Proactive Investors -
Ceres is very well positioned to build on the strong momentum generated during the period as we look to play our part in delivering clean energy technology to enable a net zero future
Phil Caldwell, chief executive
What it does
Ceres’ core SteelCell technology overcomes two problems traditionally associated with other solid oxide fuel cells (SOFC): cost and lack of robustness.
SteelCell can use a variety of fuels - natural gas, hydrogen, biofuel - that can be manufactured from widely available materials, making it the most cost-effective solution on the market.
“This scalability is Ceres’s key competitive advantage, in our view,” broker Berenberg said recently
Ceres has an impressive roster of partners. Key among them are Chinese engines giant Weichai Power, German engineering firm Bosch, US engine maker Cummins and Japanese carmakers Nissan and Honda.
How it is doing
In March Ceres Power Holdings PLC (LON:CWR) completed a £181mln fundraising through both a placing and subscription to accelerate the development of its hydrogen electrolysis and fuel cell technology.
Following strong investor demand, it placed around 8.9mln shares at a price of 1,060p each, a 4.3% discount to the previous closing price, while existing operational partners and shareholders, engineering giant Bosch and Chinese engine maker Weichai Power, have agreed to subscribe to around 3.65mln and 4.1mln new shares at the same price.
The proceeds will be used to invest in its core business and maintain its technology leadership across solid oxide electrolysis (SOEC) and fuel cells, as well as expanding its research & development engineering and advanced manufacturing capabilities.
Part of the cash raised will also be used for general working capital purposes to cover the increased operating cost base of the larger business, with plans to move up to a premium listing on the London Stock Exchange main market by mid-2022.
Turnover for the 12 months ended 31 December 2020 increased 15% to £21.9mln.
What the boss says: Phil Caldwell, chief executive
"Ceres is a leader in solid oxide technologies aimed at delivering cleaner energy to the world. We are on the way to establishing our fuel cells as an industry standard, supporting our manufacturing partners as they scale up to initial mass-market launches in 2024. Raising additional funds now allows us to develop our business into new market sectors from the same technology base and with the same high margin licensing model as our power system activities."
"The urgency for climate action continues to drive the global demand for clean energy technologies, and our strategy of licensing to global partners, with a leading position in their products and markets, continues to be highly successful. Despite the disruption from COVID we have delivered a solid set of results, with continued revenue growth and sector leading margins. This is driven by good progress with our customer programmes and increased manufacturing output."
What the brokers say
The increased interest and investment in the hydrogen energy sector in the past year is almost certain to be sustained due to the growth needed to fill the gaps in energy demand that cannot be met by other forms of electricity, according to a report from broker finnCap.
“The growth of hydrogen stocks throughout 2020 has demonstrated widespread confidence in its potential to fulfil an urgent need for clean energy,” said Jonathan Wright, finnCap’s director of research.
“We believe that this momentum will be maintained throughout 2021 as technology and key partnerships continue to develop. Whilst significant private and public funds will need to be directed to scaling up the sector, hydrogen is critical to achieving global net zero climate ambitions.”