23rd Mar 2006 07:03
Acta S.p.A.23 March 2006 23 March 2006 Acta S.p.A Preliminary Results for the year ended 31 December 2005 Acta S.p.A develops and produces platinum free catalysts for the fuel cellindustry. Catalysts traditionally used in low temperature fuel cells containeither platinum or platinum group metals ("PGM"s). With the exception of fuelcells operating at very high temperatures, no fuel cell has previously beendemonstrated to operate with commercially acceptable output levels without theuse of a PGM based catalyst. PGM catalysts are expensive and limit the fuelsusable in fuel cells to hydrogen and methanol, both of which have significantissues in being introduced to widespread use. Highlights: • Two successful private placements in March and July• Flotation on the AIM market and raising of £8m.• Company's first marketing and distribution contract signed with Sumitomo Corporation• Lavoria facility fitted out and commissioned in September• Doubled the power output of the Company's catalyst for Direct Ethanol Fuel Cell• Further patent applications filed• Engagement with strong blue chip client base• Encouraging outlook Outlook Robert Drummond, Chairman, said today: "We believe Acta's breakthrough in catalyst technology will enable thecompetitive launch of fuel cells to the mass consumer market and, having laidthe foundations for our success in 2005, the outlook remains encouraging. Ibelieve that the Company is in a strong position to meet its objectives." For further information please contact: Acta S.p.A 020 7067 0700Toby Woolrych Weber Shandwick Square Mile 020 7067 0700Nick Dibden / Dominic Furlonge Chairman's Statement I am delighted to report that 2005 was a breakthrough year for Acta on manylevels. Acta's main goals for the year were to raise money on public markets, torecruit a high calibre management team and to develop and launch Acta's uniquetechnology to the fuel cell market. We have achieved all of those goals in aperiod of very rapid progress. SummaryActa is the developer and manufacturer of a unique patented catalyst technology,called HYPERMEC, which has initially been launched to the fuel cell market.Traditionally, fuel cells have been hampered by the need to use expensiveplatinum catalysts and impractical hydrogen or toxic methanol as fuels. HYPERMECis a platinum-free catalyst which has exceptional performance yet can beindustrialised at much lower costs. HYPERMEC can work with the fuels currentlyused in fuel cells such as hydrogen and methanol but, uniquely andsignificantly, they enable the use of ethanol as a fuel. Financial ResultsWe raised €2.9m from a private placement in March, and a further €3.1m in Julyin a private placement with a range of high quality UK investment funds andprivate clients. On 4 October 2005 the Group raised £8m (€11.7m) and floated onthe AIM market of the London Stock Exchange. This money has paid for theestablishment of the Company, the investment in the factory and has settled allcosts of the IPO. It also leaves sufficient funds in place for two to threeyears of product development and operational activity. We will continue to invest in the growth of Acta according to our business plan,and we therefore expect costs to rise to around €5m in 2006. This will includean increased investment in development scientists and the recruitment of smallcommercial and operations teams. The commercial team will be responsible forproviding technical support and information to our growing customer list. Theoperations team will prepare for increased revenue by implementing high qualitymanufacturing procedures and scaling up production of our main catalystformulations. The loss for the year of €2.7m, excluding termination payments and non-cashshare option costs, is in line with expectations. We expect this cost base tonearly double over the course of 2006, offset to some extent by increased grantincome. Most of the increased cost is in the form of employee costs, which canbe controlled or deferred if necessary. The business plan has been built oncautious estimates concerning the timing of future revenues and we will continueto invest in the Company's growth in a prudent but positive fashion. Admission to AIM has helped Acta in many ways besides the successful raising ofdevelopment capital. The public offering has raised the profile of the Companyand offered valuable publicity. It also offers credibility and improves thecapability of the Company to negotiate contracts, particularly in Asia. In view of the Company's stage of development, the Board does not consider adividend to be appropriate. Board Changes Paolo Bert, Chief Executive, and Alessandro Tampucci, Research Director, haveboth been instrumental in laying the foundations for our success in 2005. I wasdelighted to join the Board in July as Chairman and I have been joined by somehigh calibre non-executive directors from the UK and Italy who together offer awide range of corporate and financial experience from both countries. In May wewere delighted to recruit Toby Woolrych as Chief Operating Officer and ChiefFinancial Officer. I am also very pleased to report that Paul Barritt, currentlya non-executive director, will join us as full time Chief Financial Officer fromMay 1st 2006. Outlook We will continue to build on the progress made last year; we are recruiting acommercial team to manage the increasing customer activity and to provide thetechnical support that customers value. We will continue to install analyticalequipment and test-beds to accelerate data generation and product development.We are also committed to looking ahead to the industrialisation phase. We willrecruit a plant manager to implement high quality manufacturing systems so thatcustomers can have confidence that not only is our product based on soundchemistry but that we will be able to make it and supply it to a high standard. We believe Acta's breakthrough in catalyst technology will enable thecompetitive launch of fuel cells to the mass consumer market and, having laidthe foundations for our success in 2005, the outlook remains encouraging. Ibelieve that the Company is in a strong position to meet its objectives. Robert DrummondNon Executive Chairman Operating Performance Review of the Year A new facilityExactly one year ago we had three scientists at our partner research centre, theCNR, in Florence and our future facility in Lavoria was still an empty shell.This was fitted out over the summer and commissioned in September. We now havesix full time scientists working in four world class laboratories and ananalytical laboratory equipped with the tools we need to continue to developHYPERMEC. We have also installed sufficient equipment to scale up andmanufacture enough catalyst to meet global demand and put in place theadministration to manage the company and meet the needs of customers. Sumitomo ContractIn April we signed a marketing and distribution contract with SumitomoCorporation, one of Japan's largest and most prestigious trading houses. Thecontract covers Japan, South Korea and Taiwan. Sumitomo has scale, resources,reputation and relationships and, as a result, has probably advanced ourcommercial capability by at least a year. This contract is an important first step into the critical Asian market for theCompany and we will be building on this strong foundation by seeking to developcommercial relationships with the leading Asian OEMs over the coming months. Power Output doubled for Direct Alcohol Fuel CellsIn November the Company announced that it had more than doubled the power outputof its catalyst for Direct Alcohol Fuel Cells. This increased level of poweroutput is equal to most platinum catalysed systems running on methanol. The increase in power, which is from 25mW/cm2 to 55mW/cm2 on an air breathing,room temperature fuel cell, demonstrates that platinum-free HYPERMEC catalystsoffer performance comparable to other platinum-containing catalysts, yet theycan be manufactured for a fraction of the cost. It also demonstrates that fuelcells powered by ethanol, which is safe and environmentally friendly, can matchthe power output of fuel cells powered by methanol. Outlook Strategic plan: 1. Creating a global awareness of Acta. Acta has a global customer base and we will target potential customers world-wide. We use a direct sales team for the US and Europe, and we are using Sumitomo Corporation as our partner for the critical Asian market. 2. Manufacturing catalysts for the fuel cell market. We aim to make and sell HYPERMEC catalysts to fuel cell developers for both medium sized and portable applications. The manufacturing process of the catalyst is a core part of our intellectual property and we are putting in place the operational organisation required to serve large electronics and automotive OEMs. 3. Exploring opportunities in other markets. We also intend to begin exploring opportunities to sell HYPERMEC into other markets, such as hydrogen generation. In the next year or two this is likely to require only modest commercial and development resource to progress and there is a strong overlap in technical activity with our core business. 4. Recruiting high quality people. We will continue to recruit high calibre people to help grow the business, expand development and build on the commercial and operations functions in particular. 5. Control of costs in a focused business plan. We will achieve our strategy whilst carefully controlling costs and maintaining our focus so that the funds we have raised are well spent on carefully targeted activity. We are confident that we can scale up to meet foreseeable demand without significant additional capital investment. The industrialisation of new chemistry always creates challenges which need tobe overcome. Part of our effort is therefore geared towards further developmentand testing of HYPERMEC and the generation of more performance data in differentconditions and with different raw materials. However, we also have an excitingdevelopment pipeline for new products for both the fuel cell and other markets.We will therefore maintain a balance between supporting and improving what wehave and the development of new growth opportunities. The outlook for Acta is encouraging. From a technical perspective we continue toexpand our understanding of our core chemistry and will both improve the productfor existing applications and identify new uses for HYPERMEC. Commercialengagement with customers of the highest quality is going well. It is hard topredict when this engagement will result in announceable progress, but ourdeepening involvement with our target customer base and their real developmentand market issues is already giving us invaluable insight into the strengths ofHYPERMEC and also what the customer needs in order to make best use of it. Theorganisation will expand and mature over the next twelve months, greatlyincreasing our capacity to serve our customers and deliver world class productand service. The initial market response has been encouraging. We are now actively engagedwith many of the world's leading portable electronics manufacturers and alsowith a number of leading fuel cell manufacturers. Samples have been shipped forevaluation and we are beginning to get positive feedback. We have found that thesheer uniqueness of HYPERMEC is requiring us to do additional work to prove theproduct performance. We have commissioned research at the CNR laboratories inFlorence to demonstrate the full conversion of ethanol achieved by breaking thestrong double carbon bond in an ethanol fuel. Proving the chemistry toexperienced fuel cell users will help demonstrate its viability as analternative to the components that they currently use. Strategic PartnershipsWe have a very open approach to collaboration with partners at many levels ofthe supply chain. Each partner has core knowledge which we lack and thisapproach enables us to remain highly focused on our breakthrough catalystchemistry. We believe that our inclusive and collaborative position willmaximise the number of potential partners and customers available to us. We havebeen working hard to build relationships and share information with membranemanufacturers and makers of MEA (Membrane Electrode Assembly - the membrane/catalyst assembly which powers the fuel cell). We are also looking to buildrelationships downstream with companies who are committed to the development ofDMFC (Direct Methanol Fuel Cell) and DEFC (Direct Ethanol Fuel Cell) stacksusing Acta technology. We are additionally making contact with other potentialpartners or customers in the related fields of hydrogen generation and processcatalysis. Intellectual PropertyWe have filed a total of 12 Italian and European patent applications to date.These applications cover the core chemistry for fuel cell applications as wellas for reforming and most recently for electrolysers. We will continue to filepatents where appropriate for new developments in formulations, processes orapplications. We anticipate a European patent to be granted on our coretechnology this year. SummaryWe will continue to develop our product offering during 2006, building on ourstrategic plan. The outlook for our HYPERMEC catalyst remains encouraging and welook forward to updating the market on further commercial, product and patentannouncements in due course. Paolo Bert Toby WoolrychChief Executive Officer Chief Operating Officer Consolidated income statementfor year ended 31 December 2005 Year ended 31 Year ended 31 December December 2005 2004 •'000 •'000 Revenue 11 - Other Operating Revenue - - ------------------ ------------------ 11 - Raw materials and consumables used (84) (8)Personnel expense (1,394) (87)Depreciation and amortisation expense (190) (20)Other operating expenses (1,532) (271) ------------------ ------------------Loss from operations (3,189) (386) Financial income 84 -Financial expenses (39) - ------------------ ------------------Loss before tax (3,144) (386) Income tax expense (15) 5 ------------------ ------------------Loss for the period (3,159) (381) ------------------ ------------------ Attributable to:Shareholders of the parent (3,159) (381)Minority interest - - ------------------ ------------------ (3,159) (381) ------------------ ------------------ Basic earnings per share (euro) (0.117) (0.037) Diluted earnings per share (euro) (0.113) (0.037) Consolidated balance sheetat 31 December 2005 31 December 31 December 2005 2004 Group Group •'000 •'000 ASSETSNon-current assetsShare capital proceeds to be received - 1Property, plant and equipment 886 48Goodwill 11 11Other intangible assets 865 919Deferred tax assets - - --------------------- -------------------- Total non-current assets 1,762 979 Current assetsInventories 14 -Trade receivables 10 -Non trade receivables 691 139Cash and cash equivalents 11,284 161 --------------------- -------------------- Total current assets 11,999 300 --------------------- --------------------Total assets 13,761 1,279 ===================== ==================== EQUITY AND LIABILITIESEquity attributable to shareholders of the parentShare capital 216 122Capital reserve 15,854 428Retained earnings (3,524) (365) --------------------- -------------------- 12,546 185 Minority interest 100 (1) --------------------- --------------------Total equity 12,646 184 --------------------- -------------------- Non-current liabilitiesEmployee benefits 10 2Provisions 89 -Interest bearing loans and borrowings 88 -Deferred tax liabilities - - --------------------- --------------------Total non current liabilities 187 2 --------------------- -------------------- Current liabilitiesOther financial liabilities 57 59Interest bearing loans and borrowings 22 -Trade and other payables 787 1,034Deferred Government grants 47 -Current tax payables 15 - --------------------- --------------------Total current liabilities 928 1,093 --------------------- --------------------Total liabilities 1,115 1,095 --------------------- --------------------Total equity and liabilities 13,761 1,279 ===================== ==================== These financial statements were approved by the Board of Directors on 20 March 2006 Statements of changes in equityFor the year ended 31 December 2005 Share Capital Retained Minority Total Capital Reserve Earnings Interest •'000 •'000 •'000 •'000 •'000 ------------ ------------ ------------ ------------ ------------ Balance at 28 June 2004 120 - - - 120 New shares subscribed for 2 428 - (1) 429 Loss for the period - - (365) - (365) ------------ ------------ ------------ ------------ ------------Balance at 31 December 2004 122 428 (365) (1) 184 New shares subscribed for 94 17,646 - - 17,740 Share issue expenses - (2,445) - - (2,445) Equity settled expenses - 225 - - 225 Loss for the period - - (3,159) - (3,159) New Shares issued in Idea Lab - - - 101 101 ------------ ------------ ------------ ------------ ------------ 216 15,854 (3,524) 100 12,646 ============ ============ ============ ============ ============ Consolidated cash flow statementfor year ended 31 December 2005 31 December 31 December 2005 2004 Group Group •'000 •'000Cash flows from operating activitiesloss from operations (3,159) (381) Adjustments for: Depreciation, amortisation and impairment 190 20 Movement in provision for employees benefit (TFR) 8 2 Bonus accrual 90 - Income taxes 15 (5) Equity settled share-based payment expenses 225 - -------------------- ------------------Cash outflow before changes in working capital and provisions (2,631) (364) (Increase) in trade and other receivables (562) (132) (Increase) in inventories (14) - (Decrease)/increase in trade and other payables (247) 127 (Decrease)/increase in deferred government grants 47 - (Decrease)/increase in provisions 89 - -------------------- ------------------Cash outflow from operations (3,318) (369) -------------------- ------------------Cash flows from investing activities Acquisition of subsidiary, net of cash acquired - (11) Acquisition of property, plant and equipment, net of finance leases (810) (50) Development expenditure acquisition of intangible assets (92) - -------------------- ------------------Net cash used in investing activities (902) (61) -------------------- ------------------Cash flows from financing activities Proceeds from the issue of share capital of Acta 17,740 550 Share Capital issue expenses (2,445) - Proceeds from new loan - 21 Proceeds from minorities in Idea Lab 101 - -------------------- ------------------Net cash inflows from financing activities 15,396 571 -------------------- ------------------ Net increase in cash and cash equivalents 11,176 141 Cash and cash equivalents at 1 January 161 20 Effect of exchange rate fluctuations on cash held (52) - -------------------- ------------------Cash and cash equivalents at 31 December 11,284 161 ==================== ================== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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