Composting technology group TEG, which has long been awaiting the final financial close of a PFI contract in Greater Manchester, has made some bullish noises at its annual meeting.

The final close of this contract has been delayed and delayed, but cash from two advance works orders to fund design and procurement, according to house broker Canaccord Adams, ‘should be in TEG’s account within a couple of weeks’. Now TEG is so confident of the deal closing in the ‘near future’ that it has set a date of 16 June for it to begin construction of the first site, at Rochdale.

An upbeat statement from chairman Nigel Moore also outlined the fact that demand across the company’s industry has been buoyed by the government’s confirmed increase in landfill tax by £8 per tonne per year for the next three years, resulting in ‘a steady increase in waste sales’. Furthermore, he declared that TEG has enjoyed ‘significant growth’ to date in 2008, with all three of its own facilities ‘trading significantly ahead of 2007’.

Moore also informed that construction of the first manufacturing plant from the ‘Vardia’ joint venture with Glendale – aiming to produce high-specification horticultural compost using TEG technology – is expected to be operational by October. Another announcement was that the board is exploring the possibility of using its technology in the energy generation process.

TEG, first tipped by Growth Company Investor at 49.5p in 2004, has been the subject of much hype during its time on AIM. Down from their all-time high of 145p in April last year, the shares are now trading for not much over ten times earnings, with legislative drivers providing growth. Hold.

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TEG Group	AIM	£16.66m	34.50p	0.00p
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