Fulcrum Utility Services Ltd Domestic Asset Sale Update (8228D)
02 November 2020 - 6:00PM
UK Regulatory
TIDMFCRM
RNS Number : 8228D
Fulcrum Utility Services Ltd
02 November 2020
2 November 2020
FULCRUM UTILITY SERVICES LIMITED
("Fulcrum" or "the Group")
Domestic Asset Sale Update
Fulcrum is pleased to provide an update on the sale of its
domestic customer gas connection assets and associated meters to
E.S. Pipelines Limited (ESP) , as previously announced on 23
December 2019.
Timing of future asset transfers and associated payments
The asset sale agreement with ESP originally provided that
future asset transfers would occur when the value of the completed
assets exceeds GBP6.5 million or at twelve monthly intervals,
whichever is the earlier. Given the delays to house building caused
by the COVID-19 lockdown, it has now been agreed that future asset
transfers will instead occur on fixed dates, namely the 30 November
and 31 May of each year. The first subsequent transfer (being the
second tranche of assets transferred) will therefore occur on 30
November 2020, with a total estimated consideration GBP4.7 million,
of which GBP4.4 million will be received in cash on that date, with
the retention balance expected to be received on 31 May 2022. The
revised arrangements give the Group greater certainty of cash
inflows and will thus support the Group's cash planning. In the
current economic environment, these amounts will be retained in the
business in the short to medium term to provide liquidity to
support the Group's operations and growth strategy.
Enhanced payments milestone achieved
The arrangements with ESP under the asset sale agreement also
provides for the Group to receive additional payments from ESP if
certain milestones are achieved for new domestic connections won in
the period to 31 March 2025. The Group is pleased to confirm that
the first milestone has been successfully achieved. This will
result in an additional payment in respect of the first tranche of
assets transferred, which completed on 31 March 2020, of GBP0.4
million which will be received on or around 30 November 2020. The
amounts stated above in respect of the second tranche of assets to
be transferred, are inclusive of the additional milestone
payment.
Reflecting the achievement of this milestone, the total gross
consideration receivable by Fulcrum is now expected to increase by
c.GBP1 million to c.GBP49 million. GBP17.4 million has been
received to-date and, as noted above, GBP4.4 million will be
received on 30 November 2020, leaving approximately GBP27 million
to be received over the next five years. The arrangement with ESP
includes further milestone targets which, if achieved, would
trigger additional enhanced payments of up to GBP4 million over the
remaining term of the contract.
Daren Harris, CEO, said:
"I am very pleased to today confirm the achievement of the first
enhanced payment milestone, resulting from a strong series of new
housing contract wins, and the amended arrangements with ESP which
will provide certainty of the timing of cash inflows and thus
enhance our cash planning.
The asset sale has significantly strengthened the Group's
balance sheet and aids our strategic growth ambitions, and the
enhancement to payments will further support this. Our relationship
with ESP also continues to progress strongly and is delivering
improvements in the Group's capabilities across all segments of the
market."
Enquiries:
+44 (0)114 280
4102
Fulcrum Utility Services Limited
Daren Harris, Chief Executive Officer
+44 (0)20 7397
Cenkos Securities plc (Nominated adviser and broker) 8900
Max Hartley (Nomad) / Michael Johnson (Sales)
N+1 Singer (Joint Corporate Broker) +44 (0)20 7496
Sandy Fraser / Rachel Hayes / Carlo Spingardi 3000
Camarco (Financial PR advisers)
Ginny Pulbrook / Tom Huddart +44(0)203 757 4992
Notes to Editors:
Fulcrum is a multi-utility infrastructure and services provider.
The Group operates nationally with its head office in Sheffield, UK
and its main business is the design, build, ownership and
maintenance of energy connections and their related utility
infrastructure. The Group's offering also extends to smart meter
ownership and exchange programmes, and the selective ownership and
maintenance of utility networks and infrastructure.
https://investors.fulcrum.co.uk/
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