LONDON (Alliance News) - Hydrodec Group PLC Tuesday said it is re-emerging as a stronger company as the board implements its six-point plan to turn the company to profitability.
The advanced oil and chemical process technology, products and services company said its priorities are clear ahead of Hydrodec's annual general meeting on Tuesday.
Chairman Colin Moynihan said the company is "re-emerging stronger" from a period of re-building and re-investment and is starting to deliver on its strategy using its six-point plan.
The plan begins with delivering the rebuild and expansion of its US market position through the company's Canton oil refinery. By the end of 2015, it is expecting the operation to be cash generative and to be processing around 19 million litres of transformer oil.
The second step is embedding the outsourcing relationship with Southern Oil in Australia. This Australian business is also expected to be cash generative before the end of 2015.
The third step involves delivering the "leading oil" and associated waste management business in the UK, which is aiming to deliver a positive cash run-rate by the end of 2015 as a stand-alone business. Early indications are that revenue, scale and efficiency savings will amount to more than GBP1.5 million on an annualised basis, Moynihan said.
"In the last three months, Hydrodec has commissioned the rebuilt, improved and expanded facility in Canton, Ohio, commenced tolling under outsourcing arrangements with Southern Oil in Australia, and has consolidated feedstock collection for its proposed lubricant re-refinery in the UK through the acquisition of Eco-Oil," he said.
Fourthly, the company is looking to secure its technology. The company said it has filed patent applications to protect the "know-how and operating developments" in the transformer oil technology industry.
The fifth step is focused on building up its presence in the large lubricant oil re-refining market. The company is currently working on the UK's first purpose-built lubricant oil refinery, which is expected to be producing toward the end of 2017. Hydrodec will be reviewing detailed financing options during the next two quarters, which on which it will update shareholders at the appropriate time, the chairman said.
The final step is reviewing other growth options in the core transformer oil business, de-risking any expansions by working with partners or collaborating with other companies.
"The company has also taken the next steps to register technology patents and is close to agreement for a lease for the proposed re-refinery in the North West of England, subject to the Nationally Significant Infrastructure Projects regime with formal application expected before year end," Moynihan added.
"The company's priorities are clear, and the board endorses a focused and comprehensive six point plan, the key elements of which are already in train. The board firmly believe the delivery of this plan will drive the company to profitability," he said.
Hydrodec said it also aims to save a further GBP500,000 per year through cost reduction to corporate overheads by relocating the head office and from Lee Taylor and David Robertson stepping down from the executive management after the annual general meeting in July. Both will stay on at the company as Hydrodec has "reallocated their responsibilities", Moynihan said.
Hydrodec shares fell 1.2% to 8.03 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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