Trading Statement

RNS Number : 1003Q

Sabien Technology Group PLC

15 June 2015

 



Sabien Technology Group plc

("Sabien" or "the Company")

Trading Update

The Board of Sabien Technology Group plc (AIM: SNT), the manufacturer and supplier of M2G, an energy efficiency technology, announces that, in light of some substantial orders being delayed beyond June 2015, the Company now expects to report revenues of c.£1.9m and a loss of up to c.£0.6m in the financial year to 30 June 2015.  

While there is a shortfall in revenue and profit relative to management expectations, due to tight control of administrative expenses (in line with management expectations forecast to be at the same level as last year), the Company has a satisfactory net cash position of £1.1m.

The sales pipeline currently stands at £6.2m which compares with £6.9m at the time of the interim results in February and £5.8m as at 30 June 2014.

Commenting on trading and the change in piloting strategy, Alan O'Brien, Chief Executive of Sabien said:

"Although we are disappointed to see some of the substantial orders we expected slip beyond June 2015 we are encouraged by the robustness of the sales pipeline and have prepared a five-year growth strategy focusing on improving the size and speed of conversion of sales prospects. This step change involving the provision of "free" pilots is expected to reduce our sales cycle by up to 24 weeks by removing a significant barrier to clients agreeing pilot programmes.

In the UK Sabien has a strong reputation in the market place for boiler optimisation controls built on over 8 years of experience and know-how in delivering successful client pilots. We have a high conversion rate from pilots to orders and a number of multi-million pound orders have been secured. We believe scaling the number of pilots and making it easier for our clients to work with us is the correct course of action to take.

Since 2004, we have converted 87% of M2G pilots to our sales pipeline and 69% of pilots have led to an estate-wide roll-out. A number of pilots which ran during the 2014/2015 heating season and which concluded in April 2015 are not yet reflected in the pipeline as we are in the process of finalising the business case with the clients.

To date we have charged clients for running pilots, but going forward Sabien will fund the pilot and the associated costs of the pilot M2G units will be reflected in the final roll-out business case. This does away with private sector clients having to raise a purchase order for the full value of the pilot before it commences. This process can take weeks if not months before an order is placed on us. Public sector clients frequently have to run a public tender for a pilot which also causes delays in receiving a pilot order. We estimate this step change will reduce the sales cycle by up to 24 weeks.

Our rationale of charging for pilots was a sensible one as we were a new entrant company looking to build its reputation, gain sales traction and preserve cash from what was effectively a 'stand still' start we now have achieved a significant foothold in the UK market with over 9,000 M2G installations. We are scaling up the number of M2G pilots we will run in any one heating season as we believe this will give management better visibility and predictability of contract award and start dates.

We have already started the process of recruiting the relevant personnel needed to scale our business to include Data Analysts, Business Development Managers, Engineers and Project Managers.

A further update will be provided to the market with the final results anticipated to be in October 2015.

For further information:

Sabien Technology Group plc

Alan O'Brien, CEO                                            Tel: [phone] 

Gus Orchard, CFO                                            www.sabien-tech.co.uk

Westhouse Securities

Antonio Bossi                                                    Tel: [phone]    

Background:

Sabien Technology is a UK-based company which specialises in providing proven and commercially viable technology to reduce carbon emissions and energy usage for private and public organisations.

The M2G is a patented energy efficient technology designed to reduce fuel consumption in commercial boilers. M2G dynamically responds to changing load demand by measuring, identifying and removing dry cycling thus maximising efficiency under all conditions.

M2G is retro-fitted to commercial boilers regardless of age and size and fully integrates and complements existing controls, such as BMS, boiler sequencing, weather compensation and building optimisation controls.

Using intelligent software and hardware, the M2G unit improves a boiler's efficiency by reducing energy wastage. For further information, please visit our website www.sabien-tech.co.uk.

 

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