TEG.L Regulatory News (TEG)

14 Sep 2007 14:47

TEG Group (The) PLC14 September 2007 For release 14.30 14th September 2007 The TEG GROUP PLC (TEG/L) ("TEG" or "the Company") Progress with Greater Manchester PFI Waste Services Procurement Update on General Plant Sales Further to the press release made by the Greater Manchester Waste DisposalAuthority ("GMWDA") on 7 September 2007 (www.gmwda.gov.uk/news.htm), The TEGGroup PLC, the AIM-listed cutting edge green technology company, which convertsorganic wastes into natural organic fertiliser, confirms it has been advisedthat it is the intention to conclude commercial contracts with its customerCostain Limited ("Costain") in advance of Financial Close which is now projectedto occur in December. As outlined by the GMWDA in its press release, this willbe part of a commercial close process. Subject to the finalisation of detailedagreements between GMWDA and Viridor Laing, this will allow contracts to beplaced with technology providers, such as TEG, to allow construction activitiesto commence ahead of financial close. On 29 January 2007, TEG announced that it is a principal sub-contractor to theViridor-Laing consortium that has been awarded preferred bidder status for theGreater Manchester Waste PFI contract. TEG is the exclusive supplier of InVessel Composting ("IVC") technology to the consortium and following financialclosure, TEG will receive an order to supply all the IVC capacity in the GreaterManchester region. TEG is expected to build four plants as part of the consortium, over the periodfrom 2007 to 2010 with a combined capacity of 180,000 tonnes per annum,producing 125,000 tonnes of compost product per annum. The plants will allprocess green waste and kitchen waste collected from households in the GreaterManchester region. It is intended that the first plant to be constructed by TEG will be sited atWaithlands, Rochdale. Planning permission has been secured which will allowconstruction activities to commence following commercial closure of thecontract. The detailed contractual terms for the facility are close tocompletion. The three further plants to be constructed by TEG are progressively scheduledfor construction between the second quarter of 2008 and the second quarter of2010. The planning application for the second site is due to be submitted inSeptember and the development of the two remaining sites is already underway inanticipation of gaining planning approvals in 2008. In addition, the Company is pleased to confirm planning approval has beenforthcoming for its contract with Gwynedd Council and that site clearance workscommenced on Monday 10 September 2007 in advance of the construction of the£1.45m TEG Silo Cage plant. Contract signature is expected very soon and a fullannouncement will be made in due course. The Company has also been informed by two of its customers of planning decisiondelays in respect of two further plant construction projects. It had beenanticipated that planning approval for both projects would be forthcoming in2007 but the planning decision dates for the projects are now expected to beDecember 2007 and January 2008. Consequently, TEG does not anticipate revenuereceipts from either project until financial year 2008. The combined value ofthese two projects is approximately £3.5m. Commenting for TEG, Chief Executive Mick Fishwick said: "We are delighted that the decision has been taken by GMWDA to introduce acommercial close procedure. While the exact timetable for completion of each ofthe technology supplier contracts is still to be determined, we hope thispositive step will allow construction of the TEG plants to commence to schedule.Given the scale and complexity of the PFI project, the progress made by GMWDA,Viridor/Laing and Costain has been substantial and we are pleased to havesupported the process as far as we can in advancing the TEG projects toschedule. We look forward to completing the contracts and to moving into theconstruction and execution phase." "The delays to the implementation of other plant construction projects arefrustrating but unfortunately outside the control of the Company. Positively,approval has now been forthcoming at Gwynedd and we anticipate approval for theother 2 projects planned for 2007 by the end of the year or early in 2008. Weanticipate revenues will be deferred from 2007 but will strengthen the revenuesin 2008." "The Company remains extremely positive about its future development and canreport that the sales pipeline continues to grow. The Board is confident thatthe frustrations and delays of the last 6 months will transform into verypositive revenues in 2008 and beyond". ENDS Contact: The TEG Group Plc Tel: 01772 314100 Michael Fishwick, Chief Executive Adventis Financial PR Tel: 020 7034 4758 Tarquin Edwards 07879 458 364 Cannacord Adams (Nomad) Tel : 020 7050 6742 Chris Bowman Editor's Notes: TEG provides an in-vessel composting technology, which is one of the fewapproved technologies capable of treating animal by-product (ABP) waste. Planteconomics are predominantly driven by the gate fees charged, rather than thevalue of the end product (compost). The TEG process is an economic alternativeto landfill. The Silo Cage system, one of the few technologies in Europe capable of treatingthis waste, is a natural process producing compost as an end product, used as anexcellent soil conditioner that fertilises, retains moisture, provides structureand reduces the incidence of plant disease. TEG's Silo-Cages are housed inself-contained buildings, are not unsightly and are environmentally friendly. Customers include local authorities, waste management companies, foodprocessors, farmers and landowners. The Company's expanding market is driven byincreasingly stringent EU and UK legislation regulating the treatment anddisposal of organic waste. Statutory targets for the diversion of waste fromlandfill increase annually through to 2020, increasing TEG's market opportunityyear on year. The Waste Resource Action Programme estimates that 450 compostingplants will be needed by 2020 to satisfy local authority requirements alone, andthere is increasing demand from the private sector driven by ABP legislation. NOFCO is a marketing company specialising in the development of end markets forcompost products, an important aspect of all plant developments and key to localauthority development. The company has an expertise in the development ofagricultural and horticultural markets and this capability is to be provided tocustomers to enhance TEG's overall service offering. This information is provided by RNS The company news service from the London Stock Exchange