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TEG Group

  • BY: Andrew Hore |
  • POSTED: 19/03/2010 |

Waste composting plants operator TEG Group reported better than expected 2009 figures.

Revenues grew from £12.7m to £15.4m, with the growth split between sales of plant and equipment and revenues from TEG’s own plants.

TEG reported a swing from a loss of £1.48m to a profit of £155,000 but this was flattered by negative goodwill on the acquisition of Banham Compost of £956,000 – effectively the amount below asset value TEG paid for the business.

There are up to 30 potential projects in the pipeline at various stages of progress up to tendering. Demand from local authorities is strong and new legislation is improving prospects all the time.

Net cash was £1.5m at the end of 2009 but more than £2m of cash has flowed in since then. There is also £1.4m of potential deferred consideration.

TEG has enough cash for its own needs but would have to find additional finance if it were to make an acquisition.

TEG would like to buy complimentary, regional businesses and it could also expand into related markets in the renewable energy sector. 

This year’s revenues are underpinned by the Greater Manchester waste contract and annualised revenues from TEG plants of around £4m. House broker Canaccord forecasts an underlying profit of £700,000 on revenues of £22.6m in 2010. TEG will need to win new contracts to hit that figure.

At 44p a share, TEG is valued at £23.4m.

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