Ceres Power Holdings Plc (LON:CWR) issued a trading update this morning upgrading its FY17 total income line by 140% from £1.67m to approaching £4.0m. For Ceres total income aggregates commercial revenue and other operating income, and this significant percentage upgrade has come about due to the outstanding commercial progress made by the company over the last 12 months. With the topline upgrade comes a modest reduction in cash burn, with our FY17 closing net cash position moving from £15.79m to a healthy £16.35m. Our bottom line remains unchanged, reflecting an increase in share based payments and increased investment in the business. In the period Ceres signed its first ‘go to market’ agreement for a micro-combined heat and power (‘micro-CHP’) product in the business sector, as well as development agreements with Honda, Nissan, and Cummins in stationary power, automotive and data centres respectively, and with an existing global OEM partner to enter a new vertical and develop a residential m-CHP product. Management has been executing the Ceres OEM partnering model in multiple vertical markets exceptionally well, and ahead of stated and forecast time frames.
* FY17 Top line upgrade is evidence of the commercial viability of the Ceres Steel-cell platform, and management executing its OEM partnering commercialisation model. The FY17 revenue upgrade today from Ceres is further testament to the commercial viability of Ceres’s world-class Steel-cell platform technology. It also validates the company’s OEM partnering model and demonstrates the capacity of management to successfully negotiate and close the type of deals necessary for Ceres to execute its commercialisation strategy.
* FY18 top line forecast upgrades. The revenue uplift from Ceres Power Holdings Plc has been exceptional in FY17. We fully expect revenues to increase further into 2018, however we do not expect the same percentage increase (140%). In FY 2018 Ceres is looking to strengthen its existing OEM partnerships and add 1, or maximum 2, more. The company will then have its optimum number of OEM partners with respect to its deployable resource. To reflect this, we have increased our FY18 total income line by 50% from £4m to £6m. Our bottom line and closing cash remain broadly unchanged, again reflecting an increase in share based payments and increased investment in the business.