MARKET REPORT: Green hydrogen firm slumps on Blue Monday

Blue Monday hit the UK hydrogen industry as ITM Power issued its third profit warning in just eight months.

The green energy company was seen as a pioneer when it went public in London in 2004, becoming the first ever hydrogen company to make the move.

It quickly became a stock darling with shares hitting an all-time high of 682p in January 2021 – an increase of 1264 per cent from the 50p float price.

But the past two years have not been kind, and investors sold shares again yesterday when CEO Dennis Schulz said it would fall short of expected earnings for the current year – the third warning since June. Shares fell 12 percent, or 12.5 pence, to 91.3 pence.

The company makes electrolysers that separate hydrogen from water, a key technology in the green revolution.

However, production problems at its Sheffield plant have prevented it from supplying major customers, including German gas giant Linde and chemical company Yara, who are jointly building a green hydrogen plant in Norway.

According to analysts, the problem is ITM’s transition from research and development to large-scale production.

Nick Walker from Peel Hunt said: ‘ITM knows how to make the products, but now it has to deliver them. These are two very different skills and require the right people, machines and setup.

“Investors are quickly running out of patience, but more worryingly, so are customers. If they go elsewhere, it’s a problem.’

Schulz came over from Linde in December, but he won’t have long to turn things around.

He said, “If the company is to develop from a research and development unit to a mature supply organization, we need a stronger foundation.”

Stock watch – Amigo

Amigo shares fell nearly 25 percent as it struggled to convince investors to help pay what it owed on missold loans from customers they couldn’t afford.

The high-interest lender said it has failed to find a so-called ‘cornerstone’ investor to raise £15 million for clients, blaming the ‘economic background’.

Amigo has been in trouble for several years after a spate of complaints about how it sold loans to customers.

Shares fell 24.6 percent, or 0.96 pence, to 2.94 pence.

The stock is closely followed by private investors, but backers also include JCB grandee Lord Bamford and financier Peter Hargreaves, who have stakes of 7 percent and 4.5 percent respectively.

Homebuilder Taylor Wimpey rose 2.3 percent, or 2.6 pence, to 117.35 pence following broker upgrades from UBS and JP Morgan.

Barratt Developments also added 1.8 percent, or 8.2 pence, to 463.2 pence and student housing provider Unite climbed 2.1 percent, or 21 pence, to 1,004 pence.

Investors remained anxious to see if the FTSE 100 index would break its all-time high of 7877.45.

But with US markets closing for Martin Luther King Day, the index lacked momentum and ended the session up 0.2 percent, or 16 points, to 7860.07.

Miners and oil companies also weighed on progress as Brent Crude and copper and zinc on the London Metal Exchange all fell.

BP fell 0.7 percent, or 3.35p, to 481p, Shell lost 0.6 percent, or 15p, to 2425.5p and Rio Tinto fell 2 percent, or 123p, to 6096p.

There was more action on the domestic-focused FTSE 250, which rose 0.7 percent, or 129.49 points, to 20082.33, when clothing retailer Asos and events company Ascential won.

Brokers have been keeping a close eye on Ascential (7.9 percent, or 16.4 pence, to 224 pence) since it told investors in April it was about to split.

The idea is to create more shareholder value by listing the digital business in the US, where technology companies have had better valuations.

The rest of the business – such as the Cannes Lions and World Retail Congress events – would remain London-listed.

The plans have never been formally approved by the board, but investors expect more details next month with full-year results.

Asos continued its turnaround, adding 5.2 percent or 38.5p to 783.5p.

The fast fashion retailer is back in the good books of the city after last week’s trade update gave investors a boost.

And the news that sales of miniskirts have increased by more than a third in the past four months made hearts beat faster.