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27 Jan 2021 | 16:41

Verditek sees slowdown at end of 2020

(Sharecast News) - Solar panel technology company Verditek updated the market on its trading in 2020 on Wednesday, reporting that production was ramped up at its manufacturing plant near Milan in the fourth quarter, to fulfil existing and anticipated orders. The AIM-traded firm said a number operational challenges were overcome, with the plant able to demonstrate its capacity by running two shifts on one production line for the early part of December.

Bespoke solutions sought by customers required front-end design and procurement work which caused some delays, the board said.

Work on the 'PowerMat' solution - a containerised, quick deployment and minimal infrastructure solar product - had resulted in two design offerings going into production, one of which would be used to fulfil the InterGroup mining order announced on 24 September.

It was now expected that the order would be shipped to Australia in the first quarter of 2021.

"Despite the company's plant being located in an area where the levels of the Covid-19 pandemic have been high, the interruption at factory level has been low so far," the board said in its statement.

"However, the pandemic and in particular the second surge in infections in the autumn have had a significant commercial impact with opportunities and trials continuing to be delayed.

"Not only has this impeded our sales team's efforts post widespread lockdowns from November onwards, but it has led to greater caution among our customers thereby delaying the expected conversion of our sales pipeline."

As it announced on 17 December, orders including the $2.2m, 1.5MW SAF Pakistan order had been delayed.

The board said that had meant that the company's previously-stated ambition of being cash flow positive on a monthly basis by the end of 2020 was not met.

Revenues recognised in the year would be "minimal", the board said, adding that cash balances at year-end on 31 December were around £1.7m, with the company currently debt-free.

"The company has just under 1MW of finished panels in stock ready to ship and, as a result of the delays, production at the factory has been reduced to November 2020 levels.

"The board remains optimistic that, with the advent of mass vaccination globally, companies will soon return to acting on their green energy requirements and that the company's prospects can convert into firm orders."

At 1622 GMT, shares in Verditek were down 14.96% at 4.81p.
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