Clean Air Power's annual revenues soar on Dual-Fuel sales

Clean Air Power reported a 73 per cent increase in annual revenue on Thursday, buoyed by sales of its Dual-Fuel combustion technology for heavy-duty diesel engines.

Revenue came to £7.94m for the year ended December 31st 2012, up from £4.59m the previous year.

Gross profit jumped by 37.5% to £3.52m from £2.56m.

The Dual-Fuel division was the main driving force as revenue increased by 101% to £6.64m from £3.30m as a rise in interest of European products resulted in a total of 300 sales compared to 70 in 2011.

An order for 49 Genesis-EDGE Dual-Fuel systems was delivered to Sainsbury, along with 27 to a major logistics organisation in the UK. An order was also received for 82 of the systems to HAM Cryonenica.

"The January 2012 European OEM [original equipment manufacturer] production commencement has seen Clean Air Power become a tier one system supplier under a Supply Agreement for an initial period up to July 2015," said Chief Executive Officer John Pettitt.

"This achievement has been complemented by commercial success in Europe with our Genesis-EDGE product including the delivery of 49 systems to Sainsbury's and further deliveries to other major fleet operators in the UK and Spain."

Cantor Fitzgerald said the results were in line with expectations. However, the analyst noted that project costs were slightly higher than previously guided.

"We will be revising our [fiscal year] 2013 numbers in due course," the broker said.

"We are currently expecting the company to report a small pre-tax loss but this is likely to prove too optimistic given the higher costs mentioned above, however EBITDA [earnings before interest, tax, depreciation and amortisation] is expected to remain positive. We reiterate our 'buy' stance and our target price of 25p, continued progress with both Genesis Edge and OEM sales are encouraging."

Shares plunged 13.48% to 9.62p at 08:44 Wednesday.

RD