A renewable energy company has issued a profits warning for one of its divisions after contracts failed to materialise.
APC, which has its HQ on Medway City Estate in Strood, says its three main operating divisions, Component Distribution, Water Hygiene and Minimise Energy, will meet revenue expectations for the full year.
The distribution and water divisions will also meet profit expectations. But not Minimise Energy.
A trading statement from the APC board, issued today, says: "Following completion of a detailed project profit margin analysis it has become clear that margins achieved by Minimise Energy have been negatively impacted by excessive freight charges and other incremental costs incurred to meet delivery times on a number of recent contracts.
“In addition, the board now expects the Minimise Generation business and the Minimise American business to miss the Board’s expectations for the full year.”
Minimise Generation was formed in January this year to serve UK markets but, says the board, contracts have not yet materialised as anticipated.
“This is due largely to the uncertainty around government renewables policy and the knock-on effect this has had on the uptake of PV-T technology.
"A major contract, valued in excess of £1m, which has been active since January, 2015, and was due to be delivered this year, has now been delayed. Business in the Americas is developing more slowly than previously expected, in part due to the short term fall in energy prices.”
The statement adds that the group’s revenues will be in line with market expectations, underlying operating profit for 2015 will be below market expectations.
Group chairman Leonard Seelig is leading an operational review of the group’s business with the board to “further focus group attention and effort on the markets in which the group currently operates that will deliver greatest profitable growth in the near term.”
The statement says the board remains confident in the short, medium and longer term prospects for the group and expects to update the market with the findings of this operational review in the late autumn.
Mr Seelig said:”It is disappointing that after considerable effort and investment, the Generation and American businesses have not been able to deliver the contracts and growth expected. While this is in part due to wider market conditions, it has had an impact on the group, given our stage of development, and we have taken appropriate action to address this looking forwards.”