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Wave power technology developer Ocean Power Technologies claims to be ahead of the pack among companies seeking to produce a truly commercial sea-powered generation facility. Unfortunately for them, that's not saying much - their system is yet to launch, and losses are mounting.
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Even so the company is ploughing ahead with various development contracts around the world, boasting several top-grade partners including Iberdrola in Spain, Griffin Energy in Australia, Total in France and the US Navy in North America.
But despite blue-chip partners and plenty of development contracts, Ocean Power still hasn't perfected the design of its scaled up 150 kilowatt Powerbuoy device, and ocean testing is now not expected until next year. Management hopes to use the 150 kilowatt device as the basis for a 500 kilowatt design, the level of capacity at which wave power stations start to look a more feasible possibility.
But that development is likely to take some time, so it's good news that Ocean Power has managed to hoard a healthy cash pile - in fact, shares are trading below the value of the cash it has in the bank.
OCEAN POWER TECHNOLOGIES (OPT) |
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|---|---|---|---|---|
| ORD PRICE: | 410p | MARKET VALUE: | £42m | |
| TOUCH: | 390-430p | 12-MONTH HIGH: | 845p | LOW: 405p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 980¢* | NET CASH: | $88.7m | |
| Year to 30 Apr | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2004 | 4.7 | -2.97 | -71 | nil |
| 2005 | 5.4 | -0.46 | -8 | nil |
| 2006 | 1.8 | -7.22 | -137 | nil |
| 2007 | 2.5 | -9.64 | -183 | nil |
| 2008 | 4.8 | -14.66 | -144 | nil |
| % change | +89 | - | - | - |
Ex-div: na Payment: na *NAV 492p at £1 = $1.99 |
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Ocean Power's technology is still a long way from commercialisation. With cash to burn it will be around for some time, but long development time-scales mean the shares are fairly priced.
Last IC view: Fairly priced, 62p, 10 November 2006.
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-IC-1.5.0d-prod - 07/10/2008 17:37:17 - FurseJ
