Information  X 
Enter a valid email address

Renewable Energy (REH)

  Print   

Monday 30 April, 2012

Renewable Energy

Preliminary Results

RNS Number : 2847C
Renewable Energy Holdings plc
30 April 2012
 



30 April 2012

 

Renewable Energy Holdings plc

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

 

Preliminary unaudited results for the year ended 31 December 2011

 

Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor in, and operator of, European wind power, is pleased to announce its preliminary results for the year ended 31 December 2011.

 

Highlights

 

·    Subsequent to the year end, the Board of Directors has reached the decision that it would be in the best interests of shareholders to dispose of all of the Company's assets and return the net proceeds to them by way of a cash distribution, or such other return of capital that is deemed most efficient at the time, having taken necessary advice.

·    Management has conducted a rigorous review of REH's assets, in order to determine the most appropriate sale process to adopt, in each case to maximise shareholder value in the shortest possible time.

Poland - created an electronic data room which contains all pertinent documentation evidencing the efficacy of REH's fully permitted 30MW wind project. 

Wales - planning application for an 81MW wind project has been completed and it is REH's intention that it will be submitted to the planning authorities during the second or third quarter of 2012.  Subject to the granting of the permits, this is a first class project of significant size and value, and during the planning review period, it will be pre-marketed to qualified buyers.

Carnegie Wave Energy - REH will seek a strategic investor to take all of REH's shareholding in Carnegie Wave Energy (25.8% as at 31 December 2011) and will work closely with the management in Carnegie in doing so.

·    Cost controls continued to be in place throughout 2011, with £1m savings on an annualised basis.

 

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

"With the continued difficult capital environment setting the context for the business, the Board explored every avenue for achieving value for its shareholders and it is my view, that the realisable value of the Company's assets significantly exceeds its current market capitalisation. Accordingly, a return of those funds to shareholders after an orderly sell down of assets is the best course of action in light of the current market conditions."

 

 

For further information please contact:

 

Renewable Energy Holdings plc

Mike Proffitt, Chief Executive  / Alex Bush, Finance Director

 

Tel: +44 (0)16 2464 1199

Strand Hanson Limited

Rory Murphy / James Spinney

 

Tel: +44 (0)20 7409 3494

FTI Consulting

Billy Clegg / Ed Westropp / Alex Beagley

Tel: +44 (0)20 7831 3113

 

 



 

 

Renewable Energy Holdings plc

 

Chairman's statement

for the year ended 31 December 2011

 

 

 

During 2011 we have seen little or no easing in the capital markets and have been unable, therefore, to proceed with new developments.   We see no realistic prospect of an early change in the situation.

 

Whilst we have used this time, in Poland to better understand the local renewable energy market, and in Wales to keep up with the changing landscape of UK/Wales planning regulations, in 2012 your Board of Directors has decided to conduct an orderly sell down of the Company's assets and a return of cash to shareholders, subject, inter alia, to obtaining professional advice from our financial, legal and tax advisers and taking account of  the view of shareholders and obtaining shareholder approval as required.

 

Accordingly, the Company is preparing to realise best value from the disposal of its principal assets and to operate during this period on a least cost basis. The Chief Executive will report periodically on details of this process, which we expect to complete in 2013.

 

 

 

 

 

Sir John Baker

Chairman



 

 

 

Renewable Energy Holdings plc

 

Chief Executive Officer's report

for the year ended 31 December 2011

 

 

As set out in the Chairman's Statement, the Board has reached a decision subsequent to the year end that it would be in shareholders best interests to dispose of all the Company's assets and return to them the net proceeds by way of a cash distribution, or such other return of capital that is deemed most efficient at the time, having taken necessary advice.

 

As CEO, I have prepared the Company to execute this strategy with the minimum of overhead costs.  Staff numbers have been reduced to an absolute minimum, with a corresponding reduction in head office rental and other operating costs.

 

In preparation for this strategic decision, we have conducted a rigorous review of our assets, in order to determine the most appropriate sale process to adopt in each case in order to maximise shareholder value in the shortest time.

 

In Poland, we have created an electronic data room which contains all pertinent documentation evidencing the efficacy of our fully permitted 30MW wind project.  Interested parties will be invited to purchase Gamar GHL, the development Company, a wholly owned subsidiary of the Company.

 

In Wales, the planning application for an 81MW wind project has been completed and it is our intention that it will be submitted to the planning authorities during the second or third quarter of 2012.  Subject to the granting of the permits, this is a first class project of significant size and value, and during the planning review period, it will be pre-marketed to qualified buyers.

 

We will seek a strategic investor to take all of our holding in Carnegie Wave Energy ("Carnegie") and we will work closely with the management in Carnegie in doing so.

 

The Board continues to have confidence in the CETO Wave Energy Technology and the potential value it can return to the Company's shareholders. Whilst we do not believe that the current Carnegie share price reflects the true value of the technology, in order to comply with International Financial Reporting Standards as adopted by the European Union, the Company has impaired the Balance Sheet carrying value of its investment to the market price on the 31 December 2011. This impairment has resulted in a non-cash expense of £12.1m recognised in the Consolidated Income Statement.

 

The Company is pleased to have maintained its commitment to reducing running costs, having reduced the administrative expense of the Head Office by approximately £1m in 2011 on an annualised basis.    

 

Finally, it is my view, that the realisable value of the Company's assets significantly exceeds the current market capitalisation of the Company and a return of those funds to shareholders is the best course of action in light of the current market conditions.

 

 

 

 

 

 

 

Michael J Proffitt

Chief Executive Officer



 

Renewable Energy Holdings plc

 

Consolidated income statement

for the year ended 31 December 2011

 

 



2011

2010


Note

£

£



('000s)

('000s)

Revenue


-

-





Cost of sales


(139)

(142)





Gross profit/(loss)


(139)

(142)





Other operating income


49

90

Development expenditure


(156)

(99)

Administrative expenses


(1,595)

(2,565)





Profit/(loss) from operations


(1,841)

(2,716)





Share of losses in associate


(1,772)

(1,144)

Impairment of associate

3

(12,148)

-

Finance income


47

14

Finance costs


      (301)

  (359)





Profit/(loss) before income tax


(16,015)

(4,205)





Income tax credit/(expense)


             -

      640





Profit/(loss) for the year from continuing operations

5

(16,015)

(3,565)





Discontinued operations








Profit/(loss) for the year from discontinued operations


             -

(2,664)





Profit/(loss) for the year

2

(16,015)

(6,229)





 

Profit/(loss) attributable to:

Owners of the parent

Non-controlling interests

 

 

 

 

 

 

4

 

 

(16,015)

             -

(16,015)

 

 

 

(6,229)

          -

(6,229)

Earnings/(loss) per share attributable to the equity holders of the parent during the year:








Basic and diluted




From continuing operations


(23.01)p

(5.12)p

From discontinued operations


             - (23.01)p

(3.83)p

(8.95)p

 

 

 

 

 


Renewable Energy Holdings plc

 

Consolidated statement of comprehensive income

 for the year ended 31 December 2011

 

 



2011

2010



£

£



('000s)

('000s)





Profit/(loss) for the year


(16,015)

(6,229)





Other comprehensive income/(expense)




Exchange differences on


(207)

(794)

translating foreign operations








Exchange losses transferred from foreign exchange reserve on discontinued operations


             -

(2,490)





Total comprehensive income/(expense) for the year


(16,222)

(9,513)

 

Attributable to:

Owners of the parent

Non-controlling interests

 

 

 

 

 

4

 

 

(16,222)

             -

(16,222)

 

 

(9,513)

           -

(9,513)

Total comprehensive income/(expense) attributable to owners of the parent arises from:

Continuing operations

Discontinued operations


 

 

(16,222)

             -

 (16,222)

 

 

(4,359)

(5,154)

(9,513)

 

 


Renewable Energy Holdings plc

 

Consolidated statement of changes in equity

for the year ended 31 December 2011

 

 


Attributable to owners of the parent









Share capital

Share premium reserve

Foreign exchange reserve

Share based payment reserve

Merger reserve

Retained earnings

 

 

 

Total

Non-controlling interest

Total equity


£

£

£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)











Balance at 1 January 2011

696

26,740

(209)

1,107

4,410

(5,080)

 

27,664

 

-

27,664











Comprehensive income/(expense)










Profit/(loss) for the year

-

-

-

-

-

(16,015)

(16,015)

-

(16,015)

Other comprehensive income/(expense):










Exchange difference on translating foreign operations

       -

        -

(207)

        -

        -

            -

(207)

            -

     (207)











Total comprehensive income/(expense)

       -

        -

(207)

        -

        -

(16,015)

(16,222)

            -

(16,222)











Transactions with owners










Share based payment charge

-

-

-

27

-

-

 

27

 

-

27

 

Non-controlling interests

Acquisition of subsidiary

 

 

 

 

 

-

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(532)

 

 

 

 

(532)

Balance at 31 December 2011

696

26,740

(416)

1,134

4,410

(21,095)

 

11,469

 

(532)

10,937

 

 


Renewable Energy Holdings plc

 

Consolidated statement of changes in equity   

for the year ended 31 December 2010

 


Attributable to owners of the parent




Share capital

Share premium reserve

Foreign exchange reserve

Share based payment reserve

Merger reserve

Retained earnings

Total equity


£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)









Balance at 1 January 2010

    696

26,740

3,075

1,079

4,410

1,149

37,149

















Comprehensive income(/expense)








Profit/(loss) for the year

-

-

-

-

-

(6,229)

(6,229)

Other comprehensive income/(expense):








Exchange difference on translating foreign operations

-

-

(794)

-

-

-

(794)

Exchange gains/(losses) transferred from foreign exchange reserve on discontinued operations

         -

         -

(2,490)

         -

         -

          -

(2,490)









Total comprehensive income/(expense)

         -

         -

(3,284)

         -

         -

(6,229)

(9,513)









Transactions with owners








Share based payment charge

-

-

-

28

-

-

28









Balance at 31 December 2010

    696

26,740

    (209)

1,107

4,410

(5,080)

27,664

 

 

 

  

Renewable Energy Holdings plc

 

Consolidated balance sheet at 31 December 2011

 

 

 



2011

2010


Note

£

£



(000s)

(000s)

Non-current assets




Property, plant & equipment


2,386

1,938

Intangible assets


1,565

1,565

Investment in associate


  8,578

22,498

Total non-current assets


12,529

26,001





Current assets




Cash and cash equivalents


746

3,604

Trade and other receivables


1,280

1,185

Total current assets


2,026

4,789





Total assets


14,555

30,790





Current liabilities




Trade and other payables


618

626

Borrowings


2,500

2,500

Total current liabilities


3,118

3,126





Non-current liabilities




Borrowings

4

   500

        -

Total non-current liabilities


   500

       -

 

Total liabilities


 

3,618

 

3,126





NET ASSETS

2

10,937

27,664





Capital and reserves attributable to equity holders of the parent




Share capital


696

696

Share premium reserve


26,740

26,740

Foreign exchange reserve


(416)

(209)

Share based payment reserve


1,134

1,107

Merger reserve


4,410

4,410

Retained earnings


(21,095)

(5,080)



  11,469

 27,664

 

Non-controlling interests

 

4

 

     (532)

 

           -





TOTAL EQUITY


  10,937

 27,664





 



 

 

 

Renewable Energy Holdings plc

 

Consolidated cash flow statement

for the year ended 31 December 2011

 

 

 


2011

2010


£

£


(000s)

(000s)

Operating activities



Loss after tax including discontinued operations

(16,015)

(6,229)

Adjustments for :



Depreciation

17

3,107

Amortisation

-

16

Foreign exchange gain/(loss)

(25)

(306)

Finance income

(47)

(14)

Finance expense

301

912

Share of loss in associate

1,772

1,144

Impairment of associate

12,148

-

Equity settled share based payment

27

28

Income tax credit

          -

(640)




Cash flows from operating activities before changes in working capital

(1,822)

(1,982)

Decrease/(increase) in trade and other receivables

35

71

Increase/(decrease) in trade and other payables

   (117)

(1,392)




Cash generated from (used in) operations

(1,904)

(3,303)




Income taxes paid

           -

         -




Cash flows from operating activities

(1,904)

(3,303)




Investing activities



Acquisition of property, plant & equipment

(572)

(284)

Proceeds from the sale of subsidiaries

-

33,168

Interest received

        3

         1




Cash flows from investing activities

 (569)

32,885




Financing activities



Repayment of borrowings

35

(27,551)

Finance costs paid

(272)

     (766)




Cash flows from financing activities

(237)

(28,317)




Increase/(decrease) in cash and cash equivalents

(2,710)

1,265




Cash and cash equivalents at 1 January

3,604

2,375




Exchange losses on cash and cash equivalents

 (148)

(36)




Cash and cash equivalents at 31 December

   746

3,604

 

 

 

 

 


 

 

 

Renewable Energy Holdings plc

Notes forming part of the unaudited preliminary results for the year ended 31 December 2011

 

 

1   Basis of preparation

This unaudited consolidated preliminary financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs).

 

The principal accounting policies used in preparing the preliminary results are those the Group expects to apply in its audited financial statements for the year ended 31 December 2011 and are unchanged from those disclosed in the Group's Report and Financial Statements for the year ended 31 December 2010. Except for the following:

·      The results have been stated in £000s.

·      During 2011, the Group changed the presentation of its segmental information based on changes to operations.  Capitalised costs relating to the Sweetlamb and Kobylany wind farms which were previously considered part of the assets of the Head Office Isle of Man segment have been reclassified into the relevant segments.

The unaudited financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the year ended 31 December 2011. The financial information for the year ended 31 December 2010 is derived from the statutory accounts for that year which have been delivered to the Companies Registry.  The Group's auditor, PricewaterhouseCoopers LLC, reported on those accounts; their report was unqualified and did not contain a statement under section 15 (4) or 15 (6) of the Isle of Man Companies Act 1982.  The statutory accounts for the year ended 31 December 2011 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting.

 

In assessing the going concern basis of preparation of the financial information for the year ended 31 December 2011, the Directors have taken into account the status of current negotiations on the sale of assets. Forecasts and projections through to December 2013 have been prepared, taking into account the economic environment and its challenges. The Directors consider that the Group has sufficient facilities for its ongoing operations and therefore have continued to adopt the going concern basis in preparing the 2011 financial results.



 

2                Segment information

 

The Group had four main reportable segments during the year ended 31 December 2011 and six during the year ended 31 December 2010. The four segments at 31 December 2011 were:

·      Head office - this segment represents the operation of the Group's head office facility in the Isle of Man.

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

·      Polish wind farms - this segment represents the wind farm under construction at Kobylany.

·      Welsh wind farms - this segment represents the wind farm development project at Sweetlamb.

 

Year ended 31 December 2011


CETO





Head office

development

Wind farms

Wind farms



Isle of Man

Australia

Poland

Wales

Total


£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)







Total revenue

360

-

-

-

360

Inter-segmental revenue

(360)

           -

           -

          -

  (360)

Revenue from external customers

-

-

-

-

-







Cost of sales*

-

-

(139)

-

(139)

Administration expenses

(1,375)

(141)

(79)

-

(1,595)

Development expenditure

(56)

-

(100)

-

(156)

Finance income

47

-

-

-

47

Finance costs

(301)

-

-

-

(301)

Other income

49

-

-

-

49

Share of losses in associate

          -

 (1,772)

         -

        -

(1,772)

Impairment of associate

          -

(12,148)

         -

        -

(12,148)







Segment profit/(loss) before tax

(1,636)

(14,061)

  (318)

        -

(16,015)







Additions to non-current assets

         4

            -

      63

   499

        566







Investment in wind farms

-

-

3,117

1,561

4,678

Other assets

1,211

8,605

     49

     12

  9,877

Reportable segment assets

1,211

8,605

3,166

1,573

14,555







Reportable segment liabilities

(2,996)

   (12)

   (49)

(561)

(3,618)

 

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


Year ended 31 December 2010










CETO







Head office

development

Windfarms

Windfarms

Windfarms

Landfill gas



Isle of Man

Australia

Germany

Poland

Wales

Wales

Total




(Discontinued)



(Discontinued)



£

£

£

£

£

£

£


(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

(000s)

Total revenue

 

540

-

-

-

-

-

540

Inter-segmental revenue

   (540)

         -

         -

         -

         -

         -

(540)

Revenue from external customers

-

-

-

-

-

-

-









Cost of sales*

-

-

-

(142)

-

-

(142)

Administration expenses

(2,315)

(208)

-

(42)

-

-

(2,565)

Development expenses

-

-

-

(70)

(29)

-

(99)

Finance income

14

-

-

-

-

-

14

Finance costs

(359)

-

-

-

-

-

(359)

Other income

90

-

-

-

-

-

90

Profit/(loss) from discontinued operations

          -

          -

(2,942)

        -

        -

     278

(2,664)

Share of losses in associate

          -

(1,144)

          -

        -

        -

          -

(1,144)









Segment loss before tax

(2,570)

(1,352)

(2,942)

 (254)

   (29)

     278

(6,869)









Additions to non-current assets

       81

          -

          -

   140

        -

          -

      221









Investment in windfarms

-

-

-

3,160

1,060


4,220

Other assets

  4,010

22,503

         -

     57

        -

          -

26,570

Reportable segment assets

  4,010

22,502

         -

3,217

1,060

          -

30,790

Reportable segment liabilities

(3,045)

    (56)

         -

   (25)

        -

          -

(3,126)

2      Segment information(continued)

 

 

 

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

 

3        Impairment of investment in associate

 

Carnegie Wave Energy Limited

At 31 December 2011 the Group owns 232,600,000 shares, which represented a 25.8% stake in Carnegie Wave Energy Limited, ("CWE"). The Group's investment in CWE meets the definition of an associate and is accounted for using the equity method.  Despite the Board's confidence in CWE's CETO technology, the fact that CWE's market value has declined significantly over a prolonged period has been considered by the Board to be an indicator that its investment in CWE is impaired in accordance with IAS 36 "Impairment of assets".

 

In accordance with IAS 36, the Group's investment in associate has been impaired to £8,578,000, the fair value of the shares at 31 December 2011. The impairment expense of £12,148,000 has been recognised in the Consolidated Income Statement as "Impairment of associate".

4        Mynydd Y Gwynt

 

Acquisition of Mynydd Y Gwynt

During the year the Group paid £2,000 for 2,000 "A" preference shares of Mynydd Y Gwynt Limited and as a result achieved control. Mynydd Y Gwynt Limited has the right to the land leases at the proposed Sweetlamb wind farm and is responsible for the related planning application. A consideration of £225,000 per MW is payable, to the original shareholders of Mynydd Y Gwynt, contingent on planning consent. Mynydd Y Gwynt has a further 1,000 ordinary shares in issue owned by the founders of the company. Under the terms of the existing agreement, these shares will be acquired by the Group on payment of the consideration.

    

     As a result of achieving control, Mynydd Y Gwynt Limited has been consolidated using the acquisition method. The company's assets and liabilities have been recognised in the Group's Consolidated Balance Sheet at fair value and the performance of the company from the date of acquisition in the Group's Consolidated Income Statement. The non controlling interest in Mynydd Y Gwynt has been recognised at the fair value of the non controlling interests proportionate share of identifiable net assets.

 

    

 

4        Mynydd Y Gwynt (continued)

     The Group has a controlling interest in Mynydd Y Gwynt Limited due to owning over 50% of the

     voting rights and having significant influence over the entity. However, the Group's "A" preference shares are not classified as equity, therefore, the Non-controlling interest represents 100% of Mynydd Y Gwynt.

 

Mynydd Y Gwynt shareholder loan

Prior to the Group gaining control over Mynydd Y Gwynt, Mynydd Y Gwynt's working capital requirements of up to £500,000 were funded by Howard Evans, an original shareholder. This amount is repayable and contingent on receiving planning consent for the Mynydd Y Gwynt wind farm (and will be settled from the consideration paid to the original shareholders).  The board expects this to occur in 2013 and therefore this is classified within non-current liabilities.

 

5        Events after the reporting period

Subsequent to the reporting date the Board has reached a decision that it would be in shareholders best interests to dispose of all the Company's assets and return to them the net proceeds by way of a cash distribution, or such other return of capital.  The Company has initiated discussions regarding the sale of its interests in the Welsh and Polish wind farm projects, which may or may not lead to a disposal.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR EDLFLLZFEBBE

a d v e r t i s e m e n t