Steven Ralston, CFA
XZERES signs largest distributed wind energy dealer in UK
Today, XZERES (XPWR) announced that a Letter of Intent was signed for an exclusive dealer arrangement with VG Energy, Ltd., the largest distributed wind energy dealer in the U.K. The agreement requires a minimum of $5.0 million in turbines to be purchased from XZERES over the next 15 months in order to maintain the exclusivity in certain areas of the United Kingdom.
With a dominant market share (roughly 36%) in the 15 kW-to-100 kW segment, VG Energy will utilize XZERES wind turbine products to address the 6.1 kW-to-15 kW market in the U.K. The agreement further improves the confidence that XZERES can maintain very high sequential quarter top-line growth above 35%.
Importantly, the President of VG Energy, Jim Paterson, stated that XZERES products are “the most reliable and dependable wind turbines that we have found after extensive market research around the World.” This comment is a testament to the quality of the XZERES product line. In addition, XZERES management is clearly aware and focused on delivering a high degree of customer service and support as exemplified in the last order announcement concerning a $3.2 million turbine order for micro-grid island electrification applications in Vietnam.
Our confidence improves regarding our revenue estimates for the company, and we reiterate our Outperform rating on XZERES.
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