CFU (ASX) Ann: Shareholder update 12/07/12

Originally posted by Archaeo ↑

@Archaeo the long game still looks good but the cliffs, rocky roads, axe murderers etc in our way scares me!

How many order have they taken vs how many installed as of today? What is the glut / supply hiccup that means it takes so long to get an ordered unit out the door and installed?

I see them having to move away from the business model that partly attracted me to CFU in the first place. Bluegens are appearing to be the main mover and the integrated mCHPs are really hitting a wall. Even EON are now looking at Bluegens packaged with Ideal boilers as a solution rather then the fully integrated mCHP unit with space heating. That was always the simpler solution, in that their facilities could simply make Gennex units and farm them to partners for all equipment assembly, field installation and field support.

Each quarter CFU are moving closer to being an appliance manufacturer which is a far more involved business model, more vendors, contract manufactures, QA, overheads, cash flow etc

In the near future they will be able to make 3,500 stacks per year...its encouraging that capacity is increasing confirms my concern that they cant meet reasonable roll out numbers of fuel stacks let alone assembled Bluegens and fuel stacks for fully integrated mCHPs.

If anything at all is on the cards with EON and the exclusive distribution rights it is going to be a very small rollout for the first 2 of 6 years based on what CFU's foreseeable capacity will be. So expect the 100,000 units to be more like 15,000-25,000 units over 6 years (????)

And the numbers you are talking are pie in the sky stuff. If CFU can get up to their existing facility production of 10,000units then that would be a major goal. There was talk that the facility could house production of something like 150,000units per year. We will get an 18-24 months heads up that things are going that well as it's going to need capital investment in the facility and equipment, plus commissioning. Then you have another 2 years for anything bigger then that if they have enough of a market that they need to expand to the adjoining property which they have an option on.

So what happens when we get to under 5c and have strong technology and no money or production...would make for an easy take over target which is something I would hate to see.