery capacity of the devices. IE also demonstrated consumer electronics derived technologies into another adjacent and fast growth market to a potential industrial partner. Finally, the integration of the strategic assets acquired from Société BIC earlier in the year is progressing well and will be completed during the second half of the financial year 2015/16.
Funding
IE intends to raise additional funds through a two tier process. Both transactions are consistent with IE's objective of protecting existing shareholders. Firstly, this involves a proposed issue of a convertible instrument to industrial partners; the terms of the convertible instrument include a strike price that is at a premium to the current share price. Secondly, the Company realises there is significant value in aspects of its DP&G Indian operations and has therefore appointed Jefferies, the investment bank, to assist the Company in realising some of this value to finance its current and future growth plans and notes that it has been in discussions with potential investors since the early summer.
Note: Numbers relating to the financial year ended 30 September 2015 are unaudited. Prior period numbers are audited.
