Have been in here for few weeks and it looks as if their gas boilers could produce a flame should be a reasonable term AIM stock

Pre-close statement
RNS
RNS Number : 5222B
Flowgroup plc
05 March 2014



05 March 2014

Flowgroup plc

(the "Company" or the "Group")



Pre-close statement



Flowgroup plc (AIM: FLOW), which develops and commercialises alternative and efficient energy products, reports a pre-close update ahead of its results for the financial year ending 31 December 2013, which are expected to be announced on 08 May 2014.



The Company has made significant operational and financial progress during the period with revenue expected to be slightly ahead of analyst forecasts. Furthermore, the Company is on schedule for the commercial launch of the Flow Boiler in the second half of 2014.



A year of significant achievement

The year to 31 December 2013 saw a number of significant achievements for the Company: the successful launch and commercialisation of its energy business, Flow Energy; the launch of the domestic pilot of its microCHP Flow boiler; its production agreement with Jabil for the manufacture and assembly of up to 390,000 Flow microCHP boilers; and the signing of a framework agreement between National Grid and the Group's Flow Battery division.



Flow Energy

The energy business continues to exceed expectations with annualised revenues of no less than £30m. Having conducted detailed analysis of the current market, the Group considers that conditions are favourable and will therefore enter the energy market again in April with a competitive tariff. Gaining new energy customers increases the Group's revenue and provides more qualified customers to whom to market the Flow boiler.



Flow Boiler

The Flow boiler pilot was launched and expanded throughout the period and has already generated a significant amount of real-world data from a wide range of domestic homes. These data will be used to perfect the Company's installation procedures and documentation before commercial launch in the second half of 2014.



Reliability and performance of the boiler unit has been according to the design and whilst the pilot will continue for the remainder of the year, the Group expects to finalise the design of the mass production version of the boiler and deliver volume production designs to Jabil in March.



A broad range of the Group's employees are currently working closely with Jabil to effect the technology transfer of the boiler to Jabil and to assist the build of a high quality volume production capability. Jabil's 130,000 square foot facility in Livingstone, Scotland, is expected to commence production in the second half of this year.



Flow Battery


Flow Battery, the Group's award-winning compressed air backup power business, also enjoyed success in 2013. In November, Flow Battery was awarded a three year framework agreement by National Grid UK, to replace conventional lead-acid backup power units in National Grid's substation network in England and Wales as they reach the end of their service life. Flow Battery is pleased to announce that it has now received the first orders under the agreement. With over 3,200 battery systems across 303 National Grid substations, this contract has the potential to provide a strong revenue stream for the Group over the coming years.




Group Strategy and Outlook

The Group regards the emergence of the 'connected home' as having a significant and direct correlation to the Group's activities and technologies. The Group will continue to develop the 'smart' capability of its boiler, enabling integration with third-party connected home technologies such as internet connected 'smart' thermostats and energy monitors.



Market Expansion

The Group's research and development activities regarding the boiler will continue beyond the final design of the boiler in March 2014. The Group's boiler roadmap, which sets out the development of several different versions of the Flow boiler for UK and international markets, includes the development of more powerful versions of the boiler and a combination ("combi boiler") version, which will allow the Group to increase significantly its potential UK market size.



Furthermore, designing boilers for the North American and European markets will also allow the Group to target large overseas markets with the latter market opportunity exceeding nine million boiler sales annually. Broad interest in the potential for the Flow boiler to be used in small commercial installations has also become clearer and the Group will be analysing this large potential market in more detail during 2014.



Installation partnerships

Building on the existing relationships the Group enjoys with Calor and Carillion, the Group is in discussion with a range of additional installation partners. Direct sales will be driven via a multi-channel marketing campaign to a new, upgraded website and an expanded call centre. As well as providing extra installation resource, the Group plans that its installation partners will also provide a strong sales channel to supplement direct sales.





Tony Stiff, CEO of Flowgroup, said:

"We've consistently spoken about our technology platform as having the potential to underpin Flowgroup's development into a large, global company. We believe that, in 2014, we'll see that profile of company begin to emerge. Our launch in the second half of this year will be the first time that microCHP technology has been commercialised in an affordable form for the mass market. That represents a significant opportunity to gain market share in the UK and beyond and generate strong returns for shareholders."



Flowgroup plc
www.flowgroup.uk.com

Tony Stiff, Group Chief Executive Officer
Tel: +44 (0)151 348 2100






Cenkos Securities plc (NOMAD & Broker)
www.cenkos.com

Stephen Keys / Christopher Golden (Corporate Finance / Nomad)

Julian Morse (Sales)
Tel: +44 (0)20 7397 8900






Walbrook PR Ltd
Tel: +44 (0)20 7933 8780 or flowgroup@walbrookpr.com

Paul McManus (Media Relations)
Mob: 07980 541 893

Paul Cornelius (Investor Relations)
Mob: 07827 879 460

Hi Doodlebug
Thanks for adding the your posts, I hope you were in with me a few weeks ago. If all goes according to plan we will be very happy this time next year

Unfortunately, I'm not a holder of this one colinspurr - damn ! :-)

Just ben to the London Stock Ex show. Great presentation by the CEO. I did not realise that this gas boiler not only does the central heating but it produces electricity as well which can serve 40% of a reasonable sized households demands. Excess goes to the grid. Goes on sale next year at approx. £500 more than standard boiler or they will install FOC and keep the electricity themselves to sell to grid. Great business plan.
If it takes off BG will have to buy them or make some 1000 gas fitters redundant.
One for the long tem

The LSEclick here to watch Stock Market Show - Interview with Flowgroup

http://www.dailymail.co.uk/news/article-2810404/Boiler-generates-electricity-cut-power-bills-500-Mini-power-station-provide-heating-hot-water-fuelling-generator-appliances.html

This one has been hammered down from nearly 50p to present 32p.

Perhaps MMs taking the pi33 after private investors jumped aboard following M.O.S tip around 40 odd pence.

I've had a wee nibble at 31.75p as appears bottom fishers have arrived.

Just noticed the FD bought a chunk not two weeks back at 43p.

34p to buy now and chugging back up the hill nicely.

37p to buy. Decent coverage last week's SHARES.

Watch: Sean Fennon, CEO, Flowtech Fluidpower - Highlights of the final results

click here

Good comment from Cantor and new buy rec, target price 100p:

"We estimate that Flowgroup's fundraising announced yesterday will dilute reported earnings in the near term. However we think the accelerated development of a combi boiler using Flowgroup's mCHP technology whould be seen as a strong positive in the longer term. As the company itself points out, this will increase the addressable market from 400k to 1.7m units. The sizing and economics of the current product makes it more suitable for larger households with above average gas and electricity consumption...By accelerating development we think a wider market can now be addressed at an earlier stage and we see this and other investments announced yesterday de-risking the prospects for the company"

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