25th May 2005 11:33
Impax Group PLC25 May 2005 25 May 2005 Impax Group plcInterim results for the six months ended 31 March 2005 Impax Group plc, which provides specialised asset management and corporatefinance services within the environmental markets sector, today announces itsinterim results for the six months ended 31 March 2005. Highlights * Successful launch of Impax Environmental Markets (Ireland) * 38% increase in assets under management to £94 million over twelve months * Loss reduced to £250,000, after amortisation of goodwill of £141,000 Commenting on the results, Keith Falconer, Chairman said: "Last year the Board focused on setting a strategy and establishing a base forgrowth. In the six months to March we have concentrated on building the Impaxbusiness. In December, we raised £16.3m with the successful launch of aDublin-listed open-ended investment fund that has a similar portfolio of stocksto our investment trust, Impax Environmental Markets plc. We believe we can growthese assets substantially over the coming twelve months. Further fund raisingsare underway which, if successful, should enable the Group to generate positivecashflow. During the period, our corporate finance activities again saw a number of newclients and increased net revenue. The environmental markets sector,particularly the energy, water and waste markets on which we concentrate, isgrowing rapidly, and, with increasing public policy intervention and privatesector capital expenditure, should become even more attractive. In the second half we are continuing our efforts to turn this opportunity intogrowth in assets under management and corporate finance fees." For further information please contact: Keith Falconer or Ian Simm 020 7434 1122Impax Group plcJohn Webb 020 7490 3788Marshall Securities Limited Impax Group plcChairman's Statement This time last year, I reflected on a busy programme of changes that we had putin place, including the disposal of our oil interests. Our recent efforts havebeen focussed on building a solid foundation for earnings which can be grownover the next few years. I believe that the prospects for Impax are excellent as the environmentalmarkets sector in which we specialise is growing rapidly and is increasinglytopical. Almost every day, the newspapers report new issues that serve toillustrate commercial opportunities in this area, many of which are driven by asolid legislative framework. Against this backdrop, we are making good progress towards building sustainablerevenues and generating positive cash flow. The interim results this year show higher revenues and reduced losses comparedwith this period last year, reflecting significant progress in both ouroperating divisions. In December, we raised £16.3m with the successful launch ofa Dublin-listed open-ended investment fund that has a similar portfolio ofstocks to our investment trust, Impax Environmental Markets plc. We believe wecan grow these assets substantially over the coming twelve months. This fund hascontributed revenues for only four months of the interim period and it is beingactively marketed to new investors. We are also pursuing other fund-raisingactivities and hope to report success in the near future. Results for the period Turnover for the six months to 31 March 2005 was £951,000 (2004: £891,000). Theloss for the period of £250,000 (2004: £350,000) is after a £141,000 (2004:£141,000) charge for the amortisation of goodwill. I am pleased to report that we are steadily growing the net revenue lines in ourfinance divisions and that the majority of this increase has been added directlyto the bottom line, thereby reducing the operating loss before amortisation forthe period to £84,000 (2004: £147,000). Our net interest charge has fallen to £25,000 (2004: £62,000) as interestreceivable from the production notes on the sale of our oil assets has offset inpart the interest charge on our convertible loan stock. Corporate Finance Impax Capital's turnover for the period was £421,000 (2004: £530,000). Afterdeducting project expenses, the division's net revenue was £418,000 (2004:£353,000) an 18% increase over the corresponding six month period last year. Inparticular, our team was able to close three transactions involving theprovision of merger and acquisition advice. In rapidly growing markets, demandfor this expertise is high, and we are confident that we can generate furtherfees in this area. The UK's need to renew its waste management and renewable energy infrastructureis bringing new participants into the market, with attendant opportunities tosell corporate finance services including merger and acquisition advice, financeraising, financial and public policy consulting. Our corporate finance team iswell positioned to take advantage of this trend. Asset Management Revenues in Impax Asset Management ("IAM") were £530,000 during the period, a47% increase over the corresponding six-month period last year. By 31 March2005, IAM managed or advised six funds with total assets under management ofaround £94m (2004: £69m). These funds have performed well. The net asset value ("NAV") of the largestfund, Impax Environmental Markets plc, ("IEM") rose 15.9% over the year ending31 December 2004, an out-performance over the MSCI World Index, which rose 5.2%over the same period. In the twelve months ending 31 March 2005, the IEM NAVrose 13.0%, while the MSCI World Index rose 5.7%. The unquoted funds alsoperformed well; in particular, The Recycling Fund completed its secondinvestment and is expected to announce further investments shortly. We have also secured two new management contracts. On 9 December 2004, asreported above, we completed the fund raising for and commenced management ofImpax Environmental Markets (Ireland). On 1 April 2005 (i.e. since the end ofthe period under review), we started to manage the ASN Milieufonds, anopen-ended fund investing in quoted companies in the environmental marketssector to which we had been providing investment advice since July 2001. The environmental markets sector is growing quickly and many investors want toincrease their exposure to it. Few institutions have the expertise to do this bythemselves and this plays directly to our core competence. We intend to grow ourrange and the size of the funds actively in the future in both private andquoted equity. Employee share ownership We are grateful to shareholders who approved the establishment of the EmployeeBenefit Trust. I gave the reasons why I thought it was important to have such atrust last year. Although it does mean potential dilution of shareholdersinterests, shares are only allocated to employees if they are successful inmeeting their objectives and corporate targets as a consequence of which theshares will have been rewarding investments for shareholders in each period. Prospects We operate against a favourable background but our results will depend on howsuccessful we are in exploiting the opportunities presented to us. The asset management division has developed a more solid underpinning to itsearnings and we hope that we shall secure higher fees in the second half. Weintend to concentrate on growing fund management revenues, which are predictableand are therefore more highly-rated by shareholders. Our corporate finance division is dependant on the outcome of the mandates wehave won and our ability to win new business. Our efforts will concentrate onexecuting these mandates successfully. I hope that we will be able to deliver further positive news in the near future. Keith FalconerChairman 25 May 2005 Impax Group plcConsolidated Profit & Loss Account for the six months ended 31 March 05 ---------------------------------------------------------------------------------------- Notes Six months Six months ended ended Year ended 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Turnover 2 951 891 1,738 Operating expensesAmortisation ofgoodwill 2 ( 141) ( 141) ( 283)Other operatingexpenses ( 1,035) ( 1,038) ( 2,031) -------------- -------------- -------------- ( 1,176) ( 1,179) ( 2,314) Operating lossContinuingoperations 2 ( 225) ( 288) ( 576) Net interestpayable ( 25) ( 62) ( 102) -------------- -------------- -------------- Loss on ordinaryactivities beforetaxation ( 250) ( 350) ( 678)Taxation - - - -------------- -------------- -------------- Loss attributableto the Group ( 250) ( 350) ( 696) -------------- -------------- -------------- Basic loss pershare 4 (0.67)p (0.98)p (1.91)pAdjusted loss pershare 4 (0.09)p (0.59)p (1.14)p -------------- -------------- -------------- Statement of Total Recognised Gains and Losses Loss for the period ( 250) ( 350) ( 696)Currencytranslationdifferences ( 106) ( 267) ( 260) -------------- -------------- -------------- Total recognisedlosses ( 356) ( 617) ( 955) -------------- -------------- -------------- All disclosures relate only to continuing operations. Impax Group plcConsolidated Balance Sheet as at 31 March 2005 ---------------------------------------------------------------------------------------- Notes As at As at As at 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Fixed assets Intangible fixed assets 1,771 2,053 1,912 Tangible fixed assets 11 2,288 16 ------------- ------------- ------------- 1,782 4,341 1,928 ------------- ------------- ------------- Current assets Debtors 2,891 1,122 3,080 Cash at bank and in hand 6 839 877 1,002 ------------- ------------- ------------- 3,730 1,999 4,082 Creditors -amountsfalling duewithin oneyear ( 311) ( 492) ( 476) ------------- ------------- ------------- Net currentassets 3,419 1,507 3,606 Total assetsless currentliabilities 5,201 5,848 5,534 Creditors -amountsfalling dueafter morethan one year ( 2,279) ( 2,260) ( 2,256) ------------- ------------- ------------- Total netassets 2,922 3,588 3,278 ------------- ------------- ------------- Capital and reserves Called up share capital 7 8,892 8,885 8,892 Share premium 7 759 736 759 Exchange equalisation reserve 7 ( 867) ( 767) ( 761) Profit and loss account 7 ( 5,862) ( 5,266) ( 5,612) ------------- ------------- ------------- Equityshareholders'funds 2,922 3,588 3,278 ------------- ------------- ------------- Impax Group plcConsolidated Cash Flow Statement for the six months ended 31 March 2005 ---------------------------------------------------------------------------------------- Six months Six months ended ended Year ended 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Cash outflow from operatingactivities ( 200) ( 257) ( 349) Returns on investments and servicing offinanceInterest received 67 31 67Interest paid ( 61) ( 59) ( 105) Taxation - ( 33) ( 33) Capital expenditure and financial investmentPurchase of tangible fixedassets - ( 90) ( 13)Proceeds from sale of fixedassets 84 85 182Disposal of subsidiary - - 333 Management of liquid resourcesCash held on deposit tosupport oil activities - - 61 ------------- ------------- ------------- (Decrease)/increase in cashin the period ( 110) ( 323) 143 ------------- ------------- ------------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cashin the period ( 110) ( 323) 143 (Decrease) in cash ondeposit in year - - ( 61)Non cash transaction -convertible loan stock ( 23) 39 44Translation differences ( 53) ( 19) ( 300) ------------- ------------- ------------- Movement in net debt in theperiod ( 186) ( 303) ( 174) Net debt at beginning ofperiod ( 1,254) (1,080) ( 1,080) ------------- ------------- ------------- Net debt at end of period ( 1,440) (1,383) ( 1,254) ------------- ------------- ------------- Reconciliation of operating profit/(loss) to net cash flow from operatingactivities Six months Six months ended ended Year ended 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating loss ( 225) ( 288) ( 576)Goodwill amortisationcharge 141 141 283Depreciation 4 2 6Decrease/(increase) indebtors 7 ( 9) ( 73)(Decrease)/increase increditors ( 127) ( 103) 11 ----------- ----------- ----------- Net cash flow fromoperating activities ( 200) ( 257) ( 349) ----------- ----------- ----------- Impax Group plcNotes to the Interim Accounts for the six months ended 31 March 2005 -------------------------------------------------------------------------------- 1 The financial information set out in this report does not constitute full accounts for the purposes of Section 240 of the Companies Act 1985. The interim accounts for the six months ended 31 March 2005 and 31 March 2004 are unaudited. The comparative figures for the financial year ended 30 September 2004 are not the Company's statutory accounts for the financial year but are abridged from those accounts which have been reported on by the Company's auditors, whose report was unqualified. The interim accounts have been prepared on the basis of the accounting policies set out in the annual financial statements of the Group for the year ended 30 September 2004. The interim accounts were approved by the Directors on 25 May 2005. 2 Segment analysis Six months Six months ended ended Year ended 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Turnover Financial services 951 880 1,738 Oil - 11 - ------------- ------------- ------------- 951 891 1,738 ------------- ------------- ------------- Operating loss Financial services ( 84) ( 142) ( 293) Oil - - - Exchange loss - ( 5) - Amortisation of goodwill ( 141) ( 141) ( 283) ------------- ------------- ------------- ( 225) ( 288) ( 576) Net interest payable ( 25) ( 62) ( 120) ------------- ------------- ------------- Loss on ordinary activities ( 250) ( 350) ( 696) before taxation Tax on loss on ordinary - - - activities ------------- ------------- ------------- Loss for the year ( 250) ( 350) ( 696) ------------- ------------- ------------- 3 Amounts denominated in US Dollars have been converted at the closing rate on 31 March 2005 of £1 to $1.87 (31 March 2004: $1.82; 30 September 2004: $1.80). The results of the US subsidiary undertaking have been translated on a monthly basis at the average rate ruling during each month. 4 The figures for basic loss per share are based on the loss attributable to the Group of £250,000 (31 March 2004: £350,000; 30 September 2004: £695,771) and on the weighted average number of ordinary shares in issue during the period of 31 March 2005: 37,498,367 (31 March 2004: 35,698,084; 30 September 2004: 36,377,018). The calculation of diluted loss per share is based on the weighted average number of shares outstanding adjusted by the dilutive share options and convertible loan stock. These adjustments give rise to an increase in the weighted average number of shares outstanding to 31 March 2004: 91,249,098 (31 March 2004: 91,249,098; 30 September 2004: 91,249,098). In order to show results from operating activities on a comparable basis, an adjusted loss per share has been calculated which excludes goodwill amortisation and exceptional items from the results. 5 The Directors do not propose an interim dividend. 6 Cash at bank and in hand Six months Six months Year ended ended ended 31 Mar 05 31 Mar 04 30 Sept 04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Cash at bank and on hand 839 822 1,002 Cash on deposit - 55 - ------------- ------------- ------------- 839 877 1,002 ------------- ------------- ------------- 7 Reconciliation of movements in capital and reserves Share Share premium Exchange Profit & capital reserve equilisation loss reserve reserve £'000 £'000 £'000 £'000 As at 1October 2004 8,892 759 ( 761) ( 5,612)Loss for theperiod - - - ( 250)Conversion of Loan Stock - - - -Translationadjustments - - ( 106) - ----------- ----------- ----------- ----------- As at 31 March 2005 8,892 759 ( 867) ( 5,862) ----------- ----------- ----------- ----------- Copies of this interim statement will be sent to shareholders and are available free of charge from the Company's registered office, Broughton House, 6 - 8 Sackville Street, London W1S 3DG. It is also available from our website www.impax.co.uk. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Impax Asset Management