Gas and electricity provider Fulcrum has entered into a conditional agreement for the £33m sale of its domestic customer gas connection assets.
The Sheffield-based firm said the move will support its strategy to expand its multi-utility infrastructure and services. The firm, which is gearing up for a big increase in demand for electric cars, is in talks with 25 blue chip companies about switching to cleaner, green vehicles.
Fulcrum said the proposed sale of the gas connection assets to ES Pipelines will significantly strengthen its balance sheet, allowing it to focus on key markets and deliver operational improvements.
The company will use the investment to strengthen its position in the housing and Industrial and Commercial (I&C) multi-utility infrastructure and metering markets to bolster its order book.
Philip Holder, chairman of Fulcrum, said: “The sale of our domestic gas utility assets to ES Pipelines presents the opportunity to focus on our activities in key growth markets.
“This is part of our core growth strategy, which includes the design and build of utility connections, as well continuing to adopt assets in the traditional I&C market where appropriate.
“There continue to be significant opportunities in strategically important markets, and these should increase with the improved political and economic certainty following the General Election.”
In the six months to September 30, Fulcrum has seen its order book for future contracts increase by 4 per cent to £63m.
At the beginning of the second half of its financial year, Fulcrum has secured housing related projects such as a £1.8m contract to install new electrical infrastructure to service over 1,300 properties as part of a significant regeneration scheme in South East England for a major housing developer.
The company has also been awarded projects for mixed-use schemes containing new homes, such as a £2.4m contract to provide over six kilometres of new gas, water and electrical infrastructure for a development in the East Midlands.
Outside of the housing market, Fulcrum is developing its presence in the I&C sector, with a number of recent projects such as a £3.2m contract to install new high voltage electrical infrastructure for two 50MW gas peaking plants, connecting them to Northern Powergrid’s 132kV network in North East England and a £1.6m contract to install new gas infrastructure for the latest phase of a significant redevelopment in London.
Following the lifting of the Capacity Market Suspension in October 2019, the company has also secured several orders, with a combined value of approximately £2.0m, to provide utility infrastructure to Short Term Operating Reserve (STOR) sites across the UK.
Fulcrum said housing activity will be enhanced by the new partnership with ES Pipelines, while Fulcrum will continue to add I&C assets to its portfolio. This will be achieved by retaining its Independent Gas Transporter (IGT) and Independent Distribution Network Operator (IDNO) licences.