1st Jul 2014 10:18
LONDON (Alliance News) - Shares in Flowgroup PLC fell 11% Tuesday after it said it was allowing more time to install the production facility for its microCHP Flow boilers, and now expects full production of the boilers to start in the first quarter of 2015.
At the time of the company's full year results in May, the company had expected that the boiler would launch in the second half of 2014.
Tuesday, Flowgroup said that during its planning with manufacturing partner Jabil Circuit, it had sourced new European suppliers to improve component quality and secure volume capacity for the boilers. It has placed "significant" orders with a number of these suppliers, it said.
However, with the introduction of new and improved components into the process "it would be prudent" to allow more time for the installation of the facility and getting a CE mark for the production line, it said. The microCHP Flow boiler received a CE marking in March.
A CE marking indicates a product's compliance with EU legislation and so enables the free movement of products within the European market.
The production line will begin operations in the second half of the year, with full production in the first quarter of 2015.
Flowgroup said that its expectations for the current year remain in line with expectations, and it continues to believe it has the cash resources to take it through to cash generation in 2015.
"We are delighted with the level of interest that our low cost Flow mCHP boiler is generating and considering the scale of the opportunity it represents, it is essential to customers, and indeed shareholders, to produce the very highest quality product when we move into volume production," said Chief Executive Tony Stiff in a statement.
Shares in Flowgroup were trading down 11% at 25.40 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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