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Novera Energy PLC (NVE)

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Tuesday 18 March, 2008

Novera Energy PLC

Final Results

Novera Energy PLC
18 March 2008


                                                                   18 March 2008


                 Novera Energy plc ('Novera' or 'the Company')

            PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007


Novera, one of the leading quoted independent UK renewable energy companies,
announces its preliminary results for the 12 months to 31 December 2007.

HIGHLIGHTS*

• Revenue increased 10 per cent to £34.4 million (2006: £31.4
  million):

    • Generation increased by 3 per cent to 564 GWh (2006: 546 GWh); and
    • Average price achieved increased 7 per cent to £57/MWh from £53/MWh.

  As a result of consolidating the operating results from 22 January 2007, 
  actual revenue for the year ended 31 December 2007 was £32.1 million (2006: 
  £2.2million).

• Costs per MWh (excluding royalties) decreased reflecting successful
  initiation of operational improvements and we are on track to deliver
  acquisition operating efficiencies and synergies of £1.3 million per annum 
  from 2008.

• Gross profit before depreciation and amortisation increased 19 per
  cent to £16.0 million (2006: £13.5 million). As a result of consolidating the
  operating results from 22 January 2007, actual gross profit before 
  depreciation and amortisation for the year ended 31 December 2007 was £14.9 
  million (2006:£0.3 million).

• EBITDA increased 26 per cent to £11.2 million on a pro-forma basis
  (2006: £8.9 million). As a result of consolidating the operating results from 
  22 January 2007, actual EBITDA for the year ended 31 December 2007 was £10.3
  million (2006:£(3.2) million).

• £10.8 million cash at bank at 31 December 2007, of which £6.5 million was in 
  restricted cash bank accounts, with net debt of £78.2 million.

• Good progress towards five year goal of developing wind portfolio of
  250MW of wind farm capacity:

    • Construction of Lissett Airfield Wind Farm Yorkshire (30MW) is underway. 
      First production is expected December 2008;
    • Projects with potential capacity in the range of 78-91MW submitted into
      planning during 2007:

        • Mountboy, Angus, North East Scotland
        • Fleeter Wood, Cumbria
        • Glenkerie, Scottish Borders
        • A'Chruach, West Scotland

    • Further portfolio of projects with a potential capacity of 320MW

• Close to finalising the key commercial contracts for ELSEF, with
  follow up projects under development.


Commenting on the results, David Fitzsimmons, CEO said: "Today's strong results
demonstrate our success in optimising the performance of our existing assets
whilst significantly growing our portfolio. We have exceeded our target to
submit 70MW of wind projects into planning in 2007, and continue to make steady
progress towards our goal of developing a 250MW wind portfolio by 2011. We are
developing an attractive set of Energy from Waste opportunities."

Commenting on the recent announcements, Roy Franklin, Chairman said: "As
announced on 17 March 2008, the Company is continuing negotiations with 3i
Infrastructure Limited concerning a possible cash offer for the entire issued
share capital of Novera at a price of 90 pence per share. We have also received
an approach from Infinis Acquisitions Limited. Further announcements will be
made as and when appropriate.

Whilst at the time of writing this report the future ownership of Novera is
uncertain, the Board remains confident in the underlying opportunities for
renewable energy in the UK and the Novera team's contribution to this exciting
sector."


* The Directors have presented the consolidated results of the Group in
accordance with IFRS. For the purposes of comparison the Directors have also
presented the results of the Group on a pro-forma basis which better reflects
the underlying performance of the businesses comprising the Group as at 31
December 2007, including 100 per cent. of Novera Macquarie Renewable Energy JV
('NMRE') from 1 January 2006 (refer to Note 5). During 2006 and to 22 January
2007 the Group actually owned 50 per cent of NMRE.


Enquiries:

Oriel Securities Limited 
(Novera's Financial Adviser, Nominated Advisor and Broker)

Adrian McMillan / Michael Shaw
Tel: +44 (0) 20 7710 7600

Gavin Anderson & Company (PR)

Ken Cronin / Kate Hill
Tel: +44 (0) 20 7554 1400


Notes to Editors:

Novera is a leading independent UK renewable energy company, with a portfolio of
landfill gas, waste and wind assets and projects.  The Company has 122MW of
renewable power generation at 58 sites across the UK and employs over 150
members of staff.

Asset                                 Detail                        Capacity

Landfill Gas (operational)            46 sites                          87MW
Hydro (operational)                   10 sites                          16MW
Industrial (operational)              1 site                             4MW
Wind (operational)                    Mynydd Clogau                     15MW
Wind (in construction)                Lissett Airfield                  30MW
Wind (in planning)                    Mountboy                           6MW
Wind (in planning)                    Fleeter Wood                      10MW
Wind (in planning)                    Glenkerie                      22-27MW
Wind (in planning)                    A'Chruach                      40-48MW
Total                                                              230-243MW

                  For more details, visit www.noveraenergy.com


CHAIRMAN'S REPORT


I am pleased to make my first Chairman's report on the activities of Novera.
This has been an exciting time to join the Company. Policy initiatives at both
European Union (EU) and United Kingdom (UK) level are increasingly positive for
renewable power and we are well-positioned to benefit from this.

We have established ourselves as a leading independent renewable energy
developer and generator in the UK. Our strategy is to build on our established
core skills of landfill gas operations and wind development. We will also apply
this expertise to potential energy from waste projects. We aim to grow scale to
compete effectively in the rapidly growing renewables industry. We will consider
the acquisition of operating assets or development opportunities that leverage
our core skills both in the UK and in selected overseas markets.

Operational performance improved following the acquisition of the remaining 50
per cent of Novera's joint venture from Macquarie International Infrastructure
Fund ('Macquarie') at the start of the year. Our targeted operating improvements
were delivered in 2007 and have been incorporated in our future plans for the
business. On a pro-forma, illustrative basis revenue was up 10 per cent to £34.4
million (unaudited) driven by increased generation which was up 3 per cent to
564GWh, and higher unit revenue. Statutory revenue was £32.1 million. The pro
forma numbers are explained fully within the Financial Review.

We remain confident in our ability to achieve our target of 250MW of operational
wind capacity by 2011. Our second wind farm, Lissett Airfield Wind Farm
('Lissett') is under construction. A further four planning applications
representing over 70MW of operational capacity are in the planning process. We
have 20 sites at the pre-planning stage with a total potential operational
capacity of 320MW. We expect planning decisions on all four sites which are in
planning during the course of 2008.

The 10MW East London Sustainable Energy Facility (ELSEF) is progressing well. We
are also engaged in a number of follow-up projects.

Novera Energy Limited was listed on the London Stock Exchange's Alternative
Investment Market ('AIM') in June 2005. May 2007 marked another milestone in the
evolution of Novera Energy plc with the reincorporation of the Company in the UK
as Novera Energy plc, the successor entity, which was admitted to trading on AIM
simultaneously with the re-domicile.

Employees

The Group has grown during the past year with the workforce now numbering 154. I
would like to take this opportunity to thank the staff for all their efforts and
I anticipate another successful year for them all. In support of our expanding
Scottish team and development pipeline, we have opened a Scottish office in
Edinburgh. This office is in addition to the established corporate headquarters
in London, operations centre in Warrington and Welsh office in Cardiff.

Outlook

The prospects for renewable energy in the UK will be enhanced by the commitment
of the EU for renewable energy to reach 20 per cent of total energy consumption
by 2020. The UK's target is currently set at 15 per cent. It is widely expected
that this will result in a renewable target of 40-45 per cent of total
electricity generation. This is a substantial increase over the current level of
5 per cent and the current target of 20 per cent.

As announced 17 March 2008, the Company is continuing negotiations with 3i
Infrastructure Limited concerning a possible cash offer for the entire issued
share capital of Novera at a price of 90 pence per share. We have also received
an approach from Infinis Acquisitions Limited. Further announcements will be
made as and when appropriate.

Whilst at the time of writing this report the future ownership of Novera is
uncertain, the Board remains confident in the underlying opportunities for
renewable energy in the UK and the Novera team's contribution to this exciting
sector.


Roy Franklin
Chairman
17 March 2008


OPERATING REVIEW


Novera has made excellent progress during 2007, not only in consolidation of the
joint venture operational assets, but also in developing our wind portfolio.

We are also encouraged by the continuing support of the renewables industry from
the UK Government, as reflected in its recent Energy White Paper. Particularly
welcome are the decisions to improve the planning process for renewables, to
maintain the level of support for onshore wind and to increase the support for
emerging technologies such as gasification.

Operations


Generation

The Key Performance Indicators ('KPIs') for our operations, which include power
generation, revenue, costs and gross profit, and are presented on a pro-forma
basis as explained fully within the Financial Review. This basis, in the opinion
of the directors, provides a more meaningful analysis of the trends in the
underlying business.

During 2007, output increased by 3 per cent from 546GWh to 564GWh (excluding
discontinued operations in 2006).

Power from sites developed under the UK Government's Non Fossil Fuel Obligation
('NFFO') programme, representing 59 per cent of total generation, is sold to the
Government's Non Fossil Purchase Agency. The remainder of our output is eligible
for Renewable Obligation Certificates ('ROCs') and is sold to energy retailers
such as EON and Centrica. 90 per cent of Novera's total power output is sold
under long-term contracts.

The main risk areas to our operations relate to performance, health, safety and
environmental standards and the impact of weather and are managed by appropriate
operational processes.


Landfill Gas

At the time that we acquired the remaining 50 per cent of Novera's joint venture
from Macquarie we targeted £0.6 million in operating improvements in the first
year, with £1.3 million per annum thereafter. During 2007 we made good progress
and met our improvement targets. The full set of operating improvements have
been included in our 2008 Budget and business plans going forward. These include
better management of our external engine maintenance contracts, the optimisation
of engine use to maximise the time between overhauls and the successful
re-negotiation of lower royalty payments at two sites.

Our landfill gas portfolio generated 487GWh in 2007, an increase of 4 per cent
from 470GWh in 2006. The increased generation was achieved through a combination
of two new developments, which commenced operation during the second half of
2006, the strategic relocation of engines, the drilling of additional wells and
improved gas field management.

Our operational counterparties are the waste companies with whom we work: WRG,
Sita, Viridor and the operations and maintenance providers, Clarke Energy,
Finnings and Edina UK.


Hydroelectric

The 16MW hydro portfolio across the ten sites performed in-line with 2006,
generating 49GWh.


Wind

Generation from Mynydd Clogau (15MW) increased by 2 per cent to 28GWh. A
potential extension to the existing site is currently under consideration.


Industrial and Water Services

Novera is the UK's largest independent operator of sludge drying and dewatering
facilities. We manage the operations and maintenance of sludge drying and
dewatering facilities in Cardiff, Newport and Port Talbot for Kelda Water
Services a role we have fulfilled the last nine years. Novera also operates and
maintains a major plant in Edinburgh for Veolia Water Services.

We also operate one diesel-powered generation 'standby' site. This does not
generate significant quantities of electricity.


Pre-construction

Wind

We have an established target of 250MW of wind capacity in operation by 2011. We
establish interim targets annually for each stage of the planning process:
appraisal, pre-planning, sites into planning and consents. Progress against all
of these measures is tracked by the Company on a monthly basis.

For 2007, targets included obtaining planning consent and starting construction
for Lissett, and submitting a further 70MW of wind capacity into planning. We
ended the year with four sites in the planning process with a potential output
in the range of 78-91MW being Mountboy (North East Scotland), Glenkerie
(Scottish Borders), A'Chruach (West Scotland), and Fleeter Wood (Cumbria). We
expect planning decisions on all four sites during the course of 2008. In
addition to the long-term 250MW, our targets for 2008 include submitting a
further 170MW into planning.

We reached financial close on Lissett in November 2007. Construction started in
December 2007. Civil works are well underway with some roads and piling of wind
turbine bases completed. The first turbines are due on site in October, with
first generation planned in December 2008. Our approach to development has
secured what is probably the shortest programme for a UK wind farm, with only
2.5 years from planning application to the programmed date for first production.

Our on-going site search programme is delivering good results and we have
already identified 20 new sites with a combined potential capacity of 320MW.
With a further potential 270MW of wind capacity at the appraisal stage, we
remain confident that we will deliver our target of having 250MW in production
by the end of 2011.

We have expanded the wind development and construction team and further growth
is planned for 2008.


Energy from Waste

Following the Government's announcement that they will double the support for
renewable power from biomass gasification through the ROC system, we continue to
progress the East London Sustainable Energy Facility. We are close to finalising
the key commercial contracts with our prospective Engineering, Procurement and
Construction ('EPC') contractors, Shanks East London and Ford Motor Company. We
are developing a number of follow-up projects.

Novera has been assisting Multiplex Developments and their partners in the
conceptual design for a gasification/ Combined Heat Power ('CHP') facility to be
integrated into this proposed Brent Cross Cricklewood Energy Centre. The
facility would provide in excess of 15MW of electricity and 30MW of heat to the
proposed commercial and retail development in North London.

In late 2007 Novera was awarded a contract for a small, wood-fuelling
gasification/CHP facility for a major infrastructure owner. The proposed
gasification facility will generate approximately 1MW of electricity and 2MW of
heat, all of which would be used in a new development being planned.


FINANCIAL REVIEW


2007 was another important and transformational year for Novera. Of special note
was:

 -  acquisition of our remaining 50 per cent of Novera Macquarie
    Renewable Energy Limited (NMRE) for £30.0 million, our 50:50 joint venture 
    with Macquarie;

-   raising £38.0 million (before costs) in cash by issuing an additional
    69.1 million shares to fund the acquisition of NMRE;

-   the change in the domicile of the Parent Company from Australia to
    the UK;

-   continuing investment in our wind development and construction
    programmes; and,

-   securing £31.5 million of non-recourse project finance debt facilities for 
    the Lissett wind farm development.


Financial Overview

The consolidated results of the Group are prepared in accordance with
International Financial Reporting Standards (IFRS) and include the following
figures:


                                                          31 Dec 07    31 Dec 06
                                                              £'000        £'000
--------------------------------------------------------------------------------
Revenue                                                      32,148        2,183
--------------------------------------------------------------------------------
Cost of sales                                               (17,239)      (1,881)
--------------------------------------------------------------------------------
Gross profit before depreciation and amortisation            14,909          302
--------------------------------------------------------------------------------
EBITDA                                                       10,250       (3,219)
--------------------------------------------------------------------------------
Net loss after tax                                           (1,958)      (3,016)
---------------------------------------------------------------------------------
               

Tangible & intangible assets                                159,056           76
--------------------------------------------------------------------------------
Cash balance                                                 10,803        3,693
--------------------------------------------------------------------------------
Borrowings                                                  (87,910)           -
--------------------------------------------------------------------------------
Net assets                                                   57,229       15,688
--------------------------------------------------------------------------------


The 2007 consolidated statutory accounts include 100 per cent of NMRE from 22
January 2007, equity accounting Novera's 50 per cent interest in NMRE in 2006
and in 2007 up to 22 January.

The Directors have produced the results of the Group on a pro-forma basis which
shows the results for 2006 and 2007 as if Novera had owned 100 per cent of NMRE
(excluding discontinued operations) for both of those years to provide a
comparison between 2007 and 2006 which reflects the underlying performance of
the business.

                   
                                                        31 Dec 07      31 Dec 06
                                                        Pro forma      Pro forma
                                                            £'000          £'000
                                                       (unaudited)    (unaudited)
---------------------------------------------------------------------------------
Revenue                                                    34,440         31,410
--------------------------------------------------------------------------------
Cost of sales                                             (18,449)       (17,955)
---------------------------------------------------------------------------------
Gross profit before depreciation and amortisation          15,991         13,455
--------------------------------------------------------------------------------
EBITDA                                                     11,230          8,912
--------------------------------------------------------------------------------

                       
Tangible & intangible assets                              159,056        156,315
--------------------------------------------------------------------------------
Cash balance                                               10,803         18,368
--------------------------------------------------------------------------------
Borrowings                                                (87,910)       (92,111)
---------------------------------------------------------------------------------
Net assets                                                 57,229         58,117
--------------------------------------------------------------------------------

On a pro-forma basis the key financial highlights for the year ended 31 December
2007 include:

-  annual revenue record of £34.4 million up 10 per cent (excluding
   discontinued operations)

   • Landfill gas increased by 11 per cent to £27.0 million
   • Hydroelectric increased by 2 per cent to £3.1 million
   • Wind increased by 8 per cent to £1.9 million
   • Water Services and Industrial increased by 6 per cent to £2.4 million

The average sales price achieved across the portfolio increased to £57/MWh in
2007 (2006: £53/MWh). Higher prices were achieved due to a total of seven former
NFFO sites now receiving higher revenue ROC contracts.


-  total cost of sales increased by 3 per cent, significantly less than
   revenue increases resulting in a record gross profit (before depreciation and
   amortisation) margin of 46 per cent, an increase of 3 per cent over 2006. 
   This was largely due to increased unit sales revenue, implementation of 
   improvement programme and various one-off items.


-  new records achieved across all key earnings measures including gross
   profit before depreciation and amortisation was up 19 per cent to £16.0 
   million and EBITDA up 26 per cent to £11.2 million.


-  pre-construction expenditure incurred in cash was £3.0 million (2006: £2.4 
   million) of which £1.8 million (2006: £nil) was capitalised. Pre-construction
   expenditure is capitalised when the operational and financial viability of 
   the project has been established with reasonable certainty and the decision 
   made to take the project forward to planning. In previous years all
   pre-construction costs were expensed. This new accounting policy recognises
   Novera's expertise in project development and management. Wind cash 
   expenditure increased by 118 per cent to £2.4 million (£1.8 million 
   capitalised), reflecting the increase of activity with four planning 
   applications submitted during the year. ELSEF-related expenditure decreased 
   by 54 per cent to £0.6 million.


-  Lissett Airfield Wind Farm reached financial closure in November.


-  we also settled the Roxwell indemnity (£0.7 million) and Samba
   warranty claims (£0.4 million), both accounted for as a reduction in the
   purchase consideration of NMRE.


Change of Domicile from Australia to United Kingdom

Novera Energy plc was incorporated on 15 March 2007 and, on 29 May 2007 under a
scheme of arrangement approved by shareholders and the Australian Supreme Court
replaced Novera Energy Limited (incorporated in Australia) as the parent company
of the Group. The shareholders and their interests in the business immediately
before and after this arrangement were the same. These financial statements have
been presented as if Novera Energy plc had been the parent throughout the
reported period together with comparative information.


Acquisition of Remaining 50 per cent of NMRE

The acquisition of the remaining 50 per cent of NMRE from Macquarie was
completed on 22 January 2007. The purchase price was £30.0 million.

The acquisition was financed through a placing of 69.1 million shares at 55
pence per share, raising a total of £38.0 million before costs. Immediately
following the placing the number of ordinary shares on issue was 124.1 million.

The assets now being consolidated following the NMRE acquisition are the
landfill gas, hydro and wind farm assets owned by NMRE. As a result the balance
sheet of the Group fundamentally changed from 22 January 2007 onwards, with
£70.0 million of fixed assets, £83.3 million of intangible assets and £3.4
million of goodwill coming onto the balance sheet on acquisition date,
representing our provisional assessment of fair values of the assets acquired.
The Group is not adopting a policy of revaluation.


Cash Position and Finance Facilities

Novera focuses on operating cash flow to maximise shareholder value over the
long-term. Operating cash flow is principally used to invest in further
development.

As at 31 December 2007, bank loans were £89.0 million and cash on hand was £10.8
million including £6.5 million in restricted cash.

In November, Novera finalised the funding for Lissett. The capital cost has been
funded through a combination of new debt facilities and existing cash reserves.
Under the debt facility, Fortis Bank has underwritten £31.5 million of limited
recourse debt facilities over a 16.5 year term of the project.

The Company is currently considering options for refinancing the business and
the Directors believe the Group has significant additional borrowing capacity,
which can be used to fund further development projects.


Power Sales and Trading

The Group has entered into various Power Purchase Agreements ('PPAs') under
which a customer takes all the electricity generated from specified assets for
the contractual period, typically between one and 15 years. The unit price paid
for electricity is specified in the PPA fixed in the shorter term and based on
market prices in the longer term. These arrangements are similar in nature to
operating leases with no minimum committed payments. Revenue from PPAs and the
relevant assets used to generate the electricity are reported in the segment
relevant to the type of asset used to generate the electricity. Revenue is
recognised as electricity is generated at the contracted rate on the date of
generation, except where that rate cannot be determined with reasonable accuracy
in which case it is recognised when the rate can be determined with reasonable
certainty.


Risk Management

The Group's activities expose it to a variety of financial risks such as market,
economic, credit and interest risk.


The Group's overall risk management programme focuses on the predictability of
revenue and control over operating costs to maximise the financial performance
of the Group. Our policies require us to prepare a risk management plan that is
reviewed by the Board. The risks faced by Novera are discussed in further detail
within the notes to these accounts.


Dividend

The directors are not proposing to pay a dividend.


David Fitzsimmons                   Rory Quinlan
Chief Executive Officer             Chief Financial Officer
17 March 2008                       17 March 2008



Novera Energy plc
Consolidated Income Statement
For the year ended 31 December 2007


                                                              2007          2006
                                                             £'000         £'000
Revenue                                                     32,148         2,183
Cost of sales before amortisation and depreciation         (17,239)       (1,881)
--------------------------------------------------------------------------------
Gross profit before depreciation and amortisation           14,909           302

Depreciation                                                (5,275)          (33)
Amortisation                                                (4,072)              
--------------------------------------------------------------------------------
Total Cost of Sales                                        (26,586)       (1,914)

Gross Profit after depreciation and amortisation             5,562           269

Other income                                                    25         1,133
Pre-construction costs                                      (1,179)       (2,405)
Administration expenses                                     (3,505)       (2,249)
--------------------------------------------------------------------------------

Operating profit/(loss)                                        903        (3,252)

Interest payable and similar charges                        (5,644)           (2)
Interest receivable                                            946           202
Shares of net profit of a joint venture                        259            36
--------------------------------------------------------------------------------

Loss before income tax                                      (3,536)       (3,016)

Taxation                                                     1,578             -
--------------------------------------------------------------------------------

Loss for the year                                           (1,958)       (3,016)
--------------------------------------------------------------------------------


Loss per share attributable to the equity holders:

                                               2007                       2006
                                               Pence                      Pence
Basic                                          (1.6)                      (5.5)
Diluted                                        (1.6)                      (5.5)



Novera Energy plc
Consolidated Balance Sheet
As at 31 December 2007


                                                              2007          2006
                                                             £'000         £'000
ASSETS
Non-current assets

Intangible assets                                           82,634             -
Property, plant & equipment                                 76,422            76
Investments accounted for using the equity method                -        14,608
Receivables                                                    700           785
Deferred tax assets                                            881             -
--------------------------------------------------------------------------------
Total non-current assets                                   160,637        15,469
--------------------------------------------------------------------------------
Current assets

Trade and other receivables                                  7,752         1,267
Derivative financial instruments                               642             -
Cash and cash equivalents                            3      10,803         3,693
--------------------------------------------------------------------------------
Total current assets                                        19,197         4,960
--------------------------------------------------------------------------------
LIABILITIES
Current liabilities

Trade and other payables                                   (10,075)       (1,982)
Deferred revenue                                                 -          (154)
Borrowings                                                  (4,634)            -
--------------------------------------------------------------------------------
Total current liabilities                                  (14,709)       (2,136)
--------------------------------------------------------------------------------
Net current assets                                           4,488         2,824
--------------------------------------------------------------------------------
Non-current liabilities

Deferred revenue                                                 -        (2,605)
Retirement benefit obligation                                 (156)            -
Borrowings                                                 (83,276)            -
Deferred tax                                               (24,464)            -
--------------------------------------------------------------------------------
Total non-current liabilities                             (107,896)       (2,605)
--------------------------------------------------------------------------------

Net assets                                                  57,229        15,688
--------------------------------------------------------------------------------
EQUITY
Ordinary shares                                              6,203        32,243
Merger reserve                                              61,979             -
Other reserves                                               7,399           533
Accumulated losses                                         (18,352)      (17,088)
--------------------------------------------------------------------------------
Total equity                                                57,229        15,688
--------------------------------------------------------------------------------


Novera Energy plc
Consolidated Statement of Recognised Income and Expense
For the year ended 31 December 2007


                                                              2007          2006
                                                             £'000         £'000
--------------------------------------------------------------------------------
Revaluation on acquisition of subsidiary                     8,394             -
Hedging reserve movement                                    (1,557)            -
Share of movement in JV reserves                               453         1,720
--------------------------------------------------------------------------------
Net income recognised directly in equity                     7,290         1,720
Loss for the year                                           (1,958)       (3,016)

Total recognised income and expense for the year is
attributable to:                                                                 

Members of Novera Energy plc                                 5,332        (1,296)
--------------------------------------------------------------------------------


Novera Energy plc
Consolidated Cash Flow Statement
For the year ended 31 December 2007

                                                              2007          2006
                                                             £'000         £'000
Cash flows from operating activities
Cash generated from operations                         4    10,933        (2,607)
Interest received                                              849            98
Interest paid                                               (5,920)            -
Distribution received from joint venture                         -         1,600
--------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating activities          5,862          (909)
---------------------------------------------------------------------------------

Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)     5   (20,377)            -
Proceeds from sale of property, plant & equipment              448             -
Payments for property, plant & equipment                   (11,677)          (22)
Receipts to decrease the investment in joint venture             -           870
Proceeds from/(payments) to vending of business                181          (119)
Refund of purchase consideration                             1,097             -
(Repayment of related party borrowings)                          -           (24)
--------------------------------------------------------------------------------
Net cash (outflow)/inflow from investing activities        (30,328)          705  
--------------------------------------------------------------------------------

Cash flows from financing activities
Net proceeds from issue of share capital                    35,882            32
Repayment of borrowings                                     (4,306)            -
--------------------------------------------------------------------------------
Net cash inflow from financing activities                   31,576            32
--------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash equivalents         7,110          (172)
Cash at the beginning of the financial year                  3,693         3,865
--------------------------------------------------------------------------------
Cash at end of year                                         10,803         3,693
--------------------------------------------------------------------------------
Reconciliation of cash balances
Cash at bank                                                10,803         3,693
--------------------------------------------------------------------------------



1. Basis of preparation

   The financial statements have been prepared under the historical costs
   convention, modified where necessary by the revaluation of financial assets 
   and liabilities (including derivative instruments).

   The financial information set out in this announcement does not constitute 
   the Group's statutory financial information for the year ended 31 December 
   2007, but is extracted from those financial statements. The auditors have 
   reported on those financial statements and have given an unqualified report 
   which does not contain a statement under section 237 (2) or 237 (3) of the 
   Companies Act 1985.

   i) Compliance with IFRS

      The consolidated financial statements have been prepared in accordance 
      with International Financial Reporting Standards ("IFRS"), as adopted by 
      the European Union IFRIC interpretations and the Company's Act 1985 
      applicable to companies reporting under IFRS.

  ii) Basis of Consolidation

      Novera Energy plc was incorporated on 15 March 2007, and on 29 May 2007 
      under a scheme of arrangement approved by shareholders and the Australian 
      Supreme Court New South Wales replaced Novera Energy Limited (incorporated
      in Australia) as the parent company of the Group. The shareholders and 
      their interests in the business immediately before and after this 
      arrangement where the same. These financial statements have been presented
      as if Novera Energy plc had been the parent throughout the reported period
      together with comparative information.

      The difference between the nominal share capital of Novera Energy plc and 
      the contributed capital of Novera Energy Limited is shown as merger 
      reserve as permitted by section 131 of the Companies Act 1985. The 
      consolidated financial statements comprise the financial statements of 
      Novera Energy plc and its subsidiary undertakings drawn up to 31 December. 
      The accounting years of the subsidiary undertakings are conterminous with 
      that of the parent company. The results and cash flows of subsidiary 
      undertakings acquired or sold during the year are included from the 
      effective date of acquisition to disposal and accounted for under the 
      acquisition method of accounting. Intra group sales and profits are fully 
      eliminated on consolidation


2. Dividend

   There were no dividends provided or paid during the 12 months to 31 December
   2007.


3. Cash and Cash equivalents

                                                         2007               2006
                                                        £'000              £'000
        Cash at bank and in hand                          356              1,060
        Short term bank deposits                        3,954              2,633
        Restricted cash                                 6,493                  -  
                                                   ----------          ---------                        
                                                       10,803              3,693
                                                   ----------          ---------

   The Group has restricted cash for the NMRE facility loan of £5.0 million, 
   which relates to the principal and interest payments payable on 30 June 2008 
   and £1.5 million relating to the Lissett loan facility.

   The effective interest rate on short-term deposits was 4.75 per cent 
   (2006: 3.85 per cent).


4. Cash flow from operating activities
                                                                2007        2006
                                                               £'000       £'000
   Loss from ordinary activities before income tax            (3,536)     (3,016)
   Depreciation                                                5,275          33
   Amortisation                                                4,072           -
   Foreign exchange differences                                   (6)          -
   Release of discounted deferred revenue                         (2)       (153)
   Interest income                                              (946)       (202)
   Interest expense                                            5,644           2
   Completion payment                                              -          25
   Share of profits of associates and JV partnerships not
   received as dividends or distributions                       (259)        (36)
   Decrease /(increase) in receivables                           969        (256)
   (Decrease)/increase in trade payables                        (554)        910
   (Increase)/decrease in share based payments reserve           276          86
                                                             -------    --------
   Net cash (outflow)/inflow from operating activities        10,933      (2,607)
                                                             -------    --------


5. Acquisitions

   On 22 January 2007 Novera acquired the remaining 50 per cent of the share 
   capital of Novera Macquarie Renewable Energy Limited (NMRE) from Macquarie 
   Renewable Limited (MRL), a 100 per cent owned subsidiary of Macquarie 
   International Infrastructure Fund. NMRE was established as a 50:50 Joint 
   Venture between Novera Energy Ltd and MRL in December 2004. From 22 January 
   2007 the results have been 100 per cent consolidated.

   The acquired business contributed revenues of £29.8 million and net profit of
   £1.3 million to the Group for the period 22 January 2007 to 31 December 2007. 
   If the acquisition had occurred on 1 January 2007, Group revenue would have 
   been £34.4 million and net loss after tax of £2.1 million.

   The acquisition has been accounted for using the step acquisition method with
   the deferred revenue relating to the original 50% being reclassified as 
   goodwill and changes to fair value relating to the previously owned 50 per 
   cent accounted for as revaluations. The purchase price adjustments relate to 
   the settlement of outstanding disputes in respect of the consideration paid 
   in 2004 and 2005, received in cash during the year.


   Details of net assets acquired and goodwill are as follows:
   Prior investments in NMRE:
                                                              £'000
   Cost                                                      18,542
   Fair Value of net assets acquired                        (18,542)
   Reclassification of deferred revenue                      (2,756)
   Purchase price adjustments arising in                     (1,097)
   2007                                                     -------
                                                             (3,853)
                                                            -------

   Acquisition of additional 50% January 2007:

   Cash Paid                                                 30,000
   Direct costs relating to acquisition                       1,002
                                                            -------
   Cost of investment                                        31,002
   Fair Value of net assets acquired                        (23,715)
                                                            -------
                                                              7,287
                                                            -------
                                                            -------
   Goodwill on acquisition                                    3,434
                                                            -------

   The acquisition was funded through the issue of 69.1 million shares raising 
   £38.0 million. £2.1 million of costs were incurred associated with this share
   issue.

   The directors reviewed the book values of the assets and liabilities acquired
   and have made the following adjustments:
                                    
                                                Acquiree's             
                                                  Carrying    Fair value
                                    Fair value      amount    Adjustment
                                        £'000        £'000         £'000
 
   Cash and cash equivalents           10,625       10,625             -
   Property, plant and equipment       69,951       69,951             -
   Energy Usage Rights
   (included in intangibles)           83,272       42,753        40,519                               
   Investment in Joint Ventures             -          414          (414)
   Trade and other receivables          7,396        7,396             -
   Financial Assets                     2,178        2,178             -
   Trade and other payables            (8,541)      (8,541)            -
   Retirement benefit
   obligation                            (175)        (175)            -
   Borrowings                         (92,115)     (92,115)            -
   Deferred tax liabilities           (25,161)      (1,845)      (23,316)
   ----------------------------------------------------------------------
   Net assets                          47,430       30,641        16,789
   Previously held                    (23,715)
                                    ---------
   Net assets acquired(50%)            23,715
                                    ---------

   Purchase consideration settled 
   in cash                                          31,002

   Cash and cash equivalents in
   subsidiary acquired                             (10,625)
                                                 ---------
                                                    20,377
                                                 ---------

   The fair value adjustment is £16,789,000 on acquisition. 50 per cent
   (£8,394,000) has been recognised in the revaluation reserve.

   There were no acquisitions in the year ended 31 December 2006.


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