9th Dec 2005 12:46
Impax Group PLC09 December 2005 IMPAX GROUP PLC PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 Impax Group plc, the AIM quoted boutique which provides specialist financialservices within the environmental markets sector, today announces itspreliminary results for the year ended 30 September 2005. Highlights • Rising energy costs and serious concerns over the impact of climate change have reinforced the strong prospects for the environmental markets sector. • Assets under management grew from £69m at the end of September 2004 to £170m a year later and, following the recent expansion of Impax Environmental Markets plc, have now reached £229m. • Impax intends to attract further funds in the coming year. • Clear platform for profitable growth established. Commenting on the results, Keith Falconer, Chairman said: "Impax has demonstrated that it has the business model and skills to growshareholder value in the years ahead. Investors increasingly recognise thegrowth opportunities in our sector, and, as proven investment managers, we arewell positioned to make further progress." For further information please contact Keith Falconer, Chairman 07747 066637Impax Group plc Ian Simm, Chief Executive 020 7432 2619Impax Group plc CHAIRMAN'S STATEMENT Your Group has made outstanding progress in developing the business, and thefirst thing I wish to do is to congratulate my colleagues who have worked sosuccessfully on your behalf. They were set and have fulfilled very challengingobjectives, and with the Group now on a secure footing, we are implementing aplan to grow shareholder value significantly over the next few years. Last year, I commented on the favourable growth prospects for our chosen sectors- renewable energy, water and waste. Rising energy costs, unusual weatherpatterns and a growing commitment to combat climate change have reinforced theseprospects. Conversations with investors suggest that they are increasingly awareof the growth opportunities in environmental markets, and therefore I believe wehave a sound platform for the further expansion of our business. Results for the period The successful development of the business is not reflected in the financialresults for the period ended 30 September 2005, principally because twosignificant fund raisings took place close to or just after the year end.Turnover for the year was £1,725,060, almost unchanged from last year (2004:£1,737,805). The operating loss for the year was £220,383 (2004: £293,430)before two significant non-cash charges: £282,604 (2004: £282,604) foramortisation of goodwill; and £154,488 (2004: nil) for shares awarded in theGroup's Employee Benefit Trust. In addition, the Group made an exceptionalprofit of £129,216 from the sale of shares that it had previously received inlieu of corporate finance fees. Asset Management The asset management division produced strong underlying fund performance andexpanded significantly during the year, securing three new mandates. In spite ofonly a partial contribution from new assets, revenue increased 49% over theprevious year to £1,170,882. The funds under management rose from £69m at the end of September 2004 to £170mone year later, with the most significant contributor being Impax New EnergyInvestors LP (the "New Energy Fund"), which raised €60m (£41m) of capitalcommitments in its first closing. As at 30 November 2005 total assets undermanagement were £229m. Against a backdrop of rapid growth in environmental markets and rising companyearnings, the listed equity funds that we manage recovered strongly in theperiod. In particular, the net asset value of Impax Environmental Markets plc("IEM"), an investment trust quoted on the London Stock Exchange, rose 39% overthe year, significantly ahead of the MSCI World Index, which grew 20% in thesame period. On 14 November 2005 we were able to complete the fund raising foran additional £60m of capital for IEM, taking its total net assets to £105m. My interim statement reported that in December 2004 we completed fund raisingfor and commenced management of Impax Environmental Markets (Ireland) ("IEMI"),an open-ended investment fund listed on the Irish Stock Exchange, and that weassumed management of the Amsterdam-listed ASN Milieufonds in April 2005. I ampleased to report that both these funds have performed well. IEMI has grownfrom £16.3m at launch to £26.5m at 30 November 2005 and the ASN fund hasexpanded from €6.9m at the start of the financial year to €28.4m at 30 November2005. On 19 August 2005 we announced the first closing of the New Energy Fund, a 10year fund investing in projects in the renewable energy and related sectors,predominantly in Western Europe. Impax Group plc has committed to invest up to€3.75m (£2.56m) in the fund. This fund has a target size of €125m and we arecontinuing to market it to potential new investors. Corporate Finance As part of our strategy to create a fast-growing investment management company,we have made significant personnel changes at Impax Capital Limited ("IC").Earlier in the year we set up a small team focussed primarily on M&A activity,while other IC staff supported the Group's fund raising activities. Followingthe launch of the New Energy Fund, two IC staff members were reassigned to theasset management team, and Melville Haggard joined DEFRA's Waste ImplementationProgramme on a one-year secondment. The M&A team, led by Nigel Taunt, completed five deals during the year: twobusiness acquisitions, two disposals and one financing/ partnership transaction.With the benefit of the sale of shares referred to above, the corporate financeactivity made a positive financial contribution. Employee Benefit Trust An important action in the year was to establish an Employee Benefit Trust. Thepurpose of establishing this incentive arrangement is to motivate andincentivise eligible participants to achieve value for shareholders. Prospects The considerable potential for Impax is beginning to be realised. In the yearjust started, the Group will have the full benefit of the New Energy Fund andthe increased contribution from the enlarged investment trust. We have an excellent, committed team, led by Ian Simm and they, with a highlysupportive and hard working board, will endeavour to build further shareholdervalue in the coming year. J Keith R Falconer 9 December 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended 30 September 2005 Note 2005 2004 £ £ TURNOVER 3 1,725,060 1,737,805 --------- -------- Operating loss 3 (657,475) (576,034) Profit on disposal of investment 5 129,216 - --------- -------- (528,259) (576,034) Interest receivable and similar income 131,140 66,612Interest payable and similar charges (196,095) (186,349) --------- -------- LOSS ON ORDINARY ACTIVITIESBEFORE TAXATION (593,214) (695,771) Tax on loss on ordinary activities 6 - - --------- -------- (593,214) (695,771) ========= ======== LOSS PER SHARE 9 Basic (1.56)p (1.91)p ========= ========Adjusted (0.75)p (1.14)p ========= ======== CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESYear ended 30 September 2005 2005 2004 £ £ Loss for the financial year (593,214) (695,771) Currency translation differences 47,142 (259,708) --------- -------- Total recognised losses for the year (546,072) (955,479) ========= ======== CONSOLIDATED BALANCE SHEETAs at 30 September 2005 2005 2004 £ £FIXED ASSETSIntangible fixed assets 1,629,097 1,911,701Tangible fixed assets 13,140 15,567 --------- -------- 1,642,237 1,927,268 --------- -------- CURRENT ASSETSDebtors due after one year 2,041,998 -Debtors due in one year 1,283,384 844,037Investments 79,752 2,236,134Cash at bank and in hand 863,187 1,002,100 --------- -------- 4,268,321 4,082,271CREDITORS - amounts fallingdue within one year (635,726) (476,088) --------- --------NET CURRENT ASSETS 3,632,595 3,606,183 --------- -------- TOTAL ASSETS LESS CURRENTLIABILITIES 5,274,832 5,533,451 CREDITORS - amounts fallingdue after more than one year- Convertible unsecured loan stock (2,302,088) (2,255,505) --------- -------- 2,972,744 3,277,946 ========= ========= CAPITAL AND RESERVES Called up share capital 8,973,635 8,891,556Share premium 759,069 758,791Exchange equalisation reserve (713,831) (760,973)Treasury shares (72,700) -Other reserve 231,213 -Profit and loss account (6,204,642) (5,611,428) --------- ---------EQUITY SHAREHOLDERS'FUNDS 2,972,744 3,277,946 ========= ========= CONSOLIDATED CASHFLOW STATEMENTYear ended 30 September 2005 Note 2005 2004 £ £NET CASH OUTFLOW FROMOPERATING ACTIVITIES 10 (640,047) (349,112) RETURNS ON INVESTMENTS ANDSERVICING OF FINANCE 11 (18,016) (38,302) TAX PAID 11 - (32,741) CAPITAL EXPENDITURE ANDFINANCIAL INVESTMENT 11 231,495 (12,903) ACQUISITIONS AND DISPOSALS 11 - 515,325 MANAGEMENT OF LIQUID RESOURCES 11 - 60,736 --------- -------- NET CASH OUTFLOW BEFORE FINANCING (426,568) 143,003 FINANCING 11 82,000 - --------- -------- (DECREASE)/INCREASE IN CASH 12 (344,568) 143,003 ========= ======== RECONCILIATION OF NET CASHFLOW TOMOVEMENT IN NET DEBT (DECREASE)/INCREASE IN CASH IN YEAR (344,568) 143,003 DECREASE IN CASH ON DEPOSITIN YEAR - (60,736) --------- -------- CHANGES IN NET DEBT RESULTINGFROM CASHFLOWS (344,568) 82,267 NON CASH TRANSACTIONS- conversion of Loan Stock (46,583) 44,495- movement on Treasury reserve (72,700) -- movement on Other reserve 231,213 - TRANSLATION DIFFERENCES 47,142 (299,914) --------- -------- MOVEMENT IN NET DEBT IN THE YEAR (185,496) (173,152) NET DEBT AT 1 OCTOBER 2004 (1,253,405) (1,080,253) --------- -------- NET DEBT AT 30 SEPTEMBER 2005 12 (1,438,901) (1,253,405) ========= ========= IMPAX GROUP PLCNOTES TO THE PRELIMINARY STATEMENT 1 NATURE OF THE FINANCIAL INFORMATIONThe financial information set out above does not constitute full accounts forthe purposes of section 240 of the Companies Act 1985. The financial informationhas been extracted from the Group's accounts for the year ended 30 September2005 on which the auditors, MRI Moores Rowland LLP, have given an unqualifiedopinion. 2 ACCOUNTING POLICIESThe accounting policies used throughout the Group have not differed from thosepublished in last year's financial statements, except that the Group now holds acurrent listed and unlisted investment. The policy adopted for these assets isto mark listed investments to market and hold unlisted investments at cost. 3 TURNOVER, OPERATING LOSS AND NET ASSETS Turnover relates solely to the principal activities of the Group. Turnover 2005 2004Europe £ £ Asset management and corporate finance advisory 1,725,060 1,737,805 ======== ======== Operating loss 2005 2004Europe £ £ Asset management and corporate finance advisory (374,871) (293,430)Goodwill amortisation (282,604) (282,604) -------- -------- (657,475) (576,034) ======== ======== Net assets 2005 2004Europe £ £ Asset management and corporate finance advisory 655,318 840,061 United StatesLoans receivable 2,317,426 2,437,885 -------- -------- 2,972,744 3,277,946 ======== ======== 4 OPERATING LOSS Operating loss is stated after charging £154,488 for an Employee Benefit Charge(2004: £nil). On 4 February 2005, shareholders approved the establishment by the Company ofthe Impax Group Employee Benefit Trust (the "EBT") as part of the Company'semployee incentive arrangements. The issue of Ordinary Shares to the EBT by the Company gave rise to a charge of£154,488 to the profit and loss account for the year. This forms part of a totalcharge of £463,464 evenly spread over the three years to 30 September 2007,which is the performance period for the share award. It is calculated inaccordance with the requirements of UITF 17 "Employee share schemes" byreference to the mid market price of an Ordinary Share of 6.375p on the approvaldate of 4 February 2005 and on the Directors' assumption that the EBTperformance criteria will be met and all of the shares will vest to employeesand their families. 5 EXCEPTIONAL ITEMS 2005 2004 £ £ Profit on disposal of listed investments 129,216 - -------- -------- 129,216 - ======== ======== In 1999, the Group acquired shares in Ensyn Group Inc. ("Ensyn") with a value of£165,000, in consideration for fees. In 2002 full provision was made forimpairment of this unlisted investment. In April 2005 Ensyn merged with a subsidiary of Ivanhoe Energy Inc. ("Ivanhoe"),a listed company. The consideration for this merger took the form of acombination of cash, shares in Ivanhoe and shares in Ensyn. Following the merger the Group received the cash element of the considerationand subsequently sold part of its holding in Ivanhoe. These transactions havegiven rise to a gain of £294,216, being £165,000 write back of impairment ofunlisted investment and £129,216 profit on disposal of listed investment for theGroup for the year ended 30 September 2005 of which £236,609 has been realised. 6 TAX ON LOSS ON ORDINARY ACTIVITIES 2005 2004 £ £UK taxation is based on the loss for the year at a rateequivalent to 30% (2004: 30%): - - -------- --------Current year tax charge - - ======== ======== 2005 2004 £ £Factors affecting the tax charge for the year Loss on ordinary activities before taxation (593,214) (695,771) ======== ======== Tax at 30% of loss on ordinary activities beforetaxation (177,964) (208,731)Effects of:Capital gains 56,901 -Current year trading losses utilised (56,901) -Non-deductible expenses 162,147 9,069Capital allowances (3,927) (4,725)Non chargeable income (49,500) -Amortisation 84,781 84,781(Losses utilised)/losses carried forward (15,537) 119,606 -------- --------Current year tax charge - - ======== ======== The Group has tax losses of approximately £5.0m (2004: £4.4m) available foroffset against future taxable profits in the UK. Given the pre-tax loss for theyear ended 2005, the Directors consider it inappropriate not to recognise adeferred tax asset at this point in time. 7 FOREIGN CURRENCIES The results of subsidiary undertakings reporting in foreign currencies aretranslated at the average rate ruling in the accounting period (US$1.85: £1;2004: US$1.70: £1) and the assets and liabilities at the rate ruling at thebalance sheet date (US$1.76: £1; 2004: US$1.80: £1). 8 DIVIDENDS No dividend is proposed. 9 LOSS PER SHARE The calculation of loss per share is based on the loss for the year of £593,214and on the weighted average number of ordinary shares in issue of 38,065,022(2004: loss of £695,771 on shares in issue of 36,377,018). In order to show results from operating activities on a comparable basis, anadjusted loss per share has been calculated which excludes goodwill amortisationof £282,604 (2004: £282,604), exceptional items of £129,216 (2004: £nil) and EBTcharge of £154,488 (2004: £nil). 10 RECONCILIATION OF OPERATING LOSS TO NETCASH OUTFLOW FROM OPERATING ACTIVITIES 2005 2004 £ £ Operating loss (657,475) (576,034)Write back impairment of unlisted investment (165,000) -Revaluation of listed and unlisted investments (22,145) -Depreciation charges 7,542 5,949Amortisation of goodwill 282,604 282,604Increase in debtors (245,211) (73,032)Increase in creditors 159,638 11,401 -------- -------- Net cash outflow from operating activities (640,047) (349,112) ======== ======== 11 ANALYSIS OF CHANGES IN CASHFLOWSDURING THE YEAR 2005 2004RETURNS ON INVESTMENTS £ £AND SERVICING OF FINANCE Interest received 131,140 66,612Interest paid (149,156) (104,914) -------- -------- (18,016) (38,302) ======== ======== CAPITAL EXPENDITURE ANDFINANCIAL INVESTMENT Payments to acquire tangible fixed assets (5,114) (12,903)Proceeds from sale of investments 236,609 - -------- -------- 231,495 (12,903) ======== ======== ACQUISITIONS AND DISPOSALS Net proceeds from disposal of subsidiaries - 332,755Repayments received - 182,570 -------- -------- - 515,325 ======== ======== MANAGEMENT OF LIQUID RESOURCES Cash held on deposit to support oil activities - 60,736 -------- -------- - 60,736 ======== ======== FINANCING Issue of share capital 82,000 - -------- -------- 82,000 - ======== ======== TAXATION Tax paid - (32,741) -------- -------- - (32,741) ======== ======== 12 ANALYSIS OF CHANGES IN NET DEBT 1 October Cash Translation Non-cash 30 September 2004 Flow Difference transactions 2005 £ £ £ £ £Cash at bankand in 1,002,100 (344,568) 47,142 158,513 863,187handDebt due afterone (2,255,505) - - (46,583) (2,302,088)year ------- -------- --------- --------- --------NET DEBT (1,253,405) (344,568) 47,142 111,930 (1,438,901) ======== ========= ========= ======== ======= 13 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2005 2004 £ £ Loss for the financial year (593,214) (695,771)Conversion of Loan Stock 357 91,434Issue of Shares - EBT 82,000 -Treasury Shares - EBT (72,700) -Other Reserve - EBT 231,213 -Translation Adjustments 47,142 (259,708) -------- -------- Net reduction inshareholders' funds (305,202) (864,045) Opening shareholders' funds 3,277,946 4,141,991 -------- -------- Closing shareholders' funds 2,972,744 3,277,946 ======== ======== Copies of the report and accounts of the Company for the year ended 30 September2005 will be sent to shareholders. Copies will also be available on theCompany's web site www.impax.co.uk and may be collected from the RegisteredOffice. Registered Office:Broughton House6-8 Sackville StreetLondon W1S 3DG This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Impax Asset Management