Australian Power & Gas (ASX:APK) Sustained Growth In Revenues And New Customer Accounts Underpins Strong Q1 Results

Sydney, Oct 27, 2010 AEST (ABN Newswire) - First quarter cashflow statements lodged today by independent energy retailer, Australian Power & Gas (ASX:APK), for the three months ended 30 September 2010 highlight revenues of A$50.5 million, reflecting a 60% growth in customer receipts against the prior corresponding quarter.

The company's successful expansion into the QLD & NSW markets has seen over 23,000 customer accounts added to the billing systems over the quarter with the resulting underlying cash flow for the period finishing at A$0.70 million. Customer account acquisition payments, credit support and net finance costs associated with the growth into new markets resulted in a net operating cash outflow of $3.91 million.

Australian Power & Gas CEO, James Myatt, said: "At September 30, we had over 165,000 accounts on our billing systems that number has grown to almost 180,000 as of today."

"Clearly, there is strong growth momentum across our business. As a result, we are on schedule to deliver against our FY 2011 guidance of 250,000 customer accounts and revenues of between A$200 and A$220 million."

The company recently announced it had successfully placed A$15 million in equity to be issued in two tranches.

Approximately 14.0 million shares will be issued in the first tranche, with the balance of shares to be issued in a second tranche, on receipt of shareholder approval being requested at the company's AGM on 29th November 2010. Following grant of shareholder approval for the equity placement, the company intends to exercise its option to collapse the Convertible Note Facility, approved by shareholders on 29 September 2010.

As part of that process A$6.3 million of these Convertible Notes will convert to equity at 45c per share.

"Our recently announced capital management initiatives will strengthen our financial position by reducing gearing levels and our overall borrowings costs, leaving us well placed as we continue to expand into new markets," said Mr Myatt.

"Led by a senior and experienced management team, Australian Power & Gas is realising its potential as a high-growth company positioned to deliver long-term value for its shareholders," Mr Myatt concluded.

Cash on hand at the end of the quarter was A$8.5 million compared to A$5.5 million at 30 June. The A$8.5 million does not include an additional A$3.8 million in cash deposits held as security for bank guarantees provided to suppliers.

Contact

Andrew Butler Australian Power & Gas Tel: +61-2-8908-2711 Mob: +61-419-818-801 http://www.australianpowerandgas.com.au