News

October 15, 2008

Execution Risk Lingers Over Clipper Windpower

By Rue Swabey

Aim-listed wind turbine manufacturer Clipper Windpower has a solid order book for its 2.5MW Liberty turbine with firm orders in excess of 300, 350 and 400 in 2008, 2009 and 2010 respectively. It also has a joint venture with British Petroleum to develop wind assets. But Clipper’s turbines have been plagued by technical problems which has eroded market confidence. The stock is now trading at a 52-week low of 182.50p and down 80 per cent from its high of 914p in mid-2007.

Problems related to turbine blades and quality issues with component suppliers resulted in remediation programmes (including inventory write downs and late delivery penalties) have cost US$107 million in 2007 and US$139 million in the first half of 2008.  During a routine check in August Clipper discovered a non-structural manufacturing defect on the blade skin of the turbine blade. Provisions for the costs of the new blade skin defect were recognised in the first half 2008 numbers and...