RedTs storage units hold much potential if execution goes to plan
Energy storage business RedT Energy (RED:AIM) is confident of extracting further efficiencies and costs out of the manufacturing process of its vanadium redox flow energy storage units.
This should aid its market seeding programme now in progress. More crucially, this could accelerate commercial unit sales and put the company on a firm path to profit.
Chief executive Scott McGregor wont quantify the implied costs on its first generation units, claiming the information is locked into commercially sensitive arrangements with current trial partners, including European energy giant E.ON (EOAN:ETR).
He says the second generation units are operating on a rough $700 per KWh (kilowatt hour), claiming this is a low enough cost for mass market take-up.
That progress has largely come from adapting parts and streamlining manufacturing, mainly of the electrode and membrane stack components, and of the electrolytes, the tanks of chemically charged liquids.
Work is already underway on the third and fourth generation versions. This could potentially further cut the KWh cost.
FinnCap forecasts 4.6 million revenue in 2016 soaring to 23.9 million next year. Having raised £3.5 million via a share placing in January 2016, RedT had 7.5 million of cash as of 31 March, with the company thought to be burning roughly 4 million a year cash.
The CEO remains tight-lipped on whether extra funds are likely to be needed to get to break-even. The shares are trading at 18.62p
Shares says: "It remains too early for the shares to be anything other than speculative, but the company is definitely one to watch. "
Met the management at an event and liked them fundamentals and the sector. Reckoned this sector would expand. But the newsflow recently is fantastic. Couldnt be better. Appearing on BBC news, voted Risk Management Company of the year. Total rerating. Totally hot sector. Happy to continue to hold as I am trying to run my winners now. Or are others topslicing?
No idea, but I am gone from here. I just reckon cash will be king for a while. I am clearing out everything I can without taking too big a loss. (It could just be people buying on the fundamentals as a bit of a punt. The figures look great if you don't read the news).
This is what I liked about this business. The costs are fairly fixed so all new wins like this go straight to the bottom line. And I can see them winning a lot more. Seem sensibly run. Am gradually building up my stake in them.
The company announced this morning that it has acquired a 25% stake in Linx International. It received this in return for handing over its profitable, but very low margin, training wing (Ark) to Linx. This seems a very astute move to me, and an indicator that these people have business sense as well as a head for their core activities.
Agreed Tipp. Managed to get in myself today (at last!) As well as all the internal positives Microgen have let it be known they are in the market for possible acquisitions, and this or LRM would be idle targets for them. This is either a possible takeover target or a good old-fashioned growth company. A better place to have your dosh than the bank at the mo.
Blimey this is a quiet board,,,,,,,,,not a bad thing IMV,,,,,,,,,got in here yesterday, had it on my watchlist since last news and feel there is very little down side on the sp now,,,,,,,,,,,decent company to plant my money in for the long term IMV,,,,DYOR
Im amazed to see no comments for such a long time, especially considering the good interim results that were announced.
Having sold out completely last year, I have now built a good holding again.
Looking forward to the trading update in April. As Seymour Pierce don't seem to have adjusted their forecasts to reflect the good first half and the additional prospects from the food recall business, I'm expecting an announcement that they have exceeded expectations.
It will also be interesting to see how many staff have taken up the the share loan scheme which has been popular over the past two years.
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