TIDMITM
RNS Number : 1289D
ITM Power PLC
29 January 2018
29 January 2018
ITM Power plc
("ITM Power", "the Group" or the "Company")
Half Year Results for the Period ended 31 October 2017
Significant commercial progress, financial position strengthened
by GBP29.4m working capital fundraise
ITM Power (AIM: ITM), the energy storage and clean fuel company,
announces its half year results for the six month period ended 31
October 2017. Comparable figures, where stated, refer to the
corresponding period in 2016 unless otherwise indicated.
Commercial Progress:
-- As at today, GBP27.0m (GBP17.0m) of projects under contract
and a further GBP10.4m (Jan-2017: GBP1.4m) of contracts in the
final stages of negotiation constituting a total backlog of
GBP37.4m (Jan-2017: GBP18.3m), up 103% year on year
-- Tender opportunity pipeline has grown steadily and is now
over GBP200m, reflecting strong industrial demand
-- 10MW refinery hydrogen project with Shell to build the
world's largest PEM electrolyser at the Rhineland refinery,
Germany
-- World's first tidal-powered hydrogen generated at European
Marine Energy Centre (EMEC) in Orkney
-- First hydrogen bus route in the Pau region of France
-- 20 tonne/day (50MW) hydrogen refuelling station designs launched in Las Vegas in September
-- A new total of 20 hydrogen fuel contracts
Financial Highlights:
-- Total income of GBP4.4m (2016: GBP3.0m), up 47%, comprising:
o Revenue - GBP1.7m (2016: GBP0.4m), up 325%
o Grant income plus grants receivable for capital projects -
GBP2.7m (2016: GBP2.6m), up 4%
-- Increase in fixed assets to GBP5.5m (2016: GBP3.8m), up 139%
-- Loss from operations GBP2.9m (2016: GBP2.3m), increased by 26%
-- Cash balance of GBP27.3m at period end (2016: GBP1.7m)
-- Debtors balances of GBP12.8m (2016: GBP9.2m), up 39%
Operational Developments:
-- New, larger factory premises identified and heads of terms agreed
-- Expansion of the manufacturing and after sales support teams
-- Creation of Australian subsidiary ITM Power Pty Ltd and appointment of Dr Neil Thompson as MD
Graham Cooley, CEO, commented: "The six months under review have
seen significant advances in all areas of ITM Power's business. The
announcement of the deployment of the worlds' largest PEM
electrolyser at Shell's Rhineland refinery is a particularly
important development seeing ITM Power enter the 10MW product class
with a commercial product at scale. The Company's pipeline of deals
has more than doubled since last year showing strong and consistent
growth in both the refuelling and power-to-gas markets."
Roger Putnam, Chairman, added: "The Board is pleased with the
result of the successful equity raise, which secured the working
capital the Company needs to underpin the significant progress that
has been achieved in growing the order pipeline of commercial
sales. Our stronger financial position will help us to continue to
strengthen our relationships with a number of major blue-chip
companies as we progress our international business. With the
establishment of our new company in Australia I welcome Neil
Thompson to the development team."
For further information please visit www.itm-power.com or
contact:
ITM Power plc
Andy Allen, CFO +44 (0)114 244 5111
Investec Bank plc (Nominated Adviser and
Broker)
Corporate Finance: Jeremy Ellis / Jonathan
Wynn
Corporate Broking: Chris Sim / Rob Baker +44 (0)20 7597 5970
Tavistock (Financial PR and IR)
Simon Hudson / James Collins +44 (0)20 7920 3150
About ITM Power plc:
ITM Power manufactures integrated hydrogen energy solutions for
grid balancing, energy storage and the production of green hydrogen
for transport, renewable heat and chemicals. ITM Power was admitted
to the AIM market of the London Stock Exchange in 2004. In
September 2017 the Company announced the completion of a GBP29.4m
working capital fundraise. The Company signed a forecourt siting
agreement with Shell for hydrogen refuelling stations in September
2015 and subsequently a deal to deploy a 10MW electrolyser at
Shell's Rhineland refinery. Additional customers include National
Grid, RWE, Engie, BOC Linde, Toyota, Honda, Hyundai, Anglo American
among others. The Company currently has GBP27.0m of projects under
contract and a further GBP10.4m of contracts in the final stages of
negotiation constituting a total of GBP37.4m, subject to exchange
rate variations.
CHAIRMAN'S STATEMENT
The half year under review and the months since the period end
have seen considerable progress made by the Company towards
converting interest into tenders, and more importantly, tenders
into contracted backlog and commercial sales. Our opportunity
pipeline is at a record level, which is more than double the level
it was a year ago. The traction developed by ITM Power in global
markets has continued to increase as governments and companies
worldwide have begun to recognise the attractions of hydrogen, both
as a fuel and as an energy storage medium. Our recently announced
project with Shell is a significant step into the very large market
of decarbonising industrial hydrogen.
The successful equity fund raise of GBP29.4m to finance a move
to enlarged facilities and boost working capital has underpinned
the significant progress in the order pipeline. On behalf of the
Board, I would like to thank our shareholders for their
support.
Financial Results
Revenue recognised for the period under review was GBP1.7m
(2016: GBP0.4m). This was supplemented by grant income of GBP1.9m
(2016: GBP1.6m) and GBP0.8m (2016: GBP1.0m) of grants receivable
for capital projects, which impacts directly on the balance sheet.
Due to recognising revenue on a long term contracts basis, , our
revenue line depends on the stage of build of projects at the
reference date. Effectively, the busier we are on project build,
the more weighted we become to the most recent period. After
increased staff costs associated with the higher volumes of
manufacturing in the period, the loss before tax for the half year
was GBP2.9m (2016: GBP2.3m).
As a result of the fundraise, cash and short-term deposits at
the period end were GBP27.3m (GBP3.0m at 30 April 2017 and GBP1.7m
at 31 October 2016). Debtor balances increased to GBP12.8m (2016:
GBP9.2m) reflecting grants for capital projects yet to be received
and the balances yet to be paid on projects underway at period
end.
The Board is not recommending the payment of a dividend for the
period in accordance with our stated policy.
Team
In October, Peter Hargreaves, a Non-executive director since
2003, notified the Company of his intention to step down from the
Board with effect from the half year end. On behalf of his Board
colleagues, the staff of ITM Power and all of our shareholders, I
would like to thank Peter for his help and support during his 16
year involvement with the Company. We would not be where we are
today without him.
I am delighted to welcome Dr Neil Thompson who joins us as the
new Managing Director of ITM Power Pty Ltd in Australia. Neil's
background includes engineering and commercial roles in the clean
technology, aerospace and automotive industries across the
Americas, Europe and the APAC region.
Once again, the Board would like to record its appreciation of
the hard work and fantastic commitment of the Company's staff,
without which we would not be in the strong position globally that
we are today.
Outlook
The second half of the financial year to end April 2018 looks
set to be busier than ever when we will be beginning the process
relocating to new manufacturing premises in the South Yorkshire
region which will give us the additional capacity necessary to
manufacture large scale electrolysers of 10MW and beyond. In
addition the ability to operate under one roof is expected to
provide important operational and cost synergies.
Our relationship with key blue-chip partners such as Shell,
Toyota, National Grid, BOC Linde, RWE and Engie continue to
strengthen, leading to an increasing number of significant
opportunities. Our business is now global and we have new projects
in France and Germany and the establishment of our new company in
Australia should provide a strong footprint to generate further
opportunities in the APAC region.
Hydrogen technology is now receiving the attention it deserves
in industrial processes, energy storage and refuelling. The second
half is set to be very exciting, with ITM Power's products
positioned as undoubted leaders in the world's PEM electrolyser
markets for green hydrogen. I look forward to reporting to
shareholders on the full year outcome in the summer.
Prof Roger Putnam CBE
Chairman
26 January 2018
CEO's Review
The strong growth in the opportunity pipeline reported in these
results reflect the hydrogen and energy storage markets' rapid
growth worldwide and ITM Power's focus on developing commercial
sales. Scale is now key and ITM Power is in a great market position
with our larger footprint of compliant reference plant deployed all
over the world. ITM Power is at the forefront of a market which is
revolutionising air quality, energy storage and the decarbonisation
of heavy industry.
Products in Build and Order Backlog
ITM Power continues to steadily process its order book. Today,
the Company has work in progress which will constitute over 5MW of
installed capacity that is either in build, undergoing factory
acceptance testing, is ready for shipment or being commissioned in
the field. The order backlog and opportunity pipeline clearly
demonstrate a trend towards larger scale. The backlog is also
reflective of the Company's focus on commercial sales. In order to
accommodate the increased numbers and size of units in production,
and the capacity for Factory Acceptance Testing the company is
planning to relocation to a larger facility accommodating all
functions under one roof.
Technology Progress
ITM Power's technology development team continues its efforts
towards lowering product costs, maximising durability and
increasing efficiency. At the system level, the Company has used
its modular system design effectively to supply customers with
equipment optimised for its duty. Using this principle, systems up
to 100MW in size have been developed utilising ITM Power's well
proven technology. This strategy has enabled the Company to rapidly
engage with large scale opportunities and while minimising
technical risk. After detailed and lengthy verification processes,
ITM Power is now routinely offering electrolyser systems
incorporating high current density PEM stacks. This has enabled ITM
Power to reduce the number of stacks in any given system without
compromising in efficiency or durability.
Industry Developments:
On 13 November the Hydrogen Council published a first-of-a kind
study detailing hydrogen's potential to be a key pillar of the
energy transition. The study concluded that when deployed at scale,
hydrogen could account for almost one-fifth of total final energy
consumed by 2050. This would reduce annual CO(2) emissions by
roughly six gigatons compared to today's levels, and contribute
roughly 20% of the abatement required to limit global warming to
two degrees Celsius.
Marketing
The Group's marketing efforts remain focused on engagement with
multi-national companies that operate within the energy, transport
and chemical sectors. Salesforce has become a key tool for the
sales and marcomms teams with the industry contacts data base now
at over 28,000 contacts. ITM Power attends and presents at many
industry specific trade fairs and conferences in the UK, mainland
Europe and the United States. A regularly updated list of all the
events the company will be attending can be found at
http://www.itm-power.com/news-media/events
Outlook
Quotations, sales and the order pipeline are stronger than they
have ever been. The traction with customers and partners that ITM
Power achieves through its market leading PEM electrolyser
technology combined with the additional balance sheet strength
following the recent equity fund raising puts the group in a very
strong position to deliver its future growth ambitions. The global
growth in demand for hydrogen solutions in utility, petrochemical
and refuelling markets is also very encouraging. I look forward to
reporting on what will be a very active second half to the year, as
well as reporting on the development of the opportunity pipeline at
the announcement of the full year results.
Dr Graham Cooley
Chief Executive Officer
26 January 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Results for the six months ended 31 October 2017
Six months Six months
ended 31 ended 31 Year ended
October October 30 April
2017 (unaudited) 2016 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
Revenue 1,739 405 2,415
Cost of sales (1,580) (313) (1,757)
----------------- ----------------- ---------------
Gross profit 159 92 658
Operating costs
* Research and development (957) (790) (2,023)
* Prototype production and engineering (1,586) (1,614) (2,615)
* Sales and marketing (673) (744) (1,528)
* Administration (1,739) (833) (2,202)
Other operating income
- grant income 1,920 1,616 4,160
Loss from operations (2,877) (2,274) (3,550)
Investment revenues - 2 -
Loss before tax (2,877) (2,272) (3,550)
Tax 348 69 (230)
----------------- ----------------- ---------------
Loss for the period (2,529) (2,203) (3,780)
OTHER TOTAL COMPREHENSIVE
INCOME:
Items that may be reclassified
subsequently to profit
or loss
Foreign currency translation
differences on foreign
operations 134 81 (250)
================= ================= ===============
Total comprehensive loss
for the period (2,395) (2,122) (4,030)
================= ================= ===============
Loss per share
Basic and diluted (1.0p) (1.0p) (1.7p)
================= ================= ===============
Weighted average number
of shares 250,613,176 216,892,973 222,513,007
================= ================= ===============
The loss per ordinary share and diluted loss per share are equal
because share options are only included in the calculation of
diluted earnings per share if their issue would decrease the net
profit per share or increase the net loss per share.
All results presented above are derived from continuing
operations.
The loss for the period is equal to the total comprehensive
expense for the period.
The accompanying notes form part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Results for the six months ended 31 October 2017
Called Share Foreign
up share premium Merger Exchange Retained Total
capital account reserve reserve loss Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 May 2016 10,845 58,151 (1,973) 54 (55,442) 11,635
Loss for the period - - - - (2,203) (2,203)
Other comprehensive
income for the
period - - - 81 - 81
--------- -------- --------- --------- ---------- ---------
Total Comprehensive
income for the
period - - - 81 (2,203) (2,122)
Issue of share
capital - - - - - -
Credit to equity
for equity settled
share based payments - - - - - -
At 31 October 2016
(unaudited) 10,845 58,151 (1,973) 135 (57,645) 9,513
========= ======== ========= ========= ========== =========
At 1 May 2017 12,531 61,930 (1,973) (196) (59,222) 13,070
Loss for the period - - - - (2,529) (2,529)
Other comprehensive
income for the
period - - - 134 - 134
--------- -------- --------- --------- ---------- ---------
Total Comprehensive
income for the
period - - - 134 (2,529) (2,395)
Issue of share
capital 3,669 24,767 - - - 28,436
Credit to equity
for equity settled
share based payments - - - - - -
At 31 October 2017
(unaudited) 16,200 86,697 (1,973) (62) (61,751) 39,111
========= ======== ========= ========= ========== =========
The accompanying notes form part of these financial
statements.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
31 October 2017
As at 31 As at 31 As at
October October 30 April
2017 2016 2017 (audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
NON CURRENT ASSETS
Development Costs 330 352 380
Property, plant and equipment 5,137 3,447 4,519
------------ ------------ ---------------
5,467 3,799 4,899
CURRENT ASSETS
Inventories 749 445 760
Trade and other receivables 12,834 9,195 11,082
Cash and cash equivalents 26,190 1,315 1,558
Restricted cash and cash
equivalents 1,117 410 1,446
------------ ------------ ---------------
TOTAL CURRENT ASSETS 40,890 11,365 14,846
CURRENT LIABILITIES
Trade and other payables (6,479) (5,651) (6,666)
Provisions (767) - (9)
------------ ------------ ---------------
TOTAL CURRENT LIABILITIES (7,245) (5,651) (6,675)
NET CURRENT ASSETS 33,644 5,714 8,171
------------ ------------ ---------------
NET ASSETS 39,111 9,513 13,070
EQUITY
Called up share capital 16,200 10,845 12,531
Share premium account 86,697 58,151 61,930
Merger reserve (1,973) (1,973) (1,973)
Foreign Exchange Reserve (62) 131 (196)
Retained loss (61,751) (57,645) (59,222)
------------ ------------ ---------------
TOTAL EQUITY 39,111 9,513 13,070
============ ============ ===============
The accompanying notes form part of these financial
statements.
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Results for the six months ended 31 October 2017
Six months Six months
ended 31 ended 31 Year ended
October October 30 April
2017 (unaudited) 2016 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
Loss from operations (2,877) (2,274) (3,550)
Adjustments:
Depreciation of property,
plant and equipment 730 415 1,181
Loss on disposal 2 22 22
Fixed asset impairment 39 - 100
Amortisation 50 - 23
----------------- ----------------- ---------------
Operating cash flows before
movements in working capital (2,056) (1,837) (2,224)
Decrease/ (Increase) in
inventories 11 (154) (469)
(Increase) in receivables (1,493) (2,803) (5,363)
Increase in payables 1,984 3,838 2,747
Increase in provisions 758 - 9
----------------- ----------------- ---------------
Cash used in operations (796) (956) (5,300)
Income taxes received 189 252 252
----------------- ----------------- ---------------
Net cash used in operating
activities (607) (704) (5,048)
----------------- ----------------- ---------------
Investing activities
Interest received - 2 -
Purchases of property,
plant and equipment (3,574) (839) (647)
Proceeds from sale of plant
& equipment - 3 4
Payments for intangible
assets - (100) (151)
----------------- ----------------- ---------------
Net cash (used in) investing
activities (3,574) (934) (1,419)
----------------- ----------------- ---------------
Financing activities
Proceeds from issue of
shares 29,359 - 5,732
Costs associated with fund
raise (921) - (267)
----------------- ----------------- ---------------
Net cash from financing
activities 28,438 - 5,465
----------------- ----------------- ---------------
Increase/ (decrease) in
cash and cash equivalents 24,257 (1,638) (377)
Cash and cash equivalents
at the beginning of the
period 3,004 3,336 3,336
Effect of foreign exchange
rate changes 46 27 45
Cash and cash equivalents
at the end of the period 27,307 1,725 3,004
================= ================= ===============
Cash Burn
Cash burn is a measure used by key management personnel to
monitor the performance of the business.
Increase/ (Decrease) in
Cash and Cash equivalents
per the cash flow statement 24,257 (1,638) (377)
Effect of foreign exchange
rates 46 27 45
Less share issue proceeds (29,359) - (5,732)
Cash Burn (5,056) (1,611) (6,064)
-------- ------- -------
The accompanying notes form part of these financial
statements.
The condensed interim financial statements were approved by the
board of Directors on 26 January 2018
Notes to condensed interim financial statements
1. Basis of preparation of interim figures
The interim financial statements have been prepared using
accounting policies consistent with International Financial
Reporting Standards (IFRSs) as adopted for use in the EU. While the
financial information included in this interim announcement has
been compiled in accordance with the recognition and measurement
principles of IFRSs, this announcement does not itself contain
sufficient information to comply with IFRSs. This interim financial
information does not constitute statutory financial statements
within the meaning of section 435 of the Companies Act 2006. The
financial information for the six months ended 31 October 2015 have
been subject to an interim review in accordance with ISRE2410 by
the Group's auditors. The financial information for the six months
ended 31 October 2017 have not been subject to an interim review.
The information relating to the year ended 30 April 2017 has been
extracted from the Group's published financial statements for that
year, which contain an unqualified audit report that does not draw
attention to any matters of emphasis, and did not contain
statements under section 498(2) and 498(3) of the Companies Act
2006 and which have been filed with the Registrar of Companies.
The Group's condensed interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the European Union. The principle accounting policies
adopted by the group are as applied in the Group's latest annual
audited financial statements.
The financial statements have been prepared on the historical
cost basis. The principle accounting policies adopted by the Group
are as applied in the Group's latest audited financial
statements.
Going concern
The Directors have prepared a cash flow forecast (the
"Forecast") for the period to 31 January 2018 (the "Forecast
Period"). The Forecast includes proceeds from the equity fund raise
completed in October 2017 less expenses relating to the fundraise,
together with a number of assumptions, including the level of
projected sales and grant income, the timing of which is inherently
uncertain.
The Directors have a reasonable expectation that the Company and
Group can continue to meet their liabilities as they fall due, for
a period of not less than twelve months from the date of approval
of this condensed set of financial statements.
Accordingly, the financial statements have been prepared on a
going concern basis.
2. Revenue, other operating income and Investment Income
In 2017, the following accounted for more than 10% of total
revenue (2016: no single customer contract):
Customer GBP456,672
A
Customer GBP438,572
B
Customer GBP232,915
C
Customer GBP278,229
D
An analysis of the Group's revenue 2017 2016
is a follows: GBP'000 GBP'000
Continuing operations
Revenue from construction contracts 1,522 213
Consulting services 99 157
Maintenance services 32 23
Fuel sales 63 4
Other 23 8
-------- --------
Revenue in the Consolidated Income
Statement 1,739 405
Grant income 1,920 1,616
Investment income - 2
-------- --------
3,659 2,023
======== ========
Revenues from major products and services
The Group's revenues from its major products and services were
as follows:
2017 2016
GBP'000 GBP'000
Continuing operations
Power-to gas 639 148
Refuelling 398 249
Chemical Industry 679 -
Other 23 8
-------- --------
Consolidated revenue (excluding investment
revenue) 1,739 405
======== ========
GEOGRAPHIC ANALYSIS OF REVENUE
A geographic analysis of the Group's revenue is set out
below:
2017 2016
GBP'000 GBP'000
United Kingdom 419 150
Germany 770 172
Italy 439 -
Rest of Europe 53 2
North America 58 81
1,739 405
========= =========
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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