Australian zinc-bromine flow battery maker Redflow has resumed trading on the ASX – and released its highest annual sales revenue since 2012 – following a short, self-imposed hiatus to take stock after a less successful than hoped capital-raising round.
The Brisbane-based company said on Tuesday that its recent Entitlement Offer had raised a total of $A4.899 million before closing on Friday – less than the $6.25 million target – and that it had requested a trading halt from ASX to consider its plans.
A new statement on Friday morning said the company’s directors had agreed that the flow battery maker had sufficient funds to continue to “meaningfully pursue” its strategy, with a primary focus on the accelerated development of the new Gen3 battery.
“Having considered Redflow’s growth plans, the Directors have determined that the applications received from shareholders under the Entitlement Offer, combined with $3.4 million cash… and an expected R&D tax rebate for FY2020 will provide sufficient funding to meaningfully pursue Redflow’s strategy,” the statement read.
Redflow said that, with these resources, the company planned to narrow its focus to key markets – including Africa, Australia, and New Zealand – and to key applications that its zinc-bromine flow batteries had gained traction in, such as off-grid telecoms.
The Friday morning notice was bolstered by a separate June 2020 Quarterly activities report, revealing the company had notched up its highest total annual sales revenue since FY2012.
The report shows FY2020 sales were up 143%, to $A1.95 million, (FY2019: $800k) – a reflection, Redflow says, of the conversion of existing orders and new sales.
The report also noted the company had received an additional order from Rural Connectivity Group (RCG) in New Zealand, formed a partnership with Darwin-based Delta Electrics, and deployed an energy storage system at Swansea University in the UK.
But the company’s great hope is in accelerating its Gen3 battery development – the third iteration of its Australian made zinc-bromine flow, or ZBM, battery technology.
This was detailed in Redflow’s previous quarterly results update, in March, when it was announced that the ZBM3 batteries were expected to deliver at least 30% in production cost reductions compared to the current model.
“Gen 3 is all about putting Redflow on the pathway towards a sustainable, vibrant volume manufacturing business,” he said in a video presentation at the time,” Redflow CEO Tim Harris said at the time.
“We do expect this engineering work to deliver at least 30% cost reductions versus our current model at reasonable volumes.”
In a statement in the Quarterly report, Harris said that the company’s directors were pleased with its progress in the final quarter of FY2020, achieved despite the multiple challenges from COVID-19.
“Our recent capital raise, combined with our current cash balance, allows us to meaningfully progress our strategy with a primary focus on the accelerated development of the new Gen3 battery. We remain on track to commence customer trials by the end of the year.
“We have continued to implement cost-saving measures to ensure we are positioned to benefit once government-imposed COVID restrictions are lifted and the demand for deployments increases.
“We will continue to progress strategic investment discussions and explore potential options to licence our battery technology where credible opportunities exist,” Harris said.