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Ceres Power targets more Asian fuel cell deals

Fuel cell developer had a successful year including progress in Japan and South Korea
Ceres Power targets more Asian fuel cell deals
Ceres says steel fuel cells can be mass-produced at low cost

Ceres Power (LON:CWR) predicted more deals with Asian industrial giants for its pioneering fuel cell technology as it unveiled annual results.

Ceres, which has already signed a joint development deal with a Japanese company, expects to report progress on other potential agreements "in the near future", it said.

The group aims eventually to license its technology to manufacturers of new combined heat and power (CHP) boilers, as well as supplying know-how to potential industrial users.

Chief executive Phil Caldwell said the evaluations were going well.

"We're making the right progress for the long-term," he said in an interview with Proactive Investors.

Ceres is developing a new type of steel fuel cell to provide cheap and efficient heat and power for homes and businesses.

It reckons the cells, initially developed by researchers at Imperial College, are more cost-effective, robust and energy-efficient than previous ceramic-based cells.

Until now, the high costs associated with fuel cell technology have restricted widespread adoption without significant supporting subsidies.

Caldwell said Japan was a key market for the group - a country targeting a million home fuel cell generators by 2020 and 5mln by 2030.

Ceres is also targeting markets in the US and South Korea, a country forecast as having revenue potential of US$15bn alone by 2021.

It also hopes eventually to use its advances in Asia as a springboard to roll out the technology in Europe.

Caldwell said: "The UK market is huge for this kind of technology but the partner organisations most active in it are in Asia."

Ceres is also in discussions with several partners about developing manufacturing operations, focusing particularly on Asia as a first market.

The group raised £20mln in July 2014, which it said would leave the firm well supported for the following two years.

"We're very well backed with some good shareholders on the register, which gives us financial strength," he said.

Earlier Ceres said it made annual losses of £10mln in the year to June 30 against £7.4mln the year before, meeting internal hopes as it invested significantly in testing, validation and engineering.

It also reported a fall in underlying revenue to £900,000 from £1.1mln last time as some customer evaluations of the technology took longer than expected.

Edison Investment Research said it believed the company had made good progress towards commercialising its technology during the year.

"As FY15 results were in line with our estimates, we leave our FY16 and FY17 forecasts broadly unchanged," the firm said in a note.

Shares in Ceres dropped 0.62p to 8p in London.

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