First Half-Year 2022 and Recent Operational Highlights
Completed the build of the full-scale VX4 Prototype. The VX4 Prototype, as part of its intensive flight test programme, has conducted a series of ground tests and is expected to begin flying over the summer.Enhanced Vertical’s collaborative industrial partnership ecosystem by entering into a strategic partnership with Molicel, a leading manufacturer of lithium-Ion cells, for the supply of high-power, low-impedance, cylindrical battery cells for the VX4 battery pack.Strengthened Vertical’s leadership team by welcoming Mike Flewitt, former Chief Executive Officer of McLaren Automotive Ltd and VP Manufacturing of Ford Europe, to the Board of Directors as an independent non-executive director.Secured 50 new pre-orders for the VX4 from business aviation operator FLYINGGROUP; announced a new partnership with Babcock for emergency medical services and logistics application of the VX4, and received a commitment from American Airlines to make a pre-delivery payment to secure delivery slots for the first 50 VX4s of their conditional pre-order of up to 250 aircraft, with an option to purchase an additional 100 aircraft.Secured concurrent validation of the VX4 between European Union Aviation Safety Agency (“EASA”) and the UK’s Civil Aviation Authority ("CAA") on the same SC-VTOL certification basis.
First Half-Year 2022 and Recent Financial Highlights
During the first half of 2022 Vertical invested in the build of the VX4 Prototype, the development of its test and certification activities and in the people, systems and processes to support the company.Vertical reported a net operating loss of £39m for the six months ended June 30, 2022, compared to a net loss of £22m for the six months ended June 30, 2021.As of June 30, 2022, Vertical had cash and cash equivalents of £158m. Vertical expects that its existing cash and cash equivalents will enable Vertical to fund its operating expenses and capital expenditure requirements for at least the next 12 months.In August 2022, to support ongoing capital requirements, Vertical established an equity subscription line with Nomura, which will allow Vertical to issue up to $100 million in new ordinary shares. This facility is intended to provide flexibility around the timing of issuing new stock to minimise dilution.
Unaudited Condensed Consolidated Interim Statement of Comprehensive Income
H1’2022 £ 000 | H1’2021 £ 000 | |
Revenue | - | 66 |
Cost of sales | - | (25) |
Gross profit | - | 41 |
Research and development expenses | (19,396) | (7,747) |
Administrative expenses | (23,466) | (23,890) |
Related party administrative expenses | - | (127) |
Other operating income | 3,407 | 9,686 |
Operating loss | (39,455) | (22,037) |
Finance income | 42,497 | - |
Finance costs | (20,063) | (37) |
Related party finance costs | - | (483) |
Net finance income/(costs) | 22,434 | (520) |
Loss before tax | (17,021) | (22,557) |
Income tax expense | - | - |
Net loss for the period | (17,021) | (22,557) |
Foreign exchange translation differences | 9,482 | - |
Total comprehensive loss for the period | (7,539) | (22,557) |
Unaudited Condensed Consolidated Interim Statement of Cashflows
| H1’2022 £ 000 | H1’2021 £ 000 |
Cash flows from operating activities |
|
|
Net loss for the period | (17,021) | (22,557) |
Adjustments to cash flows from non-cash items: |
|
|
Depreciation and amortization | 832 | 330 |
Depreciation on right of use assets | 189 | 70 |
Finance (income)/costs | (22,434) | 37 |
Related party finance costs | - | 483 |
Share based payment transactions | 7,294 | 16,815 |
Net exchange differences | 4,694 | - |
Income tax expense | - | (4) |
| (26,446) | (4,826) |
Working capital adjustments: |
|
|
(Increase) in trade and other receivables | (1,499) | (7,654) |
(Decrease)/increase in trade and other payables | (30,442) | 2,160 |
Net cash flows used in operating activities | (58,387) | (10,320) |
Cash flows from investing activities |
|
|
Acquisitions of property plant and equipment | (167) | (147) |
Acquisition of intangible assets | (393) | (349) |
Net cash flows used in investing activities | (560) | (496) |
Cash flows from financing activities |
|
|
Proceeds from convertible loan notes | - | 25,000 |
Proceeds from related party borrowings | - | 2,208 |
Payments to lease creditors | (235) | (87) |
Net cash flows (used)/generated from financing activities | (235) | 27,121 |
Net (decrease)/increase in cash at bank | (59,182) | 16,305 |
Cash at bank as at January 1 | 212,660 | 839 |
Effect of foreign exchange rate changes | 4,074 | - |
Cash at bank as at June 30 | 157,552 | 17,144 |
Unaudited Condensed Consolidated Interim Statement of Financial Position
| 30 June 2022 £ 000 | 31 December 2021 £ 000 |
| Assets | ||
Non-current assets |
|
|
Property, plant and equipment | 1,738 | 1,834 |
Right of use assets | 2,112 | 1,969 |
Intangible assets | 4,028 | 4,208 |
| 7,878 | 8,011 |
Current assets |
|
|
Trade and other receivables | 14,157 | 12,658 |
Cash at bank | 157,552 | 212,660 |
| 171,709 | 225,318 |
Total assets | 179,587 | 233,329 |
Equity |
|
|
Share capital | 16 | 16 |
Other reserve | 80,271 | 63,314 |
Share premium | 249,103 | 248,354 |
Accumulated deficit | (267,064) | (250,123) |
Total equity | 62,326 | 61,561 |
Non-current liabilities |
|
|
Lease liabilities | 1,683 | 1,580 |
Provisions | 98 | 95 |
Derivative financial liabilities | 92,450 | 112,799 |
Trade and other payables | 6,632 | 5,975 |
| 100,863 | 120,449 |
Current liabilities |
|
|
Lease liabilities | 426 | 362 |
Warrant liabilities | 6,187 | 10,730 |
Trade and other payables | 9,785 | 40,227 |
| 16,398 | 51,319 |
Total liabilities | 117,261 | 171,768 |
Total equity and liabilities | 179,587 | 233,329 |