Oxford University spin-off and purger of hydrocarbons from aviation fuel Velocys posted audited full year financial results today. Doubling net assets, eliminating borrowing, boosting its sales pipeline by over £8 million as its running costs grew by £4.1 million, lit up its sky in 2021.
Sales agreements with major airlines Southwest in the US and with Europe’s IAG, owners of BA, Iberia, Aer Lingus and Vueling, for the firm’s fuel synthesised from end-of-life plastic, lifted performance to higher altitudes, as did a successful rights issue last December, which grossed £26.2 million.
Operating losses inched £200,000 ahead on 2020, reaching £9.0 million by last December, as the firm’s headcount increased.
Core of the 16-year old firm’s technology is its commercialisation of what chemical engineers – “plumbers”, in their parlance – know as the Fischer-Tropf process. Taking syngas feedstock and splitting it into various types of hydrocarbons is the heart of the technique.
The Oxford-domiciled firm’s particular mastery of Fischer-Tropf won it last year, in partnership with British Airways, a grant of up to £2.4 million from the government under its Green Fuels Green Skies grant scheme.
Japan’s government smiled too on Velocys last year. Collaborating with petrochemical engineers Toyo Corporation, Velocys was chosen for an e-fuels project commissioned in Tokyo.
Post year-end events included selling for £9.75 million to Foresight Group the Immingham site of Velocys’ Altalto project with BA. A three-year option to repurchase the site, plus a right of first refusal for Foresight to invest up to £100 million into the Altalto project, came as part of the deal confirmed in March.
Also two months ago, the firm took out a 15-year lease in Ohio, for a new technical centre housing Velocys’ needs in catalyst construction, assembling cores of microchannel reactors and technology licensing.
Happy CEO Henrik Wareborn confirmed the company is now firmly in the delivery and commercialisation phase of its growth plans.
“We have a growing pipeline of new customer opportunities spanning multiple continents, which have developed in response to client-specific net zero targets in countries that are ahead of the game on mandates and policy incentives,” Wareborn opined.
“Synthetic drop-in fuel is the here-and-now solution, which requires no modification to aircraft or airport infrastructure”.
“The synthetic fuel enabled by our technology will greatly benefit our customers, industry and society,” the Velocys boss told investors.
By late morning Velocys’s share price on AIM was unchanged, valuing it at £ 78.1 million.