30th Jun 2015 10:03
LONDON (Alliance News) - Energy efficient boiler designer Flowgroup PLC on Tuesday said its long-term plans remain on track, despite a recent European tax ruling, and said the company is in talks with a potential supplier to scale up its business.
In a statement set to be given at the company's annual general meeting, Flowgroup Chief Executive Tony Stiff said the start of the company's volume installation campaign has been delayed until later in the year following a decision by the European Court of Justice which raises the possibility of value-added tax being levied on the company's Flow boiler and its installation.
Stiff said the delay does not impact the long-term business model of the company and said the development of its combination boiler remains on track for the fourth quarter of 2016.
"I acknowledge that the EU judgement was unforeseen, not only by us, but also by UK government and industry alike. Whilst the government has yet to clarify its position, we understand that it remains committed to providing incentives to encourage the adoption of products like the Flow boiler," Stiff said.
He added the company is working closely with its manufacturing partner and said the overseas expansion plans of the company remain intact, despite the tax decision in Europe.
"We are currently in negotiations with a well-known global supplier around this requirement. In the current market, a successful energy supply company has the potential to be of significant value and to provide a platform for ongoing growth in energy and additional growth in product supply," Stiff added, saying the talks may lead to a deal which would allow Flowgroup to scale up its business in a less cash-intensive way.
Flowgroup shares were up 1.5% to 17.00 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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