The ITM Power plc (LON: ITM) share price has risen 30.6% in the past month. The rally in ITM Power’s share drive was driven by the positive investor sentiment towards the company, which is currently in the middle of a 12-month strategic review.
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Earlier today, the company signed a non-binding Heads of Terms agreement to sell Motive Fuels Ltd as part of its strategic review. The hydrogen power company is making good progress in its business, which underpinned the month-long rally.
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However, the rally seems to be slowing down, given that ITM shares barely moved after today’s significant announcement. The hydrogen electrolyser manufacturer noted that it had announced the pending sale in January this year when it presented its interim results.
The company did not reveal the buyer but stated that it would save about £28 million of cash to redirect to its core business.
ITM reminded investors that it had committed to investing £30 million in Motive Fuels Ltd when the joint venture was established in March 2022 to develop and roll out hydrogen refuelling stations across the UK.
The joint venture’s vision was to build a significant UK refuelling business, with each JV party committing £30 million as seed funding. ITM had not spent much money on the JV, given that it will reallocate most funds to its core business activities.
The sale of Motive Fuels Ltd comes when ITM Power has embarked on a 12-month strategic review focused on increased cost and capital discipline, which should help its core business flourish.
ITM Power shares are currently trading sideways below a crucial resistance level. It remains to be seen whether they can break above it.
Andy Allen, ITM Power’s CFO, said: “The sale of Motive will allow us to devote our time, attention and capital resources on our core competencies, to ready the business for scaling up to capture the significant growth opportunities that lie ahead of us. Motive has been an important part of ITM's journey, and it is important to us that the business will be left in capable and ambitious hands.”
The ITM Power share price.
The ITM Power share price has risen 30.62% in the past month. Will the uptrend continue?
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