Preliminary Results

 11 April 2011

Renewable Energy Holdings plc

("REH", "the Company" or "the Group")

Preliminary results for the year ended 31 December 2010

Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor in, and operator of, European wind power, is pleased to announce its preliminary results for the year ended 31 December 2010.

Highlights

·; Cash balances at period end of £3.6m (2009: £2.3m)

·; Completed disposal of landfill gas asset, Bryn Posteg, giving a profit on disposal of up to £600k and realising up to £2.75m in cash

·; Completed disposal of German wind assets to Allianz Renewable Energy Management GmbH for total cash consideration of up to €39.8m, realising up to £7.6m in cash after repayment of project debt

·; Retain approximately 27% shareholding in Carnegie Wave Energy. At the 31 December 2010 the market value of the shares was approximately £16.8m

·; Roger Harper appointed to the Board as a Non-Executive Director, replacing Roger Witcomb

Commenting on the results, Mike Proffitt, Chief Executive of REH, said:

"2010 has been a successful year for the Company as we completed the strategic disposals of our non-core and underperforming assets. Our windfarm projects in Poland and Wales are progressing well through the various stages of development and we expect to commence construction in Poland later this year.

"REH remains well capitalised with a strong balance sheet and the Board continues to look to the future with excitement and confidence."

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Chairman's Statement

Since my last report, we have completed our strategy to dispose of non-core and underperforming assets, and drive down our overhead costs. Our focus now is on the construction of our Polish windfarm, securing planning permission for our Welsh windfarm, and realising value from the CETO wave-energy technology by active management of our shareholding in Carnegie Wave Energy.

The Company is one of few in its sector that has survived the challenging and changing market over the last few years, and I believe that we are well positioned to take advantage of this as the economy recovers. Continuing pressures on the availability and cost of hydrocarbons, together with the obvious environmental issues surrounding nuclear energy, emphasise the need for continued development of renewable energies.

Towards the end of the year, we saw the departure of Roger Witcomb from the Company's Board, for personal reasons, and I wish to thank Roger for his valuable contribution while a board member. Roger has been replaced by Roger Harper FCA, who will also take the Chairmanship of the Audit Committee. In addition to the talent he will bring to the Board, Roger has the advantage for us of being resident in the Isle of Man, like the Company itself.

The Board and the management team of the Company have a clear strategy for the future delivery of shareholder value and I am enthused by the size and quality of our opportunities, each of which is in a solid, commercially orientated jurisdiction. Given this and our clarity of purpose, we continue in our belief that the Company is well placed with much value to offer its investors.

Sir John Baker

Chairman

Chief Executive Officer's Report

2010 was a year of significant change for the Company. In 2009, we saw the requirement to change the Company's strategic direction in light of the lack of funding available in the market following the global financial crisis. As a result, we needed to rationalise our assets, reduce head office costs, focus on developing new wind farms using internally generated funds and streamline our management team. We successfully executed this strategy throughout 2010 and the Company is now leaner and more efficient as a result.

The sale of our landfill gas asset in Wales, a non-core asset in a sub sector of renewable energy that offered limited growth, was completed in February 2010, realising up to £2.75m in cash.

Our German windfarms, which had not performed to our expectations in the light of several years of below average wind speeds, were also sold. Completion of this sale took place in September 2010, realising up to £7.6m in cash after repayment of project debt.

In 2009 we exited from our direct ownership of the Intellectual Property in the CETO wave energy technology along with the continuing obligation to fund its development. The CETO Intellectual Property was sold to Carnegie Wave Energy ("CWE") in return for a substantial shareholding in CWE, which currently represents approximately 27% of CWE's shares in issue. This sale provided the Company with a holding in an ASX quoted equity investment which could be used as a future potential source of funds or could be retained in order for REH to participate in any potential value uplift in the event of a future commercialisation of the technology. At the 31 December 2010 the market value of the shares was approximately £16.8m.

The aforementioned transactions have provided the Company with the requisite equity funding and strategic clarity to concentrate on the construction of the Company's 30MW windfarm project in Poland and the development of our 69MW windfarm project in Wales.

In addition, we have addressed the annual operating costs of the business in order to secure the alignment of management with our new strategy. Completed by the end of 2010, this exercise has successfully reduced the Company's future annualised head office costs by approximately £1.0 million.

Looking to the future, the Company is currently finalising negotiations with two Polish banks for the provision of project financing for our 30MW windfarm in Kobylany, Poland, on which we expect to commence construction in the summer of this year.

During 2010, we have worked closely with key stakeholders in relation to our 69MW windfarm project in Sweetlamb, Wales, including Powys County Council and the Infrastructure Planning Commission. We have revised and updated many of the environmental studies, including ecological and ornithological assessments as well as preparing a repeat public consultation process. As a result of these new studies, which have revealed less environmental constraints than previously assumed, it has been possible to include four additional turbines without significant environmental impact. Thus the "nameplate" capacity of the wind farm increases from 69MW to 81MW. We would expect this project to be fully permitted by mid 2012. It is intended that construction will be with a joint venture partner, creating a carried interest for the Company of up to 25%.

Through our investment in CWE, we have continued to monitor the progress of CETO throughout the year in preparation for the sea trials of a full scale CETO Wave Energy device, which we expect to commence in the coming weeks, with data results anticipated to be made available shortly thereafter.

Outlook

As we move forward through 2011, the Company's management have a clear and determined focus to create shareholder value through the development of our three major assets, being the wind farms in Poland and Wales and the CWE investment, within the resources currently available to the Company. Pleasingly to date in 2011, all these projects are progressing well and according to plan.

Michael J Proffitt

Chief Executive Officer

Renewable Energy Holdings plc

Unaudited consolidated income statement

for the year ended 31 December 2010

Renewable Energy Holdings plc

Unaudited consolidated statement of comprehensive income

for the year ended 31 December 2010

Renewable Energy Holdings plc

Unaudited consolidated statement of changes in equity

for the year ended 31 December 2010

Renewable Energy Holdings plc

Unaudited consolidated statement of changes in equity

for the year ended 31 December 2009

Renewable Energy Holdings plc

Unaudited consolidated balance sheet

for the year ended 31 December 2010

Renewable Energy Holdings plc

Unaudited consolidated cashflow statement

for the year ended 31 December 2010

Renewable Energy Holdings plc

Unaudited consolidated cashflow statement (continued) 

for the year ended 31 December 2010

Renewable Energy Holdings plc

1 Basis of preparation

This unaudited consolidated preliminary 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 preliminary results are those the Group expects to apply in its audited financial statements for the year ended 31 December 2010 and are unchanged from those disclosed in the Group's Report and Financial Statements for the year ended 31 December 2009.

The unaudited financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the year ended 31 December 2010. The financial information for the year ended 31 December 2009 is derived from the statutory accounts for that year which have been delivered to the Companies Registry. The Company's former auditor, BDO LLP, Gatwick, reported on those accounts; their report was unqualified and did not contain a statement under section 15 (4) or 15 (6) of the Isle of Man Companies Act 1982. The statutory accounts for the year ended 31 December 2010 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

2 Segment information

The Group had five main reportable segments during the years ended 31 December 2010 and 2009:

·; Head office - this segment represents the operation of the Group's head office facility in the Isle of Man. Balances relating to the Group's windfarm project in Wales are included within this segment.

·; CETO development - this segment represents the Group's investment in CETO technology development operations in Perth, Western Australia. This technology was sold in 2009 and the amounts in this segment relate to costs associated with the Group's Australian subsidiary.

·; German windfarms - this segment represents the operational windfarms at Kirf and Kesfeld which were disposed of in September 2010.

·; Polish windfarms - this segment represents the windfarm under construction at Kobylany.

·; Welsh landfill gas - this segment represents the landfill gas operations which were disposed of in February 2010.

*Cost of sales represent the land lease costs at Kobylany, Poland.

2 Segment information (continued)

*Cost of sales represent the land lease costs at Kobylany, Poland

Reconciliation of reportable segment profit or loss, assets and liabilities to the Group's corresponding amounts: 

2 Segment information (continued)

3 Discontinued operations

In February 2010 the Group sold its shares in Gwynt Cymru Limited. Gwynt Cymru Limited operated the Group's landfill gas site at Bryn Posteg in Wales. The consideration due to the Company of up to £2.75m was payable in cash, with £2m paid on the completion of the sale and £750,000 of deferred consideration. The £750,000 of deferred consideration is calculable on a sliding scale, with £500,000 contingent in the event that the purchaser increases the output capacity of the site. Should no additional capacity be added to the facility, a payment of £250,000 will be due from the purchaser on 31 January 2012. The deferred contingent consideration was recognised as an available for sale financial asset and has been subsequently derecognised in the second half of 2010. The deferred consideration of £250,000 has been recognised with a fair value of £204,171 at 31 December 2010 and is included within "Other receivables". The assets and liabilities of Gwynt Cymru Limited were classified in the Group's Consolidated Balance Sheet at 31 December 2009 as held for sale.

On 23 September 2010 the Group secured shareholder approval for the sale of the Group's entire interests in Windpark Kesfeld Heckhuscheid GmbH & Co KG ("Kesfeld") and Windpark Kirf GmbH & Co KG ("Kirf") to Allianz Renewable Energy Management GmbH for a total cash consideration of up to €39.8 million, comprising €37.5 million of Initial Consideration and €2.2 million of Deferred Consideration. The sale was completed on the 28 September 2010. The initial consideration of €37.5 million was received on completion of the sale and in March 2011 €1.7million of the Deferred Consideration was received.

Accordingly, the Group's German windfarm operations and Gwynt Cymru Limited have been presented as discontinued operations. In accordance with IFRS 5 the income statement results of Kesfeld and Kirf for the period ended 28 September 2010 and the results for Gwynt Cymru Limited up to its date of sale, 23 February 2010, together with the comparatives for the year ended 31 December 2009 have been restated to exclude income generated and expenses incurred by Kesfeld, Kirf and Gwynt Cymru Limited and their results have been disclosed as a single line item "Loss for the year from discontinued operations" in the income statement.

3 Discontinued operations (continued)

*Expenses other than finance costs' for Kesfeld include an impairment charge of £1.3m