Interim Results
Impax Group PLC
25 May 2005
25 May 2005
Impax Group plc
Interim results for the six months ended 31 March 2005
Impax Group plc, which provides specialised asset management and corporate
finance services within the environmental markets sector, today announces its
interim results for the six months ended 31 March 2005.
Highlights
* Successful launch of Impax Environmental Markets (Ireland)
* 38% increase in assets under management to £94 million over twelve months
* Loss reduced to £250,000, after amortisation of goodwill of £141,000
Commenting on the results, Keith Falconer, Chairman said:
'Last year the Board focused on setting a strategy and establishing a base for
growth. In the six months to March we have concentrated on building the Impax
business. In December, we raised £16.3m with the successful launch of a
Dublin-listed open-ended investment fund that has a similar portfolio of stocks
to our investment trust, Impax Environmental Markets plc. We believe we can grow
these assets substantially over the coming twelve months. Further fund raisings
are underway which, if successful, should enable the Group to generate positive
cashflow.
During the period, our corporate finance activities again saw a number of new
clients and increased net revenue. The environmental markets sector,
particularly the energy, water and waste markets on which we concentrate, is
growing rapidly, and, with increasing public policy intervention and private
sector capital expenditure, should become even more attractive.
In the second half we are continuing our efforts to turn this opportunity into
growth in assets under management and corporate finance fees.'
For further information please contact:
Keith Falconer or Ian Simm 020 7434 1122
Impax Group plc
John Webb 020 7490 3788
Marshall Securities Limited
Impax Group plc
Chairman's Statement
This time last year, I reflected on a busy programme of changes that we had put
in place, including the disposal of our oil interests. Our recent efforts have
been focussed on building a solid foundation for earnings which can be grown
over the next few years.
I believe that the prospects for Impax are excellent as the environmental
markets sector in which we specialise is growing rapidly and is increasingly
topical. Almost every day, the newspapers report new issues that serve to
illustrate commercial opportunities in this area, many of which are driven by a
solid legislative framework.
Against this backdrop, we are making good progress towards building sustainable
revenues and generating positive cash flow.
The interim results this year show higher revenues and reduced losses compared
with this period last year, reflecting significant progress in both our
operating divisions. In December, we raised £16.3m with the successful launch of
a Dublin-listed open-ended investment fund that has a similar portfolio of
stocks to our investment trust, Impax Environmental Markets plc. We believe we
can grow these assets substantially over the coming twelve months. This fund has
contributed revenues for only four months of the interim period and it is being
actively marketed to new investors. We are also pursuing other fund-raising
activities and hope to report success in the near future.
Results for the period
Turnover for the six months to 31 March 2005 was £951,000 (2004: £891,000). The
loss for the period of £250,000 (2004: £350,000) is after a £141,000 (2004:
£141,000) charge for the amortisation of goodwill.
I am pleased to report that we are steadily growing the net revenue lines in our
finance divisions and that the majority of this increase has been added directly
to the bottom line, thereby reducing the operating loss before amortisation for
the period to £84,000 (2004: £147,000).
Our net interest charge has fallen to £25,000 (2004: £62,000) as interest
receivable from the production notes on the sale of our oil assets has offset in
part the interest charge on our convertible loan stock.
Corporate Finance
Impax Capital's turnover for the period was £421,000 (2004: £530,000). After
deducting project expenses, the division's net revenue was £418,000 (2004:
£353,000) an 18% increase over the corresponding six month period last year. In
particular, our team was able to close three transactions involving the
provision of merger and acquisition advice. In rapidly growing markets, demand
for this expertise is high, and we are confident that we can generate further
fees in this area.
The UK's need to renew its waste management and renewable energy infrastructure
is bringing new participants into the market, with attendant opportunities to
sell corporate finance services including merger and acquisition advice, finance
raising, financial and public policy consulting. Our corporate finance team is
well positioned to take advantage of this trend.
Asset Management
Revenues in Impax Asset Management ('IAM') were £530,000 during the period, a
47% increase over the corresponding six-month period last year. By 31 March
2005, IAM managed or advised six funds with total assets under management of
around £94m (2004: £69m).
These funds have performed well. The net asset value ('NAV') of the largest
fund, Impax Environmental Markets plc, ('IEM') rose 15.9% over the year ending
31 December 2004, an out-performance over the MSCI World Index, which rose 5.2%
over the same period. In the twelve months ending 31 March 2005, the IEM NAV
rose 13.0%, while the MSCI World Index rose 5.7%. The unquoted funds also
performed well; in particular, The Recycling Fund completed its second
investment and is expected to announce further investments shortly.
We have also secured two new management contracts. On 9 December 2004, as
reported above, we completed the fund raising for and commenced management of
Impax Environmental Markets (Ireland). On 1 April 2005 (i.e. since the end of
the period under review), we started to manage the ASN Milieufonds, an
open-ended fund investing in quoted companies in the environmental markets
sector to which we had been providing investment advice since July 2001.
The environmental markets sector is growing quickly and many investors want to
increase their exposure to it. Few institutions have the expertise to do this by
themselves and this plays directly to our core competence. We intend to grow our
range and the size of the funds actively in the future in both private and
quoted equity.
Employee share ownership
We are grateful to shareholders who approved the establishment of the Employee
Benefit Trust. I gave the reasons why I thought it was important to have such a
trust last year. Although it does mean potential dilution of shareholders
interests, shares are only allocated to employees if they are successful in
meeting their objectives and corporate targets as a consequence of which the
shares will have been rewarding investments for shareholders in each period.
Prospects
We operate against a favourable background but our results will depend on how
successful we are in exploiting the opportunities presented to us.
The asset management division has developed a more solid underpinning to its
earnings and we hope that we shall secure higher fees in the second half. We
intend to concentrate on growing fund management revenues, which are predictable
and are therefore more highly-rated by shareholders.
Our corporate finance division is dependant on the outcome of the mandates we
have won and our ability to win new business. Our efforts will concentrate on
executing these mandates successfully.
I hope that we will be able to deliver further positive news in the near future.
Keith Falconer
Chairman
25 May 2005
Impax Group plc
Consolidated Profit & Loss Account for the six months ended 31 March 05
----------------------------------------------------------------------------------------
Notes Six months Six months
ended ended Year ended
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Turnover 2 951 891 1,738
Operating expenses
Amortisation of
goodwill 2 ( 141) ( 141) ( 283)
Other operating
expenses ( 1,035) ( 1,038) ( 2,031)
-------------- -------------- --------------
( 1,176) ( 1,179) ( 2,314)
Operating loss
Continuing
operations 2 ( 225) ( 288) ( 576)
Net interest
payable ( 25) ( 62) ( 102)
-------------- -------------- --------------
Loss on ordinary
activities before
taxation ( 250) ( 350) ( 678)
Taxation - - -
-------------- -------------- --------------
Loss attributable
to the Group ( 250) ( 350) ( 696)
-------------- -------------- --------------
Basic loss per
share 4 (0.67)p (0.98)p (1.91)p
Adjusted loss per
share 4 (0.09)p (0.59)p (1.14)p
-------------- -------------- --------------
Statement of Total Recognised Gains and Losses
Loss for the period ( 250) ( 350) ( 696)
Currency
translation
differences ( 106) ( 267) ( 260)
-------------- -------------- --------------
Total recognised
losses ( 356) ( 617) ( 955)
-------------- -------------- --------------
All disclosures relate only to continuing operations.
Impax Group plc
Consolidated Balance Sheet as at 31 March 2005
----------------------------------------------------------------------------------------
Notes As at As at As at
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed assets
Intangible fixed assets 1,771 2,053 1,912
Tangible fixed assets 11 2,288 16
------------- ------------- -------------
1,782 4,341 1,928
------------- ------------- -------------
Current assets
Debtors 2,891 1,122 3,080
Cash at bank and in hand 6 839 877 1,002
------------- ------------- -------------
3,730 1,999 4,082
Creditors -
amounts
falling due
within one
year ( 311) ( 492) ( 476)
------------- ------------- -------------
Net current
assets 3,419 1,507 3,606
Total assets
less current
liabilities 5,201 5,848 5,534
Creditors -
amounts
falling due
after more
than one year ( 2,279) ( 2,260) ( 2,256)
------------- ------------- -------------
Total net
assets 2,922 3,588 3,278
------------- ------------- -------------
Capital and reserves
Called up share capital 7 8,892 8,885 8,892
Share premium 7 759 736 759
Exchange equalisation reserve 7 ( 867) ( 767) ( 761)
Profit and loss account 7 ( 5,862) ( 5,266) ( 5,612)
------------- ------------- -------------
Equity
shareholders'
funds 2,922 3,588 3,278
------------- ------------- -------------
Impax Group plc
Consolidated Cash Flow Statement for the six months ended 31 March 2005
----------------------------------------------------------------------------------------
Six months Six months
ended ended Year ended
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash outflow from operating
activities ( 200) ( 257) ( 349)
Returns on investments and servicing of
finance
Interest received 67 31 67
Interest paid ( 61) ( 59) ( 105)
Taxation - ( 33) ( 33)
Capital expenditure and financial investment
Purchase of tangible fixed
assets - ( 90) ( 13)
Proceeds from sale of fixed
assets 84 85 182
Disposal of subsidiary - - 333
Management of liquid resources
Cash held on deposit to
support oil activities - - 61
------------- ------------- -------------
(Decrease)/increase in cash
in the period ( 110) ( 323) 143
------------- ------------- -------------
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash
in the period ( 110) ( 323) 143
(Decrease) in cash on
deposit in year - - ( 61)
Non cash transaction -
convertible loan stock ( 23) 39 44
Translation differences ( 53) ( 19) ( 300)
------------- ------------- -------------
Movement in net debt in the
period ( 186) ( 303) ( 174)
Net debt at beginning of
period ( 1,254) (1,080) ( 1,080)
------------- ------------- -------------
Net debt at end of period ( 1,440) (1,383) ( 1,254)
------------- ------------- -------------
Reconciliation of operating profit/(loss) to net cash flow from operating
activities
Six months Six months
ended ended Year ended
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating loss ( 225) ( 288) ( 576)
Goodwill amortisation
charge 141 141 283
Depreciation 4 2 6
Decrease/(increase) in
debtors 7 ( 9) ( 73)
(Decrease)/increase in
creditors ( 127) ( 103) 11
----------- ----------- -----------
Net cash flow from
operating activities ( 200) ( 257) ( 349)
----------- ----------- -----------
Impax Group plc
Notes to the Interim Accounts for the six months ended 31 March 2005
--------------------------------------------------------------------------------
1 The financial information set out in this report does not constitute full accounts
for the purposes of Section 240 of the Companies Act 1985. The interim accounts for
the six months ended 31 March 2005 and 31 March 2004 are unaudited. The comparative
figures for the financial year ended 30 September 2004 are not the Company's
statutory accounts for the financial year but are abridged from those accounts
which have been reported on by the Company's auditors, whose report was
unqualified. The interim accounts have been prepared on the basis of the accounting
policies set out in the annual financial statements of the Group for the year ended
30 September 2004. The interim accounts were approved by the Directors on 25 May
2005.
2 Segment analysis
Six months Six months
ended ended Year ended
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Turnover
Financial services 951 880 1,738
Oil - 11 -
------------- ------------- -------------
951 891 1,738
------------- ------------- -------------
Operating loss
Financial services ( 84) ( 142) ( 293)
Oil - - -
Exchange loss - ( 5) -
Amortisation of goodwill ( 141) ( 141) ( 283)
------------- ------------- -------------
( 225) ( 288) ( 576)
Net interest payable ( 25) ( 62) ( 120)
------------- ------------- -------------
Loss on ordinary activities ( 250) ( 350) ( 696)
before taxation
Tax on loss on ordinary - - -
activities
------------- ------------- -------------
Loss for the year ( 250) ( 350) ( 696)
------------- ------------- -------------
3 Amounts denominated in US Dollars have been converted at the closing rate on 31
March 2005 of £1 to $1.87 (31 March 2004: $1.82; 30 September 2004: $1.80). The
results of the US subsidiary undertaking have been translated on a monthly basis at
the average rate ruling during each month.
4 The figures for basic loss per share are based on the loss attributable to the
Group of £250,000 (31 March 2004: £350,000; 30 September 2004: £695,771) and on the
weighted average number of ordinary shares in issue during the period of 31 March
2005: 37,498,367 (31 March 2004: 35,698,084; 30 September 2004: 36,377,018).
The calculation of diluted loss per share is based on the weighted average number
of shares outstanding adjusted by the dilutive share options and convertible loan
stock. These adjustments give rise to an increase in the weighted average number of
shares outstanding to 31 March 2004: 91,249,098 (31 March 2004: 91,249,098; 30
September 2004: 91,249,098).
In order to show results from operating activities on a comparable basis, an
adjusted loss per share has been calculated which excludes goodwill amortisation
and exceptional items from the results.
5 The Directors do not propose an interim dividend.
6 Cash at bank and in hand
Six months Six months Year
ended ended ended
31 Mar 05 31 Mar 04 30 Sept 04
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash at bank and on hand 839 822 1,002
Cash on deposit - 55 -
------------- ------------- -------------
839 877 1,002
------------- ------------- -------------
7 Reconciliation of movements in capital and reserves
Share Share premium Exchange Profit &
capital reserve equilisation loss
reserve reserve
£'000 £'000 £'000 £'000
As at 1
October 2004 8,892 759 ( 761) ( 5,612)
Loss for the
period - - - ( 250)
Conversion of Loan Stock - - - -
Translation
adjustments - - ( 106) -
----------- ----------- ----------- -----------
As at 31 March 2005 8,892 759 ( 867) ( 5,862)
----------- ----------- ----------- -----------
Copies of this interim statement will be sent to shareholders and are available free
of charge from the Company's registered office, Broughton House, 6 - 8 Sackville
Street, London W1S 3DG. It is also available from our website www.impax.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 15 hours ago Mattioli Woods
- 16 hours ago Morgan Advanced Materials
- 16 hours ago Capita
- 16 hours ago Judges Scientific
- 16 hours ago Me Group International