Trading Statement

RNS Number : 7578I

Sabien Technology Group PLC

08 July 2013

 



Sabien Technology Group plc

(AIM - SNT)

("Sabien", "the Group" or "the Company")

Post Year End Trading Update

Sabien, the manufacturer and supplier of M2G, a boiler energy efficiency technology, is pleased to provide an update on trading following the end of the financial year to 30 June 2013.

Profit Before Tax is expected to be in line with market expectations on turnover which is expected to be at a similar level to 2012 despite orders received being £0.5m higher at £2.9m. Net cash of £1.3m is lower than last year's £1.4m due to the significant amount of sales at the end of the period.

Notable contract wins in the 12 months included:

·     SSE Contracting (PriDe (MOD)): £1,234,044

·     Babcock Support Services (MOD): £294,533

·     Norland (Nuffield Hospitals): £244,500

·     Edmundson Electrical (Glasgow City Council): £159,200

·     BAE Surface Ships: £118,400

Sabien has established a superior market position offering greater value to our clients. The company is in a strong financial position with a hard won reputation for our M2G technology, service differentiation and providing an excellent customer experience.

We are making progress on our strategy for delivering long-term sustainable growth which is based on three key drivers: increased sales of M2G in the UK, overseas distribution expansion and organic innovation in products for the heating and cooling market both for the UK and overseas.

As announced in May and June, the Group received orders totalling £1.2m from SSE Contracting for the installation of M2G units at various MOD sites in the South of England. At the time of the announcements, we indicated that we expected that a large part of these orders would be recognised as revenue in the current financial year to 30 June 2013. As at 30 June, the amount of revenue recognised in respect of these orders is £0.7m leaving £0.5m to be recognised as revenue in the financial year to 30 June 2014.

We had a strong sales performance from our indirect partners who represent some 90% in total of turnover in the year (2012: 43%) and we expect further growth from all channels for the year ending 30 June 2014. The sales process for this channel requires a degree of support and technical assistance from our business development and operations teams.  Indirect partners include major international Facility Management companies, Energy Utilities, Product Specifiers and Energy Consultants. 

However we have been caught between dual priorities of managing our costs and growing revenue which on reflection has slowed our pipeline growth this year and delayed investment in personnel and innovation. Also the unpredictability of contract award dates influences the timing of the up-scaling of resources. However, the notable contract wins towards the end of FY2013 have allowed us to invest in sales resource to accelerate our revenue growth capabilities. We have now also taken other steps to ensure our sales pipeline is strengthened considerably over the course of the next 12 months.

We are doubling our business development function capacity and will be investing in organic product innovation on already identified new technology solutions for the heating and cooling market in the UK and overseas. Strengthening our capabilities that create value and innovation for our customers will keep us well placed to compete in an industry demanding high standards from retro-fit technology providers.

The Sabien executive team has also implemented a strategy focusing on operational and business development excellence to improve returns from the opportunities presented to the business. Our Operational and Organisational reviews are now well advanced and, whilst they have added costs, we expect these initiatives to materially strengthen our market position and drive our long-term sustainable growth.

While we are rightly focusing on primarily the UK, we firmly believe there is a significant international opportunity for Sabien and M2G and we continue to look to grow revenues through international opportunities.

We announced earlier in the year that we signed a non-exclusive distribution agreement with Fireye, based in the USA, a leading manufacturer of flame safeguard controls and burner management systems for the supply of our UL-approved M2G boiler optimisation controller. The territories covered by the agreement include the U.S., the European Union, Switzerland, China, Japan and South Africa. The agreement creates an excellent opportunity for Sabien to access major overseas markets and I would expect the agreement with Fireye to make a material contribution to our revenue performance in 2014.

Alan O'Brien, Chief Executive Officer, commented:

Overall, I'm pleased with the progress the Company has made in the second half of the year. This is a testament to the dedication and hard work of our people. They have performed admirably.

The tangible benefits of these efforts are now becoming more evident and demonstrate the opportunity that Sabien has ahead of it. I'm confident our stronger financial performance will provide the company with the impetus towards continued and sustainable profitable revenue generation and smart innovation over the coming years and I am delighted to be leading the business at this exciting time.

The Group's full year audited results will be announced on Tuesday 1st October 2013.

For further information:

Sabien Technology Group plc

Alan O'Brien, CEO                                                      Tel: [phone]

Gus Orchard, CFO                                                     www.sabien-tech.co.uk

Westhouse Securities

Antonio Bossi                                                              Tel: [phone]

Paul Gillam

About Sabien Technology

Founded in March 2004 by its CEO, Alan O'Brien, UK-based Sabien Technology specialises in providing proven and commercially viable technology to reduce carbon emissions and energy usage for private and public organisations. Sabien Technology Group Plc floated on AIM in 2006.

The M2G is a patented energy efficient technology designed to reduce fuel consumption in commercial boilers. Using intelligent software and hardware M2G dynamically responds to the changing heating demands within the building by measuring and analysing each boiler in real time to prevent the inherent problem of boiler dry cycling thus maximising efficiency under all conditions.

M2G is retro-fitted to commercial boilers regardless of age and size and fully integrates and complements existing controls, such as BMS, boiler sequencing, weather compensation and building optimisation controls.

 For further information, please visit our website www.sabien-tech.co.uk.

 

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