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(Alliance News) - Shares in Xeros Technology Group PLC rose on Thursday as the company signed two agreements to sell most of its Hydrofinity US laundry customer portfolio.
Shares in the water saving technology provider were 10% higher at 8.76 pence on Thursday.
The agreements are for the sale of 164 washing machines installed with Hydrofinity customers and their lease contracts to laundry equipment distributor Eastern Laundry Systems and laundry equipment and services supplier Wash IQ.
In 2018, these lease contracts had an adjusted gross loss of USD376,000, and have no value on Xeros's balance sheet.
Hydrofinity, formerly known as Xeros Cleaning Technologies, will receive an upfront payment of USD109,000 in cash and ongoing licence fees for the provision of XOrbs, sphere-shaped polymers which remove dirt and stains from workwear.
Hydrofinity will use the proceeds to fund ongoing working capital.
The customer base sale reflects Hydrofinity's strategy to reduce its physical presence in markets and move to a full licensing model.
Looking ahead, Xeros expects further sales of smaller portfolios to other US regional distributors "over the coming months".
"As part of our strategy to implement a licensing model for all our applications, we completed the transfer of sales and service to our channel partners in the US earlier this year in order to improve customer service and reduce our costs," said Chief Executive Officer Mark Nichols.
"This sale of the majority of our existing Hydrofinity lease agreements in the US to channel partners means we will be paid ongoing fees for the use of XOrbs by customers, providing a high margin return on our technology without any physical involvement in the supply chain," Nichols added.