We needed to start the new year off with some real enthusiasm and energy. So I took that literally, as I know that so many of you have picked small cap resource stocks this year in the Fool Share Challenge and, of course, it was an oil company that won last year.
None of you, however, went for this already profitable alternative energy company Alkane Energy (LON:ALK) which is on a very low rating and set for significant double digit earnings growth this year. Alkane Energy is the UK’s leading coal mine methane (CMM) producer. Alkane Energy has unrivalled expertise in the design, build and operation of methane gas fuelled power plants. Our clean tech power plants contribute to the UK’s efforts to reduce the emission of harmful ‘green house’ gas. Alkane has 17MWs of installed electrical generating capacity covering CMM, conventional gas and biogas. Here is their website. The company updated the market only a couple of days ago and it was very positive.
Trading for the year ended 31 December 2010 has been very encouraging, with output increasing by more than 25% compared to the same period last year. For the period, the Group expects to have delivered an estimated full year electricity output of circa 120GWh (2009: 95GWh). This increase reflects the contribution of the three new sites which became operational during the year, at Florence in Staffordshire, Newmarket in West Yorkshire and Kings Mill Hospital in Nottinghamshire. As at the year end, the Company had 12 operating sites (2009: 9). The average electricity sales price for 2010 is expected to be around £44/MWh (2009: £54/MWh).
The Board expects that the results for the year ended 31 December 2010 will be in line with market expectations. Looking forwards, the news is even more promising.The on-going roll out programme is progressing well and Alkane remains confident of opening a further three coal mine methane sites during 2011. Electricity pricing has shown greater strength over recent months and as at 31 December 2010, approximately 65% of the Group’s expected 2011 output is now contracted at an average price of £48/MWh.
If one looks back at previous updates, that suggests that the company is now achieving in excess of £50/MWh and we know there are three additional sites this year. The…
