HydroDec Group plc AGM Statement (6177G)

TIDMHYR

RNS Number : 6177G

HydroDec Group plc

10 June 2013

Hydrodec Group plc

("Hydrodec", the "Group" or the "Company")

AGM Statement

Lord Moynihan, the chairman of Hydrodec Group plc, the cleantech industrial oil re-refining group (AIM: HYR), will make the following statement at the Company's Annual General Meeting later today:

"I am pleased to report in my first AGM address as Chairman that your Company has made significant progress in the 12 months since the last AGM. Trading in the current calendar year to date has been strong and the Company remains on track to achieve first half results ahead of the same period last year.

The past 12 months mark a step change in the Company's development. Ian Smale and his management team have delivered a platform for long term growth and profitability.

Our strategic partnership in the US with a strong and well established local partner is transformational and provides a clear route to growth as well as a blueprint for future development of the business. There is immediate agreement with the partners to expand capacity at the Canton facility from four to six processing trains. Work on engineering design, permitting and a contracting strategy has already begun. We would expect this expanded capacity to be commissioned in the summer of next year.

The management team has also taken the first steps to diversify beyond transformer oils. Our successful proof of concept in extending the Hydrodec technology into re-refining of industrial and motor oils opens up materially larger global markets for the Company. Testing continues and a pilot phase will be designed by the end of the year.

The management team continues to explore new licensing, partnership and acquisition opportunities across the business.

Turning to our near term prospects, the Company has continued to trade strongly in the first five months of 2013:

-- Sales volumes are up on the same period last year, with Australia performing particularly well, and we expect to achieve a new record for the first half;

-- Overall revenues have also increased relative to the same period last year despite lower average sales prices. While the industry benchmark ICIS Pale 60 index is down 14 per cent our sales prices have further narrowed the discount to this index;

-- Gross margins are broadly in line with the same period last year but significantly higher than those achieved in 2012 as a whole. The improvement reflects tight controls on feedstock and other direct costs, offsetting the fall in sales prices;

-- Utilisation of productive capacity remained steady at approximately 70 per cent and we would expect this to increase in the second half of the year.

The Board believes that there remains further room for improvement in trading in the near term and we continue to target positive operating cash-flow at Group level before the end of the year.

With our new broker, and the support of the Board, the management team intend to re-launch the Hydrodec investment proposition and thus move the Company forward based on a clear route to profitability and a growing opportunity in our core transformer oil business with very significant upside in the broader lubricant market."

For further information please contact:

 
Hydrodec Group plc                             020 7907 9220 
Ian Smale, Chief Executive Officer 
Chris Ellis, Chief Financial Officer 
Mike Preen, Head of Corporate and Legal 
 Affairs 
 
Peel Hunt LLP (Nominated adviser and broker)   020 7418 8900 
Richard Kauffer, Daniel Harris 
 
Luther Pendragon (PR adviser to Hydrodec)      020 7618 9100 
Neil Thapar, Alexis Gore, Sarah Davis

Notes to Editors:

Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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