Shares in TEG Group soared Thursday after the biomass group announced a strong performance in 2012.

The company's shares rocketed 19.44% to 5.38p as it released a trading update showing business had exceeded the board's expectations.

The UK business, which specialises in organic waste technology, said revenues and profitability increased markedly.

The results were driven by a record volume of waste processed.

Projects were also performing well, including the construction of a new £16m anaerobic digestion (AD) plant at Dagenham Dock which is due for final completion in the first quarter of 2014.

The Perth AD plant in Scotland which was commissioned in the first half operated well through the period.

"Overall, the trading performance for the business improved substantially in the second half of the year with both the operational and projects elements of the business performing well," TEG said in a statement.

"The company finished the year with a strong cash position and a low level of borrowings."

TEG expects demand to increase in 2013 as local authorities and private firms continue to divert organic waste from landfill to meet statutory targets.

"Landfill Tax is expected to rise again in April 2013, further increasing the attractiveness of TEG's plants and technologies, and interest in both AD and composting continues to grow strongly," the company said.

However TEG said receiving financing for new projects has been challenging and will "remain cautious about the availability of funding for new projects in the immediate future and the rate at which these projects can be executed".

RD

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