TEG celebrates ‘defining’ year as losses halve

TEG Group, the Lancashire recycling business that converts organic waste into fertiliser, has increased its turnover six-fold to £12.7m and halved its losses in what it calls a “defining year” for the company.
 
At the group’s annual general meeting, to be held today at The Malmaison hotel in Manchester, non-executive chairman Nigel Moore will say that 2008 was a “defining” year for the company as it strengthened its position in the composting market and trading in all aspects of the group’s operations improved significantly.

Turnover was £12.7m for the year to the end of December 2008, compared with £2.2m in 2007.

Losses were reduced to £1.5m against a £3m loss in the previous year. The group recorded a gross profit of close to £2m against a loss of £236,000 in 2007. The group’s cash position stood at £6.8m as at 31 December 2008.

Mr Moore will add that trading in 2009 is meeting expectations and the board anticipates revenue levels in the second half to grow as activity levels on capital sales projects increase.

In April, TEG secured a £38m contract with Costain to build four composting plants to handle 175,000 tonnes of food and green waste a year as part of the Greater Manchester PFI contract. The four sites will be in Rochdale, Bredbury, Bolton and Trafford Park.

The first facility under construction is in Rochdale, where building works have been underway since June 2008.   
 
Expansion of the Company’s Todmorden facility to accommodate increased sales volumes has completed, with a further 12,000 tonnes of capacity bringing the total capacity to approximately 37,000 tonnes a year. The site is now the highest turnover facility in the company’s portfolio.

In March TEG agreed a collaborative partnership with German technology company UTS to develop anaerobic digestion plants in the UK.

Under the terms of the partnership, TEG will lead bids and tenders that use the UTS technology to local authorities, waste management and private clients, while UTS will continue to market directly into other sectors such as agriculture and the general private sector.
 
Mr Moore will say that the company is actively pursuing projects that involve both AD and composting.

“In keeping with our observations of market developments, the board believes there will be considerable growth in AD in the UK over the next decade and TEG’s expertise in organic waste treatment, operational experience and agricultural end market experience makes it ideally placed to develop AD facilities in tandem with its Silo Cage composting technology,” he said in a statement ahead of the AGM.  

Mr Moore will add that the company plans to grow through a combination of plant sales and build own and operate facilities, whereby TEG offers a processing service, gaining revenues from gate fees for waste and sales of compost products.

He said: “While the interest in TEG is growing and the value of such plant sales is increasing significantly, we still believe it is important to the security of the business to continue to develop our own facilities.”