7th Mar 2006 07:00
Renewable Energy Holdings plc07 March 2006 Renewable Energy Holdings plc ("REH" or the "Group") Interim results for the period ended 31 December 2005 REH, the investor and operator of proven and innovative renewable energytechnologies, announces interim results for the period ending 31 December 2005. Highlights: • First operating income received in December 2005 • £600,000 net of operating costs is anticipated to be generated from the Kesfeld wind farm on an annual basis • Conditional contracts exist over 40MW of wind farm assets to be owned and operated in Germany by 2007 • Significant pipeline of projects in the UK, Hungary and Ireland as well as Eastern Europe • Projects being looked at include hydro, methane recovery and biomass projects as well as wind • CETO device undergoing commercial design and engineering for an anticipated 2007 deployment • Placing during the period raised £2.5m • Further £6m of funds raised post period end to acquire a wind farm in Hungary John W Baker CBE, Chairman of REH, said: "The prospect of the acquisition of the 45MW windfarm in Hungary plus a strongpipeline of deals gives the Board great confidence in the outlook for REH". Chairman's Statement Concerns about the potential impact of climate change from global warmingcontinue to grow, leading to increasing focus on the need to control carbonemissions from the production, transmission and use of energy. Against thisbackground, renewable energy technologies are widely regarded as a vitalcomponent of plans to reduce carbon emissions. I am pleased to report that the Group's first operating income occurred inDecember 2005 at the Group's windfarm development in Kesfeld, Germany, soreaching a target that we set ourselves at our start up, a year ago, to achievesome income from our first project by quarter 4, 2005. The Group has a 20 yearagreement with RWE, the German Utility, to take the power generated and theproject is expected to yield some £600,000 per annum net of operating costs anddebt servicing. This 27.9MW windfarm is the first stage of planned developments that will seeover 40MW of windpower owned and operated by the Group in Germany by 2007. The Group has also developed a significant pipeline of potential projects forearly acquisition or development in the UK, Hungary and Ireland and there arefurther prospects in Eastern European countries, all keen to encourage thedevelopment of renewable energy. Direct costs incurred on pipeline projects arecapitalised on completion of the project. However, all overhead costs relatingto project development are expensed as incurred, rather than being deferred tofuture periods. We are looking at small hydro, methane recovery and biomass projects as well aswind power. We will continue to concentrate on developing only in countriesthat offer significant environmental uplift to support the sales of energy. I am also pleased to report progress with the development of the Group'sinnovative wave-energy device, CETO. After successful deployment and testing ofthe prototype, that has proved the concept, work is now proceeding on the designand engineering of a commercial version. The Board believes that this could beavailable for deployment during 2007. Also during the period ended 31 December 2005, the group raised some £2.5million by way of placing and subsequent to the balance sheet date has raised afurther £6 million to finance, in particular, the acquisition of a wind projectin Hungary. John W BakerChairman Condensed consolidated income statement for the six months to 31 December 2005 Notes Six months to Three months to Nine months to 31 December 2005 31 December 2004 30 June 2005 (Unaudited) (Unaudited) (Audited) £ £ £Revenue & gross profitOperating Income 11,629 - - _________ _________ _________ ExpenditureCETO development expenses 262,795 - 535,809Administrative expenses 879,847 - 988,722 _________ _________ _________ Loss from Operations (1,131,013) - (1,524,531) Finance cost - - - Finance income 111,929 - 135,631 _________ _________ _________ Loss before tax (1,019,084) - (1,388,900) Tax expense - - - _________ _________ _________ Loss after tax (1,019,084) - (1,388,900) __________ __________ __________ Basic and diluted loss per share 6 (3.22p) - (8.86p) __________ __________ __________ Condensed consolidated statement of recognised income and expense for the sixmonths to 31 December 2005 Notes Six months to Three months to Nine months to 31 December 2005 31 December 2004 30 June 2005 (Unaudited) (Unaudited) (Audited) £ £ £ Loss after tax (1,019,084) - (1,388,900) _________ _________ _________ Foreign exchange loss on retranslation ofoverseas operations (2,366) - (9,778) _________ _________ _________Total recognised income and expense forthe period 7 (1,021,450) - (1,398,678) __________ __________ __________ Condensed consolidated balance sheet at 31 December 2005 Notes At At 31 At 31 December 2005 December 2004 30 June 2005 (Unaudited) (Unaudited) (Audited) £ £ £Non- current assetsIntangible assets 5,559,878 - 5,559,878Fixed assets under construction 3 11,156,408 - - Current assetsTrade and other receivables 2,321,484 - 255,952Cash and cash equivalents 5,009,756 - 7,220,479 _________ _________ _________ Total current assets 7,331,240 - 7,476,431 _________ _________ _________ Total assets 24,047,526 - 13,036,309 _________ _________ _________ Current LiabilitiesTrade and other payables 490,397 - 134,929Other financial liabilities 2 1,385,690 - - _________ _________ _________ Total current liabilities 1,876,087 - 134,929 _________ _________ _________Non-current LiabilitiesFinancial liabilities 2 7,898,931 - - _________ _________ _________ Total Liabilities 9,775,018 - 134,929 _________ _________ _________ TOTAL NET ASSETS 14,272,508 - 12,901,380 __________ __________ __________Capital and reserves attributable toequity holders of the companyShare capital 4 331,667 - 290,000Share premium reserve 15,450,036 - 13,112,425Foreign exchange reserve (12,144) - (9,778)Share based payment reserve 910,933 - 897,633Retained earnings (2,407,984) - (1,388,900) _________ _________ _________TOTAL EQUITY 7 14,272,508 - 12,901,380 __________ __________ __________ Condensed consolidated cashflow for the six months to 31 December 2005 Six months to Three months to Nine Months to 31 December 2005 31 December 2004 30 June 2005 (Unaudited) (Unaudited) (Audited) £ £ £Operating activitiesNet loss from ordinary activities (1,131,013) - (1,524,531)Adjustments for:Equity-settled share based payments 13,300 - 445,233 ________ ________ _________ Operating loss before changes inworking capital and provisions (1,117,713) - (1,079,298) Increase in trade and other receivables (1,807,783) - (58,107)Increase in other financial assets - - (1,276)Increase in trade and other payables 353,102 - 12,273 _________ _________ _________ Cash absorbed from other operations (2,572,394) - (1,126,408) Income taxes paid - - - _________ _________ _________ Cash flows from operating activities (2,572,394) - (1,126,408) _________ _________ _________Investing activitiesPurchase of fixed assets (10,972,984) - -Increase in deferred expenditure (394,062) - (196,569)Acquisition of intangible asset - - (561,300)Interest received 111,929 - 135,631Interest paid capitalised within fixed assets (47,111) - - _________ _________ _________ Cash flows from investing activities (11,302,228) - (622,238) _________ _________ _________Financing activitiesIssue of ordinary shares 2,500,000 - 10,000,000Issue costs (120,722) - (1,030,875)Proceeds from bank borrowings 9,284,621 - - _________ _________ _________Cash flows from financing activities 11,663,899 - 8,969,125 _________ _________ _________(Decrease)/increase in cash andcash equivalents (2,210,723) - 7,220,479 __________ __________ __________ Notes to the Interim Financial Statements for the six month period ended 31December 2005 (unaudited) 1. Accounting policies The interim financial statements have been prepared on the basis of applicableaccounting policies set out in the Group accounts for the period ended 30 June2005, and are in compliance with International Accounting Standard 34. The comparative figures for the period ended 30 June 2005 do not constitute thecompany's full statutory accounts. The statutory accounts for that period havebeen reported on by the company's auditors and delivered to the CompaniesRegistry. The audit report was unqualified and did not contain a statementunder chapter 2 section 15.4 (a) - (b) of the Companies Act 1982. The financial information presented in this interim report has been prepared inaccordance with the accounting policies the Group expects to be applicable at 30June 2006. The interim report has been prepared in accordance with thoseInternational Financial Reporting Standards as adopted by the EU and IFRICinterpretations (IFRS) issued and effective as at the time of preparing thestatement. The interpretations that will be applicable at 30 June 2006 are notknown with certainty at the time of preparing the interim report. These figuresmay therefore require amendment to change the basis of accounting orpresentation of certain financial information, before their inclusion in theIFRS financial statements for the year ending 30 June 2006. The interim financial statements are unaudited, but have been reviewed by theauditors. The interim financial statements were approved by the Board on 6March 2006. 2. Acquisitions during the period On 20 July 2005 and 12 August 2005 the group acquired 100% of the equityinterest in both Windpark Kesfeld Heckhuscheid GmbH & Co. KG (Windpark Kesfeld)and Windpark Kirf GmbH & Co. KG (Windpark Kirf) respectively. Details of the fair value of identifiable assets and purchase consideration areas follows: Windpark Windpark Windpark Windpark Kesfeld Kesfeld Kirf Kirf £ Euro £ EuroFair value of assets acquiredPlanning permission and leases 27,484 40,000 22,331 32,500 Cash 6,871 10,000 1,718 2,500 ________ ________ _________ _________ Consideration paid as cash 34,355 50,000 24,049 35,000 __________ __________ __________ __________ Carrying value prior to acquisition 6,871 10,000 1,718 2,500 __________ __________ __________ __________ Post acquisition profit 21,806 31,988 - - __________ __________ __________ __________ Notes to the Interim Financial Statements for the six month period ended 31December 2005 (unaudited) (continued) Acquisitions during the period (continued) There is no difference between the revenue and profits of the Group had theacquisitions been made on 1 July 2005. No goodwill arose on the aboveacquisitions as the consideration paid was equal to the fair value of the assetsacquired. Windpark Kesfeld has entered into a contract for the construction of a windfarmat a contract price of £22,674,179 (€33,000,000). This is to be financed partby a loan facility of £18,681,461 (€27,189,000) which will be drawn down in fullupon completion of the windfarm during 2006. £ EuroThe facility carries interest rates as follows: 4.3% 9,038,752 13,155,0005.0% 2,292,153 3,336,0003.9% 2,226,879 3,241,000LIBOR +1.5% 5,123,678 7,457,000 _________ _________ 18,681,462 27,189,000 __________ __________ Analysis of loan repayments on the total facility: In one year or less 1,385,690 2,016,734In more than one year but not more than two years 1,469,921 2,139,324In more than two years but not more than five years 4,148,793 6,038,153In more than five years 11,677,058 16,994,789 _________ _________ 18,681,462 27,189,000 _________ _________ Less issue costs (585,335) (851,997) _________ _________ 18,096,127 26,337,003 __________ __________ At 31 December the amount drawn under the loan was £9,869,956, of which£1,385,690 is due within one year or less. 3. Fixed assets under construction Fixed assets under construction represent amounts paid in respect of WindparkKesfeld. At 31 December 2005 €18,276,923 was outstanding on the €33,000,000contract. Substantial completion is expected to be achieved on Windpark Kesfeld duringMarch 2006 and at this time the asset will be transferred to plant andmachinery. Notes to the Interim Financial Statements for the six month period ended 31December 2005 (unaudited) (continued) 4. Issue of shares On 2 September 2005, 4,166,167 shares were issued at 60 pence per share, raising£2,500,000 before expenses. After the balance sheet date, on 7 March 2006, 12,000,000 shares together with12,000,000 attached warrants to acquire further shares at a price of 50 penceper share, were issued at a price of 50 pence for each share together withattached warrant. The placing price represents a discount of 13.05% to theclosing mid market price of 57.5 pence on AIM as at 9 February 2006. The warrants may be exercised for a period of two years after the date of issueof the placing shares. It is intended that the net proceeds will be used to assist in the acquisitionof a 45MW windfarm in Hungary, in which (assuming the acquisition is completedas it is currently proposed) the Group will have an 80% holding. 5. Segment information For the six months to 31 December 2005 Renewable Portfolio/ CETO Development Total Europe Australia £ £ £IncomeFinance Income 110,309 1,620 111,929Operating Income 11,629 - 11,629 _________ _________ _________ ExpensesContinuing operations 818,547 310,795 1,129,342Non-cash charge 13,300 - 13,300 _________ _________ _________ Total loss 709,909 309,175 1,019,084 _________ _________ _________ Balance sheetAssets 18,341,372 5,706,154 24,047,526Liabilities 9,747,452 27,566 9,775,018 _________ _________ _________ Net assets 8,593,920 5,678,588 14,272,508 __________ __________ __________ Notes to the Interim Financial Statements for the six month period ended 31December 2005 (unaudited) (continued) Segment information (Continued) For the nine months to 30 June 2005 Renewable Portfolio/ CETO Development Total Europe Australia £ £ £IncomeFinance Income 133,395 2,236 135,631 _________ _________ _________ ExpensesContinuing operations 543,489 535,809 1,079,298Non-cash charge 445,233 - 445,233 _________ _________ _________ Total loss 855,327 533,573 1,388,900 _________ _________ _________ Balance sheetAssets 9,032,296 4,004,013 13,036,309Liabilities 29,740 105,189 134,929 _________ _________ _________ Net assets 9,002,556 3,898,824 12,901,380 __________ __________ __________ The figures for the three months ended 31 December 2004 are nil. 6. Loss per share The earnings per share calculation is based on the loss for the period aftertaxation and the weighted average number of shares in issue throughout theperiod. Calculation of loss per share is based on losses of £1,019,084 (30 June2005:£1,388,900) and a weighted average number of ordinary shares being theequivalent of 31,626,814 (30 June 2005:15,684,827) ordinary shares. The dilutedloss per share is the same as the basic loss per share as the effect of shareoptions granted is anti-dilutive. The loss per share for the three months ended 31 December 2004 was nil. Notes to the Interim Financial Statements for the six month period ended 31December 2005 (unaudited) (continued) 7. Changes in shareholders equity Six months to Three months to Nine Months to 31 December 2005 31 December 2004 30 June 2005 (Unaudited) (Unaudited) (Audited) £ £ £Capital and reserves attributable to equity holdersof the parent at the beginning of the period 12,901,380 - -Total recognised income and expense (1,021,450) - (1,398,678)Issue of new ordinary shares for cash(net of expenses) 2,379,278 - 8,902,425Issue of new ordinary shares other than for cash(net of expenses) - - 4,500,000Share based payment expense 13,300 - 897,633 _________ _________ _________Capital and reserves attributable to equity holdersof the parent at the end of the period 14,272,508 - 12,901,380 __________ __________ __________ 8. Related party transactions During the period to 31 December 2005 an amount of £14,446 (12 months to June2005: £24,055) was paid to Carnegie Corporation in respect of administrationservices received. Mr Alan Burns, a Director of Renewable Energy Holdings plcand Seapower Pacific PTY Limited, is Chairman of Carnegie Corporation. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
REH.L