Case Studies: Fuel cell technology - UK

Justin Randall at Jeffreys Henry, the City accountancy practice with a large concentration of small-cap PLC clients, contacted us in late 2006 to introduce us to the CEO at AFC Energy, as the company was planning an AIM flotation and needed an FD to join its board.

AFC Energy PLC is a low-cost fuel cell company, entering the market place by targeting waste hydrogen applications. AFC uses a unique, low-cost electrode, has various patents, and uses cost-engineered alkaline fuel cell technology on its clear route to commercialisation – taking the fuel cell to the hydrogen.

Simon Walters joined AFC’s board as the company moved towards its April 2007 flotation and led the financial aspects of the process, liaising with the lawyers, auditors, brokers and NOMADs on its Admission Document and preparing the Financial Reporting Procedures documentation required from companies prior to joining AIM.

AIM-quoted companies need strong financial controls and an accounts team capable of producing monthly accounts for directors in a speedy yet accurate format.
Working on a flexible basis to suit the fluctuating requirements of the job, Simon Walters ensured that the board received a monthly report including accounts and an accompanying commentary to keep them abreast of the financial position.

It is essential that all directors of ambitious fast-growing quoted companies have all necessary information at their fingertips. So Simon produced a full report ahead of each board meeting, highlighting areas beyond mere accounting – volume of share trades, movements in AFC’s share price, capex plans, cash forecasts, the free float, and lots more besides.

AFC had achieved significant funding at the time of flotation and needed to spend the money wisely and put in place a strong executive team to take the company through its development phase.
Simon ensured that capex was controlled and cost comparisons attained before incurring expenditure; that financial implications of staff recruitment were carefully considered; and that overheads were kept on a tight leash – all within the three-year projections prepared for the working capital adequacy report on flotation.

Statutory requirements for AIM companies are onerous: half-yearly reporting, regulatory announcements, liaison with broker and NOMAD, monitoring share dealings, website compliance – the list goes on. Simon had a wealth of experience of this and handled it to enable the executive directors and technical team to concentrate on their roles.

In spring 2008, during turbulent times when most companies were struggling to raise any finance at all, Simon and AFC’s chief executive Gerard Sauer led a fundraising during which they attended an exhausting schedule of meetings with City institutions, at the end of which a £4m placing was heavily oversubscribed..

With David Marson having proven himself a more than able replacement, Simon handed over the FD’s hot-seat in mid-2009 and keeps in touch with the board. AFC had benefited from the team-approach at FD Solutions – as Simon had used Paul Pascan on IFRS issues, David Dawson on financial modelling and another colleague on share-based payment calculations – and we remain involved assisting in these areas when required.