17th Sep 2007 07:02
Energetix Group plc17 September 2007 Press Release 17 September 2007 Energetix Group plc ("Energetix") Interim Results Energetix Group plc (AIM:EGX), a leading developer of new and sustainablealternative energy products, today reports its Interim Results for the sixmonths ended 30 June 2007. Summary of results - Cash in bank at the period end was £2.9m, some £1.2m ahead of budget; - Pre-tax loss for the period increased from £0.3m to £1.3m in line with budget and increased level of development activity since the Group's admission to AIM in August 2006; - Field trial of Genlec lightweight wall-hung micro CHP boiler completed to plan, demonstrating overall efficiency of up to 95 per cent; - Expansion of Pnu Power product line to include a low power long duration unit for telecoms' use, complementing existing Uninterruptible Power Supply product this will be first displayed at Intelec, a major international trade show, in October; - Pnu Power accelerated life cycle testing has achieved 8 years' product life; - Successful completion, on 1 August 2007, of a share placing which raised £11.3 million (net); - Receipt, in August 2007, of a £0.2 million grant from the North West Regional Development Agency for development of a Genlec combination boiler; - Signing, in August 2007, of two letters of intent with mainland European boiler manufacturers for Genlec; - The announcement, on 3 September 2007, of the Group's intention to reverse Energetix Voltage Control Limited onto AIM to provide funding for the commercialisation of Voltage Control. Commenting on the results, Chief Executive, Adrian Hutchings said: "I am pleasedto report another strong six months for the Energetix Group, the notable highpoints of which include successful field trials of Genlec the Group's micro-CHPboiler, and the expansion of our Pnu Power product line - bringing with itincreased market opportunities. Furthermore, we have continued this pace intothe second half, as demonstrated by two letters of intent for Genlec, August'splacing, our intention to float Energetix Voltage Control on AIM in its ownright, and significant progress on the next generation of Genlec unit - asboosted by our recent £0.2 million grant." - ENDS - For further information: Energetix Group plcAdrian Hutchings, Chief Executive Officer Tel: +44 (0) 151 348 2111Richard Smith, Chief Financial Officer Tel: +44 (0) 151 348 2116 www.energetixgroup.com Zeus Capital 0161 831 1512Alex ClarksonBen Thompson www.zeuscapital.co.uk BankOra Limited 020 7099 1940Michael BrennanHenry Turcan www.bankora.com Media enquiries: Abchurch Communications 020 7398 7712Justin HeathMonique [email protected] www.abchurch-group.com ENERGETIX GROUP PLC ("Energetix") Interim Financial Statements for the six months ended 30 June 2007 Energetix is a leading developer of new energy products using robust proventechnologies to deliver fast to market low cost product solutions. With an initial focus on distributed power generation and energy storage,Energetix has grown businesses to develop and commercialise new products forthese markets. "Energetix has had a very successful six month period with the initial fieldtrials for Genlec, the Group's mCHP boiler, completed to plan, a significantincrease in the market opportunities for Pnu Power, the Group's compressed airbattery for industrial applications and the appointment of seasoned managementteams to two of its core subsidiaries. The start to the second half of the year has delivered significant progress withthe entering into letters of intent with two European boiler manufacturers toprogress the commercial launch of Genlec based heating appliances and a placingin August of 10 million new ordinary 5 pence shares raising £12 million (beforeexpenses). This has served to accelerate additional opportunities for Genlecand Pnu Power as well as assisting the working capital requirements of otheropportunities. Genlec has been awarded a £0.2 million development grant by theNWDA which will be used towards the development of the next generation ofGenlec. In addition the Group has progressed its subsidiary, Energetix Voltage ControlLimited, an energy efficiency technology for domestic properties which is beingtaken to AIM via a reversal into Flightstore Group plc. We continue to maintain a strong focus on good cash management and at the end ofthe period had £1.2 million more cash than budgeted". Alan Aubrey Chairman Highlights Financial & operational highlights • Genlec's field trial of its lightweight wall hung appliance completed to plan and identified that a Genlec enabled appliance can be operated at an overall efficiency of up to 95 per cent.; • A significant increase in the number of potential partners expressing an interest in Genlec; • Pnu Power product line expanded to include a low power long duration unit for telecoms' applications in addition to the existing high power short duration UPS product. New product to be launched at Intelec 2007 in Rome; • Pnu Power accelerated life cycle testing progress has achieved 8 years of product life; • A substantial expansion in the footprint of market opportunities for the Pnu Power product; • The establishment of two seasoned management teams for both core subsidiaries; • Progress with the Group's domestic energy efficiency device in its subsidiary, Energetix Voltage Control Limited; • Cash in bank at the period end was £2.9m, some £1.2m ahead of budget; • Pre tax loss for the period in review increased from £0.3m to £1.3m in line with budget reflecting the increased level of development activity occurring since IPO. Post 30 June 2007 highlights • The signing of two letters of intent with mainland European boiler manufacturers for Genlec; • The Group raised £12 million before expenses (£11.3 million net) via a placing of new ordinary shares of 5 pence each at 120 pence per share. The placing price represented a discount of 10.1 per cent. to the closing market price of 133.5 pence per share on 31 July 2007; • Genlec has been awarded a grant of £0.2 million to accelerate the development of the next generation Genlec unit for use in combination boiler applications where the hot water is provided on demand rather than provded from a store of hot water; • On 3 September 2007 the Company announced its intention to reverse Energetix Voltage Control Limited into Flightstore Group plc and (subject to approval of the Flightstore Group plc shareholders) seek a listing of the enlarged entity on the AIM market of the London Stock Exchange. This transaction will provide funding for the commercialisation of Voltage Control's products whilst leaving the Group with 55.1 per cent. of the enlarged equity of Flightstore Group plc, which it is planned to be renamed as VPhase plc. Chief Executives Review In the six months ended 30 June 2007, the Group has made significant progresswith the commercialisation of its portfolio in particular in its two corebusinesses Energetix Genlec Limited ("Genlec") and Energetix Pnu Power Limited("Pnu Power") and the advancement of its new domestic energy efficiencytechnology in Energetix Voltage Control Limited ("Voltage Control"). Thisprogress together with the establishment of experienced teams in Genlec and PnuPower and the holding of more cash than budgeted leaves the Group in a strongposition for the second half of the financial year. Portfolio businesses: Genlec Genlec continues to make substantial progress with the product which in itsfield trials has demonstrated that it can be operated at an overall energyefficiency of up to 95 per cent. In certain cases this is better than the latestcondensing boilers that operate at an overall efficiency of approximately 90 percent. and a significant improvement over most of the currently installedconventional boilers many of which operate at around 70 per cent. efficiency. The field trials also provided data and ongoing development work that hasenabled the design of the next generation Genlec enabled appliances to be 20 percent. smaller and 45 per cent. lighter than the first models. A Genlec enabled appliance is expected to deliver energy savings of £150 to £200per year to homeowners and reduce the average home's carbon dioxide emissions byapproximately 1 tonne per year compared to a condensing boiler. In August Genlec entered into its first commercial agreements in the period withthe signing of letters of intent with two European Boiler manufacturers toproduce Genlec based heating appliances for commercial launch. In July 2007, Genlec was awarded a development grant of £0.2m from the NorthWest Regional Development Agency to develop the next generation Genlec productswhich will apply to combination boilers. Combination boilers produce hot wateron demand rather than producing it when the central heating is on and storing itin a tank until required. These boilers represent a growing proportion of the UKmarket. Pnu Power The appointment of Neil Bright (previously President of Exide Industrial Energy,a $1bn turnover division of Exide Inc.) as the CEO of Pnu Power to lead thisbusiness has assisted in the identification of a significant number ofadditional applications in particular: • Telecoms support for remote locations where the use of fibre networks and remote wireless base stations has led to the use of battery backup power being required in environments that are detrimental to the operation of traditional lead acid batteries, mainly due to extremes of temperature. Pnu Power devices are predominantly unaffected by extremes of temperature and are therefore suited to these applications. • Demand response opportunities predominantly in the USA driven by the need for peak power in metropolitan areas, without generating polluting emissions. Pnu Power is investigating the potential to extend the existing technology platform to address this market opportunity. Each of these opportunities represents a substantial market opportunity for thebusiness significantly increasing its potential earnings compared to thoseidentified at the time of float. In addition to the appointment of a UK based team the subsidiary has appointedan experienced US representative who has identified a substantial number ofopportunities which Pnu Power is currently investigating or preparing proposalsfor. Voltage Control Voltage Control controls the incoming voltage to a property to a set point. Thevoltage level delivered to domestic properties is normally set to a nominalvalue of between 110 volts to 240 volts depending on location. In the UnitedKingdom the nominal voltage is set to 230 volts; however, the actual level ofvoltage delivered to each home can legally vary between 216 volts and 253 volts.Most electrical devices in the United Kingdom are designed to operate at thelower level and any higher level of volts does not give additional performance,rather the surplus energy is wasted in the form of heat. The company has developed a device designed to be attached to the post residualcurrent circuit breaker ("RCCB") side of the consumer unit in order to controlthe incoming voltage to a set point of 220 volts. This is slightly higher thanthe minimum design point for electrical items in Europe, thereby ensuring thatelectrical appliances in the home operate closer to the voltage condition forwhich they were designed. Tests by Voltage Control have demonstrated that the device can save around 10per cent. of the electricity used by domestic products such as televisions,fridges, freezers, central heating pumps and other items. This should equate tosavings for the homeowner of c. £30 to £40 per annum. In addition, there isevidence that the life of electrical appliances can be extended by the use ofthis device; light bulbs, in particular have demonstrated at least two timeslonger life when on a circuit managed by the voltage control device as comparedto those without the voltage control device. The business is currently in discussions with organisations about routes tomarket and other potential wider market opportunities. Corporate developments In March 2007 the Group appointed BankOra Limited as joint broker with itsnominated adviser and broker Zeus Capital. This arrangement has helped raise theprofile of the Group and in the recent placing BankOra were the sole agent forthe Company. During the period under review the Company's share price has rangedfrom a low of 41.5 pence to a high of 144.5 pence and is currently 126 pence asat 12th September 2007. The placing of 10 million ordinary 5 pence shares at 120 pence per share raiseda further £12 million gross (£11.3 million net) for the Group enabling Genlec toengage with more potential partners and for Pnu Power to address an increasingnumber of leads from across the world. Pnu Power will also be able to progressnewly identified markets outside of uninterruptible power. The fund raising has also strengthened the Group's balance sheet which helpswhen in negotiations with partners and suppliers and enables the Directors tocontinue to research and source applicable technologies focused on theincreasingly important sustainable alternative energy sector. Financial performance During the six month period to 30 June 2007 pre-tax losses increased to £1.32million (30 June 2006 : £0.28 million), reflecting the planned increased levelof commercialisation activity since the Group's IPO in August 2006. Thisincrease in activity has required additional staff in the recruitment ofseasoned management teams for Genlec and Pnu Power, as well as additional supplychain, commercial and technical employees. In addition, the Group is utilisingthe additional space leased in 2006 to facilitate this expansion. Capital expenditure has also increased to £0.12 million as the Group hasinvested in the new test facilities, enabling intense testing of its keyproducts. At the end of June 2006, the Group had cash of £2.94 million which is some £1.2million better than budget and leaves the Group in a good position from which toachieve its commercial targets. Summary The Group has made excellent progress in the first six months of the year,having established experienced teams in its subsidiaries, continued to exercisestrong cash management and starting the second six months with a substantiallystrengthened balance sheet and focus on business commercialisation, growth anddelivering shareholder value. Adrian HutchingsChief Executive Consolidated interim income statementFor the six months ended 30 June 2007 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006Continuing activities Note £ £ £ Revenue - 64,184 66,948 Cost of sales - (45,941) (46,441) ________________ _____________ _______________Gross profit - 18,243 20,507 Administrative expenses (1,314,423) (302,321) (1,219,741) ________________ _____________ _______________Operating loss (1,314,423) (284,078) (1,199,234) Finance income 98,737 291 67,678Other gains - net (105,845) - 110,148 ________________ _____________ _______________Loss before income tax (1,321,531) (283,787) (1,021,408) Income tax expense - - - ________________ _____________ _______________Loss for the period (1,321,531) (283,787) (1,021,408) ________________ _____________ _______________ Attributable toEquity holders of the Company (1,321,531) (283,787) (1,021,076)Minority interest - - (332) ________________ _____________ _______________ (1,321,531) (283,787) (1,021,408) ________________ _____________ _______________ Loss per share attributable to the equity holdersof the Company during the period - basic and diluted 4 (2.94)p (0.95)p (2.86)p Consolidated interim balance sheetAs at 30 June 2007 Unaudited Unaudited Audited At At At 30 June 30 June 31 December 2007 2006 2006 Note £ £ £ASSETSNon-current assetsGoodwill - - -Other intangible assets 5 6,796,850 428,211 6,456,833Property, plant and equipment 168,440 7,173 76,506Trade and other receivables - 2,378,433 - ________ ________ ________ 6,965,290 2,813,817 6,533,339 ________ ________ ________Current assetsTrade and other receivables 213,344 930,478 135,138Cash and cash equivalents 2,936,712 892 4,444,731 ________ ________ ________ 3,150,056 931,370 4,579,869 ________ ________ ________Total assets 10,115,346 3,745,187 11,113,208 ________ ________ ________LIABILITIESNon-current liabilitiesFinancial liability - borrowings 2,626,639 360,000 2,558,574 ________ ________ ________ 2,626,639 360,000 2,558,574 ________ ________ ________Current liabilitiesFinancial liability - borrowings 187,500 589,631 200,000Trade and other payables 581,606 217,908 347,345 ________ ________ ________ 769,106 807,539 547,345 ________ ________ ________Total liabilities 3,395,745 1,167,539 3,105,919 ________ ________ ________ ________ ________ ________ EQUITYCapital and reserves attributable toequity holders of the CompanyShare capital 2,250,000 1,499,990 2,250,000Share premium 5,269,819 179,052 5,269,819Reverse acquisition reserve (1,499,756) (1,499,763) (1,499,756)Warrant reserve 256,500 - 256,500Other reserve 77,733 - 43,890Retained earnings 365,305 2,424,125 1,686,836 ________ ________ ________Total shareholders' equity 6,719,601 2,603,404 8,007,289Minority interest - (25,756) - ________ ________ ________Total equity 6,719,601 2,577,648 8,007,289 ________ ________ ________Total equity and liabilities 10,115,346 3,745,187 11,113,208 ________ ________ ________ ________ ________ ________ Consolidated interim cash flow statementFor the six months ended 30 June 2007 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 Note £ £ £ Cash flows from operating activitiesCash consumed by operations 6 (854,213) (189,006) (796,976) ________ ________ ________ Cash flows from investing activitiesExpenditure on intangible fixed assets (531,670) (118,101) (564,673)Purchases of property, plant and equipment (115,028) (1,032) (78,096)Interest received 98,737 291 67,678 ________ ________ ________ (547,961) (118,842) (575,091) ________ ________ ________ Cash flows from financing activitiesNet proceeds from the issue of ordinary shares - - 5,597,689Other borrowings (105,845) 89,631 - ________ ________ ________ (105,845) 89,631 5,597,689 ________ ________ ________ Net (decrease)/increase in cash and cash equivalents (1,508,019) (218,217) 4,225,622 Cash and cash equivalents at the beginning of the period 4,444,731 219,109 219,109 ________ ________ ________Cash and cash equivalents at the end of the period 2,936,712 892 4,444,731 ________ ________ ________ ________ ________ ________ Consolidated interim statement of changes in equityFor the six months ended 30 June 2007 Attributable to equity holders of the Company ____________________________________________________________ Reverse Share Share Retained acquisition Warrant Other Minority Total Capital Premium earnings reserve reserve reserve interest equity £ £ £ £ £ £ £ £As previously reported inEnergetix (Europe) Limitedas at 31 December 2005 166 179,052 2,707,912 - - - (25,756) 2,861,374Cost of acquisition 1,499,763 - - (1,499,763) - - - - _________ _________ ___________ ___________ ________ _______ ________ ________Balance at 31 December 2005as restated 1,499,929 179,052 2,707,912 (1,499,763) - - (25,756) 2,861,374 Shares issued 6 April 2006 61 - - - - - - 61 Total recognised income/(loss)- Loss for the period - - (283,787) - - - - (283,787) _________ _________ ___________ ___________ ________ _______ ________ ________Balance at 30 June 2006 1,499,990 179,052 2,424,125 (1,499,763) - - (25,756) 2,577,648 8 August 2006 Loan note 10 499,842 - - - - - 499,852conversion Proceeds from EIS placing- 15 August 2006 125,000 875,000 - - - - - 1,000,000Proceeds from General placing- 16 August 2006 625,000 4,375,000 - - - - - 5,000,000Share issue expenses - (402,575) - - - - - (402,575)Warrants issued - (256,500) - - 256,500 - - -Total recognised income/(loss)- Loss for the period - - (737,289) 7 - 43,890 (332) (693,724)Provision against minority - - - - - - 26,088 26,088interest _________ _________ ___________ ___________ ________ _______ ________ ________Balance at 31 December 2006 2,250,000 5,269,819 1,686,836 (1,499,756)256,500 43,890 - 8,007,289 Total recognised income/(loss)- Loss for the period - - (1,321,531) - - 33,843 - (1,287,688) _________ _________ ___________ ___________ ________ _______ ________ ________Balance at 30 June 2007 2,250,000 5,269,819 365,305 (1,499,756)256,500 77,733 - 6,719,601 _________ _________ ___________ ___________ ________ _______ ________ ________ Selected explanatory notes 1. Nature of operations and general information Energetix Group plc and subsidiaries ("the Group") principal activity is focusedon the commercialisation of intellectual property and technical productdevelopment of alternative energy products for global markets. The Group is a leading developer of new energy products focusing on using robustproven technologies to deliver fast to market, low cost product solutions andEnergetix has grown businesses to develop and commercialise new products foralternative energy markets. Energetix Group plc is the Group's ultimate parent company. It is incorporatedin England and Wales. The address of the registered office is Steam PacketHouse, 76 Cross Street, Manchester, M2 4JU. The Group trades through a number ofsubsidiaries, whose place of business is Capenhurst Technology Park, Capenhurst,Chester, CH1 6EH. Energetix Group plc's shares are listed on the AIM Market ofthe London Stock Exchange. These condensed unaudited consolidated interim financial statements have beenprepared in accordance with International Financial Reporting Standard (IFRS)IAS 34 Interim Financial Reporting. They do not include all of the informationrequired for full annual financial statements and should be read in conjunctionwith the consolidated financial statements of the Group as at and for the yearended 31 December 2006. Energetix Group plc's consolidated interim financial statements are presented inpounds sterling (£), which is also the functional currency of the parentcompany. 2. Accounting policies The consolidated interim financial statement has been prepared under thehistorical cost convention. The Group accounting policies used in the interimfinancial statements are consistent with those applied in its most recent annualfinancial statements. For further information, please refer to Energetix Groupplc's annual financial statements for the year ended 31 December 2006. 3. Segmental information The business of the Group comprises one segment, alternative energy, and as suchno segmental information is provided. 4. Loss per share The loss per share is calculated by reference to the loss attributable toordinary shareholders divided by the weighted average number of shares in issueduring the period as follows: Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 Loss attributable to equity holders of the Group (1,321,531) (283,787) (1,021,076) _________________ ____________ _______________ Weighted average number of ordinary shares in issue 45,000,000 29,999,160 35,718,812 _________________ ____________ _______________Basic and diluted loss per share (pence) (2.94)p (0.95)p (2.86)p _________________ ____________ _______________ _________________ ____________ _______________ The weighted average number of ordinary shares for the period ended 30 June 2006and the year ended 31 December 2006 assumes that the 29,998,580 ordinary sharesissued in relation to the reverse acquisition of Energetix Group plc had existedfor the entire period. The share options and warrants in issue are anti-dilutive in respect of thebasic loss per share calculation and have therefore not been included in theabove calculations. 5. Other intangible assets Compressed Micro CHP air ________________________________ battery Intellectual R & D R & D Property Assets Total Assets TOTAL At 1 January 2006 Cost - - - 310,110 310,110 Additions - - - 118,101 118,101 Accumulated amortisation - - - - - _____________ __________ ___________ ____________ _________ At 30 June 2006 - - - 428,211 428,211 Additions 5,787,007 272,513 6,059,520 174,059 6,233,579 Accumulated amortisation (204,957) - (204,957) - (204,957) _____________ __________ ___________ ____________ _________ At 31 December 2006 5,582,050 272,513 5,854,563 602,270 6,456,833 Additions - 276,515 276,515 255,155 531,670 Accumlated amortisation (191,653) - (191,653) - (191,653) _____________ __________ ___________ ____________ _________ 5,390,397 549,028 5,939,425 857,425 6,796,850 _____________ __________ ___________ ____________ _________ Intangibles include internally generated capitalised productdevelopment costs in accordance with IAS 38. The Group currently has internally generated intangible assets fromdevelopment of its mCHP module and compressed air battery. All otherdevelopment work has been written off as incurred as the criteria forrecognition as an asset are not met. 6. Cash consumed by operations Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 £ £ £ Loss before income tax (1,321,531) (283,787) (1,021,408) Adjustments for: -Depreciation 23,094 1,648 9,379 -Amortisation 191,653 - 204,957 -Other income (98,737) (291) (67,678) -Other gains - net 105,845 - (110,148) -Share option compensation charge 33,843 - 43,890 -Provision against minority interests - - 26,088 Changes in working capital -Trade and other receivables (78,206) 3,713 (101,009) -Trade and other payables 289,826 89,711 218,953 ________ ________ ________ (854,213) (189,006) (796,976) ________ ________ ________ ________ ________ ________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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