Fulcrum transfers third tranche of gas connections to ES Pipelines

Fulcrum Utility Services updated the market on the sale of its domestic customer gas connection assets and associated meters to ES Pipelines on Tuesday, confirming the transfer of the third tranche of connection assets to ESP on 1 June, for a total consideration of £3.8m.

The AIM-traded firm said cash of £3.7m would be received on 1 June, with the retention balance of £0.1m expected to be received on 31 May 2022.

It said the cash received strengthened its balance sheet, and supported its strategy and growth ambitions.

In addition, the group said it had received a further £0.1m for the first and second tranche of assets transferred under the ESP asset sale.

That additional payment was a result of the group achieving the first enhanced payment milestone under the asset sale agreement.

Fulcrum said the total gross consideration receivable was expected to be around £49m.

A total of £25.8m had been received to-date, leaving about £23.2m to be received, with the majority expected to be collected over the next two-to-three years.

The arrangement with ESP also included further milestone targets which, if achieved, would trigger additional enhanced payments of up to £3.9m over the remaining term of the contract.

“We are pleased to report another successfully completed tranche in the asset sale to ESP,” said chief executive officer Terry Dugdale.

“The proceeds from this third tranche, and the future proceeds from the sale, provide the group with additional financial strength that supports the continued strengthening of the business and the execution of our strategy and growth plans.”

At 1417 BST, shares in Fulcrum Utility Services were down 0.14% at 35.2p.