29th Sep 2008 09:35
RNS Number : 5268E
Alecto Energy PLC
29 September 2008
29 September 2008
Alecto Energy plc ('Alecto Energy' or 'the Company')
Interim Results for the period ended 30 June 2008
Chairman's Statement
The current equity and investment markets conditions creating a global economic environment not experienced since last century has and continues to provide significant challenges. Alecto Energy plc is not immune from those challenges.
The ability to attract appropriate funding for the PEM technology has become even more difficult in these circumstances and therefore the Board of Directors have taken a conservative approach and impaired the goodwill recognised following the acquisition of Oreion Australia Energy Pty Ltd ("Oreion") in March of this year. This action has been taken despite the PEM technology being considered by many potential investors, for some of whom due diligence continues.
Alecto Energy is continuing negotiations with CSIRO in relation to the development and commercialisation of the PEM technology and associated products.
On a positive note, the Company is continuing to pursue additional new investment opportunities in line with the investment strategy and is currently reviewing other potential projects. The investments may be either quoted or unquoted and may be in companies, partnerships, joint ventures or direct interests in energy projects. The Directors intend to undertake initial assessments and due diligence on potential investments themselves and will take appropriate professional advice if merited by the circumstances.
Results
During the six months to 30 June 2008, the Company made a loss of £2,736,703 (30 June 2007: £178,073). This loss includes an impairment charge of £2,481,260 on the goodwill resulting from the acquisition of Oreion Australia Energy Pty Ltd. Loss from operations of £257,882 includes £148,251 of other expenses directly related to the PEM technology development.
Martin Thomas
Chairman
|
Consolidated Income Statement
|
6 months to
30 June 08
Unaudited
£
|
6 months to
30 June 07
Unaudited
£
|
Year ended 31 December 2007
Audited
£
|
|
Administration expenses
|
(169,761)
|
(219,023)
|
(462,127)
|
|
Foreign exchange gains
|
60,130
|
-
|
-
|
|
Other expenses
|
(148,251)
|
-
|
(938,564)
|
|
Transaction expenses
|
-
|
-
|
(399,395)
|
|
Other income
|
-
|
-
|
938,564
|
|
Loss from operations
|
(257,882)
|
(219,023)
|
(861,522)
|
|
Impairment of goodwill
|
(2,481,260)
|
-
|
-
|
|
Finance income
|
9,686
|
40,950
|
85,570
|
|
Finance costs
|
(7,247)
|
-
|
-
|
|
Loss from ordinary activities before tax
|
(2,736,703)
|
(178,073)
|
(775,952)
|
|
|
|
|
|
|
Corporation tax expense
|
-
|
-
|
-
|
|
|
|
|
|
|
Retained loss for the period attributable to shareholders
|
(2,736,703)
|
(178,073)
|
(775,952)
|
|
|
|
|
|
|
Loss per share - basic and diluted
|
(1.052) pence
|
(0.08) pence
|
(0.34) pence
|
|
|
|
|
|
|
Consolidated balance sheet
|
30 June 08
Unaudited
£
|
30 June 07
Unaudited
£
|
31 December 07
Audited
£
|
|
ASSETS
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant & equipment
|
1,170
|
2,623
|
1,894
|
|
Intangible assets
|
-
|
-
|
-
|
|
|
1,170
|
2,623
|
1,894
|
|
Current assets
|
|
|
|
|
Trade and other receivables
|
30,486
|
761,173
|
1,561,328
|
|
Bank balances and cash
|
347,365
|
1,994,512
|
895,544
|
|
|
377,851
|
2,755,685
|
2,456,872
|
|
Total assets
|
379,021
|
2,758,308
|
2,458,766
|
|
EQUITY & LIABILITIES
|
|
|
|
|
Equity
|
|
|
|
|
Issued capital
|
196,146
|
161,146
|
161,146
|
|
Share premium account
|
3,720,170
|
2,755,170
|
2,755,170
|
|
Other reserves
|
175,707
|
175,707
|
175,707
|
|
Foreign currency translation reserve
|
(63,079)
|
-
|
-
|
|
Accumulated losses
|
(3,738,336)
|
(403,755)
|
(1,001,634)
|
|
|
290,608
|
2,688,267
|
2,090,389
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
88,413
|
70,041
|
368,377
|
|
|
88,413
|
70,041
|
368,377
|
|
Total equity and liabilities
|
379,021
|
2,758,308
|
2,458,766
|
|
Statement of recognised income and expense
|
30 June 08
Unaudited
£
|
30 June 07
Unaudited
£
|
31 December 07
Audited
£
|
|
Exchange differences on translation of foreign operations
|
63,079
|
-
|
-
|
|
Total expense items recognised directly in equity
|
63,079
|
-
|
-
|
|
Loss for the period
|
2,736,703
|
178,073
|
775,952
|
|
Total recognised expense for the period
|
2,799,782
|
178,073
|
775,952
|
|
Consolidated cash flow statement
|
|
6 months to
30 June 08
Unaudited
£
|
6 months to
30 June 07
Unaudited
£
|
12 months to 31 December 2007
Audited
£
|
|
|
|
|
|
|
|
Cash inflow from operating activities
|
|
|
|
|
|
Operating loss
|
|
(257,882)
|
(219,023)
|
(861,522)
|
|
Depreciation
|
|
569
|
718
|
1,447
|
|
Foreign exchange loss/(gain)
|
|
(60,130)
|
-
|
-
|
|
Decrease/(Increase) in other receivables and prepayments
|
|
39,794
|
(517,629)
|
(971,506)
|
|
(Decrease)/Increase in trade and other payables
|
|
(280,373)
|
58,044
|
222,408
|
|
Net cash outflow from operating activities
|
|
(558,022)
|
(677,890)
|
(1,609,173)
|
|
Cash flows from investing activities
|
|
|
|
|
|
Loans granted
|
|
-
|
(200,000)
|
(395,908)
|
|
Interest paid
|
|
-
|
-
|
-
|
|
Interest received
|
|
9,686
|
40,950
|
69,173
|
|
Net cash used in investing activities
|
|
9,686
|
(159,050)
|
(326,735)
|
|
Net decrease
in cash and cash equivalents
|
|
(548,336)
|
(836,940)
|
(1,935,908)
|
|
Cash and cash equivalents at the beginning of the period
|
|
895,544
|
2,831,452
|
2,831,452
|
|
Cash and cash equivalents at the end of the period
|
|
347,208
|
1,994,512
|
895,544
|
Notes to the unaudited financial statements
1. General information
The principal activity of Alecto Energy plc (‘the Company’) and its subsidiaries (together ‘the Group’) is to make investments and/or acquire projects in the energy sector, which may include exploration, development or production projects in oil and gas, coal, uranium and renewable energy.
The address of its registered office is 200 Strand, London WC2R 1DJ.
2. Financial information
The interim financial information set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS) as adopted by the European Union. The accounting policies applied in preparing the financial information are consistent with those that have been adopted in the Group’s 2007 audited statutory accounts. Statutory accounts for the year ended 31 December 2007 were approved by the Board of Directors on 26 June 2008 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified.
The financial information for the 6 months ended 30 June 2008 and the 6 months ended 30 June 2007 has not been audited. As permitted, the Group has chosen not to adopt IAS 34 “Interim Financial Statements” in preparing this interim financial information.
3. Accounting policies
A summary of the principal accounting policies applied in the preparation of the interim financial information are set out below. These policies have been consistently applied to all the periods presented.
Basis of preparation
This financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and IFRIC interpretations. The financial information has been prepared under historical cost convention. The annual accounts of Alecto Energy plc are prepared in accordance with IFRS as adopted by the European Union. The same accounting policies are followed in the interim financial information as applied in the Group’s latest annual audited accounts.
The preparation of this financial information in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial information and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
Although the Company’s assets are not generating revenues and an operating loss has been reported, the Directors’ believe that the Company has sufficient funds to undertake its operating activities over the next 12 months including meeting any commitments under the CSIRO commercialisation agreement. The interim statements therefore, have been prepared on a going concern basis. However, if additional projects and acquisition targets are identified or current investments require additional funding that is unforeseen at this point in time, the Company may be required to raise additional funds either via an issue of equity or through the issuance of debt.
Basis of consolidation
The Company acquired the Oreion Australia Energy Pty Ltd on 14 March 2008 through the issue of 50,000,000 new ordinary shares in the Company at a consideration price of 2p per share.
Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between group enterprises are eliminated on consolidation.
The goodwill recognised on acquisition of £2,481,260 has been fully provided for as at 30 June 2008.
Foreign currency translation
Items included in the Financial Statements are initially measured using the currency of the primary economic environment in which the entities in the Group operate (their “functional currency”). This is Pounds Sterling for the legal parent and Australian Dollars for the subsidiary. The presentation currency for both the parent and the Group is Pounds Sterling. This reflects the primary economic environment in which the Group as a whole operates.
Assets and liabilities of the subsidiary are translated into the presentation currency using the rate of exchange ruling at the Balance Sheet date, and income and expenses at the average rate for the year. Foreign exchange differences are recognised in equity.
Transactions in currencies other than the functional currency are translated into the functional currency at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities are retranslated at the rates of exchange ruling at the balance sheet date. Foreign exchange differences on retranslation and settlement are recognised in the Income Statement.
Share based incentives
The fair value of the employee services received in exchange for the grant of share options is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date the Group revises its estimate of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
4. Dividends
No dividend is proposed for the period.
5. Loss per share
The calculation of loss per share is based on a retained loss of £2,736,703 for the period ended 30 June 2008 (30 June 2007: £178,073; 31 December 2007: £775,952) and the weighted average number of shares in issue in the period 30 June 2008 of 260,152,956 (30 June 2007:230,207,901 31 December 2007: 230,207,901). There is no difference between the diluted loss per share and the loss per share shown.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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