Preliminary Results

Note: A briefing for analysts will be held this morning at 9.30am at Buchanan, 107 Cheapside, London EC2V 6DN. For further details please contact Buchanan on 020 7466 5000.

For immediate release 9 June 2015

Energy Assets Group plc

("Energy Assets", the "Company" or the "Group")

Preliminary Results for the year ended 31 March 2015

Energy Assets Group plc (LSE: EAS.L), the largest independent provider of industrial and commercial (I&C) gas metering services in the UK[1] and a major provider of utility infrastructure services and electricity metering and data services, is pleased to announce its preliminary results for the year ended 31 March 2015. 

Financial highlights

· Total revenue increased by 50% to £36.2m (2014: £24.2m);

· Recurring revenue generated from the Group's meter and data asset portfolio increased by 38% to £23.3m (2014: £16.9m) representing 64% of total revenue;

· Revenue from Siteworks activity increased by 77% to £12.9m (2014: £7.3m);

· EBITDA before exceptional items increased by 29% to £19.4m from £15.0m;

· Operating profit before exceptional items increased by 30% to £12.7m from £9.8m;

· Profit before tax and exceptional items increased by 33% to £8.9m (2014: £6.7m). Profit before tax was £9.3m (2014: £6.0m);

· Adjusted basic EPS increased by 37% to 25.77p (2014: 18.84p);

· Cash generated from operations increased by 34% to £19.5m (2014: £14.5m);

· A new £5m revolving credit facility was secured in November 2014 with Santander which has provided additional finance to support the continued growth of the business;

· Available facilities at 31 March 2015 of £28.7m and cash at bank of £7.8m.

Operational highlights

· The Group's owned and managed meter and data asset portfolio has increased by 123% to circa 365,000 assets (2014: circa 163,500), incorporating both organic growth and circa 150,000 assets from the acquisition of Bglobal Metering Limited (Bglobal Metering) on 17 April 2014. Of the asset growth in the period, 67% related to the I&C gas sector and the remaining 33% related to the I&C electricity sector;

· Cumulative capital investment in meter and data assets increased by 27% to £107.3m which has driven the increase in recurring revenue in 2014/15;

· Registration as an Independent Gas Transporter will further enhance Siteworks activities and enable the Group to offer flexibility to larger clients in respect of their energy and infrastructure requirements.

Acquisitions

· The acquisition of Bglobal Metering in April 2014 provided the systems, accreditations and expertise required for Energy Assets to operate as a leading metering services provider and data collector in the electricity sector; 

· The acquisition of Origin Technical Business Services Limited (Origin) in October 2014 secured control of Origin's industry leading mobile work platform and the expertise to continue the development of the Group's web enabled service offering and industry leading IT systems;

· The acquisition of SA Gas Engineers Limited (SA Gas) in March 2015 has significantly extended the Group's operational capability as well as expanding the range of increasingly sophisticated services provided to link the gas network to the customer's usage point. 

New contracts

· A strategic agreement with British Gas Business (BGB), signed in July 2014, to install advanced meters for circa 50% of BGB's UK I&C gas customers provides further diversification of the Group's customer base and the opportunity for significant future growth in long-term recurring revenue;

· A new contract was awarded by The Pirbright Institute during the year to design and project manage the installation of gas infrastructure and metering to support the ongoing refurbishment of the organisation's Surrey campus. This represents the largest Siteworks project to date with a value in excess of £1m and was successfully completed, on time and on budget, in March 2015;

· Within the electricity sector, a new agreement with npower was secured in October 2014 for the provision of data collection and aggregation services. A further new agreement with BES Utilities (BES) was also secured during the year; 

· An agreement with CityWest Homes for the installation of a "Community Metering" project in 800 properties across eight social housing tower blocks in Central London was signed during the year incorporating new Half Hourly (HH) "Community Metering" technology which has been developed by the Group.

Chief Executive's comment

Commenting on today's announcement, Chief Executive Phil Bellamy-Lee said:

"The financial year to 31 March 2015 has been very successful for Energy Assets incorporating good organic growth across our asset portfolio and Siteworks business from strong trading activity.

We have successfully integrated three new acquisitions into the Group which have facilitated expansion into the electricity market, provided control of industry leading systems and expertise, and have significantly extended the Group's operational capability and expanded the range of increasingly sophisticated services provided to link the gas network to the customer's usage point. 

We have secured a number of major new contracts across both the gas and electricity sectors including the opportunity to install advanced meters for circa 50% of BGB's UK I&C gas customers and new agreements for the provision of data collection and aggregation services with npower and BES. 

As our financial results portray, the Group's position is strong and with the combination of opportunities arising from Government regulatory requirements and our relationships with energy suppliers and the wider market we are confident of delivering our long term growth strategy.

The new financial year has started strongly, all segments continue to grow and we are on track to deliver another year of strong operating and financial performance."

Enquiries

For further information visit www.energyassets.co.uk or contact:

Notes to Editors:

Energy Assets provides metering and related services in the I&C segment of the UK utility market and is the largest independent provider of I&C gas metering services in the UK, by number of assets owned and managed. 

The Group offers utility suppliers and end-user consumers of energy a broad spectrum of expert metering services from the provision and management of new and replacement meters through its Meter Asset Management division to the procurement and project management of related utility infrastructure works, including fully managed gas installations and live connections, gas pipework modifications and in-depth gas maintenance projects, through its Siteworks division. The Group also collects and provides energy consumption data through its Data Services division.

Energy Assets (EAS) is listed on the Main Market of the London Stock Exchange.

Chairman's statement

The 2014/15 financial year has been a year of significant expansion for Energy Assets incorporating strong organic growth and three successful acquisitions including Bglobal Metering which has enabled the Group to establish a strong presence in the electricity metering market. The success we have achieved to date in this market is pivotal as we strive towards our goal of being able to provide a full end to end multi-utility service offering across gas, electricity and water.

Our successful year is apparent in our results with profit before tax and exceptional items up 33% to £8.9m. Additionally, we have increased our owned and managed asset portfolio by 123% to circa 365,000 assets, through organic growth and the acquisition of Bglobal Metering, and our Siteworks business has generated revenues of £12.9m, representing an increase of 77% (2014: £7.3m).

The strength of this performance is testament to the continuing and growing demand for our services and the strength and scalability of our operating systems and procedures.

Strategy

Energy Assets has a clearly defined growth strategy that provides effective scope for the continued expansion of the business and we remain well positioned to achieve our primary objectives which are:

· To further consolidate our position as the largest independent metering and data service provider to the UK I&C gas sector;

· To grow our position across the utility sector as a whole; and

· To grow our successful Siteworks business and expand the range and complexity of the services provided. 

Energy Assets has consistently demonstrated strong year-on-year growth and our strategy focuses primarily on continuing to achieve such growth both organically and through making targeted acquisitions which can add value. 

During the financial year to 31 March 2015 the Group completed the acquisitions of Bglobal Metering, Origin and SA Gas which have been successfully integrated into the business and which have enabled us to progress further towards meeting our primary objectives. 

Funding

In November 2014, the Group secured a new £5m revolving credit facility with Santander to provide additional finance to support the continued growth of the business.

Additionally, we continue to nurture good relationships with all our banking partners who have expressed a keen interest to continue working with Energy Assets and provide sufficient funds to facilitate our organic or acquisition related growth plans.

Dividend

At the time of listing it was stated that it was the Directors' intention to prioritise investment to grow the Company's installed asset base. This remains the case and, in the financial year to 31 March 2015, a total of £22.5m (2014: £21.0m) was invested in assets that generate long-term recurring revenue for the business. Additionally, Group return on capital employed at 31 March 2015 was 13%. The Board is, therefore, not recommending a dividend for the financial year ended 31 March 2015. 

People

We now have over 200 employees across the Group and each of these individuals has a key role to play in the successful operation of our business. In particular, we have a dedicated and talented management team who have steered the business through a period of significant growth with great success.

On behalf of the Board, I would like to thank all of our people for their hard work during this financial year and for their continued commitment to Energy Assets.

Outlook

Energy Assets has reported another period of strong trading activity, maintaining a continued pattern of growth across the asset portfolio and Siteworks business. We are committed to creating shareholder value and the Board is confident that we will continue to deliver added value for all our stakeholders as we continue to broaden our offering whilst still providing the highest levels of service to our customers.

The new financial year has started well across the business, we are on track to deliver another year of sound operating and financial performance in 2015/16 and we continue to look to the future with confidence.

Dr Christopher Masters

Chairman

9 June 2015

Business and financial review

Energy Assets is the largest independent provider of I&C gas metering services in the UK (by number of meters owned and managed) and a major provider of utility infrastructure services and electricity metering and data services.

Our strategy

The Group's primary objectives are:

· to further consolidate our position as the largest independent metering service provider to the UK I&C gas sector, as measured by meters under ownership and management;

· to grow our position across the utility sector as a whole; and

· to grow revenue and profits within our successful Siteworks business.

This strategy focuses primarily on growing the business organically while making targeted acquisitions which can add value to our core business. 

In implementing this strategy we expect to:

· Continue to grow our asset base, focussing on the I&C segment of the metering market;

· Grow and diversify the primary energy supplier client base;

· Increase direct engagement with end-user consumers;

· Offer services across a multi-utility platform; and

· Increase operational flexibility.

The Group's achievement of these key strategic priorities to date can be linked to key performance indicators as follows:

Our progress in relation to our strategy can be further highlighted through the trends in our asset base and revenue over the past few years as follows:

Business model

The Group offers utility suppliers and end-user consumers of energy a broad spectrum of expert metering services from the provision and management of new and replacement meters through its Meter Asset Management division to the procurement and project management of related utility infrastructure works, including fully managed gas installations and live connections, gas pipework modifications and in-depth gas maintenance projects, through its Siteworks division. The Group also collects and provides energy consumption data through its Data Services division.

Meter Asset Management and Data Services

The Group's main area of recurring revenue activity is the provision, management and maintenance of I&C gas meters and the collection and provision of consumption data. The Bglobal Metering business acquired on 17 April 2014 also provides advanced metering technology to the UK I&C electricity sector which includes meter operator services (MOP) together with the provision of services for the ongoing collection and aggregation of energy data (DCDA). The Group has relationships with some of the largest UK utility suppliers and also some of the most respected niche suppliers, operating across both gas and electricity.

The Group's meter and data asset portfolio has increased by circa 201,500 assets during the year incorporating both organic growth and circa 150,000 assets under management from the acquisition of Bglobal Metering, bringing the owned and managed meter and data asset portfolio to circa 365,000 assets. 

Recurring revenue, which is generated through recurring meter rental payments and payments for the provision of consumption data from utility suppliers and end-user consumers, increased by 38% to £23.3m in the current period (2014: £16.9m) representing 64% of total revenue.

On 23 July 2014, a strategic agreement was signed with British Gas Business to install advanced meters for circa 50% of their I&C gas customers across the UK and, in October 2014, a new agreement was signed with npower for the provision of data collection and aggregation services from advanced electricity meters being installed over the next 12 months. Both of these new contracts provide the opportunity for significant future growth in long-term recurring revenue. 

Going forward the I&C asset base is expected to increase significantly as a result of existing contracts and future demand for the installation of advanced and smart gas meters being driven by Government policy which currently requires every metering point in the UK to have advanced or smart-enabled energy meters by 2020.

Siteworks

Through its Siteworks business the Group provides customers with an expert engineering, consultancy, system design and project management service of the highest standard for gas and electricity infrastructure works and meter point infrastructure. 

Siteworks continues to develop strongly with revenue from Siteworks activity increasing by 77% during the year to £12.9m (2014: £7.3m). This increase in revenue can be attributed to strong organic growth of £3.2m and the successful integration of Bglobal Metering into the Group.

The business is rapidly establishing a reputation as a technical leader in the design and project management of metering systems installations in the I&C sector and this has enabled the team to secure a number of larger value, high end contracts during the year. This includes selection by The Pirbright Institute to design and project manage the installation of gas infrastructure and metering to support the ongoing refurbishment of the organisation's Surrey campus. This project represents the largest Siteworks contract to date with a value in excess of £1m which was successfully completed, on time and on budget, in March 2015 and underpins the Group's aspirations to become the leading siteworks service provider in the utility sector.

The acquisition of SA Gas in March 2015 also significantly extends the Group's operational capability as well as expanding the range of increasingly sophisticated services provided to link the gas network to the customer's usage point. The acquisition will thus enable the Group to increase the market share of its existing Siteworks division and provide a broader service offering to customers.

Additionally, registration as an Independent Gas Transporter will further enhance Siteworks activities and enable the Group to offer flexibility to larger clients in respect of their energy and infrastructure requirements.

Financial results and Key Performance Indicators

Throughout the year the business has continued to grow, both organically and through further acquisitions, increasing the owned and managed asset portfolio and strengthening the expanding Siteworks business. This has been reflected in the strong financial performance detailed below, which is testament to the sound underlying operations of the Group and the continuing demand for its services. 

The Group monitors a number of financial and key performance indicators as follows:

The Group has continued to grow revenue and profits through strong performances across each of its business segments.

For the year ended 31 March 2015, revenue was £36.2m, showing an increase of £12.0m (50%) compared with the previous financial year. This increase is predominantly due to the expanding asset portfolio owned and managed by the Group, incorporation of the Bglobal Metering business acquired in April 2014 and the strong organic growth of the Siteworks offering.

At 31 March 2015 recurring revenue accounted for 64% of total revenue being £23.3m compared to £16.9m in the previous year, an increase of 38%. These recurring revenues are as a result of the long term nature of the Group's metering and data contracts. 

Exceptional costs have been incurred in both the current and prior year. In the prior year, exceptional costs were substantially made up of £0.6m incurred in relation to share based payments arising from employee share schemes implemented as part of the IPO in 2012. Exceptional acquisition costs in relation to Bglobal Metering of £0.1m were also incurred. 

A similar share based payment expense of £0.23m has been incurred in 2014/15 which has been reduced due to the full vesting of the awards issued under the IPO Award Plan, with only costs relating to the IPO LTIP award remaining. These awards have fully vested in the current year. Costs of £0.13m relating to the acquisitions of Origin and SA Gas have also been incurred. 

These exceptional costs have, however, been offset by a gain of £0.76m in relation to the acquisition of Bglobal Metering whereby the fair value of the net assets acquired, including acquired tax losses, was greater than the value of the consideration paid resulting in a bargain purchase.

Operating profit before exceptional items increased from £9.8m to £12.7m, a rise of 30% and EBITDA before exceptional items increased by 29% from £15.0m to £19.4m.

Profit before tax and exceptional items increased by 33% to £8.9m (2014: £6.7m). Profit before tax was £9.3m (2014: £6.0m) after crediting the net exceptional gain of £0.4m.

Profit margins within the core gas business have been maintained against the prior year, however, there has been a slight decrease in the overall group profit margins to a gross profit margin of 56% (2014: 59%) and a margin on profit before tax and exceptional items of 25% (2014: 28%) which can be attributed to the integration of Bglobal Metering into the Group. Following substantial losses made under previous ownership, the performance of Bglobal Metering has improved significantly during the year and, as expected at the time of acquisition, has made a positive contribution to the Group's overall results and profits.

At a divisional level, the Group has installed circa 22,000 gas meter assets during the year, increasing its total portfolio by 22% to circa 123,000 meters. Given that the design life of meters is in excess of 20 years it is expected that these assets will continue to provide a solid source of long-term recurring revenue over the life of the asset which is currently forecast at £255.3m (2014: £210.3m). 

In addition, the managed electricity meter asset portfolio acquired with Bglobal Metering has increased to circa 68,000 assets by the year end.

Revenue from our data services business has increased to £9.2m (2014: £6.3m) and the number of meter points from which data is collected has increased to circa 174,000 across gas and electricity (2014: circa 62,500). This represents one of the largest portfolios within the UK I&C sector.

The Gas Industry Registration Scheme (GIRS) accredited Siteworks division continues to develop with significant annual growth during the current financial year. Overall revenues improved by 77% to £12.9m as a result of significant organic growth of £3.2m and increased opportunity within the electricity sector following the acquisition of Bglobal Metering.

Acquisitions

BGlobal Metering

On 17 April 2014, Energy Assets acquired the entire issued ordinary share capital of Bglobal Metering Limited for a cash consideration of £2.3m which included a payment of £0.2m for the completion cash balance. The acquisition was made on a debt free basis with a working capital adjustment mechanism in place post completion.

Based near Blackburn, Bglobal Metering is a fully accredited meter operator (MOP) and provider of data consumption and aggregation services (DCDA services). Pre-acquisition, Bglobal Metering provided MOP services to utility companies for circa 60,000 meter points and DCDA services for in excess of 90,000 meter points.

The Bglobal Metering acquisition has provided Energy Assets with the systems, accreditations and expertise to successfully operate as a leading service provider in the electricity sector and is in line with the Group's strategy to offer metering and associated energy services across a multi-utility platform.

The Energy Assets and Bglobal Metering offerings are extremely complementary and both businesses deliver services to a number of energy providers, energy brokers and a significant number of end user clients.

Completion of the acquisition has reinforced Energy Assets' position as a leading metering services provider and has also created cross-selling opportunities to the wider business. It has also provided an opportunity to extend the Group's successful existing Siteworks activities into the electricity market.

Bglobal Metering has been fully integrated within the year with two significant new contracts with npower and BES secured since acquisition. Management are delighted with the performance during the year which has made a positive contribution to the overall results and profits as expected, following significant losses under previous ownership. Bglobal Metering is expected to continue to positively contribute to the Group's performance going forward.

Origin

On 6 October 2014, Energy Assets acquired the entire issued ordinary share capital of Origin Technical Business Services Limited, a provider and developer of mobile works management systems, data capture, data hosting and analysis services to both Energy Assets and a number of other customers within the utility sector, for a consideration of £0.87m, which included an initial payment of £0.4m, a deferred consideration of £0.25m and an amount of £0.22m for the completion cash balance. 

Based in Chesterfield, Origin has a long standing relationship with the Group providing the software interface and on-site mobile installation and audit platform which is an integral element of Energy Assets' unique project and supply chain management platform "TEAMS".

This strategic acquisition secured control of Origin's industry leading mobile work platform and the expertise to continue the development of the Group's web enabled service offering and industry leading IT systems, which provide service differentiation to our customers. All intellectual property rights transferred to Energy Assets with the acquisition. 

SA Gas

Energy Assets acquired the entire issued share capital of SA Gas Engineers Limited, an accredited meter asset manager and a leading UK expert in complex I&C gas engineering and specialist siteworks projects on 2 March 2015.

The transaction consideration comprises an initial cash payment of £3.4m, 222,108 shares in Energy Assets Group plc, with a market value of £1m, which are subject to the sellers of SA Gas remaining with the Group during a restrictive period of two years, an earnout consideration of up to £0.5m contingent on the future profitability of SA Gas and an amount of £0.3m for the completion cash balance of SA Gas.

Established in 1992, and based in Nottinghamshire, SA Gas has developed a strong reputation in the market as a highly respected specialist, providing services both upstream and downstream of the customer's meter. This acquisition significantly extends the Group's operational capability as well as expanding the range of increasingly sophisticated services provided to link the gas network to the customer's usage point. The acquisition will thus enable the Group to increase the market share of its existing Siteworks division and provide a broader service offering to customers.

SA Gas has a wealth of experience and expertise in all types of I&C gas related engineering projects. The highly qualified team of specialist engineers and technicians, all of whom transferred with the business, has a reputation for delivering innovative, efficient and cost-effective solutions to a wide range of the UK's leading companies. 

The Energy Assets directors are confident that, following full integration into the Group, the SA Gas business will be earnings enhancing in the financial year 2015/16. 

New contracts

British Gas Business (BGB)

In July 2014, Energy Assets announced a strategic agreement with BGB to install advanced meters for around 50% of their I&C gas customers across the UK. The BGB meters have a 20 year contracted term which allows for an annual RPI price adjustment and provides opportunity for significant future growth to the Energy Assets long-term recurring revenue portfolio and further diversification of the Group's customer base.

As part of the deployment, Energy Assets will undertake all project management activity and provide a web based customer interface via its innovative "TEAMS" project management platform, which is currently the most sophisticated of its kind in the market place. The visibility and control that is delivered through the industry-unique end to end electronic data, asset management, audit and control platform was a key element of the award process. The "TEAMS" system enables both BGB and its customers to have full project visibility, ensuring communication is clear and proactive and the need for customer to supplier interaction is minimised.

To ensure continued improvement, Energy Assets has assembled an internal team of highly skilled direct labour engineers. The Group has also opened a central UK operational hub based in Sheffield to continue supporting existing customers and to deliver project support for the BGB installation program.

This is a significant step in the achievement of the Energy Assets growth strategy and is testament to the relationship that has been developed with BGB.

Bglobal Metering contracts

In October 2014, Energy Assets signed a new agreement with npower, a leading integrated UK energy company, for the provision of data collection and aggregation services from advanced electricity meters being installed over the next 12 months.

The new agreement, which is a variation to an existing agreement, has been signed by Bglobal Metering and was the first of its kind to be secured since acquisition of the company in April 2014.

A second significant contract was also signed during the year with BES, an energy supplier in the commercial electricity sector, for the provision of advanced electricity metering technology and data services solutions, again delivered by Bglobal Metering. This agreement offers BES a suite of innovative options and solutions to help customers manage their energy use and meet the industry's obligations on carbon reduction.

The securing of these contracts underpins the aspirations of Energy Assets to become a leading service provider in the electricity sector and is in line with the initial growth targets set by the Group at the time of acquisition.

The Pirbright Institute

During the year, Energy Assets was selected by The Pirbright Institute to design and project manage the installation of gas infrastructure and metering to support the ongoing refurbishment of the organisation's Surrey campus. The project, with a contract value in excess of £1m, completed on time and on budget in March 2015 and encompassed the engineering design, project management and delivery of over 3km of medium pressure polyethylene pipeline together with a new pressure reduction and metering installation.

The project, which was the first to be fully managed by the Siteworks division following the Group's successful accreditation to full "Project Management" status under GIRS (Gas Industry Registration Scheme), underpins Energy Assets' aspirations to become the leading siteworks service provider in the utility sector and is in line with the growth targets set by the Group.

The award of this contract is testimony to the expertise within the Energy Assets business and is a strong endorsement of the Group's ability to handle complicated siteworks projects and demonstrates its uniquely differentiated offering.

CityWest Homes

An agreement with CityWest Homes, the provider of housing management services to Westminster City Council, was signed in January 2015 for the installation of a "Community Metering" project in 800 properties across eight social housing tower blocks in Central London.

The work will be delivered by Bglobal Metering and, as well as the installation and maintenance of meters, will incorporate new Half Hourly (HH) "Community Metering" technology which has been developed by the Group. This technology is the first of its kind in the UK and will allow suppliers to provide beneficial tariffs to the landlord and therefore reduce energy charges to residents where fuel poverty is prevalent. 

Although there is limited impact in 2014/15, the success of this pilot project should present multiple opportunities for further projects of this kind within the social housing, local authority and heat with rent sectors, generating future revenue potential for the Group.

Funding and financial position

In November 2014, the Group secured a new £5m revolving credit facility with Santander to provide additional finance to support the continued growth of the business.

Additionally, we continue to nurture good relationships with all our banking partners who have expressed a keen interest to continue to work with Energy Assets and provide sufficient funds to facilitate our growth plans whether these are organic or through acquisition.

Net debt at 31 March 2015 of £65.1m was £14.0m higher than the previous year mainly as a result of the increase in capital expenditure to service the growing meter portfolio. Capital investment in meters amounted to £20.9m in the year and, at 31 March 2015, Energy Assets had a gas meter portfolio of circa 123,000 meters with a net book value of £85.4m (2014: circa 101,000 gas meters with a net book value of £68.5m). 

Available facilities at the financial year end amounted to £28.7m (2014: £39.0m) and the cash at bank balance at 31 March 2015 was £7.8m (2014: £7.9m). 

Principal business risks and uncertainties

With 64% of our revenue being long term recurring revenue, over up to 20 years, much of our business is considered to be predictable and relatively low risk. 

Nonetheless, potential risks to the business are continuously reviewed as part of our Operational Risk Self Assessment process and actions to mitigate these risks are identified. The key risks identified and managed are set out in the Strategic Report within the 2015 Annual Report and Accounts and are summarised below:

By order of the Board

Philip Bellamy-Lee John McMorrow

Chief Executive Officer Chief Financial Officer

9 June 2015 9 June 2015

Consolidated statement of comprehensive income

For year ended 31 March 2015

Consolidated Balance Sheet

As at 31 March 2015

Consolidated Statement of Changes in Equity

For year ended 31 March 2015

Consolidated Statement of Changes in Equity

For year ended 31 March 2015

Consolidated statement of cash flows

For year ended 31 March 2015

Notes to the consolidated financial statements

For the year ended 31 March 2015

1) Financial information

This announcement does not constitute full accounts within the meaning of section 434 of the Companies Act 2006 but is derived from the audited accounts for the year ended 31 March 2015 for which an unqualified audit report has been received. The statutory accounts for the year ended 31 March 2015 will be delivered to the Registrar of Companies.

The Annual General Meeting (AGM) of Energy Assets Group plc is intended to take place in London on 1 September 2015. Notice of the AGM and related papers, including the statutory accounts, will be sent to shareholders at least 21 working days before the meeting.

While the information included within this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), it does not in itself contain sufficient information to comply with IFRS.

This information has been approved for issue by the Board of Directors of Energy Assets Group plc on 9 June 2015. Energy Assets Group plc was incorporated in the United Kingdom on 1 February 2012 which is where it is domiciled. 

2) Basis of preparation

The consolidated financial statements of Energy Assets Group plc have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), the Companies Act 2006 applicable to companies reporting under IFRS and the Listing Rules.

The consolidated financial statements have been prepared under the historical cost convention, as modified by financial assets and liabilities (including derivative instruments) at fair value through profit or loss.

3) Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report within the 2015 Annual Report and Accounts.

The Directors have considered these factors, the likely performance of the business and possible alternative outcomes, the financing facilities available to the Group, compliance with financial covenants and the possible actions able to be taken should new facilities not be available in the future.

Having taken all of these factors into consideration, the Directors confirm that forecasts and projections indicate that the Group and its Parent Company have adequate resources for the foreseeable future and at least for the period of 12 months from the date of this report. Accordingly the financial statements have been prepared on the going concern basis.

4) Segment information

Operating segments are reported in a manner consistent with the reports made to the chief operating decision maker. It is considered that the role of chief operating decision maker is performed by the Board of Directors.

The Group currently only operates in the UK and for management purposes is organised into three core divisions:

· Meter asset management;

· Data services; and

· Siteworks

This currently forms the basis of the Group's reportable operating segments. However, in the future as the business develops and moves towards a multi utility offering in accordance with its primary strategy, meter asset management and data services are likely to converge into a single division as customer demand increases for a combined service offering meaning it may become less relevant to split out revenue and costs associated with these divisions.

The measure of profit principally used to allocate resources is gross profit. However, as interest costs arise on borrowings which are wholly attributable to the meter asset management and data services segments, finance costs are also allocated to these segments.

EBITDA is monitored on a Group level but not at segment level and therefore this has not been presented within this note.

Certain central costs, assets and liabilities are not allocated to segments as they are managed on a Group basis. These comprise primarily central head office and management overhead costs, cash, accounts receivable and accounts payable.

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 4 - Segment information (continued)

During the year, sales to related parties amounted to £9.0m (2014: £8.7m) being sales made on an arm's length basis to a company controlled by the Group's significant shareholder. In addition, revenue of £4.5m (2014: £3.9m) was received from another single external customer in relation to data and metering services.

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 4 - Segment information (continued)

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

5) Exceptional items

Items that are material because of their size or nature, non-recurring and whose significance is sufficient to warrant separate disclosure and identification within the consolidated financial information are referred to as exceptional items. The separate reporting of exceptional items helps to provide an understanding of the Group's underlying performance.

The Group implemented a number of share based payment schemes as part of the IPO on 22 March 2012. The expense for the current year in relation to these schemes amounted to £0.2m (2014: £0.6m), no further expense will be incurred in the future in relation to these schemes.

During the year the Group also incurred non-recurring transaction costs relating to the acquisitions of Origin and SA Gas amounting to £0.1m. In the prior year similar costs of £0.1m were incurred in relation to the acquisition of Bglobal Metering. 

Upon acquisition of Bglobal Metering, the fair value of the net assets of this company were greater than the fair value of the consideration paid resulting in a gain on the acquisition of £0.8m (see note 11).

6) Taxation

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 6 - Taxation (continued)

Tax effect of non-deductible or non-taxable items primarily relates to non-recurring acquisition gains. 

Changes to the UK Corporation tax rates were substantively enacted as part of the Finance Bill 2013 on 2 July 2013. These include reductions to the main rate to reduce the rate to 21% from 1 April 2014 and to 20% from 1 April 2015. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.

7) Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. 

This is done by calculating the number of shares that could have been acquired at fair value (determined as the average market share price of the Company's shares in the year) based on the monetary value of the exercise price attached to outstanding share options. The number of shares calculated above is compared with the number of shares that will be issued assuming the exercise of the share options.

Therefore, the earnings per share calculation is required to be adjusted in relation to the share options that are in issue under the LTIP and the IPO Award Plan as follows. None of the shares under the Employee Retention Award Plan are potentially dilutive as these are to be settled with shares purchased on the open market.

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 7 - Earnings per share (continued)

Adjusted earnings per share

The earnings per share calculation in the current and prior year is impacted in relation to exceptional items. The profit figures have therefore been adjusted to show profit after a notional tax charge at 21% (2014: 23%) and before exceptional items.

8) Property, plant and equipment

Gas Meter additions include directly attributable costs of £4.1m (2014: £2.9m).

Borrowings are secured by a fixed and floating charge over the metering assets to which they relate.

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 8 - Property, plant and equipment (continued)

9) Net debt/EBITDA

The Group monitors capital on the basis of net debt divided by EBITDA. Net debt is calculated as total borrowings less cash and EBITDA is calculated as operating profit before any exceptional items, interest, tax, depreciation and amortisation as follows:

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

10) Leased assets

The Group, as part of its core business, is a lessor of gas metering assets. These are leased to customers under operating leases. The minimum lease rentals receivable at current prices assuming the lease remains in place for its expected term are as follows:

These lease payments are subject to annual reviews and are cancellable by the customer.

11) Acquisitions

Bglobal Metering

On 17 April 2014, the Group acquired 100% of the share capital of BGlobal Metering Limited for a cash consideration of £2.3m which included payment of £0.2m for the completion cash balance. The acquisition was made on a debt free basis with a working capital adjustment mechanism in place post completion. Bglobal Metering is a fully accredited meter operator (MOP) and provider of data consumption and aggregation services (DCDA services).

The following table summarises the consideration paid for Bglobal Metering and the fair value of the amounts recognised at the acquisition date for each major class of assets acquired and liabilities assumed:

The gain on bargain purchase has been credited to the income statement in the year ended 31 March 2015. 

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 11 - Acquisitions (continued)

The fair value of trade and other receivables is £1.7m and includes trade receivables with a fair value of £1.1m. This is the gross contractual amount of which all is expected to be collectible.

In the year to 31 March 2015, revenue of £6.3m and profit of £0.2m was included in the income statement relating to Bglobal Metering for the period from the date of acquisition. If the acquisition had taken place at the start of the year revenue of £6.6m and a profit of £0.2m would have been included. 

Acquisition costs relating to the transaction amounted to £0.1m and were charged to exceptional administrative expenses in the income statement in the financial year ended 31 March 2014.

Origin

On 6 October 2014, Energy Assets acquired the entire issued ordinary share capital of Origin Technical Business Services Limited, a provider and developer of mobile works management systems, data capture, data hosting and analysis services, for a consideration of £0.87m which included an initial payment of £0.4m, a deferred consideration of £0.25m and an amount of £0.22m for the completion cash balance. 

The following table summarises the consideration paid for Origin and the fair value of the amounts recognised at the acquisition date for each major class of assets acquired and liabilities assumed, as provisionally determined. The fair value of assets acquired and liabilities assumed may be revised within the 12 month period post acquisition:

Separately identifiable intangible assets and goodwill have been reflected within intangible assets on the group balance sheet. Goodwill recognised is attributable to a variety of intangible benefits including economies of scale from bringing the Origin business in-house, access to new technology and internal development resource.

The fair value of trade and other receivables is £0.1m and is fully attributed to trade receivables. This is the gross contractual amount of which all is expected to be collectible.

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 11 - Acquisitions (continued)

In the year to 31 March 2015, revenue of £0.3m and a breakeven profit postition was included in the income statement relating to Origin for the period from the date of acquisition. If the acquisition had taken place at the start of the year revenue of £0.6m and a breakeven profit position would have been included. It is expected that in the financial year ended 31 March 2016, under the Group's management, the subsidiary will become profitable.

Acquisition costs relating to the transaction amounted to £0.02m and have been charged to exceptional administrative expenses in the income statement in the year ended 31 March 2015.

SA Gas

Energy Assets acquired the entire issued share capital of SA Gas Engineers Limited, an accredited meter asset manager and a leading UK expert in complex I&C gas engineering and specialist siteworks projects on 2 March 2015.

The following table summarises the consideration paid for SA Gas and the fair value of the amounts recognised at the acquisition date for each major class of assets acquired and liabilities assumed, as provisionally determined. The fair value of assets acquired and liabilities assumed may be revised within the 12 month period post acquisition:

Goodwill has been reflected within intangible assets on the group balance sheet. Goodwill recognised is attributable to a variety of intangible benefits including economies of scale from bringing the SA Gas business in-house, the ability to provide a broader service offering to customers and access to the company's highly qualified team of specialist engineers and technicians.

The fair value of trade and other receivables is £0.8m and is fully attributed to trade receivables. This is the gross contractual amount of which all is expected to be collectible.

In the year to 31 March 2015, revenue of £0.2m and a profit of £0.02m was included in the income statement relating to SA Gas for the period from the date of acquisition. If the acquisition had taken place at the start of the year revenue of £3.2m and a profit of £0.7m would have been included. 

Notes to the consolidated financial statements

For the year ended 31 March 2015 (continued)

Note 11 - Acquisitions (continued)

Acquisition costs relating to the transaction amounted to £0.1m and have been charged to exceptional administrative expenses in the income statement in the year ended 31 March 2015.

Further details of the above business combinations and the benefits that these will bring to the Group are included within the Strategic Report.