News blog

Kedco

• BY: Andrew Hore |
• POSTED: 28/03/2013 |

Last year’s purchase of Reforce Energy has turned Kedco into a wider ranging renewable energy business. 

It will take time to build up revenues but the initial wind power investment by Reforce in County Cork should be generating cash later in 2013. Financing of €1.15m has been secured for the 800kw project and a 15 year power purchase agreement signed with Energia. There are also two small scale solar projects that should be commissioned in 2013. Two other wind projects have planning permission, while a formal planning submission for three much larger projects should be made in October.

The CHP operations continue to progress. The first 2MW of the Newry biomass CHP project is generating electricity and the next 2MW will be commissioned in the coming months. This should then generate €4m of annualised revenues and €2m of EBITDA. There are plans for further increases in capacity.

Financing is being secured for the 12MW Enfield biomass CHP project and planning permission sought for Clay Cross and Londonderry projects.

Revenues have been generated from supplying equipment and expertise to the Newry joint venture. In the six months to December 2012, revenues declined from €7.38m to €1.76m. There is little or no profit margin on these sales. Kedco does not recognise the income generated by the Newry joint venture from selling electricity. There is a small overall loss from Kedco’s three joint ventures.

Net debt was €3.48m at the end of 2012 with the Newry joint venture debt off-balance sheet. Since then, a further £400,000 has been raised from a convertible loan issue to 26.8% shareholder, Farmer Business Developments. This should provide enough working capital to get Kedco near to the end of 2013. The first wind project should start to generate cash before the end of the year.

At 0.85p a share, Kedco is valued at £9.51m.

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