Trading update
The Company has performed strongly over the 12-month period ending 31 March 2017. Revenue and cash are expected to be in line with market forecasts, whilst EBITDA is expected to be slightly ahead of market expectations.
As at 28 February 2017, the Company's order book had increased by £7.2m (33%) to £29.0m, from £21.8m at 31 March 2016. This increase highlights progress within the business during 2016/17 and includes £4.2m for the gas conversion contract in the South West reported at the half-year. The Company continues to secure electricity contracts and a broad base of gas and multi-utility projects of less than £50,000 revenue. Notable contract wins in H2 include:
· A £1.1m, 7.7km gas pipeline project to convert a Scottish distillery from its existing fuel source to natural gas
· A £0.4m new gas pipeline to feed a Short Term Operating Reserve (STOR), which will use gas to generate electricity to deliver more back-up electricity to the national grid when required
· A £0.3m multi-utility contract to install gas, electricity, water and telecoms to three commercial units in London
· An £0.2m infrastructure contract to deliver new gas and electricity connections to a 100-plot housing development in Staffordshire.
In accordance with the stated asset growth strategy, the Company has seen a ramping-up of agreements to adopt external gas assets from utility infrastructure providers (who do not have an independent gas transportation licence that enables them to own gas pipelines). The value of assets to be purchased is currently £2.8m. The cash will be spent as these schemes are built out, increasing future transportation income. The Company also confirms that plans are on track to obtain the independent distribution network operator (IDNO) licence by the end of the calendar year to enable ownership of electrical assets.
Martin Donnachie, Chief Executive of Fulcrum, stated: “We have achieved our aim of growing the sales order book – 2016/17 has seen continued expansion of both our infrastructure services and asset ownership businesses. The business has an established and growing market leading position. We will continue to focus on improving customer service, building our order book and using the cash generated to increase the asset base and the recurring transportation income, all whilst maintaining and improving operational disciplines. We remain confident in our outlook for the business.”