ITM Power pleased with trading as pipeline grows

Energy storage and clean fuel company ITM Power updated the market on its trading on Thursday, reporting that the delivery of completed projects increased “significantly” in the second half of its financial year ended 30 April, as expected.

The AIM-traded firm said that as a result, the total income under IFRS 15 was expected to be approximately £17m, which would make for an increase of over 20% year-on-year.

It said its EBITDA loss from operations would be around £6.7m, widening from £4.9m but in line with the board’s expectations.

Total financial assets at year-end were approximately £19.8m, comprising £5.2m of cash, £1.7m of cash on guarantee and deployed working capital of £12.9m.

A cash movement of £10.4m for the second half of the 2019 financial year reflected a period of deploying working capital, the board explained.

That involved procuring components for the delivery of four hydrogen refuelling stations in the UK, the bus hydrogen refueling station in France, and also materials for the Shell 10MW Refhyne project.

ITM Power said the increase in working capital was expected to partially unwind in the first half of the current 2020 financial year, as cash receipts were recognised from those projects.

The company said its contracts backlog stood at a record level of £45.1m, at present, which was an increase of £9.4m since February, and comprised £29.0m of projects under contract and a further £16.1m of awards in the final stages of negotiation.

Its tender opportunity pipeline also stood at a record level of £330m - an increase of £90m since February and comprising 46 active commercial tender responses over the last 12 months, with an average project size of £7.2m - up from £6.5m - reflecting “strong” industrial demand for larger systems.

“ITM Power is undoubtedly in the right place at the right time,” said chief executive officer Dr Graham Cooley.

“This trading update demonstrates the attractiveness of our products around the world and the hard work of our team.

“Total recognised revenue, our contracts backlog and quotations against tenders are all showing strong growth and the world outlook for green hydrogen demand and electrolysers is very encouraging.”