Fulcrum upbeat after series of high-value contract wins

Multi-utility infrastructure and services provider Fulcrum Utility Services updated the market on its trading on Wednesday, claiming it performed “strongly” over the six month period to 30 September, as investors gathered for its annual general meeting.

The AIM-traded firm said the “successful execution” of its strategy gave the board “confidence” that results would be in line with market forecasts for the financial year to 31 March 2018.

Its board said it would announce its half-year results on 5 December.

On the operational front, as at 31 August the company's order book increased by 11% to £33.7m, up from £30.3m as at 31 March.

To support the increase in multi-utility projects being tendered and won, Fulcrum said it was continuing to strengthen its in-house capabilities through investment in additional multi-skilled direct delivery teams and technical designers.

Notable contract wins in the first half included a £2.4m project to deliver new gas infrastructure to three short-term operating reserve sites across the UK, which will convert gas to electricity at times of peak demand.

There was also a £0.4m project to convert a Scottish distillery from its existing fuel source to natural gas, with the installation of a 1.8km gas pipeline, and a £0.2m multi-utility contract to deliver gas, water and electricity infrastructure to a new 61-plot housing development in the West Midlands.

Fulcrum also confirmed a £0.2m dual-fuel contract to install gas and electricity connections to 101 new homes as part of a new housing development in the South East.

In addition to those large contract wins, the company said it was continuing to secure a core portfolio of projects of up to £50k in revenue.

“In line with its strategy, the company continues to grow its gas asset estate and the associated annuity revenue streams by adopting the assets it constructs, alongside assets from other utility infrastructure providers (UIPs),” the firm’s board said in its statement.

“In particular, there has been encouraging growth in the gas assets secured from UIPs, with the committed external capital spend increasing from £2.8m as at 31 March to £6.4m as at 31 August.

“The company remains on track to obtain an Independent Distribution Network Operator (IDNO) licence by the end of 2017, which will enable the adoption and ownership of electricity assets from early 2018.”

Fulcrum said that IDNO licence would be an “important strategic step” for the company, allowing it to broaden and increase its long-term income stream by adopting the electricity assets constructed both in-house and by other contractors.

As it had previously indicated, the board was set to propose a resolution at Wednesday’s AGM for the payment of a final dividend of 1.3p per ordinary share, taking the total dividend paid for the year to 1.9p for the year, up from 0.9p at the same time last year.

“The successful execution of the company's strategy continues to place Fulcrum in a strong financial and operational position,” said chief executive Martin Harrison.

“Our commitment to customer service excellence, the enhancement of our in-house multi-utility capabilities and sustained focus on construction and asset growth, provide a robust foundation to build upon the performance achieved in the first half of the year.

“We therefore look with confidence to the full year 2018 and beyond.”