Ceres Power shares jumped on Monday after the green hydrogen company upgraded its revenue guidance for the year and announced a significant global licensing agreement for its solid oxide electrolyser cell (SOEC) technology.
Ceres Power shares were 16% higher at the time of writing.
Investors would have been more than delighted to see the group upgrades its full year revenue target to £50-60 million, a significant increase on last year’s £22.6 million.
Ceres Power is establishing itself as a real leader in green hydrogen and fuel cells and in a joint statement combining a trading statement and new partnership released on Monday, announced a new agreement with a Global OEM expected to generate substantial revenues for Ceres through licence fees, engineering services, and hardware sales over multiple years.
Additionally, the company will benefit from royalty payments on future commercial production and sales of SOEC equipment by the new partner. This revenue structure mirrors previous successful OEM licensing deals, reinforcing Ceres’ business model.
Revenue growth
The company’s interim results for the first half of 2024 are set to confirm a step change in revenue growth. Revenue for the period is projected to reach £27-29 million, more than doubling the £11.7 million reported in the same period last year.
Profitability has also seen a marked improvement, with gross margins climbing to 75-80%, up from 62% in the first half of 2023.
The company’s cash position remains solid, with approximately £126 million in cash and short-term investments as of 30 June 2024. While this represents a £14 million reduction from the end of 2023, it also indicates a slower cash burn rate compared to the previous year.
“We are making great commercial progress this year, and I am particularly excited by the advances in our highly efficient and differentiated SOEC electrolyser technology, which is now being adopted by several leading global companies with the manufacturing, supply chain and balance sheet strength to bring this technology to market at scale,” said Phil Caldwell, CEO of Ceres.
“This builds on Ceres’ strategy to establish partnerships in regions with strong manufacturing capability coupled with ambitious targets for the use of hydrogen for industrial decarbonisation. By licensing our best-in-class solid oxide technology, Ceres is establishing its clean energy technology as the industry standard and, through its partner network, is building towards delivering decarbonisation at the scale and pace needed globally for the energy transition.”