REG - ITM Power PLC - Interim Results
30/01/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250130:nRSd1933Va&default-theme=true
RNS Number : 1933V ITM Power PLC 30 January 2025
30 January 2025
ITM Power PLC
Interim Results for the Six Months to 31 October 2024
We are delighted to announce our interim results, showing continued strong
year-on-year progress. Revenue has increased further, adjusted EBITDA losses
have reduced, and we have maintained a strong cash position. Our contracted
order backlog has grown to our highest-ever number of £135m.
Interim results summary
· Revenue of £15.5m (H124: £8.9m)
· Adjusted EBITDA loss of £16.8m (H124: £18.1m)*
· Cash at the end of H125 of £203.1m (H124: £253.7m)**
· Record contract backlog to date of £135.3m, up from £43.7m two
years ago
· First-half highlights:
o Contract signed for REFHYNE II 100MW project for Shell
o 500MW and 8MW capacity reservations secured
o Commissioned a 4MW pilot plant for RWE in Germany
o Inauguration of the 24MW plant for Yara in Norway
· Post period end:
o Two NEPTUNE V contracts signed, totalling 4 units and 20MW in Germany
o Front End Engineering Design (FEED) contract signed for a 50MW project in
the EU
o FEED contract signed for a 10MW standard plant configuration for several
projects to be deployed in the UK
o Further 40% iridium loading reduction, lowering costs
o Sales pipeline stronger than ever, including high customer demand for
NEPTUNE V
· Reiteration of full-year revenue guidance, improved adjusted EBITDA
losses versus original guidance, and a further improvement to cash:
o Revenue between £18m and £22m
o Adjusted EBITDA loss between £32m and £36m
o Cash between £185m and £195m, substantially improved against original FY
guidance of £160-175m and previously improved guidance of £170-180m
*Adjusted EBITDA is a non-statutory measure. The calculation method is set out
in the Note 4
*The prior year results were restated. Please see notes 2 and 4
**Cash is stated after an exceptional payment of £13m paid to Linde relating
to a commercial settlement previously disclosed in the FY24 preliminary
results.
Dennis Schulz, CEO of ITM, said: "Green hydrogen has begun to play its vital
role in decarbonising the global energy system, whether as a feedstock in
sectors such as chemicals and refining, as a fuel, or as a source of flexible
power generation.
Gone is the unrealistic hype that the hydrogen economy would develop
overnight. Instead, today, the hype has given way to real industrial scale-up
of projects and production capacities. The green hydrogen industry has started
gaining traction with an increasing number of project Final Investment
Decisions (FIDs) taken over the recent months.
Our sales pipeline and contract backlog have never been healthier, and we now
have a product portfolio tailored to our customers' needs. This has been
evidenced in us winning the
Shell REFHYNE II 100MW project, two contracts for a total of four NEPTUNE V
units, and a 50MW and a 10MW FEED contract; all profitable orders.
Operationally, we are in the best condition the company has ever been in.
Tangible evidence of this is our continuously improved factory acceptance test
(FAT) first-time-pass rate for stacks, which now stands at 98%, up from below
50% just two years ago. We commissioned important reference plants for our
customers, some of which were publicly inaugurated, such as the 24MW green
hydrogen to green ammonia plant operated by Yara in Norway and the 4MW pilot
plant at Lingen for RWE. All this is conducive to customer confidence, and,
over time, these factors support converting our growth into profitability and
cash generation. Today, I am even more optimistic about our future than when I
joined the company two years ago."
Dennis Schulz, Amy Grey, Andy Allen and Dr Simon Bourne will present to
analysts and investors at 9:00 a.m. GMT.
The presentation will be via the Investor Meet Company platform. Questions can
be submitted pre-event via the Investor Meet Company dashboard anytime during
the live presentation. Analysts and investors can sign up to Investor Meet
Company for free via:
https://www.investormeetcompany.com/itm-power-plc/register-investor
(https://www.investormeetcompany.com/itm-power-plc/register-investor) . Those
who follow the Company on the Investor Meet Company platform will
automatically be invited.
A recording will be made available on the Investor Relations section of the
ITM website after the event.
For further information, please visit www.itm-power.com
(http://www.itm-power.com/) or contact:
ITM Power PLC
Justin Scarborough, Head of Investor Relations +44 (0)114 551 1080
Berenberg
Ciaran Walsh, Harry Nicholas +44 (0)20 3207 7800
J.P. Morgan Cazenove
Richard Perelman, Charles Oakes +44 (0)20 7742 4000
About ITM Power PLC:
ITM Power was founded in 2000 and ITM Power PLC was admitted to the AIM market
of the London Stock Exchange in 2004. Headquartered in Sheffield, England, ITM
Power designs and manufactures electrolysers based on proton exchange membrane
(PEM) technology to produce green hydrogen, the only net zero energy gas,
using renewable electricity and water.
INTERIM REVIEW
Operational update
Today, ITM is in the best operational shape it has ever been. Over the last
two years, we have put our house in order to ensure readiness to scale with
accelerating customer FIDs.
We managed our costs and capital allocation decisions effectively,
continuously improving our operational and commercial capabilities and further
advancing our technology and product portfolio. This unwavering commitment is
a testament to our dedication to providing our customers with the best
electrolysers and services.
· Processes and capabilities: Over the past two years, we have focused
on evolving and improving our processes and capabilities in manufacturing,
engineering, procurement, and field services. Every stack we manufacture must
pass a comprehensive Factory Acceptance Test (FAT) before it can be deployed,
and there is no better measurement of our operational improvements than how
they manifest in FAT pass rates.
We provided some insights into our FAT data at the time of our FY23
preliminary results in August 2023, and whilst we had already made significant
improvements at that time, there was still more to be done. Two years ago, we
faced a pass rate of less than 50%, which we have improved continuously. We
are proud that our targeted efforts have propelled the pass rate of our stacks
to 98% as we fulfil our commitment to the 200MW Lingen project.
· Product portfolio: Our 12-month plan included rationalising our
portfolio, enabling us to focus on developing and manufacturing our core
technology for real-world projects. As part of this process, we identified a
gap in our product line-up, which led to the launch of NEPTUNE V, our 5MW
containerised full-scope electrolyser plant, in May 2024.
NEPTUNE V utilises ITM's proven TRIDENT stack technology. It is compact and
versatile, and provides 5MW of reliable and highly efficient hydrogen
production capacity, all contained in the smallest footprint per MW in the
industry today. NEPTUNE V is competitively priced and ideally suited for
mid-size projects, complementing our 2MW containerised solution, NEPTUNE II.
Customer interest and demand for NEPTUNE V have been phenomenal, which
materialised in our first NEPTUNE V contract with Guttroff, a private German
company that provides solutions for technical and medical gases, welding
supplies, and engineering, and which celebrates its 100th company anniversary
in 2025. This success was quickly followed by the sale of three further
NEPTUNE V units in December 2024. Furthermore, we announced FEED contracts for
50MW and 10MW of NEPTUNE V products, demonstrating the versatility to customer
projects of different sizes.
· Technology development: We are differentiating ourselves from our
peers by retaining all core science and manufacturing processes in-house,
which maximises our value-add, provides security of supply, and enables rapid
improvement and validation cycles.
In November, we announced the conclusion of a further technical milestone,
having validated
an additional 40% iridium loading reduction whilst maintaining stack
performance and longevity. This builds on the Company's track record of
successful precious metal reduction, having already lowered loading by over
80% in the past years. ITM met the EU's 2030 precious metal loading target for
PEM electrolysers already in 2019.
The development of our next-generation Chronos stack platform remains well on
track.
· Sales pipeline: Our sales pipeline has grown significantly and beyond
expectations over the last two years. The market-leading NEPTUNE V product has
had a notable impact on the near-term opportunities.
Income statement
Revenue for the period was £15.5m (H124: £8.9m), driven predominantly by
product revenue from NEPTUNE deployments. Included within the total was income
of £1.1m (H124: £1.9m) was recognised from consulting contracts.
The gross loss was £10.2m (H124: £8.1m), mainly driven by three factors.
These were under-absorption of factory costs (through having unlocked
increased capacity in the prior year's 12-month plan), provisioning on
inventory against older generation products as our latest TRIDENT stacks
achieve backwards compatibility and NEPTUNE V bridging the gap from
small-scale to large-scale plants, and costs associated with on-site works.
The Company posted an adjusted EBITDA loss of £16.8m (H124: £18.1m*) for the
period, which is a 7% improvement.
The loss before tax was £28.8m (H124: £15.3m), which is disclosed after
exceptional costs in the period. On 15 August 2024, the Company disclosed a
contingent liability around a commercial dispute in its Preliminary Results
announcement. In September 2024, the Company concluded this commercial dispute
with Linde/BOC Group, leading to a payment to Linde of £13.0m, in line with
the Company's estimation for the loss at the time of the announcement. Whilst
the dispute details remain confidential, the Board is satisfied that all
historic claim risk is now settled and the ongoing relationship between ITM
and Linde is strong. The payment was incorporated into cash guidance for FY25.
*The prior year results were restated. Please see notes 2 and 4
Cash flow and balance sheet
Capital expenditure totalled £5.4m in the period (H124: £7.0m), with £3.4m
(H124: £5.7m) invested
in capital projects, namely factory upgrades and machinery and investment in
new product development (intangible assets) of £2.0m (H124: £1.3m).
The working capital inflow in the first half was £1.0m, with receivables and
payables reducing by £4.5m and £1.0m, respectively, offset by an increase in
inventories of £2.6m.
Inventories held decreased to £73.0m from £76.8m in the prior year but
increased from £70.4m at April 2024. The inventory has primarily been
processed into finished subsystems and products, with the raw materials
balance reducing from £9.4m (H124) to £7.8m (H125). This balance remains an
opportunity for ITM to improve working capital through project execution.
Cash at the period end was £203m (H124: £254m), representing an outflow
since the year-end of
£27m, which includes a payment of £13.0m to Linde as described above, which
was paid before 31 October. Finance income in the period was £5.5m (H124:
£6.3m), representing an annual average interest rate of c.5%. Before
exceptional items, the net outflow was halved to £14.2m, compared to £28.9m
in the same period in the prior year.
Market Update
Achieving net zero requires a comprehensive transformation of the energy
system, and governments worldwide are implementing policies, regulatory
frameworks, and financial support mechanisms. As the only net-zero gas, green
hydrogen is becoming a significant pillar of the global energy mix, whether as
a feedstock in sectors such as chemicals and refining, as a fuel where
electrification is not possible due to the need for high-temperature heat, or
as a source of flexible power generation. Given government ambitions
worldwide, supported by significant funding, the potential of the green
hydrogen and electrolyser industry remains phenomenal and provides optimism
for the future.
The new UK government reaffirmed support for 11 electrolytic hydrogen projects
selected in the Hydrogen Allocation Round 1 (HAR1) auction last December,
signalling an ongoing commitment to hydrogen. The timeframe between awards and
contract signatures for HAR2 is expected to be shorter.
The EU has an ambitious strategy to position hydrogen as a cornerstone of the
energy transition. Its target is to produce up to 10Mt of renewable hydrogen
by 2030, requiring around 100GW of electrolyser capacity. According to the
European Union Agency for the Cooperation of Energy Regulators (ACER), this
equates to more than 500 times the installed capacity at the end of 2023.
Within the EU, some Member States are also making significant efforts to
foster, develop and promote their hydrogen markets. The European Commission
awarded €4.8bn in grants to 85 net-zero projects across 18 countries,
focusing on energy-intensive industries, renewable energy, hydrogen
production, carbon management and sustainable mobility. Expected to reduce CO2
emissions by 476Mt by 2030, this largest Innovation Fund allocation brings
total support to €12bn, advancing the EU's Net-Zero Industry Act goals.
Germany has led the world in policy and funding support for green hydrogen.
The Federal Network Agency recently approved a 9,040km hydrogen core network,
set to be operational by 2032, with the first approximately 500km of pipeline
announced to come online this year. The €18.9bn network will repurpose 60%
of natural gas pipelines by connecting hydrogen production centres, storage,
and end-users. It is supported by state guarantees and an amortisation scheme
to balance early-stage low revenues. The initiative aims to advance Germany's
decarbonisation, create jobs and support industrial growth, with capped user
fees to keep early adoption affordable. KfW, the German development bank, has
also announced that it will provide €24bn to support the construction of
Germany's hydrogen core network.
US energy policy and related net-zero targets remain uncertain after the US
election. The Inflation Reduction Act (IRA) has always had bi-partisan
support, and much of the investment in manufacturing has been concentrated in
Republican states. The Hydrogen Production Tax Credit, Section 45V, was
introduced with the IRA and proposes to award up to $3 per kg of hydrogen
produced with low lifecycle greenhouse gas emissions. The US Treasury
Department and the Internal Revenue Service (IRS) released the long-awaited
'final' rules in early January. Certain provisions within the three pillars of
Incrementality, Deliverability and Time Matching have been relaxed; most
notably, the implementation of hourly matching requirements has been pushed
back to 2030 versus the original guidance of 2028. However, President Trump
has since signed an Executive Order immediately pausing the disbursement of
funding appropriated through the IRA and the Infrastructure Investment and
Jobs Act (IIJA). All agencies must review their processes, policies, and
programmes for issuing grants, loans, contracts, or any other financial
disbursements of these appropriated funds for consistency with a set of
criteria. Until the outcome is clearer, industry participants will likely hold
off making material investment decisions in the US.
Board changes
Post-period end, we welcomed two new Directors to the Board, with Amy Grey
starting as CFO on 6th January and Matthias von Plotho appointed as Linde's
nominated Board representative, a Non-executive role. They replace Andy Allen
and Jürgen Nowicki, respectively. Amy brings a wealth of experience, joining
us from Sheffield Forgemasters, where she served as CFO. Before this, Amy was
Vice President of Finance for Greenlane Renewables, a global provider of
biogas upgrading systems. Matthias joined Linde in 2001 as Team Lead
Accounting and subsequently held different positions in Finance &
Controlling, and Global Head of M&A. He is currently Senior Vice President
Finance EMEA at Linde Gas.
Improved financial guidance for FY25
ITM's financial performance in the first half of the year was pleasing, which
allowed guidance to be refreshed positively in our trading update in December.
We reiterate revenue and EBITDA whilst improving cash:
· Full-year revenue of £18m to £22m
· Adjusted EBITDA loss range between £32m and £36m
· Cash at year-end in the range of £185-195m, up from original
guidance of £160-175m and previously already improved guidance of £170-180m
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Results for the six months ended 31 October 2024
Note Six months to 31 October 2024 Six months to 31 October 2023 Year ended 30 April 2024
Restated (unaudited)
(unaudited) £'000 (audited)
£'000 £'000
Revenue 3 15,534 8,883 16,509
Cost of sales (25,722) (17,029) (33,173)
Gross loss (10,188) (8,146) (16,664)
Administrative expenses (23,894) (12,778) (22,575)
Other income - government grants 295 225 1,228
Loss from operations before exceptional items (20,705) (20,699) (38,011)
Exceptional items 8 (13,082) - -
Loss from operations (33,787) (20,699) (38,011)
Share of loss of associate companies (2) (260) (291)
Finance income 5,496 6,269 12,219
Finance costs (499) (295) (643)
Loss on disposal of joint venture - (331) (331)
Loss before tax (28,792) (15,316) (27,057)
Tax (68) (26) (167)
Loss after tax (28,860) (15,342) (27,224)
Other comprehensive income:
Foreign currency translation differences on foreign operations (142) (152) 174
Total comprehensive loss for the period (29,002) (15,494) (27,050)
Basic and diluted loss per share (4.7p) (2.5p) (4.4p)
Weighted average number of shares 617,175,156 616,604,544 616,743,434
All results presented above are derived from continuing operations. The prior
interim period has been restated (see Note 2).
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. The number of potentially
dilutive shares not included in the calculation above due to being
anti-dilutive at 31 October 2024 were 6,586,560 (31 October 2023: 3,858,217;
30 April 2024: 6,582,037).
CONSOLIDATED BALANCE SHEET
As at 31 October 2024
Note 31 October 2024 31 October 2023 30 April 2024
Restated
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Investment in associate and joint venture 87 109 53
Intangible assets 10,965 12,130 10,174
Right of use assets 11,926 6,495 12,250
Property, plant and equipment 31,137 24,932 29,398
Financial asset at amortised cost 512 180 400
Total non-current assets 54,627 43,846 52,275
Current assets
Inventories 5 73,000 76,825 70,417
Trade and other receivables 24,049 28,634 28,741
Cash and cash equivalents 203,134 253,749 230,348
300,183 359,208 329,506
Current liabilities
Trade and other payables (67,330) (60,500) (68,290)
Provisions 6 (9,357) (16,739) (10,095)
Lease liability (804) (646) (678)
Total current liabilities (77,491) (77,885) (79,063)
Net current assets 222,692 281,323 250,443
Non-current liabilities
Lease liability (11,820) (6,617) (12,026)
Provisions 6 (25,283) (38,253) (21,974)
Total non-current liabilities (37,103) (44,870) (34,000)
Net assets 240,216 280,299 268,718
Equity
Share capital 30,869 30,844 30,849
Share premium 542,833 542,698 542,735
Merger reserve (1,973) (1,973) (1,973)
Foreign exchange reserve 204 20 346
Retained loss (331,717) (291,290) (303,239)
Total Equity 240,216 280,299 268,718
The prior interim period has been restated (see Note 2).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Results for the six months ended 31 October 2024
Share capital Share premium Merger reserve Foreign Exchange reserve Retained loss Total
£'000 £'000 £'000 £'000 £'000 Equity
£'000
At 1 May 2024 30,849 542,735 (1,973) 346 (303,239) 268,718
Transactions with Owners
Issue of shares 20 98 - - - 118
Credit to equity for share based payment - - - - 382 382
Total Transactions with Owners 20 98 - - 382 500
Loss for the period - - - - (28,860) (28,860)
Other comprehensive income - - - (142) - (142)
Total comprehensive income - - - (142) (28,860) (29,002)
At 31 October 2024 (unaudited) 30,869 542,833 (1,973) 204 (331,717) 240,216
At 1 May 2023 30,823 542,593 (1,973) 172 (276,107) 295,508
Transactions with Owners
Issue of shares 21 105 - - - 126
Credit to equity for share based payment - - - - 159 159
Total Transactions with Owners 21 105 - - 159 285
Loss for the period (restated) - - - - (15,342) (15,342)
Other comprehensive income - - - (152) - (152)
Total comprehensive income - - - (152) (15,342) (15,494)
At 31 October 2023 restated (unaudited) 30,844 542,698 (1,973) 20 (291,290) 280,299
At 1 May 2023 30,823 542,593 (1,973) 172 (276,107) 295,508
Transactions with Owners
Issue of shares 26 142 - - - 168
Credit to equity for share based payment - - - - 92 92
Total Transactions with Owners 26 142 - - 92 260
Loss for the year - - - - (27,224) (27,224)
Other comprehensive income - - - 174 - 174
Total comprehensive income - - - 174 (27,224) (27,050)
At 30 April 2024 (audited) 30,849 542,735 (1,973) 346 (303,239) 268,718
The prior interim period has been restated (see Note 2).
CONSOLIDATED CASH FLOW STATEMENT
Results for the six months ended 31 October 2024
Note Six months to 31 October 2024 Six months to 31 October 2023 Year ended 30 April 2024
Restated
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net cash used in operating activities 7 (27,012) (27,533) (50,581)
Investing activities
Proceeds on sale of joint venture - - 1,483
Deposits paid on new leasehold assets - - (496)
Purchases of property, plant and equipment (3,441) (5,726) (11,967)
Proceeds on disposal of non-current assets - 30 19
Payments for intangible assets (1,988) (1,279) (2,037)
Interest received 5,483 6,263 12,203
Net cash generated from / (used in) investing activities 54 (712) (795)
Financing activities
Issue of ordinary share capital 118 126 167
Payment of lease liabilities (383) (645) (1,058)
Net cash used in financing activities (265) (519) (891)
Decrease in cash and cash equivalents (27,223) (28,764) (52,267)
Cash and cash equivalents at the beginning of period 230,348 282,557 282,557
Effect of foreign exchange rate changes 9 (44) 58
Cash and cash equivalents at the end of period 203,134 253,749 230,348
The prior interim period has been restated (see Note 2).
The interim summary accounts were approved by the board of Directors on 30
January 2025.
Notes to the interim summary accounts
1. Basis of preparation of interim figures
These interim summary accounts have been prepared using accounting policies
consistent with UK-adopted international accounting standards, with the
requirements of the Companies Act 2006. Whilst the financial information has
been compiled in accordance with the recognition and measurement principles of
UK-adopted international accounting standards (IFRSs), it does not 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 has 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.
As permitted, this interim report has been prepared in accordance with the AIM
rules and not in accordance with IAS 34 "Interim financial reporting".
The information relating to the year ended 30 April 2024 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.
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group since the last annual consolidated financial
statements as at the year ended 30 April 2024.
Going Concern
The Directors have prepared a cash flow forecast for the period ending 31
January 2026. This forecast indicates that the Group and parent company would
expect to remain cash positive without the requirement for further fund
raising based on delivering the existing pipeline, for a period of at least 12
months from the date of approval of these summary accounts.
By the end of the period analysed, the Group expect to hold funds sufficient
to trade for a minimum of a further year if the business continued to operate
in a similar way beyond the forecast period.
This cash flow forecast has also been stress tested. As a worst-case scenario,
if all payments had to continue as forecast while receipts were not received
at all, the business would remain cash positive for the full twelve months
from the date of approval of these summary accounts.
The interim summary accounts have therefore been prepared on a going concern
basis.
2. Restatement of prior interim period
The prior interim period has been restated to remove a general accrual based
on budgeted items (£2,873,000) that were not undertaken and therefore did not
meet the criteria for recognition as liabilities under IFRS 9. This has
reduced the administrative expenses in the income statement and therefore
reduced the reported loss (£15.3m instead of the reported £18.2m after tax).
It has also reduced trade and other payables on the balance sheet and so the
net assets value is now increased (£280.3m instead of the reported £277.4m).
The accrual had already been removed by year end. The loss per share and
diluted loss per share have also been restated, at 2.5p (against a
previously-reported 3.0p).
3. Revenue and other operating income
An analysis of the Group's revenue is as follows:
Six months to 31 October 2024 (unaudited) Six months to 31 October 2023 (unaudited) Year ended
£'000 £'000 30 April 2024 (audited)
£'000
Revenue from product sales recognised over time - - 75
Revenue from product sales recognised at point in time 13,820 4,892 8,144
Consulting contracts recognised at point in time 1,072 1,883 5,040
Maintenance contracts recognised at point in time 208 480 1,498
Fuel sales 94 117 216
Other 340 1,511 1,536
Revenue in the Consolidated Income Statement 15,534 8,883 16,509
Grant income (claims made for projects) 24 - 401
Other government grants (R&D claims) 271 225 827
Grant income in the Consolidated Income Statement 295 225 1,228
15,829 9,108 17,737
The "Other" category includes contractual revenues recognised at point in time
but not classified elsewhere as not involving the transfer of goods or the
completion of maintenance or consultancy services.
Revenues from major products and services
The Group's revenues from its major products and services were as follows:
Six months to 31 October 2024 (unaudited) Six months to 31 October 2023 (unaudited) Year ended
£'000 £'000 30 April 2024 (audited)
£'000
Power 74 19 253
Transport 251 2,545 2,764
Industry 13,896 4,241 7,275
Other 1,313 2,078 6,217
15,534 8,883 16,509
The "Other" category contains consultancy values that cannot be allocated to a
single product group.
GEOGRAPHIC ANALYSIS OF REVENUE
A geographical analysis of the Group's revenue is set out below:
Six months to 31 October 2024 (unaudited) £'000 Six months to 31 October 2023 (unaudited) Year ended
£'000 30 April 2024
(audited)
£'000
United Kingdom 985 1,912 5,900
Germany 11,966 2,582 6,028
Austria 20 1,660 1,659
Rest of Europe 754 908 996
Israel 38 - -
United States 94 117 216
Australia 5 1,704 1,710
Japan 1,672 - -
15,534 8,883 16,509
The following accounted for more than 10% of total revenue:
Six months to 31 October 2024 (unaudited) Six months to 31 October 2023 (unaudited) Year ended
£'000 £'000 30 April 2024 (audited)
£'000
Customer A 10,753 N/A N/A
Customer B <10% 1,698 4,490
Customer C <10% <10% 3,121
Customer D <10% 1,266 <10%
Customer E N/A 1,660 1,659
Customer F N/A 1,316 <10%
Customer G <10% 903 <10%
Customer H N/A 1,064 <10%
Customer I 1,672 N/A N/A
4. Calculation of Adjusted EBITDA
In reporting EBITDA, management use the metric of adjusted EBITDA, removing
the effect of the non-repeating costs that are not directly linked to the
trading performance of the business in the period under review:
Six months to 31 October 2024 Six months to 31 October 2023 Year ended
Restated 30 April 2024
(unaudited) (unaudited)
£'000 £'000 (audited)
£'000
Loss from operations (33,787) (20,699) (38,011)
Add back:
Depreciation 2,329 1,766 4,008
Amortisation 1,188 624 1,921
Loss on disposal of property, plant and equipment - 39 126
Impairment - - 1,417
Non-underlying share-based payment charge 403 159 149
Exceptional Items (see Note 8) 13,083 - -
(16,784) (18,111) (30,390)
The prior interim period has been restated (see Note 2).
Management uses Adjusted EBITDA as an alternative performance measure (APM) as
it allows better monitoring of the operations. Notwithstanding, Management
recognises the limitations of APMs as it may not allow industrywide
comparison, and includes removing the effect of certain annual changes such as
non-underlying share-based payments, identified above.
5. Inventories
October 2024 October 2023 April 2024
£'000
£'000 £'000
Raw Materials 7,761 9,367 10,257
Work in progress 65,239 67,458 60,160
73,000 76,825 70,417
Included in work in progress is inventory that has yet to be assigned to a
specific contract. If not assigned to a specific contract, inventory is tested
for obsolescence and net realisable value (NRV) and a provision is created
against such non-contract stock where necessary. Inventories are stated after
a provision for impairment of £27.9 million (October 2023: £21.0 million;
April 2024: £23.6 million).
In addition to the above inventory provisions, at the point that the work in
progress is assigned to a contract and it is loss-making, the work in progress
will be reduced to recoverable value, which will be offset by an equal and
opposite reduction in the contract loss provision.
6. Provisions
Half year to October 2024 Leasehold Property Provision Warranty Provision Other Provisions Employers' National Insurance Provision Total
for contract losses Provisions
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 May 2024 (1,109) (3,431) (19,852) (7,272) (405) (32,069)
Provision created in the period (33) (77) (748) (497) (26) (1,381)
Use of the provision - 18 1,158 64 18 1,258
Transfer between provisions - (111) 111 - - -
Transfer from inventory - - (4,734) - - (4,734)
Release in the period - 83 1,006 1,197 - 2,286
Balance at 31 October 2024 (1,142) (3,518) (23,059) (6,508) (413) (34,640)
In the balance sheet:
Expected within 12 months - (2,032) (1,878) (5,034) (413) (9,357)
(current)
Expected after 12 months (1,142) (1,486) (21,181) (1,474) - (25,283)
(non-current)
Half year to October 2023 Leasehold Property Provision Warranty Provision Other Provisions Employers' National Insurance Provision Total
for contract losses Provisions
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 May 2023 (896) (3,854) (42,630) (5,326) (215) (52,921)
Provision created in the period (23) (249) (11,645) (2,049) - (13,966)
Use of the provision - 452 11,396 - 21 11,869
Transfer between provisions - (161) 161 - - -
Release in the period - - - - 26 26
Balance at 31 October 2023 (919) (3,812) (42,718) (7,375) (168) (54,992)
In the balance sheet:
Expected within 12 months - (2,979) (7,211) (6,549) - (16,739)
(current)
Expected after 12 months (919) (833) (35,507) (826) (168) (38,253)
(non-current)
Full year to April 2024 Leasehold Property Provision Warranty Provision Other Provisions Employers' National Insurance Provision Total
for contract losses Provisions
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 May 2023 (896) (3,854) (42,630) (5,326) (215) (52,921)
Provision created in the period (213) (344) (10,734) (4,524) (261) (16,076)
Use of the provision - - 27,695 - 71 27,766
Release in the period - 767 5,817 2,578 - 9,162
Balance at 31 October 2023 (1,109) (3,431) (19,852) (7,272) (405) (32,069)
In the balance sheet:
Expected within 12 months - (452) (3,152) (6,086) (405) (10,095)
(current)
Expected after 12 months (1,109) (2,979) (16,700) (1,186) - (21,974)
(non-current)
The leasehold property provision represents management's best estimate of the
present value of the dilapidations work that may be required to return our
leased buildings to the landlords at the end of the lease term. The discount
applied to this is amortising over the lease term. Although we took on the
lease of the unit next door in last financial year, no provision for
dilapidations has been recognised so far; this is due to work having yet to be
undertaken for the fit-out of the unit.
The warranty provision represents management's best estimate of the Group's
liability under warranties granted on products, based on knowledge of the
products and their components gained both through internal testing and
monitoring of equipment in the field. As with any product warranty, there is
an inherent uncertainty around the likelihood and timing of a fault occurring
that would trigger further work or part replacement. Warranties are usually
granted for a period of one year, although two-year warranties are the
standard within some jurisdictions.
The provision for contract losses is created when it becomes known that a
commercial contract has become onerous. The provision is based on best
estimates and information known at the time to ensure the expected losses are
recognised immediately through profit and loss. The effects of discounting on
non-current balances were not deemed to be material. The increase on the
provision in the current year is due to a number of factors including changes
of scope to projects and additional on-site engineering works. The increase in
the year is allocated against three projects. This provision will be used to
offset the costs of the project as it reaches completion in future periods.
Contract loss provisions are recognised as greater than one year based on the
expected completion of the contract.
Provision is also made at the point when project forecasts suggest that the
contractual clauses for liquidated damages might be triggered. The other
provisions category relates to potential liquidated damages for overruns on
contracts with customers. The release in the year is attributable to
renegotiations of contract terms. The provision also represents management's
best current estimate of monies that could be refundable to grant bodies for
non-completion of works.
Lastly, there is a provision for Employer's NIC due on share options as they
exercise.
7. Notes to the Cashflow Statement
Six months to 31 October 2024 Six months to 31 October 2023 Restated Year ended
(unaudited) 30 April 2024
(unaudited) £'000
£'000 (audited)
£'000
Loss from operations (33,787) (20,699) (38,011)
Adjustments:
Depreciation of property, plant and equipment 2,332 1,766 4,008
Loss on disposal of property, plant and equipment - 39 126
Impairment - - 1,417
Amortisation 1,189 624 1,921
Share based payment (as seen through equity) 382 159 92
Foreign exchange on intercompany transactions (178) (112) 176
Operating cash flows before movements in working capital (30,062) (18,223) (30,271)
Increase in inventories (2,583) (17,985) (11,577)
Decrease / (increase) in receivables 4,521 (7,458) (9,219)
(Decrease) / increase in payables (959) 14,419 22,209
Increase / (decrease) in provisions 2,542 2,048 (21,056)
Cash used in operations (26,541) (27,199) (49,914)
Interest paid (471) (272) (605)
Income taxes paid - (62) (62)
Net cash used in operating activities (27,012) (27,533) (50,581)
Cash Burn
Cash burn is a measure used by key management personnel to monitor the
performance of the business.
Six months to 31 October 2024 (unaudited) Six months to Year ended
£'000 31 October 30 April 2024 (audited)
2023 (unaudited) £'000
£'000
Decrease in Cash and Cash equivalents per the cash flow statement (27,223) (28,764) (52,267)
Effect of foreign exchange rates 9 (44) 58
Less share issue proceeds (net) (118) (126) (167)
Cash Burn (27,332) (28,934) (52,376)
8. Related Parties
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. All related party transactions which were not intra-group have been
conducted at arm's length.
In the last financial year, the Group disclosed a contingent liability around
a commercial dispute. During the year, the Group reached the conclusion of the
commercial dispute with Linde/BOC Group, represented on the Board by J
Nowicki, leading to a payment to Linde of £13.0m. Whilst the details of the
dispute remain confidential, the Directors are satisfied that all historic
claim risk is now settled. We have shown these costs, together with related
professional fees, as exceptional items in the income statement.
During the period purchases from Linde/BOC Group totalled £0.1m (H1 2024:
£0.3m; YE 2024: £0.7m) with £0.02m outstanding for payment at period-end
(H1 2024: £0.1m; YE 2023 £43,000). There were also milestone billings on
sales contracts of £9.4m (H1 2024: £6.8m; YE 2023: £25.2m) with £6.1m
outstanding (H1 2024: £1.9m; YE 2024: £13.5m).
There were stage payments of £nil (H1 2024: £Nil; YE 2024: £0.2m), and
£Nil remained outstanding from ITM Linde Electrolysis GmbH at period end (H1
2024: £0.7m; YE 2024: £Nil). However, the Group continued to pay for the
hosting of ILE's website.
9. Subsequent events
There have been no subsequent events to report.
Independent review report to ITM Power PLC
Conclusion
We have been engaged by ITM Power PLC (the 'company') to review the condensed
set of financial statements in the half-yearly financial report for the six
months ended 31 October 2024 which comprises the Consolidated Statement of
Comprehensive Income, the Consolidated Balance Sheet, the Consolidated
Statement of changes in Equity, the Consolidated Cash Flow Statement and the
related explanatory notes.
We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 October 2024 is not prepared, in
all material respects, in accordance with the recognition and measurement
principles of UK-adopted International Accounting Standards and the AIM rules
for Companies.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by Financial Reporting Council
for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
As disclosed in note 3, the annual financial statements of the group are
prepared in accordance with UK-adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with the basis of preparation in note
1.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK), however future events or conditions may cause the entity to
cease to continue as a going concern.
In our evaluation of the directors' conclusions, we considered the inherent
risks associated with the group's business model including effects arising
from macro-economic uncertainties such as inflation, we assessed and
challenged the reasonableness of estimates made by the directors and the
related disclosures and analysed how those risks might affect the group's
financial resources or ability to continue operations over the going concern
period.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the recognition and
measurement principles of UK-adopted international accounting standards and
the AIM rules for Companies which require that the half-yearly financial
report be presented and prepared in a form consistent with that which will be
adopted in the annual accounts having regard to the accounting standards
applicable for such accounts.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report.
Our conclusion, including our Conclusions relating to going concern, are based
on procedures that are less extensive than audit procedures, as described in
the Basis for conclusion paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our review work has been undertaken so that we might state to the company
those matters we are required to state to it in an independent review report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusion we have formed.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Sheffield
29 January 2025
-ends-
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPUCGGUPAGBBRecent news on ITM Power
See all newsREG - ITM Power PLC - FY25 guidance raised
AnnouncementREG - ITM Power PLC - Director/PDMR Shareholding
AnnouncementREG - ITM Power PLC - Strategic Partnership with Deutsche Bahn AG
AnnouncementREG - ITM Power PLC - Engineering integration package for Hynamics
AnnouncementREG - ITM Power PLC - Director/PDMR Shareholding
Announcement