The Verditek PLC (LON: VDTK) share price rallied 25% after revealing that it had signed an exclusive 3-year supply agreement with Lindab Profil AB, a Swedish company that develops, manufactures and sells building products.
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Lindab, which specialises in roofing systems, will integrate Veerditek’s photovoltaic technology in its roofing panels and sell them to its clients across Europe. Lindab acquired the exclusive rights to sell the panels in Nordic countries and Eastern Europe.
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The deal covers the Eastern European countries Bulgaria, Hungary, Poland, Czech Republic, Slovakia and Romania, and the Nordic countries of Norway, Denmark, Finland, Sweden and Iceland.
Investors' positive reaction to the news was expected despite the agreement not specifying any minimum purchasing requirements or financial milestones to be met by Lindab. The positive reaction was mainly tied to Verditek has already supplied over €100k worth of panels to Lindab for various projects.
However, a closer look at the agreement’s details indicates that the exclusivity clause will only remain in force if Lindab can reach a target volume of panels generating 850kw of electricity in 2023. This condition will result in Lindab buying many panels from Verditek to meet the above threshold.
Verditek is in a great position to profit from the increasing demand for energy sufficiency, especially in Europe, given the recent energy crisis triggered by the Russia-Ukraine war. The number of people who want to install solar power in their homes has risen significantly.
More people are now interested in switching to renewable energy amid the energy crunch that has hit most European countries. Installing Verditek’s photovoltaic panels is one way to lower their carbon footprint and protect the environment.
Luckily solar panels also act as roofing materials and can be connected to a home’s existing power infrastructure to provide electricity as a backup or the primary power source.
Investors should closely monitor Verditek’s performance this year, especially how its collaboration with Lindab unfolds.
*This is not investment advice.
Verditex share price.
The Verditek share price surged 25% to trade at 0.85p, from Thursday’s closing price of 0.68p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.