Job losses loom at energy firm after ‘unacceptable financial performance’

Energy storage and clean fuel company, ITM Power, has posted an adjusted EBITDA loss £54.1m (H122: £12.9m) in its interim results for the six months to 31 October 2022, as it warns it will need to slash staff headcount by 25%.

Revenues for the Sheffield-based company were £2m (H122: £4.2m). In its financial guidance for FY23, ITM Power says adjusted EBITDA loss is expected to be in the range of £85m to £95m.

The business says implementing a 25% cut in full-time equivalents job posts should result in a 30% (£9m) annualised saving on personnel cost. According to its Annual Report and Accounts for 2022, ITM Power currently employs more than 430 workers.

The company notes its existing product suite is too wide. It says the services it provides to support older generation technologies are disruptive to the company’s manufacturing process and have become too costly.

Sir Roger Bone, chairman, said: “We raised capital to pursue an expansion strategy and in doing so underestimated the competencies and capabilities required to scale up and to transition from an R&D company to a volume manufacturer.

“As a consequence, we set unrealistic targets for project completion. This has produced an unacceptable financial performance.

“We have acted swiftly by appointing Dennis as our new CEO. During his two months at ITM, Dennis has developed a 12-month plan which lays out the underlying challenges of the business as well as the solutions which we will put into place.

“I have no doubt the immediate actions being taken will provide strong foundations for the future.”

CEO Dennis Schulz added: “I am convinced ITM’s technology can outperform the competition. However, product focus must be narrowed significantly.

“Our balance sheet is robust, but we need a much more rigorous approach to managing cost.

“This requires scrutinising every aspect of the business for cost saving potential, and it will make difficult decisions necessary. One of those is the need to streamline our organisation via a headcount reduction programme.  

“We need to transform ITM from an R&D culture company to a professional and credible delivery organisation ready for volume manufacturing – sustainably growing into a profitable business.”