Flowgroup boiler installations delayed by testing process

Full-year losses increased at alternative energy group Flowgroup despite strong revenue growth as it begins to roll out production and installation of its innovative combined heat-and-power (microCHP) boiler.

AIM-listed Flowgroup ramped up revenues by 142% to £33.4m, the majority from its energy reselling business, but saw losses grow by around a quarter to £10m as it started manufacturing the first of its Flow boilers.

The boiler, which was launched during January, is due for its first commercial installations in June.

Following CE approval, 50 pre-production models were produced on the line and were subject to verification and validation testing that, the company admitted, was "an extremely rigorous process which is taking longer than expected but must be satisfactorily completed before Flow boilers are released for customer installations".

The testing is now approaching completion and the first customer installations will take place during June 2015.

Chairman Clare Spottiswoode said: "Following the launch of our electricity-generating Flow boiler we believe we are now in a position to take advantage of the commercial possibilities that this game-changing product presents. We believe we are well set for a year of good progress in 2015."

To accelerate future growth Flowgroup raised £21.3m net with the issue of new equity since the year end, including £7.4m from Jabil, the external manufacturer of its boilers.

House broker Investec said the company is at "the tipping point" of commercialisation of the boiler technology, which targets the mass market in both the UK and internationally.

"While these results are important, investor focus will be on the execution of the production and installation ramp-up, with first installations now expected in June."