It went from $1.17 to 77 cents in a space of a week.

The company said its current strategy is to secure sustainable cash flow from a combination of direct sales and project equity investments. It put the lack of direct sales down to the "immaturity" of the renewable energy markets. "REL has responded to this by increasing its build-own-operate effort. Engineering alliances are in place with Duke Engineering & Services in the US and Mitsui Babock in Europe," the company said.

REL said due to the lack of direct sales, the company was now expecting a half year loss to 31 December 2001. "The company's cash position remains strong at $28 million. It is premature to speculate on the likely full year results given there is more than six months remaining and a number of opportunities are reaching firm order stage," REL said. "A small profit is achievable for FY 2001/2. Brokers' medium term valuations largely remain unchanged."

REL's board and management said they remained committed to the company's business strategy and are confident that it can lead to the establishment of a large and successful company operating in the renewable energy markets on a global basis.