16 November 2016 – update
A detailed and lengthy trading update has been released. One key element is that the company had expected clarity from Government in early Q4 2016 on the scope of ongoing Feed-in-Tarriff support for microCHP. However, this has is still awaited and it is now thought that any revised scheme will now not come into place until April 2017. The company is therefore weighing up its options but ultimately it may decide to sell or exit its microCHP business. Clearly this would be a disappointment as potential for the new boiler was the initial reason for our interest. However, the rest of the business has been performing well and earnings and cash for 2016 are still due to be in line with expectations. We retain our SPECULATIVE BUY recommendation.