19th Sep 2007 07:01
Alkane Energy PLC19 September 2007 Immediate Release 19 September 2007 Alkane Energy plc ("Alkane" or "the Company") Unaudited interim results for the half-year ended 30 June 2007 Alkane Energy plc (AIM:ALK) the international renewable energy company thatdesigns, builds, operates and services methane treatment and electricitygeneration plants. These plants greatly reduce emissions of damaging greenhousegases and help in global efforts to slow climate change. Financial Highlights •Profit after tax £310,000 (2006 H1: loss after tax £484,000) •Earnings per share up to 0.34p (2006 H1: loss per share 0.53p) •Turnover up 29.6% (excluding Pro2) £2,359,000 (2006 H1: £1,820,000) •Pro2 now an associate company (2006 H1 Alkane turnover incl. Pro2 £8,435,000) •Cash and cash equivalents £1,446,000 (2006 H1: £843,000) •Net debt position of £491,000 (30 June 2006: £2,867,000) Operational Highlights United Kingdom - Alkane Energy UK Limited •Turnover in first half £2,359,000 (2006 H1: £1,820,000) •Record operating profit £513,000 (2006 H1: £76,000) €17 MW of power generation and gas supply plants operating €39% increase in energy output to 39 million kWh (2006 H1: 28 million kWh) •Equivalent of 6MW of direct gas sales to customers •Share of loss of associate Pro2, £34,000 German Associate - Pro2 Anlagentechnik GmbH •Turnover up to £7,924,000 (2006 H1: £6,696,000) • 2007 order book at record high • New international renewable energy markets opening up •Additional bank finance under negotiation Dr Cameron Davies, Chief Executive, commenting on the interim results, said: "Alkane made a record operating profit of £513,000 in the first half of 2007with the UK power generation and gas sales business performing well. Ourexisting mine gas plants generated the equivalent of 39 million kWh ofelectricity in the first half of 2007, considerably higher than the 28 millionkWh in the first half of 2006. A full review of the mine gas potential of ourpetroleum licence portfolio has identified a five year pipeline of generationprojects for development. Pro2 also improved its performance and came close tobreak even in the first six months. Although a number of one off items have heldback profits in the first half, the background of robust electricity prices anda strong portfolio performance give us confidence to push ahead with ourdevelopment plans." Enquiries: Alkane Energy plc Tel: 01623 827927Cameron Davies - Chief Executive OfficerSteve Goalby - Finance DirectorBuchanan Communications Tel: 020 7466 5000Ben WilleyNicholas MelsonMiranda HighamBrewin Dolphin Securities Tel: 0113 241 0136Andrew Emmott CHAIRMAN'S STATEMENT Introduction I am pleased to report that Alkane was profitable during the first half of 2007as a result of a good contribution from the UK business and a near break evenposition at Pro2 Anlagentechnik GmbH (Pro2), which is now an associate companyin which Alkane holds a 38% interest. The UK business contributed a recordoperating profit of £513,000. Our share of Pro2's much reduced loss was £34,000leading to an overall profit of £310,000 compared with a loss of £484,000 in thefirst half of 2006. The increase in UK revenue and operating profit was principally due to theaddition of new plants to our portfolio, high average contract electricityprices and high gas prices. Our portfolio of electricity contracts providesvisibility at attractive commercial prices into 2009 giving us continued goodreturns on our mine gas projects. Forward market contracts indicate thatelectricity prices will continue to rise gently in the medium term. The Company generated a record 39 million kWh (kilowatt hours) of climate changelevy exempt electricity during the period compared with 28 million kWh in thesame period in 2006. An independent study of our licence areas has identified apipeline of more than 20 sites with potential for electricity generation and gassupply plants subject to the results of drilling, connections and consents. Weare planning a programme to exploit this potential as quickly as possible. Financial Overview These results are the first to be produced under International FinancialReporting Standards (IFRS). The comparative results for the six months to 30June 2006 have been restated to IFRS, the net effect on earnings being areduction in the loss attributable to equity holders from £520,000 to £484,000. The results are also the first to be published following the investment by newshareholders of €1.4 million in the equity of Pro2 announced on 12 July 2007.The Company's holding in Pro2 has reduced from 51% to 38% as a result of thistransaction, which was effective on 1 January 2007. Accordingly, Pro2, istreated for reporting purposes as an associated company of Alkane Energy plcrather than as a subsidiary from that date, and in these unaudited interimresults Alkane has reported its share of Pro2's results as one line in theincome statement, rather than consolidating turnover and costs by individualcategory. The reduction in the Company's stake in Pro2 Anlagentechnik GmbH hasled to a deemed partial disposal, with an accounting loss of £120,000. The comparisons of the numbers for the six months ended 30 June 2007,particularly those for turnover, gross profit and operating profit, with thesame period last year are significantly affected by the change of status of Pro2from subsidiary to associate. In order to facilitate comparison, the numbers forH1 2006 are shown both with the Pro2 contribution excluded and as reported, andthe commentary refers first to the UK business, followed by a separatecommentary on the Pro2 business. Alkane recorded turnover of £2,359,000 (2006 H1: excluding Pro2 £1,820,000; asreported £8,435,000). The increase reflects a higher volume of gas andelectricity sales, due to the contribution of the new sites completed duringlast year, with electricity sale prices averaging £44/MWh during the period(2006 H1: £45/MWh). As a result of this growth, gross profit increased to£1,549,000 (2006 H1: excluding Pro2 £886,000; as reported £2,558,000).Operating profit increased significantly to £513,000 (2006 H1: excluding Pro2£76,000; as reported, a loss of £1,105,000). The overall profit attributable toequity holders was £310,000, (2006 H1: a loss of £484,000) whilst earnings pershare were 0.34p (2006 H1: loss per share of 0.53p). As well as the bigger contribution from operating sites there are threenon-recurring items that affect operating profit. As announced on 21 March 2007a licence, covering a flooded coal mine, was transferred to a coal bed methaneoperator for £185,000; the external costs to date associated with the conversionto IFRS are £60,000; and the Company incurred costs of £221,000 in respect of anaborted corporate transaction. Two further non-recurring items were the impairment of the balance of thegoodwill that was capitalised when the Company acquired Pro2 Services Limited inMarch 2005 (£66,000) and a loss on the deemed disposal of Pro2 (£120,000). TheCompany's share (38%) of the loss of Pro2 is £34,000. This is a significantimprovement on the results from Pro2 in H1 2006, a loss of £693,000. Theimprovement is mainly due to increased turnover of £7,924,000 (H1 2006:£6,696,000) and increased margins, which led to an operating profit of £93,000(H1 2006: loss of £1,183,000). Pro2's renewable energy business is biasedtowards the second half, and as in previous years it is expected that Pro2 willrecord an overall profit at the year-end. Pro2 Services Limited was acquired in order to provide in-house operating andmaintenance services, and to assist in the promotion of the German Pro2 businessin the UK. It also has a small business of servicing customers in the landfillindustry. This latter business has not met expectations and it was thereforeappropriate to write off £66,000, the balance of goodwill. Net debt at 30 June 2007 stood at £491,000 (30 June 2006: excluding Pro2 netfunds of £171,000, as reported net debt of £2,867,000) whilst the balance ofcash and cash equivalents was £1,446,000 (30 June 2006: excluding Pro2£1,291,000, as reported £843,000). Net cash inflows from operating activitieswere £193,000 (2006 H1: excluding Pro2, £31,000, as reported outflows of£1,826,000). The principal use of cash was capital expenditure on the additionof a generator and preparatory work in respect of two new sites. Mine Gas Operations Alkane's plants generated 39 million kWh of climate change levy exemptelectricity during the period compared with 28 million kWh of electricity during2006 H1 and project economics remain robust. The plants have operated at highavailability and our own service team is gradually taking on more of the routineservicing operations from external contractors. At Alkane UK's methane plant in Germany, the volumes and purity have been lowerthan predicted at the Joarin mine gas plant, however it is now operatingsteadily at a reduced rate with a single generation system. A technical studyhas commenced into increasing the purity of the methane at Joarin along withanother study to verify past emissions savings for trading in the internationalvoluntary carbon market. The other container previously installed at Joarin hasbeen relocated to Warsop in the UK and is operating successfully. We have applied for planning consent for additional 1.35MW generators at ourexisting plants at Bevercotes and Warsop but the slow planning process hasdelayed these additions probably until Q4 2007 and Q1 2008 respectively.Applications to drill the first new mine gas appraisal boreholes have also beenmade and detailed documentation is being prepared for submission to the localauthorities and DBERR (formerly DTI). A 5-year generation project pipeline has been identified following an evaluationof gas reserves by independent consultants at partially developed andundeveloped sites within our licence portfolio. The study concluded that thereare more than 20 sites with potential for mine gas generation and gas supplyplants, subject to the results of drilling, grid connections and planning. The application for planning permission for a pilot biodiesel generation plantat Markham was turned down on amenity grounds but we are investigating the otherpotential green energy solutions to use this and our other valuable unused gridconnections. Pro2 Anlagentechnik GmbH The confidence shown by the highly respected new investors and the proceeds ofthe equity investment are helping Pro2 to source increased funding for workingcapital and project finance. The first agreement has been reached to provide anincreased overdraft facility from a new bank. Negotiations are expected to becompleted soon on loan, mezzanine and project finance. In the first half of 2007, Pro2's turnover increased to £7,924,000 from£6,696,000 as a result of strong demand for biogas-fuelled renewable electricityplants in Germany and new orders from the rapidly expanding French landfill andbiogas markets. The company made a small net loss of £89,000 compared with aloss of £1,361,000 in 2006. The firm order book for 2007 is at a record high andthe outlook for 2008 is for continued growth. The board of Alkane and the newPro2 supervisory board believe that a well-funded Pro2 will be able to continueto grow and also significantly improve its profitability. Carbon Emissions Trading We have initiated a study by Dutch emissions trading company Carbon-TF B.V. toverify our current and historic emissions reductions. TUV Nord, the German worldleader in emissions measurement and accredited by the UNFCCC (United NationsFramework Convention on Climate Change), has started the verification process.The objective is to verify all or part of Alkane's last 7 years' emissionssavings, which exceed 2 million tonnes of carbon dioxide equivalent. If they areverified then Carbon-TF will trade these Verified Emissions Reductions (VERs) onAlkane's behalf in the voluntary international carbon market. VERs are actualcarbon emissions reductions created by the capture of methane rather thanoffsets provided by tree planting or carbon sinks. Outlook Alkane has again made good progress during the first half, with an increase inturnover in the UK and an increased profit as a result of good performance here,and a much improved performance from Pro2. Looking ahead, the second halfweighting is less pronounced than it has been in the past and we are currentlytrading in line with market expectations. Commercially attractive electricity prices for our current projects are now tiedin with contracts giving visibility on operating revenues up to Summer 2009 andas our pipeline of potential projects is developed the business will continue togrow. I consider that the future of the Company is secure and planning is under wayfor a smooth succession to the next generation of managers. Finally, I wouldlike to welcome our new non-executive board member, Julia Henderson, who hasalready made a valuable contribution to our discussions. John LanderChairman GROUP INCOME STATEMENT for the six months ended 30 June 2007 Six months Six months ended ended 30 June 2007 30 June 2006 (Unaudited) (Unaudited) £ '000 £ '000 REVENUE 2,359 8,435 Cost of sales (810) (5,877) -------- -------- GROSS PROFIT 1,549 2,558 Administrative expenses (1,279) (3,830) Other operating income 58 167Profit on sale of licence 185 - -------- -------- OPERATING PROFIT/LOSS 513 (1,105) Finance income 131 65Finance costs (87) (214) -------- -------- NET FINANCE INCOME/(COSTS) 44 (149) IMPAIRMENT OF GOODWILL (note 7) (66) - LOSS ON DEEMED DISPOSAL (note 5) (120) - SHARE OF LOSS OF ASSOCIATE (34) - -------- -------- PROFIT/(LOSS) BEFORE TAX 337 (1,254) Tax (27) 102 -------- -------- PROFIT/(LOSS) FOR THE PERIOD 310 (1,152) ======== ======== PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:Equity holders of the parent 310 (484) Minority interest - (668) -------- -------- 310 (1,152) ======== ======== Earnings/(loss) per share Basic, for profit/(loss) for the periodattributable to equity holders of the parent 0.34p (0.53p)Diluted, for profit/(loss) for the periodattributable to equity holders of the parent 0.33p (0.53p) The earnings/(loss) per ordinary share calculationrepresents total and continuing results GROUP BALANCE SHEET at 30 June 2007 as at as at as at 30 June 2007 30 June 2006 31 December 2006 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 NON-CURRENT ASSETS Intangible assets - 790 774Property, plant and equipment 3,334 5,939 6,443Gas assets 3,352 2,898 3,374Investments accounted for usingthe equity method 3,070 - -Other investments - - 3 -------- -------- --------- 9,756 9,627 10,594 -------- -------- --------- CURRENT ASSETSInventories 78 7,020 6,631Trade and other receivables 3,656 5,797 7,768Other financial assets 350 505 512Cash and short-term deposits 1,096 1,071 946 -------- -------- --------- 5,180 14,393 15,857 -------- -------- --------- TOTAL ASSETS 14,936 24,020 26,451 -------- -------- --------- CURRENT LIABILITIES Trade and other payables (895) (8,590) (9,381)Financial liabilities (304) (1,517) (1,084)Income tax payable - (119) (80)Provisions (4) (1) (4) -------- -------- --------- (1,203) (10,227) (10,549) -------- -------- --------- NON-CURRENT LIABILITIESOther payables - (66) (43)Financial liabilities (1,633) (2,925) (2,939)Provisions (1,550) (1,587) (1,550) -------- -------- --------- (3,183) (4,578) (4,532) -------- -------- --------- TOTAL LIABILITIES (4,386) (14,805) (15,081) -------- -------- --------- NET ASSETS 10,550 9,215 11,370 ======== ======== ========= EQUITY Share capital 460 457 459Share premium 33,259 33,207 33,234Other reserves 97 110 81Retained losses (23,266) (25,037) (23,572) -------- -------- --------- GROUP SHAREHOLDERS' EQUITY 10,550 8,737 10,202 Minority interests - 478 1,168 -------- -------- --------- TOTAL EQUITY 10,550 9,215 11,370 ======== ======== ========= CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2007 Attributable to equity holders of the parent -------------------------- ------- ------- ------- ------- Issued Share Retained Other Total capital premium earnings reserves equity £'000 £'000 £'000 £'000 £'000 At 1 January 2007 459 33,234 (23,572) 81 10,202 Foreign currencytranslation - - (4) 5 1 ------- ------- ------- ------- -------Total income and expensefor the period recogniseddirectly in equity - - (4) 5 1Profit for the period - - 310 - 310 ------- ------- ------- ------- -------Total income and expensefor the period - - 306 5 311 Share-based payment - - - 11 11 Issue of share capital 1 25 - - 26 ------- ------- ------- ------- ------- At 30 June 2007 (unaudited) 460 33,259 (23,266) 97 10,550 ======= ======= ======= ======= ======= At 1 January 2006 456 33,189 (24,562) 56 9,139 Foreign currencytranslation - - 41 - 41 ------- ------- ------- ------- -------Total income and expensefor the period recogniseddirectly in equity - - 41 - 41Loss for the period - - (484) - (484) ------- ------- ------- ------- -------Total income and expensefor the period - - (443) - (443) Share-based payment - - (32) 54 22 Issue of share capital 1 18 - - 19 ------- ------- ------- ------- ------- At 30 June 2006 (unaudited) 457 33,207 (25,037) 110 8,737 ======= ======= ======= ======= ======= GROUP CASH FLOW STATEMENT for the six months ended 30 June 2007 Six months Six months ended ended 30 June 2007 30 June 2006 (Unaudited) (Unaudited) £ '000 £ '000 OPERATING ACTIVITIES Profit/(loss) before tax from continuingoperations 337 (1,254) Adjustments to reconcile operating profit/(loss tonet cash flows: Depreciation and impairment of property, plant andequipment and gas assets 247 674Amortisation and impairment of intangible assets 66 8Share-based payments expense 10 22Pension accrual expense - 14Profit on sale of licence (185) -Finance income (131) (65)Finance expense 87 214Loss on deemed disposal 120 -Share of net loss of associate 34 -Movements in provisions - (1)Decrease in trade and other receivables 193 914Increase in inventories (31) (3,563)(Decrease)/increase in trade and other payables (525) 1,130Income tax (paid)/refunded (29) 81 -------- --------NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES 193 (1,826) CASH FLOWS FROM INVESTING ACIVITIES Proceeds from sale of property, plant andequipment - 2,451Proceeds from sale of licence 185 -Interest received 93 68Purchase of subsidiary undertaking - (20)Purchase of intangible assets - (5)Purchase of property, plant and equipment (466) (104)Purchase of gas assets (145) (595) -------- --------NET CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES (333) 1,795 CASH FLOWS FROM FINANCING ACTIVITIES Issue of share capital 26 19Proceeds from sale and finance leaseback 606 -Sale and finance leaseback rentals (201) (105)Repayment of capital element of finance leases - (371)Repayment of long-term loans - (27)Interest paid (86) (161) -------- --------NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 345 (645) Net increase/(decrease) in cash and cashequivalents 205 (676)Net foreign exchange difference - (6)Cash and cash equivalents at 1 January 1,241 1,525 -------- -------- CASH AND CASH EQUIVALENTS AT 30 JUNE (note 3) 1,446 843 ======== ======== NOTES TO THE ACCOUNTS 1. CORPORATE INFORMATION The interim condensed financial statements of the Group for the six months ended30 June 2007 were authorised for issue in accordance with a resolution of thedirectors on 18 September 2007. Alkane Energy plc is a public limited company incorporated and domiciled inEngland whose shares are publicly traded. The principal activities of the Group are described in note 6. 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES Basis of preparation The interim condensed consolidated financial statements are unaudited and do notconstitute statutory financial statements within the meaning of Section 240 ofthe Companies Act 1985. These are the Group's first IFRS condensed consolidated interim financialstatements for part of the period covered by the first IFRS annual financialstatements. The Group's financial statements have been prepared in accordancewith International Reporting Standards as adopted by the EU and IFRS 1First-time Adoption of International Financial Reporting Standards has beenapplied. The condensed consolidated interim financial statements do not includeall of the information required for full annual financial statements, and shouldbe read in conjunction with the Group's annual financial statements as at 31December 2006 and the Group's statement of Adoption of International ReportingStandards showing an explanation of how the transition to IFRSs has affected thereported financial position, financial performance and cash flows of the Group.This Statement includes reconciliations of equity and profit or loss forcomparative periods reported under UK GAAP to those reported for those periodsunder IFRSs. Significant accounting policies The preparation of the condensed consolidated interim financial statements hasresulted in changes to the accounting policies as compared with the most recentannual financial statements prepared under previous GAAP. The accounting policies adopted in the preparation of the interim condensedconsolidated financial statements are consistent with those presented in theIFRS Transition Statements for the opening balance sheet at the date oftransition (1 January 2006) and the comparative periods (30 June 2006 and 31December 2006). The impact of the transition from previous GAAP to IFRSs is explained in theGroup's Statement of Adoption of International Financial Reporting Standards.The accounting policies have been applied consistently throughout the Group forpurposes of these condensed consolidated interim financial statements. The preparation of interim financial statements requires management to makejudgements, estimates and assumptions that affect the application of policiesand reported amounts of assets and liabilities, income and expenses. Actualresults may differ from these estimates. These condensed consolidated interimfinancial statements have been prepared on the basis of IFRSs in issue that areeffective or available for early adoption at the Group's first IFRS annualreporting date as at 31 December 2007. Based on these IFRSs, the Board ofDirectors have made assumptions about the accounting policies expected to beadopted (accounting policies) when the first IFRS annual financial statementsare prepared for the year ended 31 December 2007. The IFRSs that will beeffective or available for voluntary early adoption in the annual financialstatements for the period ended 31 December 2007 are still subject to change andto the issue of additional interpretations and therefore cannot be determinedwith certainty. Accordingly, the accounting policies for that annual period thatare relevant to this interim financial information will be determined only whenthe first IFRS financial statements are prepared at 31 December 2007. The Group has early adopted the following standard: IFRS 8 Operating segments The Group has elected to adopt IFRS 8 as of 1 January 2007. This standardrequires disclosure of information about the Group's operating segments.Adoption of this standard did not have any effect on the financial position orperformance of the Group. The Group determined that the operating segments werethe same as the business segments previously identified under IAS 14. Additionaldisclosures about each of these segments are shown in Note 6, including revisedcomparative information. 3. CASH AND CASH EQUIVALENTS For the purpose of the interim consolidated cash flow statement, cash and cashequivalents are comprised of the following: 30 June 2007 30 June 2006 (Unaudited) (Unaudited) £ '000 £ '000 Cash at bank and in hand 1,096 1,071 Short term deposits 350 505 Bank overdraft - (733) -------- -------- 1,446 843 ======== ======== 4. INCOME TAXThe major components of income tax expense in the interim consolidated incomestatement are: 30 June 2007 30 June 2006 (Unaudited) (Unaudited) £ '000 £ '000 Foreign tax (29) - Tax over-provided in previous years 2 102 -------- -------- (27) 102 ======== ======== 5. Business COMBINATIONS On 1 January 2007 Pro2 Anlagentechnik GmbH issued new equity shares to thirdparty investors for an amount of €1,400,528. As a result Alkane Energy plc'sinterest was reduced from 51% to 38.01%. There is therefore a deemed disposalwhich gives rise to a loss. The book value of the net assets at the date of disposal were as follows: £ '000 £ '000 Non-current assets 3,585 Inventories 6,584 Trade and other receivables 6,657 Other financial assets 162 Cash and short-term deposits 55 Current liabilities (11,644) Non-current liabilities (3,023) --------Net assets at 1 January 2007 2,376 Cash inflow following transaction (€1,400,528) 942 -------- 3,318 Effective interest in Pro2 before issue of new equity:-------------------------------------------------------- 51% of £2,376,000 1,212 Plus goodwill on acquisition 665 1,877 -------- Effective interest in Pro2 after issue of new equity:------------------------------------------------------- 38.01% of £3,318,000 1,261 Plus goodwill on acquisition x 38.01/51 496 1,757 -------- --------Loss on Disposal (120) ======== The reduction in the Company's holding means that from the transaction date of1 January 2007 Pro2 Anlagentechnik GmbH has been treated for reporting purposesas an associated company of Alkane Energy plc, using the equity method ofaccounting. In previous periods the results of Pro2 Anlagentechnik GmbH werefully consolidated as a subsidiary undertaking. Under the equity method ofaccounting the Company's share of Pro2 Anlagentechnik GmbH's results are shownas one line in the income statement, rather than consolidating turnover andcosts by individual category. There is therefore a significant reduction inrevenue, cost of sales and administrative expenses in the six months to 30 June2007 when compared to the six months to 30 June 2006. In the Balance Sheet forthe six months ended 30 June 2007, the Group's investment in Pro2 AnlagentechnikGmbH is reported as one line, Investments accounted for using the equity method,leading to significant reductions in property, plant and equipment, inventories,trade and other receivables, and other payables and financial liabilities whencompared to the six months ended 30 June 2006. 6. SEGMENT INFORMATION Business segments The Group is comprised of the following business segments: • Extraction of gas from coal measures for power generation and burner tip use; and • The manufacture, supply, operation and maintenance of equipment. Seasonality of operations There is no significant seasonal nature to the Group's business of theextraction and use of gas. However manufacture and supply of equipment by theassociated company Pro2 Anlagentechnik GmbH's is biased towards the second half,principally due to the effect of the German renewable energy law under whichelectricity prices available for equipment commissioned by customers fall on 1January each year. The following tables present revenue and profit information regarding theGroup's business segments for the six months ended 30 June 2007 and 2006respectively. Six months ended 30 June 2007 (unaudited) Continuing operations Extraction of Manufacture Total gas from coal supply, operate measures and maintain equipment £ '000 £ '000 £ '000RevenueRevenue from external customers 2,308 51 2,359Inter-segment sales - 102 102 --------- -------- ---------Total revenue 2,308 153 2,461 --------- -------- ---------ResultsSegment profit/(loss) 860 (136) 724 --------- -------- --------- Corporate centre costs (497)Corporate centre finance income 230Loss on deemed disposal (120) ---------Profit before tax fromcontinuing operations 337 --------- Six months ended 30 June 2006 (unaudited) Continuing operations Extraction of Manufacture Total gas from coal supply, operate measures and maintain equipment £ '000 £ '000 £ '000Revenue Revenue from external customers 1,627 6,808 8,435Inter-segment sales - 99 99 --------- -------- ---------Total revenue 1,627 6,907 8,534 --------- -------- --------- Results Segmentprofit/(loss) 129 (1,475) (1,346) --------- -------- --------- Corporatecentre costs (128)Corporate centre finance income 220 ---------Loss before tax fromcontinuing operations (1,254)----------------------- The following table compares total segment assets as at 30 June 2007 and as atthe date of the last annual financial statements (31 December 2006). 30 June 31 December 2007 2006 (Unaudited) (Audited) £ '000 £ '000 Extraction of gas from coal measures 4,882 4,284Manufacture, supply, operate and maintain equipment 99 6,103 -------- ---------Total segment assets 4,981 10,387 Goodwill - 756Corporate centre 586 441Investment in associate 3,070 -Loan to associate 2,128 -Inter-segment adjustment (215) (214) -------- ---------Total consolidated assets 10,550 11,370 -------- --------- Geographical Segments Six months ended 30 June 2007 (unaudited) Continuing operations United Kingdom Continental Total Europe £ '000 £ '000 £ '000Revenue Revenue from external customers 2,242 117 2,359Inter-segment sales 102 - 102 --------- -------- ---------Total revenue 2,344 117 2,461 --------- -------- --------- Results Segment profit/(loss) 835 (111) 724 --------- -------- --------- Corporate centre costs (497)Corporate centre finance income 230Loss on deemed disposal (120) ---------Profit before tax fromcontinuing operations 337 ========= Six months ended 30 June 2006 (unaudited) Continuing operations United Kingdom Continental Total Europe £ '000 £ '000 £ '000Revenue Revenue from external customers 1,636 6,799 8,435Inter-segment sales 17 82 99 --------- -------- ---------Total revenue 1,653 6,881 8,534 --------- -------- ---------Results Segment profit/(loss) 77 (1,423) (1,346) --------- -------- ---------Corporate centre costs (128)Corporate centre finance income 220 ---------Loss before tax from continuingoperations (1,254) ========= The following table compares total segment assets as at 30 June 2007 and as atthe date of the last annual financial statements (31 December 2006). 30 June 31 December 2007 2006 (Unaudited) (Audited) £ '000 £ '000 United Kingdom 4,296 3,684Continental Europe 685 6,703 -------- --------Total segment assets 4,981 10,387 Goodwill - 756Corporate centre 586 441Investment in associate 3,070 -Loan to associate 2,128 -Inter-segment adjustment (215) (214) -------- --------Total consolidated assets 10,550 11,370 -------- -------- 7. Impairment of goodwillPro2 Services Limited, a 100% owned subsidiary, provides maintenance supportservices to external customers and to other Group companies. A review has beenundertaken of the future profitability of Pro2 Services Limited in respect ofexternal business and this has concluded that the goodwill capitalised when thecompany was acquired in 2005 has been impaired. As a result the outstandingamount of £66,000 has been written off in the period. 8. Plant and equipmentAcquisitions and disposalsDuring the six months ended 30 June 2007 the Group acquired assets with a costof £571,000 (2006: £645,000). There were no disposals during the six monthsended 30 June 2007 (2006: £36,000).Sale and finance leasebackDuring the six months ended 30 June 2007 the Group entered into two new sale andfinance leaseback agreements for items of plant with a total cost of £606,000. 9. Gas assetsAcquisitions and disposalsDuring the six months ended 30 June 2007 the Group acquired assets with a costof £109,000 (2006: £566,000). There were no disposals during the six monthsended 30 June 2007 (2006: nil). 10. Capital commitmentsAt 30 June 2007 the Group had capital commitments of £75,000 contracted for butnot provided in the accounts (2006: £135,000) of which £54,000 (2006: £115,000)relates to the purchase of plant and equipment and £21,000 (2006: £20,000)relates to the purchase of gas assets. 11. Share capitalDuring the six months ended 30 June 2007, options over 200,000 ordinary shareswere exercised in respect of the Post Admission Share Option Plan. 12. General NoteCopies of this interim report will be sent to registered shareholders andfurther copies will be available from the Company's registered office. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Alkemy Capital.