Flowgroup Regulatory News (FLOW)

22 Dec 2009 07:00



Energetix Group plc

("Energetix" or "the Group")

Pre-Close Trading Update

Energetix Group plc (AIM: EGX), a group of companies with three cost-effective products (Pnu Power, Genlec and VPhase) to meet the growing demand for alternative energy, today issues the following pre-close trading update for the year ending 31 December 2009.

The Group has successfully completed all of the necessary development and CE certification for both the VPhase and Pnu Power products and it anticipates Genlec to have obtained the initial CE certification for its trial products before the end of Q2 2010. The time taken to achieve certification has, however, led to delays in the timing of sales. 

The Group's tight financial control has resulted in a reduction in the expected loss for the year by approximately £250,000 compared to year ended 31 December 2008. In addition, the Group's careful cost control means that it will finish the year with cash reserves of around £5.5 million. The Group sets out, below, an update in relation to each of its companies.

VPhase

With a CE-marked product now in place, VPhase has been active in recruiting its initial sales and marketing team and has implemented a number of sales initiatives. These include an installation and sales training programme for electrical contractors, organised in conjunction with one of the electrical contractors' associations and key electrical distributors; demonstrations and trials with social housing associations; and direct sales to end-users via the internet and a dedicated order hotline. On the utility front, Scottish and Southern Energy has installed VPhase units in about 30 of its customers' homes, the remaining 20 to be installed in the New Year, as part of the UK Government's Carbon Emissions Reduction Target (CERT) trial, and British Gas has initiated its commercial sales trials. 

All these activities are expected to lead to growing sales volumes in 2010. Further announcements in relation to these trials will be made in due course.

Furthermore, VPhase has received a letter of intent from a Northwest based social housing provider indicating that it will carry out a field trial with VPhase commencing in the New Year. The trial will look at ease of installation plus energy and carbon savings delivered. This social housing provider currently provides over 15,000 high-quality, affordable homes in 30 council areas across Northwest England.

Pnu Power

Following initial positive market reaction, the team has focused on applications in which Pnu Power products are first-cost competitive with lead-acid batteries. These applications, in particular, are utility switching and emergency mobile phone networks. Pnu Power has achieved initial successes in these markets with orders from National Grid UK and, via M/A-COM, for Florida's state trooper emergency network.  National Grid UK, with a substantial market opportunity, is at an advanced stage of testing the Pnu Power back-up system for its utility switch refurbishment programme. M/A-COM is trialling the unit and is assessing further opportunities for the Florida network.

In addition, as announced on 18 December, Pnu Power has secured a first trial order from a major Spanish-based international infrastructure provider for the Pnu Power 10kVA backup power system to be used on the country's television broadcast system.

Genlec

Genlec continues to work closely with boiler partners in mainland Europe, in particular Daalderop in Holland and Stiebel Eltron in Germany, and is on target with plans to test Genlec-enabled appliances in homes this winter.  In addition, Genlec, working in conjunction with a specialist boiler designer and testing house, has developed a UK-specified, Genlec-enabled appliance; this is planned to be available as a product in the UK in the latter half of 2010 via Genlec's boiler and utility partners. 

Adrian Hutchings, CEO of Energetix Group plc, commented: "The Group has focused on obtaining product certification and establishing sales channels during this year. We are pleased that, barring delays to certification which have impacted the timing of sales, the Group's operations for this year have been largely in line with management's expectations. The Group's pipeline has begun to convert into sales, and the Board is confident that we will achieve increasing sales and carry out further product trials as Energetix progresses into next year." 

The preliminary results for the year ending 31 December 2009 are expected to be released in March 2010.

- Ends -

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About Energetix Group plc 

Energetix Group plc has three businesses with cost-effective products to meet the growing global demand for alternative energy. With a focus on distributed generation, energy storage and energy efficiency, the Energetix businesses are:

Energetix (Pnu) Power Limited - compressed-air back-up power; 

Energetix Genlec Limited - distributed generation in the home; and 

VPhase plc - domestic energy efficiency. 

Energetix's strategy is to create products based on robust engineering principles, regularly utilising existing mass-produced components configured in a novel and patentable way. Avoiding cutting-edge science has enabled the Group's businesses to de-risk the new product development process which in turn reduces development time and costs. This has enabled the businesses to have a lower-than-normal technology risk while still producing strong intellectual property. In addition, this facilitates the outsourcing of production and assembly, significantly reducing the Group's investment in capital equipment. The body of know-how developed within the Group has also enabled our businesses to modify the design of existing mass-produced components to reduce costs, improve efficiency and strengthen the Group's intellectual property position.

Energetix Group joined AIM in August 2006. The Group and its subsidiaries are all based near Chester, NW England.