17th Jun 2016 08:04
LONDON (Alliance News) - Cogenpower PLC Friday said it plans to grow operations in the UK and Italy whilst expanding its existing project in Turin as the company published its first set of financial results since joining AIM earlier this year.
The company, which joined AIM back in February, builds and operates combined heat and power plants with isolated district heating distribution networks which serve communities of up to 50,000 people, with its Anaconda power plant technology at the core of the business.
Cogenpower has operated a combined heat and power and the associated district heating network in Borgaro Torinese, a suburb of Turin, Italy, since 2008. The town has around 12,000 inhabitants and over 4,500 of them are served by the company's intelligent district heating network - a 6.5 kilometre, heavily insulated underground pipeline.
Cogenpower reported a pretax loss of EUR1.2 million in 2015, prior to joining AIM, compared to the EUR963,000 loss booked in 2014, as operating and administrative costs both rose year-on-year.
Revenue in the year climbed to EUR6.5 million from EUR5.8 million, pushing gross profit up to EUR2.4 million from EUR2.1 million a year earlier.
Administrative expenses increased to EUR1.5 million from EUR1.1 million, whilst operating expenses rose to EUR802,000 from EUR362,000, partly offset by a fall in depreciation and amortisation costs to EUR650,000 from EUR716,000 and in finance costs to EUR727,000 from EUR1.1 million.
"We have identified acquisition targets in Italy and are exploring options to penetrate the large and undeveloped UK district heating market. Encouragingly, we are seeing a good level of interest in our technology from major organisations that has the potential to open new routes to market. We are excited about our growth potential and look to the future with confidence," said Francesco Vallone, chief executive of Cogenpower.
Cogenpower believes it can grow within the district heating market which it has valued at a total of EUR30.00 billion, and noted that it is already profitable at an operating level.
Cogenpower has its Anaconda technology at the heart of its business. Anaconda is an artificial intelligence system which has a heat storage system and allows a fully automated operation to serve communities of 2,000 to 50,000 people.
The company said energy efficiency levels can be as high as 92% and ultimately provides flexible, cost effective. and reliable lower-carbon energy solutions to those communities.
Although the UK has been chosen as the next growth area due to its de-regulated energy market and strengthening drive toward decarbonisation, Cogenpower plans to expand its existing operations in Italy.
"The next phase in our development programme is to create a hybrid biomass/gas fuelled model by building a biomass power plant extension to the existing site," said the company.
Cogenpower has identified three district heating acquisition targets in the north of Italy near its existing operation in Turin, and said it has also attracted the interest of major infrastructure organisations, which have recognised its considerable environmental and performance advantages, it said.
In the UK, a strategic partnership has been established with a UK company to explore opportunities to leverage the findings of the 2013 Heat Strategy, in which the government identified the potential to provide 14% of UK heat demand via district heating in the next 15 years.
Cogenpower shares were down 0.5% to 19.15 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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