6th Mar 2006 07:01
Renewable Energy Generation Ltd06 March 2006 RENEWABLE ENERGY GENERATION LIMITED Un-audited interim consolidated results for the period ending 31 December 2005 Statement by Mike Liston Chairman Renewable Energy Generation Limited ("REG") has delivered a strong performanceover the period. Following its initial fund raising of £25m REG has invested inthree renewable energy projects providing a strong foundation for growth overthe next three years. A further £30m of new equity raised, much of it fromexisting shareholders, provides REG with sufficient resources to fund investmentin its current portfolio of wind projects, whilst allowing it to exploit furtheropportunities. In summary:- i) Total net profit for period £496,277 ii) Diluted earnings per share 1.44p iii) Interim dividend declared per share 1.00p iv) Acquisition for £4.5m of the Goonhilly Downs Wind Farm in Cornwall, from private vendors v) Non-equity investment of £7.9m in Poland's largest wind farm at Tymien, which is nearing completion vi) Acquisition for £4m of 24 wind projects across the UK from NPower Renewables, part of RWE vii) Establishment of CLP Wind Projects based in St Austell to develop REG's UK assets viii) Convening of EGM of Company's shareholders in order to put a recommended proposal before shareholders to reduce REG's share premium account Headline figures 2005 £ Revenue from continuing operations 263,014 ---------Total revenue for the period 263,014 --------- Gross loss from continuing operations (137,111)Gross margin from continuing operations (52.1%) ========= EBITDA (loss from continuing operations before finance costs, tax,depreciation and amortisation) (18,524) --------- Net profit from continuing operations 496,277 ---------Total net profit for the period 496,277 --------- Average monthly number of employees 0 --------- Earnings per sharebasic, for profit for the period attributable to 1.55pordinary equity holders of the parent ---------diluted, for profit for the period attributable to 1.44pordinary equity holders of the parent --------- Debt ratio (total liabilities/total assets) 0.13 --------- To monitor financial performance over the medium-term, REG focuses on earningsper share. REG's aim remains to provide increasing returns for its shareholdersthrough earnings per share and sustainable dividend growth. Dividend and reduction in share premium account The Board is announcing an interim dividend of 1p per share. The Board iscommitted to paying a dividend for the full year of 4p per Ordinary share. Thiswill require the passing of a resolution at an Extraordinary General Meeting("EGM") of the Company's shareholders to reduce REG's share premium account thusestablishing a distributable reserve. As outlined at the time of the Company'slaunch and subsequent fundraising, REG's distributable reserves will likelyprove insufficient to facilitate the payment of a dividend of 4p in this itsfirst financial year. Notice of the EGM will be included with the InterimStatement due to be sent to shareholders on the 15 March 2006. In accordancewith the requirements of IAS 10, the interim dividend has not been recognised asa liability in the un-audited interim consolidated financial statements at 31December 2005. Renewable Energy Generation's objectives and strategy REG is a renewable energy company which aims to plan, build and construct aportfolio of mainly wind generation projects, diversified by technology,geographical location and income stream. REG's shareholders benefit from therising value of renewable energy created by the World's commitment to a lowcarbon future. REG invests in projects which are capable of providing returns which exceed theCompany's cost of capital by a margin higher than that necessary to accommodaterisk. REG aims for its investments to provide increasing returns to itsshareholders through earnings-driven dividend growth. REG has a strong team based in the UK and in its domestic market is committed toinvestment in projects at all stages of development. In overseas markets whichmay carry a higher level of risk, REG's policy is to partner with strong localand international companies that can oversee the planning, construction andoperation of renewable energy projects on REG's behalf. A good example of thisis the Tymien project in Poland. REG benefits from the experience of its Manager, REG Power Management. Thisconsolidates the experience of The Probyn Group of Canada and Premier AssetManagement and Pure Energy Professionals both based in the UK. Corporate activity REG completed three transactions over the period. These were: The Cornwall Light & Power Co. Limited ("CLP") REG bought CLP in June 2005. CLP owns the Goonhilly Downs wind farm on theLizard Peninsula in Cornwall. The project is mature and consists of 14 Vestas 34machines each of 400KW output, making a total project capacity of 5.6MW. Theproject is situated on one of the better wind sites in the UK and has thepotential, should all of the necessary consents be forthcoming, to be repoweredfor increased production capacity. This would substantially increase an alreadyacceptable return from the project. Subsequent to purchasing CLP, the REG management team put in place a two and ahalf year power purchase agreement ("PPA") for the project. Under thisagreement, power from the site, including climate change levy exemptioncertificates and peak demand benefits but excluding any renewable obligationcertificates ("ROCs"), are sold to Smartest Energy under fixed terms. REG willsell the ROCs produced by Goonhilly into the marketplace on a spot basis. ThePPA commenced on 1 October 2005 and runs to the end of March 2008. Tymien - Poland Tymien, located approximately 5 km from the Baltic Coast, has a renewablegeneration capacity of 50 MW and is Poland's largest wind project to date. Ithas been developed by EEZ Sp. Z o.o. ("EEZ") of Poland and is expected to begincommercial production in the spring of 2006. The project is ahead of scheduleand has already sent its first power to the Polish grid. Tymien will utilise 25Vestas V80 2MW turbines, which have a proven track record of production. REG has its investment in Tymien with Invenergy Wind, a highly regarded powerdeveloper. Under the agreement with Invenergy Wind, REG is entitled to share inthe returns received from the investment in EEZ until a 15% target Internal Rateof Return has been achieved, following which REG will receive an ongoingresidual cash return. This investment will be in-line with REG's policy ofinvesting in EU accession countries where it believes there is selectivepotential for more attractive returns than in mainstream EU countries. In addition, through its agreement with Invenergy Wind, REG will have thepotential to invest in other wind projects in Poland, which are anticipated toconstitute approximately 140 MW. CLP Wind Projects In September REG purchased 24 potential wind projects in the UK from NPowerRenewables Limited, a wholly owned subsidiary of The RWE Group of the UK. The total portfolio exceeds 75MW and the assets are spread throughout Englandand Wales. The projects comprise distributed or 'embedded' generation in rurallocations, typically utilising 2 or 3 modern turbines. This approach is directlyin line with the government's aim to make electricity supply less dependent uponcentralised large power stations. By generating closer to the end-user, powerlosses in overhead lines are reduced and greater value is gained per unit ofgeneration. In addition, a more diverse national power supply is created. Eachproject should typically produce enough electricity to meet the annual needs ofseveral thousand people in the surrounding area. The portfolio contains projects at various stages of planning consent. A numberhave already gained planning consent, and the majority are well advanced in theprocess. REG intends to commence construction on the consented sites as soon asis practicable. Each of the projects should enjoy a well above average windresource and hence, REG believes, can generate electricity very competitivelyover the next two decades making a positive contribution to the UK's requirementfor environmentally sound energy production Outlook REG remains focussed on enhancing and creating value for its shareholders frominvesting in renewables projects that offer sustained returns above REG's costof capital. The environment for renewables is accommodating and the Company hasthe financial resources to develop its existing portfolio whilst seeking newopportunities to invest capital. Our challenge is to consolidate the projectsthat we have bought, particularly CLP Wind Projects, and this, together withcompletion of the Tymien project, is likely to be the main driver of REG'searnings growth over the next two years. Investor Timetable for 2006 15 March Shares ex dividend for interim dividend15 March Interim report sent to shareholders with EGM resolution17 March Record date for interim dividend31 March Final date for return of special resolution03 April EGM07 April Interim dividend sent to shareholders Please follow link to read the full Un-audited interim consolidated results for the period ending 31 December 2005. http://www.rns-pdf.londonstockexchange.com/rns/3085z_-2006-3-3.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
WIND.L