5th Aug 2014 09:51
LONDON (Alliance News) - Turbo Power Systems Inc saw its shares rise Tuesday after it reported a narrowed quarter-on-quarter loss on the back of higher revenue and lower costs, and said it had won a deal with UK Power Networks to manufacture production units for its new design of electrical energy controllers that will be tested on electricity distribution networks in the London and Brighton areas.
The company reported a net loss of GBP0.9 million for the three months to end-June, narrower than the GBP1.4 million loss it reported in the first quarter to end-March. Revenue rose to GBP4.2 million, from GBP3.3 million, while total expenses fell 16% to GBP1.5 million as it cut research and development spending as it focused on key technologies. Order intake was GBP3.3 million, a touch down on the GBP3.8 million of orders if booked in the first quarter.
"We are pleased that revenue in the second quarter grew by 26% over the first quarter, with order intake in line with the first quarter, as certain expected orders were delayed into the second half of 2014. We were able to continue to focus on our cost reduction programme, reducing our total expenses by 16% quarter-upon-quarter and during the first half as a whole, significantly improved the level of cash outflows from operations and reduced the amount of new external financing drawn from our major shareholder," Chief Executive Carlos Neves said.
He added that the company remained confident for the remainder of the year.
The power technology company reported a pretax loss of GBP2.3 million for the first half of the year, wider than the GBP1.1 million loss it reported in the year earlier period, as lower expenses were offset by a drop in revenue and higher finance costs.
First half revenue declined to GBP7.5 million, from GBP9.1 million, mainly due to a decline in development revenue the company blamed on project timings as it seeks to develop its pipeline of development projects.
The company's reduced reliance on funding from its major shareholder was a major boost, as it remains critically dependent on loans from TAO Sustainable Power Solutions (UK) Ltd. It got a GBP0.4 million extension to its current loan on May 13, and had a GBP10.8 million balance outstanding on the loan at the end of June, repayable on April 1, 2016.
Its cash outflow from operations in the first half was GBP2.0 million, down from GBP3.5 million in the year-earlier period.
The production unit manufacturing award comes after it was awarded the design contract for the technology earlier in the year.
"Turbo Power Systems' new design of electrical energy controller optimises the use of existing network capacity to accommodate increased loadings for renewable energy generation, whilst additionally supporting the addition of new homes and offices within the capacity of installed networks," Chief Executive Carlos Neves said in a statement.
The company didn't provide any financial details about the contract.
Turbo Power Systems shares were up 19.5% at 0.448 pence Tuesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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