Pre Close Trading Update

RNS Number : 1509A

TEG Group (The) PLC

27 January 2011

 



 

For release

07:00

Date: 27 January 2011

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

Pre Close Trading Update for 2010

The TEG Group PLC, the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, is pleased to report on trading activity for the 12 month period to 31 December 2010.

The Company confirms that revenues in 2010 grew significantly again compared to 2009 following particularly strong revenue growth in the second half of the year.  Unfortunately, as announced on 6^th January 2011, due to the delay in receiving the order for the fourth Greater Manchester plant and the committed overhead costs incurred, the Company did not meet market forecasts and underlying trading losses for 2010 will be of a similar level to those reported for the year ended 31 December 2009. The Group's cash balance continues to remain very healthy, closing significantly higher than the market forecast.

Trading at TEG's own facilities, including the Simpro sites acquired in June 2010, was pleasing and met Board expectations.  This was despite operational difficulties and waste shortages at these facilities due to the unusually adverse weather conditions in the latter part of the year.  The construction of the other three Greater Manchester plants has remained on schedule.  Construction of TEG's first Anaerobic Digestion ("AD") plant at Perth, a joint venture with Albion Ventures LLP, commenced in September 2010.  Although delayed due to the adverse weather, the project remains on course to commence operations in spring 2011.

The Board believes that the outlook for 2011 is positive. While the Government's Comprehensive Spending Review is likely to reduce some recycling streams in the short term, general market conditions continue to look very favourable for both the In Vessel Composting ("IVC") and AD prospects as Local Authorities continue to divert organic waste from landfill to meet statutory targets.  The Company's tendering and project pipeline remains strong.  The Board has observed the continued shift by Local Authorities from procurement of plants to the letting of waste supply contracts to private sector funded facilities. Encouragingly, the Company has generated significant interest from potential financiers to fund such projects and the Board will continue to evaluate appropriate projects on a case by case basis.

The Company anticipates announcing its preliminary results for the 12 months to 31 December 2010 in the week commencing 14 March 2011.

ENDS

Contact:

The TEG Group Plc	Tel: [phone]
Michael Fishwick, Chief Executive	www.theteggroup.plc.uk
Peckwater PR	Tel: [phone]
Tarquin Edwards	[e-mail]
Ambrian Partners Limited (Nomad)	Tel : [phone]
Andrew Craig / Ben Wright

Editor's Notes:

TEG

TEG provides an in-vessel composting technology, which is one of the few approved technologies capable of treating animal by-product (ABP) waste, and is now providing an anaerobic digestion (AD) technology to produce power from food waste.  Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).  The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs").  TEG owns its composting technology and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets.  The TEG processes are an economic alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies in Europe capable of treating this waste, is a natural process producing compost as an end product.  The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease.  TEG's Silo-Cages are housed in self-contained buildings, are not unsightly and are environmentally friendly.

Collaboration with UTS

Having supplied equipment to more than 1,500 equipped biogas plants, UTS Biogastechnik GmbH is one of the world's leading biogas companies.  The UTS group of companies offers services in the planning, construction, delivery and installation of biogas plants and their key components.  The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base.  UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited to service the United Kingdom & Ireland markets.

TEG Biogas (Perth) Limited

TEG Biogas (Perth) Limited ("TEG Biogas") is a joint venture company established by TEG with Albion LLP.  TEG Biogas is constructing a 16,000 tonnes per annum AD plant at TEG's Glenfarg site to produce 0.7MW of electrical power and 0.2MW of heat that is to be used by Binn Eco Park.  The facility is due to be completed in March 2011 and commissioned in April 2011.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners.  The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste.  Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year. 

The Natural Organic Fertiliser Company Limited ("NOFCO"), a subsidiary of TEG, is a marketing company specialising in the development of end markets for compost products, an important aspect of all plant developments and key to local authority development.  The company has an expertise in the development of agricultural and horticultural markets and this capability is provided to customers to enhance TEG's overall service offering.

 

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