Airlander ditch prototype and move to production for launch sometime in the 2020's

We have followed the Crowdcube backed Airlander for a while now. After the disaster which wrecked the prototype airship last year, the company received £32m in insurance. Now that prototype has been permanently grounded and the company aims to have a commercial version up in the skies in the 2020's.

We have written about them before here 

This was always going to be a long shot. As it turns out the £32m from the insurance claim may well be a blessing. The prototype had done its job, according to the management and rather than just bury it, they can now show £32m in cash for it. 

With luck like that, it seems that this thing may fly? There is a news report by the BBC here

In the original Crowdcube raise, the company expected to have revenues of £160m this year, resulting in profits of £30m. But as they say, who believes projections. All companies need a moment of luck, a turning point and the apparent disaster last year may just be it. 

Airlander gets a boost from £21m insurance payout

The Airlander project, backed by over £2m via Crowdcube investors, has had a windfall of £21m from the airship's recent escape from its Bedforshire home.

As the company admits, the machine was badly damaged when it slipped its moorings. However silver linings come in in all shapes and sizes and the company is now reporting a net profit of over £2m due to the excess cash from the £21m  insurance settlement.

Which is fortunate as the company recorded losses of over £2m without this exceptional item. On the back of all this, new investment to the tune of £5.4m has been raised and new debt for £2m is now on the books. 

Might be a while still before shareholders get to see any fruit. But the lucky calamity on the 18 November 2017, is just the sort of thing this type of project needs to see it over the line.   

Airlander decides to move - WHY?

Accounts just filed show £2.8m loss with a poor CA position for the next 12 months or until they can sell something. As expected the Crowdcube Nov 16 projections were a joke showing a NP of over £500k.  

Airlander, makers of the world's largest air vehicle, are leaving their home in Bedforshire. They currently have no new location to go to. Their plans are already way behind schedule. The money has run out again and their accounts are late. So what's really going on?

Airlander has taken £3.2m off 2300 Crowdcube investors to date. It has continually promised things that have failed to appear. Now, as test flights appear to be doing well over the summer, the company has announced it is uprooting it's home and moving everything somewhere else. 

Does that make any sense?

This how the Bedfordshire site was described by the compnay in the CC pitch -

The Company took delivery of the prototype Airlander 10 in late December 2013 and at the same time secured a lease on one of the two historic and purpose-built Cardington airship hangers near Bedford, England. This purpose-built facility has been the home of the UK’s airship industry for around 100 years and is currently undergoing a major refurbishment. The Company considers itself to be well placed to grow its business at this site and drive hi-tech job creation in the region through the reassembly and return to flight of Airlander 10 under EASA approval, when secured. The Company has active support from the Bedfordshire community and local government. 

Sounds like a place to stay to us.

The protoype isnt something you can put in your van and relocate. In fact the requirements for relocation must be quite specific to allow this big white sofa to float off and come back again without interfering with anything around it. This they have had in Bedfordshire for the past 4 years. They were also close to London. And what is this going to cost? Again the relocation and its costs were never flagged up last year. In the 2016 pitch it showed £30m being raised in 2017. Well records at CH show only a fraction of this to date. 

In a piece by the BBC a few days ago, here, the CEO said - 

Hybrid Air Vehicles (HAV) said it was the "right" and "pragmatic" decision.

"The success of Airlander means that we have had to review our needs for the future," said executive director Tom Grundy.

"Establishing new buildings at a new site will allow us to be sure that we have the facilities we need for the future, while allowing the film industry to take up the space it requires in Cardington."

So the prime reasons for moving are the need for more space and the need to help film industry? It wont come as any surprise that both rounds of Crowdcube investment, produced financials that are now complete tripe. Projected sales of £18m in 2017 and £130m in 2018, with a £25m NP, have now been replaced with a commercial launch in 2019. How is that success? 

One more point - in the last round in 2016, the company stated that it would not be using the investment to payback an o/s loan to one of the directors. On the 24 August 2017, this loan was satisfied in full according to CH. The money certainly did not come from any sales which remain firmly rooted at zero.

More announcements on this soon and possibly some accounts, may help to shed some light. Let's hope it's not all hot air.

Hybrid Air make it up as they go along - and Crowdcube investors pay the price.

Following our recent revelations about the Hybrid Air share value crash, we have further evidence that the company has been grossly abusing its trusting Crowdcube investors.

As if it wasnt bad enough to see the value of your holding in this company more than halved in a couple of months, the fact that the company tried to sell existing shareholders shares at the £1.40 level in late 2016, illustrates their sympathies with the Crowd.

We may never know when Hybrid discovered that £1.40 per share was considered laughable by larger investors - £1.40 being the price over 1400 Crowdcube punters forked out earlier in 2016. Earlier more Crowdcube investors forked out £1 per share in the first round.

But  correspondence we have seen from the company to existing (mainly CC) shareholders attempting to elicit more support following the crash landing of the balloon's second flight, needs to be read to be believed.

On the one had it implores further support at the £1.40 level whilst never mentioning what must have been apparent by late September 2016, that £1.40 was not going to induce larger investors to come on board.

At Companies House the Crowdcube deal is listed but shortly afterwards another deal is done at a share price of £1.19 for a small consideration of just over £30k. Why the difference?

If you need further evidence of this just look at where the final share price for this round ended up (for 'international 'investors) by December 2016 - £0.575 - well below half what they were asking just a few months earlier.

There has been much talk of the balance (or lack of it) between ordinary punters presented with Crowdcube style plans and projections and the often (but not always) more savvy Corporate, VC and Angel investors.

Whilst you cant blame Crowdcube directly for this instance of blatant abuse, as they were not involved in this final funding, it still begs the question.

The company need to raise another £30m this year according to plans. No clues yet as to the likely new share price! Answers on a postcard.

New Year brings Crowdcube investors in Airlander to the ground with a heavy bump - no parachutes issued.

Airlander - the new/old Zeppelin idea  - has had to reduce its share 'value' by 60% to gain more, much needed funding. Leaving Crowdcube investors with large potential losses.

Airlander has always talked a great game - big numbers, massive enthusiasm and glittering future prospects. Who knows the latter might yet materialise. But progress has not been good from an investors' standpoint.

In their first raise in 2015, Airlander shares were valued at £1, then again shortly afterwards they raised more on CC, at a share price of £1.42; valuing the company at over £55m. Below is the confirmation of these figures in a reply to a Q on the CC forum in the second raise. 

When we started the Crowdcube raise in March last year the company was valued at £34.4 million (with a share price of £1 per share). Today we are valued at £55.0 million (with a share price of £1.42 per share). The change in valuation is explained by a reduction in risk in the business, with the build of the aircraft now complete, and due to additional resources secured by the company. Since we commenced the last raise we have secured £3.9 million in equity, £5.3 million in grants and £4.5 million in convertible loans. All these funds add value to the company.

We are currently raising a total of £4 million of equity (of which the crowdfunding forms a part - hence why we are able to overfund by a small amount) which funds the Flight Test Programme. From that point onwards, the business plan forecasts we should break-even by getting customers to pay for the results of trials and demonstrations. At some point in the near future, we need to raise £30 million for productionisation of the Airlander, which is likely to come from an IPO or potentially through deals with other companies. So this raise will be undertaken with the benefit of secured orders in place. The level of dilution created by that raise is clearly dependent on the share prices achieved and that is extremely hard to forecast as it will depend on many factors. That said, our model suggest that the dilution percentage would be in the mid to low teens, but it could be higher of lower.

We hope that gives you a full picture of the future raises currently forecast. With anything forward-looking we cannot guarantee what will happen, but this is our plan and our best estimate as to what will happen.

The Airlander Team 

You can take all of that with a mouthwash of salt  - especially the bit about the dilution being in the low teens. All apart from the bit about we haven't a clue what will happen.

Just before Christmas 16, investors were sent a Christmas card with a lovely present  - news that this round of crowdfunding had just completed the remainder of the £4m (the 4 mentioned above) but at a share value of £0.575 per share. Crowdcube investors remember, all 1462 of them, had paid £1.42. The excuse for the discrepancy appears to be that some 'international' investors will bring extra benefit to the company - thereby making the lower valuation justified. What is it Luke Lang always says about Crowdcube giving the little a guy a fair chance! This value is not just a down round it represents value almost half of the previous, previous round.

Dear Fellow Shareholders

I am very pleased to report that we have successfully secured the first £4 million of investment in the current equity fundraising round.  In doing this we have added a number of significant international investors and we think their quality, when added to that of our existing shareholder base, will be very important to the success of the company as we go forward.

In order to secure this level of funding we have had to reduce the per share price for this round to £0.575. These funds will allow us to return Airlander to flight and to progress our discussions with customers towards securing revenue. Successes in these areas are what will drive huge value appreciation back into the company and so the Board was happy to accept this price and put the company on a good footing to start 2017.

As has always been the case, we are very keen to ensure that all shareholders have an equal opportunity to invest in new share issues.  This new price means that any investment will get more of the company for the same amount that we were offering you initially this round.  This also means that there will be more dilution to existing shareholdings than would have been the case had we achieved a higher price.  So if you didn’t participate in this fundraising or if you would like to increase your investment please reply to this email and indicate how much you would like to invest.  The amount available is limited so new applications will be accepted on a first come first served basis.

Similarly if you have any questions (for example, as to how much you would need to invest to maintain your percentage ownership of the company) then please just ask and we will come back to you.

I have pleasure in attaching our HAV Christmas Card and in wishing you all the very best for the festive season.

Regards

Steve

Stephen McGlennan FRAeS
Chief Executive

The picture at the top of this post is of the Airlander's second attempted landing - no one was hurt. It hasnt flown since. 

We dont suppose that Crowdcube even know about this double down round and if they do that they will as ever brush its embarrassing fall in share value under their increasingly lumpy office carpet. 

Of course you also have to know that Crowdcube are a sponsor of Airlander; so all the information you get from the platform on this company is highly subjective. Can it be right that an FCA platform is pushing millions of pounds into a company that it is directly linked to? That sounds like Trumponics to us. 

What's important here is to maintain some perspective. Airlander might just be a the next big thing - no one knows now. If it is, this massive fall in value will be inconsequential. However the cock up or greed on behalf the management is self evident right now - producing fictional values to rob ordinary unsophisticated investors of value. The more sosphisticated 'international' investors could not be fooled. This message is not lost on those feeling slightly bruised by the rough landing.

One thing we can guarantee is that Crowdcube, in their shortly to be PRinged Reveiw of the Successes of 2016 will make no mention of this down round and the loss of around £1.4m in 'value' on the £3.4m invested by over 2000 of the platform's investors. More for the overworked carpet cleaner intern to dispose of.

3,2,1 and we're back in the room. Nothing's changed.

We had hoped a break would bring some change but alas same old same old. GamesGrabr latest Crowdcube pitch is a great illustration of why Crowdcube will never work.

Looking at the new Grabr pitch on Crowdcube, the platform has very kindly given us a comparison against the last raise. It makes for interesting reading and explains why the pitch has failed so far to get any backing.

Forced to try this new honesty, Crowdcube is trying to fit a square peg into a round hole. Its seems pretty obvious that projections showing 12 months revenue of over £400k which turn out to be around only £65k in reality, will not encourage enthusiasm in the management or their new, massively diluted plans. Halfway through their pitch and 15 investors have manged to hand over a meagre £1,420; despite the pitch highlighting a GOLD BADGE from Crowdrating ((: and using indirect quotes about the industry as if they are about their business.

Idleman - funded via both Crowdcube and Syndicate Room, posted healthy losses of £1.8m against projected losses of £1.3m.

Angel Alerts, by its own 2013 Crowdcube predictions now looking for an IPO or trade sale, posted a £7k profit on very small trading. Still at least they actually made some money which is very rare here.

Oh and while we were away the good news that Hybrid Air's Airlander had at last flown, turned into bad news as the airship crash landed. OOOPS.

September has some very large and juicy accounts to be filed  - so dont go far. We may even find some good news!!!   

Crowdcube funded Airlander fails to take off.

We recently posted good news about the Airlander - it had manged to leave its hanger. Now the bad news. It didnt manage to fly. 

According to Crowdfund Insider here technical problems - maybe it cant fly?  - were responsible for the failure. Well the problems were unlikely to be pastoral.

Now the weather is too severe. Eh? It's calm and sunny outside my window. What conditions does this bird need? 

One to watch.

NEWS - today - 17 August - the Airlander did take off - here - as we said one to watch. 

We are sorry to announce the further delay of Airlander flight No. 1 - or any other flight for that matter

Airlander accounts are due at the end of this month. Their second Crowdcube raise projected turnover for 2016 of over £4.5 million. 

In what is becoming commonplace for Crowdcube pitches, Airlander missed its original 2014/15 Crowdcube sales projections by £1,990,000 - which we believe is a world record. Projections of £2 million were greeted with reality of £10k. 

In its second raise this year, they projected sales for 2016 of over £4.5m - YE November 16. As the craft has only just made its first tentative appearance outside its hanger, not in the air we must add,  this looks optimistic.

You would have thought that having missed the first projections by so far, the second attempt might prove better, but our guess is, it will be far worse. What are they selling to the tune of £4 million?

It's also worth noting that as usual the historic accounts given and verified by Crowdcube were wrong to the tune of £250,000. How is that possible?

Is Airlander just a load of hot air?

Hybrid Air raised £2.1m on Crowdcube a year ago - now they are back for another £500k valuing themselves (if you cant stand heights look away now) at £55m.

Since the first raise, the company has delivered just over £9k of the promised £2m in sales revenue. Of course these were just silly projections so no one really cares about this chasm.

As yet this hybrid balloon/plane has not been made or flown or landed. There is no EIS.

It completed its new round on Crowdcube in just 2 days and is now over funding, in hovering mode - please look up, you cant miss it.

The Crowdcube pitch is full of the usual Crowdcube BS. Like for example the claim that Hybrid somehow beat off 136 companies to present at this February's Cleantech Innovate event in London. Is that really how it works?

When asked some very reasonable Q's on Crowdcube about the valuation, the answer was beyond belief. Apparently the way they valued this company is by taking the EBITDA 3 years out and multiplying this by the industry norm. So for example, given the delivery of £9k of sales against a projected £2m last year, we can all see how well this system works.

They also had the balls to tell another enquirer that if the sales had been in line with the projections, then so would the profits have been!

The plan is to IPO at the end of this year to raise the £30m required to put the machine into production.

It is hard to see why this one has been so quick to raise the money when Pact Coffee failed. Both very highly valued but at least Pact had a product that had proven sales. It has to come down to 'dreaming'. Hybrid's video is very other worldly and cleverly gets the blood rushing. People are using CC for an adrenalin rush.

It will be fascinating to see what happens next. If what they claim is true then maybe £55m is OK but given the last set of promises proved wholly flawed, this is a pure guessing game. When at several thousand feet above the ground, I prefer a little more certainty. It will either be a spectacular success or go down in flames - there can be no half measures.

Good luck to all who float in her.