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entu (UK) plc (ENTU)

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Tuesday 01 September, 2015

entu (UK) plc

Trading Update

RNS Number : 6229X
entu (UK) plc
01 September 2015
 

 

entu (UK) plc

 

Trading Update

 

Entu (UK) Plc ("Entu" or the "Company" or the "Group"), the home improvement group providing energy efficiency products and services to homeowners in the UK, has the following update on trading.  

 

Discontinuance of Solar division

 

In the announcement of its results for the six months ended 30 April 2015, Entu highlighted the difficulties that it had faced in its Solar division during the first half of the year. The improvement in activity levels expected in the historically stronger months of July and August have not materialised. Furthermore, the Board expects the market environment for Solar to become increasingly difficult as a result of speculation about a possible increase in VAT for its solar products from 5% to 20% and uncertainties concerning the future level of feed-in tariffs, in particular a recent Government proposal for a substantial reduction in feed-in tariffs with effect from January 2016.

 

The Company now estimates that it will lose in excess of £2.0 million during the current year from its Solar activities against a budgeted contribution of £1.6 million. The Board does not believe that its Solar business is likely to make an acceptable return on investment in the medium term and therefore, after fulfilling all current obligations, Entu will discontinue its retail Solar activities in a controlled manner, and re-train and re-deploy as many staff as possible into its other activities.

 

Outlook

 

Following the developments in Solar, Entu now anticipates that its full year results will be below market expectations. The Company expects that its continuing activities will report an operating profit of approximately £8.0 million for the year ending 31st October 2015. 

 

Difficulties in its Solar business notwithstanding, the Board remains confident of the future prospects of the Company's continuing activities, comprising home improvement products, insulation products, boilers and repairs and renewals cover plans, which continue to trade in line with management's expectations.  As previously announced these activities have the benefit of a substantial forward order book in excess of £30 million.

 

Dividend

 

The Company paid an interim dividend of 2.67 pence per share on 28 August 2015 and, in announcing its half year results, the Board reconfirmed its intention to recommend a final dividend of 5.33 pence per share, to bring the total dividend for the year ending 31 October 2015 to 8 pence per share.

 

In light of today's update, the Company will reconsider the final dividend at the time of the preliminary announcement of its results for the year, expected to be in February 2016. The Board expect that this will not be less than 2.67p, being the same as the interim payment, giving a total for the year of not less than 5.34p.  

 

Core Strategy Unchanged

 

Entu's core strategy remains unchanged: to focus on driving organic growth from the Group's integrated product portfolio, supplemented by the agreement of corporate contracts both through the existing Group and through complementary acquisitions, with the aim of broadening the Group's ultimate customer base. The Group will maintain its focus on ensuring that the right resources are deployed to drive growth in those areas where there exist the most compelling opportunities. Entu continues to benefit from its market leading positions in key geographies.  Carefully selected acquisitions will continue to be pursued where they meet the Group's criteria to complement and broaden its offering in the energy efficiency market as well as materially enhancing earnings per share.

 

Ian Blackhurst, Chief Executive of Entu said:

 

"The prospects for our Solar business have deteriorated dramatically over the last six months, and we have taken a decision which I have no doubt will be seen to be correct. However we have disappointed our shareholders and I can only assure them that we are entirely focused on restoring earnings, dividends and shareholder value."

 

 

1 September 2015

 

 

For further information, please contact:

  

 

Entu

020 7457 2020

Ian Blackhurst, Chief Executive Officer    

 

Geoff Stevens, Chief Financial Officer

 

 

 

Grant Thornton UK LLP (Nominated Adviser)

020 7383 5100

Philip Secrett

Salmaan Khawaja

Jen Clarke

Jamie Barklem

 

 

 

Zeus Capital Limited (Broker)

020 7533 7727

John Goold

Dominic King

Andrew Jones

 

 

 

Instinctif Partners (Public Relations)

020 7457 2020

Helen Tarbet

 

James Gray

 

 

 

 

 

NOTES TO EDITORS

 

entu (UK) plc (AIM: ENTU) is a leading home improvement group providing energy efficiency products and services to homeowners in the UK.

 

Headquartered in Manchester, entu has national presence through a network of strong regional brands such as Weatherseal, Penicuik, Zenith and Staybrite Solar. The Group operates four business segments: home improvement products, energy generation and energy saving products, insulation products repairs and renewals services.

 

With around 27 million residential homes in the UK, entu operates in a growing marketplace with myriad opportunities. entu's primary strategy is to focus on driving organic growth from its diversified, fully integrated product portfolio, and also, over time, through the development of new product and service offerings, in particular, energy efficiency products and services. Additionally the Group continues to pursue an acquisitive strategy in the highly fragmented existing, and complementary, product lines and market areas.

The Group was admitted to AIM in October 2014. 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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