RNS Number : 1388E
Axeon Holdings Plc
24 September 2008
AXEON HOLDINGS PLC
Delivering clean mobile power for electric vehicles, cordless power tools and mobile power applications
Unaudited Interim Results for the six months to 30 June 2008
Axeon Holdings plc ("Axeon"), Europe's largest independent lithium-ion battery system supplier, is pleased to announce its interim
results for the six months to 30 June 2008.
Highlights
* Material revenue growth in first half of year driven by Power Tool and Mobile Power product groups along with significant new
development programmes in Automotive.
* Continued growth in Automotive and Mobile Power products in second half of the year.
* This is offset by recent flat or possibly declining demand from the largest customer in Power Tool as a result of global
construction market slow down.
* Outlook is for a reduced loss in the second half of the year instead of a profit, with a more positive picture for 2009 driven by
growth in Automotive and Mobile Power.
First half 2008
* Revenue of �32.9 million (H1 2007: �2.5 million)
* Pre-tax loss of �1.1 million (H1 2007: �0.5 million) is higher than last year, primarily due to increased investment in research
and development to position the business for future growth
* Power Tool achieved 10% like-for-like growth
* Mobile Power products achieved 30% like-for-like growth
* 12 Automotive prototypes completed for 9 customers in Automotive, broadening the customer base
* Supply agreement for vehicle batteries signed with Allied Vehicles
Post half year
* Axeon have supplied the lithium-ion battery system for the first electric sports car concept for a German manufacturer. The system
has been tested and evaluated in a road-going prototype
* Three new orders totaling �1.6 million received for the Mobile Power segment
* Orders from a major Power Tool customer, which represents approximately a third of Axeon's business, have recently indicated a
flattening and possibly weakening of demand
Commenting on the results, Hamish Grant, Chief Executive Officer of Axeon, said:
"The business has delivered on many milestones during the first half of the year and increased investment in research and development.
Automotive continues to secure new customers and while the build-up of revenue has been slow in 2008 the segment is poised for material
growth during 2009. The Mobile Power segment has grown around 30% this year. The Power Tool operation has seen strong growth in demand in
the first half of the year. However, the very significant downturn in the European construction industry appears to have recently impacted
demand from our leading Power Tool customer and this is having a negative impact on group financial performance in the near term. The
outlook for other Power Tool customers, although smaller, remains positive. Axeon AG, our European operations, continues to trade profitably
and the outlook for the Group a whole looks more positive in 2009."
CONTACT
Axeon Holdings plc www.axeon.com
Hamish Grant, CEO Tel: +44 (0)1382 400040
David Campbell, CFO Tel: +44 (0)1382 400040
Gavin Anderson & Co
Ken Cronin / Robert Speed / Janine Brewis Tel: +44 (0)20 7554 1400
Arbuthnot Securities
Antonio Bossi / John Prior Tel: +44 (0)20 7012 2000
Chairman's Statement
Overview
During the first half of 2008 the Group has made significant progress in delivering its strategy, despite challenging global market
conditions. Growing demand for low carbon vehicles is fuelling interest in our Automotive EV and HEV batteries with increasing numbers of
customers developing prototype vehicles using our batteries. A relatively slower take up of production batteries in Automotive has been
offset by higher than expected revenues in Power Tool and in Mobile Power in the first half of the year.
The team at Axeon AG (acquired as Ristma AG in August 2007) continues to perform strongly, making major contributions to the Group's
results.
Financial Review
By the end of June 2008 revenues were almost �33 million (H1 2007: �2.5 million), exceeding revenue for the whole of 2007 by more than
�3.5 million and representing a 23% increase on the preceding six month period.
Working capital demand has increased as anticipated in line with the rapidly rising revenue and therefore cash at the end of June stands
at �4.1 million.
The company has continued to invest heavily in product research and product development during the first half of 2008. The loss for the
first half of 2008 of �1.1 million is therefore higher than in the first half of 2007 (H1 2007: �0.5 million).
The balance sheet remains strong with net assets of �18.9 million.
Business Progress
Automotive Batteries
The production roll-out of Modec lithium-ion batteries has continued as planned. We are meeting Modec's demand for production batteries,
and are on schedule with the planned development of a longer range lithium-ion pack. Initial tests of this prototype pack have indicated a
range of above 120 miles.
We have previously reported on a significant supply agreement worth �17.3 million with Allied Vehicles to supply a minimum of 1,000
lithium-ion battery packs to power a range of zero-emission vehicles for their Zev Ltd subsidiary. Allied is building on its strong
relationship with Peugeot to provide a 3.5 tonne rated delivery vehicle based on the Peugeot Boxer, while the Peugeot Expert body shell
provides options for a 3 tonne rated delivery vehicle, an 8 seat minibus, and a taxi. Allied is also developing an electric 16 seat low
floor city bus. We have recently delivered the first batteries on schedule.
Orders in the first half of the year include:
* Agreement in May with Transteq, a US customer, for the supply of 5 prototype battery packs for an HEV bus application.
* An order for an HEV prototype battery for a European heavy machinery manufacturer. This pack has been delivered and is now
undergoing customer testing.
During the first half of the year we completed 12 prototype batteries for 9 different customers, including packs for 2 city cars, 1
electric scooter, 1 high performance sports car, 2 HEVs for heavy machinery (Deutz and one other), 2 fork lift trucks (Jungheinrich), 3
urban delivery vehicles (Modec and Allied) and 1 city bus (Rampini). While we continue to work on prototype opportunities with new
customers, we are now focusing attention on those that have the capability to go into volume production.
The outstanding schedule for production battery packs is currently approximately �35 million, and is expected to be met over the next
five years.
The general thrust of government and global policy is moving in favour of electric and plug-in hybrid vehicles. Recent events include
widespread commentary about the harmful economic and environmental side-effects of bio-fuels, particularly in light of the Gallagher review
in July 08, and the recent UK government consultation on its Renewable Energy policy, which indicates that the government is considering
support for the widespread introduction of EVs.
Power Tool Batteries
There are two key customers in this segment. One is showing strong order growth, while the other showed a more mixed pattern with strong
growth across some product lines and weaker growth across more consumer orientated lines. Margins were squeezed during the first half of the
year due to adverse exchange rate movements. Revenue in this segment was �28.7 million, a growth of �2.5 million over the preceding six
month period.
Mobile Power Batteries
Across the three business segments mobile power batteries shows the strongest rate of growth. Revenue in this segment was �3.6 million,
a growth of �0.8 million over the preceding six month period. This segment covers a wide variety of industrial, medical and leisure products
with over 400 customers.
Customer enquiries and orders have remained buoyant during the first half of 2008.
2nd Half 2008 Update
Automotive Batteries
In July we announced an order for a 66kWhr prototype battery for Technobus, one of Italy's leading manufacturers of electric city buses.
Technobus produces around 30 buses a year, with customers throughout Europe and North America and has an installed fleet of several hundred
vehicles.
One of our German customers is about to launch a high performance electric sports car with a prototype lithium-ion battery system from
Axeon. This all-electric prototype demonstrates that electric cars can be fun as well as useful.
We continue to work on a number of prototype packs for several new customers. The majority of these customers are based in continental
Europe, demonstrating the benefits of our pan-European business development strategy.
Power Tool Batteries
Power Tool is displaying a mixed performance due to different customer end market applications during the second half of 2008. One
significant customer continues to order increasing quantities which imply growth of around 50% between H1 and H2.
However, with our largest customer the increase in order offtake anticipated during the first 2 weeks of September has not materialized.
There has been a very significant downturn in the European construction industry during 2008 and the effects of this seem to have recently
affected their demand. Demand appears to be flattening instead of increasing as they forecast.
Mobile Power Batteries
This segment continues to display strong growth and we have recently won three orders worth EUR2 million:
* A new order for 90 power systems, including batteries, chargers, transducers and control systems. The complete systems will power
a new generation of coffee trolleys, to be deployed by a European train operator during 2008 and 2009
* A repeat order from an existing customer for 100,000 battery systems to be used in infusion pumps for medical applications
* A repeat order from an existing customer for 4,500 0.28kWh lithium-ion batteries for power-assisted electric bicycles, to be
produced during Q4 2008
The risk-diversified nature of this segment, with a focus on customers who export out of Europe, has resulted in no impact from the
economic slowdown in Europe. We continue to close new business and look forward to an exciting future for this business segment.
Outlook
Mobile Power products in particular show significant growth and the demand for Automotive EV and HEV prototype programmes is an
encouraging indication of the medium to longer term potential of this segment. These positives are somewhat offset by lower than expected
demand from our largest customer in the Power Tool segment. Axeon AG, our European operations, continues to trade profitably despite the
reduced Power Tool customer demand. The Group is likely to make a reduced loss for the second half of the year instead of a profit.
The medium term outlook for the business remains positive with increasing customer demand in two of the three segments in which we
operate.
Charles Matthews
Chairman
Financial Information
The interim financial information has been prepared on the basis of the recognition and measurement requirements of International
Financial Reporting Standards (IFRSs) in issue that are either endorsed by the European Union and effective at 30 June 2008, or are expected
to be endorsed and effective at 31 December 2008.
Axeon Holdings plc
Profit & loss account
For the 6 months to 30 June 2008
6 months to 6 months to Year to
30 June 30 June 31
2008 2007 December
Unaudited Unaudited 2007
Audited
Note
�000 �000 �000
Revenue 32,870 2,498 29,316
Cost of sales (30,436) (1,775) (25,870)
---------- ---------- ----------
Gross profit 2,434 723 3,446
Administrative expenses (2,892) (1,189) (3,306)
---------- ---------- ----------
EBITDA (458) (466) 140
Depreciation and amortisation (380) (68) (363)
---------- ---------- ----------
Operating loss before financing (838) (534) (223)
costs
Financial income 158 24 51
Financial expenses (405) (12) (345)
---------- ---------- ----------
Loss before taxation (1,085) (522) (517)
Taxation (101) - 15
---------- ---------- ----------
Loss for the period attributable (1,186) (522) (502)
to equity holders
====== ====== ======
Earnings per share
Basic and diluted loss per share 3 (2.6)p (2.1)p (1.8)p
====== ====== ======
There are no recognised gains or losses other than the loss for the current and comparative financial years.
Turnover and loss on ordinary activities before taxation for the current and previous year relate wholly to continuing activities.
Consolidated Balance Sheet
As at 30 June 2008
6 months to 6 months to 30 June Year to
30 June 2007 31
2008 Unaudited December
Unaudited 2007
Audited
�000 �000 �000
Non-current assets
Goodwill 4,819 1,408 4,819
Intangible assets 2,011 - 956
Tangible assets 2,011 207 1,677
Deferred tax asset 292 - 264
--------- --------- -------
9,133 1,615 7,716
--------- --------- -------
Current assets
Inventories 15,846 594 8,698
Trade and other receivables 12,682 3,186 12,456
Cash and cash equivalents 4,181 140 12,028
---------- ---------- --------
32,709 3,920 33,182
---------- ---------- --------
---------- ---------- --------
Total assets 41,842 5,535 40,898
---------- ---------- --------
Current liabilities
Trade and other payables 16,619 2,155 15,185
Borrowings - - -
---------- ---------- --------
16,619 2,155 15,185
---------- ---------- --------
Net current assets 16,090 1,765 17,997
---------- ---------- --------
Non-current liabilities
Deferred tax liabilities 490 - 443
Borrowings 5,774 (217) 5,696
---------- ---------- --------
6,264 (217) 6,139
---------- ---------- --------
---------- ---------- ---------
Net assets 18,959 3,163 19,574
===== ===== =====
Equity
Called up share capital 2,288 1,229 2,288
Share premium account 22,350 7,357 22,350
Merger reserve 6,381 6,380 6,381
Equity reserve 277 90 168
Translation reserve 722 - 260
Profit and loss account (13,059) (11,893) (11,873)
---------- ---------- ----------
Total equity 18,959 3,163 19,574
===== ===== =====
Axeon Holdings plc
Consolidated Cashflow Statement
For the 6 months to 30 June 2008
6 months to 6 months to Year to
30 June 30 June 31
2008 2007 December
2007
Unaudited Unaudited Audited
�000 �000 �000
Net cash from operating activities
Loss for the period (1,186) (522) (502)
Adjustments for:
Depreciation 327 68 314
Amortisation of intangible assets 16 - 21
Amortisation of loan expenses 37 - 28
Equity settled share based payment 109 36 114
transactions
Development expenditure capitalised (1,071) - (910)
Finance revenues (158) (24) (51)
Finance costs 405 12 345
Taxation 101 - (15)
--------- --------- ---------
Operating loss changes before changes in (1,420) (430) (656)
working capital
(Increase)/decrease in inventories (7,135) (195) 1,595
Increase in trade and other receivables (263) (2,204) (7,679)
Increase in trade and other payables 1,224 1,242 2,348
Interest received 158 24 61
Interest paid (288) (12) (56)
Taxation (paid)/received (8) 131 84
--------- --------- ---------
Cash used by operations (7,732) (1,444) (4,303)
--------- --------- ---------
Investing activities
Purchase of patents and trademarks - - (3)
Purchase of property, plant and (661) (51) (883)
equipment
Proceeds on disposal of property, plant
and equipment - 1 1
Acquisition of subsidiary - - (5,824)
Net cash acquired with subsidiary - - 1,776
--------- --------- ---------
Net cash used in investing activities (661) (50) (4,933)
--------- --------- ---------
Financing activities
Repayment of borrowings - (35) (2,178)
New borrowings 88 - 5,599
Proceeds on issue of ordinary shares - - 16,052
--------- --------- ---------
Net cash from financing activities 88 (35) 19,473
--------- --------- ---------
Net increase/(decrease) in cash and cash (8,305) (1,529) 10,237
equivalents
Cash and cash equivalents at beginning 12,028 1,669 1,669
of period
Effect of foreign exchange rate changes 458 - 122
--------- --------- ---------
Cash and cash equivalents at end of 4,181 140 12,028
period
--------- --------- ---------
Notes to the accounts:
1 Basis of preparation
This interim statement contains the financial information of Axeon Holdings plc ("the Company") and its subsidiaries (together "the
Group") for the six month period ended 30 June 2008. The report was approved by the directors on 23 September 2008.
The preliminary financial information has been prepared under the historical cost convention, and in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union ("adopted IFRSs").
This interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at
30 June 2008 that are, or are expected to be, endorsed and effective at 31 December 2008.
The comparative figures for the financial year ended 31 December 2007 are in the format required by adopted IFRSs. Those audited
financial statements have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors
was:
i. unqualified;
ii. did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report;
and
iii. did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The accounting policies applied in the 2007 consolidated financial statements have been applied consistently to all periods presented in
this interim financial.
2 Taxation
Corporation tax is provided for to the extent required for each company within the Group. The taxation credit reflected in the income
statement for the year to 31 December 2007 includes research and development tax credit. In accordance with the Group's accounting policy,
this is estimated on an annual basis and adjusted for on final receipt.
3 Loss per share
Loss per share is calculated as follows:
6 months to 6 months to Year to
30 June 30 June 31 December
2008 2007 2007
Unaudited Unaudited Audited
�000 �000 �000
Net loss for the financial (1,186) (522) (502)
period
--------------- --------------- ---------------
Weighted average number of
ordinary shares in issue 45,766,968 24,587,385 27,930,030
--------------- --------------- ---------------
Basic and diluted loss per (2.6)p (2.1)p (1.8)p
share
======== ======== ========
The loss attributable to ordinary shares and the number of ordinary shares for the purpose of calculating the diluted earnings per share
are the same. The exercise of share options would have the effect of reducing the loss per share and consequently is not taken into account
in the calculation of the diluted loss per share.
This information is provided by RNS
The company news service from the London Stock Exchange
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