Aggregated Micro Power to acquire two new fuel businesses

The company plans to fund the two acquisitions through a £5m fundraising and vendor subscription. Of that amount, £1.5m is to be raised through the placing of ordinary shares at 66.5p each and £3.5 through the subscription of convertible loan notes (CLN).

Midlands wood fuel, a premium grade wood fuels supplier, delivered a turnover of £3.22m and profit before interest and tax of £0.17m for the year ended 31 March 2016. The consideration due is £1.4m plus repayment of debt of £0.91m, £2.31m of which is to be subscribed by the sellers in the CLN Issue.

The group has entered into an asset purchase agreement to acquire Mi-Generation wood field customer base. The customer base delivered an unaudited turnover for the same period was £1.9m and profit before interest and tax of £0.3m based on an estimated margin of 15.5%. The consideration due is £0.75 m.

The two acquisitions come following the acquisition of another wood fuel business Forest Fuels earlier this year.

Chief Executive Richard Burrell said: "On completion of the Acquisitions we will have a national presence in wood fuels offering both wood chip and wood pellet to end customers. The fundraising has been closed post the Brexit vote and we are confident of achieving further growth in our fuels and projects businesses throughout the UK."

The UK heating market for wood chip boilers is estimated by the company to be 700,000 tonnes per annum after benefiting from the Renewable Heat Incentive and the market for wood pellet boilers is estimated to be over 450,000 tonnes per annum. AMP expects both of these markets to grow by more than 5% per annum and at present it estimates its enlarged pro-forma market share to be over 8% both markets.

Share price of AMP went up 0.75% to 67p at 1522 BST on Thursday.