Last close As at 05/08/2026
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Market capitalisation
GBP21m
Research: Industrials
Quadrise’s strategy of broadening and deepening the range of project opportunities through a network of partners in major global markets proved effective in FY20, despite the disruptions caused by COVID-19. It currently has two on-site projects in Morocco and the US scheduled for completion by the end of December. These are to demonstrate MSAR technology ahead of potential progression to commercial implementation. It is also in discussions about projects in Ecuador, Mexico and Saudi Arabia and with two major shipping companies.
Written by
Quadrise Fuels International |
Trials scheduled in Morocco and the US |
FY20 results |
Alternative energy |
5 October 2020 |
Share price performance
Business description
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Analyst
Quadrise Fuels International is a research client of Edison Investment Research Limited |
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Quadrise’s strategy of broadening and deepening the range of project opportunities through a network of partners in major global markets proved effective in FY20, despite the disruptions caused by COVID-19. It currently has two on-site projects in Morocco and the US scheduled for completion by the end of December. These are to demonstrate MSAR technology ahead of potential progression to commercial implementation. It is also in discussions about projects in Ecuador, Mexico and Saudi Arabia and with two major shipping companies.
Year end |
Revenue (£m) |
EBITDA |
PBT* |
EPS* |
DPS |
P/E |
06/17 |
0.1 |
(3.9) |
(4.1) |
(0.45) |
0.0 |
N/A |
06/18 |
0.0 |
(3.3) |
(3.5) |
(0.37) |
0.0 |
N/A |
06/19 |
0.0 |
(2.8) |
(3.0) |
(0.32) |
0.0 |
N/A |
06/20 |
0.0 |
(3.1) |
(3.4) |
(0.32) |
0.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
On-site trials in Morocco and the US
Quadrise has manufactured and shipped the equipment and fuel for a pilot trial in Morocco for an industrial application, and hopes to conduct the trial on site later this month as local COVID-19 lockdowns are lifted. The overall timetable will not have been extended significantly by this delay since management has brought forward the Phase 2 front-end engineering and design study. In August, Quadrise announced that it had entered into a commercial trial agreement with Greenfield Energy. Assuming that Greenfield can provide samples for confirmatory testing in time and it is possible for Quadrise to access the site, management expects the trial will take place in December. If this is successful, it could lead to the development of commercial MSAR plants processing up to 10,000 barrels of oil per day at sites owned or operated by Greenfield in Utah.
Cash runway to mid-calendar Q221
Quadrise is still pre-revenue. Stripping out share option and exceptional charges, operating losses widened by £0.2m y-o-y in FY20 to £3.2m, reflecting higher administrative expenses (largely associated with fund-raising) and a £140k commencement fee paid to Bergen. Free cash outflow increased by £0.5m to £3.0m. During the year, Quadrise raised £4.5m (gross) in total through the issue of convertible securities to Bergen, an open offer and a subscription, giving £2.4m cash at end June 2020. Management confirms this is sufficient to continue its business activities to mid-calendar Q221. A further tranche of up to £2.0m from Bergen may be available during FY21 if certain precedent conditions are met.
Valuation: Modest adoption transformational
Based on data from the company, the scenario analysis we presented in November 2019 calculated that even modest adoption of MSAR would generate material profits. A single refinery producing MSAR equivalent to 1.9Mtpa HFO under a licensing model would generate $15.6m in annual EBITDA.
Exhibit 1: Financial summary
£000s |
2017 |
2018 |
2019 |
2020 |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
126 |
9 |
22 |
0 |
EBITDA |
|
|
(3,858) |
(3,284) |
(2,780) |
(3,072) |
Operating Profit (before amort. and except.) |
|
|
(4,069) |
(3,514) |
(3,010) |
(3,244) |
Amortisation of acquired intangibles |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
(1,133) |
||
Share-based payments |
(242) |
(53) |
(154) |
(474) |
||
Reported operating profit |
(4,311) |
(3,567) |
(3,164) |
(4,851) |
||
Net Interest |
9 |
11 |
(3) |
(139) |
||
Profit Before Tax (norm) |
|
|
(4,060) |
(3,503) |
(3,013) |
(3,383) |
Profit Before Tax (reported) |
|
|
(4,302) |
(3,556) |
(3,167) |
(4,990) |
Reported tax |
213 |
294 |
184 |
147 |
||
Profit After Tax (norm) |
(3,847) |
(3,209) |
(2,829) |
(3,236) |
||
Profit After Tax (reported) |
(4,089) |
(3,262) |
(2,983) |
(4,843) |
||
Minority interests |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
(3,847) |
(3,209) |
(2,829) |
(3,236) |
||
Net income (reported) |
(4,089) |
(3,262) |
(2,983) |
(4,843) |
||
Average Number of Shares Outstanding (m) |
846.1 |
862.2 |
888.7 |
982.8 |
||
EPS - normalised (p) |
|
|
(0.45) |
(0.37) |
(0.32) |
(0.32) |
EPS - diluted normalised (c) |
|
|
(0.45) |
(0.37) |
(0.32) |
(0.33) |
EPS - basic reported (c) |
|
|
(0.48) |
(0.38) |
(0.34) |
(0.49) |
Dividend per share (p) |
0.00 |
0.00 |
0.00 |
0.00 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
3,980 |
3,885 |
3,654 |
3,506 |
Intangible Assets |
2,924 |
2,924 |
2,924 |
2,924 |
||
Tangible Assets |
1,056 |
961 |
730 |
582 |
||
Investments & other |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
5,561 |
2,600 |
1,396 |
2,766 |
Stocks |
61 |
61 |
61 |
61 |
||
Debtors |
302 |
188 |
169 |
213 |
||
Cash & cash equivalents |
5,045 |
2,229 |
1,060 |
2,380 |
||
Other |
153 |
122 |
106 |
112 |
||
Current Liabilities |
|
|
(247) |
(400) |
(288) |
(2,243) |
Creditors |
(247) |
(400) |
(288) |
(198) |
||
Tax and social security |
0 |
0 |
0 |
0 |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Convertible securities |
0 |
0 |
0 |
(2,045) |
||
Long Term Liabilities |
|
|
0 |
0 |
0 |
0 |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
9,294 |
6,085 |
4,762 |
4,029 |
Minority interests |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
9,294 |
6,085 |
4,762 |
4,029 |
CASH FLOW |
||||||
Op Cash Flow before WC and tax |
(3,858) |
(3,284) |
(2,780) |
(3,072) |
||
Working capital |
(428) |
298 |
(77) |
(140) |
||
Exceptional & other |
0 |
0 |
130 |
65 |
||
Tax |
213 |
294 |
184 |
147 |
||
Net operating cash flow |
|
|
(4,073) |
(2,692) |
(2,543) |
(3,000) |
Capex |
(111) |
(135) |
(24) |
(24) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Net interest |
9 |
11 |
(3) |
1 |
||
Equity financing |
4,952 |
0 |
1,401 |
2,343 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
777 |
(2,816) |
(1,169) |
(680) |
||
Opening net debt/(cash) |
|
|
(4,268) |
(5,045) |
(2,229) |
(1,060) |
FX |
0 |
0 |
0 |
0 |
||
Other non-cash movements |
0 |
0 |
0 |
2,000 |
||
Closing net debt/(cash) |
|
|
(5,045) |
(2,229) |
(1,060) |
(2,380)* |
Source: Company data. Note: *Excluding convertible securities.
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