27th May 2016 14:30
LONDON (Alliance News) - Shares in Flowgroup PLC fell Friday afternoon following an announcement from the Department of Energy & Climate Change in regard to UK government support for Feed-in-Tariffs for Flowgroup mCHP smart boiler products, which proposes a cap on the number of units eligible.
The DECC had previously indicated continuing support for the mCHP products, reaffirming a Feed-in-Tariff rate for the product and a 30,000 unit limit on eligible installations that may benefit from the tariff.
However, the department is now proposing the introduction of a cap of 1,560 units in 2017 and 1,560 units in 2018, and only 390 units in 2019.
Flowgroup said it was disappointed with this as it expects to manufacture and sell volumes of the mCHP boilers that would far exceed the proposed caps.
It plans to provide a "strong argument" to maintain the previously agreed levels through the consultation period, which ends July .
Flowgroup said it will analyse the effect this could have on the mCHP part of its business, and review opportunities to mitigate this effect.
"This is a surprising and extremely disappointing announcement from DECC, and it's one that we will challenge vigorously. We believe that our shareholders can take comfort from the fact that we have a strong portfolio of products and services which are already successful or which show significant potential. We are no longer a one-product company and considerable value has already been created in our Flow Energy business," said Chief Executive Officer Tony Stiff in a statement.
Shares in Flowgroup were down 15% at 13.50 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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