Camco Clean Energy : 2014 Trading Update

During 2014 REDT progressed from a prototype and product development phase towards the production of its flow battery. This step forward followed the securing of a contract to build a 1.26MWh wind energy storage facility in Scotland and contracting Jabil Circuit, Inc. in June 2014 to produce a commoditised low cost REDT battery.   

The company is now focussed on the launch of its manufactured REDT battery. The two key drivers for success at this stage of a new technology product launch are 1) successful technical implementation in customer applications and 2) achieving a low cost sale price to ensure economic commercial application by customers. REDT's 2015 strategy is now focussed on ensuring that these two drivers are achieved.

Orders

• The Directors expect sales to be generated following the production of Jabil manufactured REDT batteries and successful installation of these systems at customer sites during 2015. Any sales prior to delivery and installation of these systems would be with early adopters and customers working closely with REDT
• Given the above, we are proud to announce initial orders have been received for 5 units,  signalling market interest and confidence in the REDT battery technology at the pre-production stage
• Now that the business has entered its commercial phase, REDT has hired a dedicated sales director with many years of experience in the sector

Implementation

• Detailed design is now complete for the small and large product range (including 5kW-30kWhe, 10kW-30kWhe, 15kW-180kWhe, 30kW-180kWhe, 45kW-180kWhe and 60kW-180kWhe)
• The team has addressed successfully many anticipated engineering production issues expected when moving from prototype design to a commoditised manufactured product in parallel with Jabil's quality control reviews
• Production has commenced at the Jabil manufacturing facility in Scotland 
• Manufacturing of internal stacks (the core technology of the battery) has been completed and these have been tested successfully at the Jabil facility
• Production is now focussed on completing the build, certification and electrical testing for delivery during 2015 of ten 5kW-30kWhe units to selected customers across a range of customer applications and delivery of seven 15kW-180kWhe units to the Isle of Gigha

Cost 

• Initial 40% cost reductions have been achieved on these systems
• Further supply chain and research initiatives are underway to continue cost reductions, both from a production design engineer perspective, component sourcing and from research and development initiatives

During 2014 the Company extended its existing African business and was jointly appointed as investment advisor to the Green Africa Power LLP ("GAP") fund. In early 2015, GAP announced that additional funding of £26m had been provided, increasing the base fees earned by Camco from those previously announced. There is also a growing pipeline of similar complementary activities giving confidence that alongside GAP, the business can be transitioned towards higher margin activity validating Camco Clean Energy's extensive experience in the African renewables sector. 

The Company continued to deliver cash flow from its US assets during 2014. The US carbon projects delivered credits into the Californian regulated carbon market during 2014 as anticipated, providing a useful contribution to Company's cash flow. Camco's operating biogas assets Twin Falls and Jerome Facilities have performed well throughout the year and in addition the Company has continued to expand its biogas project pipeline.  

In our interim statement, we reported a significantly reduced net loss compared with the prior period. Performance in the second half of the year remained strong with the final result anticipated to be comfortably ahead of management expectations.

Cash and cash equivalents at the year-end were €4.0m. The Company has a policy of holding its cash reserves in the currencies in which it has the majority of its operational expenditure and therefore currently does not hold significant reserves of Euros thus benefiting from declines in the Euro in 2014 and 2015 to date on a reported basis.

Scott McGregor, CEO of Camco said, 

"After a period of substantial change in recent years, 2014 saw the company stabilise and start to expand its business activities, with a particular focus on taking REDT from a prototype product into commercial production, which has been a huge success. This cautious and patient strategy in bringing the REDT technology to market positions the Company very well for 2015."

* Camco Clean Energy plc, on a fully diluted basis, has an economic interest of 49% in REDT.

Camco Clean Energy +44 (0)20 7121 6100

Scott McGregor, Chief Executive Officer

Jonathan Marren, Chief Financial Officer

N+1 Singer (Nominated Adviser and Broker) +44 (0)20 7496 3000

Ben Wright, Richard Salmond

Newgate (Financial PR) +44 (0) 207 653 9850

Tim Thompson, Helena Bogle, Edward Treadwell