Fulcrum ready for surge in green car demand
FULCRUM UTILITY Services, which is gearing up for a big increase in demand for electric cars, has reported a 49 per cent jump in half year revenues as it talks to 25 blue chip companies about switching to cleaner, green vehicles.
The Sheffield-based firm, which provides gas and electricity to major sites, is busy installing charge points up and down the country as demand increases for electric vehicles.
Fulcrum’s CEO Martin Harrison said: “We are talking to lots of different businesses up and down the country about installing electric charge points.
“Customers want more electric vehicles on the road. It will be like wifi in hotels – you’ve just got to have it. You’ve got to park up anyway so it’s a good time to recharge your vehicle. Over time, it will become expected.”
Electric vehicles now make up 7 per cent of the UK’s cars, up from 5 per cent in June, and the electric market share is growing by 30 per cent.
Over the first half, Fulcrum secured a further £750,000 in electric charge deals.
“We are seeing a blend of opportunities from supermarket chains to pub chains,” said Mr Harrison.
“Tesco announced last Friday that it will install 2,500 charge stations across 600 sites all over the country. We will be tendering for that business. We’ll be right there in the mix.”
The group has also signed up a major UK pub chain, which cannot be named for confidentiality reasons.
Forecasts show that by 2040, the UK’s vehicles will be 100 per cent electric, which offers a lucrative new market for Fulcrum.
Mr Harrison was speaking as Fulcrum announced results for the six months to September 30. Revenue rose 49 per cent to £29.2m and underlying pre-tax profit rose 13.5 per cent to £4.2m.
Analyst Greg Poulton at N+1 Singer said: “Fulcrum’s interim results report strong progress.
“Both the utility connections and asset ownership businesses achieved good growth in the period. The utility connections order book stood at £45.8m at September 2018 (up from £44.1m in August) and the committed capital spend on the asset ownership side stood at £15.4m (up form £15.0m in August). We expect growth to continue through the second half and beyond.”
Analyst Akhil Patel at Shore Capital said:” Overall, we believe Fulcrum operates in strong underlying growth markets with structural opportunities in gas and electricity infrastructure and we continue to see fast growth in asset ownership.”
Fulcrum is recommending an interim dividend of 0.75p per share for 2019, an increase of 7.1 per cent.
The firm said the dividend increase reflects the board’s ongoing confidence in the group’s ability to generate cash and its future prospects.
Over the past year, Fulcrum won a £1.5m contract to install over 3km of gas infrastructure at Doncaster Sheffield Airport and a £500,000 contract to install 1km of specialist gas infrastructure at the University of Sheffield.
Fulcrum said its half year results reflect a period of continued growth and consolidation for the company.
The group said it had achieved another robust performance through organic growth within its core infrastructure and asset businesses, complemented by solid acquisitive growth delivered by Dunamis and CDS, which were acquired earlier this year.
It said that a record adjusted EBITDA of £5.4m, profit before tax of £4.0m and continued cash generation all support the company’s ability to maintain its progressive dividend policy.
“These results reflect the continued successful delivery of the group’s strategy and our commitment to meeting customer demand across each of our routes to market throughout mainland UK,” the group added.