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Alkane Energy

  • BY: Andrew Hore |
  • POSTED: 18/03/2009 |

Higher electricity prices have helped Alkane Energy to grow its revenues. 

The coal mine methane extractor and power plants developer says that the electricity prices secured for 2009 are considerably higher than for 2008, so Alkane should have an even better year in 2009. The average price per therm for the gas was £21.93 in 2008.

Revenues improved from £4.27m to £5.19m in 2008. Alkane generated a £350,000 gain on the surrender of leases, offset by a 200,000 write-down on gas assets. The equivalent one-off net gain the previous year was £119,000. There were also exceptional transaction costs and exchange gains. Underlying profit rose 59% to £1.41m.

Net cash and financial assets was £267,000. This was before the recent sale of its 38% stake in Pro2 for €3.6m (£3.32m). Including loan repayments Alkane will receive €7.56m, although €720,000 will be held in escrow. There is a further loan of €960,000 repayable in two equal instalments - at the end of 2009 and the end of 2010. This cash will be used to expand the existing business.

Although the recession is affecting electricity demand, Alkane can still get a good return on new investments. Alkane has 20MW of installed capacity and wants to grow this to 50MW over the medium term. Alkane has the cash so gaining planning approvals may be the biggest obstacle to achieving this aim.

Alkane is looking for acquisitions in coal mine methane power generation and in existing areas of expertise, such as gas handling and small scale power generation facilities, or other renewable technology. Alkane is only interested in proven technologies.

Gartmore has increased its stake by more than 10m shares, taking it to 27.1%.

Lord Fraser is stepping down from the board.

At 16.5p a share, Alkane is valued at £15.3m.

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