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Alkane Energy

  • BY: Andrew Hore |
  • POSTED: 08/03/2012 |

Coal mine methane and electricity producer Alkane Energy increased its generating output by 17% to 140GWh in 2011.

The average selling price rose 16% to £51/MWh. Revenues rose 44% to £9.5m in 2011. This includes the first sale of a power facility for a biogas plant. The sale to the plant at Glenfarg in Scotland raised £1.08m. Underlying profit was 45% ahead at £2m.

Strong cash generation has helped to finance investment in new sites. Net debt was £6.07m at the end of 2011. Since then, Alkane has announced the acquisition of rival Greenpark Energy, which should be completed in April. This will take the number of coal mine methane sites to 19 and installed capacity to 70MW.

Looking ahead, Alkane has contracted 77% of its electricity output at an average of £56/MWh. The Greenpark average price is likely to be £53/MWh. This is higher than its average last year because Greenpark has previously agreed shorter-term contracts than Alkane.

Daniel Stewart forecasts revenues of £15.2m and pre-tax profit of £3m for 2012.

At 20.75p a share, Alkane is valued at £20.7m. The shares are trading on eight times prospective earnings for 2012.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFFebruary2012_29.pdf

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