Trading Update

RNS Number : 0782B

Fulcrum Utility Services Ld

28 March 2013

 

FULCRUM UTILITY SERVICES LIMITED

Pre-close trading update for the financial year ending 31 March 2013

Fulcrum Utility Service Limited ("Fulcrum" or "the Company"), the UK based energy solutions company, today provides a trading update ahead of its financial year end on 31 March.

EBITDA performance is expected to show a significant improvement over the loss of £2.1m generated in FY12, with positive EBITDA for the full year between £1.2m and £1.4m. However, results will therefore be materially behind market expectations.  Following a pronounced deterioration in the final quarter of the financial year, revenues in the second half are expected to be approximately 10% lower than in the same period last year. Revenue for the full year to 31 March 2013 will be between £38m and £39m, approximately 7% lower than the prior year. Weaker gross margins in the second half will result in a marginally positive EBITDA result in that period.

The market for utility connections has contracted on the back of a weak construction sector, with delays in securing larger contracts and reticence on the part of small and medium sized business to invest in capital projects continuing to be a feature of the market. This has become more pronounced in the final quarter of the financial year, typically a strong period for the sector, with a commensurate impact on reported revenue and profitability.

Fulcrum has invested in working capital particularly during the last three months to ensure it remains competitive in being able to secure larger contracts. As a result, the business expects to be in a net debt position at the end of the year. Having secured debt facilities from Lloyds in January the business has the necessary funding in place to support this investment in the business.

Despite the difficult market conditions, Fulcrum has continued to win significant new contracts including a gas infrastructure project at Birmingham's New Street development and a project to deliver multi-utility infrastructure as part of redevelopment works at Victoria Hospital, Blackpool. The strategy to pursue larger contracts and deliver new services such as heavy fuel oil conversion remains a key priority, and Fulcrum has a strong pipeline of new business opportunities in place. The Directors therefore expect to see a continued turnaround in the financial performance of the business during the coming financial year. However, the market landscape is expected to continue to remain challenging against the backdrop of a sluggish construction sector, meaning that performance for the coming 12 months could be below current market estimates.

The Company expects to release its preliminary results during the week commencing 27^th May.

Enquiries:

Cenkos Securities plc         [phone]                                          (Nominated adviser and broker)

Stephen Keys

College Hill                           [phone]                                          (PR)

Toby Bates / Del Jones

Notes to Editor

Fulcrum is an energy solutions company based in Sheffield, UK. The Company's primary business is the provision of unregulated utility connection services to the residential, commercial and industrial markets throughout the UK. These range from the design, installation or alteration of connections for single site properties to large complex multi-site projects. Through its subsidiary, Fulcrum Pipelines Limited, Fulcrum is also licensed as an Independent Gas Transporter, operating pipelines that connect over 28,000 properties to the main UK gas network. 

 

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