TEG loss increases

The Chorley-based organic recycling company said in the six months to June 2011 pre-tax losses widened, but revenues increased by 6% to £9.3m from £8.7m in 2010.

In announcement on the London Stock Exchange, TEG said loss before tax was £798,000, compared to a £376,000 loss in 2010.

TEG, which operates and develops biogas plants for producing compost, said the pre-tax loss reflected the delays "to the higher margin projects" and "increased depreciation charges". Gross profit increased by 5% to £2.3m, from £2.2m last year.

TEG is providing waste recycling facilities under the Greater Manchester Waste Disposal Authority's PFI contract, with construction firm Costain appointed to build them.

During the half year period, the instruction to proceed on the fourth site in Bolton was received from Costain.

Nigel Moore, non-executive chairman of the TEG Group, said: "The Board is delighted that this project has been confirmed and is underway, though the majority of construction activity and revenues will not occur before 2012."

Moore added that a second facility at Bredbury was handed over to the customer in the first half of 2011. Construction of a third facility at Trafford Park proceeded to plan and commissioning is nearing completion, with hand over anticipated in Q3 of the current year.

Moore said: "Market demand remains strong and TEG maintains a strong pipeline of tender opportunities. Whilst tender periods for larger contracts are long, they offer secure, long term revenue growth and the Group anticipates the successful conclusion of further projects, underpinning long term shareholder value. TEG's technology is robust, is well received in the market and its facilities are operating well. The Group anticipates a further strengthening of the organic waste market in the short to medium term. The Board is confident that the Group has an exciting future with a strong outlook."

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