solco on track for record profit, page-3

A COMPANY OFFERING SUSTAINABLE WATER AND POWER SOLUTIONS

Sydney - Wednesday - July 7: (RWE Aust Business News)
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OVERVIEW
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Solco Ltd (ASX:SOO) expects to report a profit before tax of
$3.15 million for the 12 months to June 30.
The result, which is subject to finalisation and audit, would
represent a 76 per cent increase on the previous financial year.
Turnover for the year is expected to be $34.5 million, a 24 per
cent increase.
The stronger trading performance in FY10 occurred on the back on
increased demand for solar energy products, which Solco wholesales and
distributes nationally.
It represents the second consecutive year of profit growth since
the finalisation of the restructure of the board and senior management
team in 2008.
The solar renewable market in Australia has grown markedly in
the past three years, supported by government incentives, rapidly falling
product prices, rising energy costs and community awareness.
Solco expects this situation to continue in FY11.
However, the company warns that until grid parity is reached,
which puts solar on an equal cost footing to conventional energy,
unforeseen changes in government policies may have a dampening effect on
the market.
Primary revenue growth was driven by product demand due to the
increased installation of mainly domestic solar photovoltaic (PV) systems
across Australia.
The solar PV market should easily exceed 60 megawatts for
calendar year 2009, as compared with 20 megawatts in 2008.
This includes 56 megawatts being installed under the highly
successful Solar Homes and Communities Program (SHCP).
The SHCP replacement program, Solar Credits, came into operation
in October.
However, initial demand was low due to falling REC prices
although growth followed later in the year.
Solar panel price reductions have stressed Solco's total revenue
in spite of the increasing total number of units sold.
After declines in prior periods due to the cancellation of some
government support programs and rural sector downturns, Solco's solar
water pumping sales have rebounded due to increased rural demand and
improved system affordability.
Although the SHCP has finished, installations and product sales
under this program will continue well into 2010, the company says.
Sales under Solar Credits have grown recently and will continue
with a stabilising REC price and falling product costs.
Solco has developed affordable product offerings (PV kits)
specifically targeted at this program and as a result take-up is strong.
Improving Feed-in-Tariffs (FiT) allied with falling system costs
have seen increase demand for larger systems (5-10kW), especially in NSW
and the ACT.
Solco has in place the products and solutions to meet this demand
as these changes occur.
During the first half, Solco released several new product
families from both new suppliers, such as Astronergy and National
Semiconductor, and its current supply base.
This will continue with further product offerings in 2010
targeted to support the evolving Australian market with larger-wattage,
higher-efficiency lower-cost PV panels and inverters and reduced cost
balance-of-system components.
Solco's improved financial position and restructured operations
now allow for further business expansion.

SHARE PRICE MOVEMENTS
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Shares of Solco yesterday rose 1.8c to 9.8c. Rolling high for the
year is 15c and low 4.1c. The company has 199.6 million shares on issue
with a market cap of $18.56 million.
Chairman Steven Cole told shareholders at the annual meeting that
with the onset of the global financial crisis in the second half of 2008,
the company focused on its core wholesale PV distribution business (Solco
Choice Electric) to drive bottom line performance, rationalised areas of
operation which were not part of its business plans and to restructure
the executive team.

BACKGROUND
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Solco supplies solar energy systems for a broad range of
customers, environments and requirements.
The company joined the ASX list on December 15, 2000.
Solco covers domestic, commercial and rural solar panel
installation with or without grid connection.
It also has solar-powered water pumping for rural and remote
community applications.
Solco's aim is to be Australia's first choice for sustainable
energy solutions.
Today Solco's main operations are in the wholesale and
distribution of solar power and pumping solutions around Australia and
overseas, supplying a combination of imported and locally sourced
products.
The company caters for corporate and government clients directly,
and residential customers through its installer network.
Solco's brands include GridPower, Choice Electric, Solar Energy
Systems, Sun Mill, Solartech Genius, Solco Industries and Solco
Manufacturing.
Products include complete PV and small wind energy systems,
individual components for grid-connect and standalone applications, and a
range of affordable and reliable solar pumping solutions to handle the
toughest of remote water needs.
They are suitable for various locales and purposes including
irrigation, livestock watering, ponds, islands, remote homes and cabins.

Reuters.