9th Feb 2015 07:00
9 February 2015
Renewable Energy Generation Limited
("REG" or the "Group")
Interim Results for the six months to 31 December 2014
Renewable Energy Generation Limited (AIM: WIND), today announces its interim results for the six months to 31 December 2014.
● | Wind farm planning permission awarded for Hallburn, Cumbria (12MW) and resolution to grant permission at Mynydd Portref, Rhondda Cynon Taf (12MW) |
● | Sale of the St. Breock and Ramsey II wind farms to BlackRock for net proceeds of £13.8m with a profit of £4.6m recognised to date |
● | 53MW of consented onshore wind assets now moving to procurement and construction, with a further 124MW of applications awaiting determination in the UK planning system and over 100MW in pre-planning |
● | Whitemoor bio-power plant (18MW) commissioned and operating under National Grid's short term operating reserve |
● | Group revenues of £5.1m (H1 2013: £5.7m) in line with management expectations following the decommissioning of the original St.Breock windfarm during 2014 to allow for repowering |
● | Adjusted EBITDA1 of £4.2m including disposal profits of £4.6m (H1 2013: £9.6m including disposal profits of £9.4m) |
● | Increase of £3.2m in unrestricted cash resources for the six months to £14.6m as at 31 December 2014 |
Post period end events | |
● | Resolution to grant permission for the 4MW Knockshinnoch windfarm in Scotland |
¹ Earnings before interest, taxation, depreciation and amortisation ("EBITDA") is equal to the Group's continuing operating profit before exceptional items, share based payments, interest, taxation, depreciation and amortization and including profit on disposal of subsidiaries.
Andrew Whalley, REG Chief Executive Officer said:
"The period is notable for our success in obtaining planning permission at local authority level for the 12MW Hallburn wind farm in Cumbria. This was followed by a local resolution to grant consent for another six turbine scheme at Mynydd Portref in South Wales. Post the end of the period we were delighted to achieve another planning committee resolution for a two turbine project at Knockshinnoch in Scotland.
"With a further 124MW across 14 projects in the planning system, we expect to see further planning successes this year.
"In addition we have successfully completed asset sales to our long-term partner BlackRock, maintaining a prudent level of liquidity as we continue to invest in our next five wind construction projects.
"Our 18MW Whitemoor Bio-Power project is the first of its type in the UK and has started full operation under the National Grid's STOR programme, providing power at short notice to meet unscheduled demand on the system. Our waste cooking oil collection business, Living Fuels, has seen a near 60% increase in volumes also at significantly lower prices than 12 months ago. This has been aided by a large contract win from Mitchells and Butler, which alone has added 10% to volumes.
"Our new asset management business already has 56MW of assets under management and is anticipating adding additional projects over the course of the year.
"After an extended period of investment our UK businesses are beginning to mature. This should facilitate a significant increase in REG's operational MWs over the next few years".
A presentation to analysts will be held today at the offices of Broker Profile at 9.30am. The address is Augustine House, 6A Austin Friars, London, EC2N 2HA. A dial-in facility will also be available (number: 020 8609 0205, PIN: 250517#).
ENDS
Enquiries:
Renewable Energy Generation Limited Andrew Whalley, Chief Executive Officer David Crockford, Finance Director Ian Lawrence, Communications Manager
| +44 (0)1483 901 796 |
Smith & Williamson Corporate Finance Limited (Nominated Adviser) Martyn Fraser
| +44 (0)117 376 2213 |
Cenkos (Corporate Broker) Bobbie Hilliam
| +44 (0)20 7397 8900 |
Broker Profile Simon Courtenay / Harry Rippon | +44 (0)20 7448 3244 |
Notes to editors
Renewable Energy Generation Ltd (REG) is an AIM listed renewable energy group. Its main business is the development, construction and operation of wind farms and generating power from refined used cooking oil.
REG Windpower: based in Truro, Bath and Guildford, it currently operates 14 wind projects in Cambridgeshire, Cornwall, County Durham, Yorkshire, Lancashire, Cumbria and Gwynedd, with a total capacity of 67.15MW and has a development pipeline of over 1,000MW.
REG Bio-Power UK Ltd: based in Nottingham, UK: it operates electricity generation plant powered by fuel recovered from used cooking oil.
Headquartered in Jersey, REG was admitted to trading on AIM, a market operated by the London Stock Exchange, in May 2005 (AIM: WIND).
www.renewableenergygeneration.co.uk
Overview of the Period
REG's strategy is to develop, own and operate a diversified portfolio of onshore wind and Bio-Power projects as well as managing renewable energy assets on behalf of third parties. REG aims to grow value for its shareholders through sustainable and rising project cash flows coupled to an increasing net asset value.
REG Windpower
This has been a successful period for wind development with a planning permission achieved at Hallburn (12MW) in Cumbria and a council resolution to grant Mynydd Portref (12MW) in Wales. Post the period end a further resolution was gained for Knockshinnoch (4MW) in Scotland.
The Group now has 53MW of onshore wind sites with a planning permission or a resolution to grant awaiting construction, with a further 124MW in the planning system expecting decisions over the course of the next 12 months.
The sale of the St Breock and Ramsey II windfarms to a fund managed by BlackRock for a total enterprise value of £36m and net proceeds to date of £13.8m, has provided REG with ample liquidity to continue to build investment into its own portfolio of operational wind assets.
Procurement is proceeding on Denzell Downs (10MW), French Farm (4MW), Rodbaston (4MW) and Draperstown (6MW). We expect these projects to move to construction later this year and be operational under the current Renewable Obligation regime. Additionally, our project at Barlborough (0.9MW) is proceeding to construction, funded by REG's own equity, to be run under the small scale feed-in-tariff.
REG Bio-Power
Project finance was completed on REG's 18MW facility at Whitemoor Business Park near Selby, Yorkshire. The plant is now fully operational, together with its sister plants at Bentwaters (6MW) and Leeds North (2MW), within National Grid's Short Term Operating Reserve, with all achieving excellent operational hours.
Planning was achieved for a new 10MW Bio-Power project in Yorkshire and it is expected that this site, plus one other 18MW project will enter construction later this year.
REG Asset Management
A new business segment for REG, Asset Management already operates 56MW on behalf of a fund managed by BlackRock. We have started marketing this capability to new third parties and expect revenues to grow strongly here over the next few years.
Dividend
The interim dividend of 0.55p per share will be paid on 24 April 2015 to shareholders on the register as at 7 April 2015.
Unaudited Interim Consolidated Statement of Profit and Loss
For the six months to 31 December 2014
Six months to 31 December 2014 | Six months to 31 December 2013 | Year to30 June 2014 | ||
£'000 | £'000 | £'000 | ||
(unaudited) | (unaudited) | (audited) | ||
Revenue | 5,076 | 5,660 | 11,556 | |
Cost of Sales | (3,541) | (3,723) | (7,411) | |
Gross profit | 1,535 | 1,937 | 4,145 | |
Wind administrative expenses | (1,923) | (1,812) | (3,367) | |
Bio-power administrative expenses | (309) | (297) | (760) | |
Central administrative expenses | (730) | (870) | (1,484) | |
Development costs | (906) | (658) | (2,697) | |
Corporate finance costs | (156) | (180) | (374) | |
Other operating income | - | - | 84 | |
Group operating loss from continuing activities | (2,489) | (1,880) | (4,453) | |
Profit on disposal of subsidiaries (note 5) | 4,558 | 9,375 | 9,483 | |
Net finance cost | (997) | (1,040) | (2,166) | |
Profit on continuing operations before tax | 1,072 | 6,455 | 2,864 | |
Tax credit | 19 | - | 1,015 | |
Profit on continuing operations after tax | 1,091 | 6,455 | 3,879 | |
Attributable to | ||||
Equity holders of the parent | 1,091 | 6,455 | 3,879 | |
Non controlling interest | - | - | - | |
Total | 1,091 | 6,455 | 3,879 | |
Earnings per share attributable to the equity holders of the Company during the period | |||||
- basic EPS | 1.05p | 6.23p | 3.74p | ||
- diluted EPS | 1.02p | 6.10p | 3.66p | ||
Unaudited Interim Consolidated Statement of Financial Position
As at 31 December 2014
31 December 2014 | 31 December 2013 | 30 June 2014 | ||
£'000 | £'000 | £'000 | ||
ASSETS | (unaudited) | (unaudited) | (audited) | |
Non-current assets | ||||
Goodwill (note 3) | 4,890 | 7,390 | 4,890 | |
Development assets (note 3) | 15,653 | 14,308 | 19,096 | |
Property, plant and equipment (note 4) | 55,719 | 44,496 | 50,093 | |
Deferred tax asset | 2,613 | 1,664 | 2,347 | |
78,875 | 67,858 | 76,426 | ||
Current Assets | ||||
Assets classified as held for sale | - | 8,108 | 11,652 | |
Inventories | 1,263 | 628 | 782 | |
Trade and other receivables | 6,125 | 3,212 | 4,326 | |
Intangibles | 1,266 | 2,087 | 1,848 | |
Restricted cash | 2,640 | 3,619 | 2,737 | |
Cash and cash equivalents | 14,623 | 19,262 | 10,987 | |
25,917 | 36,916 | 32,332 | ||
Total assets | 104,792 | 104,774 | 108,758 | |
| ||||
LIABILITIES | ||||
Current liabilities | ||||
Trade and other payables | 4,015 | 4,061 | 6,034 | |
Liabilities directly associated with assets classified as held for sale | - | 4,246 | 2,389 | |
Borrowings | 1,161 | 997 | 1,108 | |
5,176 | 9,304 | 9,531 | ||
Non-current liabilities | ||||
Borrowings | 21,353 | 17,087 | 21,495 | |
Derivative financial instruments | 2,230 | 620 | 753 | |
Provisions | 3,318 | - | 3,321 | |
Deferred tax liabilities | - | 319 | 5 | |
26,901 | 18,026 | 25,574 | ||
Total liabilities | 32,077 | 27,330 | 35,105 | |
EQUITY | ||||
Share capital | 10,374 | 10,366 | 10,374 | |
Share premium | 79,952 | 79,912 | 79,952 | |
Own shares | (200) | (197) | (200) | |
Share- based payment reserve | 608 | 438 | 528 | |
Hedging reserve | (1,637) | (466) | (1,234) | |
Retained earnings | (16,935) | (13,159) | (16,320) | |
Equity attributable to the equity holders of the parent | 72,162 | 76,894 | 73,100 | |
Non controlling interest | 553 | 550 | 553 | |
Total equity and liabilities | 104,792 | 104,774 | 108,758 | |
| ||||
Unaudited Interim Consolidated Cash Flow Statement
For the six months to 31 December 2014
Six months to31 December 2014 | Six months to31 December 2013 | Year to30 June 2014 | |
£'000 | £'000 | £'000 | |
(unaudited) | (unaudited) | (audited) | |
Cash flows from operating activities | |||
Net cash generated/(used) in operations | (3,908) | (1,148) | (801) |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (2,501) | (8,788) | (19,366) |
Capitalised development costs | (2,435) | (2,022) | (6,974) |
Acquisition of subsidiary | - | - | (30) |
Net proceeds from sale of subsidiary | 12,688 | 9,080 | 14,187 |
Interest received | 25 | - | 53 |
Movement in restricted cash accounts | (79) | 3,686 | 5,316 |
Net cash generated/(used) in investing activities | 7,698 | 1,956 | (6,814) |
Cash flows from financing activities | |||
New borrowings net of issue costs | 2,738 | 3,795 | 6,495 |
Interest paid (including interest rate swaps) | (1,027) | (759) | (1,775) |
Repayment of borrowings | (598) | (462) | (989) |
Purchase of own shares | - | (137) | (140) |
Issue of shares | - | 36 | 38 |
Dividends paid to Company's shareholders | (1,706) | (1,552) | (2,121) |
Net cash generated from financing activities | (593) | 921 | 1,508 |
Net (decrease)/increase in cash and cash equivalents | 3,197 | 1,729 | (6,107) |
Cash at beginning of period | 11,426 | 17,533 | 17,533 |
Cash at end of period | 14,623 | 19,262 | 11,426 |
Cash included in disposal group classified as held for sale | - | - | 439 |
Unaudited Consolidated Statement of Total Comprehensive Income
For the six months to 31 December 2014
Six months ended 31 December 2014 | Six months ended 31 December 2013 |
Year ended 30 June 2014 | |
£'000 | £'000 | £'000 | |
(unaudited) | (unaudited) | (audited) | |
Profit for the period | 1,091 | 6,455 | 3,879 |
Effective portion of change in fair value cash flow hedges net of recycling ( net of tax) | (403) | 664 | (104) |
Total comprehensive income / (expenditure) for the period net of tax | 688 | 7,119 | 3,775 |
Attributable to | |||
Equity holders of the parent | 688 | 7,119 | 3,775 |
Non controlling interest | - | - | - |
Total | 688 | 7,119 | 3,775 |
Unaudited Interim Consolidated Statement of Changes in Equity
For the six months to 31 December 2014
Share capital |
Share premium account |
Own shares | Share based paymentsreserve |
Hedging reserve |
Retained earnings | Non controlling interest | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 July 2014 | 10,374 | 79,952 | (200) | 528 | (1,234) | (16,320) | 553 | 73,653 |
Total comprehensive income | - | - | - | - | (403) | 1,091 | - | 688 |
Share based payments | - | - | - | 80 | - | - | - | 80 |
Dividend (note 2) | - | - | - | - | - | (1,706) | - | (1,706) |
Issue of new equity | - | - | - | - | - | - | - | - |
Purchase of own shares | - | - | - | - | - | - | - | - |
At 31 December 2014 | 10,374 | 79,952 | (200) | 608 | (1,637) | (16,935) | 553 | 72,715 |
Notes to the unaudited interim consolidated financial statements
1. Statement of compliance
While the financial information included in this unaudited interim financial statement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRS.
This interim financial statement has been prepared on the basis of accounting policies adopted by the Group and set out in the annual report and accounts for the year ended 30 June 2014. The Group does not anticipate any change in these accounting policies for the year ended 30 June 2015. As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS 34 "Interim financial reporting".
2. Dividends
Six months to31 December 2014 | Six months to31 December 2013 | Year to30 June 2014 | |
Declared and paid during the period onordinary equity shares | £'000 | £'000 | £'000 |
(unaudited) | (unaudited) | (audited) | |
Final dividend declared and paid | 1,706 | 1,552 | 1,552 |
Interim dividend declared and paid | - | - | 569 |
1,706 | 1,552 | 2,121 | |
Proposed but not recognised as a liability at 31 December 2014 | |||
Equity dividends on ordinary shares: | |||
Interim dividend declared and paid - 0.55p (2013 - 0.55p) | 570 | 570 | - |
The dividend will be paid on 24 April 2015 to members on the register on 7 April 2015. Shares will be marked ex-dividend on 2 April 2015.
3. Intangible assets
(unaudited) | Development costs | Goodwill | Total |
£'000 | £'000 | £'000 | |
Cost | |||
At 1 January 2014 | 16,552 | 7,390 | 23,942 |
Additions | 10,131 | - | 10,131 |
Transfers to property, plant and equipment | (1,772) | - | (1,772) |
Asset held for sale | (2,188) | (2,500) | (4,688) |
At 30 June 2014 | 22,723 | 4,890 | 27,613 |
Additions | 2,435 | - | 2,435 |
Transfers to property, plant and equipment | (5,299) | - | (5,299) |
At 31 December 2014 | 19,859 | 4,890 | 24,749 |
Amortisation and impairment | |||
At 1 January 2014 | 2,244 | - | 2,244 |
Impairment charge | 1,383 | - | 1,383 |
At 30 June 2014 | 3,627 | - | 3,627 |
Impairment charge | 579 | - | 579 |
At 31 December 2014 | 4,206 | - | 4,206 |
Net book value | |||
At 31 December 2014 | 15,653 | 4,890 | 20,543 |
At 30 June 2014 | 19,096 | 4,890 | 23,986 |
At 1 January 2014 | 14,308 | 7,390 | 21,698 |
Included within additions to development costs are internal development costs of £164,000 (2013: £250,000).
4. Property, plant and equipment
(unaudited) | Operating wind sites | Other generation plant | Assets in the course of construction | Freehold land | Fixtures, fittings and equipment | Total |
£000 | £000 | £000 | £000 | £000 | £000 | |
Cost | ||||||
At 1 January 2014 | 41,999 | 5,798 | 4,750 | 1,252 | 2,483 | 56,282 |
Additions | 1,354 | 4,965 | 3,511 | 391 | 176 | 10,397 |
Movements | 1,788 | - | (1,788) | - | - | - |
Transfers from Development Costs | - | 26 | 1,746 | 1,772 | ||
Assets no longer held for sale | 5,682 | - | - | - | - | 5,682 |
Asset held for sale | - | - | (5,260) | (5,260) | ||
Disposals | - | (5,068) | (122) | - | (1) | (5,191) |
At 30 June 2014 | 50,823 | 5,721 | 2,837 | 1,643 | 2,658 | 63,682 |
Additions | 149 | 169 | 1,578 | - | 145 | 2,041 |
Movements | 54 | 10 | - | (64) | - | |
Transfers from Development Costs | - | - | 5,299 | - | 5,299 | |
Disposals | (143) | (5) | (148) | |||
At 31 December 2014 | 51,026 | 5,747 | 9,724 | 1,643 | 2,734 | 70,874 |
Depreciation | ||||||
At 1 January 2014 | 9,770 | 1,037 | - | - | 979 | 11,786 |
Depreciation charge | 1,540 | 138 | - | - | 196 | 1,874 |
Assets classified as held for sale | 23 | - | - | - | - | 23 |
Disposals | - | (93) | - | - | (1) | (94) |
At 30 June 2014 | 11,333 | 1,082 | - | - | 1,174 | 13,589 |
Depreciation charge | 1,247 | 176 | - | - | 175 | 1,598 |
Disposals | - | (32) | - | - | - | (32) |
At 31 December 2014 | 12,580 | 1,226 | - | - | 1,349 | 15,155 |
Net book value | ||||||
At 31 December 2014 | 38,446 | 4,521 | 9,724 | 1,643 | 1,385 | 55,719 |
At 30 June 2014 | 39,490 | 4,639 | 2,837 | 1,643 | 1,484 | 50,093 |
At 1 January 2014 | 32,229 | 4,761 | 4,750 | 1,252 | 1,504 | 44,496 |
During the period an amount of £100,000 (2013 - £45,000) of borrowing costs were capitalised into assets in the course of construction. Capitalisation of borrowing costs has increased as a result of new additions being funded from debt.
5. Disposal of subsidiary
2014 | |
£'000 | |
(unaudited) | |
Proceeds | 18,246 |
Assignment of project debt | (3,796) |
Unrestricted cash included in disposal group | (380) |
Fees | (277) |
Net proceeds | 13,793 |
Net assets of disposal group | (9,235) |
Profit on disposals | 4,558 |
Gross proceeds include £1,323,000 deferred consideration.
Further consideration of up to £1,500,000 in relation to the disposal has not yet been recognised in the financial statement of the Group, its recognition being contingent on the completion of construction at the sites and satisfaction of various performance conditions thereon.
Related Shares:
WIND.L