(Alliance News) - Fulcrum Utility Services Ltd on Wednesday said key conditions for the sale of gas connection assets to ES Pipelines Ltd have been met, meaning the deal will complete by March-end.
Shares in Fulcrum were up 6.0% at 24.90 pence in midday trading in London.
Utility infrastructure and services firm Fulcrum announced it would be selling its domestic customer gas connection assets, as well as the order book and associated meters, back in December.
Conditions concerning UK energy regulator Ofgem and the UK Competition & Markets Authority are now satisfied and so the deal will complete by March 31.
Fulcrum will receive GBP33 million for the assets sold. This will be paid by ES Pipelines in tranches, with the first GBP17 million paid on completion and the rest over a four-year period - with at least one more transfer in calendar year 2020, the minimum amount of which will be GBP6.5 million.
Money from the sale will be used to fully repay Fulcrum's GBP12 million of borrowings.
Furthermore, Fulcrum said its electrical design and build business, Dunamis, has won a number of recent utility contracts.
These include, as included in the company's interim results, two contracts in northeast England worth a combined GBP3.2 million. Adding to this is a GBP1.9 million contract in south-east England and a GBP1.8 million contract, also in the south-east.
Fulcrum confirmed trading in its financial year ending March 31 will align with expectations, and that it still expects "further profitable growth next year, underpinned by ongoing contract wins".
Chief Executive Daren Harris said: "I am pleased to announce that the key conditions in relation to the sale of our domestic gas assets to [ES Pipelines] have now been satisfied. The sale will significantly strengthen the group's balance sheet and it supports our future strategic growth ambitions. Our new relationship with ESP is also progressing well and is already helping to enhance the group's capabilities and service offering in our core design and build markets
"The electrical capabilities of Dunamis has enabled the group to tender on and contract win opportunities previously unachievable to the business, and we are delighted to announce that we have secured these large and significant electrical and dual fuel contracts."
"This strong succession of significant orders highlights immediate potential in the electrical market following a period of political and economic uncertainty. The board is confident that these wins, coupled with recent market developments such as the decarbonisation of energy, also demonstrate the significant, long-term level of opportunity available to us in the electrical infrastructure market," he added.
By Anna Farley; annafarley@alliancenews.com
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