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
Future News Releases
News provided all financial results and news are only published on the Company’s website (http://investors.eurositepower.co.uk/news-releases).
Anyone wishing to receive notice of a news release should subscribe to the email alerts service provided within the Company’s investors pages (http://investors.eurositepower.co.uk/email-alerts).
Alternative Reporting Standard
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 firstname.lastname@example.org