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TEG Group

  • BY: Andrew Hore |
  • POSTED: 01/04/2014 |

Composting and anaerobic digestion plants supplier and operator TEG Group has acquired a composting operation near Exeter which is owned by a subsidiary of Parkwood.

TEG is paying an initial £1m with potential deferred consideration of £400,000 dependent on profit over the next four years. The plant has annual revenues of £1m. TEG will supply additional waste to the plant. TEG installed the TEG Silo Cage on the site in 2008. The plant supplies compost to the local market. An anaerobic digestion (AD) facility is being considered for the site.

TEG had a poor 2013 but additional projects should boost the current year. Revenues fell from £22.4m to £19.6m while the loss increased from £1.28m to £2.68m. The decline in revenues was in construction contracts revenues. Net debt was £3.33m at the end of 2013.

TEG says the second half was disappointing due to one-off costs and delays with the Gaydon composting and AD project in Warwickshire. Financial close is expected by the summer. Revenues from the project are likely to be recognised in 2014 and 2015.

This year TEG has handed over the Dagenham AD and composting facility and received the final retention of £1.5m. TEG has a 15-year operating contract generating £1.3m a year as well as owning 24.5% of the facility. Retentions relating to the Greater Manchester Waste PFI contract could be received this year. The Perth AD facility is operating ahead of design capacity. The Todmorden facility has increased capacity by 95% and Telford by 50%.

In February, Peter Gyllenhammar increased his holding in TEG to 19.2%.

Leo McKenna is replacing Rory Maw as chairman.

At 4p a share, TEG is valued at £7.54m.

Download the latest AIM Journal from http://wwww.hubinvest.com/AIMPDFMarch2014_54.pdf

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