Blackouts provide a boost for struggling Chloride

Chloride Group, which provides back-up power supplies in the event of a blackout, yesterday reported a boost in sales after outages increased demand for its products.

Keith Hodgkinson, the chief executive of Chloride, said: "The recent blackouts in London and elsewhere reinforce our message that power quality is declining in most countries and that responsible companies must address how they protect their critical applications from this threat. Against this background, we are confident that the long-term growth we have seen will re-assert itself and that we are very well placed to benefit from this."

During the August blackout that affected 410,000 homes and businesses in the South-east, Chloride provided emergency lighting equipment that helped thousands of passengers stuck on London's Underground network escape from their trains and walk along tunnels to safety. Chloride said sales were up 11 per cent over the past six months to £75m, of which 3 per cent was organic growth.

The news came alongside a warning that the UK faces widespread blackouts over the coming years. The prediction came from Ian Russell, the chief executive of ScottishPower, who believes the Government needs to encourage generators to build more power stations to cope with demand.

According to Chloride, which provides emergency power systems to hospitals, banks, rail systems and other sectors that rely on uninterrupted electricity, power outages are happening more frequently. It says the average customer lost 84 minutes of power a year in 2002, compared with 71 minutes of lost power in 2000.

Operating profits rose 12 per cent to £3.4m and profits on ordinary activities before tax were up 16 per cent to £1.7m over the past six months. Chloride also enjoyed strong cash flow over the past six months, of £4.5m.

Mr Hodgkinson said that markets had been tough and the company had experienced difficulties from the outbreak of Sars in Asia. It has recently expanded into China and achieved £1.5m of sales in the past six months, but was held back from marketing its products. Sales were also affected by the conflict in Iraq as the company's Middle East market slowed.

Mr Hodgkinson said he was cautious that despite the long-term decline in the quality of uninterrupted power, the company's immediate trading environment remained challenging.

Shares in Chloride closed down 2.5p at 44.5p on the company's continued gloomy outlook.