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  • Writer's pictureMark Watson-Mitchell

Invinity Energy Systems – Maker Of Vanadium Redox Utility-Grade Energy Storage Has Big Profits On Its Horizon

Invinity Energy Systems (LON:IES) is a manufacturer of vanadium flow batteries.

Its technology centres on vanadium redox, a set of reactions first demonstrated in the early 1980s.

It has the largest installed fleet of modular VFB batteries in the world, with installations at dozens of sites worldwide.

The £88m capitalised group, which today announced its results for the year to end December 2023, has indicated that there are now some very big profits on the horizon.

The Business

Its principal manufacturing facilities are located in Vancouver and in the central belt of Scotland, and its principal end markets are in California, Australia, the UK, and Taiwan.

Invinity works with significant supply partners, in particular Baojia New Energy, a contract manufacturer, which support the assembly of its containerised energy storage products.

Vanadium Flow Batteries

Vanadium flow batteries  are typically capable of more than 40,000 charge/discharge cycles with minimal degradation, as compared to even ultra-long-life lithium-ion batteries that operate with less than 10,000 cycles.

VFBs have low fire risk and a wide operating temperature range, allowing them to be installed with much less HVAC climate control and consequently lower operating costs.

In contrast, their charge-discharge through-cycle efficiency is lower than lithium-ion (70-72% as compared to around 95%).

Given the lower maturity of the sector, the capital cost of VFBs is currently higher than lithium-ion but the per-charge or perdischarge cost is already considerably lower.

Management View

CEO Larry Zulch stated that:

"Our impressive gains in 2023 delivered on the very high expectations we set for ourselves and established an appropriate foundation for a successful fundraise just completed.

We welcome our new investors as we focus on progressing toward positive cashflow with a compelling new product and a low-capex strategy for delivering it at scale into a market hungry for energy storage."

Analysts View

Analyst Alex Brooks at Canaccord Genuity Capital Markets rates the group’s shares as a Buy, with a Price Objective almost three times the current price at 65p.

“We note Invinity is the largest listed UK battery company, with its largest global manufacturing facilities based in Scotland - where the planned GB Energy is also expected to be based.”

He estimates that the current year to end December will see sales up from £22.1m to £30.8m, with its EBITDA loss reducing slightly to £18.8m (£21.1m loss).

However, for 2025 he sees sales revenues leaping to £123.4m, turning the company around to £2.1m EBITDA.

Even greater sales in 2026, he estimates, will come through at £200.8m, while EBITDA will shoot ahead to £26.2m, worth 4.9p in earnings per share – but that is for 2026!

My View

This time last year this group’s shares were trading at around 50p, just a couple of weeks ago they were down to 18.80p.

Last night they closed at 19.50p and at around that price the shares offer risk-tolerant investors some significant upside.


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