It is my pleasure to deliver this address to you as Chairman of your Company.
Since our successful listing on the ASX on 14 December 2010, I am pleased to advise that the Company has progressed all of the key initiatives that were set out in the IPO Prospectus.
These include managing a company-wide upgrade of organisational capability, completing the Brisbane factory expansion and winning our largest ever sales contract. Of particular significance is the signing of a manufacturing agreement with Jabil Circuit, a highly experienced global contract manufacturer, for our zinc-bromine battery module (ZBM) production.
The manufacturing agreement with Jabil achieves a key milestone for RedFlow, as it secures the path for large scale ZBM supply. The first Jabil manufactured ZBM component, the core conductive plastic electrode, was supplied to Redflow in October, with regular ongoing monthly shipments scheduled.
This is a significant first step under the agreement, which we expect will transition to commercial scale production of the complete ZBM in mid 2012. This schedule is nine months ahead of the program outlined in our November 2010 Prospectus.
RedFlow’s products have seen improvements in performance and quality during the period. We anticipate this will continue and improve even further as a consequence of the outsourced manufacturing process and with future generations of products. The CEO’s address will provide more detail on these and other achievements during the period.
We believe the Company maintains a strategic competitive advantage with its ‘flow’ battery technology. With continued focus on costs and margins, we anticipate delivering increasing value from our products and markets in the 2012 calendar year.
The demand for electricity storage remains strong, not just in Australia, but globally, due to increasing peak electricity load requirements, rising electricity costs and the ever increasing uptake of new technologies that use electricity. RedFlow’s focus now is to convert that demand into commercial sales.
The financial results in our first financial year as a listed company were in line with expectations recording a loss of $7.3 million with statutory revenue of $2.25 million.
The earlier than expected move to outsourced manufacturing has brought forward the timeline to progress our commercial plans. To fund this, RedFlow raised $12 million with a share placement in August 2011, and $842,000 from a Share Purchase Plan in September.
These funds provide RedFlow with a stronger balance sheet and further enable us to progress our commercial goals in 2012. The Company’s cash balance as at the end of September 2011 was $15.9 million with no corporate debt.
Looking forward, the Board and senior management are focused on a number of major areas for the next period. Primary among these are managing the manufacturing scale up and ensuring coordinated growth with the sales and marketing plans. This commercialisation effort is being planned and managed via a sales and marketing strategy in a staged and deliberate manner both domestically and overseas.
Your Board is aware that coming to profit needs a balanced and focused approach to manage the risks associated with commercial expansion and to successfully enter new markets. To ensure that the Board has the necessary blend of skills to manage this stage of the Company’s development, we are recruiting and expect to appoint a new non-executive director shortly.
I would like to acknowledge the strong support from our shareholders and customers in 2011. On behalf of the Board, I thank our CEO Phillip Hutchings, his senior management team and all of our employees for successfully meeting the challenges of the past twelve months.
Peter Pursey AM
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