Energy firm powers towards £20m profits

Sep 27 2008 by Chris Knox, The Journal

RENEWABLE energy company Helius Energy says it is set to see its profits rocket to over £20m from a loss of £1.2m following the sale of an unfinished renewable electricity plant.

The Middlesbrough-based company has sold its biomass power plant project in Stallingborough, Grimsby, to German utility group RWE Innogy, in a deal worth almost £30m.

The sale, which had always been part of Helius’ plans since setting up in 2005, will help the firm invest in the development of three other plants by early 2009, with sites in the North East being considered. As part of the deal, £22.5m will be paid immediately on completion, while £1.4m retention is payable within the following 12 months. Helius, which floated on the stock exchange last year, has also ensured that it will maintain a significant interest in the plant and will receive 13% of its yearly profits after tax over the next 24 years.

It will also work alongside RWE over the next four years as a technical adviser to ensure that the plant is completed during that time.

Managing director of Helius, John Seed, said: “Our sales figures for the current year are going to be a lot different than previously, that’s for sure. I think it’s safe to say that we are on course to make a profit of over £20m, which will allow us to go ahead with the development of other sites.

“As part of this, developing a plant in the North East is certainly a major consideration as we would have easier access from our head office. It would certainly make travelling to the site a lot easier.”

Helius had revealed that it was to develop a plant at Seaton Port in Hartlepool in 2007, but has since shelved the plan, citing logistical problems and greater investment opportunities elsewhere. The firm, which employs 28 people, was set up by former D1 Oils executive Alex Worrall as chairman, and former North East Chamber of Commerce director Chris Corner as chief executive.

Despite the success of the deal with RWE, Mr Seed said that it was not part of its future business model and that he was looking to build up and maintain a portfolio of profitable sites.

He said: “Considering how many people we employ and how long we have been in operation, we’re massively punching above our weight.”