What it does  

Ceres’ core SteelCell technology overcomes two problems traditionally associated with other solid oxide fuel cells (SOFC): cost and lack of robustness.

SteelCell can use a variety of fuels – natural gas, hydrogen, biofuel – that can be manufactured from widely available materials, making it the most cost-effective solution on the market.

“This scalability is Ceres’s key competitive advantage, in our view,” broker Berenberg said recently

Ceres has an impressive roster of partners. Key among them are Chinese engines giant Weichai Power, German engineering firm Bosch, US engine maker Cummins and Japanese carmakers Nissan and Honda. 


How it’s doing

In July, Ceres said it ended the last 12 months in a strong position with operational momentum maintained against the headwinds caused by the coronavirus (COVID-19) outbreak.

The clean energy specialist said revenue for the period to June 30, 2020, will be in the region of £20mln, representing year-on-year growth of 20-25%.

Cash and short-term investments were £108mln as of that date.

Looking ahead, the fuel cells specialist said it expects to sign new customer partnerships “as commercial demand remains strong”.

Longer-term, the environment appears to be supportive of companies such as Ceres, whose SteelCell technology can efficiently turn biogas, ethanol, or hydrogen into power.

The company received two major votes of confidence during the year just gone with German giant Bosch investing £38mln to increase its stake in the business to 18% and China’s Weichai putting up £11mln to stay at 20%.

The former has now begun manufacturing Ceres’ technology at its pilot facility.

The firm said the commissioning of its new Redhill manufacturing site began in January, and while ramp-up was, slower than anticipated (not surprising given the current challenges), the facility delivered record production last month.

Assessing the impact of COVID on the business, Ceres said it adapted well to lockdown, with the full onsite team returning in early May.

Some orders have been deferred, it said, but “results remain in line with market expectations”. Supply chain hiccups have been “managed well”, it added.

Ceres said it plans to invest £5mln to develop solid oxide electrolysis for hydrogen and potential synthetic fuels over the next 18 months. Plans are also in train to expand the Redhill facility.

What the boss says: Phil Caldwell, chief executive 

 “If anything, the current pandemic has only intensified the urgency for climate action and I believe Ceres has a no-regrets fuel cell technology for power generation that is highly complementary to today’s energy infrastructure, is hydrogen ready for the future, and can form a critical building block in achieving a net-zero carbon future.”


What the brokers say  


In early April, analysts at Liberum retained their ‘buy’ rating a 540p price target, saying they believed Ceres was “one of the best-placed fuel cell companies for the energy transition given the class-leading energy efficiency of SOFCs, the very competitive technology package, very strong partners and fuel flexibility”.

“We forecast around £150mln annual revenues and over £100mln of earnings and free cash flow in 2030 from customer royalties associated with the data centre power, commercial heat and power and commercial vehicle battery range extender markets”, the broker added.

Inflexion points

  • In March, Ceres raised £49mln in total from share subscriptions by existing investors German firm Bosch and Weichai Power of China
  • In June, former Vodafone man Warren Finegold became chairman.
  • Ceres forecast revenues to rise by 20-25% to £20mln in the year to June