Shares fall 30% as manufacturing delays raise red flags at green technology company

Shares in ITM Power fell by more than 30% in early trading after it revealed manufacturing delays will affect revenues this year and could significantly impact its future performance.

The energy storage and clean fuel specialist has told shareholders that it now expects annual revenues to be “towards the bottom” of the current forecasted range of £23m-£28m.

However its final figures “will be dependent on success of the current work” to address the issues it is facing.

Graham Cooley, ITM Power

ITM Power’s share price had already fallen 80% from the highs seen last November, and dropped a further 30% when the markets opened this morning.

Delays in finalising the tooling and testing of its stack modules has resulted in “limited deliveries”.

ITM Power now only has limited field data for performance to assess the level of warranty provisions, which means it will have to “materially increase” the warranty provision in its financial results from the current level of £3m.

It has warned this may result in EBITDA losses, which are a measure of operational profitability.

In a statement, ITM Power said: “The board is aware of the potential risk associated with the growing and uncertain levels of warranty provisions and is seeking to mitigate this portfolio risk.

“As a result, the company expects there may be delays in finalising contracts in the final stages of negotiation which could place large scale projects at risk of deferred financial close.

“The company remains fully committed to the successful delivery of the order backlog and is working closely with customers to get projects finalised.”