What significant factors led AFC Energy to receive its first commercial order?

Source: Alexander Kirch, Shutterstock

Summary

• AFC Energy PLC had not reported any revenue during FY20 ended on 31 October 2020.
• AFC had reported a comprehensive loss of approximately negative £4.2 million during FY20.
• AFC had completed fundraising activity of £34 million during July 2020.
• AFC had reported a cash balance of £31.6 million as of 31 October 2020.

AFC Energy PLC (LON:AFC) is the LSE listed energy stock. AFC’s shares have generated a return of approximately 138.50% in the last 12 months. It is listed on the FTSE AIM All-Share Index. The Company was incorporated in 2006.

Business Model

AFC Energy PLC is the UK-based provider of hydrogen power generation technologies. AFC is engaged in the installation, operation, and maintenance of alkaline fuel cell systems to produce electricity by using hydrogen. The hydrogen council launched in 2017 would render support to tackle the world’s decarbonization challenge.

 (Source: Company website)

Recent News

On 01 March 2021, AFC updated that John Rennocks intended to retire from his position of Non-Executive Director.

On 25 February 2021, the Company had announced regarding the launch of a dedicated Anion Exchange Membrane (AEM) Fuel facility. The Cell testing facility would be at Surrey headquarters in the UK.

On 08 February 2021, AFC updated that Dr Michael Rendall will join the Company as the Chief Engineer and Product Officer effective from 01 March 2021.

FY20 Financial and Operational Highlights (for the period ended on 31 October 2020, as of 01 March 2021)

 (Source: Company result) 

• The Company had not generated any revenue for FY20 ended on 31 October 2020.
• Moreover, AFC had widened its comprehensive loss to approximately negative £4.2 million during FY20, while it was negative £2.9 million during FY19, primarily due to rising investments in the products range.
• The Company reported a confirmed order book of £1.1 million as of 31 October 2020, illustrating a robust pipeline of commercial orders.
• Meanwhile, the Company has achieved its first commercial order as the Official Charging Partner of FIA Accredited Extreme E in 2021. The Company may grab further marketing opportunities through this contract.
• The investing and operating activities had demonstrated a cash outflow of £4.1 million during FY20.
• AFC had completed £34 million of fundraising activity during July 2020 to strengthen its balance sheet.
• Furthermore, the Company had also announced a partnership with global contractor ACCIONA to seize sustainable construction opportunities.
• AFC had a cash balance of £31.6 million as of 31 October 2020.

Share Price Performance Analysis of AFC Energy PLC

(Source: EODHD/Others, chart created by Kalkine group)

Shares of AFC Energy PLC were trading at GBX 54.44 and were up by close to 1.00% against the previous closing price as on 01 March 2021 (before the market close at 12:36 PM GMT). AFC's 52-week Low and High were GBX 9.00 and GBX 94.40, respectively. AFC Energy PLC had a market capitalization of around £364.55 million.

Business Outlook

AFC Energy updated that 2020 has proven to be a transformational year for the Company as hydrogen was recognized as a key provider for a sustainable future. The resilient performance was driven by several factors like rising order book, expansion through several strategic collaborations and robust cash position. Moreover, AFC’s confidence is underpinned by several lucrative strategic investments in the industry. Thus, AFC believed that favorable government policies and optimistic industry sentiments would accelerate the growth trajectory in key markets. Meanwhile, AFC had sufficient cash to manage the investment in products and technology. Therefore, the Company would continue to seek a lucrative investment opportunity through collaborations in 2021. Overall, AFC would make significant contributions to delivering emissions-free solutions to the world's energy challenges.

(Source: Company result)