Shares in anaerobic digestion and composting firm TEG fell by more than 50% on the day it reported it had failed to find a buyer and wanted to sell £2m of new shares.
The firm’s preliminary results for the year to 31 December 2011 showed a pretax loss of £8m from £628,000 in 2010. Revenue for 2011 was £17.8m, down from £20.7m.
Waste volumes at the firm’s own plant operations grew by 32% to 244,000 tonnes from 185,000 tonnes in 2010. Average gate fees rose by 16%.
The company builds, operates and sells AD and composting plants for organic waste recycling. Trading results were said to be ahead of market expectations with “group plant operations producing significant growth in both revenues and profits”.
But the report added: “The projects side of the business suffered significant delays, as were announced during 2011, and revenues suffered accordingly.”
The firm is reported to have suffered from local authorities switching from financing the building of plants, to outsourcing to recycling services.
Nigel Moore, non-executive chairman of TEG Group, said: “The last year has proved to be challenging for the company and in particular the difficulties faced by the industry in securing project finance have had a significant impact, resulting in long delays and disappointments in losing key projects.
“Moreover this has resulted in a major impact on revenues and cash flow. The board has taken all the steps it could to secure funding and its strategic review considered all the options open to the company.”
He added: “Nevertheless, market demand remains strong and with a secure funding position at the project level, the group will be well placed to continue to take advantage of the expanding market. TEG maintains a strong pipeline of tender opportunities and anticipates the successful conclusion of further projects in 2012. Furthermore, demand for the group’s own plant operations is increasing and the board expects a continued strong performance in that segment of the business. The board is confident that the group has an exciting future with a promising outlook for trading in the remainder of 2012 and beyond.”
TEG put itself up for sale in January in an attempt to resolve its funding problems, but reported on Wednesday (6 June) that it had failed to find a buyer. Shares in the company fell by 53% to 3.38p on the announcement of the new share offer. Shares in TEG were down by nearly 84% on the year.
- The photo above shows TEG chief executive Mick Fishwick inside the a composting site at Trafford Park, Manchester.