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UPDATE - Sabien Technology expects 2015 results in line with its expectations

Last updated: 11:00 10 Feb 2015 GMT, First published: 12:00 10 Feb 2015 GMT

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Boiler optimisation specialist Sabien Technology (LON:SNT) expects full year results to be in line with its expectations as it revealed its sales pipeline continues to grow.

Unveiling its latest half year numbers, the group said there was a "great deal" more work to be done and sales had reduced in the first half as expected but that recent financial commitment to strengthen its new business development was expected to bear fruit in the second half.

This, along with sales pipeline opportunities, means it is assured that a return to profitability can be achieved, it said.

Since the beginning of 2015, the firm had received £146,000 of orders, giving total orders received for delivery this financial year of £2mln compared to £1.1mln in 2013/14, it said.

In the six months to end December, the group, which makes M2G energy saving devices for boilers, posted a loss before tax of £521,000 compared to a loss of £245,000 in the comparable period last year.

Revenue from sales came in at £542,000 compared to £924,000 with high gross margins maintained.

"The group continues to identify and position itself for a number of larger opportunities that will generate medium term revenue growth," it told investors.

"Some good progress has been made since our last update in October 2014 and we look forward to confirming the results of these discussions during the second half of the year."

The balance sheet remains robust, it said, with cash at end January remaining at £1.1mln and there have been no other significant changes to the financial position of the group from that reported in October 2014. 

"We have a strong order book and are continuing to grow our sales pipeline while also creating further opportunities for revenue growth in overseas markets."

It added: "Increased scale and the resulting smoothing of our performance is still at an early stage. There is a great deal more work to do and no doubt further challenges to overcome."

Chief executive Alan O'Brien told Proactive: "The business is progressing albeit it's been lumpy this half."

Broker Westhouse rates the shares a 'buy' targeting 50p - well over double the current price of 17.5p.

It is confident the firm can hit the broker's full year sales forecast of £3mln as the orders received for delivery in full year 2015 now amount to £2mln.

"Indeed, the hiring of two further business development managers (bringing the total to five), a sales pipeline of £6.9m, the continuing development of the overseas Tech Centre network and the launch of M1G (for water heaters) in September 2014 all augur well for future revenue growth in our view," said analyst Robert Sanders.

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