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UPDATE 2-Bglobal signs British Gas contract, shares rise

Stocks

   

Wed Feb 3, 2010 3:08pm IST

* Contract worth more than 12 million pounds

* Cold weather affected meter installations

* Full-year profit to miss forecast

* Shares up 3.5 percent

(Adds detail, analyst comment, shares)

By Sarah Young

LONDON, Feb 3 (Reuters) - Bglobal (BGBL.L), which provides smart meters to Britain's retail energy market, said it had signed a contract with British Gas worth more than 12 million pounds ($19 million), boosting its shares.

Bglobal also said on Wednesday that revenue for the year to end-March would be in line with expectations but profit would miss forecasts after freezing weather in December and January caused installation of meters to fall below target.

Bglobal will supply and install smart meters for Centrica (CNA.L) unit British Gas during 2010. It will also provide data services which will deliver annual revenue of over 1 million pounds, the company said.

"The contract win is very positive for the company. We are beginning to see a pick-up in momentum," said Charles Stanley analyst Richard Hickinbotham, who has a 'buy' recommendation and 70 pence target price on the stock.

"There are a number of positives which are possible, npower also has a framework agreement with Bglobal and it could, like British Gas, look to make this a firm order," he said.

Bglobal said installations had recovered since early January and it expected to benefit from the contract with British Gas Business which would give it more visibility on customer requirements.

Charles Stanley cut its 2009-10 forecast to a loss of 1 million pounds from break-even, and cut its 2010-11 profit forecast to to 3 million from 4.5 million.

Bglobal shares, which had risen 120 percent in the past six months, were up 3.5 percent to 52.25 pence at 0919 GMT, valuing the company at 41 million pounds. (Editing by Matt Scuffham and Dan Lalor) ($1 = 0.6278 pound)

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