At an investors’ meeting on 21 September Intelligent Energy forecasted revenue for their financial year to end September 2016 of £90 million (2015: £78 m) for a loss before interest, tax, depreciation and amortisation of  £42 m (2015: £46 m). Cash and cash equivalents are expected to be over £20 m (2015: £24 m). Share price is around 13p, down from a 12-month high of 110p

Intelligent Energy is a pioneer of hydrogen fuel cells, starting at the University of Loughborough in 1988 and developing fuel cells of all sizes for many applications: electric power generators, transport (scooters, cars and drones) and consumer electronics.  Revenues increased slowly over the years through sales and from joint ventures with automobile and other companies, but losses were usually larger than revenues.

However in 2014 IE was riding high. They had recently listed on the stock exchange and their Indian branch (Essential Energy) had obtained a provisional contract to operate and maintain the power generators of some 10,000 telecom towers throughout the country. These towers were either not on the grid or with access to irregular supply.  They were powered by diesel generators, which IE expected to replace gradually with fuel cells, while generating income from asset management.

This contract led to a big jump in revenues from £14 m in 2013 to £78 m in 2014, but the margins from managing the generators was small and the introduction of fuel cells slow. IE continued to expand, buying the portable fuel cell and disposable cartridge assets of Societe Bic in early 2015.

IE’s 5 watt Upp portable charger based on air-cooled hydrogen fuel cells. It can keep a mobile phone charged for up to a week (

By early 2016, cash was running out, so IE decided to focus on existing commercial opportunities and to put on hold future technologies such as evaporative cooling cells. Headcount outside India was halved and divisions reorganised. £27 m was raised from convertible loan notes.

Meanwhile, the contract in India (with GPL, a large infrastructure company) was expanded to 27,000 towers while remaining provisional. At the meeting on 21 September John Maguire, CFO, stated that “there is no guarantee that the transaction would be completed” but that even if it does not “the outlook….. for the core business is not materially dependent on the completion of the GTL transaction”. It seems unlikely that such a large part of the business would not have a significant effect.

Fuel cells have advantages over both batteries and diesel generators, but the major issue is the supply of hydrogen. For off-grid power plants, such as those in India, hydrogen cylinders can be trucked in. Portable cells for consumer electronics could be particularly useful in off-grid communities or site operations, but there will still need to be some means of re-fuelling nearby.  Drones can be re-fuelled at their base, but vehicles will depend on the development of a hydrogen network.

IE are pursuing all these possibilities. They have a strong IP base with over 1000 patents and still have several joint ventures with larger companies.  The actions taken earlier this year were necessary but will they be enough?  IE need a breakthrough in one market to keep them afloat – and hopefully profitable – while waiting for the distribution and general public acceptance of hydrogen to improve.  Their Indian telecom towers may provide the trigger.