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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Itm Power Plc | LSE:ITM | London | Ordinary Share | GB00B0130H42 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.45 | -0.89% | 50.10 | 50.00 | 50.40 | 50.75 | 49.62 | 50.75 | 418,531 | 11:40:55 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Electrical Machy, Equip, Nec | 5.23M | -101.2M | -0.1641 | -3.05 | 309.06M |
From Apr 2019 to Apr 2024
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
Hot Features
Premium
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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IR EAAFXAAAFEAA
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