Last checked at 30 Jul 2010 07:00
30 July 2010
ITM Power plc
("ITM or "the Company")
Full Year Results
For the year ended 30 April 2010 ("FY 2010")
ITM Power plc (AIM:ITM) is a clean energy company focused on developing technology to alleviate the present dependence on hydrocarbon fuels. Today it announces its Final Results for the year ended 30 April 2010.
Highlights
·; The principal recommendations of the comprehensive review of the Company's activities accepted by the Board in May 2009 have been implemented.
·; Dr. Simon Bourne was appointed to the position of Chief Technology Officer following the retirement of Dr. Don Highgate.
·; Barry Cunliffe was appointed Chief Financial Officer and Company Secretary.
·; The Company achieved accreditation at its production facility in Sheffield for ISO 9001, ISO 14001, BS OHSAS 18001 and completed the roll out of its manufacturing system which enables the seamless design and manufacture of components and products and represents the last major milestone in the commercial launch of its product range ahead of completion of CE accreditation.
·; The Company defined its first commercial product range and completed a successful launch at the Hannover Messe trade show in April 2010. At the Hannover Messe numerous endorsements were received from large and established businesses, in particular concerning the engineering quality and effective transition from technology developer to product suppliers.
·; The Company re-established its link with the US market by attending the National Hydrogen Association conference at Long Beach, California in May 2010. At the NHA conference it was clear that hydrogen refuelling at both a domestic and commercial scale was recognised as an important and inevitable progression towards wider adoption of hydrogen fuel and ITM Power presented a paper outlining its experience and developments in the field of hydrogen refuelling for transport applications. On 9 June 2010 CEO Graham Cooley was elected to the board of the US Fuel Cell Council further developing the Company's presence in the US.
·; Following the NHA conference the Company announced that it had been awarded a contract by the NextEnergy Centre in Detroit to supply a design for a home refuelling unit complying with US standards.
·; During the past year the Company has established good working relationships with the major grant funding bodies and has been successful in winning several grant awards totaling over £500k.
·; As part of the 'Hydrogen On Site Trials' (HOST) project the Company announced a partnership with DHL and Stansted Airport to demonstrate the Hfuel vehicle refueller product.
Prof Roger Putnam, Chairman of ITM commented:
"I am delighted with the progress that has been made at ITM in the last 12 months. The new management team has proved that the Company is capable of commercialising its technology and engineering developments into commercial products. The feedback from both the Hannover Messe and the NHA in California was very encouraging and initial interest in the product range bodes well for the future of the Company."
For further information please contact:
| ITM Power plc | 0114 244 5111 |
| Dr Graham Cooley, Chief Executive Officer |
|
| Panmure Gordon & Co. | 020 7459 3600 |
| Katherine Roe |
|
| Tavistock Communications | 020 7920 3150 |
| Simon Hudson / James Midmer |
|
CHAIRMAN'S STATEMENT
I am pleased to report the results for the year ended 30 April 2010 and update shareholders on current developments within ITM.
Since the comprehensive review was completed and its recommendations adopted by the Board in May 2009, ITM Power has achieved a remarkable shift in strategy and outlook. The new CEO, Dr Graham Cooley, has assimilated into the business very quickly, identifying the strategy required to move ITM from a research led organisation to a market driven product development organisation. The success of the Hannover Messe product launch is testament to the abilities of the team to deliver marketable products to very tight deadlines. I am also delighted that this development has been made whilst at the same time reducing the cash burn to £500k under budget for the year.
Financials
The loss for the year decreased from £5.2m to £5.1m, capital expenditure for the year under review decreased from £0.9m to £0.5m and during the year the Company's cash and cash equivalents balance reduced from £21.8m to £16.9m this being £0.5m better than the budgeted cash resources at the period end. The increase in operating costs reflects the successful development and launch of the Company's first product range. The monthly average headcount across the year has reduced from 61 to 56 with the permanent full-time headcount being reduced to 49.
Board and Staff
During the year there have been several changes to the Board of Directors. On 16 December 2009 Peter Hargreaves stepped down as Company Non-Executive Chairman to be succeeded by me. He remains a Non-Executive Director of the Company. Dr Donald Highgate retired from the Board of Directors on 29 November 2009 to be replaced by Dr Simon Bourne the new Chief Technology Officer. Simon has been with ITM Power since 2002 and has played a significant role in the development of the ITM Power's technology. It is important for ITM Power that this continuity of scientific knowledge is maintained at Board level.
It is with great sadness that I must report the loss of Lord Peter Walker; he was a valued member of the ITM Power Board and his contribution will be missed.
I would like to thank all of the staff who have remained focused and dedicated to ITM over the past year.
Outlook
The outlook for ITM, although challenging, is very positive. The development of hydrogen networks both in the UK and internationally is gaining traction and ITM Power is now involved in several key projects. ITM Power has established good working relationships with the major grant funding bodies as well as key industrial partners and has re-established significant links in the US, the major early adopter of hydrogen technology. I believe that ITM is now better placed than it has ever been to achieve commercialisation of its technology.
Prof Roger Putnam CBE
Non-Executive Chairman
CEO'S STATEMENT
The transition from technology to products is one of the most difficult a company can face. The staff at ITM Power have risen to this challenge and responded to all of the tough deadlines set for them with enthusiasm and drive; their success over the last year has been considerable.
ITM Power has undergone two major reorganisations and has focused its efforts at producing a range of market ready products which can be manufactured in an accredited process. The Company has designed and built prototype products; developed and commissioned a manufacturing system; achieved ISO accreditation; commissioned its first product build programme and started long term product testing in its new test facilities. The achievement of CE product accreditation at the end of 2010 will mark the completion of this successful transition to market ready products.
Commercial Strategy:
The first product range is directed towards existing hydrogen markets and early adopters in new markets. Product sales are expected to begin in 2011 and in parallel with delivering CE marked products the Company is actively engaging with trial partners and distributors.
ITM Power is focused on energy storage and clean fuel. Central to the Company's strategy is using energy storage to add value to renewable energy. The intermittency of renewable energy will ultimately limit its deployment unless methods of predictably dispatching the power can be developed. Using Hydrogen as a medium for energy storage is a rapidly emerging market.
Clean Fuel:
Green hydrogen is also a compelling proposition for transport. ITM Power is positioning itself for the big win: to be a world leading supplier of infrastructure products for transport fuel. The Company is developing two products to address this huge opportunity.
HFuel, the modular and transportable refuelling unit, was sponsored by the UK Government through a grant from the Technology Strategy Board and the product will be launched at our AGM in September. We were delighted that DHL, Stansted Airport and Gateway to London have joined the Hydrogen On Site Trials programme and the Company expects to announce further trial partners over the coming months.
Home refuelling has also been revisited by the Company in response to a design competition launched by Next Energy in the US and won by ITM Power. The steering committee of the project involves all of the main global car manufacturers.
A Big Win for the UK Economy
If the UK is to benefit from the emergence of a new low carbon economy the UK Government will need to select the best technologies and support UK companies developing products for these new markets. We call on the Government to revisit the use of Hydrogen for decarbonising transport. In the UK we push on with rolling out a recharging infrastructure when other European governments such as Germany have committed $2bn to build 1,000 hydrogen refuelling stations by 2015.
Outlook:
ITM Power has world class staff, technology and market prospects. We have focused the Company on delivering products, market entry and building a sustainable business. Energy storage and clean fuel are huge opportunities that we intend to capture.
Dr Graham Cooley
Chief Executive Officer
CONSOLIDATED INCOME STATEMENT
For the year ended 30 April 2010
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| 2010 £'000 | 2009 £'000 | |
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| Operating costs |
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|
|
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| - Research and development |
|
| (3,531) | (3,579) |
| - Prototype production and engineering |
|
| (1,316) | (984) |
| - Sales and marketing |
|
| (389) | (303) |
| - Administration |
|
| (1,665) | (1,276) |
| Other operating income - grant income |
|
| 139 | - |
| Loss from operations |
|
| (6,762) | (6,142) |
|
|
|
|
|
|
| Interest receivable |
|
| 203 | 987 |
| Interest payable |
|
| (1) | (1) |
| Loss before tax |
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| (6,560) | (5,156) |
| Tax |
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| 1,509 | - |
| Loss for the year, being total comprehensive income for the year |
|
|
(5,051) |
(5,156) |
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|
|
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|
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| Loss per share |
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|
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| Basic and diluted |
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| (5.0p) | (5.0p) |
| Weighted average number of ordinary shares |
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| 102,409,137 | 102,098,735 |
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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.
All results presented above are derived from continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 April 2010
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| Called up share capital £'000 | Share premium account £'000 |
Merger reserve £'000 |
Retained loss £'000 |
Total equity £'000 |
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| At 1 May 2008 | 5,105 | 36,272 | (1,973) | (10,828) | 28,576 |
| Share based payments | - | - | - | 67 | 67 |
| Retained loss, being total comprehensive income for the year |
- |
- |
- |
(5,156) |
(5,156) |
| At 30 April 2009 | 5,105 | 36,272 | (1,973) | (15,917) | 23,487 |
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| At 1 May 2009 | 5,105 | 36,272 | (1,973) | (15,917) | 23,487 |
| Issue of shares | 37 | 5 | - | - | 42 |
| Share based payments | - | - | - | (15) | (15) |
| Retained loss, being total comprehensive income for the year |
- |
- |
- |
(5,051) |
(5,051) |
| At 30 April 2010 | 5,142 | 36,277 | (1,973) | (20,983) | 18,463 |
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CONSOLIDATED BALANCE SHEET
As at 30 April 2010
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| 2010 £'000 | 2009 £'000 | |
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| NON CURRENT ASSETS |
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| Property, plant and equipment |
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| 1,364 | 1,830 |
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| CURRENT ASSETS |
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| Inventories |
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| 12 | 70 |
| Trade and other receivables |
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| 733 | 242 |
| Cash and cash equivalents |
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| 16,932 | 21,794 |
| TOTAL CURRENT ASSETS |
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| 17,677 | 22,106 |
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| CURRENT LIABILITIES |
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| Trade and other payables |
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| (578) | (449) |
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| NET CURRENT ASSETS |
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| 17,099 | 21,657 |
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| NET ASSETS |
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| 18,463 | 23,487 |
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| EQUITY |
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| Called up share capital |
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| 5,142 | 5,105 |
| Share premium account |
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| 36,277 | 36,272 |
| Merger reserve |
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| (1,973) | (1,973) |
| Retained loss |
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| (20,983) | (15,917) |
| TOTAL EQUITY |
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| 18,463 | 23,487 |
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CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 April 2010
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Note |
| 2010 £'000 | 2009 £'000 | |
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| Net cash used in operating activities | 2 |
| (4,627) | (5,528) |
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| Investing activities |
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| Interest received |
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| 203 | 1,251 |
| Interest paid Proceeds on disposal of property, plant and equipment |
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| (1) 11 | (1) - |
| Purchases of property, plant and equipment |
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| (490) | (875) |
| Short term deposits |
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| - | 20,000 |
| Net cash (used in) from investing activities |
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| (277) | 20,375 |
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| Financing activities |
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| Issue of ordinary share capital |
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| 42 | - |
| Net cash from financing activities |
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| 42 | - |
| (Decrease) increase in cash and cash equivalents |
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| (4,862) | 14,847 |
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| Cash and cash equivalents at the beginning of year |
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| 21,794 | 6,947 |
| Cash and cash equivalents at the end of year |
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| 16,932 | 21,794 |
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| 2010 £'000 | 2009 £'000 |
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| Cash, cash equivalents and short term deposits at the beginning of year |
| 21,794 | 26,947 |
| Decrease in the year |
| (4,862) | (5,153) |
| Cash, cash equivalents and short term deposits at the end of year |
| 16,932 | 21,794 |
NOTES TO THE FINANCIAL STATEMENTS
Year ended 30 April 2010
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 company expects to publish full financial statements that comply with IFRS in August 2010.
The going concern basis has been adopted in preparing the financial statements. In reaching their conclusion regarding going concern, the Directors have considered the risks and uncertainties, prepared and examined the cost budgets for the coming year and reviewed the level of cash balances and concluded that the going concern basis of preparation remains appropriate.
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 for collection from the Company's registered office at 22 Atlas Way, Sheffield, S4 7QQ.
2. NOTES TO THE CASH FLOW STATEMENT
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| 2010 £'000 | 2009 £'000 |
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| Operating loss |
| (6,762) | (6,142) |
| Adjustments for property, plant and equipment: |
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|
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| - Depreciation |
| 722 | 573 |
| - Loss on disposal |
| 223 | 126 |
| Share-based payments |
| (15) | 67 |
| Operating cash flows before movements in working capital |
| (5,832) | (5,376) |
| Decrease in inventories |
| 58 | 25 |
| (Increase) decrease in receivables |
| (5) | 6 |
| Increase (decrease) in payables |
| 129 | (183) |
| Cash used in operations |
| (5,650) | (5,528) |
| Income taxes received |
| 1,023 | - |
| Net cash used in operating activities |
| (4,627) | (5,528) |
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3. FINANCIAL INFORMATION
The financial information set out in the announcement does not constitute statutory financial statements for the years ended 30 April 2009 or 30 April 2010, but is derived from these statutory accounts, which have been reported on by the Company's auditors. Statutory accounts for the year ended 30 April 2009 have been delivered to the Registrar of Companies and those for 2010 will be delivered following the Company's Annual General Meeting. The financial statements were approved by the Board of Directors on 29 July 2010. The auditors have 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.