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Cleantech magazine, a Cleantech Investor publication

London senior market attracts cleantech companies - June/July 2007

June saw two clean technology companies list on the London Stock Exchange Main Market. Solar company PV Crystalox Solar and residential energy efficiency consultancy, Eaga, are both profitable and mature companies. They look set to be joined by IdaTech, a fuel cell company, in July.

First published in Cleantech magazine. June/July 2007 © Cleantech Investor Ltd. 2007

PV Crystalox Solar (PVCS)

Multicrystaline silicon ingot and wafer manufacturer, PV Crystalox Solar, joined London’s Main Market in June. At a listing price of 130p, the shares were capitalised at £542 million, implying an historic PER valuation of almost 50x, based on 2006 EPS of EUR4.21. PV Crystalox has been profitable since 2002.

The company was formed in 2002 through a merger between Crystalox of the UK and German based PV Solar. It ranks as an established player in the global solar industry. Starting out as an engineering company, supplying equipment to PV manufacturers, PV Crystalox Solar later moved downstream, to supply material to solar companies. The company was one of the first to develop industrial scale multicrystaline technology and can claim to have set the industry standard for ingot production. Today, it ranks as the largest supplier to Sharp: PV Crystalox Solar delivered 20% of Sharp’s requirements in 2006.

Rapid growth in the solar industry has underpinned sales, which have more than tripled over the past five years. 2006 sales grew by 32%, to EUR242 million while pre tax profit surged ahead by 56%. Net profit was EUR 31.6 million and EPS was EUR4.21. In 2006, production of silicon wafers and ingots corresponded to solar energy capacity of 215 MWp.

Proceeds from the IPO will be ploughed into a EUR 80 million investment in a polysilicon production facility in Bitterfeld, Germany. This facility, which should become operational in 2009, will provide PV Crystalox Solar with greater flexibility in sourcing silicon feedstock.

The listing positions PV Crystalox Solar as a unique play on the solar sector on London’s Main Market. Although there are alternative investment opportunities on offer either on AIM, or elsewhere in the world (notably on US and German stock markets), the company is likely to attract investment from funds which are restricted to UK main market investments.

Eaga (EAGA)

eaga Plc, a leading provider of residential energy efficiency improvements, joined London’s main market in June. A total of 121.5 million eaga shares were placed, of which 105 million were sold by existing shareholders and 16.6 million were new shares. The placing price of 181p valued the company at £453 million. The shares hit a high of 226p on the first day of trading. The placing raised £30 million of gross funds, to be used for future growth. Brewin Dolphin was the Sponsor and Broker.

eaga was owned by its employees prior to listing and the company’s social enterprise culture will be perpetuated after the listing. Employees retain 51% of the shares through the eaga Partnership Trust (ePT).

eaga’s work with public sector bodies and utility companies in the UK includes projects aimed at reducing carbon emissions and energy consumption. A key focus is the housing and social needs of low income and vulnerable households. eaga is an important deliverer of the UK Government’s Fuel Poverty programmes, working on ‘Warm Front’ in England, ‘HEES Wales’ and ‘Warm Homes’ in Northern Ireland. The services offered by the company include energy surveys, the administration of energy efficiency funding and the installation of central heating systems, cavity wall and loft insulation.

Earnings visibility is good, underpinned by pre contracted revenue, estimated at some £1.5 billion over the term of the contracts. eaga had revenues of £354.4 million in the year ending May 2006. EBITA for the period was £19.7 million. In the six months to November 2006, the company brought in revenues of £214.6 million and EBITDA of £13.4 million.

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