AFC Energy narrows loss as it progresses towards revenue generation

Pre-revenue alkaline fuel cell power company AFC Energy announced its unaudited preliminary results for the year ended 31 October on Friday, confirming the development of new high-power density alkaline fuel cell technology with potential use in applications where space and weight were “key” considerations.

The AIM-traded firm said that opened opportunities for early revenue generation through licensing or joint development in existing markets.

Its operating loss had narrowed to £4.96m from £5.51m year-on-year, with its basic and diluted losses per share falling to 1.1p from 1.36p.

The company said it concluded a funded engineering study for the deployment of a fuel cell system in Australia at Southern Oil's Gladstone refinery during the year.

It had also continued its joint development with De Nora, with further improvements in electrode longevity and performance while reducing cost, and completed a global tender process and chosen Advanced Plastics to be its flow plate mass manufacturing partner.

AFC said it had “successfully developed” an electric vehicle charging solution and installed a demonstration unit at its Dunsfold facilities, and completed detailed ‘go-to-market’ studies confirming addressable markets, distribution strategy, product benchmarking and the resources required.

The firm said it was invited to join the Hydrogen Council, and was “actively participating” in the debate to promote the hydrogen economy and develop long-term strategic relationships with like-minded global industrial companies.

It said it had commenced engagement with international industrial partners to discuss joint product development and market initiatives.

Cash reserves as at 31 October stood at £2.6m, down from £6.7m year-on-year.

Post period-end, the company had arranged a £4m convertible loan facility to fund working capital and develop its commercial strategy, and had improved its liquidity by raising a further £0.81m in an equity placement

“Progress has been made in a number of areas; new technology, product development, manufacturing readiness, commercial footprint and financing,” said AFC Energy chief executive officer Adam Bond.

“The high-power density alkaline fuel cell technology complements our existing technology opening opportunities where space and weight influence the purchasing decision.

“This new technology also has the possibility to be monetised in the short term through joint development cost sharing and licensing agreements.”

Bond said its manufacturing readiness was built around its industrial partners, starting with De Nora, with which the firm had now selected an electrode pairing, with Advanced Plastics being welcomed as its mass manufacturing partner for flow plates.

“Our commercial activity continues to grow, both through prospecting and market studies.

“The latter has identified several addressable markets over and above our Chlor Alkali base principally in off grid applications traditionally dominated by diesel generators.”

AFC’s product development work had seen the installation of an electric vehicle charging demonstration unit at its Dunsfold facilities, Bond explained, which had commanded “much attention” and demonstrated the role fuel cells could play in building a truly emissions-free environment.

“Finally, the fundraising concluded provides us with £4.8m which, together with existing cash reserves, funds the continued development of our technology base, range of products, manufacturing readiness and commercial presence.”