TIDMITM
RNS Number : 1488P
ITM Power PLC
14 October 2021
14 October 2021
ITM Power plc
("ITM", "ITM Power", the "Group" or the "Company")
Trading Update
Alongside the proposed placing announced separately today ITM
Power, the energy storage and clean fuel company, announces,
exceptionally, Q1 trading performance for the three months to 31
July 2021. This information is also included in the offering
memorandum published in connection with the proposed placing and
should be read alongside the announcement of the proposed
placing.
-- Revenue of GBP1.2m (Q1 2021: GBP0.3m), up 357%
-- Loss from operations GBP6.3m (GBP5.6m), increased by 12%
-- Adjusted EBITDA loss of GBP5.2m, (GBP5.1m), increased by
1%
-- Cash balance of GBP170.8m (GBP33.8m)
-- Cash burn* of GBP5.3m (GBP8.0m), down 34%
* Cash burn is a non-statutory measure. Please see the note to
the cash flow statement (Note 4)
For further information please visit www.itm-power.com or
contact:
ITM Power plc
James Collins, Investor Relations +44 (0)114 551 1205
Justin Scarborough, Investor Relations +44 (0)114 551 1080
Investec Bank plc (Nominated Adviser
and Broker) +44 (0)20 7597 5970
Jeremy Ellis / Chris Sim / Ben
Griffiths
Tavistock (Financial PR and IR) +44 (0)20 7920 3150
Simon Hudson / David Cracknell
/ 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. ITM Power signed a deal to deploy a 10MW electrolyser at
Shell's Rhineland refinery in 2017. 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. 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.
Independent review report to ITM Power Plc
Introduction
We have been engaged by the company to review the financial
information in the first quarter financial report for the three
months ended 31 July 2021 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 first quarter financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial information.
Directors' responsibilities
The financial report is the responsibility of, and has been
approved by, the directors. The AIM rules of the London Stock
Exchange require that the accounting policies and presentation
applied to the financial information in the first quarter financial
report are consistent with those which will be adopted in the
annual accounts having regard to the accounting standards
applicable for such accounts.
As disclosed in Note 3, the annual financial statements of the
group are prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006. The financial information in the financial report has been
prepared in accordance with the basis of preparation in Note 1.
Our responsibility
Our responsibility is to express to the company a conclusion on
the financial information in the first quarter financial report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, 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.
The impact of uncertainties arising from the UK exiting the
European Union on our review
Our review of the summary accounts in the financial report
requires us to obtain an understanding of all relevant
uncertainties, including those arising as a consequence of the
effects of Brexit. Such reviews assess and challenge the
reasonableness of estimates made by the directors and the related
disclosures and the appropriateness of the going concern basis of
preparation of the financial statements. All of these depend on
assessments of the future economic environment and the company's
future prospects and performance.
Brexit is one of the most significant economic events for the
UK, and at the date of this report its effects are subject to
unprecedented levels of uncertainty, with the full range of
possible outcomes and their impacts unknown. We applied a
standardised firm-wide approach in response to these uncertainties
when assessing the company's future prospects and performance.
However, no review of interim financial information should be
expected to predict the unknowable factors or all possible future
implications for a company associated with a course of action such
as Brexit.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the first
quarter financial report for the three months ended 31 July 2021 is
not prepared, in all material respects, in accordance with the
basis of accounting described in Note 1.
Use of our report
This report is made solely to the company in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the company those matters we are required to state
to it in a 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
14 October 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three months Three months Year ended
to 31 July to 31 July 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
Note GBP'000 GBP'000 GBP'000
Revenue 2 1,195 261 4,275
Direct costs (1,665) (1,260) (12,145)
Grant income against direct
costs - 168 1,356
----------------- ----------------- ---------------
Cost of sales (1,665) (1,092) (10,789)
Gross loss (470) (831) (6,514)
Operating costs
Research and development (1,297) (1,172) (3,489)
Production and engineering (2,063) (1,477) (8,839)
Sales and marketing (386) (348) (1,436)
Administration expenses (2,120) (1,855) (7,404)
Expected credit risk (3) 19 (165)
Other income - government grants 75 65 1,190
----------------- -----------------
Loss from operations (6,264) (5,599) (26,657)
Share of profit / (loss) of
associate company 81 (36) (595)
Finance income 20 42 83
Finance costs (130) (115) (479)
----------------- -----------------
Loss before tax (6,293) (5,708) (27,648)
Tax (10) (3) (49)
Loss for the period (6,303) (5,711) (27,697)
----------------- ----------------- ---------------
Other total comprehensive income:
Foreign currency translation
differences on foreign operations (51) (32) (78)
----------------- ----------------- ---------------
Net other total comprehensive
income (51) (32) (78)
----------------- ----------------- ---------------
Total comprehensive loss for
the period (6,354) (5,743) (27,775)
================= ================= ===============
Loss per share
Basic and diluted (1.1p) (1.2p) (5.5p)
================= ================= ===============
Weighted average number of
shares 550,658,155 474,672,370 507,262,743
================= ================= ===============
All results presented above are derived from continuing
operations.
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 in the
years presented were 7,490,129 (Q1 2020: 9,042,055; YE 2021:
50,893,546).
CONSOLIDATED BALANCE SHEET
As at 31 July As at 31 July As at 30 April
2021 2020 2021 (audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
Non-current assets
Investment in associate 326 310 259
Intangible assets 3,352 2,407 3,269
Right of use assets 6,342 6,353 6,399
Property, plant and
equipment 13,681 9,932 13,514
Financial asset at amortised
cost 150 137 148
------------- ------------- ---------------
Total non-current assets 23,851 19,139 23,589
------------- ------------- ---------------
Current assets
Inventories 8,511 6,347 6,418
Trade and other receivables 23,933 21,229 22,981
Cash and cash equivalents 170,765 33,771 176,078
------------- ------------- ---------------
Total current assets 203,209 61,347 205,477
Current liabilities
Trade and other payables (18,559) (14,957) (12,857)
Provisions (10,677) (7,122) (12,276)
Lease liability (88) (119) (204)
---------------
Total current liabilities (29,324) (22,198) (25,337)
Net current assets 173,885 39,149 180,140
------------- ------------- ---------------
Non-current liabilities
Lease liability (6,468) (6,393) (6,282)
Net assets 191,268 51,895 197,447
============= =============
Equity
Called up share capital 27,533 23,873 27,533
Share premium account 302,248 138,849 302,248
Merger reserve (1,973) (1,973) (1,973)
Foreign exchange reserve 32 129 83
Retained loss (136,572) (108,983) (130,444)
------------- ------------- ---------------
Total Equity 191,268 51,895 197,447
============= ============= ===============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called Foreign
up share 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 2021 27,533 302,248 (1,973) 83 (130,444) 197,447
Transactions with Owners
Issue of shares - - - - - -
Credit to equity for
share based payment - - - - 175 175
--------- ------------- -------- --------- --------- --------
Total Transactions with
Owners - - - - 175 175
Loss for the period - - - - (6,303) (6,303)
Other comprehensive
income - - - (51) - (51)
--------- ------------- -------- --------- --------- --------
Total comprehensive
income - - - (51) (6,303) (6,354)
At 31 July 2021 (unaudited) 27,533 302,248 (1,973) 32 (136,572) 191,268
========= ============= ======== ========= ========= ========
At 1 May 2020 23,664 137,236 (1,973) 161 (103,342) 55,746
Transactions with Owners
Issue of shares 209 1,613 - - - 1,822
Credit to equity for
share based payment - - - - 70 70
--------- ------------- -------- --------- --------- --------
Total Transactions with
Owners 209 1,613 - - 70 1,892
Loss for the period - - - - (5,711) (5,711)
Other comprehensive
income - - - (32) - (32)
--------- ------------- -------- --------- --------- --------
Total comprehensive
income - - - (32) (5,711) (5,743)
At 31 July 2020 (unaudited) 23,873 138,849 (1,973) 129 (108,983) 51,895
========= ============= ======== ========= ========= ========
Called Share Merger Foreign Retained Total
up share premium reserve exchange loss equity
capital account GBP'000 reserve 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
Transactions with Owners
Issue of shares 3,869 165,012 - - - 168,881
Credit to equity for
share based payment - - - - 595 595
Total Transactions with
Owners 3,869 165,012 - - 595 169,476
Loss for the year - - - - (27,697) (27,697)
Other comprehensive income - - - (78) - (78)
--------- -------- --------- --------- --------- ---------
Total comprehensive income - - - (78) (27,697) (27,775)
At 30 April 2021 (audited) 27,533 302,248 (1,973) 83 (130,444) 197,447
========= ======== ========= ========= ========= =========
CONSOLIDATED CASH FLOW STATEMENT
Note Three months Three months Year ended
to 31 July to 31 July 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
Net cash used in operating activities 4 (4,275) (3,836) (20,141)
Investing activities
Investment in associate - - (535)
Purchases of property, plant and
equipment (680) (4,002) (14,422)
Capital Grants received against
purchases of non-current assets 25 190 3,992
Proceeds on disposal of plant
& equipment - 1 3
Payments for intangible assets (271) (355) (1,524)
Interest received 17 42 83
----------------- ----------------- ---------------
Net cash used in investing activities (909) (4,124) (12,403)
----------------- ----------------- ---------------
Financing activities
Issue of ordinary share capital - 1,822 173,835
Costs associated with fund raise - - (4,954)
Payment of lease liabilities (28) (37) (156)
Net cash from financing activities (28) 1,785 168,725
----------------- ----------------- ---------------
(Decrease)/ increase in cash and
cash equivalents (5,212) (6,175) 136,181
Cash and cash equivalents at the
beginning of period 176,078 39,919 39,919
Effect of foreign exchange rate
changes (101) 27 (22)
----------------- ----------------- ---------------
Cash and cash equivalents at the
end of period 170,765 33,771 176,078
================= ================= ===============
Notes to the summary accounts
1. Basis of preparation of interim figures
These interim summary accounts have been prepared using
accounting policies consistent with International Accounting
Standards, in conformity with the requirements of the Companies Act
2006. Whilst the financial information has been compiled in
accordance with the recognition and measurement principles of
International Financial Reporting 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.
The information relating to the year ended 30 April 2021 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.
Going Concern
The directors have prepared a cash flow forecast for the period
ending 31 October 2022. 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 will still hold a
large proportion of the monies from the fund raise in October 2020.
This should give the business sufficient funds to trade for the
next three years if the business continued to operate in a similar
way beyond the forecast period.
With the uncertainty created for the economy by Covid-19, 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. Revenue and other operating income
An analysis of the Group's revenue is as Q1 2021 Q1 2020 FY 2021
follows: GBP'000 GBP'000 GBP'000
Revenue from product sales recognised over
time 454 105 1,697
Revenue from product sales recognised at
point in time 672 - -
Consulting contracts recognised over time 28 79 2,108
Maintenance contracts recognised at point
in time - 33 112
Fuel sales 41 45 153
Other - - 205
-------- -------- --------
Revenue in the Consolidated Income Statement 1,195 261 4,275
Grant income shown against cost of sales - 168 1,356
Grant income (claims made for projects) 19 12 761
Other government grants (R&D claims) 56 28 404
Other government grants (Covid-19 furlough
scheme) - 25 25
-------- -------- --------
75 65 1,190
Grant income in the Consolidated Income
Statement 75 245 2,546
1,270 506 6,821
======== ======== ========
Revenues from major products and services
The Group's revenues from its major products and services were
as follows:
Q1 2021 Q1 2020 FY 2021
GBP'000 GBP'000 GBP'000
Power-to gas
(of which product sales recognised over
time GBP25,000) 27 79 210
Refuelling
(of which product sales recognised over
time GBPnil) 709 138 (38)
Chemical Industry
(of which product sales recognised over
time GBP429,000) 430 (5) 1,870
Other 29 49 2,233
-------- -------- --------
1,195 261 4,275
======== ======== ========
GEOGRAPHIC ANALYSIS OF REVENUE
A geographical analysis of the Group's revenue is set out
below:
Q1 2021 Q1 2020 FY 2021
GBP'000 GBP'000 GBP'000
United Kingdom
(of which product sales recognised over
time GBPnil) 69 125 2,505
Rest of Europe
(of which product sales recognised over
time GBP454,000) 454 136 1,770
Australia
(of which product sales recognised over
time GBPnil) 672 - -
-------- -------- --------
1,195 261 4,275
======== ======== ========
The following accounted for more than 10% of total revenue:
Q1 2021 Q1 2020 FY 2021
GBP'000 GBP'000 GBP'000
Customer A 430 <10% 1,870
Customer B 676 - -
Customer C <10% 92 <10%
Customer D <10% 49 2,027
Customer E - 30 <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:
Three months Three months Year ended
ended 31 ended 31 July 30 April
July 2021 2020 2021
GBP'000 GBP'000 GBP'000
Loss from operations (6,264) (5,599) (26,657)
Add back:
Depreciation 668 561 2,321
Impairment - - 1,713
Amortisation 163 57 274
(Gain)/ loss on disposal - (1) 173
Share based payment charge /
(credit) 233 (166) 799
-------------- ---------------- ------------
(5,200) (5,148) (21,377)
============== ================ ============
4. Notes to the Cashflow Statement
Three months Three months Year ended
to 31 July to 31 July 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
Loss from operations (6,264) (5,599) (26,657)
Adjustments:
Depreciation of property, plant
and equipment 668 561 2,321
(Gain)/ loss on disposal - (1) 173
Impairment - - 1,712
Amortisation 163 57 274
Share based payment (as seen through
equity) 175 70 595
-----------------
Operating cash flows before movements
in working capital (5,258) (4,912) (21,582)
Increase in inventories (2,093) (1,915) (1,987)
Decrease in receivables (898) 4,760 185
Decrease in payables 5,703 (1,886) (1,156)
Increase in provisions (1,599) 232 4,857
----------------- ----------------- ---------------
Cash used in operations (4,145) (3,721) (19,683)
Interest paid (130) (115) (479)
Income taxes received - - 21
----------------- ----------------- ---------------
Net cash used in operating activities (4,275) (3,836) (20,141)
----------------- ----------------- ---------------
Cash Burn
Cash burn is a measure used by key management personnel to
monitor the performance of the business.
Three months Three months Year ended
to 31 July to 31 July 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
(Decrease)/ increase in Cash and
Cash equivalents per the cash flow
statement (5,212) (6,175) 136,181
Effect of foreign exchange rates (101) 27 (22)
Less share issue proceeds (net) - (1,822) (168,881)
-----------------
Cash Burn (5,313) (7,970) (32,722)
----------------- ----------------- ---------------
5. 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 arms' length.
In the period, sales of hydrogen fuel to JCB Research (a
corporate shareholder, represented on the Board by T Rae) totalled
GBPnil (Q1 2020: GBP39; YE 2021: GBP141). The balance outstanding
at the period-end was GBP260 (Q1 2020: GBP678; YE 2021: GBP260),
which is deemed as being fully recoverable.
During the period purchases from Linde/BOC Group, represented on
the Board by J Nowicki, totalled GBP0.2m (Q1 2020: GBP0.2m; YE
2021: GBP3.5m) with GBPnil outstanding for payment at period-end
(Q1 2020: GBPnil; YE 2021 GBP0.3m). Furthermore, an amount of
GBP0.6m brought forward from the year-end relates to stage payments
made for goods not yet received (Q1 2020: GBP4.0m). Sales to
Linde/BOC group in the period were GBPnil (Q1 2020: GBP0.3m; YE
2021: GBP0.4m) with GBPnil outstanding (Q1 2020: GBPnil; YE 2021:
GBP13,684).
There were also stage payments of GBP3.8m (Q1 2020: GBPnil; YE
2021: GBP2.1m), which remained outstanding from ITM Linde
Electrolysis GmbH at period end (amounts listed in comparative
periods were also received post period ends). These were the only
sales / purchase transactions made with that entity in the period.
During the 2021 financial year, ITM Power engaged ILE for
consultancy work equating to GBP0.8m, of which GBP0.2m remained
unpaid at year-end. No such services were purchased from them in
either Q1 period and nothing remained outstanding at the end of
those periods.
6. Post Balance Sheet Events
There are no significant changes post balance sheet.
-ends-
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