Key Placing Highlights
• Raised £4.67m in a placing
• Placing 5,842,295 new ordinary shares of at 80p per share
• Expected market capitalisation on admission of £25.06m
• Proceeds to be used for, primarily, to invest in internal infrastructure and manufacturing automation and working capital requirements

Felix Heidelberg, PPS’ Chief Executive Officer, said, “We have a cost effective modular solution ready to go into volume manufacture with applications where back to base refuelling occurs.

“The requirement to improve air quality and the increasing worldwide acceptance of the need to defend against climate change in an economic way are major drivers for our customers.

“PPS is well placed to contribute to these goals and we see AIM as an ideal market in which to allow investors to also play their part.”

Proton Motor has developed and produced a standard fuel cell module, fuelled by hydrogen integrated with an energy storage system to create a hybrid electric fuel cell system capable of providing power during peak demand situations. The market focus is on industrial applications where ‘back-to-base’ refuelling occurs, on site, at the end of each shift or work period.

The Group has identified opportunities to replace lead-acid batteries with their PEM fuel cell systems and has identified niche markets in the materials handling and mass-transportation sectors where hybrid electric fuel cell systems offer considerable advantages over conventional engine technology and fuel cell only drive systems.

The Group has identified two initial market segments in which the Directors believe the advantages of hybrid electric fuel cell systems will lead to economic benefits for the end user – forklift trucks and buses.

Finally a confidential supply arrangement with a major, global manufacturer of material handling trucks is currently under negotiation at board level.

Markets

Proton Motor has identified two initial market segments in which the Directors believe the advantages of hybrid electric fuel cell systems will lead to economic benefits for the end user - forklift trucks and buses.<

Forklift trucks
In 2003, batteries for use in battery powered forklift trucks generated more than US$1.5 billion in worldwide sales. In 2004, the global market for sales of material handling vehicles was in excess of approximately 700,000 units and it is anticipated that battery powered forklifts’ share of the material handling market will steadily increase. The Directors believe that fuel cell conversion could be applicable to approximately 20 per cent. of this market. The Directors believe that this battery powered segment offers an immediately addressable market for hybrid electric fuel cell systems.

Buses
Global bus production has reached approximately 240,000 units per annum. The Directors believe that one of the first markets where a hybrid electric fuel cell system could achieve significant penetration is the local bus sector - those buses operating in built up areas and moving relatively short distances from base. The Directors have estimated that approximately 25 per cent. of this market could be addressed by a fuel cell solution with an average cost per application of approximately €25,000 and a total market value of approximately €1.5 billion per annum. 

Prospects

Proton's principal objective, upon completion of Admission, is to establish a volume manufacturing facility based upon solid sales orders. This should enable  the Group to achieve an economically viable unit cost for its hybrid fuel cell  systems. The funds available from the Placing should also enable the Group to  continue to develop both new and existing relationships, and enhance its ability  to take advantage of new opportunities as they arise. Initially, the Group will  invest in increased operational and sales infrastructure appropriate to its  ongoing growth. The Directors believe that the advanced stage of  commercialisation of the Group's technology, coupled with the Group's existing  partnerships, should allow the business to firmly establish itself as a leading,  global, fuel cell system provider.