Sign up Australia
Proactive Investors - Run By Investors For Investors
Why invest in AMPH?
Aggregated Micro Power Holdings plc: THE INVESTMENT CASE

Aggregated Micro Power fills in northern gap with Billingtons buy

AMP acquired Billingtons from Drax for £2mln. Of that, £1.6mln is being paid in shares to give the power station operator just over a 4% stake
picture of truck
INVESTMENT OVERVIEW: AMPH The Big Picture
Billingtons has four depots

Aggregated Micro Power Holdings PLC (LON:AMPH) is a classic study of a vertically integrated business.

The group installs commercial size biomass-fuelled boilers used by schools, care homes and business parks.

WATCH: Aggregated Micro Power acquires wood pellet group Billingtons

These are financed by two special purpose vehicles AMPIL 1 and 2, a method that frees up capital to fund more new projects.

AMP provides fuel for the boilers (wood chip and wood pellets) and commissions and installs them on a long term contract.

Billingtons fills northern gap

The acquisition last year of Forest Fuels made it one of the UK’s largest woodchip suppliers.

Recent acquisitions have taken it deeper into wood pellet supply.

Latest purchase, Liverpool-based Billingtons, fills a gap in the network in the north-west, chief executive Richard Burrell told Proactive.

“We can now serve most customers in most prices at very competitive prices and quality.” 

Peaking plant progress

AMP is also branching out into power supply and has over 80Mws of grid balancing projects with planning permission and grid connection offers. These peaking projects kick-in when demand is overwhelming the grid.

In January, funding (£14mln) came through for its first peaking plant in Kent, a project that will comprise some 21Mw of natural gas reciprocating engines.

The finance is being provided by funds managed by Triple Point Investment Management.

“AMPH will earn project development fees, on-going operation and maintenance fees and has shares in the project which are subject to a hurdle return being achieved by Triple Point,” said Burrell.

Drax now a shareholder

AMP acquired Billingtons from Drax for £2mln. Of that, £1.6mln is being paid in shares to give the power station operator just over a 4% stake.

Based in Liverpool, Billingtons supplies 40,000 tonnes of premium wood pellets a year to more than 1,500 commercial customers from four depots. 

WATCH: Aggregated Micro Power's' Richard Burrell 'delighted' with full year results

Revenues in 2016 were £6.8mln with a loss before tax of £430,000, including a management charge to Drax.

Burrell said Drax would be a long–term investor and the two companies will work together on a number of projects and it was an excellent fit with Forest Fuels.

A month previously, AMP acquired the wood pellet assets and customer base of CPL Distribution, a business turning over £5.1mln annually.

Last year Forest Fuels reported revenue of £15.8mln and profit from operations of £426,000 including a tax credit, but adding CPL would mean an additional profit of £137,500, AMP said at the time.

Acquisitions a kicker

Total revenues in the year to March 2017 overall jumped to £19.7mln (£1.3mln for 15 months), while the AIM-listed group also posted a profit of £930,000 (£7.7mln loss).

Burrell said acquisitions over the past year had driven the improvement and will give sales a further kicker in the current year. 

"The acquisition of three fuels businesses, which will see further turnover growth next year reflecting a full year's trading, has made for a transformational year at AMP.”

Assets under management grew to £66m comprising operational boilers, in-development peaking plant assets and other biomass assets on long term contracts.

Shares rising

Investors have started to recognise the progress being made with the shares up by 21% this year to 97.5p and valuing the group at £37mln.

 



PhilW.jpg


Register here to be notified of future AMPH Company articles
View full AMPH profile View Profile

Aggregated Micro Power Holdings plc Timeline

Related Articles

1510629376_Agent-Reality-and-Sweep.JPG
November 16 2017
Thred's Geoff Marshall at Proactive's CEO Sessions in Melbourne and Sydney.
gas-pipelines---great-pic.jpg
August 10 2017
The Power and Electromechanical (P&EM) business's unaudited backlog was $19.2mln as at end June
pioneering_tech_-__smart_burner_-_woman_hands_fire.png
May 18 2017
In 2016, Pioneering's market capitalization increased by 1,170% and its share price appreciated by 725%.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2017

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use