Turbo Power extends loan and narrows annual loss

16th Mar 2015 12:03

Electrical machines and electronic systems manufacturer Turbo Power Systems has reached an agreement with TAO Sustainable Power Solutions to extend its loan deal by one year.The new agreement with TAO, which is Turbo Power's major shareholder with an 89% stake in the business, means the repayment date has been extended to 1 April 2017, while the other terms remain unchanged.On 20 February the London-listed group said it was undertaking a strategic review of its operations and that it remained "critically dependent" on the financial support of Vale Soluções, TAO's parent company, which is the energy services arm of Brazilian metals and mining giant Vale SA.Turbo Power, which is open to a potential acquisition, said that its annual loss narrowed slightly, even though weaker production volumes resulting from delays to existing contracts weighed on revenue.At £2.3m, the company's annual loss was 20.7% smaller than in the previous year, despite revenue falling 20% to £15.2m, while order intake for the year edged 3.44% higher to £18m.In the fourth quarter, the group posted a £80,000 profit compared with a £50,000 loss in the previous three months, thanks to an improvement in its gross margin in the quarter to 41%, compared to a 30% margin in the third quarter."We continued to implement our strategy of bidding for profitable production and development contracts, whilst maintaining a disciplined and considered approach to costs which has resulted in a reduction in our total expenses by 14% quarter-upon-quarter and significantly improved the level of cash flows from operations," said group chief executive Carlos Neves.Turbo Power shares were down 13.14% to 0.339p at 12:26 on Monday.