(ITM) ITM Power

25^th January 2012

ITM Power plc

("ITM Power", "the Group" or the "Company")

Half-Year Results

For the six months ended 31^st October 2011

ITM Power (AIM: ITM) the energy storage and clean fuel company is pleased to announce half-year results for the six months ended 31^st October 2011.

HIGHLIGHTS:

Operational

Financials and Corporate

Outlook

Prof Roger Putnam, Chairman of ITM Power commented:

"The UK H₂Mobility initiative represents a very significant step forward for the UK in the adoption of hydrogen for transport. This, coupled with the EcoIsland project, places ITM Power at the heart of the emergence of this exciting new fuel industry.

"Building relationships has been a major focus for ITM Power over the last six months and the achievement of our first major EU grant is a sign of relationship development that will, we hope, result in significant commercial traction in 2012."

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

CHAIRMAN'S STATEMENT

I am pleased to report results for the six months ended 31 October 2011 and to update shareholders on developments at our Group.

ITM Power is now at a major turning point in its development. The Group's HFuel technology packaged in 100kg per day units forms the basis of a large scale technology platform to meet the challenges of hydrogen roll out. 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.

Financials

The pre-tax loss for the six months under review increased to £3.5m from £3.0m in line with the increase in activity. Total grant funding received in the period was £269k (2010: £335k).

Interest rates remain depressed and risk remains the key priority in the choice of the financial institutions in which the Group chooses to place its funds. The Group holds over 99% of its funds on deposit with its bankers, NatWest. Deposit rates are monitored regularly with funds being placed in the most beneficial interest-bearing accounts. The Group's cash and short-term deposit balances totalled £9.0m at the period end (£14.7m at 31^st October 2010 and £12.2m at the last financial year end on 30^th April 2011).

The Board is not recommending the payment of a dividend for the period in accordance with our stated dividend policy.

Board and Staff

Our management and staff continue to rise to the challenges set for product development and CE marking and I would like to thank all of our people for their contribution to the advances made in the last six months.

Outlook

The need for energy storage is now well understood by decision makers around the world. The rising levels of intermittent forms of renewable power generation have increased the need for energy storage and demand side control. EcoIsland is the UK's premier project showcasing these technologies and I was delighted that the Group was invited to join.

I am also pleased to report that the Group is at the heart of the recently announced UKH₂Mobility programme. This programme, modeled on the hydrogen roll-out underway in Germany, will be key to the uptake of hydrogen as a transport fuel in the UK and an ideal opportunity for the development of our HFuel product. This programme, together with EcoIsland, gives the Group the opportunity to work with some of the largest companies in the world across several energy sectors.

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.

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.

Prof Roger Putnam CBE

Chairman

24^th January 2012

CEO's REVIEW

Hydrogen's role in both renewable energy storage and transport is becoming internationally recognised and the Group and its product offering now have global traction and visibility. As well as our continuing HOST program, we are now part of the two critical projects that will advance the roll-out of hydrogen infrastructure in the UK, EcoIsland and the UKH2Mobility program.

Major Infrastructure Projects

The UK has begun the process of hydrogen adoption with the launch of the UKH2Mobility programme. This programme uses the German model as its foundation and marks the start of the UK's commitment to hydrogen as the transport fuel of the future. We are particularly pleased to be a member of the management committee for the programme and the only green hydrogen equipment manufacturer in the project. This will give us the opportunity to work with some of the world's largest automotive OEMs and energy companies.

The EcoIsland project on the Isle of Wight is the first complete energy system integration project in the world. EcoIsland aims to incorporate all of the major energy efficiency and green energy technologies available globally and gives the Group the opportunity to work with partners such as SSE, Cable & Wireless, IBM and Toshiba.

HFuel CE Compliance

The design and supply of a refuelling product to The University of Nottingham has given us the opportunity to CE mark our HFuel refuelling, storage and dispensing product for the European market. This product order was won under a competitive tender arrangement and few sector companies have achieved CE marking for their products for sale in the EU. ITM Power has already achieved CE compliance for three electrolyser product platforms.  This has now been extended to five.

ITM Power has now CE marked a standardised hydrogen refueling system. In addition, the core hydrogen generation module has been CE marked in its own right; HPac40.  ITM Power can add further generation modules to purchased refuelling systems, based on the true modularity of the design. The HPac40 can also be sold as a stand-alone product which generates 40 litres of hydrogen per minute and which will be launched at the Hannover Messe in April 2012. This adds a larger capacity electrolyser product to the portfolio, positioned for additional industrial hydrogen applications. 

ITM has also been working closely with TUV SUD to achieve compliance to use HFuel in Germany. Although much of the compliance work is common, some specific areas of difference exist between the UK and Germany, which are being addressed.

The HOST programme continues to be a big success for the company; gathering in-field operational and cost data, developing productive relationships with end users and raising the profile of hydrogen as a sustainable clean fuel.  Since the first trial at London Stansted Airport in March 2011, over 200 refueling events have been undertaken, more than 450kg of hydrogen has been generated on site and in excess of 10,000km have been travelled on hydrogen by over 50 van drivers.  HFuel has continued to achieve 100% availability through all 13 trial conducted to date.

Product Sales

The Group is now focused on product sales, developing a pipeline of blue chip customers and building a sustainable product revenue stream. Orders for electrolyser products started well with £0.43m of orders taken in the first period that they were available, of which we recognised £40k in revenue in the period to 31 October 2011. The current outstanding order book stands at £537k. Further orders have not developed as rapidly in the subsequent period and the industry seems to operate firmly on the principle of budgetary cycles. As we enter the next fiscal year from April onwards we therefore expect sales to increase. Against this background, however, we have seen a significant upturn in requests to tender and quote for the supply of products across our range with the larger HFuel modules being particularly popular as hydrogen applications gain understanding and as the implementation of diverse energy strategies begins.

ITM Power is now focused on commercial income generation and we look forward to updating shareholders on progress with aggregated product sales figures at the time of the full year results.

Fuel Cell Development and Monetisation

We have seen significant industry interest in the Group's high power density fuel cell MEA.  Engagement with OEMs and potential manufacturing partners has been active and encouraging.  This engagement has, given the competitive environment in the global auto industry, been largely confidential to date.  Announcements regarding OEM engagement have therefore not been possible although we can confirm that we are at evaluation stage with a number of potential partners.

Grant Funding and Partnerships

Our commercialisation strategy is built on partnerships developed through grant funded projects. We have been very successful at putting together consortia to apply for EU grant funds and have been able to announce success in the first of these. Further partnerships have been brought together and we are in the negotiating stage for a further £1.5m of grant funds which, if achieved, would flow into the Group over the next three years. Our grant funding approach is driven by the corporate partners involved and their interest in the Group's technology for their global markets.

The Future

With the advent of the EcoIsland and UKH2Mobility projects, hydrogen is now at the top of the energy agenda in the UK and also across Europe.  ITM Power is positioned at the heart of both these projects with a growing range of products targeting green fuel and energy storage.  We are, I believe, in the right place at the right time, with the right products. 

Dr Graham Cooley

Chief Executive Officer

24^th January 2012

CONSOLIDATED INCOME STATEMENT (UNAUDITED)

Results for the six months ended 31 October 2011

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.

The loss for the period is equal to the total comprehensive expense for the period.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

Results for the six months ended 31 October 2011

CONSOLIDATED BALANCE SHEET (UNAUDITED)

As at 31 October 2011

CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

Results for the six months ended 31 October 2011

1. Basis of preparation of interim figures

The interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted for use in the EU.  While the financial information included in this interim announcement has been compiled in accordance with the recognition and measurement principles of IFRSs, this announcement does not itself contain sufficient information to comply with IFRSs.  This interim financial information does not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006.

The financial information for the six months ended 31 October 2011 and 31 October 2010 has not been audited.  The information relating to the year ended 30 April 2011 has been extracted from the Group's published financial statements for that year, which contain an unqualified audit report, does not draw attention to any matters of emphasis, and did not contain statements under section 498(2) and 498(3) of the Companies Act 2006 and which have been filed with the Registrar of Companies.

The directors continue to believe that the going concern basis of preparation remains appropriate based upon the level of the Group's level of cash and short term investments relative to the foreseeable operating losses, for a period of not less than 12 months from the date of this report.

2. Significant accounting policies

The financial statements have been prepared on the historical cost basis.

The principal accounting policies adopted by the Group are as applied in the Group's latest annual audited financial statements.

3. Called up share capital

4. General

Copies of this statement are available on our website, www.itm-power.com

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