What can we make of Celtic Renewables' performance?

A bit like a jigsaw, this is where we try to pull together all the facts and reports into a cohesive understanding of the company.  Nevertheless, a number of questions remain unanswered.

Let's start with the relationship between the two companies

Celtic Renewables Limited is the main 'holding company' and Celtic Renewables Grangemouth Ltd (somehow once a plc) was set up as a subsidiary to report the trading of the first production site.

Period to end 2023 for which reports are available shows that CRG Ltd £3.9m of production costs, £2.35m of administrative costs, operating income of £.62m and debt interest of just over £1m, leaving a loss before taxation of £6.67m.  Net liabilities stood at -£24.8m.

Bearing in mind that no product was shipped until 2024.

Celtic Renewables incurred a loss of £4.4m (£5.4m for administrative costs) and net assets of £14.4m at the end of the period. 

Income projections

Caledon Plant

In its 25 April 2024  'We are crowdfunding' newsletter the Company stated that has a 3 year offtake agreement with Caldic worth £2-3m for 850 tonnes of product per year.  Elsewhere it says that Caldic is its exclusive customer and distributor, somewhere else that there are 40 customers testing the product (do we presume customers of Caldic?) but then elsewhere that the Offtake agreement is for 50% of the production. 

But let's just assume Caldic is set to buy £2-3m for 850 tonnes of product.  Offset against £3.9m of production costs, £2.35m of admin costs in 2023, and the small scale plant is not sustainable unless the costs are reduced.  Energy is supplied to the plant through local renewables.  What is the cost of the feed product?  Can this really be provided free of charge as there is competition from animal food producers to RipCell, another Scottish company in this sector.  Perhaps we are wrong, but it be nice to know what the costs are.

Proposed 2nd plant

The  original site proposed for the second plant was abandoned.  The landscape has changed as the original petrochemical plant at Grangemouth closes after 100 years, creating a new opportunity for a low carbon manufacturing hub as analysed in Project Willow Report.  It is not clear but it seems that this is now where CR propose to situate their second plant.

Furthermore, according to the company's newsletter that  launched the spring crowdfunding in 2024,  the company expects to have 4 more plants each capable of producing up to 8,000 tons of product per year between 2024 and 2029  (8-10x the capacity of our first  plant).   However, the new plants don't need to be 8 - 10 times larger than the original. The first two of the new plants will be “Build, Own, Operate” and the last two joint Venture business models.  With these in place they target to achieve revenues of over £120m by 2029.  

Further fundraising

As part of the enticement to crowdfund shareholders to invest again in 2024, the Company mentioned its expansion plans, and also that it was raising £6m of capital in the spring/summer 2024.  In addition, it was looking for Phase B funding to the tune of £25m, due to be concluded in September 2024 , to fund the  business for the next 2 years ie to September 2026, but NOT funding of any new refineries.

Since that announcement in spring 2024, we've not received an update on the success or otherwise of the Phase B fundraising.  Furthermore, the CFO that came into partly to manage this process only a year or so earlier departed the company in April.

So what are we to conclude?  How much does a plant cost?  What does the feed for the plant cost?   What assumptions can we make about the £129m turnover due to be recorded in 2029?   Can we expect a 50% gross margin (£65m?)   Admin costs £24m (£12m/year).    Interest on borrowing  - £5m?  Who knows?

But let's say that 'the business', in whatever shape or form it may be, one day makes £40m profit before tax (after interest).  4.5million shares.  That's just under £10 earnings per share.  But the fact is, we're having to second guess when anything is happening, when to expect a profit and any form of dividend, and when we might actually get our money back.  

18 September 2025

In my post today in the live feed, I mention that I had been intending to share some of my musings while we await the publication of the annual report.  Celtic Renewables are legally obliged to send all shareholders a copy -  Prepare annual accounts for a private limited company: Overview - GOV.UK. So I look forward to that . If I don't receive a copy I will download one from Companies House  and share with you.

Needless to say,  it is of concern that the company has not managed to attract the Series B funding of £25m that they started last year.  It seems to be a widespread problem at the moment: investors are more weary of investing in the current economic climate,  even when we have a Labour Government which is pro renewable energy and the circular economy.  Furthermore, with Britain needing to fill a growing spending gap with potential new tax rises, you can see why the market is slowing down, despite there being a clear demand for CR's products.

In the meantime, they use the small shareholders like us for top-up funding to keep the company afloat as they did last year.  They could not have risked  asking us for more  this year as ' whilst in the first half of 2025, the company has made significant progress on multiple fronts, the investment market in the UK is in one of the worst positions for decades due to geopolitical,  macroeconomic and national economy issues' as they wrote to some of their shareholders.' 

I know from speaking to other investors that they are not being honest with us the ordinary shareholders.  Remember the Abundance Shareholders?  Well,  last year they voted to defer interest repayments until September this year, and they are now being asked to to defer this again until 2027.  £4,497,674 interest is owed and being deferred, accruing 9% interest each year. Now, I don't want to make things worse for Celtic Renewables, because I believe in them.  However, they have not mentioned any of this to us.  To give you an example of how difficult things have been, this is how they introduced the idea of deferring the interest payments two days ago to their Abundance shareholders:   ''It is only in the last fortnight that a way forward for the future survival of the company has become clear, which also needs you as investors to be willing to give us more time. We are relieved to have a proposal to put to you notwithstanding our regret for the lack of communication and the fact that we are not able to pay you the interest we owe at the end of this month as we had intended. ''

I guess the Abundance shareholders have no choice but to accept.  The growth we all expected is being postponed by another 2-3 years while we wait for the super plant to be funded, built, tested etc.  These are the times we live in.   But when you write to 'Investor Relations'  all you will receive, if you're lucky, is an anonymous reply.   It is not good enough.

Interpretation of annual reports and Abundance shareholders' meeting

2 October 2025

Summary of what has been communicated to the present date.

With last month’s meeting for the ‘Abundance shareholders’ requesting the deferment of the repayment of loans, and the publishing this week of last year’s annual accounts for both companies, it is clear that the company has had a very tough year from a trading perspective and in terms of financing. 

The Grangemouth plant recorded an increase in its losses (£7,743,415 in 2024 versus £5,705,697 for 2023). 

Still, there is cause for optimism as PWC’s own report identified an immediate addressable market that would need 15 of the plant full-scale plants to satisfy. 

We have further developments such as the future use of the company’s own waste to feed biomass energy to fuel the plant, making this a truly circular company.  We also have the excellent leadership of Mark Simmers and his team navigating the Covid, geopolitical and investment challenges, and moreover the continued support of Scottish Enterprise and other private investors. 

We’re obliged however, to wait probably another three to four years before we see the full impact of the proposed industrial- size plants, and any understanding of potential profitability.  At the moment the business needs around £10m a year to stay afloat.

That said, the communications from the board are as clear as mud.   The goal posts keep moving, not only because of external events outside of anyone’s control, but also because the information Celtic Renewables share with us keeping changing.

Here as some examples.

• In July 2022, the company was said to be in discussions with a Rothes CoRDe, in Speyside, with a view to developing a larger scale project with a capacity ‘8 to 10’ times greater the Caledon Green, and on 27 February 2024 they announced that they had plans for four plants in the next five years, which would be eight to ten times the capacity of the first plant with target revenues of over £120m by 2029. Did they mean cumulative turnover by 2029, or did they mean in that single year? And, on 25 April 2024, they are quoted as aiming to maximise capacity towards 850 tonnes per year for the Caledon Green plant so that means 6,800 to 8,500 tonnes each for the large scale plants.
• 12 April 2024 ‘Our growth strategy is straightforward: develop 4 new, larger-scale plants in the next 5 years to meet this demand head-on. Each facility will have an annual throughput of approximately 8,000 tonnes of green chemicals, collectively producing min. 32,000 tonnes per year of green chemicals. 
• Initially, we will follow a build/own/operate model and expect to have 100% ownership of plants 2 and 3, and 50% ownership of plants 4 and 5. Subsequent plants will be developed on a technology licensing or joint venture basis.
• On 25 April 2024, they also reported that ‘a 3-year offtake agreement had been signed with a major distributor for a guaranteed minimum quantity of green chemicals at fixed prices per tonne worth between £2-3 million p.a, 'demonstrating industry demand for our sustainable chemicals.’
• On 31 May 2024 they reported an immediate demand of 18,000 tonnes of green chemicals, increasing to between 30,000 and 50,000 tonnes within 3-5 years (2027-2029). All good so far.’
• On 28 November 2024m they reported ‘Celtic Renewables is addressing the $2billion global market for green chemicals.

Here is the situation as it is reported this month.

• Funding of £120m is now required in order to finance a plant on the former Grangemouth oil refinery through Project Willow, plus Grissan (the Speyside plant mooted in 2022 with whom they have been working on the Biomass development), and Kerry Menstrie.
• 100 jobs will be created. Where?

Let’s assume there will be three of the large scale sites instead of four or five,  one of which is now on the site of the former Grangemouth oil refinery but, despite the size of the site, remains the same planned capacity of the other two.

In his remarks to the Abundance shareholders,  Mark Simmers said the output of the new site would be around 6,600 tonnes per annum.

With regard to Caledon Green, despite him saying that it was meeting all targets and KPIs, while mentioning that had been some contamination issues, he confirmed that its output would only be around 500-600 tonnes a year.  The original target was 850 tonnes, meaning that even at the best production of 600 tonnes, that’s 30% less than expected.

He also originally said that the large scale plants would produce around 8,000 tonnes.  That’s now 6,600.  Around 30% less.

Size of overall market potential now 13m tonnes growing to 17m by 2033, with a value of over $25bn, quite an upgrade from 2bn

Size of the immediately addressable market has increased to 100,000 tonnes, twice the size mentioned in May 2024. 

This is not a bad thing in itself.  However, the slides used in the Abundance presentation, showed the overall market to be 13,000 tonnes now and 17,000 tonnes in 2033.  Just a loss of 3 noughts…..

If we take the $25bn value of the presumably correct 17m tonnes forecast for 2033, that equates to $1470 per tonne or £1100 roughly at today’s exchange rates.

In terms of the 100,000 tonnes of ‘high value immediately addressable product', in the presentation it was valued at $600m dollars or $6,000 per tonne (£4,600).  However, Mark Simmers said it was £6,000 per tonne.’

Of course, it depends on the mix of what they end up producing.  They have manufactured all three products -  bio acetone, butanol and ethanol, with the bulk being the first two.  In contrast:

• Food / pharmaceutical grade bio ethanol sales price averages around $1,200 to $2,000 (£890 to £1,480) per tonne
• Bio-acetone $1200 to $1,500 in Europe ( £890 -£,1100)
• Bio butanol is hovering around $1270 ( £940).

NOTE these figures are from the internet and may not be correct.  The point is this.  Whether the company focuses on a single product or a mix, there is not much difference in the price, and nowhere points to $6,000 or £6,000 per tonne for any of the products.

Now let’s assume that all three plants are developed and produce a full year’s production in 2029.

• 3 x 6,600 tonnes of product – 20,000 tonnes, in a whole production year 2029.
• Let’s say, for example, it is weighted towards bio acetone, the most expensive product, at £1100 per tonne, then that’s a turnover of £22m, nowhere near the £120m mentioned in February 2024.  (To get to £120m you would need five years' production at that level of output, which clearly is impossible given the time needed to raise the funds, commission plants and get them up to volume.  The first plant took 3 years from the first test output.)
• Allow for the fact that there are three new plants now planned, not four or five, all producing 30% less,  that should equate to around £63m.
• Say a gross margin of 60%, that’s £13,200,000 gross margin.  Meanwhile the company loses around £10m per year. Something clearly does not add up.

The point is this.  The shareholders should not have to second guess the company’s performance or to interpret potentially incorrectly, the their figures.

And if it's so easy  to confuse one currency with another in a shareholder communication and to quote an inconsistent price per tonne even in the same currency, what are we to believe?

7 October 2025

Over the last couple of days I have been contacted by people allegedly 'in the know' or by allegedly former employees.

It does seem, if they are to believed - and what they say does seem to tie in with my analysis - that the business is not a happy place.  Allegedly, some staff were made redundant last year some of whom feel they were unfairly treated.

What we do know is that the Caledon Green made a loss of £7,743,415 on an undeclared turnover.   850 tonnes of product were contracted at a price of  around £3,500 per tonne.  Let's assume that all the costs including overheads of the plant are reflected in the CG accounts, then effectively they had around £11m of costs.

Then looking at the consolidated main accounts for the group there's 

• A turnover of £68,772.
• Cost of sales £4,050,841
• Gross loss :  £3,982,069
• Administrative costs:  £6,916,854
• Operating loss:  £10,745,795.

I'm not close enough or knowledgeable enough to understand the inter company relations.

However, the Caledon Green plant is operating at a loss not only because of not reaching its production capacity but also because operating costs and overheads are far too high.  I'm not sure if it could ever be profitable.

The group's overheads are too high.  I see no reason to employ a director from its subsidiary in order to develop business when 1) apparently the product is oversold and 2) they can't make any more for another 3 to 4 years.

The Abundance shareholders cannot be repaid out of Scottish Enterprise grants. Therefore, like all the other shareholders,  they will to have a few more years for any hope. 

Fundamentally, they need to sort out what on earth is going wrong in the production.  Otherwise, the new plants will  - if they work at the yield levels of the Caledon  Green plan t- only exist to pay for the annual losses of £10m or so accruing every year.

11 October 2025

Just as we thought all was lost, the company has announced the strategic partnership with Enzyme Supplies, quite clearly to address the problems of the weak yields that have the story of the Caledon Plant.  These strategic arrangements don't happen over night, so evidently the company has recognised the problem and has sought a solution. Key, now, will be to get Caledon Green humming.  Congratulations to the team.  This is more positive news.

13 October 2025

Let's hope Martin Tangney's visit to Japan is successful.  We need to get something for the £98,000 consultancy fee he is paid.

18 October  2025

This blog article published on 13 October, with quotes from the two businesses  two days after the announcement of the collaboration with Enzyme Supplies,  and our post of 7 October stating that there is a major issue with the yield from the initial plant, confirms everything that we suspected. 

This is a typical upbeat press release.  No used of the word  'delighted'.  That's an improvement. 

“This collaboration is a major step forward in commercialising our technology at scale. By harnessing the power of Enzyme Supplies’ biocatalysts, we’re able to increase yields, reduce processing times, and expand the range of waste and by-product materials we can valorise. It’s a win-win for innovation and the environment.”   

No admission that there's a problem.  No transparency with shareholders.  Just bla bla.  'Aren't we good'?