Final Results

RNS Number : 9565O

ITM Power PLC

25 August 2017

 

25 August 2017

ITM Power plc

("ITM Power", the "Group" or the "Group")

Final Results for the Year to 30 April 2017

ITM Power (AIM:ITM), the energy storage and clean fuel Group, announces preliminary results for the year ended 30 April 2017. The Group currently has £17.8m under contract and a further £17.6m in the final stages of negotiation, constituting a total pipeline of £35.5m having recognised £6.3m of income in H2 2017.

Commercial

Clean Fuel

·      Launched first London Hyfive refuelling station at the National Physical Laboratory, Teddington, London

·      Opened first hydrogen refuelling station with Shell in the UK and obtained planning permission for three other Shell stations

·      £3.5m contract won to deploy a 3MW electrolyser system in the year ending 30 April 2018

Power-to-Gas

·      Contracted the £1.1m sale of 0.5MW electrolyser to National Grid under the HyDeploy project for build in FY2019

·      €1.5m sales contract to HDF, a multi-MW electricity storage solutions provider, ITM's first sale in France

·      €0.7m electrolyser sale to global speciality gas Group by competitive tender

Renewable Chemistry

·      £1.6m sale of a 1.25MW electrolyser to a major Engineering Procurement & Construction ("EPC") Group

Since Year End

·      A further £4.1m of products under contract secured since year end (31 July 2016: £1.4m)-

·      A further £12.3m of grant contracts entered into final stages of negotiation (31 July 2016: £0.5m)

Financial

·      Total Revenue & Grant Funding of £9.2m (2016: £8.2m) up 13%, comprising:

o   Revenue - £2.4m (2016: £1.9m) up 25%

o   Grant income - £4.2m (2016: £3.2m) up 30%

o   Grants receivable for capital projects - £2.7m (2016: £3.1m), down 14%

·      Increase in property, plant and equipment net book value of £4.6m from £3.0m, up 53%

·      Loss from operations £3.6m (2016: £4.4m), down 18%

·      Cash balances of £3.0m (2016: £3.3m), down 10%; comprising

o   £1.6m available cash (2016: £1.1m)

o   £1.5m restricted cash on guarantee  (2016: £2.1m)

·      Development costs of £0.15m capitalised in the year (2016: £0.25)

·      A material uncertainty exists around going concern as the Group remains in a growth phase. Recognising the current need to manage working capital carefully and efficiently, ITM Power continues to structure quotes to include upfront payment with orders so that working capital is not impacted adversely by increased activity.

Technical

·      Winner of the Rushlight award for improvement of the manufacturing process

·      New Control room established in Sheffield

·      Development of an autonomous test facility for ultra-high current density (cost reduction)

Corporate

·      Appointment of new Managing Director of ITM Power GmbH, Calum McConnell

·      £5.7m gross funding round secured in January 2017 for working capital to service existing pipeline

·      Appointment of Investec Bank plc as Nominated advisor and sole broker

·      Exhibited at All-Energy, the UK's largest renewable energy event, Glasgow, 10 & 11 May 2017

·      Staff numbers increased by 4 full-time equivalents (currently the Group has 72 staff)

·      Development work is tightly focused on increasing electrolyser scale, improving performance and cost reduction

The annual general meeting shall be held on Wednesday 18 October 2017 at 11:00 at 1 Cornhill, London EC3V 3ND.

Graham Cooley, CEO, commented, "This is a very exciting time for the energy industry, and ITM Power is at the forefront of a market which will revolutionise air quality and energy storage for future generations. As evidenced by the significant growth in our pipeline, momentum in the hydrogen sector is continuing to gather pace. Our market is growing rapidly and with larger systems, compliant to operate all over the world, ITM Power is in a great position to be a market leader."

Roger Putnam, Chairman, added, "ITM Power continues to develop a burgeoning pipeline of exciting projects that demonstrate that there is a large and growing market for electrolyser technology. Our focus remains ensuring that ITM Power is optimally positioned to deliver its growing pipeline of established high efficiency products into those markets. I would like to thank the staff this year for their continued hard work as the Group takes its next steps as a leading technology supplier."

For further information please visit www.itm-power.com or contact:

ITM Power plc Graham Cooley, CEO	[phone]
Investec Bank plc (Nominated Adviser and Broker) Jeremy Ellis / Chris Sim / Jonathan Wynn	[phone]
Tavistock (Financial PR and IR) Simon Hudson / James Collins	[phone]

About ITM Power plc

ITM Power manufactures integrated hydrogen energy solutions which are rapid response and high pressure that meet the requirements for grid balancing and energy storage services, and for the production of clean fuel for transport, renewable heat and chemicals. ITM Power plc was admitted to the AIM market of the London Stock Exchange in 2004. The Company received £4.9m as a strategic investment from JCB in March 2015. The Company signed a forecourt siting agreement with Shell in September 2015. The Company currently has £24.06m of projects under contract and £18.22m of contracts in the final stages of negotiation, totalling £42.28m (subject to exchange rate variation).

REVIEW OF THE BUSINESS

Business environment

Today ITM Power is a globally recognised expert in hydrogen technologies with applications in clean fuel for transport, energy storage and industry.  We believe that all of these markets will grow significantly over the next few years based on the increasing drive for improved air quality in inner cities worldwide, the growth of renewables in the energy mix and the need to decarbonise the production of hydrogen for industry. 

We now have four publicly accessible hydrogen refuelling stations (HRS) in operation with a further six under contract, positioned to take advantage of the accelerating roll-out of commercial and passenger fuel cell electric vehicles. With this market in its infancy, these stations will initially incur losses, and will be dependent on vehicle rollout for the stations to reach profitability and positive cash flows in the medium to long term. The Group will report hydrogen sales in the April 2018 financial statements.  In addition, we have secured £5.2m in funding for our first fuel cell electric bus (FCEB) refueller in Birmingham.  We expect the FCEB market to grow quickly, driven by air quality legislation.  In the UK, cities are now under increasing pressure to improve air quality.  Air pollution levels have reached "very high" or "high" in eight regions and London has been issued a final warning by the EU.  This is a global problem and the products and services ITM Power is developing, particularly for the 'return to base' FCEB market, will be exportable to multiple locations worldwide.

Power-to-Gas

Proposals during the year from the EU include energy storage involving the conversion of electricity to another energy carrier, such as hydrogen.  Ongoing work includes investigating hydrogen/methane blends and establishing admissible concentration levels for hydrogen in natural gas grids across Europe.  These developments will enable Europe-wide deployment of power-to-gas plant for injecting hydrogen into the gas grid while offering balancing services to the electricity grid.  These balancing services can be an important source of revenue for operators and ITM Power's rapid response PEM technology allows units to be turned on and off in under one second making them eligible for the UK National Grid's Enhanced Frequency Response Payments.

ITM Power enjoys a unique position having supplied the world's first Proton Exchange Membrane (PEM) Power-to-Gas electrolyser in 2014, which continued throughout the financial year to inject hydrogen into the German gas distribution network.  The Group supplied a second PEM Power-to-Gas system to RWE Group Gmbh in the financial year ended April 2015, and contracted in March 2016 to supply a third in Germany, which remained in build and on schedule at year end. The Group also contracted with National Grid as part of the HyDeploy project for a 0.5MW electrolyser to inject into a UK gas network for deployment in calendar year 2018.

Clean Fuel

ITM Power has won contracts to supply on-site hydrogen generation equipment for refuelling in the UK and the US, and more recently to France, and is currently rolling out a network of 10 hydrogen refuelling stations in the UK of which four are now open for public access.

ITM Power systems are now at a scale where a fleet of thirty buses could be supported by one electrolyser on a return to base principle and large schemes are now being envisaged, for applications such as heavy logistics, trains and ships. In the year the Group was awarded a £3.5m contract for its first hydrogen refuelling station for buses which will be deployed in 2018.

Renewable Chemistry

In the year, ITM Power won its first renewable chemistry contract with a major EPC contractor and the project was substantially completed within the year. This plant will serve as reference plant for future bids into the industry. The scale of hydrogen production capacity required in the renewable chemistry market means that this market will likely adopt the larger scale, multi-MW systems.

ITM Power showcased a series of large scale electrolyser configurations up to 100MW in size at Hannover Messe 2017 in April this year, attracting significant interest from potential customers worldwide.

Key financials

A summary of the financial KPI's is set out in the table below and discussed in this section.

	2017	2016	2015	2014	2013
Total Projects income, being sales and grants receivable	£9.2m	£8.20m	£5.1m	£3.1m	£1.4m
Of which: Sales Revenue	£2.4m	£1.9m	£1.6m	£1.1m	£0.1m
Of Which: Grant recognised in the income statement	£4.2m	£3.2m	£1.8m	£1.4m	£1.4m
Of Which: Grant recognised on the balance sheet (offsetting asset build)	£2.6m	£3.1m	£1.6m	£0.6m	£nil
New grant project awards*	£6.6m	£8.1m	£5.8m	£3.4m	£3.7m
Pre-tax loss	£3.6m	£4.4m	£5.7m	£8.0m	£6.2m
Projects Under Contract or in final stage of negotiation*	£35.5m	£16.3m	£10.5m	£9.3m	Not measured
Non-Current Assets	£4.9m	£3.3m	£2.5m	£1.8m	£1.5m
Net Assets	£13.1m	£11.6m	£10.3m	£11.0m	£7.4m

*Contracts can take a period longer than 12 months to unwind through the accounts. In the year ended 30 April 2017, income recognised was £9.2m against a pipeline reported at the results announcement of £16.3m. Therefore, of the contracted pipeline, the Group delivered on projects equivalent to 57%.

Projects under contract and in the final stage of negotiation are a non-statutory measure that the board of directors use to assess progress and monitor the Group. Items under contract are contract projects that are being progressed. Projects in negotiation are added once the directors are 100% certain that a contract will get signed, and represents future pipeline. These numbers are reported via the regulatory news service (RNS) with each announcement. The directors do not make representations as to the timing of the revenue recognition associated with the projects under contract or in the final stages of negotiation.

Financial performance

The pre-tax loss for the year under review decreased to £3.6m (2016: £4.4m) and net cash burn before fund raise decreased to £5.9m (2016: £8.5m). Cash burn is a non-statutory measure the directors use to monitor the Group, and is calculated by deducting from the cash flow the effects of any equity fund raise.

The decrease in loss in the year being reported can be attributed to three major factors - a concerted development and engineering effort towards product efficiencies through economies of scale and standardisation; the increase in sales revenue and at profitable margins, and; the increased grant funding received in the year on both new and existing projects. Grant funding has specifically increased as the rate of grant funding (the intervention rate, or percentage reimbursed to the Group) has increased compared with prior years, such that grant activity was increasingly between 70% and 100% funded in the year in review.

The cash burn decrease is a result of increased sales activity in the year, along with an increased intervention rate on grants that were completed in the year. The Group was also the recipient of large grant claims debtors from the prior year, which were received in the current year.  The timing of grant receipts is often not aligned in the same period as the expenditure. This cash outflow, which is significantly greater than the losses in the year, shows the continued commitment of ITM Power to being a refuelling system owner and operator as the industry grows in the UK in order to gain market share and improve opportunities for FCEV adoption.

Debtors have increased from £6.5m to £11.1m at the year ends in 2016 and 2017 respectively. This movement is dominated by prepayments made to suppliers near year end to order components for the existing pipeline and also as deposits on dispensers for deployment as part of the fleet of refuelling stations. Prepayments and accrued income was £8.8m in 2017, up £4.7m year on year (2016: £4.0m).

Creditors have increased from £1.8m to £6.7m at the year ends in 2016 and 2017 respectively. This movement is a result of an increase in accruals and deferred income from £0.9m to £5.6m.

Revenue has increased as the Group gains traction in the growing hydrogen market, but is also representative of servicing a growing pipeline. In the year, revenue growth was encouraging and comprised largely of an electrolyser for the chemicals industry, and part builds of a number of contracts announced in the year, including for refuelling applications in Germany.  With the Group in a strong pipeline development and delivery phase, it is likely that the next period will continue to see a supply of units to Europe despite the challenges in the current political climate. The Group will continue to operate in a high value, low volume environment too, which will continue to influence the results over the next few years.

ITM Power is first and foremost a manufacturer, and the majority of revenue comes from construction contracts to design and build full hydrogen systems. These systems can then be deployed in a number of scenarios.

Revenue continues to be driven by sales to the chemical industry, which is a newer application identified for the Group's products. There has also been an increase year on year in consultancy, with ITM Power a recognised expert in the field. The Group is starting to find its consultancy services are procured with a view to sourcing units in the future in competitive tenders. ITM Power has a strong record in competitive tenders and considers the technical achievements made in the year will make the Group even more competitive.

In the year, the Group capitalised development costs of £0.15m (2016: £0.25m). This is for product developments that will continue to keep the Group at the forefront of PEM electrolysis and the directors see continued product development as key to building commercial traction.

Total collaborative project funding recognised in the year was £6.8m of which £4.2m is recognised on the income statement (2016: £6.3m, of which £3.2m was recognised on the income statement). This increase in asset builds supported through project funding has allowed ITM Power to develop a suite of hydrogen generation equipment that it will own and operate as part of the collaborative projects, with data and knowhow to be incorporated into new generations of electrolysers. 

In the year, three refuelling stations have been opened to the public around London. Revenues from refuelling will be reported separately in note 5 of the financial statements from the year ended April 2018.

Commentary on the year's revenue

The sales order book at the year-end stood at £5.3m (2016: £2.9m). This increase is representative of the growing commercial pipeline and represents a large Power-to-Gas unit, some smaller units, the sale of a hydrogen refuelling station in France and the first contract with National Grid.

The value of projects under contract at the time of writing stood at £17.8m (2016: £16.3m). Projects under contract represents the value of contracted revenue and grant funding yet to be recognised by ITM Power in the future. The Board believes this a more accurate reflection of the increase in activity the Group has experienced in the year. The Board also recognises that not only do contracts need to continue to be signed but also that delivery on these contracts is a part of the picture that leads to a fully commercial offering and a reduction in the Group's proportionate mix of grant funding as part of the pipeline.

Financial position

At year end, ITM Power had £3.0m (2016: £3.3m) of funds in the bank, and trade and other receivables of £11.1m (2016: £6.5m), totalling £14.1m (2016: £9.8m). The receivables predominantly relate to trade debtors (while 2016 was predominantly grant income debtors). ITM Power had cash held on guarantee that totalled £1.5m (2016: £2.2m). Presently, the Group is required to place amounts on guarantee as cash cover, which limits working capital available to the Group mid-contract. This limited the Group to £1.6m of available cash at year end. As such, there is a material uncertainty over the going concern assumption due to the risk around the timing of cashflows. Recognising the current need to manage working capital carefully and efficiently, ITM Power continues to structure quotes to include upfront payment with orders so that working capital is not impacted adversely by increased activity.

At year end, the Group had trade creditors of £0.9m against a prior year balance of £0.7m. This number has predominantly increased due to the stage of progress on contracts in the pipeline, but there has been an increase in creditor days as better supplier terms are negotiated. The Group also had accruals and deferred income of £5.6m against a prior year figure of £0.9m. This reflects both money received up front for construction contracts and also accruals for goods received that have not yet been invoiced.

ITM Power has seen an increase in fixed assets to £5.0m from £3.3m in the prior year as the Group engages in projects that create assets for the future. This is a policy that will continue, especially with the completion of H2ME and H2ME2 projects.

Outlook

The Group has enjoyed a greater level of customer engagement in the past year than at any other time in its history. This was never more noticeable than at the Hannover Messe in April 2017 where the Group enjoyed the greatest footfall it had ever experienced as it showcased its 100MW electrolyser plant. The year ending 30 April 2017 also saw the Group deliver a number of landmark events, including the deployment and opening of the first ITM Power refuelling station on a Shell forecourt, and of two further refuelling stations in London, as well as successfully winning a contract to build a 3MW bus refueller in the UK. ITM Power is now in a position to be cost competitive with other forms of electrolysers and other hydrogen solutions, having hit the European Horizon2020 price target for MW scale electrolysers.

The directors have disclosed as part of the going concern statement that there is a current sensitivity to the timing of sales and grant receipts. As always, near term cash resources will continue to be closely monitored and controlled due to the associated working capital requirements of the Group in delivering its growing order pipeline, and winning new business. The Board believes that in order for the Group to secure the best chance of winning new business contracts, the Group needs to be able to continue to demonstrate to potential customers its suitability to be awarded long term contracts. A consequence of this is that certain customers may continue to request that the Group provide guarantees for contracts. A mitigating action the Group is taking is to structure smaller stage payments aligned with more frequent milestones.

With markets growing rapidly, and air quality in particular being a major issue throughout 2017, ITM Power looks forward to developing further contracts in the pipeline. The bulk of enquiries continues to be for 0.3MW to 6MW, often including ancillary hydrogen energy systems and after sales support contracts. In addition, the Group is increasingly receiving enquiries from multinational entities for significantly larger platforms and for a broader range of applications.

The Board looks forward to reporting progress as contracts are awarded, and to providing an update at the AGM.

STRATEGY AND OBJECTIVES

Strategies:

ITM Power is now firmly focussed on large scale solutions. The current strategy is to use the existing, operational Thüga and RWE projects as a reference plant for Power-to-Gas sales.

Using the same initial platform, the Group will also be able to show demonstrable success in the near future of hydrogen, using the M1 Wind refueller and HyFive stations as reference plant for further refuelling stations. Similarly the Shell forecourt at Cobham services and the 3MW bus refueller contract that was won in the year will serve to demonstrate ITM Power's competitiveness and application for electrolysers.

In the medium term, the national mobility programmes, in which ITM Power has positioned itself as a key partner for refuelling through electrolysis, will drive refuelling station sales.

ITM Power is currently positioned as a refueller of hydrogen, and will also be able to gain market share for hydrogen sales as vehicle adoption accelerates. The Group expects to start reporting on hydrogen sales in the results for the year ending 30 April 2018.

Objectives:

ITM Power had immediate objectives in the prior year in terms of product development and, in particular, scale-up of proven electrolysis equipment. Having successfully achieved these, immediate objectives are to generate more sales traction at higher volumes and higher capacity in order to achieve penetration of larger markets.

Cash flow remains a key measure for the Board, with the other key objective for ITM Power being the achievement of a positive cash flow in the shortest possible time, whilst maintaining the appropriate working capital requirements. In the year in review, cash flow for the year was an outflow of £0.3m after the fund raise of £5.6m gross (2016: £3.2m after £5.7m gross fund raise). With a sensitivity existing around certain sales and grant receipts, continuing to closely control cash resources will be a short-term objective for the management.

Break-even is another measure for the Board and is one of the key drivers in decisions to develop business. 

Strategies for achieving our objectives

Product development, and in particular upscaling of product offering, will be achieved through securing and utilising project funding. This serves the dual purpose of reducing cash outflow and creating strong key partnerships within industry.

Short-term cash flow is aided but not totally mitigated by ITM Power quoting for sales with upfront payments, which reduces reliance on working capital. This is dependent on the type of guarantees customers may require the Group to offer, including cash cover for some guarantees, which does not help working capital at the outset. Cash outflow is minimised through working with support from partners on the development of technology whilst we are continuing to build a contract pipeline. Historically, it has taken two years for potential customers to move through a learning curve and to reach the point of purchasing equipment, and we are keeping this in mind as we build a larger pipeline.

NON-FINANCIAL KEY PERFORMANCE INDICATORS

	FY 2017	FY 2016
Fuel Dispensed (kg)	1,043	-
Fuel Contracts signed	14	1

Given the early stage of the refuelling market, no expectation has been set with regards to the KPI performance in the current year but these KPIs will act as a baseline for future performance.

	2017	2016	2015	2014	2013
Hydrogen production capacity under contract in kw	12,138	5,948	2,685	1,613	472

CONSOLIDATED INCOME STATEMENT

Year ended 30 April 2017

	Note	2017 £'000	2016 £'000
Revenue	5	2,415	1,930
Cost of sales		(1,757)	(1,483)
Gross profit		658	447
Operating costs
- Research and development		(2,023)	(1,952)
- Prototype production and engineering		(2,615)	(2,954)
- Sales and marketing		(1,528)	(1,364)
- Administration		(2,202)	(1,724)
Other operating income - grant income	6	4,160	3,188
Loss from operations		(3,550)	(4,359)
Investment income		-	-
Loss before tax		(3,550)	(4,359)
Tax	8	(230)	359
Loss for the year		(3,780)	(4,000)
OTHER TOTAL COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences on foreign operations		(250)	(62)
Net other total comprehensive income		(250)	(62)
Total comprehensive loss for the year		(4,030)	(4,062)
Loss per share
Basic and diluted	6	(1.7p)	(2.0p)

All results presented above are derived from continuing operations and are attributable to owners of the Group.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 30 April 2017

		Called up share capital £'000	Share premium account £'000		Merger reserve £'000	Foreign exchange reserve £'000	Retained loss £'000	Total equity £'000
At 1 May 2015		8,905	54,738		(1,973)	116	(51,442)	10,344
Issue of shares		1,940	3,413		-	-	-	5,353
Loss for the year		-	-		-	-	(4,000)	(4,000)
Other comprehensive income for the year		-	-		-	(62)	-	(62)
Total comprehensive income for the year		-	-		-	(62)	(4,000)	(4,062)
At 30 April 2016/ 1 May 2016		10,845	58,151		(1,973)	54	(55,442)	11,635
Issue of shares		1,686	3,779		-	-	-	5,465
Loss  for the year		-	-		-	-	(3,780)	(3,780)
Other comprehensive income for the year		-	-		-	(250)	-	(250)
Total Comprehensive income for the year		-	-		-	(250)	(3,780)	(3,929)
At 30 April 2017		12,531	61,930		(1,973)	(196)	(59,222)	13,070

CONSOLIDATED BALANCE SHEET

As at 30 April 2017

	Note	2017 £'000	2016 £'000
NON CURRENT ASSETS
Intangible Assets		380	252
Property, plant and equipment		4,519	3,024
		4,899	3,276
CURRENT ASSETS
Inventories		760	291
Trade and other receivables	4	11,082	6,487
Cash and cash equivalents		1,558	1,207
Restricted cash and cash equivalents		1,446	2,129
TOTAL CURRENT ASSETS		14,846	10,114
CURRENT LIABILITIES
Trade and other payables		(6,666)	(1,755)
Provisions		(9)	-
TOTAL CURRENT LIABILITIES		(6,675)	(1,755)
NET CURRENT ASSETS		8,171	8,359
NET ASSETS		13,070	11,635
EQUITY
Called up share capital	5	12,531	10,845
Share premium account		61,930	58,151
Merger reserve		(1,973)	(1,973)
Foreign exchange reserve		(196)	54
Retained loss		(59,222)	(55,442)
TOTAL EQUITY		13,070	11,635

CONSOLIDATED CASH FLOW STATEMENT

Year ended 30 April 2017

	Note	2017 £'000	2016 £'000
Net cash used in operating activities	2	(5,048)	(7,098)
Investing activities
Purchases of property, plant and equipment		(3,293)	(3,315)
Capital Grants received against purchases of property plant and equipment		2,646	2,148
Proceeds on disposal of property, plant and equipment		4	-
Payments for intangible assets		(151)	(252)
Net cash (used in) / from investing activities		(794)	(1,419)
Financing activities
Issue of ordinary share capital		5,732	5,819
Costs associated with fund raise		(267)	(466)
Net cash from financing activities		5,465	5,353
Decrease in cash and cash equivalents		(377)	(3,164)
Cash and cash equivalents at the beginning of year		3,336	6,576
Effect of foreign exchange rate changes		45	(76)
Cash and cash equivalents at the end of year		3,004	3,336

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended April 2017

1.  BASIS OF ACCOUNTING

The preliminary announcement is based on the financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in July 2016.

Going concern

The directors have prepared a cash flow forecast (the "Forecast") for the period ending 31 August 2018 ("The forecast period"). This forecast indicates that the Group and group would expect to remain cash positive without the requirement for further funding based on delivering existing pipeline, for a period of at least 12 months from the date of approval of these financial statements.

However, the forecast includes certain assumptions, in particular in respect of the timing of contracted sales and grant cash inflows. The timing of some receipts depend upon actions outside of the control of the Group and whilst the forecast has taken a prudent approach to the timing of such receipts based on historical data, this constitutes a material uncertainty.

The existence of a material uncertainty may cast significant doubt about the Group's ability to continue as a going concern. Notwithstanding this material uncertainty, the Directors have a reasonable expectation that the Group and group are a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Accordingly the financial statements have been prepared on a going concern basis.

The financial information is prepared on the basis of the accounting policies as shown on the Group's website, www.itm-power.com 

Copies of the financial statements/annual report will be available on the Group's web site and for collection from the Group's registered office at 22 Atlas Way, Sheffield, S4 7QQ.

2. NOTES TO THE CASH FLOW STATEMENT

	2017 £'000	2016 £'000
Loss from operations	(3,550)	(4,359)
Adjustments for property, plant and equipment:
- Depreciation	1,181	619
-Impairment of non-current assets	100	-
- Loss on disposal	22	67
Amortisation	23	-
Operating cash flows before movements in working capital	(2,224)	(3,673)
(Increase)/ Decrease in inventories	(469)	221
Increase in receivables	(5,363)	(1,998)
Increase/ (Decrease) in payables	2,747	(1,540)
Increase/ (Decrease) in provisions	9	(108)
Cash used in operations	(5,300)	(7,098)
Income taxes received	252	-
Net cash used in operating activities	(5,048)	(7,098)

3. FINANCIAL INFORMATION

The financial information set out in this announcement does not constitute statutory financial statements for the years ended 30 April 2016 or 30 April 2017, but is derived from these statutory accounts, which have been reported on by the Group's auditor. Statutory accounts for the year ended 30 April 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Group's Annual General Meeting. The financial statements were approved by the Board of Directors on 24 August 2017. The auditor has reported on those accounts; their reports were unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) of the Companies Act 2006

4. TRADE AND OTHER RECEIVABLES

	2017 £'000	2016 £'000
Amount receivable for the sale of goods	61	16
Amounts due from construction contract customers (note 14)	779	58
Amounts receivable under grant claims	1,133	1,726
Allowance for doubtful debts	(166)	(29)
Other receivables	317	15
Corporation tax	191	669
Prepayments and accrued income	8,767	4,032
	11,082	6,487

5. CALLED UP SHARE CAPITAL AND RESERVES

	2017 £'000	2016 £'000
Called up, allotted and fully paid:
250,613,176 (2016 - 216,892,973) ordinary shares of 5p each	12,531	10,845
Authorised Share capital: 256,350790 (2016- 222,630,587) ordinary shares of 5p each	12,818	11,131

During the year the Group issued 33,720,203 ordinary shares of 5p each for a consideration of £5,732,435.

6. LOSS PER SHARE

The calculation of the basic and diluted earnings per share is based on the following data:

	2017 £'000	2016 £'000
Loss for the purposes of basic and diluted loss per share being net loss attributable to owners of the Group	(3,780)	(4,000)
Number of shares
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share	222,513,007	184,566,326
Loss per share	1.7p	2.0p

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.

-ends-

 

END

 

 

FR DBGDIGBDBGRS