30th Sep 2010 07:00
30 September 2010
Renewable Energy Holdings plc
("REH", "the Company" or "the Group")
Interim results for the six months ended 30 June 2010
Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor and operator of European wind farms, is pleased to announce its interim results for the six months ended 30 June 2010.
Highlights
·; Loss before tax £1.1 million (2009 H1: loss of £1.7 million)
·; Completed disposal of landfill gas asset, Bryn Posteg, giving a profit on disposal of £600k
·; Post period end, completed disposal of German wind assets to Allianz Renewable Energy Management GmbH for total cash consideration of up to €39.8 million (pre debt repayment and expenses)
Commenting on the results, Mike Proffitt, Chief Executive of REH, said:
"2010 has been a transformational year for REH culminating in the sale of our German wind assets in September. The Company is in a strong financial position with a solid balance sheet and 29% shareholding in Carnegie Wave Energy Ltd and its CETO technology. REH will maintain focus on its wind projects in Poland and Wales and looks forward to updating shareholders on progress in due course."
For further information please contact:
|
Renewable Energy Holdings plc Mike Proffitt, Chief Executive
|
Tel: +44 (0)16 2464 1199 |
|
Strand Hanson Limited Rory Murphy / James Spinney
|
Tel: +44 (0)20 7409 3494 |
|
Novus Capital Markets Ltd Charles Goodfellow / Paul Dudley
|
Tel: +44 (0)20 7107 1872 |
|
Financial Dynamics Billy Clegg / Ed Westropp / Alex Beagley |
Tel: +44(0)20 7831 3113 |
Chairman's Statement
As I pointed out in my Chairman's Statement accompanying our 31 December 2009 results we must be prepared to dispose of assets, if necessary, in order to improve shareholder returns.
Landfill gas was deemed not to be in our core business strategy and we successfully disposed of this asset in February of this year.
Germany's wind regime in 2009 and early 2010 was once again below national average and the Board decided that the equity capital in the German investment should be liberated and invested elsewhere.
A sale of the German wind assets was successfully completed 28 September 2010 following an EGM on 23 September 2010. This disposal helps provide the cash resources required to proceed with the Polish wind farm opportunity of 30 MW, considered by the Board to have much stronger potential shareholder value.
We continue to be in discussions with various debt providers in relation to project financing for Poland which would allow us to commence construction. Further announcements will be made in due course
Our Welsh wind farm opportunity of 69MW is progressing through the consultation process and we expect to submit an application for planning in early 2011.
We have been monitoring our investment in Carnegie Wave Energy and are pleased to note that the CETO development programme is on track for the deployment of a full size demonstration plant in November of this year, and we are confident that results of this exercise will herald the beginning of CETO's commercialisation. We continue to believe that this investment will provide strong shareholder value.
Finally, subject to the relevant shareholder approval, we intend to embark on a share buy back programme which we intend to use as a means of removing "overhang" in the market and we believe that this will relieve the stock price from the pressure of institutional sellers who are no longer willing or able to invest in or hold small cap companies. Further announcements will be made in due course.
Outlook
The Board now feel that, with the cash resources in hand, we can proceed with plans to grow the company that had effectively stalled earlier last year. The Board's confidence in Poland, Wales, our Carnegie Wave Energy investment (CETO) and our pipeline has never diminished and we are pleased that we are now in a position to commence realising these potential values.
Sir John Baker
Chairman
|
Consolidated income statement for the six months ended 30 June 2010 (unaudited) |
|
|
Note |
Six months ended 30 June 2010 (Unaudited)
|
Six months ended 30 June 2009 (Unaudited) |
Year ended 31 December 2009 (Audited)
|
|
|
|
£ |
£ |
£ |
|
Revenue |
|
- |
- |
3,909,705 |
|
|
|
|
|
|
|
Cost of sales |
|
(53,405) |
- |
(48,053) |
|
|
|
|
|
|
|
Gross profit/(loss) |
|
(53,405) |
- |
3,861,652 |
|
|
|
|
|
|
|
Other operating income |
|
57,928 |
182,800 |
282,501 |
|
Administrative expenses |
|
(1,156,067) |
(1,844,380) |
(3,021,727) |
|
|
|
|
|
|
|
Profit/(loss) from operations |
|
(1,151,544) |
(1,661,580) |
1,122,426 |
|
|
|
|
|
|
|
Profit on disposal of subsidiary |
|
606,105 |
- |
- |
|
Profit on disposal of intangible assets |
|
- |
- |
11,110,597 |
|
Share of losses in associate |
|
(414,102) |
(155,196) |
(322,409) |
|
Finance income |
|
16,052 |
75,172 |
76,266 |
|
Finance costs |
|
(131,171) |
- |
(27,820) |
|
|
|
|
|
|
|
Profit/(loss) before tax |
|
(1,074,660) |
(1,741,604) |
11,959,060 |
|
|
|
|
|
|
|
Tax expense |
|
(4,369) |
(227,384) |
(656,766) |
|
|
|
|
|
|
|
Profit/(loss) for the period from continuing operations |
|
(1,079,029) |
(1,968,988) |
11,302,294 |
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
Loss for the period from discontinued operations |
3 |
(1,599,784) |
(439,436) |
(1,010,361) |
|
|
|
|
|
|
|
Profit /(loss) for the period |
|
(2,678,813) |
(2,408,424) |
10,291,933 |
|
|
|
|
|
|
|
Earnings/(loss) per share attributable to the equity holders of the company during the period: |
||||
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
|
From continuing operations |
|
(1.55p) |
(3.00p) |
16.84 p |
|
From discontinued operations |
|
(2.30p) |
(0.67p) |
(1.51p) |
|
|
|
(3.85p) |
(3.67p) |
15.34 p |
|
Consolidated statement of comprehensive income for the six months ended 30 June 2010 (unaudited) |
|
|
Six months ended 30 June 2010 (Unaudited)
|
Six months ended 30 June 2009 (Unaudited)
|
Year ended 31 December 2009 (Audited)
|
|
|
£ |
£ |
£ |
|
|
|
|
|
|
Profit/(loss) for the period |
(2,678,813) |
(2,408,424) |
10,291,933 |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Exchange differences on |
(1,336,574) |
(2,158,174) |
(1,505,403) |
|
translating foreign operations |
|
|
|
|
Disposal of available for sale financial assets |
- |
- |
34,066 |
|
Revaluation of available for sale financial assets |
- |
259,926 |
-
|
|
|
|
|
|
|
Total comprehensive income/(expense) for the period |
(4,015,387)
|
(4,306,672) |
8,820,596 |
|
|
|
|
|
|
Total comprehensive income/(expense) attributable to the equity holders of the company |
(4,015,387)
|
(4,306,672) |
8,820,596 |
|
Consolidated statement of changes in equity for the six months ended 30 June 2010 (unaudited) |
|
|
Share capital |
Share premium reserve |
Foreign exchange reserve |
Share based payment reserve |
Merger reserve |
Retained earnings |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
Balance at 1 January 2010 |
696,094 |
26,739,529 |
3,075,251 |
1,079,285 |
4,410,000 |
1,149,149 |
37,149,308 |
|
|
|
|
|
|
|
|
|
|
Changes in equity 1 Jan 2010 to 30 June 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive expense for the period |
- |
- |
(1,336,574) |
- |
- |
(2,678,813) |
(4,015,387) |
|
|
|
|
|
|
|
|
|
|
Share based payment charge |
- |
- |
- |
12,967 |
- |
- |
12,967 |
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2010 |
696,094 |
26,739,529 |
1,738,677 |
1,092,252 |
4,410,000 |
(1,529,664) |
33,146,888 |
|
Consolidated statement of changes in equity for the six months ended 30 June 2009 (unaudited) |
|
|
Share capital |
Share premium reserve |
Convertible loan notes |
Foreign exchange reserve |
Share based payment reserve |
Merger reserve |
Available for sale reserve |
Retained earnings |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
Balance at 1 January 2009 |
655,586 |
26,025,411 |
1,500,000
|
4,580,654 |
1,046,960 |
4,410,000 |
(34,066) |
(9,142,784) |
29,041,761 |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in equity 1 Jan 2009 to 30 June 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive expense for the year |
- |
- |
- |
(2,158,174) |
- |
- |
259,926 |
(2,408,424) |
(4,306,672) |
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment charge |
- |
- |
- |
- |
16,163 |
- |
- |
- |
16,163 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2009 |
655,586 |
26,025,411 |
1,500,000 |
2,422,480 |
1,063,123 |
4,410,000 |
225,860 |
(11,551,208) |
24,751,252 |
|
Consolidated statement in changes in equity for the year ended 31 December 2009 (audited) |
|
|||||||||
|
|
Share capital |
Share premium reserve |
Convertible loan notes |
Foreign exchange reserve |
Share based payment reserve |
Merger reserve |
Available for sale reserve |
Retained earnings |
Total equity |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
Balance at 1 January 2009 |
655,586 |
26,025,411 |
1,500,000
|
4,580,654 |
1,046,960 |
4,410,000 |
(34,066) |
(9,142,784) |
29,041,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in equity 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
(1,505,403) |
- |
- |
34,066 |
10,291,933 |
8,820,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment charge |
- |
- |
- |
- |
32,325 |
- |
- |
- |
32,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
40,508 |
714,118 |
- |
- |
- |
- |
- |
- |
754,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of convertible loan notes |
- |
- |
(1,500,000) |
- |
- |
- |
- |
- |
(1,500,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2009 |
696,094 |
26,739,529 |
- |
3,075,251 |
1,079,285 |
4,410,000 |
- |
1,149,149 |
37,149,308 |
|
|
Consolidated balance sheet at 30 June 2010 (unaudited) |
|
|
Note |
30 June 2010 (Unaudited) |
30 June 2009 (Unaudited) |
31 December 2009 (Audited) |
|
|
|
£ |
£ |
£ |
|
Non-current assets |
|
|
|
|
|
Property, plant & equipment |
|
1,722,051 |
38,201,970 |
39,934,373 |
|
Intangible assets |
|
1,564,974 |
1,773,533 |
1,564,974 |
|
Non current assets held for sale |
|
- |
10,721,228 |
- |
|
Investment in equity accounted associate |
|
23,228,026 |
139,144 |
23,642,128 |
|
Available for sale financial asset |
|
589,484 |
- |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
979,813 |
4,060,648 |
2,341,065 |
|
Trade and other receivables |
|
986,867 |
1,807,162 |
1,794,547 |
|
Assets of a disposal group classified as held for sale |
2,3 |
33,436,760 |
- |
2,076,587 |
|
Available for sale financial asset |
|
- |
497,393 |
- |
|
Deferred tax asset |
|
197,515 |
- |
197,515 |
|
|
|
|
|
|
|
Total current assets |
|
35,600,955 |
6,365,203 |
6,409,714 |
|
|
|
|
|
|
|
Total assets |
2 |
62,705,490 |
57,201,078 |
71,551,189 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
1,669,029 |
1,645,868 |
3,219,330 |
|
Income tax liability |
|
837,556 |
227,384 |
843,813 |
|
Other financial liabilities |
|
- |
2,326,743 |
2,517,551 |
|
Liabilities directly associated with assets of disposal group classified as held for sale |
2,3 |
24,552,017 |
- |
71,197 |
|
|
|
|
|
|
|
Total current liabilities |
|
27,058,602 |
4,199,995 |
6,651,891 |
|
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
|
Financial liabilities |
|
2,500,000 |
24,114,608 |
27,169,273 |
|
Deferred licence fee income |
|
- |
3,905,314 |
- |
|
Deferred tax liability |
|
- |
229,909 |
580,717 |
|
|
|
|
|
|
|
Total non current liabilities |
|
2,500,000 |
28,249,831 |
27,749,990 |
|
|
|
|
|
|
|
Total liabilities |
2 |
29,558,602 |
32,449,826 |
34,401,881 |
|
|
|
|
|
|
|
NET ASSETS |
|
33,146,888 |
24,751,252 |
37,149,308 |
|
|
|
|
|
|
|
Consolidated balance sheet at 30 June 2010 (unaudited) (continued) |
|
|||
|
|
Note |
30 June 2010 (Unaudited) |
30 June 2009 (Unaudited) |
31 December 2009 (Audited) |
|
|
|
£ |
£ |
£ |
|
Capital and reserves attributable to equity holders of the company |
|
|
|
|
|
Share capital |
|
696,094 |
655,586 |
696,094 |
|
Share premium reserve |
|
26,739,529 |
26,025,411 |
26,739,529 |
|
Convertible loan notes |
|
- |
1,500,000 |
- |
|
Foreign exchange reserve |
|
1,738,677 |
2,422,480 |
3,075,251 |
|
Share-based payment reserve |
|
1,092,252 |
1,063,123 |
1,079,285 |
|
Merger reserve |
|
4,410,000 |
4,410,000 |
4,410,000 |
|
Available for sale reserve |
|
- |
225,860 |
- |
|
Retained earnings |
|
(1,529,664) |
(11,551,208) |
1,149,149 |
|
|
|
|
|
|
|
TOTAL EQUITY |
|
33,146,888 |
24,751,252 |
37,149,308 |
|
|
|
|
|
|
These interim financial statements were approved by the Directors and authorised for issue on 28 September 2010 they were signed on its behalf by:
John Baker, Chairman Michael J. Proffitt, Director
|
Consolidated cash flow statement for the six months ended 30 June 2010 (unaudited) |
|
|
30 June 2010 (Unaudited) |
30 June 2009 (Unaudited) |
31 December 2009 (Audited) |
|
|
£ |
£ |
£ |
|
Operating activities |
|
|
|
|
Profit/(loss) after tax, including discontinued operations |
(2,678,813) |
(2,408,424) |
10,291,933 |
|
Adjustments for : |
|
|
|
|
Depreciation |
1,133,237 |
1,147,337 |
2,409,928 |
|
Amortisation |
7,876 |
52,679 |
105,358 |
|
Impairment of assets classified as held for sale |
1,300,000 |
- |
- |
|
Foreign exchange gain/(loss) |
74,530 |
(247,158) |
(347,760) |
|
Finance income |
(16,052) |
(76,016) |
(77,568) |
|
Finance expense |
558,027 |
720,162 |
1,605,164 |
|
Share of loss in associate |
414,102 |
155,197 |
322,409 |
|
Equity settled share-based payment |
12,967 |
16,163 |
32,325 |
|
Profit on disposal of intangibles |
- |
- |
(11,110,597) |
|
Profit on disposal of subsidiary |
(606,105) |
- |
- |
|
Release of deferred income |
- |
- |
(3,626,981) |
|
Income tax expense |
138,005 |
227,384 |
1,015,767 |
|
|
|
|
|
|
Cash inflow/(outflow) from operating activities before changes in working capital |
337,774 |
(412,676) |
619,978 |
|
|
|
|
|
|
Decrease in trade and other receivables |
376,536 |
659,322 |
364,757 |
|
(Decrease)/Increase in trade and other payables |
(1,171,446) |
1,163,143 |
2,562,843 |
|
|
|
|
|
|
Cash (used by)/generated from operations |
(457,136) |
1,409,789 |
3,547,578 |
|
|
|
|
|
|
Income taxes paid |
(115,890) |
- |
(10,905) |
|
|
|
|
|
|
Cash flows from operating activities |
(573,026) |
1,409,789 |
3,536,673 |
|
Consolidated cash flow statement for the six months ended 30 June 2010 (unaudited) (continued) |
|
|
|
30 June 2010 (Unaudited) |
30 June 2009 (Unaudited) |
31 December 2009 (Audited) |
|
|
|
|
£ |
£ |
£ |
|
|
Cash flows from operating activities |
|
(573,026) |
1,409,789 |
3,536,673 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Acquisition of property, plant & equipment |
|
(13,479) |
(286,912) |
(1,227,652) |
|
|
Proceeds from disposal subsidiary |
|
2,093,314 |
- |
- |
|
|
Disposal costs on sale of subsidiary |
|
(106,842) |
- |
- |
|
|
Acquisition of intangible assets |
|
- |
(825,879) |
(3,761,475) |
|
|
Disposal costs on sale of intangible assets |
|
- |
- |
(403,401) |
|
|
Disposal of investments held for sale |
|
- |
- |
254,036 |
|
|
Finance income received |
|
14 |
76,016 |
10,874 |
|
|
|
|
|
|
|
|
|
Cash outflow from investing activities |
|
1,973,007 |
(1,036,775) |
(5,127,618) |
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Issue of ordinary shares |
|
- |
- |
972,199 |
|
|
Repayment of convertible loan notes |
|
- |
- |
(1,500,000) |
|
|
Issue costs |
|
- |
- |
(217,573) |
|
|
Proceeds from borrowing |
|
|
- |
2,500,000 |
|
|
Repayment of bank borrowing |
|
(1,469,837) |
(1,571,996) |
(2,438,127) |
|
|
Finance costs paid |
|
(482,950) |
(802,172) |
(1,605,164) |
|
|
|
|
|
|
|
|
|
Cash outflow from financing activities |
|
(1,952,787) |
(2,374,168) |
(2,288,665) |
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
(552,806) |
(2,001,154) |
(3,879,610)
|
|
|
Cash and cash equivalents at beginning of period/year |
|
2,374,632 |
6,451,580 |
6,451,580 |
|
|
|
|
|
|
|
|
|
Exchange gains on cash and cash equivalents |
|
(211,578) |
(389,778) |
(197,338) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period/year |
|
1,610,248 |
4,060,648 |
2,374,632 |
|
|
|
|
|
|
|
|
|
Cash held as part of a disposal group |
|
630,435 |
- |
33,567 |
|
|
Cash held in continuing operations |
|
979,813 |
4,060,648 |
2,341,065 |
|
|
|
|
1,610,248 |
4,060,648 |
2,374,632 |
|
1. Basis of preparation
This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively IFRSs).
The principal accounting policies used in preparing the interim results are those the Company expects to apply in its financial statements for the year ended 31 December 2010 and are unchanged from those disclosed in the Company's audited Annual Report and Financial Statements for the year ended 31 December 2009 which are available at www.reh-plc.com.
While the financial information included in this consolidated interim financial information has been prepared in accordance with the AIM Rules for Companies and with IFRSs, this interim consolidated financial information does not itself contain sufficient information to comply fully with IFRSs. As permitted, the Company has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements.
The financial information for the six months ended 30 June 2010 and 30 June 2009 is unaudited and does not constitute the Company's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2009 has, however, been derived from the statutory financial statements for that period. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 15.4 of the Isle of Man Companies Act 1982.
2. Segment Information
The Group has five main reportable segments:
·; Head office - this segment represents the operation of the Group's head office facility on the Isle of Man.
·; CETO development - this segment represents the remainder of the Group's operations in Perth, Western Australia, following the sale of the CETO intellectual property in 2009.
·; German windfarms - this segment represents the operational windfarms at Kirf and Kesfeld.
·; Polish windfarms - this segment represents the windfarm under construction at Kobylany.
·; Landfill gas - this segment represents the landfill gas site at Bryn Posteg in Wales.
|
Six months ended June 2010 |
Head office |
CETO development |
Windfarms |
Windfarms |
Landfill gas |
|
|
|
Isle of Man |
Australia |
Germany |
Poland |
Wales |
Total |
|
|
|
|
(Discontinued) |
|
(Discontinued) |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Revenue |
|
|
|
|
|
|
|
Total revenue |
450,417 |
- |
- |
- |
- |
450,417 |
|
Intersegmental revenue |
(450,417) |
- |
- |
- |
- |
(450,417) |
|
Revenue from external customers |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Cost of sales |
- |
- |
- |
(53,405) |
- |
(53,405) |
|
Administration expenses |
(1,103,288) |
(48,088) |
- |
(293) |
- |
(1,151,667) |
|
Finance income |
16,052 |
- |
- |
- |
- |
16,052 |
|
Finance costs |
(131,171) |
- |
- |
- |
- |
(131,171) |
|
|
|
|
|
|
|
|
|
Other income |
57,928 |
- |
- |
- |
- |
57,928 |
|
Profit on disposal of subsidiary |
606,105 |
- |
- |
- |
- |
606,105 |
|
Depreciation |
(4,400) |
- |
- |
- |
- |
(4,400) |
|
|
|
|
|
|
|
|
|
Segment loss before tax |
(558,774) |
(48,088) |
- |
(53,698) |
- |
(660,558) |
|
|
|
|
|
|
|
|
|
Profit/(loss) from discontinued operations |
- |
- |
(1,654,428) |
- |
54,644 |
(1,599,784) |
|
Share of losses in associate |
(414,102) |
- |
- |
- |
- |
(414,102) |
|
|
|
|
|
|
|
|
|
Additions to non-current assets |
602,966 |
- |
- |
526,374 |
|
|
|
|
|
|
|
|
|
|
|
Additions to non-current assets |
163 |
313 |
-- |
-- |
-- |
477 |
|
|
|
|
|
|
|
|
|
Investment in associate |
23,228,026 |
- |
- |
- |
- |
23,228,026 |
|
|
|
|
|
|
|
|
|
Reportable segment assets |
4,145,476 |
208,483 |
- |
1,686,745 |
- |
6,040,704 |
|
Reportable segment liabilities |
(3,198,708) |
(1,671,966) |
- |
(135,911) |
- |
(5,006,585) |
|
|
|
|
|
|
|
|
|
Non current assets held for sale |
- |
- |
33,436,760 |
- |
- |
33,436,760 |
|
Non current liabilities held for sale |
- |
- |
(24,552,017) |
- |
- |
(24,552,017) |
2. Segment Information (continued)
|
Six months ended June 2009 |
Head office |
CETO development |
Windfarms |
Windfarms |
Landfill gas |
|
|
|
Isle of Man |
Australia |
Germany |
Poland |
Wales |
Total |
|
|
|
|
(Discontinued) |
|
(Discontinued) |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Revenue |
|
|
|
|
|
|
|
Total revenue |
50,000 |
- |
- |
- |
- |
50,000 |
|
Intersegmental revenue |
(50,000) |
- |
- |
- |
- |
(50,000) |
|
Revenue from external customers |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Cost of sales |
- |
- |
- |
- |
- |
- |
|
Administration expenses |
(1,536,802) |
(307,579) |
- |
- |
- |
(1,844,381) |
|
Finance income |
75,141 |
32 |
- |
- |
- |
75,173 |
|
Finance costs |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Other income |
182,800 |
- |
- |
- |
- |
182,800 |
|
Profit on disposal of subsidiary |
- |
- |
- |
- |
- |
- |
|
Depreciation |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Segment loss before tax |
(1,278,861) |
(307,547) |
- |
- |
- |
(1,586,408) |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
- |
- |
(439,294) |
- |
(143) |
(439,436) |
|
Share of losses in associate |
(155,196) |
- |
- |
- |
- |
(155,196) |
|
|
|
|
|
|
|
|
|
Additions to non-current assets |
- |
-- |
-- |
-- |
-- |
- |
|
|
|
|
|
|
|
|
|
Investment in associate |
139,144 |
- |
- |
- |
- |
139,144 |
|
|
|
|
|
|
|
|
|
Reportable segment assets |
5,320,945 |
59,145 |
40,214,436 |
- |
248,788 |
46,340,706 |
|
Reportable segment liabilities |
(606,463) |
(563,097) |
(31,014,017) |
- |
(266,249) |
(32,449,826) |
|
|
|
|
|
|
|
|
|
Non current assets held for sale |
- |
- |
10,721,228 |
- |
- |
10,721,228 |
2. Segment Information (continued)
|
Year ended 31 December 2009 |
Head office |
CETO development |
Windfarms |
Windfarms |
Landfill gas |
|
|
|
Isle of Man |
Australia |
Germany |
Poland |
Wales |
Total |
|
|
|
|
(Discontinued) |
|
(Discontinued) |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Revenue |
|
|
|
|
|
|
|
Total revenue |
100,000 |
3,909,705 |
- |
- |
- |
4,009,705 |
|
Intersegmental revenue |
(100,000) |
- |
- |
- |
- |
(100,000) |
|
Revenue from external customers |
- |
3,909,705 |
- |
- |
- |
3,909,705 |
|
|
|
|
|
|
|
|
|
Cost of sales |
- |
- |
- |
(48,053) |
- |
(48,053) |
|
Administration expenses |
(2,678,782) |
(306,202) |
- |
- |
- |
(2,984,984) |
|
Finance income |
76,212 |
54 |
- |
- |
- |
76,266 |
|
Finance costs |
(27,820) |
- |
- |
- |
- |
(27,820) |
|
|
|
|
|
|
|
|
|
Other income |
238,400 |
44,101 |
- |
- |
- |
282,501 |
|
Profit on disposal of intangible assets |
11,110,597 |
- |
- |
- |
- |
11,110,597 |
|
Depreciation |
(8,389) |
(28,354) |
- |
- |
- |
(36,743) |
|
|
|
|
|
|
|
|
|
Segment profit/(loss) before tax |
8,710,218 |
3,619,304 |
- |
(48,053) |
- |
12,281,469 |
|
|
|
|
|
|
|
|
|
Profit/(loss) from discontinued operations |
- |
- |
(1,159,978) |
- |
149,617 |
(1,010,361) |
|
Share of losses in associate |
(322,409) |
- |
- |
- |
- |
(322,409) |
|
|
|
|
|
|
|
|
|
Additions to non-current assets |
602,966 |
- |
- |
526,374 |
98,312 |
1,227,652 |
|
|
|
|
|
|
|
|
|
Investment in associate |
23,642,128 |
- |
- |
- |
- |
23,642,128 |
|
|
|
|
|
|
|
|
|
Reportable segment assets |
2,193,547 |
277,031 |
41,269,646 |
2,092,250 |
- |
45,832,474 |
|
Reportable segment liabilities |
(4,174,112) |
(1,715,206) |
(28,319,843) |
(121,523) |
- |
(34,330,684) |
|
|
|
|
|
|
|
|
|
Non current assets held for sale |
- |
- |
- |
- |
2,076,587 |
2,076,587 |
|
Non current liabilities held for sale |
|
|
- |
- |
(71,197) |
(71,197) |
3. Discontinued operations
In February 2010 the Group sold its shares in Gwynt Cymru Limited. Gwynt Cymru Limited operated the Group's landfill gas site at Bryn Posteg in Wales. The consideration due to REH of up to £2.75m is payable in cash. £2m was paid on completion of the sale and has been received in the period. The £750,000 of deferred consideration is calculable on a sliding scale, in the event that the purchaser increases the output capacity of the site. The deferred consideration has been recognised in the period as an available for sale financial asset with a fair value of £589,484 at 30 June 2010. Should no additional capacity be added to the facility, a payment of £250,000 will be due from the purchaser on 31 January 2012. The assets and liabilities of Gwynt Cymru Limited were classified in the Group's Consolidated Balance Sheet at 31 December 2009 as held for sale.
During 2010 the Group entered into discussions to sell its German windfarm operations and on 23 September 2010 the Group secured shareholder approval for the sale of the Group's entire interests in Windpark Kesfeld Heckhuscheid GmbH & Co KG ("Kesfeld") and Windpark Kirf GmbH & Co KG ("Kirf") to Allianz Renewable Energy Management GmbH for a total cash consideration of up to €39.8 million, comprising up to €37.8 million of Initial Consideration and up to €2.0 million of Deferred Consideration.
At 30 June 2010 the directors believe that the assets classified as held for sale are impaired and as a result an impairment charge of £1.3m has been recognised at the period end. The directors are confident that this impairment charge will be offset by the crystallisation of foreign exchange gains in the second half of the year that are realised on the net proceeds of the disposal of the windfarms after the repayment of the associated £23.6m of financial liabilities secured on the assets.
The following major classes of assets and liabilities relating to Kesfeld and Kirf which represent all of the Group's activities in its German windfarm segment, have been classified as held for sale in the Consolidated Balance Sheet at 30 June 2010.
|
|
Kirf |
Kesfeld |
Total |
|
|
£ |
£ |
£ |
|
Property, plant and equipment |
7,236,804 |
24,821,381 |
32,058,185 |
|
Trade and other receivables |
57,120 |
691,020 |
748,140 |
|
Cash |
106,385 |
524,050 |
630,435 |
|
|
7,400,309 |
26,036,451 |
33,436,760 |
|
|
|
|
|
|
Trade and other payables |
(23,836) |
(939,815) |
(963,651) |
|
Other financial liabilities |
(4,936,155) |
(18,652,211) |
(23,588,366) |
|
|
(4,959,991) |
(19,592,026) |
(24,552,017) |
|
|
|
|
|
|
Net assets |
2,440,318 |
6,444,425 |
8,884,743 |
Accordingly, the Group's German windfarm operations and Gwynt Cymru Limited have been presented as discontinued operations. In accordance with IFRS 5 the income statement results of Kesfeld and Kirf for the six months ended 30 June 2010 and the results for Gwynt Cymru Limited up to its date of sale, 23 February 2010, together with the comparatives for the year ended 31 December 2009 and the period ended 30 June 2009 have been restated to exclude income generated and expenses incurred by Kesfeld, Kirf and Gwynt Cymru Limited and their results have been disclosed as a single line item "Loss for the period from discontinued operations" in the income statement.
3. Discontinued operations (continued)
|
Result of discontinued operations 30 June 2010 |
Kirf |
Kesfeld |
Gwynt Cymru Limited |
Total |
|
|
£ |
£ |
£ |
£ |
|
Revenue |
503,630 |
1,409,888 |
113,007 |
2,026,525 |
|
Other income |
- |
15,355 |
- |
15,355 |
|
Expenses other than finance costs* |
(446,919) |
(2,711,526) |
(58,363) |
(3,216,808) |
|
Finance costs |
(116,321) |
(308,535) |
- |
(424,856) |
|
Profit/(loss) for the year |
(59,610) |
(1,594,818) |
54,644 |
(1,599,784) |
*-'Expenses other than finance costs' for Kesfeld include an impairment charge of £1.3m
|
Result of discontinued operations 30 June 2009 |
Kirf |
Kesfeld |
Gwynt Cymru Limited |
Total |
|
|
£ |
£ |
£ |
£ |
|
Revenue |
497,432 |
1,582,263 |
198,757 |
2,278,452 |
|
Expenses other than finance costs |
(346,519) |
(1,452,378) |
(198,900) |
(1,997,797) |
|
Finance costs |
(133,377) |
(586,714) |
- |
(720,091) |
|
Profit/(loss) for the year |
17,536 |
(456,829) |
(143) |
(439,436) |
|
Result of discontinued operations 31 December 2009 |
Kirf |
Kesfeld |
Gwynt Cymru Limited |
Total |
|
|
£ |
£ |
£ |
£ |
|
Revenue |
1,105,730 |
3,390,669 |
530,434 |
5,026,833 |
|
Other income |
- |
- |
24,727 |
24,727 |
|
Expenses other than finance costs |
(713,264) |
(3,431,032) |
(405,544) |
(4,549,840) |
|
Finance costs |
(282,450) |
(1,229,631) |
- |
(1,512,081) |
|
Profit/(loss) for the year |
110,016 |
(1,269,994) |
149,617 |
(1,010,361) |
4. Events after the balance sheet date
As disclosed in note 3, during 2010 the Group entered into discussions to sell its German windfarm operations and on 23 September 2010 the group secured shareholder approval for the sale of the Group's entire interests in Windpark Kesfeld Heckhuscheid GmbH & Co KG ("Kesfeld") and Windpark Kirf GmbH & Co KG ("Kirf") to Allianz Renewable Energy Management GmbH for a total cash consideration of up to €39.8 million, comprising up to €37.8 million of Initial Consideration and up to €2.0 million of Deferred Consideration. On the 28 September 2010 the sale was completed.
Independent review report to Renewable Energy Holdings plc
Introduction
We have been engaged by the company to review the interim consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2010, which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial statements included in this half-yearly financial report have been prepared in accordance with the basis of preparation set out in note 1.
Our responsibility
Our responsibility is to express to the company a conclusion on the interim financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the International Auditing and Assurance Standards Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with the basis set out in note 1 and the AIM Rules for Companies.
PricewaterhouseCoopers LLC
Chartered Accountants
Douglas, Isle of Man
29 September 2010
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