TIDMITM
RNS Number : 1329N
ITM Power PLC
28 January 2021
28 January 2021
ITM Power plc
("ITM Power", "the Group" or the "Company")
Half Year Results for the Period ended 31 October 2020
ITM Power (AIM: ITM), the energy storage and clean fuel company,
announces half year results for the six-month period ended 31
October 2020. Comparable figures, where stated, refer to the
corresponding period in 2019 unless otherwise indicated.
Commercial:
-- Transformative GBP172m fundraise post period end
-- Fundraise proceeds to accelerate the Company's technology and manufacturing strategies
-- Partnership with Snam to develop projects with preferred supplier status for the first 100MW
-- First major ILE project of 24MW in Leuna Germany (world's
largest contracted PEM electrolyser)
-- Collaboration with Orsted and Siemens Gamesa on the EUR5m EU funded OYSTER project
Backlog and Pipeline:
-- GBP124m (GBP42m) backlog comprising GBP36m (GBP16m)
contracted and GBP88m (GBP26m) in advanced stages of negotiation or
subject to preferred supplier status
-- GBP434m+ (October 2020 fundraise: GBP325m) total tender
pipeline; a 34% uplift in three months
o Total pipeline attributable to ITM Power: GBP284m, being 65%
of total contracts quoted
Operational:
-- Practical completion of the ITM Gigafactory at Bessemer Park in January 2021
-- Production has commenced in the new factory
-- ITM Motive division has agreed a fuel contract with National
Express for 20 buses in Birmingham
-- ITM Support division has developed its first partnership with Optimal in Australia
-- ITM Academy formed for training apprentices, staff and partners
Financial:
-- Total income of GBP4.4m (GBP3.8m), up 16%, comprising:
o Revenue of GBP0.2m (GBP2.4m), down 92% due to delays in final
installation of projects required for revenue recognition arising
from Covid-19 issues
o Grant income plus grants receivable for capital projects of
GBP4.2m (GBP1.4m), up 200%
-- Loss from operations GBP12.0m (GBP9.8m), increased by 22%
-- Adjusted EBITDA Loss of GBP10.4m, (GBP8.1m), increased by 28%
-- Cash balance (excluding restricted balances) of GBP25.9m (GBP56.9m) at period end
-- Current cash of GBP187m after fund raise proceeds of GBP172m received in November.
-- Cash burn* of GBP14.0m (GBP6.1m), including GBP5.7m on Bessemer Park and GBP1.7m on inventory
* Cash burn is a non-statutory measure. Please see the cash flow
statement
Corporate:
-- Katherine Roe appointed as independent non-executive director in May 2020
-- Tom Rae appointed non-executive director in December 2020 representing JCB
-- Formation of Environmental, Social & Governance (ESG) and
Strategy sub-committees, both chaired by independent ITM Power
NEDs
-- CEO, Dr Graham Cooley joins the UK Government's Hydrogen Advisory Council
Graham Cooley, CEO, commented: "The collaboration agreement with
Snam and the strategic investment that accompanied it, as part of
the GBP172m funding round, is another transformative deal for ITM
Power. Alongside the Linde partnership and formation of ILE, ITM
Power can concentrate on its core competence of developing and
manufacturing electrolysis equipment. The Company is now able to
offer a full turnkey solution at industrial scale with the EPC
(Engineering, Procurement and Construction) competence of a world
leader in the hydrogen industry. The rapidly developing backlog and
tender pipeline demonstrates that ITM Power and our partners Linde,
Snam and Shell have a world class offering. The completed move into
the new 1GW per annum electrolyser factory at Bessemer Park gives
the Company a powerful cost reduction trajectory and world beating
manufacturing capacity for our record order book and pipeline."
Roger Bone, Chairman, added: "I was delighted to welcome
Katherine and Tom to the ITM Power board in 2020 and to see such
strong progress with the Snam agreement, the rapidly developing
Linde partnership and the factory move. Despite all the
difficulties Covid has caused we are well poised to accelerate our
manufacturing programme and to sustain the significant growth in
shareholder value we have seen over the last twelve months. We are
also proud of the skills and dedication of our workforce and have
rolled out an important incentives programme for all staff. As
ever, I will continue my focus on governance, including the
development of the Company's ESG reporting, which will be a key
task in 2021 and beyond."
There will be a call for analysts and investors on the Investor
Meet Company platform today at 1400h GMT. To register for the call,
please go to:
https://www.investormeetcompany.com/itm-power-plc/register-investor
For further information, please visit www.itm-power.com or
contact:
ITM Power plc +44 (0)114 263 7646
James Collins (IR)
Investec Bank plc (Nominated Adviser and
Broker) +44 (0)20 7597 5970
Jeremy Ellis / Chris Sim / Ben Griffiths
/ Will Fenby
Tavistock (Financial PR and IR) +44 (0)20 7920 3150
Simon Hudson / Edward Lee / Tim Pearson
About ITM Power plc
ITM Power plc manufactures integrated hydrogen energy solutions
for grid balancing, energy storage and the production of renewable
hydrogen for transport, renewable heat and chemicals. ITM Power plc
was admitted to the AIM market of the London Stock Exchange in
2004. In October 2019, the Company announced the completion of a
GBP58.8 million fundraising, including an investment by Linde of
GBP38 million, together with the formation of a joint venture with
Linde to focus on delivering renewable hydrogen to large-scale
industrial projects worldwide. ITM Power signed a deal to deploy a
10MW electrolyser at Shell's Rhineland refinery. In November 2020,
ITM Power completed a GBP172m fundraising, including a GBP30m
investment by Snam, one of the world's leading energy
infrastructure operators. ITM Power operates from the world's
largest electrolyser factory in Sheffield with a capacity of 1GW
(1,000MW) per annum. ITM Power received an order for the world's
largest PEM electrolyser of 24MW from Linde in January 2021. Other
customers and partners include Sumitomo, Ørsted, Phillips 66,
Scottish Power, Siemens Gamesa, Cadent, Northern Gas Networks,
Gasunie, RWE, Engie, GNVert, National Express, Toyota, Hyundai and
Anglo American among others.
CEO's Review
Backlog
The Company's backlog increased significantly with the
incorporation of the Snam 100MW of preferred supplier orders for
delivery by 2024/25. Discussions are progressing well with Snam on
finalising these contracts. As of today, the total backlog stands
at GBP124.0m (2020: GBP42.4m) with GBP36.1m (2020: GBP16.3m) of
projects under contract and a further GBP16.2m (2020: GBP26.1m) in
the final stages of negotiation, representing strong deal
conversion. The balance of the GBP124m is the preferred supplier
contracts with Snam.
Tender Opportunity Pipeline
The tender opportunity pipeline (TOP) continues to grow
highlighting the significant increase in the adoption of green
hydrogen worldwide. The value attributable to ITM-Power
electrolysers of this pipeline has increased sharply despite
tighter qualification criteria before ITM Power bids on a project
and currently sits at GBP434m, of which GBP284m is attributable to
ITM Power, representing 423MW of ITM Power standard products. The
Tender Opportunity Pipeline has increased 34% since October 2020.
ITM Power has worked closely with Linde to develop a joint bidding
strategy appropriate both for the opportunities arising and for ITM
Linde Electrolysis to bid.
Financial Results
Total Income for the period was GBP4.4m (GBP3.8m), up 16%.
Revenue recognised for the period under review was GBP0.2m
(GBP2.4m), down 92%. This was largely a result of the continued
restrictions of Covid, since income is only recognised upon
completion of on-site work. With the safety of staff and customers
the highest priority, less progress has been made on site that
would have otherwise have been the case. The delays in product
delivery are expected to be reversed as the projects are completed,
and will be recognised as work is completed as we progress through
the contracted backlog. Without Covid restrictions, the Revenue
would have been c.GBP3.1m higher.
The Gross loss was GBP2.8m (GBP2.5m), as the company continues
to incur on-site EPC costs on projects, including the Shell Refhyne
project, which is forecast to generate its first hydrogen in Q2
2021. The Company expects all other legacy projects to have been
concluded within the current financial year. Future sales, both in
the backlog and in the tender opportunity pipeline represent lower
risk as the EPC element of the execution of a contract is passed to
Linde Engineering and ITM Linde Electrolysis.
The loss before tax for the half year was GBP12.0m (GBP9.8m),
reflecting the growth in headcount and the inflated costs of
operating over three sites in Sheffield, which will consolidate
into one site resulting from the move to Bessemer Park. The skills
that the Company has brought in will leave ITM Power well equipped
to address the anticipated demand in coming years. The legacy
leases will be terminated by October 2021 at no material cost to
the Company.
In the past, the Company has been able to offset some overhead
through grant income. This has diminished in the current period
(GBP0.4m vs GBP0.8m) as remaining grants have started to reach a
conclusion. Whilst there are new UK grant schemes becoming
available, the period to 31 October 2020 saw a lower level of grant
related income in the income statement. The Company will continue
to seek support via grant funding when this aligns with the product
and technology development roadmaps. ITM Power is delighted by the
news that the UK remains eligible for European Funding under the
'Horizon Europe' funding rules and looks forward to a continued
positive relationship with our European Partners.
Development of Key Strategic Partnerships
During the period the Company has continued to develop strong
partnerships for projects, including benefiting from the work with
partners to find new innovations, new product improvements, and
further routes to market. The Company has made announcements over
the past year regarding its partnerships with Linde, Snam, Shell,
Scottish Power (part of the Iberdrola group), Orsted, Philips 66
and Siemens Gamesa.
Linde: Working with Linde on the larger EPC projects allows the
Company to focus on the element of a project where its technology
and expertise adds the greatest value. The partnership with Linde
continues to progress very well with strong collaboration at both
management and at an operational level. The Company recently
reviewed the first year of trading at ITM Linde Electrolysis Gmbh,
in which a feasibility study was won, a 100MW and 20MW FEED study
was undertaken as part of the Gigastack project for large
applications in the Humber region, and most recently, a sale of a
24MW electrolyser was won in a competitive tender. The Company has
also sold three smaller, standard units to Linde Gas (BOC) in the
last twelve months, for deployment in Europe and Australia.
Snam: The Group has entered into a Commercial Partnership
Agreement with Snam, under which the Group will be the preferred
supplier for the first 100 Megawatts (MW) of PEM electrolysis
projects ordered by Snam, which are intended to be deployed in the
period 2021 to 2025. The Commercial Partnership also includes the
potential for collaboration on a global pipeline of further
projects. Since the partnership was agreed in October 2020, initial
discussions have taken place between ITM Power and Snam to
establish best practices for working and partnering on projects.
There has also been discussion jointly between ITM Power, ITM Linde
Electrolysis (ILE) and Snam on a large system deployment.
On 7 December 2020 Snam and Linde announced an MoU to "work
together to promote key technologies along the hydrogen value chain
and develop opportunities for joint investments in commercial
projects in the areas of production, distribution, compression and
storage." On 23 December Snam announced an agreement with the
Italian oil and gas major Eni and investment bank Cassa Depositi e
Prestiti in a bid to decarbonise Italy's energy system. "The
agreement ... provides that the three companies can jointly carry
out integrated projects along the entire value chain in key sectors
for the energy transition, such as hydrogen, circular economy
(including the use of biomethane), and sustainable mobility,"
Scottish Power: In September 2020 a pioneering Strategic
partnership with Scottish Power Renewables (SPR) was established to
create new green hydrogen production facilities with clusters of
refuelling stations across Scotland, supporting the country's
efforts to achieve net zero by 2045. The partnership's first
project, 'Green Hydrogen for Glasgow', is designed to provide
carbon-free transport and clean air for communities across the
city, which wants to become the first net-zero city in the UK. A
proposed green hydrogen production facility located on the
outskirts of the city will be operated by BOC, using wind and solar
power produced by ScottishPower Renewables to operate a 10MW
electrolyser, delivered by ITM Power. The project aims to supply
hydrogen to the commercial market within the next two years
following delivery of the electrolyser in 2022.
Ørsted : The Gigastack project has progressed well over the last
year with the 100MW and 20MW FEED studies progressing to a
conclusion. The Company was also pleased on announce on 8 Jan 2021
that ITM Power, Ørsted, Siemens Gamesa Renewable Energy, and
Element Energy have been awarded EUR 5 million in funding from The
Fuel Cells and Hydrogen Joint Undertaking (FCH2-JU) under the
European Commission to demonstrate and investigate a combined wind
turbine and electrolyser system designed for operation in marine
environments. The consortium will develop and test a megawatt-scale
fully marinised electrolyser in a shoreside pilot trial.
Optimal Australia: ITM Support has signed an agreement with
Optimal Group for Optimal to provide operation maintenance support
for the roll-out of its products across the region. This agreement
reinforces ITM Power's capability for project delivery and ongoing
support of its systems across Australia. ITM Power also received a
purchase order from Optimal Group for the provision of its 0.7MW
HGas electrolyser system for the Federal Government's Blue Economy
CRC hydrogen micro-grid project in Tasmania. This first deployment
with Optimal will be the training platform for the development of
the ongoing relationship through the ITM Academy.
ITM Motive
Duncan Yellen was recruited as Managing Director of ITM Motive,
the division of ITM Power responsible for the UK build, own and
operate portfolio of hydrogen refuelling stations in June 2020, and
completed a thorough review of operations. ITM Motive owns and
operates a network of eight publicly accessible hydrogen refuelling
stations, each incorporating an ITM Power electrolyser and a Linde
IC90 compression, storage and dispensing system. The division has
developed a new strategy for refuelling buses in the UK, and has
agreed its first fuel contract with National Express for supplying
fuel from the Birmingham Bus refuelling station, the first of its
kind in the UK. The October 2020 funding included GBP30m of seed
funding for further larger refuelling stations, which will be
geared to support wider deployment of hydrogen buses, trucks and
trains.
ITM Motive is also working closely with Orsted to ensure the
stations fully utilise their energy storage capacity to operate
solely on offshore wind generated green electricity .
Technology Progress
At the core of ITM Power is its technology. Using its in-house,
best in class research and development facilities, the Company
continues to execute its technology roadmap. Focus remains on
reducing cost, increasing performance and enabling production
capacity expansion to support our ambitious growth plan. We are
ahead of schedule on the cost reduction roadmap and expect to
achieve the stated target of EUR500k per MW by 2025.
The development and verification of the next generation
Gigastack platform is well underway. This is the heart of the
larger 5MW modular offering which the Company has brought forward
in response to market demand. Through its joint venture, ITM Linde
Electrolysis, both parent companies are collaborating productively,
pooling their resources and competencies to develop superior
solutions for large scale electrolyser opportunities.
Standardisation and modularisation is central to ITM Power's
product philosophy. This enables production efficiencies and
procurement optimisation while maintaining a flexible offering to
the market. Standard products simplify stock holding, reducing lead
times and streamlining spare part provision for after sales
support.
Gigafactory
The last 12 months have seen the opening of Bessemer Park, the
new head offices of ITM Power incorporating 1GW per year production
capacity. This facility has been equipped with a suite of new
machines to enable semi-automation of stack production, reducing
both cycle time and cost. Product cost reduction continues to track
our targets and the technology development pipeline holds exciting
promise for the next 12 months and beyond.
People
The Company now employs over 218 staff across the UK, USA,
France, Germany and Australia, an increase of 28 over the last 12
months as we gear up for the planned step change in scale of
operations. We are very well placed with the skills mix, augmented
by the partnerships with Linde and Snam, to respond to the rapidly
scaling market for larger electrolyser systems. The continuing,
accelerated development of the Gigastack product - the
next-generation stack platform - enables the Company to compete at
all scales, but particularly at the largest scale to meet the
demand of national recovery strategies that are placing hydrogen at
the centre of economic recovery.
Health and Safety
COVID continues to have an impact on the normal operations of
the Group. We continue to give our staff and customers' health and
safety top priority and following government guidance and best
practice have continued to successfully implement remote working
facilities for all desk-based staff. Manufacturing staff and
essential support functions are working across our Sheffield sites
in COVID secure environments. ITM Power continues to monitor the
local and national situation and is pleased to report confirmation
of excellent COVID safe working practices following inspections by
local PHE inspectors.
Working on customer sites has been hampered by national COVID
travel and quarantine restrictions, We continue to work closely
with all our customers to support plant in operation, and continue
commissioning activities if it is safe and appropriate to do
so.
Following the retirement of our previous Head of HSE, we have
welcomed Lee Hamilton into the role. Lee brings a strong focus on
manufacturing safety and behaviour led safety and continues to work
with senior managers to ensure safe practices throughout the
Group.
Project Management
With the appointment of a Head of Projects, Jenny Hewitt, and
two new project managers, the project delivery team continues to
grow and work across the business functions to ensure delivery of
projects. ITM Power has implemented the Projects Online facility, a
powerful online solution for Project Portfolio Management delivered
through Office 365 allowing effective resource management across
the Company and facilitating detailed reporting.
Sustainability
The Board has formed an ESG (environmental, social and
governance) Committee to assist the Company's commitment to be a
sustainable business. The committee met for the first time on 15
Jan 2021. Understanding the Company's ESG impact and management has
become an increasingly important lens through which to assess
performance for investors and other stakeholders. Environmental
criteria will look at how we perform as a steward of the natural
environment; social criteria will examine relationships with our
employees, suppliers, customers and the communities in which we
operate, and governance criteria will look at internal processes
and leadership, including executive pay, audit and internal
controls, and shareholder rights.
The Committee is chaired by Non-Executive Director, Katherine
Roe with additional members consisting of Dr Graham Cooley, CEO and
Dr Rachel Smith, Executive Director plus James Collins, Head of IR
and Kathryn Connell, Head of HR in attendance. The Committee will
set ITM Power's ESG strategy and policy, and provide feedback from
across the business to external stakeholders. It will examine
particularly closely the greenhouse gas emissions resulting from
ITM Power's own activities as well as those of its suppliers and
customers with the aim of achieving continuous improvements in
performance. To assist with this goal, the Company has appointed
Goodbusiness, a consultancy with more than two decades of
experience, to help create and monitor ITM Power's ESG framework
and KPIs.
The formation of this new committee underscores and reaffirms
ITM Power's commitment to become a leading global good citizen.
Outlook
Global energy markets are increasingly recognising the need for
the use of green hydrogen within their industrial and pandemic
recovery strategies. This year we have seen a large number of
governments, industrial conglomerates and big corporations announce
new plans or strategies to make hydrogen into a feasible option for
the energy landscape in the decades to come.
These have included the EU hydrogen strategy, published in July
2020, one of the biggest moments for green hydrogen produced by
electrolysis. The EC's target of at least 40GW of green
electrolysis by 2030, which complements the earlier commitments by
the governments of Germany, the Netherlands and Portugal for a
total of 10GW, means green hydrogen will take centre stage in the
world's drive to decarbonise. Other countries, including Italy,
Poland, Chile, Denmark and France have also published national
strategies totalling multi-GW requirements.
ITM Power, with its joint venture ITM Linde Electrolysis GmbH is
uniquely positioned to deliver on this opportunity, with the
ability to scale up production at Bessemer Park and EPC delivery
through Linde. This will be reflected in delivered orders, and
consequently revenues, in the coming periods. Following the
successful fundraising in November 2020 and the partnership with
Snam, the Company also has the balance sheet strength required to
seed its Motive business, to accelerate its product roadmap and
develop world class solutions for services and after sales support.
We have the building blocks in place to make the most of the
opportunities presented by global decarbonisation.
Dr Graham Cooley
Chief Executive Officer
28 January 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Results for the six months ended 31 October 2020
Six months Six months Year ended
ended 31 October ended 31 October 30 April
2020 (unaudited) 2019 (unaudited) 2020 (audited)
GBP'000 GBP'000 GBP'000
Revenue 178 2,438 3,291
Grant income against cost of
sales 310 689 1,719
Cost of sales (3,295) (5,649) (10,839)
----------------- ----------------- ---------------
Gross loss (2,807) (2,522) (5,829)
Operating costs
Distribution expenses
* Research and development (2,183) (1,087) (2,298)
* Production and engineering (3,243) (4,318) (13,919)
* Sales and marketing (660) (771) (1,386)
----------------- ----------------- ---------------
(6,085) (6,176) (17,603)
Administration expenses (3,278) (1,938) (7,028)
IFRS 9 credit risk impairment - - 15
Other operating income - grant
income 481 807 1,049
----------------- -----------------
Loss from operations (11,689) (9,829) (29,396)
Share of loss of associate company (129) - (3)
Investment income 54 - 90
Interest expense (242) (10) (214)
----------------- -----------------
Loss before tax (12,006) (9,839) (29,523)
Tax (6) 25 (38)
----------------- ----------------- ---------------
Loss for the period (12,012) (9,814) (29,561)
OTHER TOTAL COMPREHENSIVE INCOME:
Foreign currency translation
differences on foreign operations (13) 30 50
----------------- ----------------- ---------------
Total comprehensive loss for
the period (12,025) (9,874) (29,511)
================= ================= ===============
Loss per share
Basic and diluted (2.5p) (3.0p) (7.4p)
================= ================= ===============
Weighted average number of shares 476,066,814 331,124,871 398,184,707
================= ================= ===============
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.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Results for the six months ended 31 October 2020
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 2020 23,664 137,236 (1,973) 161 (103,342) 55,746
Loss for the period - - - - (12,012) (12,012)
Other comprehensive income
for the period - - - (13) - (13)
--------- --------- --------- --------- ----------- ----------
Total Comprehensive income
for the period - - - (13) (12,012) (12,025)
Issue of share capital 209 1,613 - - - 1,822
Credit to equity for
equity settled share-based
payments - - - - 141 141
At 31 October 2020 (unaudited) 23,873 138,849 (1,973) 148 (115,213) 45,684
========= ========= ========= ========= =========== ==========
At 1 May 2019 16,200 86,631 (1,973) 111 (74,760) 26,209
Loss for the period - - - - (9,814) (9,814)
Other comprehensive income
for the period - - - 30 - 30
--------- --------- --------- --------- ----------- ----------
Total Comprehensive income
for the period - - - 30 (9,814) (9,784)
Issue of share capital 7,353 50,443 - - - 57,796
Credit to equity for
equity settled share-based
payments - - - - 182 182
At 31 October 2019 (unaudited) 23,553 137,074 (1,973) 141 (84,392) 74,403
========= ========= ========= ========= =========== ==========
The accompanying notes form part of these financial
statements.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 31 October 2020
As at 31 October As at 31 October As at 30
2020 2019 April 2020
(audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
NON-CURRENT ASSETS
Investment in Associate 360 - 346
Intangible Assets 2,752 1,056 2,154
Right of Use Assets 6,165 798 6,520
Property, plant and equipment 12,779 7,504 6,501
Financial Asset at amortised cost 142 - 137
---------------- ---------------- -----------
22,198 9,358 15,658
---------------- ---------------- -----------
CURRENT ASSETS
Inventories 6,110 3,519 4,432
Trade and other receivables 18,458 23,239 23,166
Cash and cash equivalents 25,940 56,878 39,919
---------------- ---------------- -----------
TOTAL CURRENT ASSETS 50,508 83,636 67,517
CURRENT LIABILITIES
Trade and other payables (11,822) (14,362) (14,013)
Lease liability (164) (310) (211)
Provisions (8,725) (3,435) (6,890)
---------------- ---------------- -----------
TOTAL CURRENT LIABILITIES (20,711) (18,107) (21,114)
NET CURRENT ASSETS 29,797 65,529 46,403
---------------- ---------------- -----------
Long-term lease liability (6,311) (484) (6,315)
NET ASSETS 45,684 74,403 55,746
================ ================
EQUITY
Called up share capital 23,873 23,553 23,664
Share premium account 138,849 137,074 137,236
Merger reserve (1,973) (1,973) (1,973)
Foreign Exchange Reserve 148 141 161
Retained loss (115,213) (84,392) (103,342)
---------------- ---------------- -----------
TOTAL EQUITY 45,684 74,403 55,746
================ ================ ===========
The accompanying notes form part of these financial
statements.
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Results for the six months ended 31 October 2020
Six months Six months
ended 31 ended 31 Year ended
October October 30 April
2020 (unaudited) 2019 (unaudited) 2020 (audited)
GBP'000 GBP'000 GBP'000
Loss from operations (11,689) (9,830) (29,396)
Adjustments:
Depreciation of property, plant and equipment 1,057 1,089 2,440
(Gain)/ Loss on disposal (1) 92 473
Impairment - - 5,588
Amortisation 115 126 197
Share based payment 141 182 978
-----------------
Operating cash flows before movements in
working capital (10,377) (8,341) (19,720)
Increase in inventories (1,679) (1,614) (2,525)
Decrease in receivables 4,605 8,637 7,964
Decrease in payables (2,191) (3,215) (2,882)
Increase in provisions 1,836 2,624 5,285
----------------- ----------------- ---------------
Cash used in operations (7,806) (1,909) (11,878)
Interest paid (242) (15) (214)
Income taxes received 103 52 52
----------------- ----------------- ---------------
Net cash used in operating activities (7,945) (1,872) (12,040)
----------------- ----------------- ---------------
Investing activities
Investment in Associate (136) - (349)
Purchases of property, plant and equipment (10,329) (4,174) (8,986)
Capital Grants received against purchases
of non-current assets 3,448 224 89
Finance Asset (Security deposit) - - (137)
Proceeds from sale of plant & equipment 1 224 1
Payments for intangible assets (794) (513) (1,771)
Interest Received 54 5 90
----------------- ----------------- ---------------
Net cash used in investing activities (7,756) (4,234) (11,063)
----------------- ----------------- ---------------
Financing activities
Proceeds from issue of shares 1,822 58,822 59,299
Costs associated with fund raise - (1,026) (1,230)
Payment of lease liabilities (73) - (236)
Net cash from financing activities 1,749 57,796 57,833
----------------- ----------------- ---------------
(Decrease)/ increase in cash and cash equivalents (13,952) 51,690 34,730
Cash and cash equivalents at the beginning
of the period 39,919 5,173 5,173
Effect of foreign exchange rate changes (27) 15 16
----------------- -----------------
Cash and cash equivalents at the end of
the period 25,940 56,878 39,919
================= ================= ===============
Cash Burn
Cash burn is a measure used by key management personnel to
monitor the performance of the business.
Six months Six months Year ended
ended 31 October ended 31 October 30 April
2020 (unaudited) 2019 (unaudited) 2020 (audited)
GBP'000 GBP'000 GBP'000
(Decrease)/ increase in Cash and
Cash equivalents per the cash flow
statement (14,006) 51,690 34,730
Effect of foreign exchange rates (27) 15 16
Less share issue proceeds (net) - (57,796) (58,069)
-----------------
Cash Burn (14,033) (6,091) (23,323)
----------------- ----------------- ---------------
The accompanying notes form part of these financial statements.
The condensed Interim Financial Statements were approved by the
board of Directors on 28 January 2021
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 periods ended 31 October
2019 and 2020 have not been subject to an interim review. The
information relating to the year ended 30 April 2020 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 financial statements have been prepared on the historical
cost basis. The principal 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 2022 (the "Forecast
Period"). The Forecast includes 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.
Note on a Change in Accounting Policy
The Group makes R&D claims as part of its annual submissions
to the tax authorities and recently started to make RDEC claims to
benefit from enhanced relief or tax credits (as appropriate). The
Group has chosen to present R&D claims within other income, as
they are similar in nature to grant funding. This leaves the tax
line of the accounts solely for the purposes of reporting
corporation tax. This change was reflected in a revised accounting
policy in the 2020 year-end financial statements. Application was
made prospectively so the half-year October 2019 comparatives
remain unadjusted.
2. Revenue and other operating income
An analysis of the Group's revenue is as follows: H1 2020 H1 2019
GBP'000 GBP'000
Continuing operations
Revenue from construction contracts (73) 1,687
Consulting services 130 392
Maintenance services 42 30
Fuel sales 79 237
Other - 92
-------- --------
Revenue in the Consolidated Income Statement 178 2,438
Grant income shown against cost of sales 310 689
Grant income (claims made for projects) 425 807
Other government grants (R&D claims) 56 -
969 3,934
======== ========
As revenue is recognised over time on custom build projects,
some construction contracts have incurred negative revenues in the
period. Developments on the projects, including Brexit and
continued Covid-19 delays or safety measures, have led to
additional costs being forecast, which reduce the stage of
completion and therefore the percentage of revenue that can be
recognised.
Revenues from major products and services
The Group's revenues from its major products and services were
as follows:
H1 2020 H1 2019
GBP'000 GBP'000
Power-to gas
(of which product sales recognised over time GBP13,000) 91 233
Refuelling
(of which product sales recognised over time -GBP165,000) (86) 908
Chemical Industry
(of which product sales recognised over time GBP80,000) 80 822
Other 93 475
-------- --------
178 2,438
======== ========
GEOGRAPHIC ANALYSIS OF REVENUE
A geographical analysis of the Group's revenue is set out
below:
H1 2020 H1 2019
GBP'000 GBP'000
United Kingdom
(of which product sales recognised over time GBP0) 212 583
Germany
(of which product sales recognised over time GBP74,000) 113 832
Rest of Europe
(of which product sales recognised over time -GBP147,000) (147) 868
United States - 155
-------- --------
178 2,438
======== ========
The following accounted for more than 10% of total revenue:
H1 2020 H1 2019
GBP'000 GBP'000
Customer A <10% 666
Customer B 80 815
Customer C 90 378
Customer D 19 <10%
Customer E 41 <10%
Customer F 35 <10%
3. Calculation of Adjusted EBITDA
In reporting EBITDA, management use the metric of adjusted
EBITDA, to better reflect underlying performance and remove the
effect of the following items:
Six months Six months Year ended
ended 31 October ended 31 October 30 April 2020
2020 2019 GBP'000
GBP'000 GBP'000
Loss before interest and
tax (11,818) (9,829) (29,396)
Add back:
Depreciation 1,057 1,317 2,440
Impairment - - 5,588
Amortisation 115 126 197
(Gain)/ Loss on disposal (1) 92 473
Share based payment charge 228 182 2,625
------------------- ------------------- ----------------
(10,419) (8,112) (18,073)
=================== =================== ================
4. Bessemer investment / capital commitment
Approximately GBP5.9m of the fixed asset additions in the period
related to the Bessemer Park fit-out and equipment for the creation
of our giga-factory. A further GBP2.6m is anticipated to complete
this.
5. Equity Issued
The increase in share capital and share premium reserves in the
period was the result of share options exercised. In the
comparative period movements on these reserves related to a fund
raise.
6. Post Balance Sheet Events
Post balance sheet, the Company entered into a strategic
partnership with Snam and raised GBP172m through an equity
fundraise, as detailed in the body of the announcement.
-ends-
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END
IR EAAFXAAAFEAA
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