Half-year Results

Powerhouse Energy Group plc (AIM: PHE), the UK technology company pioneering integrated technology that converts non-recyclable waste into low carbon energy together with a revenue generating engineering consulting division (Engsolve), is pleased to announce its unaudited half year report for the six months ended 30 June 2024.

Highlights

Corporate

• Business strategy refined to focus on licensing fees, royalties and engineering services revenues which include potentially providing third party testing of waste streams at the Brackla Technology Centre once fully commissioned.
• Appointment of David Hitchcock as Non-Executive Chairman.
• Appointment of new Nominated Adviser and separate Broker (post period end).

Commercial Development

• Progressing projects with Australian based, National Hydrogen Limited (National H2).
• The Ballymena, NI project continues to progress. Lease terms have been agreed and associated legal documentation is being drafted to set out terms in a signed contract.
• Pre-permit work at Longford, Ireland, is progressing through our JV with Hydrogen Utopia, at minimal cost to Powerhouse.
• Engsolve integration into the Group is now complete.
• Continuing to work with Altec Energy, in Thailand, with a number of potential opportunities identified.
• Protos is now a low priority project with Powerhouse having an option on a site in the Protos Plastics Park subject to an ongoing annual fee.

Technology and Innovation

• Entered into lease to assume further office space in Bridgend, to accommodate the expansion of both Powerhouse and Engsolve personnel to meet strategic requirements.
• Feedstock Testing Unit (FTU) partially complete with kiln and gas clean-up systems installed.
• Grant of GB Patent Application No GB1910309.2; "Treatment of waste producing recirculated combustible", and resolution of a challenge to one of our issued patents.
• Other patent applications have advanced in Europe and other territories.
• The Chester based Test Unit is being relocated to Bridgend to be containerised as a future project.

Financial Performance

• Revenues for the half year of £385.7k (H1 2023: nil).
• Gross Profit for period £98.2k (H1 2023: nil).
• £2.7m cash at bank at 30 June 2024 (30 June 2023: £4.9m).

The Group's revenues and gross profit for the half year ended 30 June 2024 increased compared to the previous year's figures due to the acquisition (and consolidation) of the remaining stake in Engsolve.

Outlook

• Completion of the FTU is expected in late Q4 2024 enabling the Company to accelerate the development of commercial applications for its technology.
• Further innovation and product offerings are being developed. Including a proposal to provide gasification technology into the Sustainable Aviation Fuel ("SAF") arena.
• In order to increase awareness and drive further revenue, Engsolve has engaged an experienced industrial sales originator to identify new client and project opportunities.

Statement from David Hitchcock, Non-Executive Chairman of Powerhouse Energy Group Plc

"PHE started 2024 with positive momentum, a new business strategy which played to the Company's strengths, and a stable strong knowledgeable executive team and board committed to growing the business.

We have a pipeline of potential opportunities that our CEO Paul Emmitt and CFO Ben Brier are progressing in line with our commercial validation process with a view to advancing them whilst minimising any costs incurred to Powerhouse. Our Engsolve team have also been very active and have contributed greatly to the Group, bringing new revenue streams into the Company whilst continuing to provide support to PHE to deliver its strategy; fully justifying the decision that we took last year to acquire the remaining interest in Engsolve.

The installation of the Feedstock Test Unit at the Powerhouse Technology Centre is a huge milestone for the Company and is progressing to schedule with the kiln and gas clean-up package already in place; and the ancillary sections being connected at time of writing. I look forward to the Centre being fully operational in Q4 and believe it will become a cornerstone in PHE's ability to further advance as well as promote its technology and know-how. The Centre will undoubtedly also help to support the Company's investments in capital projects in Northern Ireland and the Republic of Ireland where progress has been slower than anticipated, but which are now moving forward. We are also very pleased with the considerable interest being expressed in PHE's offering in south-east Asia and Australia. We were also delighted with the progress that has been made on patent applications / resolutions, further validating the engineering work that has been undertaken into getting the Company to this point as we drive towards commerciality.

The second half of the year promises to be an exciting one for PHE as we look forward to advancing the projects from our pipeline of opportunities. In addition to this, having a fully operational technology centre will undoubtedly help provide even greater impetus to our pipeline whilst further innovating the services that we can provide customers.

I would like to take this opportunity to thank all our stakeholders for their continued support and look forward to providing further updates in due course."

The figures as presented are not strictly comparable with the prior year period as the comparative figures are non-consolidated, with the Group only coming into effect in 2023 following the acquisition of the remaining interest in Engsolve.

The notes numbered 1 to 5 are an integral part of the half year financial information.

Statement of Consolidated Financial Position

The figures as presented are not strictly comparable with the prior year period as the comparative figures are non-consolidated, with the Group only coming into effect in 2023 following the acquisition of the remaining interest in Engsolve.

The notes numbered 1 to 5 are an integral part of the half year financial information.

Consolidated Statement of Cash Flows

The figures as presented are not strictly comparable with the prior year period as the comparative figures are non-consolidated, with the Group only coming to effect in 2023 following the acquisition of the remaining interest in Engsolve.

The notes numbered 1 to 5 are an integral part of the half year financial information.

Statement of Changes in Equity

The following describes the nature and purpose of each reserve within equity:

Deferred shares: Represents the combined total of all deferred shares (0.5p, 4p and 4.5p).

Share premium: Amount subscribed for share capital in excess of nominal value.

Merger relief reserve: Amount subscribed for share capital in excess of nominal value where merger relief applies.

The notes numbered 1 to 5 are an integral part of the half year financial information.

Notes (forming part of the half year Group financial information)

Summary of significant accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial information.

1.1. Basis of preparation

This half year consolidated financial information is for the six months ended 30 June 2024 and has been prepared in accordance with International Accounting Standard 34 "Interim Financial Statements". The accounting policies applied are consistent with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board (IASB) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS (except as otherwise stated). The accounting policies and methods of computation used in the half year financial information are consistent with those of the previous financial year and corresponding half year reporting period (save that, as mentioned above, prior year comparative figures are non-consolidated, with the Group only coming to effect in 2023 following the acquisition of the remaining interest in Engsolve) and with those expected to be applied for the year ending 31 December 2023.

The Group does not consider any new and amended standards that became applicable for the current reporting period to have any impact on the Groups results.

The unaudited results for period ended 30 June 2024 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the period ended 31 December 2023 for the Company are extracted from the audited financial statements which contained an unqualified audit report and did not contain statements under Sections 498 to 502 of the Companies Act 2006.

This half year financial statement will be, in accordance with the AIM Rules for Companies, available shortly on the Company's website.

1.2. Going concern

The Directors have considered all available information about future events when considering going concern. The Directors have prepared and reviewed cash flow forecasts for 12 months following the date of these Financial Statements. The projections show that the Group will have sufficient funding to be able to continue as a going concern on the basis of its cash balances as at 30 June 2024.

The half year financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

1.3. Functional and presentational currency

This half year financial information is presented in £ sterling which is the Group's functional currency.

1.4. Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.

1.5. Revenue

The Group provides engineering services for the application of the DMG technology, the intellectual property that the Group owns. Revenue from providing services is recognised in the accounting period in which services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided to the extent to which the customer receives the benefits. This is determined based on the actual labour hours spent relative to the total expected labour hours.

Where a contract includes multiple performance obligations as specified by the work scope, the transaction price will be allocated to each performance obligation based on the estimated expected cost-plus margin.

In the case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contact liability is recognised.

SHARE CAPITAL

The deferred shares have no voting rights and do not carry any entitlement to attend general meetings of the Company. They carry only a right to participate in any return of capital once an amount of £100 has been paid in respect of each ordinary share. The Company is authorised at any time to effect a transfer of the deferred shares without reference to the holders thereof and for no consideration.

Loss per share

SHARE BASED PAYMENTS

The expense recognised for share-based payments during the year is shown in the following table:

The were no liabilities recognised in relation to share based payment transactions.

EVENTS AFTER THE REPORTING PERIOD

On 7 August 2024 the Company announced it had appointed SP Angel Corporate Finance LLP to act as sole Broker to the Company.