25 Feb 2009 07:00
Hightex Group plc ("Hightex" or the "Company")
Trading Update
Trading update on membrane business
Reduction in SolarNext operations to stabilise group cash flow
25 February 2009
Membrane business update
Hightex's membrane business continues to grow successfully. Following the announcement made on 29 January 2009 about the contract win for the refurbishment of the roof system of the Munich Olympic Hall worth approximately EUR 8.2 million, the total contracted revenue for calendar 2009 has been lifted to EUR 16.5 million.
In addition, during 2008 Hightex undertook significant preparatory work on a number of high value potential contracts, which are expected to move to the tender stage during 2009. Hightex believes that its preparatory work will place it in a good position when these tenders are assessed by the respective client.
SolarNext
The Board of Hightex (the "Board") announces that it has completed a thorough review of its solar cooling business which has been developed through its wholly owned subsidiary SolarNext AG ("SolarNext") against the background of the downturn in world economic activity.
SolarNext product range
SolarNext has developed a solar cooling and heating system in kit form which can be retro-fitted to many kinds of structures. To date more than EUR 3.5 million has been invested in this project, with the result that SolarNext has designed and produced a proprietary air-conditioning system, driven by solar thermal energy and managed by an innovative multi-function system controller which is the subject of international patent applications. With no formal sales force or concerted selling effort, SolarNext has already sold 23 of these chillers for an aggregate sales value of approximately EUR 526,000.
The unique chillii® System Controller can be used with thermally driven heating and cooling systems or heating only systems, and is capable of handling a variety of heat sources, including solar heat, district heat, biomass, CHP units and waste process heat.
The development phase of both the system and the controller has been successfully completed and the products are ready for larger scale commercialisation. Furthermore, the Board of Hightex believes that the growing global market for these products will develop significantly as and when solar power begins to replace electrical power as the energy source used to drive air-conditioning systems.
SolarNext and its working capital requirements
Following its review of SolarNext, the Board has concluded that the working capital requirements which a move to the commercialisation phase would necessitate, including increased production volumes and recruiting a larger sales force, are beyond the current capacity of Hightex to finance in the present difficult market conditions.
Accordingly, the Board has decided to reduce SolarNext's operations with immediate effect, whilst ensuring the Company's focus remains on its successful and growing membrane business. Nine of the SolarNext staff have left the company, leaving a skeleton staff who will remain in order to maintain the intellectual property until economic circumstances permit SolarNext's products to be commercially exploited. It is anticipated that the effect of this decision will reduce net cash outflow on SolarNext in a full year from approximately EUR 1,500,000 to a maximum of EUR 400,000. In calendar 2009, it is estimated that the net cash outflow on SolarNext will amount to approximately EUR 610,000.
Charles DesForges, Chairman, stated that "The membrane business continues to grow and Hightex has been successful in winning several major new contracts based on our consistent approach of providing innovative and technically advanced solutions to the needs of clients. Hightex places a great priority on preserving cash in present markets and has therefore taken this prudent and realistic decision on SolarNext. All the relevant SolarNext intellectual property will be retained within the Hightex group and can be commercialised when financial resources permit. Meanwhile, this decision will deliver a more stable pattern of group cash flow in the short and medium term."
Enquiries:
Charles DesForges, Chairman, Hightex Group plc +44 (0) 207 603 1515
Teathers
Jeff Keating +44 (0) 207 426 9000
Cameron Duncan
About Hightex
Hightex has a long history of building large span roofs and facades using architectural membranes, exemplified by the Abuja Stadium for the All African Games in 2003 as well as the Berlin Stadium, Germany, used for the most recent FIFA World Cup Final in 2006. Hightex has been awarded the contract to provide the membrane roof as part of the upgrading of the First National Bank (FNB) Stadium in Johannesburg, which will be the stadium for several first and second round matches, one quarter-final and the final match at the FIFA 2010 Football World Cup.
In 2006 Hightex completed one of the largest membrane projects in the world, designing and constructing the energy-saving, sound-optimised, triple layer membrane roof for the Suvarnabhumi Airport in Bangkok, Thailand.