Energy-saving products group VPhase reported 'steady progress' in 2011 after securing a number of key contracts which it says have put in place the building blocks for future growth.
Revenue totalled £0.44m in the 12 months ended December 31st, compared with £0.27m in 2010, with the group saying that demand for its product continues to grow steadily. The company manufactures a patented voltage optimisation unit used in homes and small businesses, aimed at reducing customers' electricity bills by around 10%.
In September, VPhase won its first significant housing contracts: one for 1,200 units with Stockport Homes; and another for 980 units with British Gas Community Energy. During the same month, it was announced that Tesco would be offering the product from its home efficiency website, a more consumer-driven revenue stream that is expected in to commence in the second half.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Furthermore, the company is poised for impressive growth in 2012, with current trading reported to be strong. Chief Executive Officer Rick Smith said that sales in the first 11 weeks of the year have already exceeded the level of sales for the first seven months of 2011 and the total sales in the whole of 2010.
The firm recorded a loss before tax of £1.97m in 2011, compared with a loss of £1.7m the year before. Whilst not giving an estimate for the P&L account for this year, the company said that market expectations are for a "small loss" in 2012 and a swing into profitability in 2013, something that Smith said he is "not uncomfortable with".
Margins fell from 39% to 34% during the year as prices were reduced to secure volume before volume manufacturing could be established, the group said. This was slightly below the 35-40% target but the firm assured that this should correct later in the year/early 2013.
Meanwhile, the company launched two new products today, 2kw and 5kw versions of VPhase, which can be installed more easily and offer wireless connectivity.
"The board's stated strategy is to build a solid platform for future growth through markets such as social housing, and with a strong and growing pipeline of orders, we are excited about the opportunities that exist both domestically and overseas for the group," according to Smith.
Shares finished up 6.9% at 0.78p on Monday.
BC
