ITM Power's full-year loss widens but Linde buys 20% stake
ITM Power on Thursday reported a widened annual loss on the back of increased spending on research and development and for the production of prototypes, but confirmed a fundraise of as much as a £58.8m via a so-called 'cornerstone' investment, a placing with institutional investors and an open offer, alongside a collaboration agreement with German chemicals giant Linde.
All of the investment, placing and open offer would be conducted at a price of 40.0p a share, the same as when the company last raised funds in late September 2017.
The energy storage and clean fuel company booked a loss before tax of £9.3m for the year ended 30 April, compared with red ink of £6.5m the year before, as" distribution expenses", comprising R&D, prototype production and engineering, and sales and marketing all rose by 39% to £10.2m.
Management explained that the increase in expenses was mainly due to investment in significantly scaling up facilities, resources and production capacity.
Meanwhile, sales rose by 40% to £4.6m during the period and recognised grant income increased by 75% to £7.2m.
The company was positive about the coming months, noting good progress from its flagship 10 megawatt refinery project and highlighting how a May report from the Committee for Climate Change had led to an increasing proportion of power from renewables in electricity generation.
Roger Putnam, chairman of ITM, said: "I am pleased to report our plans for expansion of staff and production capacity are on track. The next year will be a period in which we transition to our much larger new factory. We welcome the Committee for Climate Change report's aspirations to make the UK zero emissions by 2050 and its recognition that PEM electrolysis will be an integral part of the new energy mix."
Significantly, ITM confirmed that Linde would take a 20.0% stake in the company for £38.0m, alongside the £14.0m placing with existing and new institutional investors, and an open offer for up to £6.8m - all at 40.0p a share.
ITM also announced the creation of a 50/50 joint venture with Linde, which would focus on delivering green hydrogen to large scale industrial projects.
At period-end, the group's cash position stood at £5.2m, which was down from £20.4m twelve months before.
Shares of ITM Power shares were up 10.85% at 45.50p at 1421 BST.