EuroSite Power Reports First Quarter 2019 Financial Performance
Gross profit increases and UK Operation reports increased net profit
MACCLESFIELD, UK, May 14, 2019 -- EuroSite Power Inc. (OTCPK: EUSP, the "Company") an On-Site Utility solutions provider, offering clean electricity, heat, hot water and cooling solutions to healthcare, hospitality, housing and leisure centers in the United Kingdom (UK) and Europe, reported first quarter energy revenues increased 11.3% to $1,153,198 compared to $1,036,556 for the first quarter 2018. Overall first quarter revenues reduced by 0.2% to $1,315,471 compared to $1,318,454 for the first quarter 2018. Gross Profit for the period ending March 31, 2019 increased by 29.7% to $396,092 when compared to $305,337 for the same period in 2018, the result of gross margin increasing from 23.2% to 30.1%. Net profit at the Company’s UK subsidiary increased 79.4% to £22,739 ($29,605) for the first quarter 2019 compared to a net profit of £12,669 ($17,756) in quarter one 2018; this subsidiary has now achieved positive EBITDA in each month since October 2017.
Commenting on the quarter’s results Chief Operating Officer and Managing Director, Paul Hamblyn said, “Given our aim to be profitable at a UK level this year the fact the UK business has now been profitable for the last four months is a great start. We have also sustained the positive cash position established over a year ago.” Mr Hamblyn added, “The priority remains the growth of our OSU fleet in order to ensure we meet our goals and to support future strategic growth.”
“The board recognise the need to invest in growth. The recent appointment of a new UK General Manager is part of this investment as too is the work currently underway to expand our sales team and enhance our marketing” said Chief Executive Officer, Dr. Elias Samaras. He added “While overall revenue was flat due to falling year-on-year turnkey revenue our energy revenue increased, leading to higher gross profits this quarter. Importantly our sales pipeline remains strong and so we remain confident we can achieve our targets.”
Energy revenues grow alongside increased gross profit and positive operating cash flow
Energy revenues increased 11.3% to $1,153,198 (£885,739) for the first quarter 2019 compared to $1,036,556 (£745,098) for the same period last year
Total revenue decreased 0.2% to $1,315,471 (£1,010,376) for the first quarter 2019 compared to $1,318,454 (£947,732) for the first quarter 2018
Overall gross profit including depreciation for Q1 2019 increased to $396,092 compared to $ 305,337 in Q1 2018, an improvement of 29.7%
Overall gross margin including depreciation increased to 30.1% for Q1 2019, compared to 23.2% for Q1 2018.
Overall gross margin excluding depreciation for the first quarter of 2019 increased to $ 537,414 compared to $ 447,856 in 2018, an improvement of 20.0%
Overall gross margin excluding depreciation increased to 40.9% for Q1 2019 compared to 34.0% for Q1 2018
UK operating subsidiary achieved a net profit for the first quarter 2019 of £22,739 ($29,605) compared to a net profit of £12,669 ($17,756) in quarter one 2018, an increase of 79.4%
UK operating subsidiary achieved a positive EBITDA cash flow for the period ending March 31, 2019 totalling £142,999 ($186,179) compared to £123,038 ($172,438) in 2018. This represents an increase of 16.2%
The Company achieved a net loss for the first quarter 2019 of $89,068 compared to a net loss of $126,142 for the first quarter 2018, an improvement of 29.4%
The Company achieved a Non-GAAP EBITDA for the first quarter 2019 of $82,614 compared to $99,206 in Q1 2018, the result of the disposal of non-energy assets during the quarter
Liquidity and cash position at March 31, 2019 remained strong at $2,535,572
Total energy production increased by 5.4% to 14,817,992 kWh for quarter ended March 31, 2019 as compared to the same period in 2018
Operational energy fleet capacity at March 31, 2019 was 40 systems at 37 sites totalling 4,835kW although both single 101kW systems at Wentworth Clubhouse and Riverside Hotel Irvine remain offline awaiting completion of long-term refurbishment works being undertaken by the client at each site. Current operating fleet capacity compares to 36 systems at 33 sites totalling 4,074kW at the end of March 2018
Contracted backlog at March 31, 2019 - 8 systems, 1,196kW
New business and strategic development
Signed a 15-year OSU agreement worth £1.43M predicted contractual revenue ($1.86M) for a 101kW system to be installed at The International Convention Centre Wales, a joint development between the Welsh Government and Celtic Manor Resorts
Grown multi-site sales pipeline to include in excess of 320 potential systems at various stages of the sales process
Appointed two part-time telemarketing operatives focused on identification of new multi-site sales opportunities
Invested in a new CRM system to improve management of all sales opportunities
After the quarter closed the Company appointed new UK General Manager and created Chief Operating Officer role enable senior management to focus on business and strategic development
Continued engagement with ELITE programme
Outlook and risks
Relative to 2018, the Company reports that there are a number of factors that could affect 2019 earnings. At a positive level these include the Company's ever-increasing operating fleet, the continued positive impact of more units being maintained in-house, rising utility prices and closure of the CRC Energy Efficiency Scheme and the resultant increase to Climate Change Levy rates. Less favourably if the retail price spark spread narrows and any adverse price changes will likely adversely impact margins through the year. Proposed changes to the charging structure for electricity transmission and distribution costs have the potential to impact both revenue and margin of the Company’s OSU fleet
Management consider the overall outlook for financial performance for the remainder of 2019 to be good although failure to secure early OSU contracts increases the risk that profitability could be impacted as staffing costs increase in response to implementation of the Company’s growth plans
The Company now files its financial statements under the Alternative Reporting Standard (ARS). Financial reports, which are prepared in accordance with US GAAP, are generally provided within 45 days of period end (90 days for fiscal year end results) and are reported to maintain at least the OTC Pink Limited Information tier.
Following corporate reorganisation and de-registration of the Company’s common stock, with effect from January 1, 2017 foreign exchange gains/losses are reported in the cumulative translation adjustment (CTA) account on the Company’s balance sheet.
Fiscal year-end financial reports for the operating company, EuroSite Power Limited are audited by a PCAOB registered firm and the Company provides current information for the purposes of SEC Rules 144(c)(2) and 10b-5 using the OTC Disclosure & News Service. Financial statements for EuroSite Power Limited are prepared in accordance with UK GAAP, and consequently differences in accounting treatment and presentation may arise.
EuroSite Power sells the energy produced from an onsite energy system to an individual property as an alternative to the outright sale of energy equipment. On-Site Utility solution customers only pay for the energy produced by the system and receive a guaranteed discount rate on the price of the energy. All system capital, installation, operating expenses and support are paid by EuroSite Power.
About EuroSite Power
The Company provides institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by conventional energy suppliers – without any capital or start-up costs to the energy user. More information can be found at www.eurositepower.co.uk.
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in financial statements held by OTC markets for the fiscal year ended December 31, 2017. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
SOURCE: EuroSite Power Inc.
For further information: Dr Elias Samaras Chief Executive Officer +44 844 693 2848 email@example.com
Dr Elias Samaras is the founder, president and managing director of Digital Security Technologies S.A. He was also the founder and president of Plefsis Information Systems S.A. and City Messengers. Elias holds a Master of Science degree from MIT, a Doctor of Philosophy from Columbia University in New York, where he was also a professor for several years and an OPM from Harvard Business School.
Chief Operating Officer
Paul Hamblyn is Chief Operating Officer of EuroSite Power Ltd with responsibility for strategic and new business development of the business.Paul is highly experienced in the energy sector having built an enviable track record prior to joining EuroSite Power. This includes strategic level roles with Corona Energy and the ENER-G Group including 3 years as the Managing Director of ENER-G Efficiency.A leading expert on UK carbon regulation Paul is a regular speaker at major conferences including those organised by the Major Energy Users Council, the Local Government Association and the Westminster Energy Forum. He is also a formerCouncil Member of the Energy Services and Technology Association (ESTA). Paul is a CIBSE accredited Low Carbon Consultant and Energy Assessor as well as principal author of the award-winning CRC Toolkit developed for the London Energy Project.
UK General Manger
Chris Marsland is UK General Manger of EuroSite Power Ltd. He leads the UK operational company and directs its operational and administrative functions. Prior to joining Eurosite Power, Chris built up years of sector expertise in senior positions including the role of Technical Director at Centrica Business Solutions, formerly ENER-G Combined Power Limited. He also Chaired the Association for Decentralised Energy Commercial Forum and is an Association Board Member. Chris earned a first-class bachelor’s degree in electronic engineering and is both a Chartered Engineer and Fellow of the Institute of Engineering & Technology.
Financial Controller & Company Secretary
Laura Chambers is EuroSite Power Ltd’s Financial Controller and Company Secretary. An experienced finance professional, Laura has undertaken financial planning and analysis roles at number of blue-chip businesses including Astra Zeneca. She also spent 7 years at Kellogg’s European Finance Services Centre (EFSC). Qualified as a Chartered Accountant at KPMG’s Manchester office, Laura brings strong organisational skills and broad finance experience to the team.
Head of Operations
Stephen Butler is EuroSite Power Ltd’s Head of Operations. Having joined the company in 2012 as Chief Engineer, Stephen has moved through the business into his current role. With an impressive resume that includes senior mechanical engineering roles at Thames Water and ENER-G Combined Heat and Power Ltd, Stephen brings strong operational, project management and technical experience to the team. He is a Technician Member of the Institution of Engineering and Technology (TMIET).
UK Sales Manager
Martin Evans is our UK Sales Manager. A well-known and seasoned energy sector specialist, he brings a wealth of commercial experience - from start-ups to corporate level engagement – to our team. With a career spanning over 30 years, he has spent much of his career in technology led businesses and manufacturing including aviation and automotive. Martin’s previous roles at cutting-edge low carbon businesses including Grid Beyond, WEMS International and EnergyQuote JHA have given him a unique insight into the challenges faced by many of the UK’s most intensive energy users. He has also amassed over 15 years direct experience in commercial asset finance. Martin studied Applied Chemistry at the University of Manchester.
Mark Brown is our Account Manager. An experienced energy sector professional - particularly in the fields of CHP and renewable technologies - Mark has worked in engineering and technical roles for over 20 years. This includes 11 years at Cogenco UK (now fully integrated into Veolia’s CHP business). A great communicator with a positive approach to creative problem solving and troubleshooting, Mark is a key member of our customer-facing team. He holds qualifications from the Institute of Leadership and Management.
Jacques de Saussure
Non-Executive Chairman of the Board
Jacques de Saussure was Senior Managing Partner of the Pictet Group from 2010 until June 2016 after being elected partner of Pictet in 1987. Founded in Geneva in 1805, Pictet Group is one of Europe’s leading independent wealth and asset managers with EUR 437 billion of assets under management and custody as of 31 December 2015. Jacques is a member of the board of the Swiss Bankers Association and has also served as Vice Chairman of the Swiss Stock Exchange, which merged into SIX group in 2008, where he remained member of the board until 2010. Jacques holds a Master’s degree from MIT’s Sloan School of Management.
Dr Ahmed F. Ghoniem
Dr. Ahmed F. Ghoniem has been a member of our Board of Directors since January 2011. He is the Ronald C. Crane Professor of Mechanical Engineering at the Massachusetts Institute of Technology (MIT). He is also the director of the Center for 21st Century Energy and the head of Energy Science and Engineering at MIT, where he plays a leadership role in many energy-related activities, initiatives and programs. Ahmed holds a Ph.D. in Mechanical Engineering from the University of California, Berkeley, and an M.S. and B.S. in Mechanical Engineering from Cairo University.
Joan Giacinti is the founder and Chief Executive Officer of Sofratesa Group with headquarters in Santo Domingo, Dominican Republic. Joan is also a founder of Aerodom, a concessionaire chosen by the Dominican government to develop, operate and manage airports in the Dominican Republic, which in 2008 was acquired by Advent International. He is the President of the Caribbean region of the French Trade Councils, “Conseillers du Commerce Exterieur” and the President for the Americas of the Forum Francophone des Affaires (FFA). He is also decorated with the Ordre national du Mérite by the President of the French Republic. Joan is a graduate from the École des Hautes Études Commerciales de Paris (HEC).
Marcel Cassard joined Deutsche Bank in 1997 where he is now a member of the Global Markets Executive Committee and Global Head of Fixed Income and Economics Research. Marcel also heads the Bank’s Global Macro Strategy Group, which advises the Board and clients on broad market risks and global economic and financial developments. Previously, Marcel spent five years at the International Monetary Fund. Previous to that, he was an Economist at the Council of Economics Advisers in the Executive Office of the U.S. President. Marcel holds a PhD in Economics from Columbia University.
Mr. Stelios Zavvos
Stelios Zavvos is the Founder and CEO of Zeus Capital Management, a private equity group. With over 35 years of corporate, finance and real estate experience, Stelios is also the Founder and CEO of Continental American Capital, an investment group that focused on real estate investment and financing in the USA. He has served as a Member of the Board of Directors of the NASDAQ listed Star Bulk Carriers Corp, serving on the Board’s Audit Committee. He has also held executive positions in blue-chip companies such as Citibank, Johnson & Johnson and Procter & Gamble. SteliosZavvos holds an MBA from Harvard Business School and an MSc in Civil Engineering.