AMP flags loss after tough year for Wood Fuels business
By Josh White
Date: Thursday 11 Apr 2019
(Sharecast News) - Distributed heat, power and renewable fuels company Aggregated Micro Power Holdings updated the market on its year ended 31 March on Thursday, reporting that it achieved "strong" outperformance in both Urban Reserve and IncubEx during the period, but had a "difficult" year in Wood Fuels.
The AIM-traded firm, which trades as as AMP Clean Energy, said it expected the Wood Fuels business to achieve satisfactory levels of profitability going forward.
It said that particular business had been impacted by significantly warmer weather during the financial year, and particularly during February and March.
During the year, the Wood Fuels business had also undergone a transformative restructuring to bring all operations into a single management and brand platform, which AMP claimed had further consolidated its market leading position.
That would result in "significant" non-recurring costs from depot closures, office relocations, redundancies and stock revaluations, all of which the board had expensed through the profit and loss account, although it said a portion could be allocated to prior period restatements.
As a result, the group said it expected to generate revenues and income of £50m and a statutory EBITDA loss in the region of £1.3m.
Looking at its project developments, AMP said development fee receipts should be ahead of expectations due to the "strong progress" made in developing flexible generation sites for Urban Reserve.
As at 31 March, the company had submitted planning applications for 13 sites amounting to 49.7 MW.
So far, 10 sites totalling 37.5 MW had received planning approval, and the remaining three sites were expected to be decided upon shortly.
In total, that would provide a "shovel-ready" portfolio of around 50 MW.
"We are confident of increasing our future development estimates to 100 MW per annum, being double that we previously indicated," the AMP board said in its statement.
"If achieved, Urban Reserve should generate development fees of £5m per annum."
In light of the increased opportunity from Urban Reserve, the board said it was currently looking at a variety of special purpose vehicle financing options with infrastructure funds and strategic investors.
At IncubEx, in which AMP holds a 29% stake, results for the last calendar year showed gross revenues of more than €12m, which was "significantly" ahead of forecast.
In conjunction with Nodal Exchange, IncubEx launched a suite of North American environmental products in November, with volumes exceeding expectations during the first few months from launch.
Looking ahead, AMP re-affirmed its revenue and EBITDA expectations for the year to 31 March 2020.
"After a difficult year in Wood Fuels, we truly believe we have a firm grasp on this business and expect it to achieve satisfactory levels of profitability going forward," said AMP chief executive Richard Burrell.
"We are delighted with the out-performance in both Urban Reserve and Incubex."
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