Ceres Power has entered into a £2.7 million contract with Centrica plc (trading as British Gas), partly funded by the DTI, to develop Combined Heat and Power (CHP) units for the UK residential market. The development effort will design, build and evaluate fuel cell CHP units, delivering electricity, heating and hot water, and substantially reducing both energy bills and CO2 emissions.
At the same time, Ceres announced its most-recent financial results. The Group's balance sheet remains strong, with £15.4 million in cash and short-term investments allowing the Group to fund immediate growth plans and take advantage of emerging opportunities. Income for the six months totaled £562,000, of which interest on cash balances provided £334,000, income from government contracts was £148,000 and revenue from development contracts was £80,000. In total this represents a 13% increase compared to the six months ended 31 December 2004.
Operating costs increased by 19% over the comparable period last year, due in large part to the strengthening of the skill base in line with the Group's commercialization plans. Administration overheads decreased to efficient levels, in the absence of the exceptional costs incurred in association with admission to AIM in November 2004.
Capital expenditure during the period totalled £665,000, significantly above the £163,000 during the prior interim period, reflecting investment in the Group's design, testing and manufacturing capabilities, including the building of complete fuel cell systems.
These announcements closely follow the Company's recent achievement of a major technical milestone: the successful delivery of a production-engineered 1kW fuel cell stack (the "Ceres Stack") generating sufficient power for the average home. The Ceres Stack is the fundamental building block of micropower generation products aimed at a variety of consumer and commercial uses.
Peter Bance, CEO of Ceres Power, commented: "We are delighted to make this important announcement as it marks the transition of our partnership with British Gas to a commercial programme to deliver fuel cell products to the mass market. Ceres technology will enable up to two-thirds of UK households to use highly efficient and environmentally-friendly CHP appliances in their homes."
