TEG.L Regulatory News (TEG)

3 Jul 2007 07:01

TEG Group (The) PLC03 July 2007 For release 7:00 am 3 July 2007 The TEG GROUP PLC (TEG) ("TEG" or "the Company") New Plant Order Received. Delay to Greater Manchester Waste PFI Financial Closure. The TEG Group PLC ("TEG" or "the Company") has been advised that financial closefor the Greater Manchester Waste PFI contract is to be delayed from June untilSeptember 2007. The Company confirms it expects a corresponding delay in theconclusion of its contracts with its customer Costain Limited, the companyretained by the Viridor/Laing consortium to manage the construction projects forthe Greater Manchester Waste PFI contract. Along with all the constructionprojects, TEG's contracts will be executed simultaneously with financial closeand TEG therefore expects to enter into its contracts in September. TEG anticipates that the delay will have a consequential impact on constructionprogrammes and it is therefore likely that construction programmes will bedelayed by a corresponding period. TEG still expects the overall contractvalue to be approximately £35m and does not anticipate any change to its scopeof supply. TEG still anticipates its first revenues from the Greater Manchestercontracts in 2007 but under IFRS accounting standards it is unlikely that theconstruction programmes will be sufficiently advanced for TEG to be able torecognise profits against the revenues in its year ending 31 December 2007accounts. The Company is also pleased to announce that it is to receive an order from anew customer to build a facility in 2007. Details of the order are to beannounced in due course. Commenting for TEG, Chief Executive Mick Fishwick said "While the delay inreaching Financial Close is of course disappointing for all involved in the PFIproject, the complexity of such contracts, coupled with the large number ofcompanies involved, does often lead to delays. We are very pleased that designand contract work is progressing well and we expect that once financial closehas taken place we will go straight into the construction phase for the firstfacility. "We are delighted to secure a further order for a TEG plant and the constructionprogramme dovetails in well with the delay with the Greater Manchester project. "In a developing business such as ours, phasing issues are to be expected but Iam pleased to say we remain in a strong position for the future and as ourrevenue streams grow, such phasing issues will have an ever reducing impact onresults. The Company's pipeline of BOO and Plant Sale projects remains verystrong, as evidenced by yet another order, and whilst the PFI delay isfrustrating we remain very confident of the Company's growth prospects goingforward". 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