Proton Power Systems

German fuel cell specialist Proton Power is poised to make a significant step on the road to industrialising its product.

In order to serve the growing demand it claims to be experiencing, the company will in the second half of this year begin mass manufacture of its fuel cells ‘stacks’ and application-specific systems. Production capacity will gradually be increased up to 5,000 units per year.

CEO Thomas Melczer says the company needs to make around €15m to break even, which means selling about 300 stacks per year. In the year to December the company increased revenues by 65% to £1.1m, while losses swelled from £2.4m to £2.8m.

With a number of different projects under its belt, the company hopes their success will encourage follow-up orders. These projects include a passenger ferry to operate on Hamburg's Alster river that was one of the first times the technology has been applied in passenger vessels; a triple-hybrid electric bus in partnership with Skoda; a street-sweeping vehicle made with one of the world’s leading suppliers of municipal vehicles; and a prototype automatic power back-up unit.

The company raised £4m before expenses via two share placings at 10p during the year and Melczer says ‘we’re not running out of cash and we’re not burning so much money – we burned over the year the same as some companies do in a month’. Some £772,000 remained in the bank at the year end but in April, non-executive director and 54% shareholder Dr Faiz Nahab set up a £1.5m convertible loan for Proton through his Roundstone vehicle.

The lowly shares, floated at 80p in 2006, remain for risk-takers only.