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Shares in Invinity Energy Systems (LSE:IES) experienced a notable decline on Friday morning following a warning about an extended sales cycle and a change in leadership. The AIM-traded company announced that delays in government policy decisions and the upcoming US election were contributing to a lengthening of the sales cycle, which is pushing some anticipated revenue into 2025.
Despite this setback, Invinity remains optimistic about its financial situation, reporting £49.2 million in cash reserves as of 30 June. The company is still aiming to achieve EBITDA breakeven by 2026. Market conditions for Long Duration Energy Storage (LDES) are reported to be favorable, with increased demand for alternatives to lithium-ion batteries in markets including the UK, EU, North America, and Australia.
The company highlighted that its VS3 vanadium flow batteries have been operational for over a year at various sites, demonstrating their reliability across different applications. While there have been delays in finalizing sales, customer interest is said to remain strong.
Invinity's next-generation product, codenamed ‘Mistral’, is progressing as planned and is anticipated to be commercially launched by the end of 2024. However, the company has decided to extend the timeline for scaling up production to incorporate cost-reduction measures, with full-volume production now scheduled for 2026. This cautious approach is aimed at achieving efficiencies to support the company’s path to profitability.
For the first half of 2024, Invinity reported a revenue of £1.6 million and a loss of approximately £11.2 million, which aligns with projections. Jonathan Marren, the newly appointed CEO, stated, “The development team, in collaboration with our joint development and commercialization partner, have rightly focused on ensuring that Mistral meets the performance characteristics demanded by customers and the market. While progress has been made, the target of reducing production costs to the desired levels is expected to be met in 2025, ahead of achieving sustainable margins in 2026 and beyond.”
In a separate announcement, Invinity revealed that Larry Zulch had stepped down as CEO to retire. Jonathan Marren, who previously served as chief financial officer and chief development officer, has been appointed as the new CEO. Marren will guide the company through this transitional phase, supported by chief commercial officer Matt Harper, while a search for a new CFO is underway.
Non-executive chairman Neil O'Brien praised Zulch for his leadership through challenging times, noting his key role in the development of the VS3 product and advocacy for the energy transition.
At 0930 BST, shares in Invinity Energy Systems were down 34.36%, trading at 12.8p.
