$25 million operating loss for Vertical Aerospace in H1 2024 as flight testing continues
September 17, 2024
Vertical Aerospace continues to progress at pace with the flight test campaign of its VX4 eVTOL, with the company’s 2024 capital plan continuing to “remain on track”. However, with net cash outflow from operations in the second half of the year expected to reach between £40 and £45 million, the company is seeking “timely receipt” of funds to extend its projected cash runway into the third quarter of 2025.
“Vertical maintained its industry-leading capital efficiency with an H1 2024 operating loss of £20 million,” explained the company, attributing the operating loss for the period to the completion of Vertical’s second full-scale prototype aircraft. Unveiled in July (and featuring 60% of its technology from tier-one aerospace partners, up from 10% on the previous prototype), this aircraft also features Vertical’s new proprietary propellers and battery technology.
In May 2024, Vertical also mutually agreed to exit Rolls-Royce’s contract to design an electric propulsion unit, following Rolls-Royce’s intention to divest itself of its advanced air mobility activities. Under this agreement, Vertical received $34 million, although states it is “already working with other EPU suppliers and does not anticipate [the requirement for a new supplier] as having any impact on the completion of [its] prototypes”.
Other income during the quarter included an £8 million UK government grant from the Aerospace Technology Institute (ATI) for its next-generation propeller development, and a cash amount of $25 from Vertical founder Stephen Fitzpatrick’s company Aero Investments. A further second $25 million tranche is expected to follow. The company has also disclosed it is “in discussions regarding potential third party investment”.
As of June 30 2024, Vertical had cash and cash equivalents of £67 million, falling to approximately £48 million as of 17 September. Following shareholder approval, Vertical’s board of directors have also authorised the implementation of a reverse share split at a ratio of one for ten.
During the first half of the year, the new aircraft successfully completed phase one of the piloted flight test programme, with Vertical preparing to progress to piloted untethered thrustborne testing. The UK Civil Aviation Authority (CAA) also expanded the scope of Vertical’s design organisation approval (DOA), while the European Union Aviation Safety Agency (EASA) also joined forces with the UK regulator to agree “how they will work together on the certification of the VX4”.
“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,” concluded Vertical CEO Stuart Simpson.
