Solar Integrated Technologies

Solar Integrated, a Los Angeles-based provider of building-integrated photovoltaic roofing systems, has a bright future, having turned the corner under new chief executive Randy MacEwen last year.

The alternative energy enthusiast said, ‘We had an extraordinary turnaround in 2007 and exited the year firing on all cylinders.’ On triple-digit sales growth to $81.1m (£41m) for the calendar year, ahead of City forecasts, gross margins expanded to 17.8% (7.3%), reflecting tight cost controls and higher selling prices, while Solar Integrated achieved its ambition of getting back into the black at headline EBITDA level. Furthermore, much of the $24.7m net loss related to non-cash accounting and Solar strengthened its balance sheet, finishing the year with $11.3m of year-end cash following December’s $28m placing, priced at 85p.

Growth prospects look sunny, with Solar Integrated seeing strong demand for its lightweight, flexible and durable roofing systems, which typically form the top layer of a customer’s roof and deliver electricity generation through sunlight. Its blue-chip customers include IKEA, Carrefour, Tesco, Coca-Cola and the US Air Force and project numbers are rising, with the volume of power installed in 2007 more than doubling to 9.1 MW, spread over 76 projects, up from 40 in 2006.

Enjoying a rising proportion of business coming from Europe, Solar Integrated looks neatly placed to capitalise on growing demand for industrial, commercial and municipal solar roofing. This year, sales could double again to $160m and MacEwen’s ‘line of sight is now on profitability in 2008’. Offering investors an exciting growth story at a lowly entry level, the shares have appeal, albeit speculative, until sustainable profits are reached.

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