Last checked at 12 Dec 2023 13:30
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
12 December 2023
Eneraqua Technologies plc
("Eneraqua", the "Company" or the "Group")
Energy Project Delays
Two Local Authorities delay group of major projects
Impact to H2 profitability but still expect to be net cash at year end
Eneraqua Technologies plc, a specialist provider of energy and water efficiency solutions has been notified by two local authority clients of a delay to the commencement of a group of major energy projects which were expected to start this month.
Whilst the clients have confirmed their intention to proceed with the projects, they have deferred the start date to post April 2024. One local authority has been impacted by budgetary pressures and significantly rising costs on other projects already in progress, while the other has had delays in the completion of enabling works.
All local authorities are required to operate balanced budgets across each financial year and the sector has seen financial pressures due to the impact of inflation that the Regulator for Social Housing advises is not expected to ease until mid-2024. Eneraqua's project teams will be redeployed to accelerate delivery of other projects and thereby mitigate some of the impact of the delay in FY24.
The deferred projects are now expected to start in FY25 and the Board has identified a number of cost reduction opportunities which will reduce operating costs by c£1.4m in the next financial year.
As a result the Board now expects to report results materially below current market expectations with Revenues of c£55m in FY24 and an Adjusted Loss Before Tax of c£6m including redundancy costs. These figures include provision for costs related to defective equipment supplied for some district heating systems which we will seek to recover in due course from the suppliers concerned.
The positive collection of receivables through H2, together with strong control of working capital means that year-end cash is expected to be broadly in-line with expectations at c£5.5m representing a Net Cash position of c£1.0m. **
Mitesh Dhanak, CEO Eneraqua Technologies, said: "While recognising the serious budgetary pressures on our local authority clients, this delay is clearly extremely disappointing for all of our shareholders and staff. Whilst inflationary pressure has made the Local Authority sector more complex to navigate, the structural need and underlying demand for our solutions in Energy remains positive given the quality of our offering and the continued drive to net zero, with these contracts moving into FY25 providing a strong basis for the year ahead."
**excluding IFRS 16 liabilities
The Company understands the FY24 consensus forecast to be Revenue £63.4m, Adjusted PBT £1.5m and year end net cash of £1.2m.
For further information please contact:
Eneraqua Technologies plc Mitesh Dhanak, Chief Executive Officer Iain Richardson, Chief Financial Officer |
Via Alma PR
|
Liberum (Nomad and Joint Broker) Edward Mansfield Benjamin Cryer |
Tel: 0203 100 2000 |
Singer Capital Markets (Joint Broker) Sandy Fraser Asha Chotai |
Tel: 020 7496 3000 |
Alma (Financial PR) Justine James Andy Bryant Will Ellis Hancock |
Tel: 020 3405 0205 eneraqua@almastrategic.com |
Notes to editors
Eneraqua Technologies (AIM:ETP) is a specialist in energy and water efficiency. The Group has two divisions energy and water. Energy is the larger division, with the Company focused on clients with end of life gas, oil or electric heating and hot water systems. The Group provides turnkey retrofit district or communal heating systems based either on high-efficiency gas or ground/air source heat pump solutions that support Net Zero and decarbonisation goals.
The water division is a growing service offering focused on water efficiency upgrades for utilities and commercial clients including hotels and care homes.
The activities in both divisions are underpinned by the Company's wholly-owned intellectual property, the Control Flow HL2024 family of products which reduce water wastage and improve the performance of heating and hot water systems.
The Company's main country of operation is the United Kingdom. The Company's head office is based in London with additional offices in Leeds, Washington (Sunderland), India, Spain and the Netherlands. The Company has 168 employees, with the majority employed within the UK. Eneraqua Technologies has received the London Stock Exchange's Green Economy Mark.
To find out more, please visit: www.eneraquatechnologies.com