ITM POWER PLC — Earnings Release 2016

Jul 29, 2016

National Storage Mechanism | Additional information

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RNS Number : 5916F

ITM Power PLC

29 July 2016

29 July 2016

This announcement contains inside information

ITM Power plc

("ITM Power" or "the Company")

Final Results for the Year to 30 April 2016

Strong commercial progress in growing markets

ITM Power (AIM: ITM), the energy storage and clean fuel company, announces its preliminary results for the year ended 30 April 2016.  The Company currently has £15.81m of projects under contract and a further £0.51m of contracts in the final stages of negotiation constituting a total pipeline of £16.32m.

Commercial progress in the year

Clean fuel

·      Strategic Forecourt Siting Partnership with Shell to deploy on Shell forecourts

·      Hydrogen Fuel Contract with Toyota

·      Hydrogen Refuelling and Siting Agreement with BOC Linde to evaluate existing BOC sites

·      €4m grant from €32m H2ME project for European Hydrogen Refuelling Station deployment

·      Launched M1 Refuelling station coupled directly to renewables

·      Deployment of City of Riverside Hydrogen Refuelling Station (HRS) in California

Energy storage

·      €2m grant from €9m "Big Hit" for a 1.5 MW Electrolyser Deployment

·      €2.75m Electrolyser System Cost Reduction Grant

·      £1.0m order received of first 1MW sale to ZEAG Energie AG

·      Launched RWE Power-to-Gas Energy Storage System in Germany

·      Memorandum of Understanding (MoU) with Good Energy to Explore Green Energy Tariffs

·      MoU with Arup to collaborate on hydrogen energy and fuel systems

·      MoU with CEME to develop a hydrogen hub in East London

·      Agreement with Symbio FCell and Arcola Energy

·      Nominated for prestigious Hermes award for HGas product

Commercial progress since year end

·      A further £1.44m of products under contract secured since year end (2015: £1.98m)

·      £0.507m of contracts in final stages of negotiation (2015: £0.363m)

·      €1.5m HRS sale to HDF, first refuelling  sale in France

·      Launched first London HyFive HRS in Teddington

·      €5m grant from €35m H2ME2 European Hydrogen refuelling station deployment

Key financial results for the year ended 30 April 2016

·      Total Revenue & Grant Funding of £8.185m (2015: £5.061m) up 56%, comprising;

o  Revenue - £1.930m (2015: £1.635m) up 18%

o  Grant income - £3.188m (2015: £1.777m) up 80%

o  Grants receivable for capital projects - £3.069m (2015: £1.649m), up 86%

·      Increase in property, plant and equipment to £3.024m (2015: £2.576m), up 17%

·      Loss from operations £4.359m (2015: £5.723m), down 21%

·      Cash balance £3.336m (2015: £6.576m), down 49%

·      Debtors balance of £6.487m (2015: £4.113m), up 58%

·      Development costs of £0.252m capitalised in the year (2015: nil)

Technical achievements

·      Reduced full system cost by 25% and footprint by 35%

·      MW scale system prices now <€1,000/kW

·      Full system cost reduction to less than EU target for 2020

·      PEM systems now competing with alkaline on price

·      Thüga Plant qualifies for the Primary Balancing Market in Germany

·      Standard electrolyser system pre-qualified for Enhanced Frequency Response by National Grid

·      Demonstrated full system turn on in 800ms and turn off in 140ms

·      HGas build time reduced by two weeks by improved supply

·      Shop floor processes defined to enable production and testing of 50 units per year & modifications underway

Corporate development

·      Dr Rachel Smith joins the board as Executive Director in September 2015.

·      Appointment of Nordic/Scandinavian Business Development Manager to develop area - Kristoffer Olsen CFA

·      Appointment of Roth Capital to represent ITM Power in the USA capital markets

·      £5.8m  funding  secured for working capital

The Annual General Meeting will be held on 15 September 2016 at 10:30am at the offices of Burges Salmon, 6 New St Square, London EC4A 3 BF.

Graham Cooley, CEO, commented: "Our markets are undoubtedly growing, our products are best in class and we have positioned ourselves at the heart of global efforts to decarbonise fuel and energy.

"By the end of 2016, we will own and operate a growing portfolio of hydrogen refuelling stations - ahead of the many launches of FCEVs expected next year.  We also have two working Power-to-gas reference plants in Germany that are already attracting attention from utilities around the world.  I am excited about the outlook and, as always, grateful to our talented team for making our successes happen."

Roger Putnam, Chairman, added: "ITM Power has a growing commercial pipeline of leading refuelling and energy storage products to deliver to more and more customers around the world, and is well placed to continue its growth in a market that is becoming more and more established. This is in no small part down to the dedication of our people over the last few years."

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

ITM Power plc Graham Cooley, CEO	+44 (0)114 244 5111
Zeus Capital Andrew Jones / Jonathan Sharp / Hugh Kingsmill Moore / Alex Davies	+44 (0)20 3829 5000
Tavistock Simon Hudson / James Collins	+44 (0)20 7920 3150

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 and is a founder member of the Social Stock Exchange. The company received £4.9m as a strategic investment from JCB in March 2015; signed a forecourt siting agreement with Shell in September 2015 and a fuel agreement with Toyota in October 2015. The Company currently has £15.81m of projects under contract and a further £0.51m of contracts in the final stages of negotiation constituting a total pipeline of £16.32m.

www.itm-power.com

REVIEW OF THE BUSINESS

Business environment

ITM Power positions itself as an expert in Hydrogen technologies, not just within the UK but globally. Consequently, we are increasingly being consulted as a leading expert in energy storage solutions and clean fuel and are well positioned to service the upturn in demand expected in the coming years.

The Hannover Messe in April 2016 attracted a record attendance of over 190,000 visitors including some 5,000 from USA and 6,000 from China.  ITM Power exhibited a complete 0.3MW HGas180 electrolyser system and a 1.5MW stack module, these exhibits generated a significant level of interest, as did the nomination for the prestigious Hermes Award.

Clean fuel

We opened our first public access HRS in September 2017, situated at the Advanced Manufacturing Park, just off the M1, Junction 33 South Yorkshire.  Supported by Innovate UK this site consists of a 225kW wind turbine coupled directly to an electrolyser, 220kg of hydrogen storage, a hydrogen dispensing unit and a 30kW fuel cell system capable of providing back up power generation for nearby buildings.

Our first London HRS was opened in May 2016 by Andrew Jones MP, Transport Minister at the Department for Transport.  This was the first of three UK stations to be deployed as part of the pan European HyFIVE project which was funded by the European Fuel Cell and Hydrogen Joint Undertaking (FCH JU) and the UK Government office of low emissions vehicles (OLEV).  Located at the National Physical Laboratory in Teddington, the hydrogen refuelling station is close to the A316 and A308 trunk roads.  Commissioning teams from ITM Power and BOC Linde have now moved onto commissioning further electrolyser based refuelling stations in and around London at the Centre for Engineering and Manufacturing Excellence (CEME) in Rainham and at a Shell/Extra MSA forecourt in Cobham.  The stations are deployed under the HyFIVE project and will be open to the public later this year once commissioning is complete.  We have developed a strong and experienced team with expertise in HRS siting activities, and to date we have been awarded planning permission for 13 HRS sites in the UK.

Hydrogen Mobility Europe (H2ME) was launched in September 2015, with ITM Power the coordinator for the UK activities which includes a large coalition of European partners.  H2ME is co-funded with €32m from the FCH JU, and our activities are additionally supported by OLEV.  H2ME is the largest European project of this nature and is based around an alliance of the four most ambitious hydrogen mobility initiatives in Europe: H2 MOBILITY Deutschland, Mobilité Hydrogène France, Scandinavian Hydrogen Highway Partnership and UK H2 Mobility.  These initiatives originally brought together the key stakeholders in the hydrogen sector (vehicle manufacturers, hydrogen refuelling station providers and Government representatives) to study and develop strategies to make hydrogen-fuelled transport a reality in the respective regions.  ITM Power will be deploying two new HRS at Shell locations in or around London, with planning permission granted for a further Shell station in a prominent position.

H2ME2 was announced in June 2016, this follow-on project provides funding from the FCH JU for a further three ITM Power HRS, located in or outside of London to expand on the developing hydrogen network in the UK.

The development of a growing network of our HRS in the UK provides a strengthening backdrop to fuel sales to public and private fleets. We announced a fuel supply agreement in October 2015 with Toyota, which sees the price of hydrogen to all customers from our public refuelling stations pegged at £10/kg which is the lowest hydrogen price at any public refuelling stations in the UK.  The recent OLEV announcement for £2m support for commercial or public sector FCEV fleets provides the opportunity to develop refuelling relationships with vehicle users in the UK.

In the US, ITM Power Inc. achieved operational status for its Riverside, California hydrogen fuelling station in November 2015.  This is the first electrolyser based station to achieve this status under the California Energy Commissions (CEC) 2014 funding program for hydrogen fuelling stations.  The station achieved this status in less than 11 weeks from the issuance of the local permit, setting a precedent for the shortest time taken to install and commission an onsite hydrogen generation fuelling station.

Energy storage

ITM Power plant continues to run successfully in the field providing Power-to-Gas energy storage in Germany.  In June 2016 the Thüga Group announced that ITM Power's Power-to-Gas technology is also suitable for primary balancing energy market; the first electrolyser to achieve this.  The plant continues to exceed expectations over two years of rigorous testing.

The system provided to RWE's Power-to-Gas plant in Ibbenbüren, North Rhine Westphalia was launched in August 2015.  The state-of-the-art plant is part of a new system that, for the first time ever, links together the supply of local electricity, natural gas and district heating.  Any excess electricity from renewable sources is converted into hydrogen so it can be stored within the natural gas network.  It can then be recalled from there at a later date for use in electricity production that boasts an extremely high utilisation rate.  This Power-to-Gas process is seen as one of the key technologies for tomorrow's energy supply.  A significant results is that RWE has measured an overall energy efficiency of 86%.

In March 2016 we announced the sale of a 1MW electrolyser system with some additional equipment to ZEAG Energie AG ("ZEAG") by competitive tender.  ZEAG engages in the production and supply of electric power in Germany.  The system will comprise an electrolyser, compressor and apparatus to fill tube trailers.  The electrolyser will have a nominal capacity of circa 0.9MW in normal operation with an overrun capability of 1MW. The system will be owned and operated by ZEAG but housed in a specially constructed building located at DLR (Deutsches Zentrum für Luft- und Raumfahrt), the German Aerospace Centre in Lampoldshausen.  ITM Power is exploring a small further engineering consultancy contract to assist DLR with extended use of hydrogen facilities.

In April 2016 we received a €5m EU grant for the BIG HIT (Building Innovative Green Hydrogen systems in an Isolated Territory) project funded by the Fuel Cells and Hydrogen Joint Undertaking ("FCH JU").  The FCH JU selected BIG HIT as the only hydrogen project in its Hydrogen Territories tender to receive funding.  ITM Power is the electrolyser provider and will receive €2.27m over five years.  The Orkney Islands have over 50MW of installed wind, wave and tidal capacity, generating over 46GWhr per year of renewable power, and has been a net exporter of electricity since 2013.  Energy used to produce the hydrogen for BIG HIT will be provided by the community-owned wind turbines on Shapinsay and Eday, two of the Orkney islands.  BIG HIT builds on foundations laid by the Orkney Surf 'n' Turf initiative, which will see production of hydrogen on the islands of Eday and Shapinsay using wind and tidal energy.  These are both world leading pilot and demonstration projects, which deploy a fully integrated model of hydrogen production, storage, transportation and utilisation for low carbon heat, power and transport.

Outlook

The Group has enjoyed a greater level of customer engagement in the past year than at any other time.  This was never more noticeable than at the Hannover Messe in April 2016 where the Company enjoyed the greatest footflow it had ever experienced.  The year ending 30 April 2016 also saw the Group deliver a number of landmark events, including deployment and opening of the first ITM Power refuelling stations in the UK and US.  ITM Power is now in a position where it can continue to focus on delivering its leading refuelling and energy storage products to more and more customers around the world, and especially in terms of refuelling infrastructure in the UK.  The Board looks forward to reporting progress as additional contracts are awarded.

FINANCIAL KEY PERFORMANCE INDICATORS

A summary of the key financial results is set out below;

	2016	2015	2014	2013	2012
Total Projects income, being sales and grants receivable	£8.201m	£5.061m	£3.077m	£1.44m	£1.46m
Of which: Sales Revenue	£1.930m	£1.635m	£1.127m	£0.087m	£0.480m
Of which: Grant recognised in the income statement	£3.188m	£1.777m	£1.370m	£1.35m	£0.98m
Of which: Grant recognised on the balance sheet (offsetting asset build)	£3.069m	£1.649m	£0.58m	£nil	£nil
New grant project awards	£8.10m	£5.75m	£3.38m	£3.66m	£2.7m
Pre-tax loss	£4.359m	£5.711m	£7.953m	£6.17m	£6.47m
Projects Under Contract or in final stage of negotiation	£16.32m	£10.46m	£9.25m	Not measured	Not measured
Non Current Assets	£3.276m	£2.546m	£1.755m	£1.463m	£1.232m
Net Assets	£11.635m	£10.344m	£11.000m	£7.379m	£7.705m

Financial performance

The pre-tax loss for the year under review decreased to £4.359m (2015: £5.711m) and net cash burn before fund raise increased to £8.471m (2015: £8.034m).

The decrease in loss in the year being reported can be attributed to three major factors - a concerted development and engineering effort towards cost reduction and standardisation; the increase in sales revenue, at profitable margins, and the increased grant funding received in the year on both new and existing projects.  The cash burn increase is a result of some timing differences, particularly in line with the increased grant activity which generally requires an outflow of cash before a receipt of grant, even if there is a proportion of upfront funding from the grant body.  This cash outflow shows the commitment of ITM Power to being a refuelling system owner and operator as the industry seeds in order to gain market share.

Revenue has increased as the Company gains traction in the growing hydrogen market, but is also representative of servicing a growing pipeline.  The Company has experienced the greatest growth in sales through UK Power to Gas sales.  However, with the Company in a strong growth phase, it is likely that the next period shall see a supply of units to Europe despite the challenges in the current political climate, so geographical sales patterns will continue to fluctuate.

Revenue in the year to April 2016, as it had been in the previous year, is driven by Power to Gas sales.  There has also been an increase year on year in consultancy, with ITM Power a recognised expert in the field.  The Company is starting to find a consultancy service is procured with a view to sourcing units in the future in competitive tenders.  ITM Power has a strong record in competitive tenders and considers technical achievements in the year will make the Company still more competitive.

In the year, the Company capitalised development costs of £0.252m (2015: £nil)  This is for product developments that will continue to keep the company at the forefront of PEM electrolysis and the directors see the continued development of product as key to building commercial traction.

Total collaborative project funding recognised in the period was £6.268m of which £3.199m is recognised on the income statement (2015: £3.426m, of which £1.777m 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, allowing data and knowhow to be incorporated into new generations of electrolysers. 

In the period, a refuelling station was opened to the public on the M1 in September 2015, and a further station was opened in California in November.  Since year end, the Company's first refuelling station has been opened in London and the Company expects to start reporting revenues from these stations at the interim and future results.

The sales order book at the year end stood at £2.90m (2015: £1.98m).  This increase is representative of the growing commercial pipeline and represents a large Power to Gas unit, some smaller units and the sale of a hydrogen refuelling station in France.

The value of projects under contract at the time of this report stood at £16.32m (2015: £10.10m).  Projects under contract represents the value of contracted Revenue and Grant Funding yet to be recognised by ITM Power in the future, and the board find this a more accurate reflection of the increase in activity that the Company has experienced in the year. 

Whilst projects under contract continue to accelerate ITM Power's growth and products in the market, the board is aware of the continued potential for revenue volatility (as experienced in 2014) as projects grow in size and complexity.  Revenue volatility will continue to decrease as the business matures and grows and as ITM Power realises opportunities in large markets.

Financial position

At year end, ITM Power had £3.336m (2015: £6.576m) of funds in the bank, and trade and other receivables of £6.487m (2015: £4.113m), totalling £9.823m (2015: £10.689m).  The receivables predominantly relate to grant income debtors.  Recognising the need to be lean with working capital, ITM Power continues to structure quotes to include upfront payment with orders so that working capital is not impacted adversely by increased activity.

ITM Power has seen an increase in fixed assets to £3.276m from £2.576m in the prior year as the Company engages in projects that create assets for the future.  This is a policy that will continue, especially with the completion of the Island Hydrogen and HyFive projects.

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 reference planst for Power-to-Gas sales.

Using the same initial platform, the Company will also be able to show demonstrable success in the near future of hydrogen, using the M1 Wind refueller and HyFive stations, which will be used as reference plant for further refuelling stations.

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 initial 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 vehicles are adopted.

Objectives:

ITM Power has immediate objectives in terms of product development and in particular scale up of our proven electrolysis equipment.  This will allow penetration of larger markets, and is a direct response to market demand from sales enquiries and from trade fairs and events.

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.

Break-even is another measure for the board and is a key driver 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 by ITM Power quoting for sales with upfront payments which reduces reliance on working capital.  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 it is with this in mind that we are creating a larger pipeline.

NON-FINANCIAL KEY PERFORMANCE INDICATORS

	2016	2015	Change
Stack efficiency*	86%	84%	Up 2.4%

*The efficiency of an electrolyser stack is a measure of the electrical energy input against the chemical energy content of the hydrogen produced.

	2017	2016	2015	2014	2013
Hydrogen production capacity under contract in kW	5,948	2,685	1,613	472	65

The Company has achieved an overall efficiency improvement to its rapid response stack platform, to greater than 86% (2015: 84%).  This was recorded from plant in the field and represents a real-world reference which can be showcased and repeated.  This will provide further significant benefit to end users and will produce a positive impact on the economics of both hydrogen refuelling and power to gas applications.

The level of knowledge gained within stack development has increased with longevity testing and cyclic testing all contributing to a total of 1,450,000 hours assembled knowledge.  This testing has enabled rapid scale up to date as demonstrated by the largest stack capacity compared with that of prior years.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 30 April 2016

	Note	2016 £'000	2015 £'000
Revenue		1,930	1,635
Cost of sales		(1,483)	(1,045)
Gross profit		447	590
Operating costs
- Research and development		(1,952)	(4,322)
- Prototype production and engineering		(2,954)	(1,141)
- Sales and marketing		(1,364)	(719)
- Administration		(1,724)	(1,908)
Other operating income - grant income		3,188	1,777
Loss from operations		(4,359)	(5,723)
Investment revenues		-	12
Loss before tax		(4,359)	(5,711)
Tax		359	84
Loss for the year		(4,000)	(5,627)
OTHER TOTAL COMPREHENSIVE INCOME:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences on foreign operations		(62)	116
Net other total comprehensive income		(62)	116
Total comprehensive loss for the year		(4,062)	(5,511)
Loss per share
Basic and diluted	6	(2.0p)	(3.4p)

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 30 April 2016

	Note	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 2014		8,093	50,703	(1,973)	-	(45,823)	11,000
Issue of shares		812	4,035	-	-	-	4,847
Credit to equity for share based payments		-	-	-	-	8	8
Loss for the year		-	-	-	-	(5,627)	(5,627)
Other comprehensive income for the year		-	-	-	116	-	116
At 30 April 2015		8,905	54,738	(1,973)	116	(51,442)	10,344
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 period		-	-	-	(62)	-	(62)
At 30 April 2016		10,845	58,151	(1,973)	54	(55,442)	11,635

CONSOLIDATED BALANCE SHEET

As at April 2016

	Note	2016 £'000	2015 £'000
NON CURRENT ASSETS
Intangible Assets		252	-
Property, plant and equipment		3,024	2,546
		3,276	2,546
CURRENT ASSETS
Inventories		291	512
Trade and other receivables	4	6,487	4,113
Cash and cash equivalents		3,336	6,576
TOTAL CURRENT ASSETS		11,035	11,201
CURRENT LIABILITIES
Trade and other payables		(1,755)	(3,295)
Provisions		-	(108)
TOTAL CURRENT LIABILITIES		(2,846)	(3,403)
NET CURRENT ASSETS		8,359	7,798
NET ASSETS		11,635	10,344
EQUITY
Called up share capital	5	10,845	8,905
Share premium account		58,151	54,738
Merger reserve		(1,973)	(1,973)
Foreign exchange reserve		54	116
Retained loss		(55,442)	(51,442)
TOTAL EQUITY		11,635	10,344

The financial statements of ITM Power plc, registered number 05059407, were approved by the Board of Directors and authorised for issue on 28 July 2016

Signed on behalf of the Board of Directors

Dr. Simon Bourne

Director

CONSOLIDATED CASH FLOW STATEMENT

Year ended 30 April 2016

	Note	2016 £'000	2015 £'000
Net cash used in operating activities	2	(7,098)	(6,684)
Investing activities
Interest (paid) / received		-	12
Purchases of property, plant and equipment		(3,315)	(1,470)
Capital grants received against purchases of property, plant and equipment		2,148	-
Payments for intangible assets		(252)	-
Net cash (used in) / from investing activities		(1,419)	(1,458)
Financing activities
Issue of ordinary share capital		5,819	4,847
Costs associated with fund raise		(466)	-
Net cash from financing activities		5,353	4,847
Decrease in cash and cash equivalents		(3,164)	(3,295)
Cash and cash equivalents at the beginning of year		6,576	9,763
Effect of foreign exchange rate changes		(76)	108
Cash and cash equivalents at the end of year		3,336	6,576

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended 30 April 2016

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 for the period ending 31 August 2017. This forecast indicates that the company and group will remain cash positive without the requirement for further funding, for a period of at least 12 months from the date of approval of these financial statements. The forecast includes certain assumptions, in particular in respect of the level and timing of projected sales and grant cash inflows, which are inherently uncertain; the directors believe that the level and timing of the projected sales represent a prudent estimate, with the current sales pipeline providing potential upside. Notwithstanding these uncertainties, the directors have a reasonable expectation that the company and group will be able to meet their obligations as they fall due, for the foreseeable future. In reaching this conclusion the directors have also considered the current liquidity position at the date of signing and believe the current liquidity position will support the business in the near and longer term.

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 Company's website, www.itm-power.com 

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

2.  Notes to the cash flow statement

	2016 £'000	2015 £'000
Loss from operations	(4,359)	(5,723)
Adjustments for property, plant and equipment:
- Depreciation	619	592
- Loss on disposal	67	87
Share-based payments charge	-	8
Operating cash flows before movements in working capital	(3,673)	(5,036)
Decrease in inventories	221	250
Increase in receivables	(1,998)	(3,008)
(Decrease)/ increase in payables	(1,540)	1,111
Decrease in provisions	(108)	(194)
Cash used in operations	(7,098)	(6,877)
Income taxes received	-	193
Net cash used in operating activities	(7,098)	(6,684)

3.  FINANCIAL INFORMATION

The financial information set out in this announcement does not constitute statutory financial statements for the years ended 30 April 2015 or 30 April 2016, 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 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Group's Annual General Meeting. The financial statements were approved by the Board of Directors on 28 July 2016. 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

	2016 £'000	2015 £'000
Trade receivables	1,771	2,041
Other receivables	15	629
Corporation tax	669	293
Prepayments and accrued income	4,032	1,150
	6,487	4,113

The directors consider that the carrying amount of trade and other receivables approximates to their fair value.  Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost. There were receivables totalling £784,000 (2015 - £101,000) receivables that were past due but considered fully recoverable. There were no receivables (2015 - none) impaired.

Cash and cash equivalents

These balances comprise cash and short-term bank deposits with an original maturity of three months or less.  The directors consider that the carrying amount of these assets approximates to their fair value.

5.  CALLED UP SHARE CAPITAL AND RESERVES

	2016 £'000	2015 £'000
Called up, allotted and fully paid:
216,892,973 (2015 - 178,100,996)  ordinary shares of 5p each	10,845	8,905

During the year the Company issued 38,791,977 ordinary shares of 5p each for a consideration of £5,819,000. Expenses in relation to the share issues, amounting to £466,000, were recognised in the share premium account.

The merger reserve arose on the acquisition of ITM Power (Research) Ltd in 2004.

6.  LOSS PER SHARE

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

Loss	2016 £'000	2015 £'000
Loss for the purposes of basic and diluted loss per share being net loss attributable to owners of the Company	(4,000)	(5,611)
	2016	2015
Number of shares
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share	184,566,326	163,213,408

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.

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This information is provided by RNS

The company news service from the London Stock Exchange

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