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Fulcrum has entered into a conditional agreement for the £33m sale of its domestic customer gas connection assets to support the company’s strategy to grow its multi-utility infrastructure and services.
The proposed sale of the assets to ES Pipelines Ltd, which includes the order book and associated meters, significantly strengthens Fulcrum’s balance sheet, facilitating the acceleration of its activity in key markets and delivering operational improvements.
The company will use the investment to continue to strengthen its position in the housing and Industrial and Commercial (I&C) multi-utility infrastructure and metering markets to further bolster its increasing order book, as reported in its current interim half year results.
In the six-month period ending 30 September 2019, for the first half of it financial year, Fulcrum has seen its order book for future contracts increase by 3.7 percent to £62.6m.
At the end of this period and the beginning of the second half of its financial year, Fulcrum has secured housing related projects such as a £1.8m contract to install new electrical infrastructure to service over 1,300 properties as part of a significant regeneration scheme in South East England for a major housing developer.
The company has also been awarded projects for mixed-use schemes containing new homes, such as a £2.4m contract to provide over six kilometres of new gas, water and electrical infrastructure for a development in the East Midlands.
Outside of the housing market, Fulcrum continues to develop its presence in the I&C sector, with a number of recent projects such as a £3.2m contract to install new high voltage electrical infrastructure for two 50MW gas peaking plants, connecting them to Northern Powergrid’s 132kV network in North East England and a £1.6m contract to install new gas infrastructure for the latest phase of a significant redevelopment in London.
Following the lifting of the Capacity Market Suspension in October 2019, the company has also secured several orders, with a combined value of approximately £2.0m, to provide utility infrastructure to Short Term Operating Reserve (STOR) sites across the UK.
Housing activity will be further enhanced by the new partnership with ES Pipelines Ltd, while Fulcrum will continue to add I&C assets to its portfolio. This will be achieved by retaining its Independent Gas Transporter (IGT) and Independent Distribution Network Operator (IDNO) licences.
Philip Holder, Chairman of Fulcrum, said: “The sale of our domestic gas utility assets to ES Pipelines presents the opportunity to focus on our activities in key growth markets. This is part of our core growth strategy, which includes the design and build of utility connections, as well continuing to adopt assets in the traditional I&C market where appropriate.
“There continue to be significant opportunities in strategically important markets, and these should increase with the improved political and economic certainty following the General Election.”