News blog

VPhase

BY: Andrew Hore |
POSTED: 20/09/2011 |

Sales are growing more slowly than hoped at voltage optimisation products developer VPhase but new deals should help them to increase over the next year or more.

VPhase increased sales of its VX1 product from £72,000 to £156,000 in the six months to June 2011. Overall revenues rose from £121,000 to £201,000, while the loss increased from £727,000 to £1.08m due to higher marketing spending.

At 1.48p a share, VPhase is valued at £11.8m. There was a £2m fundraising at 2p a share last autumn but much of this cash has gone. Investment in key components has increased stocks and they rose by £232,000 in the six month period. This contributed to a £1.12m outflow during the first half. There was £957,000 in the bank at the end of June 2011.

If deals with Tesco and the Procurement for Housing buying group for social housing firms are successful this could mean that further working capital will be required. If sales do increase then the cash outflow from operations before working capital changes should fall but the cash position will remain tight.

Tesco will be selling the VX1 online. The agreement is with Enact Energy, which will install the VX1 as part of the package on offer to consumers.

Solar installations provide a good source of demand in the short-term. Stockport Homes is including VX1s with all of its 1,200 solar PV installations. Other new business should be announced in the next few months but it probably won’t make much of a contribution until next year.

GE is negotiating a deal with retailer Best Buy which would involve the marketing of energy efficient products, including the VPhase products. This will not contribute until the middle of next year.

Download the September 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFSeptember2011_24.pdf

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