REG - Eneraqua Technolgs. - Energy Project Delays

Eneraqua TechnologiesAnnouncement

12/12/2023 13:30

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RNS Number : 5231W  Eneraqua Technologies PLC  12 December 2023

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now considered to be in the public domain.

 

12 December 2023

Eneraqua Technologies plc

("Eneraqua", the "Company" or the "Group")

 

Energy Project Delays

Two Local Authorities delay group of major projects

Impact to H2 profitability but still expect to be net cash at year end

 

Eneraqua Technologies plc, a specialist provider of energy and water
efficiency solutions has been notified by two local authority clients of a
delay to the commencement of a group of major energy projects which were
expected to start this month.

Whilst the clients have confirmed their intention to proceed with the
projects, they have deferred the start date to post April 2024.  One local
authority has been impacted by budgetary pressures and significantly rising
costs on other projects already in progress, while the other has had delays in
the completion of enabling works.

All local authorities are required to operate balanced budgets across each
financial year and the sector has seen financial pressures due to the impact
of inflation that the Regulator for Social Housing advises is not expected to
ease until mid-2024. Eneraqua's project teams will be redeployed to accelerate
delivery of other projects and thereby mitigate some of the impact of the
delay in FY24.

The deferred projects are now expected to start in FY25 and the Board has
identified a number of cost reduction opportunities which will reduce
operating costs by c£1.4m in the next financial year.

As a result the Board now expects to report results materially below current
market expectations with Revenues of c£55m in FY24 and an Adjusted Loss
Before Tax of c£6m including redundancy costs.  These figures include
provision for costs related to defective equipment supplied for some district
heating systems which we will seek to recover in due course from the suppliers
concerned.

The positive collection of receivables through H2, together with strong
control of working capital means that year-end cash is expected to be broadly
in-line with expectations at c£5.5m representing a Net Cash position of
c£1.0m. **

Mitesh Dhanak, CEO Eneraqua Technologies, said: "While recognising the serious
budgetary pressures on our local authority clients, this delay is clearly
extremely disappointing for all of our shareholders and staff.  Whilst
inflationary pressure has made the Local Authority sector more complex to
navigate, the structural need and underlying demand for our solutions in
Energy remains positive given the quality of our offering and the continued
drive to net zero, with these contracts moving into FY25 providing a strong
basis for the year ahead."

 

**excluding IFRS 16 liabilities

 

The Company understands the FY24 consensus forecast to be Revenue £63.4m,
Adjusted PBT £1.5m and year end net cash of £1.2m.

 

 For further information please contact:

 Eneraqua Technologies plc                  Via Alma PR

 Mitesh Dhanak, Chief Executive Officer

 Iain Richardson, Chief Financial Officer

 Liberum (Nomad and Joint Broker)           Tel: 0203 100 2000

 Edward Mansfield

 Benjamin Cryer

 Singer Capital Markets (Joint Broker)      Tel: 020 7496 3000

 Sandy Fraser

 Asha Chotai
 Alma (Financial PR)

 Justine James                              Tel: 020 3405 0205

 Andy Bryant                                eneraqua@almastrategic.com

 Will Ellis Hancock

 

 

Notes to editors

Eneraqua Technologies (AIM:ETP) is a specialist in energy and water
efficiency. The Group has two divisions energy and water. Energy is the larger
division, with the Company focused on clients with end of life gas, oil or
electric heating and hot water systems. The Group provides turnkey retrofit
district or communal heating systems based either on high-efficiency gas or
ground/air source heat pump solutions that support Net Zero and
decarbonisation goals.

 

The water division is a growing service offering focused on water efficiency
upgrades for utilities and commercial clients including hotels and care homes.

 

The activities in both divisions are underpinned by the Company's wholly-owned
intellectual property, the Control Flow HL2024 family of products which reduce
water wastage and improve the performance of heating and hot water systems.

 

The Company's main country of operation is the United Kingdom. The Company's
head office is based in London with additional offices in Leeds, Washington
(Sunderland), India, Spain and the Netherlands. The Company has 168 employees,
with the majority employed within the UK. Eneraqua Technologies has received
the London Stock Exchange's Green Economy Mark.

 

To find out more, please visit:  www.eneraquatechnologies.com
(http://www.eneraquatechnologies.com)

 

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