4th Feb 2013 09:57
The following replaces The Half Yearly Report announcement released at 07.00 hours today under RNS number 9823W. The only change is to correct a typographical error in relation to the projects named in the penultimate bullet point under Post period end events.
All other details in the announcement remain the same. The full text of the amended announcement is set out below
4 February 2013
Renewable Energy Generation Limited
("REG" or the "Group")
Interim Results for the six months to 31 December 2012
RENEWABLE ENERGY GENERATION REPORTS A STRATEGIC RELATIONSHIP WITH BLACKROCK AND A STRONG PIPELINE OF FUTURE PROJECTS
Financial highlights
● | Group revenues of £6.5m (H1 2012: £6.3m) |
● | Group EBITDA1 of £1.4m (H1 2012: £1.6m) |
● | Cash inflow from operating activities £1.5m (H1 2012: outflow £0.6m) |
● | Unrestricted cash resources of £10m as at 31 December 2012 (H1 2012: £19m) |
● | Proposed interim dividend of 0.5p per ordinary share (H1 2012: 0.5p) |
Operational highlights
● | Cornwall Council grants planning permission for 10MW St Breock Repower project |
● | Turbines ordered for 6MW Burnthouse Farm in Cambridgeshire |
● | Project financing completed for 10MW Sancton Hill and 6MW South Sharpley wind farms |
● | Circa 80MW of wind projects awaiting determination in the UK planning system |
Post period end events
● | Announcement of strategic partnership between REG and BlackRock |
● | Sale of two operating projects, 10MW Sancton Hill and 6MW South Sharpley to BlackRock for a total enterprise value of £32.1m |
● | Initiation of asset management agreement, under which REG will manage certain wind farms for BlackRock in return for an asset management fee |
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 amortisation.
Andrew Whalley, REG Chief Executive Officer said:
"REG ended the half year with 80MW in the planning system awaiting a decision, testimony to the efforts of our development division to progress projects towards determination."
"Cornwall Council's approval of our project to repower St Breock Wind Farm represents a major success during the period and we anticipate this highly energetic scheme entering construction later in 2013".
"The announcement of a strategic alliance with BlackRock heralds an exciting future for REG while the initial sale of two operating projects demonstrates the ongoing value of well-sited, well-managed wind farms."
A presentation to analysts will be held today at the offices of City Profile at 9.30am.
ENDS
Enquiries:
Renewable Energy Generation Limited Andrew Whalley, Chief Executive Officer David Crockford, Finance Director Ian Lawrence, Communications Manager
| +44 (0)1483 901 790 |
Smith & Williamson Corporate Finance Limited (Nominated Adviser) Martyn Fraser
| +44 (0)117 376 2213 |
Cenkos (Corporate Broker) Bobbie Hilliam
| +44 (0)20 7397 8900 |
City Profile Simon Courtenay / Abigail Genis | +44 (0)20 7448 3244 |
Notes to editors
Renewable Energy Generation Ltd (REG) is a UK 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 and Bath, UK, it currently operates twelve wind projects in Cambridgeshire, Cornwall, County Durham, Yorkshire, Cumbria and Gwynedd, with a total capacity of 57.15MW and has a development pipeline of over 1,000MW.
REG Bio-Power UK Ltd: based in Nottingham, UK: it operates electricity generation plant fuelled by waste vegetable 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 period
During the period a planning application to repower St Breock Wind Farm in Cornwall was approved at local authority level. REG purchased this highly energetic site in 2010 with the intention of replacing the existing 11 turbines with modern machines capable of generating significantly more energy. Achieving planning permission at committee level is a notable achievement given the low consent rates at this stage in England and will allow us to progress the project into construction in 2013.
Further planning submissions in the period mean REG is awaiting decisions on 80MW across 10 schemes. It is anticipated that a further 60 to 70MW of applications will follow by the year end.
A 6MW site at Burnthouse Farm in Cambridgeshire entered construction late in the period and is anticipated to become operational in the summer of 2013.
Electricity production at REG's operational fleet of wind farms climbed to 64,004MWh compared to 55,684MWh in the corresponding period last year. This is due in part to the availability throughout the period of the Sancton Hill site which came online in June 2012.
Post period end REG completed the sale of operating projects at Sancton Hill (10MW) and South Sharpley (6MW) to BlackRock NTR Renewable Power Fund for a total enterprise value of £32.1m. This results in upfront cash consideration of £16.15m, contingent deferred consideration of £0.65m and BlackRock assuming project debt of £15.3m. Additionally it is intended that a further 4MW wind farm will be sold to BlackRock in spring 2013.
The transaction also includes the establishment of an Asset Investment Agreement, which provides a framework for future co-operation between REG and BlackRock, enabling REG to continue to recycle capital to fund future growth and enhance returns to investors.
Additionally a long-term Asset Management Agreement (AMA) with BlackRock provides REG with a new high-quality income stream. The AMA, signed on normal commercial terms, allows REG to continue to manage Sancton Hill and South Sharpley in return for an asset management fee. The same arrangement will apply to any other wind farms REG sells to BlackRock and may apply to sites BlackRock acquires from other sources.
The interim dividend is maintained at 0.5p per share and will be paid on 8 April 2013 to shareholders on the register as at 22 March 2013.
Unaudited interim consolidated income statement
For the six months to 31 December 2012
Six months to 31 December 2012 | Six months to 31 December 2011 | Year to30 June 2012 | ||
£'000 | £'000 | £'000 | ||
(un-audited) | (un-audited) | (audited) | ||
Revenue | 6,466 | 6,258 | 12,108 | |
Cost of Sales | (3,714) | (3,279) | (6,968) | |
Gross profit | 2,752 | 2,979 | 5,140 | |
Administrative expenses | (2,698) | (2,300) | (4,980) | |
Exceptional administrative expenses (note 7) | (501) | (52) | (462) | |
Development costs | (411) | (646) | (1,029) | |
Other operating income | 20 | 12 | 125 | |
Group operating loss from continuing activities | (838) | (7) | (1,206) | |
Net finance (cost)/revenue | (866) | 14 | (750) | |
Profit / (loss) on continuing operations before tax | (1,704) | 7 | (1,956) | |
Tax | 200 | - | 159 | |
Profit / (loss) on continuing operations after tax | (1,504) | 7 | (1,797) | |
Attributable to | ||||
Equity holders of the parent | (1,504) | 7 | (1,797) | |
Non controlling interest | - | - | - | |
Total | (1,504) | 7 | (1,797) | |
(Loss) / earnings per share attributable to the equity holders of the Company during the period | |||||
- basic and diluted from continuing activities | (1.46p) | 0.01p | (1.74p) | ||
- basic and diluted | (1.46p) | 0.01p | (1.74p) | ||
Unaudited interim consolidated balance sheet
As at 31 December 2012
31 December 2012 | 31 December 2011 | 30 June 2012 | ||
£'000 | £'000 | £'000 | ||
ASSETS | (un-audited) | (un-audited) | (audited) | |
Non-current assets | ||||
Goodwill (note 3) | 7,390 | 7,390 | 7,390 | |
Development assets (note 3) | 9,476 | 6,894 | 7,682 | |
Property, plant and equipment (note 4) | 53,758 | 60,188 | 67,205 | |
Deferred tax asset | 1,278 | 342 | 941 | |
71,902 | 74,814 | 83,218 | ||
Current Assets | ||||
Assets classified as held for sale (note 7) | 19,978 | - | - | |
Inventories | 271 | 357 | 242 | |
Trade and other receivables | 2,891 | 3,753 | 4,395 | |
Intangibles | 2,208 | 2,551 | 2,362 | |
Restricted cash (note 5) | 6,107 | 10,556 | 8,582 | |
Cash and cash equivalents (note 5) | 9,924 | 19,045 | 9,566 | |
41,379 | 36,262 | 25,147 | ||
Total assets | 113,281 | 111,076 | 108,365 | |
| ||||
LIABILITIES | ||||
Current liabilities | ||||
Trade and other payables (note 6) | 4,196 | 5,367 | 4,949 | |
Liabilities directly associated with assets classified as held for sale (note 7) | 9,482 | - | - | |
Borrowings | 1,760 | 1,044 | 1,356 | |
15,438 | 6,411 | 6,305 | ||
Non-current liabilities | ||||
Borrowings | 32,082 | 33,812 | 33,137 | |
Derivatives | 3,233 | 2,082 | 2,661 | |
Deferred tax liabilities | - | 380 | 113 | |
35,315 | 36,274 | 35,911 | ||
Total liabilities | 50,753 | 42,685 | 42,216 | |
EQUITY | ||||
Share capital | 10,330 | 10,325 | 10,330 | |
Share premium | 79,707 | 79,707 | 79,707 | |
Share based payment reserve | 1,465 | 1,227 | 1,311 | |
Hedging reserve | (2,867) | (2,118) | (2,145) | |
Retained earnings | (26,657) | (21,300) | (23,604) | |
Equity attributable to the equity holders of the parent | 61,978 | 67,841 | 65,599 | |
Non controlling interest | 550 | 550 | 550 | |
Total equity and liabilities | 113,281 | 111,076 | 108,365 | |
| ||||
Unaudited interim consolidated cash flow statement
For the six months to 31 December 2012
Six months to31 December 2012 | Six months to31 December 2011 | Year to30 June 2012 | |
£'000 | £'000 | £'000 | |
(un-audited) | (un-audited) | (audited) | |
Cash flows from operating activities | |||
Net cash generated/(used) in operations | 1,509 | (578) | 671 |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (6,252) | (9,517) | (17,211) |
Capitalised development costs | (1,991) | (1,290) | (3,283) |
Business combinations | - | (450) | (450) |
Net proceeds from sale of subsidiary | - | 2,329 | 2,329 |
Interest received | - | 14 | - |
Movement in restricted cash accounts | 1,739 | (9,655) | (7,682) |
Net cash used in investing activities | (6,504) | (18,569) | (26,297) |
Cash flows from financing activities | |||
New borrowings (net of issue costs) | 8,809 | 23,957 | 23,892 |
Interest paid | (948) | (366) | (717) |
Repayment of borrowings | (680) | (299) | (819) |
Dividends paid to Company's shareholders | (1,549) | - | (2,065) |
Net cash generated from financing activities | 5,632 | 23,292 | 20,291 |
Net increase/ (decrease) in cash and cash equivalents | 637 | 4,144 | (5,335) |
Cash at beginning of period | 9,566 | 14,901 | 14,901 |
Cash at end of period | 10,203 | 19,045 | 9,566 |
Unaudited statement of comprehensive income
For the six months to 31 December 2012
Six months ended 31 December 2012 | Six months ended 31 December 2011 |
Year ended 30 June 2012 | |
£'000 | £'000 | £'000 | |
(un-audited) | (un-audited) | (audited) | |
Profit / (loss) for the period | (1,504) | 7 | (1,797) |
Other comprehensive income / (expenditure) | - | - | - |
Effective portion of change in fair value cash flow hedges net of recycling | (722) | (2,118) | (2,145) |
Total comprehensive income / (expenditure) for the period net of tax | (2,226) | (2,111) | (3,942) |
Attributable to | |||
Equity holders of the parent | (2,226) | (2,111) | (3,942) |
Non controlling interest | - | - | - |
Total | (2,226) | (2,111) | (3,942) |
Unaudited interim consolidated statement of changes in equity
For the six months to 31 December 2012
Share capital |
Share premium account | Share based paymentsreserve |
Hedging reserve |
Retained earnings | Non controlling interest | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 July 2012 | 10,330 | 79,707 | 1,311 | (2,145) | (23,604) | 550 | 66,149 |
Total comprehensive income | - | - | - | (722) | (1,504) | - | (2,226) |
Share based payments | - | - | 154 | - | - | 154 | |
Dividend (note 2) | - | - | - | - | (1,549) | - | (1,549) |
Acquisitions of non controlling interest with a change of control | - | - | - | - | - | - | - |
At 31 December 2012 | 10,330 | 79,707 | 1,465 | (2,867) | (26,657) | 550 | 62,528 |
Notes to the un-audited 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 2012. The Group does not anticipate any change in these accounting policies for the year ended 30 June 2013. 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 2012 | Six months to31 December 2011 | Year to30 June 2012 | |
Declared and paid during the period onordinary equity shares | £'000 | £'000 | £'000 |
(un-audited) | (un-audited) | (audited) | |
Final dividend declared and paid | 1,549 | 1,549 | 1,549 |
Interim dividend declared and paid | - | - | 516 |
1,549 | 1,549 | 2,065 | |
Proposed but not recognised as a liability at 31 December 2012 | |||
Equity dividends on ordinary shares: | |||
Interim dividend declared and paid - 0.5p | 516 | 516 | - |
The dividend will be paid on 8 April 2013 to members on the register on 22 March 2013. Shares will be marked ex-dividend on 20 March 2013.
3. Intangible assets
(un-audited) | Development costs | Goodwill | Total |
£'000 | £'000 | £'000 | |
Cost | |||
At 1 January 2012 | 7,278 | 7,390 | 14,668 |
Additions | 1,684 | - | 1,684 |
Transfers to property, plant and equipment | (492) | - | (492) |
At 30 June 2012 | 8,470 | 7,390 | 15,860 |
Additions | 1,991 | - | 1,991 |
Transfers to property, plant and equipment | (197) | - | (197) |
At 31 December 2012 | 10,264 | 7,390 | 17,654 |
Amortisation and impairment | |||
At 1 January 2012 | 384 | - | 384 |
Amortisation charge | 6 | - | 6 |
Impairment charge | 398 | - | 398 |
At 30 June 2012 | 788 | - | 788 |
At 31 December 2012 | 788 | - | 788 |
Net book value | |||
At 31 December 2012 | 9,476 | 7,390 | 16,866 |
At 30 June 2012 | 7,682 | 7,390 | 15,072 |
At 1 January 2012 | 6,894 | 7,390 | 14,284 |
Included within additions to development costs are internal development costs of £200,000 (2012: £160,000).
4. Property, plant and equipment
(un-audited) | 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 2012 | 49,372 | 5,588 | 9,624 | 1,252 | 1,500 | 67,336 |
Additions | 35 | 30 | 8,007 | - | 158 | 8,230 |
Transfers from Development costs | 219 | - | 273 | - | - | 492 |
Movements | 11,694 | 48 | (11,742) | - | - | - |
At 30 June 2012 | 61,320 | 5,666 | 6,162 | 1,252 | 1,658 | 76,058 |
Additions | 877 | (37) | 5,490 | - | 336 | 6,666 |
Movements | 6,531 | - | (6,531) | - | - | - |
Transfers from Development costs | - | - | 197 | - | - | 197 |
Assets classified as held for sale | (18,704) | - | - | - | - | (18,704) |
At 31 December 2012 | 50,024 | 5,629 | 5,318 | 1,252 | 1,994 | 64,217 |
Depreciation | ||||||
At 1 January 2012 | 6,254 | 481 | - | - | 413 | 7,148 |
Depreciation charge | 1,442 | 146 | - | - | 117 | 1,705 |
At 30 June 2012 | 7,696 | 627 | - | - | 530 | 8,853 |
Depreciation charge | 1,412 | 42 | - | 152 | 1,606 | |
At 31 December 2012 | 9,108 | 669 | - | - | 682 | 10,459 |
Net book value | ||||||
At 31 December 2012 | 40,916 | 4,960 | 5,318 | 1,252 | 1,312 | 53,758 |
At 30 June 2012 | 53,624 | 5,039 | 6,162 | 1,252 | 1,128 | 67,205 |
At 1 January 2012 | 43,098 | 5,107 | 9,624 | 1,252 | 1,087 | 60,188 |
During the period an amount of £414,000 (2012 - £427,000) 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. Cash
Six months to31 December 2012 | Six months to31 December 2011 | Year to30 June 2012 | |
£'000 | £'000 | £'000 | |
(un-audited) | (un-audited) | (audited) | |
Amounts deposited as security for letters of credit for settlement of turbine acquisitions | 1,822 | 6,003 | 4,075 |
Amounts placed as security for project finance | 3,020 | 2,583 | 2,507 |
Amounts placed as security against maintenance contractor | 2,000 | 2,000 | 2,000 |
Restricted cash | 6,842 | 10,556 | 8,582 |
Restricted cash included in disposal group held for sale | (735) | - | - |
6,107 | - | - | |
Cash and cash equivalents | 10,203 | 19,045 | 9,566 |
Cash included in disposal group held for sale | (279) | - | - |
9,924 | 19,045 | 9,566 |
6. Trade and other payables
Six months to31 December 2012 | Six months to31 December 2011 | Year to30 June 2012 | |
£'000 | £'000 | £'000 | |
(un-audited) | (un-audited) | (audited) | |
Trade payables | 931 | 806 | 1,400 |
Final dividend | - | 1,549 | - |
Deferred consideration | 1,850 | 1,850 | 1,850 |
Accruals and other creditors | 1,415 | 1,162 | 1,643 |
4,196 | 5,367 | 4,949 |
Included within deferred consideration is £1,200,000 which relates to the acquisition of the St. Breock wind farm from E.ON Climate and Renewables UK Operations Ltd and is payable on gaining satisfactory planning permission to repower the site.
Also included within deferred consideration is £650,000 on the acquisition of REG Creagh JV Limited, which is payable on financial close.
7. Post balance sheet events
On 22 January 2013, the Group's 6MW South Sharpley Wind Farm in County Durham entered commercial electricity production. Under the terms of the project financing with The Co-operative Bank the group drew down the second and final tranche of £6.3m from the loan agreement.
On 23 January 2013, the Group disposed of two newly built wind farms at Sancton Hill (10MW) and South Sharpley (6MW) to for a total enterprise value of £32.1m, resulting in upfront cash consideration of £16.15m, contingent deferred consideration of £0.65m and the buyer assuming project net debt of £15.3m.
£'000 | |
(un-audited) | |
Net assets held for sale at 31 December 2012 | 10,496 |
Post balance sheet increase in assets held for sale | 1,058 |
Post balance sheet liabilities associated with assets held for sale | (5,867) |
Net assets of disposal group | 5,687 |
As at 31 December 2012 £501,000 of fees (2012: £nil) in respect of the disposal have been charged to the income statement.
Related Shares:
WIND.L