ITM Power Plc (LON:ITM), the energy storage and clean fuel company, today announced its interim results for the six-month period ended 31 October 2016. The Group has recognised total revenue and grant funding of £2.97m in the period and currently has £16.98m of projects under contract with a further £1.37m of contracts in the later stages of negotiation, making a total pipeline of £18.35m. In the 2016 calendar year, orders have totalled £15.68m, representing an increase of 100% year on year.
Given the current contracted order book, the Directors remain confident of delivering full year results in line with market expectations.
Summary:
Commercial Progress
· National Physics Laboratory (NPL) & The Centre for Engineering and Manufacturing Excellence (CEME) refuelling sites now open in London as part of the HyFive project.
· Upgrade completed to M1 Hydrogen refuelling station in Rotherham.
· H2ME2 grant awarded to continue to extend the network of refuelling stations in the UK.
· Stations on Shell forecourts at Cobham and Beaconsfield already underway.
· Fuel contracts signed with Arcola Energy, Commercial Group and Arval.
Post period end
· A further £3.1m of products under contract secured making a current total of £16.98m under contract and a total pipeline of £18.35m
· Sale of 1.25MW electrolyser to major EPC.
· First UK Power-to-Gas project awarded.
· Fuel contracts signed with Anglo American, Europcar UK and Hyundai.
· Announcement of a proposed placing to raise a minimum of £5.5m to;
o generate working capital to support the expanding project order book;
o move toward achieving a positive cash flow position; and
o strengthen the Company’s balance sheet, to assist in meeting tender requirements
Key Financial Results for the six months ended 31 October 2016
· Total revenue and grant funding of £2.97m (2015: £3.45m), down 14%, reflecting the early stages of build projects during which there is relatively little revenue recognition*:
o Revenue – £0.4m (2015: £0.66m), down 39%
o Grant income – £1.62m (2015: £1.37m), up 18%
o Grants receivable for Capital Projects – £0.95m (2015: £1.42m), down 33%
· Increase in fixed assets to £3.8m (2015: £3.13m), up 21%
· Loss from operations £2.27m (2015: £3.17m), improved by 28%
· Cash burn+ of £1.61m (2015: £3.90m), decreased by 59%
· Cash balance of £1.7m at period end (2015: £2.6m)
· Debtors balances of £9.2m (2015: £5.14m), up 79%
· Debtors balance comprises substantially of balances from the California energy commission, UK government, and the EU Joint undertaking, but also balances paid in advance to suppliers.
* Revenue is recognised based on the percentage of costs incurred on a project, which means that the majority of revenue recognition takes place towards the end of a project
+Cash burn is a non-statutory measure and is defined underneath the Cash Flow Statement
Corporate Development
· New Managing Director, Calum McConnell, appointed in Germany to replace Phil Doran who is relocating to Scotland.
Graham Cooley, ITM Power PLC CEO, commented: “The last six months have seen significant development of our refuelling infrastructures around London and whilst this has been a key area of progress, we have also maintained a focus on our other markets and products. Demand for quotes and interest in our products and expertise continue to grow, resulting in some sizeable contracts for the second half of the current year and beyond. We hope that we can continue to develop our technology, contacts and order book as demand for our products and know-how increases on the back of these high-profile undertakings.”
Roger Putnam, Chairman, added: “While changes in world economies and the UK’s relationship with Europe in particular, have provided challenges for UK businesses, ITM Power has progressed with its refuelling projects in the UK and continues to receive significant interest from overseas power-to-gas markets, further raising the profile of ITM Power as a world leader in the deployment of PEM electrolysis.”
The company also announced a proposed fundraising of a minimum of £5.5 million, by way of the conditional firm placing (“Firm Placing”) of Firm Placed Shares at a price of 17 pence per share (the “Issue Price”) with existing and new institutional investors. If approved by Shareholders the Firm Placed Shares to be issued pursuant to the proposed Firm Placing is expected to represent approximately 13 per cent. of the Enlarged Issued Share Capital of the Company. The Firm Placed Shares will rank pari passu in all other respects with the Company’s Existing Ordinary Shares.
The Firm Placed Shares are being offered by way of an accelerated bookbuild (“Bookbuild”), which will be launched immediately following this announcement. Zeus Capital will be acting as sole bookrunner in connection with the Bookbuild.
It is expected that the finalisation of the proposed Firm Placing will commence immediately following this announcement and a further announcement will be made to confirm its completion in due course.
The proposed Firm Placing will be subject to the passing of certain resolutions for which Shareholder approval will be sought at the General Meeting of the Company, which is expected to be convened shortly by the posting to Shareholders of a circular containing notice of the meeting.
The Directors intend to use the proceeds of the Firm Placing to:
· generate working capital to support the project order book;
· move toward achieving a positive cash flow position; and
· strengthen the Company’s balance sheet, to assist in meeting tender requirements, in particular with regards to obtaining upfront payment terms from customers.
