2nd Apr 2007 07:01
Energetix Group plc02 April 2007 For immediate release 2 April 2007 Energetix Group plc ("Energetix" or the "Company") Maiden Preliminary Results for the year ended 31 December 2006 Energetix Group plc (AIM: EGX), the alternative energy specialist announces itsmaiden preliminary results for the year ended 31 December 2006: Operational highlights •Genlec field trial under household conditions commenced in early 2007; •key micro Combined Heat and Power ("mCHP") patent granted in Europe; •Pnu Power Uninterruptible Power Supply System output increased by 50% from 20kW to 30kW; •dedicated management teams for both Genlec and Pnu Power now in place. Financial Highlights •raised £5.4 million net of expenses and admission to the AIM Market of the London Stock Exchange plc ("AIM"); •cash at bank and in hand at 31 December 2006 £4.4 million; •loss before taxation £1.0 million (2005: £0.3 million). Commenting on the results, Adrian Hutchings, Chief Executive Officer, said: "2006 was a milestone year for Energetix and since floating on AIM in August,the Company has made significant progress in all areas of the business,particularly with the Genlec product which was granted a key patent and is nowundergoing field trials supporting our strategy of being the first to marketwith a lightweight wall-hung mCHP boiler." "The Company's expansion and progress is underpinned by the new facilities thathave been established for both Pnu Power and Genlec and two highly skilled anddedicated management teams have been put in place to maintain the rapid progresstowards commercialisation of these two products." For further information please contact: Energetix Group plc Adrian Hutchings, Chief Executive 0151 348 2111OfficerRichard Smith, Chief Financial Officer 0151 348 2116 Zeus Capital 0161 831 1512Alex ClarksonBen Thompson BankOra Limited 020 7099 1940Mike Brennan Buchanan Communications 020 7466 5000Ben WilleyBen Romney Chairman and Chief Executives' Review We are pleased to present the Company's first Annual Report and would like towelcome our new shareholders following our listing on the AIM Market of theLondon Stock Exchange plc ("AIM") when we raised £5.4 million net of expenses. Since flotation, the Company has made excellent progress towards its ambition ofcementing its position as the leading developer of new energy products. Inparticular the Group has: •established high calibre dedicated management teams to lead its two key subsidiaries, Energetix Genlec Limited ("Genlec") and Energetix Pnu Power Limited ("Pnu Power"); •achieved all the key development and performance testing targets; •established new facilities for both businesses; and •continued to develop partnerships with both suppliers and routes to market. In January 2007, Genlec achieved a major milestone with the successfulinstallation and demonstration of a fully integrated wall-hung mCHP domesticboiler. This pre-production system has been installed in a test house and iscurrently undergoing life and performance testing. This Genlec mCHP boiler hasthe same footprint and size as a normal boiler and is lightweight, enabling itto be wall mounted and installed as a normal boiler which is important giventhat circa 90 per cent. of the Western European boiler market comprises of wallhung units. The appliance will also have very similar service and maintenancerequirements to normal boilers. This is seen as a key part of our strategy ofbeing first to market with a wall mounted mCHP appliance that can capitalise onexisting and new routes to market. We believe that the planned field trials of Genlec over the winter 2007/08 willcreate international interest in this new product, demonstrating its advancedstage of development and the benefits, in both cost and performance, ofutilising mass produced components. Pnu Power has designed, installed, and set to work a dedicated Pnu Powerlifecycle testing facility and has already successfully completed the firstseries of life cycle tests. By the middle of 2007, the life cycle testing of Pnu Power compressed airbatteries should be completed enabling the generation of revenue from projectsand early product sales. Initial discussions have been held with potentialclients for early Pnu Power projects in Europe, the USA and South Africa. We areconfident of achieving our objective of generating Pnu Power revenue by thesecond half of 2007. Over the coming year the Group's strong and growing intellectual propertyportfolio will enable the subsidiaries to further develop partnerships withglobal suppliers and routes to markets through Original Equipment Manufacturers(OEMs), utilities and service companies and Mechanical, Electrical &Instrumentation (ME&I) contractors. As a result of the Group's increased activity and progress towardscommercialisation of Genlec and Pnu Power, the loss attributable to shareholdershas increased to £1,021,076 (2005: £301,124). Research and developmentexpenditure is directed towards the commercial development of the Group'sproducts and their preparation for market launch, total expenditure in the yearwas £591,220 (2005: £415,100). Administration expenditure, before depreciationand amortisation, of £1,005,405 (2005: £568,247) includes £234,564 of one offcosts related to the Company's admission to AIM. Overall, the financial performance for the Group was in line with our plans andwith our focus on cash control at the year end, the Company had bank balances of£4,444,731 (2005: £219,109). The small amount of income reported for the year relates to a consultancycontract carried out by Energetix (Europe) Limited which concluded in April2006. Future revenues for the Group are expected to commence in the second halfof 2007. At this stage in the Company's development, the Board is not recommending adividend in respect of the year to 31 December 2006. Investment in property, plant and equipment in the year totalled £78,096 (2005:£8,483) as the business established its new facilities. We are delighted with the excellent progress Energetix has made this year, andwe look forward to 2007 with confidence to continued growth and delivering valueto our shareholders. We would like to thank all management and staff for theirdedication and commitment without which, of course, this progress would not havebeen possible. Alan Aubrey Adrian Hutchings Chairman Chief Executive 2 April 2007 Consolidated Income Statement for the year ended 31 December 2006 Note 2006 2005 As restated £ £ Revenue 66,948 183,106Cost of sales (46,441) (163,721)Gross profit 20,507 19,385Administrative expenses (1,219,741) (570,277)Operating loss (1,199,234) (550,892)Finance income 67,678 249,169Other gains - net 110,148 -Loss before income tax (1,021,408) (301,723)Income tax expense - -Loss for the year (1,021,408) (301,723) Attributable toEquity holders of the Company 3 (1,021,076) (301,124)Minority interest (332) (599) (1,021,408) (301,723) Loss per share attributable to the equity holders of the Company during theyear: - Basic and diluted 2 (2.86)p (1.00)p All revenue and costs originate from continuing operations. Consolidated Balance Sheet as at 31 December 2006 Note 2006 2005 As restated £ £ASSETSNon-current assetsGoodwill - -Other intangible assets 5 6,456,833 310,110Property, plant and equipment 76,506 7,789Trade and other receivables - 2,378,433 6,533,339 2,696,332Current assetsTrade and other receivables 135,138 934,130Cash and cash equivalents 4,444,731 219,109 4,579,869 1,153,239 Total Assets 11,113,208 3,849,571 LIABILITIESNon-current liabilitiesFinancial liability - borrowings 2,558,574 360,000 2,558,574 360,000Current liabilitiesFinancial liability - borrowings 200,000 500,000Trade and other payables 347,345 128,197 547,345 628,197 Total liabilities 3,105,919 988,197 EQUITYCapital and reserves attributable toequity holders of the CompanyShare capital 3 2,250,000 1,499,929Share premium 3 5,269,819 179,052Reverse acquisition reserve 3 (1,499,756) (1,499,763)Warranty reserve 3 256,500 -Other reserves 3 43,890 -Retained earnings 3 1,686,836 2,707,912Total shareholders' equity 8,007,289 2,887,130Minority interest - (25,756)Total equity 8,007,289 2,861,374 Total equity and liabilities 11,113,208 3,849,571 Consolidated Cash Flow Statement for the year ended 31 December 2006 Note 2006 2005 £ £Cash flows from operating activitiesCash consumed by operations 6 (796,976) (205,014) Cash flows from investing activitiesExpenditure on intangible fixed assets (564,673) (310,110)Purchases of property, plant and (78,096) (8,483)equipmentInterest received 67,678 23,224 (575,091) (295,369)Cash flows from financing activitiesNet proceeds from the issue of 5,597,689 8ordinary shares Net increase/(decrease) in cash andcash equivalents 4,225,622 (500,375) Cash and cash equivalents at thebeginning of the year 219,109 719,484 Cash and cash equivalents at the endof the year 4,444,731 219,109 Notes 1. Basis of preparation The preliminary results for the year ended 31 December 2006 have been extractedfrom the audited accounts which have not yet been delivered to the Registrar ofCompanies. The financial information set out in this announcement does notconstitute statutory accounts for the year ended 31 December 2006 or 31 December2005. The financial information for the year ended 31 December 2006 wasunqualified and did not contain a statement under section 237 of the CompaniesAct 1985. The statutory accounts for the year ended 31 December 2005 have beendelivered to the Registrar, while the statutory accounts for the year ended 31December 2006 will be delivered to the Registrar following the Company's AnnualGeneral Meeting. 2. Loss per share The loss per share is based on the loss of £1,021,076 (2005: loss of £301,124)and 35,718,812 (2005: 29,998,580) ordinary shares of 5p each, being the weightedaverage number of shares in issue during the period. The weighted average numberof ordinary shares for the period ended 31 December 2006 assumes that the29,998,580 ordinary shares issued in relation to the reverse acquisition ofEnergetix Group plc existed for the entire period. Energetix Group plc shareshave been included since 8 August 2006, the date of the reverse acquisition, andall shares have been included in the computation based on the weighted averagenumber of days since issuance. The weighted average number of shares for theyear ended 31 December 2005 is assumed to be equal to the 29,998,580 ordinaryshares issued in relation to the reverse acquisition. 2006 2005 As restated £ £ Loss attributable to equity holders of the (1,021,076) (301,124)Group Weighted average number of ordinary shares in 35,718,812 29,998,580issue Basic & diluted loss per share (pence) (2.86) (1.00) The share options and warrants in issue are anti-dilutive in respect of thebasic loss per share calculation and have therefore not been included. 3. Consolidated statement of changes in shareholders' equity Attributable to equity holders of the Company Minority Total interest equity Share Share Retained Reverse Warrant Other capital premium Earnings Acquisition Reserves Reserves Reserve £ £ £ £ £ £ £ £ Balance at 160 179,050 3,009,036 - - - (25,157) 3,163,0891 January2005 Proceeds 6 2 - - - - - 8from sharesissued Totalrecognisedloss for - - (301,124) - - - (599) (301,723)the year Aspreviouslyreported in 166 179,052 2,707,912 - - - (25,756) 2,861,374EnergetixEuropeLimited asat 31December2005 Cost of 1,499,763 - - (1,499,763) - - - -acquisition Balance at 31 December2005 as 1,499,929 179,052 2,707,912 (1,499,763) - - (25,756) 2,861,374restated Shares 61 - - - - - - 61issued 6April 06 8 August 10 499,842 - - - - - 499,8522006 Loannoteconversion Proceedsfrom EISPlacing - 125,000 875,000 - - - - - 1,000,00015 August2006 ProceedsfromGeneral 625,000 4,375,000 - - - - - 5,000,000Placing -16 August2006 Share issue - (402,575) - - - - - (402,575)expenses Warrants - (256,500) - - 256,500 - - -issued Totalrecognisedincome/(loss)- Loss for - - (1,021,076) 7 - 43,890 (332) (977,511)the year Provisionagainstminority - - - - - - 26,088 26,088interest Balance at 2,250,000 5,269,819 1,686,836 (1,499,756) 256.500 43,890 - 8,007,28931 December2006 Minority interest Energetix Laser Technologies Limited a 60% owned subsidiary of Energetix(Europe) Limited, had net liabilities at 31 December 2006 which results in adebit minority interest. However, the Directors have made a provision againstthis balance on the basis that it is potentially irrecoverable and hence thereis no balance attributable to minority interests in the consolidated balancesheet. Other reserves Other reserves comprise the fair value provision for the costs of optionsgranted. 4. Reverse acquisition The Company was incorporated on 17 May 2006 as Futurebay Limited. On 8 August2006, the Company changed its name to Energetix Group plc and re-registered as apublic limited company. On 8 August 2006, the Company became the legal holdingcompany of Energetix (Europe) Limited via a share for share exchange. Under IFRS 3, "Business Combinations", the share for share exchange has beenaccounted for as a reverse acquisition. Although this consolidated financialinformation has been issued in the name of the legal parent, the Company itrepresents in substance is a continuation of the financial information of thelegal subsidiary, Energetix (Europe) Limited because after the transactionformer Energetix (Europe) Limited shareholders held 100% of the share capital ofthe legal parent. The following accounting treatment has been applied in respectof the reverse acquisition: a) The asset and liabilities of the legal subsidiary, Energetix (Europe)Limited are recognised and measured in the consolidated financial information atthe pre-combination carrying amounts, without reinstatement to fair value; b) The retained (loss)/earnings and other equity balances recognised inthe consolidated financial information reflect the retained (loss)/earnings andother equity balances of Energetix (Europe) Limited immediately before thebusiness combination, and the results of the period from 1 January 2006 to thedate of the business combination are those of Energetix (Europe) Limited as theCompany did not trade prior to the transaction. However, the equity structureappearing in the consolidated financial information reflects the equitystructure of the legal parent, including the equity instruments issued under theshare for share exchange to effect the business combination; and c) Comparative numbers presented in the consolidated financial informationare those reported in the consolidated financial information of the legalsubsidiary, Energetix (Europe) Limited for the year ended 31 December 2005 apartfrom equity structure of the legal parent. d) Energetix (Europe) Limited reported under IFRS for the year ended 31December 2005 and as such no reconciliation is provided between UK GAAP andIFRS. The Company had no significant assets, liabilities or contingent liabilities ofits own at the time that the share for share exchange took effect and no cashconsideration was paid in respect of the business combination. Transaction costsof equity transactions relating to the issue and listing of the Company's sharesare accounted for as a deduction from equity where it relates to the issue ofnew shares and listing costs are charged to the profit and loss account as ageneral expense. 5. Intangible Assets Micro CHP Compressed air battery Total Intellectual property R&D Asset Total R&D Asset £ £ £ £ £At 1 January2005 Cost - - - - - Additions - - - 310,110 310,110 Amortisation - - - - -value Closing net - - - 310,110 310,110book value At 31December 2005Cost - - - 310,110 310,110 Additions 5,787,007 272,513 6,059,520 292,160 6,351,680 Accumulatedamortisationand (204,957) - (204,957) - (204,957)impairment Closing net 5,582,050 272,513 5,854,563 602,270 6,456,833book value Additions may be analysed as follows: £ Non cash items 5,787,007R&D capitalised during the year 564,673 6,351,680 Intangibles include internally generated capitalised product development costsin accordance with IAS 38. The Group currently has internally generated intangible assets from developmentof its mCHP module and compressed air battery. All other development work hasbeen written off as incurred as the criteria for recognition as an asset are notmet. On 16 April 2004, the Group disposed of its 60 per cent investment in EnergetixMicropower Limited to a third party for an initial consideration of £1,031,400on completion of the transaction, deferred consideration of £4,200,000 andcontingent consideration of £600,000 (based upon the sale of 60,000 units by theacquirer). The deferred consideration was discounted at 6.75 per cent from thedate of disposal to the anticipated settlement date. Initially the discount wasrecorded as financing costs of £846,000. On 16 April 2006 the third party indicated that they would not be paying theGroup the deferred consideration for Energetix Micropower Limited that wasoriginally sold in April 2004. The terms of the original Sale and PurchaseAgreement contained clauses that anticipated this eventuality and accordinglyresulted in the return of the intellectual property into a new subsidiary of theGroup (Energyboost Limited (now Energetix Genlec Limited)) formed for thepurpose. The agreement also made provision for the original partner to EnergetixMicropower Limited to participate in the new subsidiary with their original 40%equity holding. The Group agreed that its original partner in this venture received a £3,000,000preference debt in the new subsidiary in lieu of any entitlement to equity. Thepreference debt has been discounted at 6.75% from the date of assuming untilanticipated settlement date. This preference debt will be paid out of the futureearnings of the new subsidiary. In accordance with IAS 38 the intellectual property has been capitalised at thediscounted value of the deferred consideration foregone plus the value of debtassumed by the Company. £ Current receivable foregone 900,000Discounted value of deferred consideration foregone 2,378,433Discounted value of preference debt given for 40% of 2,508,574the equityValue of intellectual property to be included in 5,787,007balance sheet 6. Cash consumed by operations 2006 2005 £ £Loss before income tax (1,021,408) (301,723)Adjustments for:- Depreciation 9,379 2,030- Amortisation 204,957 -- Other income (67,678) (249,169)- Other gains - net (110,148) -- Share option compensation charge 43,890 -- Provision against minority 26,088 -interestsChanges in working capital:- Trade and other receivables (101,009) 309,870- Trade and other payables 218,953 33,978Cash consumed by operations (796,976) (205,014) 7. Availability of statutory accounts Copies of the full statutory accounts will be available from the registeredoffices at Steam Packet House, 76 Cross Street, Manchester, M2 4JU, from 16April 2007 and will also be available on the Group's website atwww.energetixgroup.com. 8. Annual General Meeting The Annual General Meeting will be held at 10am on 16 May 2007 at the Company'sregistered office, Steam Packet House, 76 Cross Street, Manchester, M2 4JU. Notes to Editors: About Energetix Group Energetix floated on AIM in August 2006, raising £5.4 million net of expenses.The Company is currently developing two products - namely Genlec(TM) - a microCHP product for the domestic boiler market and Pnu Power an uninterruptiblepower supply product for the small to mid range power market. The Board of Energetix includes individuals experienced in the formation anddelivery of new technology businesses, with specific market knowledge andinvolvement in energy policy development. About Genlec(TM) The Genlec(TM) based micro CHP appliance has similar dimensions to currentboilers and is wall hung, which is important given that circa 90 per cent. ofthe Western European boiler market comprises wall hung units. The appliance willalso have very similar service and maintenance requirements to normal boilers. The Genlec(TM) system uses the Organic Rankine Cycle principle, similar to thatused in refrigeration. An organic liquid is pressurised by a pump and thenevaporated using heat from the boiler. This pressurised vapour then passesthrough the scroll expander, driving the scroll as it decompresses turning agenerator that produces electricity. The low-pressure organic vapour then passesthrough the heat exchanger to produce useable hot water. The organic vapourcondenses to a liquid and then repeats the process. About Pnu Power Pnu Power is a new compressed air energy storage technology that is analternative to valve regulated lead acid batteries. Its primary use and marketwill be the energy storage element of the uninterruptible power supply market. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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