redT energy plc (AIM:RED), the energy storage solutions company, today announces its full year results for the 12 months ended 31 December 2018.
HIGHLIGHTS
Financial
2018 financials were in line with management expectations. 2018 saw the first revenue contribution (£2.5m) from the redT business, with the installation of a number of Second Generation (“Gen 2”) machines at customer sites across the year. This was a vital step in validating the Company’s technology and forms a crucial element which will support the Company in its drive to attract a strategic partner to secure the long-term future of the business.
- Revenue1 up 87% to £4.2m (2017: 2.2m)
- Year-end free cash £3.3m (2017: £6.6m)
- Trading loss1 £11.7m (2017: £6.3m loss)
- Operating loss1 of £12.2m (2017: loss £7.2m)
- Loans and borrowings £Nil (2017: £Nil)
(1) From continuing operations
The Strategic Review process launched on 14 March 2019 is progressing well and there are ongoing advanced discussions with a number of potential partners. Based on current forecasts, the Board estimates the Group requires at least £10m of investment to reach a scale where it becomes cash generative, expected to be in the second half of 2021. Following the announcement on 9 April 2019 after the General Meeting approving the Strategic Review fundraise, the Group’s latest cash flow forecasts indicate that, without further funding, the business possesses cash reserves sufficient to fund operations up until the end of November 2019. The Board recognises that the need to secure funding before then casts doubt on the Group’s ability to continue as a going concern and a material uncertainty paragraph has been included to this effect in the independent auditor’s report. The Board, however, remains optimistic that the Group will secure the necessary capital in the appropriate time scale.
Operational
During the reporting period, the Company delivered 2.3MWh of its Gen 2 machines to customers in key applications and regions across the world. This achievement significantly increased redT’s deployed product base, with the systems acting as important reference sites in key markets. In June, redT launched its new Third Generation (“Gen 3”) product, with the first product sale announced in August 2018.
- More than 2.3MWh of machines (38 tank units) delivered to customers in the UK, Europe, Australia, Asia and sub-Saharan Africa.
- Deployment of the first vanadium flow / lithium-ion hybrid energy storage system, at a site in Melbourne, Australia. This is currently the largest behind-the-meter commercial energy storage system in the country, and a key reference site.
- Entry into Asian market, with unit sales to sites in Thailand.
- Launch of Gen 3 product and subsequent 300kWh sale to Anglian Water, the UK’s largest water company by geographic area.
- Exclusivity agreement signed for German grid-scale project portfolio.
Post period activity
- On 14 March 2019, the Company announced it had commenced a Strategic Review to seek strategic partners to support and finance the continued growth of the business.
- On 25 March 2019, the Company announced it had signed a partnership with Statkraft, Europe’s largest generator of renewable energy to provide a fully financed ‘solar plus storage’ product to UK Commercial & Industrial customers. This is the first time a product of this type has been offered to the UK market and the partnership aims to roll out up to 100MWp of solar and 60MWh of flow machines over the next 3 years.
- On 3 April 2019, the Company announced it had signed a purchase agreement to supply a 5MWh flow machine solution as part of the consortium delivering the £41 million Energy Superhub Oxford project. This project will be the largest deployment of flow machines in the UK to date and is redT’s first “grid-scale” project.
Neil O’Brien, Executive Chairman at redT said:
“I have been impressed by the significant step forward we have made in the design and manufacturing processes of the latest Gen 3 units and remain optimistic about the Company and its people’s ability to succeed in a market that is forecast to drive fundamental, positive change in our energy system in the years to come.
Right now, our immediate focus continues to be the satisfactory conclusion of the Strategic Review process, which is essential to provide the funding and support the Company requires in the near-term to succeed in this space. Progress to date with the Strategic Review has been encouraging and we look forward to updating shareholders further as soon as it is practical to do so.
Alongside the Strategic Review, which is being led by the Board, the executive team remain focussed on the manufacture, delivery and operation of our existing projects and securing further business from our sales opportunity pipeline. This work will support the widespread roll-out of our 3rd Generation product, which is the foundation for the Company to become cash generative in the future.
In closing, I would like to thank our highly dedicated staff who have faced and overcome the significant challenges of the last 12 months, and my Board colleagues for their continuing support and contribution to the ongoing activities of the Strategic Review process. I would like to extend my thanks also to our shareholders for their continuing support in the face of challenging circumstances, and to our customers for trusting in us to deliver high-quality energy storage infrastructure solutions for their projects.”
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