ITM Power losses widen on soaring costs

ITM, which produces electrolysers (equipment that splits water into hydrogen and oxygen), has also booked a £1.9m provision for unforeseen costs linked to Shell’s Refhyne project, which will be the world’s largest polymer electrolyte membrane electrolyser. While ITM’s revenues doubled, the group’s total income fell 24 per cent to £3.8m, as grant income fell substantially. Its cash burn rose 29 per cent to £6.2m, which was largely attributable to increased headcount and the construction of larger equipment, according to chief executive Graham Cooley. 

ITM’s new Bessemer Park site, complete with 1 gigawatt of annual capacity, will become the world’s largest electrolyser factory, giving the group “a powerful cost reduction trajectory”, he added. Its total backlog sits at £42.4m, up from £33.6m this time last year, with £16.3m of these projects now under contract. A £58.8m fundraising announced in October 2019 has beefed up the group’s balance sheet, along with providing the necessary resources for its site move, development costs and early funding for a joint venture.

ITM agreed its joint venture with Linde Engineering earlier this month, which Dr Cooley says will allow his company to “concentrate on its core competence” of developing and manufacturing electrolysis equipment. Both partners will invest £2m at the outset to provide the new entity with a £4m cash balance. 

House broker Investec forecasts pre-tax and per share losses of £17.5m and -4.4p, respectively, before losses narrow to £14.5m and -3.1p in FY2021.