Management achieved its goal of delivering a cumulative total of 100MWh of operational projects by the end of 2018, thus doubling the installed base and revenues in the space of a year. Near-term growth is underpinned by e-transport programmes, with CHF42m of the CHF60m order book for this sector. We reinstate our estimates and indicative valuation, which is CHF2.16/share.
Group FY18 revenues (including other income) more than doubled to CHF48.7m. Access to finance enabled the company to execute the pipeline of contracts already received, delivering over 50MWh of capacity, primarily for utility-scale projects. Stripping out exceptional costs and share-based payments, EBITDA losses widened by CHF5.8m to CHF36.9m as Leclanché added more than 90 staff during FY18, primarily to support future growth in its e-transport business. Management continued with its financing programme, which resulted in debt reaching CHF42.9m at the end of FY18, all of which is now owned by majority holder FEFAM. Since the period end FEFAM has agreed to convert the CHF36.0m convertible element to equity and extend the remaining loans to end FY20. Golden Partner is to provide a CHF35.0m non-convertible working capital facility. Management still needs to raise an additional CHF40.0m by end June to fund capacity expansion.
The order book at the start of FY19 was more than CHF60m, CHF42m of which relates to land and marine based e-transport projects for delivery in FY19 and 2020. This partly underpins our forecasts, although achieving the revenue growth shown in our model will require the company to successfully complete trial projects with Skoda and Sun Mobility and proceed to volume deliveries and secure further firm contracts for large-scale stationary projects.
Our valuation is based on a DCF calculation, taking the growth rate adopted in our estimates and applying a terminal growth rate of 3% and WACC of 10.0%, as set out in our June note, since both the technology and Leclanché’s ability to execute on large projects are proven. This gives an indicative valuation of CHF2.16/share (previously CHF2.33/share).