Vertical Aerospace Ltd., a global aerospace and technology company that is pioneering zero emission aviation, announced its financial results for the first half of the year ended June 30, 2024.
Vertical Aerospace has also issued a shareholder letter in conjunction with the filing of its first half-year results, which is posted to its investor relations website at investor.vertical-aerospace.com.
Stuart Simpson, CEO at Vertical Aerospace, said:
“During the past few months we have delivered our most advanced full-scale VX4 prototype, have gone from first powered ground test to ‘wheels up’ in just one week and completed the first phase of our piloted test flight programme. Every day I continue to be deeply impressed by the phenomenal engineers we have and the progress we are making here in Bristol as we build a new generation of aviation. This could not be a more exciting time to follow Vertical as we accelerate through our piloted flight tests and work closely with the UK Civil Aviation Authority, our home regulator, on the path to certification.”
First Half-Year 2024 and Recent Operational Updates
- Flight tests of new VX4 prototype: Vertical unveiled its next full-scale VX4 prototype in July and began piloted flight tests days later, following the UK Civil Aviation Authority (CAA) issuing a Permit to Fly. This more advanced aircraft has 60 percent of its technology from tier-one aerospace partners, up from 10 percent on the previous prototype, marking a significant step towards the final certification aircraft. This is also the first use of Vertical’s proprietary batteries, designed and developed at the Vertical Energy Centre, in a piloted aircraft. Vertical Aerospace’s new proprietary propellers designed specifically for eVTOLs are optimized for low noise and made of carbon fiber composite using a single-shot cure process to maximize integrity.
The VX4 recently completed Phase 1 of the piloted test flight prograe. During Phase 1, the VX4 prototype conducted multiple piloted tethered flights and ground runs, across 20 piloted test sorties, completing a total of 70 individual test points, measuring 35,000 flight and system parameters. Vertical Aerospace is now preparing to progress to piloted untethered thrustborne testing, as soon as it receives permission from the CAA. The flight tests have already shown the aircraft’s incredible stability – particularly in ground effect, typically one of the most challenging flight conditions.
- Certification Progress: The CAA expanded the scope of Vertical Aerospace’s Design Organization Approval (DOA), which is a requirement for the Type Certification of the VX4 and its entry into service. At the same time, there has been strong regulatory collaboration, with the European Union Aviation Safety Agency (EASA) and the CAA agreeing how they will work together on the certification of the VX4.
- Go To Market: At the Farnborough International Airshow, the team met existing and prospective customers, investors, suppliers, regulators and government agencies, who were able to explore the new prototype using a unique Apple Vision Pro experience. Vertical Aerospace also brought its customers together in London for their Pioneers event in Q2 to bring them up to speed on the latest developments and hear their feedback.
In August, the UK Ministry of Defence (MOD) accepted Vertical Aerospace’s application to join their Uncrewed Air Systems Heavy Lift Challenge framework. The aim of this £95m framework is to define capabilities and test solutions for the Royal Navy for non-weaponised cargo drone operations, with a special focus on ship-to-shore and ship-to-ship missions.
Acceptance onto this framework means Vertical Aerospace can participate in tenders issued by the Royal Navy, facilitating Vertical’s access to R&D funding, development support and in particular, the collaboration across the Uncrewed Air System community that membership of Defence Equipment & Support’s Heavy Lift Capability Framework provides.
- People: Vertical Aerospace continues to attract world-class aerospace professionals, including, Martyn Ashford,
Head of Aircraft Programmes Development from Leonardo. It also appointed Ben Story to the Board of Directors as an independent non-executive director and Charlotte Cowley as Director of Strategic
Finance responsible for executing Vertical Aerospace’s fundraising strategy. In May 2024, Stuart Simpson, formerly Vertical Aerospace’s CFO and a seasoned FTSE100 executive, was appointed as CEO to lead the company through the pivotal phase of certifying and commercializing its VX4 aircraft. Stephen Fitzpatrick, founder, majority shareholder and former CEO of Vertical Aerospace, remains on Vertical Aerospace’s board of directors as a non-executive director, focusing on business strategy and the delivery of the company’s vision.
In September 2024, Vincent Casey was appointed to rejoin the Vertical Aerospace board as a non-executive director, having previously served as a member of the board of directors from May 2021 to August 2023 and as Vertical Aerospace’s chief financial officer from November 2020 to February 2023. Casey is currently the chief financial officer at Ovo Energy, a leading energy supply group that includes one of Europe’s largest independent energy retailers, a company he joined in 2013.
First Half-Year 2024 and Recent Financial Updates
- Vertical Aerospace maintained its capital efficiency with an H1 2024 operating loss of £20 million ($25 million). The operating loss for the period primarily reflects the spend to successfully complete Vertical Aerospace’s second full-scale prototype aircraft.
- In May 2024, Vertical Aerospace mutually agreed to exit Rolls-Royce’s contract to design an Electric Propulsion Unit (EPU). Under the agreement, Vertical Aerospace received $34 million from Rolls-Royce which is expected to cover the anticipated costs of an alternative EPU design contract and provided an extension to the cash runway. This followed Rolls-Royce’s announcement in November 2023 of its intention to seek a partner or buyer for its advanced air mobility activities. Vertical is already working with other EPU suppliers and does not anticipate this having any impact on the completion of their prototypes.
- Over the half, Vertical Aerospace was awarded an £8 million ($10 million) UK Government grant from the Aerospace Technology Institute (ATI) for its next-generation propeller development. Vertical Aerospace also received a cash amount of $25 million from Imagination Aero Investments Ltd., a company owned by founder, Stephen Fitzpatrick, in connection with an investment agreement dated February 22, 2024 (the “Investment Agreement”). Vertical Aerospace is in discussion with regards to the second $25 million tranche of the investment committed under the Investment Agreement.
Financial Outlook
- As of June 30, 2024, Vertical had cash and cash equivalents of £67m / $84m.
- The 2024 capital plan continues to remain on track, with net cash outflows from operations in the second half of the year expected to be between £40m to £45m.
- Net cash outflows incurred in the second half of the year will be in relation to the advancement of Vertical Aerospace’s piloted flight test programme.
- As of the date of this report, Vertical Aerospace had approximately £48m / $63m of cash and cash equivalents on hand.
- As previously announced, Vertical Aerospace will need to raise capital to fund its future operations and remain as a going concern. Vertical intends to do so and are in discussions regarding potential third party
investment. The timely receipt of an amount equal or equivalent to the second tranche committed under the Investment Agreement is required to extend its projected cash runway into the third quarter of 2025 (from the second quarter of 2025).
- On September 16, 2024, following the requisite shareholder approvals at Vertical’s Annual General Meeting earlier on the same day, Vertical Aerospace’s Board of Directors authorized the implementation of a reverse share split at a ratio of 1 for 10, with an effective date of September 20, 2024.
The above forward-looking statements reflect our expectations for the six months ending June 30, 2024, as of September 17, 2024, and are subject to substantial uncertainty. Results are based on assumptions the company believes to be reasonable as of this date, but may be materially affected by many factors.
This press release was prepared and distributed by Vertical Aerospace.
