Cash burn and losses grow at ITM Power

Interim losses may have increased at clean fuel outfit ITM Power but the company reckons 2012 could be a pivotal year as the group's technology starts to make a commercial impression.

"One of the key challenges facing us has been to demonstrate that our technology has a competitive cost structure with other methods of hydrogen production. The cost structure announcement made in December was of particular significance to the group's development and has generated very significant commercial interest," the company said in its trading update.

Loss before tax in the six months to the end of October widened to £3.5m from £3.1m in the same period in 2010, as the company ramped up activity.

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According to ITM, the firm is at a "major turning point in its development", with Chairman Roger Putnam saying "I am confident that 2012 will be the tipping point for both hydrogen as a transport fuel in the UK and the group's product offering."

During the year the group received a total grant funding of £269,000, compared to £335,000 in 2010. Revenue generated off the company's own back was a mere £40,000, but at the interim stage the year before the company had zero revenues, and with "early revenue streams developing, and the now wide acceptance of the role of hydrogen in energy storage, the outlook for the group is very positive," Professor Putnam claimed.

The group's product order book currently stands at £0.54m.

The group's cash and short-term deposit balances totalled £9.0m at the period end (£14.7m at 31st October 2010 and £12.2m at the last financial year end on 30th April 2011). Net cash burn during the six month period was £3.2m, up from £2.2m in the corresponding period of 2010.

The firm is not paying a dividend for the period, in line with its dividend policy.

The share price fell 10.6% to 39.00p by 13:31.

NR