TEG.L Regulatory News (TEG)

27 Nov 2007 12:00

TEG Group (The) PLC27 November 2007 For release 12:00 27 November 2007 The TEG GROUP PLC (TEG) ("TEG" or "the Company") Greater Manchester PFI Financial Closure Update Further to the announcement made by the Greater Manchester Waste DisposalAuthority ("GMWDA") on 23 November 2007 (www.gmwda.gov.uk) of the projectedcompletion of Financial Close for the Greater Manchester Waste PFI contract("PFI Contract") at the end of March 2008, the TEG Group Plc, the AIM-listedcutting edge green technology company, which converts organic wastes intonatural organic fertiliser, confirms it expects a corresponding delay in thefinal conclusion of its contracts with its customer Costain Limited ("Costain"),the company retained by the Viridor/Laing consortium to manage the constructionprojects for the PFI Contract. Nevertheless, TEG still expects the overall contract value to be approximately£35m, does not anticipate any change to its scope of supply and does notanticipate that the delay in reaching Financial Close will significantly impactfurther on TEG build programmes. TEG still anticipates an interim order during the final quarter of 2007 forconstruction of the first of its four plants, at Waithlands in Rochdale, as itexpects the plant will still be constructed in 2008. In agreement with Costain,TEG has commenced detailed design work in November in order to enable theplanned completion of this programme to be kept on track. TEG anticipates smallrevenues from the interim order in 2007 but, as previously announced, under IFRSaccounting standards it is unlikely that the construction programmes will besufficiently advanced for TEG to be able to recognise profits against therevenues in its 2007 accounts. ENDS Contact: The TEG Group Plc Tel: 01772 314100Michael Fishwick, Chief Executive Adventis Financial PR Tel: 020 7034 4758Tarquin Edwards 07879 458 364 Canaccord Adams (Nomad) Tel : 020 7050 6742Chris Bowman Editor's Notes: Greater Manchester Waste PFI Contract 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 175,000 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. TEG 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