RNS Number : 0193G
HydroDec Group plc
25 June 2012
25 June 2012
Hydrodec Group plc
("Hydrodec" or the "Company")
Neil Gaskell, the chairman of Hydrodec Group plc, the cleantech industrial oil re-refining group (AIM: HYR), will make the following statement at the Company's Annual General Meeting later today:
"I am pleased to report that your Company has made substantial progress in several key areas in the 12 months since the last AGM. Trading in the current calendar year to date is strong, maintaining a significant improvement over the same period last year.
Ian Smale and his significantly strengthened management team have made an immediate impact on operational performance as well as providing fresh impetus to our growth objectives. Effort is focused in our core business in the United States and there is a renewed sense of purpose in Japan. They have also begun to test the further potential of Hydrodec's unique, proven and proprietary clean technology beyond transformer oil to other industrial oils and new markets.
After a good start in the first quarter:
-- Sales volumes are significantly up on the same period last year and we expect the Company to post a new half year record by the end of this month;
-- Gross unit margins have maintained their improving trend and are substantially up on the first half of 2011;
-- Plant utilisation across the Company's two sites remains at approximately 70% compared with approximately 55% in the first half 2011, despite a successful planned statutory shutdown at Young in May; and
-- The Company expects to move into a cash surplus at the operating level, excluding new business development costs, in 2012.
This significant improvement in performance is the result of the Company's additional investment in management, which will add about US$2 million to the annual cash costs. Chris Ellis' appointment as CFO completes the new management team. We are pleased that Paul Manchester will stay with the Company and we thank him for his valuable contribution as Finance Director over the last two years.
Further evidence of operational momentum is demonstrated by the recent breakthrough mandate with Mexico's federal electricity utility and the draft approval received from the US Environmental Protection Agency (EPA) to handle PCB contaminated waste oil at our Canton plant for the first time. Both effectively endorse Hydrodec's process technology as a competitive alternative to incineration, as well as providing access to higher levels of polychlorinated biphenyl (PCB) contaminated feedstock.
The Board believes that there remains further headroom for improvement in the near term. The goal is to justify further investment in plant and capacity in due course through sustained performance improvement and a clear road map to profitability.
In Japan, we have made an intervention with our joint venture partner Kobelco Eco-Solutions and are currently developing a number of options within a clear plan to progress the project in which the President of Hydrodec Japan, Takuichi Murachi, will now play a leading role.
Your Company has also made real progress in extending its proven re-refining technology beyond transformer oils to other used industrial oils. In Australia, we have now engaged with a major industrial customer and a major blender/marketer. Samples of used oil feedstock are now in Young for laboratory testing and trial production which will in due course provide a base oil product for blending and market evaluation.
I am extremely encouraged by the real improvement and momentum in the business and believe that we can have confidence that the new management team will identify and in due course resource an expansion in the core transformer oil business as the key to long term profitability, as well as create the potential for new markets and products. In view of this, the challenge for the Board is how best to support the new executive and the expanding business opportunity. Our conclusion is that we should take a fresh look at our composition based on experience and capability. Therefore we intend to conduct a full review of the Board team over the next few months in conjunction with our advisers."
For further information please contact:
Hydrodec Group plc 020 7907 9220
Neil Gaskell, Chairman
Ian Smale, CEO
Mike Preen, Head of Corporate
and Legal Affairs
Numis Securities Limited (Nominated
adviser/ joint broker) 020 7260 1000
Nominated Adviser: Hugh Jonathan
Corporate Broker: David Poutney,
Cenkos Securities plc (Joint broker) 020 7397 8900
Corporate Finance: Adrian Hargrave
Sales: Christian Hobart
Luther Pendragon (PR adviser to
Hydrodec) 020 7618 9100
Neil Thapar, Alexis Gore
Notes to Editors:
Hydrodec's technology is a proven highly efficient oil re-refining and chemical process which is being initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. The Company takes spent oil, including polychlorinated biphenyl ("PCB") contaminated oil, as the primary feedstock, which is then processed at its two plants enabling 99 per cent or greater recovery of oil for reuse while also eliminating PCBs, a toxic additive banned under international regulations, without environmentally harmful emissions.
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