Cogenpower PLC Withdrawal from gas & electricity retail business (6171K)
23 September 2016 - 4:00PM
UK Regulatory
TIDMCGP
RNS Number : 6171K
Cogenpower PLC
23 September 2016
Cogenpower plc
("Cogenpower" or "the Company")
Strategic withdrawal from gas and electricity retail
business
New gas supply contract
Cogenpower (LSE: CGP), the AIM-quoted low-carbon technology
energy business, announces that the board has resolved to withdraw
from the gas and electricity retail business, operated through the
Group's wholly-owned subsidiary, Cogenpower Gas and Power s.r.l.
("G&P").
The Group's strategy, as highlighted in its final results
announcement on 17 June 2016, is focused on growing the Combined
Heat and Power and District Heating (CHPDH) business and further
penetrating the global EUR30 billion district heating market. The
Group's profitable CHPDH business is centred around the Company's
Anaconda technology, and the withdrawal from gas and power will
leave all of G&P's resources available to further enhance the
growth of the Group's core CHPDH business.
An internal review concluded that G&P is a distraction from
the strategic aims of the Group, particularly in light of the drop
in energy prices in the market over the last eighteen months and
the new regulations in Italy that are putting further obligations
on resellers of electricity, such as G&P. The Group will retain
ownership of the subsidiary trading company and the existing assets
and liabilities held within the subsidiary will remain in the
Group.
For the year ended 31 December 2015 G&P generated revenues
of EUR2,113,000, an operating loss before exceptional provisions,
interest, tax, depreciation and amortisation of EUR106,000 and a
loss before tax of EUR499,000. As at 31 December 2015, the net
liabilities for G&P were EUR4,767,000.
New gas supply contract
Cogenpower has also negotiated a new contract with
ETRURIALuceGas S.p.A., due to commence on 1 October 2016, for the
supply of gas to the Group's CHPDH operation on highly competitive
terms. The new contract will reduce the cost of gas to the Group's
core business by approximately EUR350,000 over the one-year life of
the contract compared to the previous gas supply contract.
Dr Francesco Vallone, founder and CEO of Cogenpower, said:
"Following our IPO earlier this year, this is a positive step
for Cogenpower. The gas and electricity retail business was a
legacy business and our withdrawal allows us to reposition the
Company around the Anaconda technology which is what will
ultimately create value for our investors. We are also delighted to
have secured better terms for our gas supply contract, an
improvement on competitive rates typically available in the
market.
"This step allows us to focus on developing our core CHPDH
business and deploying our Anaconda artificial intelligence
technology for the lucrative district heating markets we are
targeting, including those in Italy and the UK."
-ENDS-
Further enquiries:
Dr. Francesco
Vallone
Martin Groak +44 (0)20 7930
Cogenpower plc Ilaria Cannata 0777
--------------------- ----------------------- ----------------------------
Allenby Capital
(Nominated Adviser Nick Athanas +44 (0)20 3328
and Broker) Richard Short 5656
--------------------- ----------------------- ----------------------------
EnVent S.p.A.
and EnVent Capital
Markets
(Financial Adviser
to the Company
in Italy) Franco Gaudenti +39 06 896 841
--------------------- ----------------------- ----------------------------
Cardew Group Shan Shan Willenbrock +44 (0) 20 7930
Nadja Vetter 0777
Emma Ruttle cogenpower@cardewgroup.com
--------------------- ----------------------- ----------------------------
About Cogenpower
Cogenpower (CGP.L) is a low-carbon energy business specialising
in the design, build and operation of efficient, automated CHPDH
networks able to serve communities of up to 50,000 people. At the
heart of the business is the Anaconda technology, an automated,
intelligent energy generation and control system equipped with a
heat storage facility that efficiently delivers heat to customers
and electricity to the grid. The innovative technology, with proven
energy efficiency of more than 90% compared to a worldwide average
of circa 45%, is designed to address the growing global EUR30
billion district heating market.
The Company's flagship plant in Borgaro Torinese, on the
outskirts of Turin in the north of Italy is a 3MWe (electrical
output) / 15MWt (heat output) CHPDH operation that serves
approximately 4,500 end users in 62 separate buildings attached to
a 13 kilometre pipe network. The operation is 92% energy efficient.
The energy efficiencies achieved by the Anaconda technology at the
existing plant, (currently fuelled by natural gas, but with a
biomass/gas hybrid plant under development) already reduce
emissions by 3,000 tonnes of CO(2) per annum, compared to
traditional heating methods. Customers benefit from lower capex
costs, no maintenance costs and lower heating bills compared to
installing conventional solutions.
Although district heating systems have been available for some
time, technological advances have brought significant new
operational and environmental advantages, making them increasingly
attractive and reliable energy solutions for communities. The
Company listed on AIM in February 2016, enabling it to pursue
growth opportunities in Italy, the UK and internationally.
www.cogenpower.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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