Invinity warns of longer sales cycle, appoints new CEO

(Sharecast News) - Shares in Invinity Energy Systems were sliding on Friday morning, after it warned of a lengthened sales cycle and announced a change of chief executive officers. The AIM-traded company reported that delays in government policy decisions and the upcoming US election were contributing to a lengthened sales cycle, pushing some expected revenue into 2025.

However, with £49.2m in cash reserves as of 30 June, it remained confident in its financial outlook and expected to achieve EBITDA breakeven by 2026.

It reported favourable market conditions for Long Duration Energy Storage (LDES), noting increased demand for alternatives to lithium-ion batteries in regions like the UK, EU, North America, and Australia.

Invinity said its VS3 vanadium flow batteries had been in operation for over a year at various sites, validating their ability to provide consistent returns across different applications.

Despite delays in closing sales, customer interest reportedly remained robust.

Invinity said its next-generation product, codenamed 'Mistral', was progressing well and was expected to launch commercially by the end of 2024.

However, the company said it had decided to extend the timeline for scaling up production to allow for cost-reduction measures, with full volume production slated for 2026.

The cautious approach was aimed at driving efficiencies to support Invinity's goal of reaching profitability.

For the first half of 2024, Invinity recorded revenue of £1.6m and a loss of around £11.2m, in line with expectations.

"The development team, in collaboration with our joint development and commercialisation partner, have rightly focused on ensuring that Mistral is capable of delivering the performance characteristics being demanded by customers and the market," said newly-appointed chief executive officer Jonathan Marren.

"I am very pleased with the results to date.

"We aren't yet where we wanted to be on working through the identified initiatives aimed at reducing production costs to the level we believe we can attain but have confidence this can be achieved in 2025 ahead of material volumes at sustainable margins in 2026 and beyond."

In a separate announcement on Friday, Invinity said its chief executive officer Larry Zulch had stepped down as he planned to retire.

Jonathan Marren, previously chief financial officer and chief development officer, had been appointed as the new CEO.

Marren would lead the company through its next phase, supported by chief commercial officer Matt Harper, while the search for a new CFO was underway.

"Invinity was created out of a transatlantic merger executed at the very peak of the Covid crisis," said non-executive chairman Neil O'Brien.

"Larry led the company through a period of unprecedented disruption and out the other side, launching a new product, the VS3 - now one of the world's most widely deployed modular flow batteries.

"He has been instrumental in the development and design of our next-generation product as well as being a global advocate and spokesperson not just for Invinity and the flow battery industry but for the energy transition as a whole."

At 0930 BST, shares in Invinity Energy Systems were down 34.36% at 12.8p.

Reporting by Josh White for Sharecast.com.