30th Sep 2009 07:00
30 September 2009
Renewable Energy Holdings plc
("REH" or "the Company")
Interim Results for the six months ended 30 June 2009
Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor and operator of proven and innovative renewable energy technologies is pleased to announce its interim results for the six months ended 30 June 2009.
Highlights:
Signed Heads of Agreement to sell CETO intellectual property to Carnegie
Crystallised material value of approximately £30 million whilst retaining significant stake in future value of CETO
Received Carnegie shareholder approval for sale on 4 September 2009
Post period end, acquired Gamar GHL, the Polish windfarm development company, on 7 September 2009
Gamar GHL now fully permitted to build a 30 MW windfarm in S.E Poland
30,197MWh power generated in the period
Revenue of £2.4m (H1 2008: £2.6m), down 8% due to unseasonal light winds in Germany
Loss before tax of £2.2m (H1 2008: £930,000)
Loss per share of 3.3p (H1 2008: 1.15p)
Board looks to future with confidence
Mike Proffitt, CEO of Renewable Energy Holdings, commented:
"Despite the unseasonal wind conditions experienced during the first half, your company has never been in better shape with electricity producing assets in place, a healthy pipeline of future development projects and access to the upside potential of CETO, whilst having crystallised a substantial gain for our shareholders."
"Your Board looks to the future with confidence."
For further information, please contact:
|
Renewable Energy Holdings plc Mike Proffitt, Chief Executive |
Tel: 01624 641199 |
|
Ambrian Partners - Nominated Adviser & Broker Richard Swindells / Andrew Craig |
Tel: 020 7634 7400 |
|
Financial Dynamics Jonathon Brill/Billy Clegg/Edward Westropp/Alex Beagley |
Tel: 020 7831 3113 |
Chairman's Statement
The half year to 30 June 2009 was notable for poor winds in Germany resulting in lower sales from our German wind farms than in the comparable period to 30 June 2008, but the value crystallised for CETO has increased the company's net assets considerably.
The adverse wind conditions were not specific to our sites but prevailed across much of Germany and Western Europe. As stated in our trading update on 20 May 2009, we consider that these unusual wind conditions are an anomaly to the German 20 year average wind index. As a consequence of these poor winds, we are reporting an operating loss of £1.4 million for the six months to 30 June 2009 (H1 2008: operating loss of £232,932). In addition, a new requirement under IFRS as to the presentation of foreign exchange gains and losses means that we show foreign exchange losses of £2.1 million. This is not a cash loss but a figure arrived at by revaluing property, plant and equipment, along with long term loans, using exchange rates as at 30 June 2009.
The increase in administration costs reflected the carrying of the development of CETO, the Company's wave energy technology, prior to sale. We announced on 11 May 2009 a Heads of Agreement under which REH would sell its Intellectual Property in CETO to Carnegie in exchange for a major shareholding in Carnegie, the Australian Company which has been developing the CETO technology under licence with REH. This important transaction means that we have crystallised material value of approximately £30 million for our shareholders whilst retaining a significant stake in the future value of CETO as the technology is developed and rolled out commercially, and removing the financing of CETO as a future burden on REH shareholders. I am pleased to report that Carnegie shareholders approved this transaction on 4 September 2009 and that financial close is imminent.
I am also very pleased to report that post the period end on 7 September 2009 we acquired Gamar GHL, the Polish Windfarm development company, now fully permitted to build a 30 MW wind farm in S.E Poland. We intend to secure strong shareholder value from this asset which we believe has the ability to produce approximately £7.5 million of revenue annually. Decisions as to how and when to take the project forward will depend on the funding of the construction costs in a situation where financial markets are still very uncertain. However, we believe the renewable energy sector should be one of the first to benefit from a recovery and that long term prospects, reflecting international governmental support for renewable energy, remain encouraging for the Company and the sector.
Outlook
Despite the unseasonal wind conditions experienced during the first half, the winds have since the period end improved and REH has delivered sales meeting management's expectations in Q3. With regards to the welsh landfill gas asset, we drilled new production wells in August, which have increased gas production from a steady rate of 450 MW/h in H1 to an average of 600 MW/h per month since.
The Board feels that your company has never been in better shape, with electricity producing assets in place, a healthy pipeline of future development projects and access to the upside potential of CETO, whilst having crystallised a substantial gain for our shareholders from the development of CETO.
All this being so, your Board looks to the future with confidence.
Sir John Baker
Chairman
Interim consolidated income statement for the six months ended 30 June 2009 (unaudited)
|
Note |
Six months ended 30 June 2009 (Unaudited) |
Six months ended 30 June 2008 (Unaudited) (Restated) |
Year ended 31 December 2008 (Audited) |
|||
|
Revenue & gross profit |
2,424,129 |
2,634,228 |
5,307,954 |
|||
|
Other operating income |
37,123 |
- |
59,220 |
|||
|
Administrative expenses |
(3,842,950) |
(2,867,160) |
(6,234,698) |
|||
|
Loss from operations |
(1,381,698) |
(232,932) |
(867,524) |
|||
|
Finance costs |
(720,162) |
(911,419) |
(1,215,391) |
|||
|
Finance income |
76,016 |
214,552 |
288,640 |
|||
|
Share of losses in associates |
(155,196) |
- |
(195,660) |
|||
|
Loss before tax |
3 |
(2,181,040) |
(929,799) |
(1,989,935) |
||
|
Tax expense |
(227,384) |
87,858 |
86,710 |
|||
|
Loss after tax attributable to the equity holders of the parent |
(2,408,424) |
(841,941) |
(1,903,225) |
|||
|
Loss per share - basic and diluted |
(3.67p) |
(1.15p) |
(2.91p) |
Interim consolidated statement of comprehensive income for the six months ended 30 June 2009 (unaudited)
|
Six months ended 30 June 2009 (Unaudited) |
Six months ended 30 June 2008 (Unaudited) (Restated) |
Year ended 31 December 2008 (Audited) |
|||
|
Loss for the period |
(2,408,424) |
(841,941) |
(1,903,225) |
||
|
Other comprehensive income |
|||||
|
Exchange differences on translating foreign operations |
(2,158,174) |
825,692 |
3,810,976 |
||
|
Revaluation of available for sale financial assets |
259,926 |
- |
(34,066) |
||
|
Total comprehensive income/(expense) for the period |
(4,306,672) |
(16,249) |
1,873,685 |
||
|
Total comprehensive income/(expense) attributable to the equity holders of the parent |
(4,306,672) |
(16,249) |
1,873,685 |
Interim 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 31 December 2008 |
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 - 30 June 2009 |
|||||||||
|
Total comprehensive income 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 |
Interim consolidated statement of changes in equity for the six months ended 30 June 2008 (unaudited)
|
Share capital |
Share Premium reserve |
Convertible loan notes |
Foreign Exchange reserve |
Share Based Payment reserve |
Merger reserve |
Retained earnings |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
Balance at 1 Jan 2008 As previously reported |
619,586 |
24,261,411 |
- |
769,678 |
1,009,119 |
4,410,000 |
(6,489,559) |
24,580,235 |
|
Change in accounting policy (note 2) |
- |
- |
- |
- |
- |
- |
(750,000) |
(750,000) |
|
Restated balance |
619,586 |
24,261,411 |
- |
769,678 |
1,009,119 |
4,410,000 |
(7,239,559) |
23,830,235 |
|
Changes in equity 1 Jan 2008 to 30 June 2008 |
||||||||
|
Total comprehensive income for the year (Restated) |
- |
- |
- |
825,692 |
- |
- |
(841,941) |
(16,249) |
|
Share based payment charge |
- |
- |
- |
- |
12,202 |
- |
- |
12,202 |
|
Issue of share capital |
36,000 |
1,764,000 |
- |
- |
- |
- |
- |
1,800,000 |
|
Issue of convertible loan notes |
- |
- |
1,500,000 |
- |
- |
- |
- |
1,500,000 |
|
Balance at 30 June 2008 |
655,586 |
26,025,411 |
1,500,000 |
1,595,370 |
1,021,321 |
4,410,000 |
(8,081,500) |
27,126,188 |
Consolidated statement in changes in equity for the year ended 31 December 2008 (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 31 December 2007 As previously reported |
619,586 |
24,261,411 |
- |
769,678 |
1,009,119 |
4,410,000 |
- |
(6,489,559) |
24,580,235 |
|
Change in accounting policy (note 2) |
- |
- |
- |
- |
- |
- |
- |
(750,000) |
(750,000) |
|
Restated balance |
619,586 |
24,261,411 |
- |
769,678 |
1,009,119 |
4,410,000 |
- |
(7,239,559) |
23,830,235 |
|
Changes in equity 2008 |
|||||||||
|
Total comprehensive income for the year |
- |
- |
- |
3,810,976 |
- |
- |
(34,066) |
(1,903,225) |
1,873,685 |
|
Share based payment charge |
- |
- |
- |
- |
37,841 |
- |
- |
- |
37,841 |
|
Issue of share capital |
36,000 |
1,764,000 |
- |
- |
- |
- |
- |
- |
1,800,000 |
|
Issue of convertible loan notes |
- |
- |
1,500,000 |
- |
- |
- |
- |
- |
1,500,000 |
|
Balance at 31 December 2008 |
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 |
Interim balance sheet at 30 June 2009
|
Note |
30 June 2009 (Unaudited) |
30 June 2008 (Unaudited) (Restated) |
31 December 2008 (Audited) |
|||
|
£ |
£ |
£ |
||||
|
Non-current assets |
||||||
|
Property, plant & equipment |
3 |
38,201,970 |
36,876,423 |
44,635,539 |
||
|
Intangible assets |
3 |
1,773,533 |
10,589,662 |
11,718,616 |
||
|
Non current assets held for sale |
3 |
10,721,228 |
- |
- |
||
|
Investments in equity accounted associates |
3 |
139,144 |
49 |
294,340 |
||
|
Current assets |
||||||
|
Cash and cash equivalents |
4,060,648 |
9,566,277 |
6,451,580 |
|||
|
Trade and other receivables |
1,807,162 |
1,791,429 |
2,384,473 |
|||
|
Available for sale investments |
497,393 |
- |
221,711 |
|||
|
Total current assets |
3 |
6,365,203 |
11,357,706 |
8,836,053 |
||
|
Total assets |
57,201,078 |
58,823,840 |
65,706,259 |
|||
|
Current liabilities |
||||||
|
Trade and other payables |
1,645,868 |
1,633,021 |
727,683 |
|||
|
Tax liability |
227,384 |
- |
- |
|||
|
Other financial liabilities |
2,326,743 |
2,142,625 |
2,688,317 |
|||
|
Total current liabilities |
4,199,995 |
3,775,646 |
3,416,000 |
|||
|
Non current liabilities |
||||||
|
Financial liabilities |
24,114,608 |
24,957,893 |
29,358,234 |
|||
|
Deferred licence fee income |
3,905,314 |
2,750,000 |
3,626,981 |
|||
|
Deferred tax liability |
229,909 |
214,113 |
263,283 |
|||
|
Total non current liabilities |
28,249,831 |
27,922,006 |
33,248,498 |
|||
|
Total liabilities |
3 |
32,449,826 |
31,697,652 |
36,664,498 |
||
|
NET ASSETS |
3 |
24,751,252 |
27,126,188 |
29,041,761 |
Interim balance sheet at 30 June 2009 (continued)
|
Note |
30 June 2009 (Unaudited) |
30 June 2008 (Unaudited) (Restated) |
31 December 2008 (Audited) |
|||
|
£ |
£ |
£ |
||||
|
Capital and reserves attributable to equity holders of the company |
||||||
|
Share capital |
655,586 |
655,586 |
655,586 |
|||
|
Share premium reserve |
26,025,411 |
26,025,411 |
26,025,411 |
|||
|
Convertible loan notes |
1,500,000 |
1,500,000 |
1,500,000 |
|||
|
Foreign exchange reserve |
2,422,480 |
1,595,370 |
4,580,654 |
|||
|
Share based payment reserve |
1,063,123 |
1,021,321 |
1,046,960 |
|||
|
Merger reserve |
4,410,000 |
4,410,000 |
4,410,000 |
|||
|
Available for sale reserve |
225,860 |
- |
(34,066) |
|||
|
Retained earnings |
(11,551,208) |
(8,081,500) |
(9,142,784) |
|||
|
TOTAL EQUITY |
24,751,252 |
27,126,188 |
29,041,761 |
|||
These financial statements were approved by the Directors on September 2009
|
John Baker, Chairman |
Michael J. Proffitt, Director |
Interim cash flow statement for the six months ended 30 June 2009
|
Note |
30 June 2009 (Unaudited) |
30 June 2008 (Unaudited) (Restated) |
31 December 2008 (Audited) |
|||
|
£ |
£ |
£ |
||||
|
Operating activities |
||||||
|
Loss before tax |
(2,181,040) |
(929,799) |
(1,989,935) |
|||
|
Adjustments for : |
||||||
|
Depreciation |
1,147,337 |
1,042,510 |
2,174,834 |
|||
|
Amortisation |
52,679 |
52,440 |
105,358 |
|||
|
Foreign exchange gain/(loss) |
(247,158) |
24 |
230,887 |
|||
|
Finance income |
(76,016) |
(214,552) |
(288,640) |
|||
|
Finance expense |
720,162 |
911,419 |
1,215,391 |
|||
|
Share of loss in associate |
155,197 |
- |
195,660 |
|||
|
Equity settled share based payment |
16,163 |
12,202 |
37,841 |
|||
|
Cashflow from operating activities before changes in working capital |
(412,676) |
874,244 |
1,681,396 |
|||
|
(Increase)/decrease in trade and other receivables |
659,322 |
(181,146) |
(774,190) |
|||
|
Increase in trade and other payables |
1,163,143 |
2,404,390 |
2,346,707 |
|||
|
Cash generated from operations |
1,409,789 |
3,097,488 |
3,253,913 |
|||
|
Income taxes received/(paid) |
- |
(47,372) |
165,208 |
|||
|
Cash flows from operating activities |
1,409,789 |
3,050,116 |
3,419,121 |
Interim cash flow statement for the six months ended 30 June 2009 (continued)
|
Note |
30 June 2009 (Unaudited) |
30 June 2008 (Unaudited) (Restated) |
31 December 2008 (Audited) |
|||
|
£ |
£ |
£ |
||||
|
Cash flows from operating activities (brought forward) |
1,409,789 |
3,050,116 |
3,419,121 |
|||
|
Investing activities |
||||||
|
Acquisition of property, plant & equipment |
(286,912) |
- |
(622,708) |
|||
|
Acquisition of intangible assets |
(825,879) |
(2,069,853) |
(3,285,831) |
|||
|
Investment in associate |
- |
(49) |
(490,000) |
|||
|
Acquisition of investments available for sale |
- |
(255,777) |
||||
|
Finance income received |
76,016 |
214,552 |
288,640 |
|||
|
Cash flow from investing actvities |
(1,036,775) |
(1,855,350) |
(4,365,676) |
|||
|
Financing activities |
||||||
|
Issue of ordinary shares |
- |
1,800,000 |
1,800,000 |
|||
|
Issue of convertible loan notes |
- |
1,500,000 |
1,500,000 |
|||
|
Repayment of bank borrowing |
(1,571,996) |
(1,345,825) |
(2,599,910) |
|||
|
Finance costs paid |
(802,172) |
(911,419) |
(1,215,391) |
|||
|
Cash flow from financing actvities |
(2,374,168) |
1,042,756 |
(515,301) |
|||
|
Increase/ (decrease) in cash and cash equivalents |
(2,001,154) |
2,237,522 |
(1,461,856) |
|||
|
Cash and cash equivalents at beginning of period |
6,451,580 |
7,115,053 |
7,115,053 |
|||
|
Exchange gains on cash and cash equivalents |
(389,778) |
213,702 |
798,383 |
|||
|
Cash and cash equivalents at end of period |
4,060,648 |
9,566,277 |
6,451,580 |
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 EU IFRSs).
The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statement for the year ended 31 December 2009 and are unchanged from those disclosed in the Group's Report and Financial Statements for the year ended 31 December 2008, except for the adoption of IAS 1 "Presentation of Financial Statements" (Revised).
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to present a Statement of Changes in Equity as a primary statement and introduces the possibility of either a single Statement of Comprehensive (combining the Income Statement and a Statement of Comprehensive Income) or to retain the Income Statement with a supplementary Statement of Comprehensive Income. The second option has been adopted by the Group in the preparation of the interim financial statements. As this standard is concerned with presentation only it does not have any impact on the results or net assets of the Group.
While the financial information included in this interim consolidated financial information has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the EU (IFRSs), this interim consolidated financial information does not itself contain sufficient information to comply fully with IFRSs.
The financial information for the six months ended 30 June 2009 and 30 June 2008 is unaudited and does not constitute the Group's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2008 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. Change in accounting policy
The comparative figures for the six month period to the 30 June 2008 have been restated in accordance with the change in accounting policy as explained in the annual report for the year ended 31 December 2008.
3. Segment Information
The Group's reporting segments are; Head Office, CETO development, Windfarms, and Landfill gas. This reflects the internal reporting structure of the group.
|
Six months ended 30 June 2009 |
Head Office |
CETO Development |
Windfarms |
Landfill gas |
Total |
|
Isle of Man |
Australia |
Germany |
Wales |
||
|
£ |
£ |
£ |
£ |
£ |
|
|
Income |
|||||
|
Revenue |
145,677 |
- |
2,079,695 |
198,757 |
2,424,129 |
|
Finance income |
70,799 |
32 |
5,098 |
87 |
76,016 |
|
Other income |
36,204 |
919 |
- |
- |
37,123 |
|
252,680 |
951 |
2,084,793 |
198,844 |
2,537,268 |
|
|
Total profit/(loss) before |
(1,227,876) |
(470,699) |
(482,322) |
(143) |
(2,181,040) |
|
taxation |
|||||
|
Balance Sheet |
|||||
|
Property, plant & equipment |
793,544 |
- |
37,221,330 |
187,096 |
38,201,970 |
|
Intangible assets |
- |
- |
- |
1,773,533 |
1,773,533 |
|
Investment in associate |
139,144 |
- |
- |
- |
139,144 |
|
Non current assets held for sale |
- |
10,721,228 |
- |
- |
10,721,228 |
|
Current assets |
3,640,450 |
59,144 |
2,560,203 |
105,406 |
6,365,203 |
|
Liabilities |
(602,170) |
(4,693,335) |
(26,888,072) |
(266,249) |
(32,449,826) |
|
Net assets |
3,970,968 |
6,087,037 |
12,893,461 |
1,799,786 |
24,751,252 |
3. Segment Information (continued)
|
Six months ended 30 June 2008 (Restated) |
Head Office |
CETO Development |
Windfarms |
Landfill gas |
Total |
|
Isle of Man |
Australia |
Germany |
Wales |
||
|
£ |
£ |
£ |
£ |
£ |
|
|
Income |
|||||
|
Revenue |
7,824 |
2,985 |
2,335,333 |
288,086 |
2,634,228 |
|
Finance income |
156,776 |
14,069 |
43,635 |
72 |
214,552 |
|
164,600 |
17,054 |
2,378,968 |
288,158 |
2,848,780 |
|
|
Total profit/(loss) before taxation |
(1,035,172) |
17,054 |
(8,554) |
96,873 |
(929,799) |
|
Balance Sheet |
|||||
|
Property, plant & equipment |
- |
- |
36,709,366 |
167,057 |
36,876,423 |
|
Intangible assets |
- |
8,710,532 |
- |
1,879,130 |
10,589,662 |
|
Equity accounted associate |
49 |
- |
- |
- |
49 |
|
Current assets |
7,148,700 |
160,674 |
4,006,566 |
41,766 |
11,357,706 |
|
Liabilities |
(289,298) |
(2,918,446) |
(28,230,150) |
(259,758) |
(31,697,652) |
|
Net assets |
6,859,451 |
5,952,760 |
12,485,782 |
1,828,195 |
27,126,188 |
3. Segment Information (continued)
|
Year ended 31 December 2008 |
Head Office |
CETO Development |
Windfarms |
Landfill gas |
Total |
|
Isle of Man |
Australia |
Germany |
Wales |
||
|
£ |
£ |
£ |
£ |
£ |
|
|
Income |
|||||
|
Revenue |
155,505 |
- |
4,642,774 |
509,674 |
5,307,953 |
|
Finance income |
232,533 |
16,686 |
38,988 |
433 |
288,640 |
|
Other income |
52,208 |
7,013 |
- |
- |
59,221 |
|
440,246 |
23,699 |
4,681,762 |
510,107 |
5,655,814 |
|
|
Total profit/(loss) before taxation |
(2,284,219) |
23,699 |
148,789 |
121,796 |
(1,989,935) |
|
Balance Sheet |
|||||
|
Property, plant & equipment |
618,772 |
- |
43,888,848 |
127,919 |
44,635,539 |
|
Intangible assets |
- |
9,892,404 |
- |
1,826,212 |
11,718,616 |
|
Investment in associate |
294,340 |
- |
- |
- |
294,340 |
|
Investments available for sale |
221,711 |
- |
- |
- |
221,711 |
|
Current assets |
4,160,676 |
364,365 |
4,118,835 |
192,177 |
8,836,053 |
|
Liabilities |
(197,287) |
(3,658,632) |
(32,689,371) |
(119,208) |
(36,664,498) |
|
Net assets |
5,098,212 |
6,598,137 |
15,318,312 |
2,027,100 |
29,041,761 |
4. Events after the balance sheet date
On the 6 August 2009 the company exercised its option to purchase Gamar GHL for €2,000,000. Gamar is a Polish development company, fully permitted to build a 30MW wind project in Kobylany, Southeast Poland.
On the 31 July 2009 Utilico Limited provided the company with a £2,500,000 loan. The loan is convertible in whole or in part into ordinary shares at any time before 31 July 2011, conditional upon the approval of the independent shareholders of REH on a poll at an extraordinary general meeting of the Company to be convened in due course, and upon receipt of a waiver from the Panel from the obligations of Utilico to make an offer for REH under Rule 9 of the City Code. Should such independent shareholder approval and such a waiver be received, the Utilico loan will, when Utilico exercises its conversion right, convert at a price of 30.25 pence per ordinary share. Draw down of funds under the Utilico Loan is not conditional upon such approval or waiver being given.
On the 31 July 2009 4,050,832 new ordinary shares of 1 pence each were issued by way of a placing at 24 pence per new ordinary share.
Related Shares:
REH.L