TIDMAMPH
RNS Number : 4788A
Aggregated Micro Power Holdings PLC
29 September 2015
29 September 2015
Aggregated Micro Power Holdings plc
("AMP" or the "Group")
Interim Results
Aggregated Micro Power Holdings plc, (AIM: AMPH), the renewable
energy developer focused on biomass, announces its unaudited
interim results for the six months ended 30 June 2015.
-- Group revenue increased to GBP627,275 (H1 2014: GBP146,036)
-- Biomass Boiler ESCO (energy service company) pipeline in
excess of GBP10m expected to be refinanced by AMPIL(1) generating
development fees for AMP
-- The older plant at Low Plains to be replaced with in-line
Spanner(2) systems, which will result in an impairment of GBP2.8m.
Further investment subject to project financing being completed
-- Planning conditions being discharged to enable construction
to commence at Hill Barton and Kingsnorth, subject to project
financing being completed
-- Co-developer on two 50MWe CHP developments on the Humber
awaiting next round of Contracts for Difference auction, which may
result in significant development fees for AMP
Post-period end
-- Option Arrangement with the sellers of Forest Fuels Holdings
Ltd ("Forest Fuels") to acquire 100% of Forest Fuels by 31 December
2015, on terms that have been substantially agreed, which include
the issue of 200,000 AMP Ordinary Shares, GBP3.0m in cash and
following certain performance criteria being met, a further 2.5m
new Ordinary Shares in due course. If the option is not exercised
by AMP by 31 December 2015, the sellers of Forest Fuels shall be
entitled to subscribe for in aggregate, 200,000 AMP Ordinary Shares
at nominal value
-- In negotiations for GBP37m of project finance to fund the
acquisition of Forest Fuels, the refurbishment of Low Plains and
the construction of Hill Barton and Kingsnorth. The negotiations
are subject to the outcome of the Government Spending Review in
November
The Strategic Partnership and Option to Acquire 100% of Forest
Fuels includes:
-- On-going assistance with funding wood chip drying facilities
on Forest Fuels' existing depots
-- Assistance with Forest Fuels ESCO developments which can be sold on to AMPIL
-- Future sale of dried wood chip to Forest Fuels from AMP
gasification plants at Low Plains, Hill Barton and Kingsnorth
-- Sale of wood pellet and wood chip to biomass boilers managed by AMP on behalf of AMPIL
1 AMPIL is a special purpose vehicle which is wholly owned by
Law Debenture for general charitable purposes and is funded via the
issuance of listed loan notes.
2 Spanner systems are manufactured in Germany and are widely
installed in a number of European countries with over 480 reference
sites.
Richard Burrell, Chief Executive of Aggregated Micro Power
Holdings plc, said:
"Our operating loss for the period is in line with management
expectations and reflects the expensing of overheads in advance of
future development fees being paid. Given the strength of our
biomass boiler pipeline, I am confident that significant
development fee income will be received by the Group during the
coming months.
I am delighted that AMP has secured an option to acquire 100% of
Forest Fuels, a leading and profitable biomass chip and pellet
distributor with sales representing 10% of the UK chip market. If
successful, this acquisition would help us to further develop our
pipeline of biomass boilers and provide fuel for the existing AMPIL
boiler base as well as provide an off-take for our future CHP
developments.
Our business is currently affected by the uncertainty that
exists around Government policy towards renewable subsidies and
specifically the Renewable Heat Incentive. The project financing of
our three CHP sites is subject to review until there is further
clarity as to the future of this policy in November 2015.
The recent Government support for nuclear has underpinned a
commitment to support low carbon energy generation which can
provide baseload power to the National Grid. At the same time, the
Government is behind on its targets to produce heat from renewable
sources. Biomass CHP addresses both these issues and should be a
positive stimulus within government for continued support for the
Renewable Heat Incentive and the Contracts for Difference subsidy
mechanisms, both of which remain important drivers to the creation
of shareholder value for AMP."
Enquiries
Aggregated Micro Power Holdings plc 0207 382 7800
Neil Eckert, Executive Chairman
Richard Burrell, CEO
Haggie Partners 0207 562 4444
Peter Rigby/Brian Norris
finncap Ltd
Ed Frisby/Simon Hicks (Corporate Finance) 0207 220 0500
Stephen Norcross (Corporate Broking) 0207 220 0513
Notes to Editors:
About Aggregated Micro Power Holdings plc
AMP was established to develop, own and operate renewable energy
generating facilities. AMP's strategy is to develop and operate
projects using small-scale technologies for converting biomass to
energy and to sell the energy produced in the form of electricity,
heat and wood fuel.
Regulatory Update
Renewable Obligation Certificates (ROCs)
-- Budgetary mechanism secured until March 2017
-- Low Plains, Hill Barton and Kingsnorth eligible
Renewable Heat Incentive (RHI)
-- Configuration of Low Plains refurbishment has been pre-accredited
-- Existing budget secure to March 2016
-- Future budget awaiting outcome of November 2015 Spending Review
Contracts for Difference (CFDs)
-- Second round auction expected to be confirmed by end 2015
-- CfDs anticipated to replace ROCs on all new CHP schemes from April 2017
Executive Chairman's Statement
The first six months of this year have seen the further
development of our small scale biomass boiler business and the
securing of capital to fund these projects via AMPIL. We have also
been developing our pipeline of CHP projects at Low Plains, Hill
Barton and Kingsnorth, and on raising the project finance to
complete these schemes.
Our decision to include Low Plains in the future project
financing has resulted in an impairment charge of GBP2.8m as we
will need to replace the older, less efficient plant with more
modern and reliable equipment from Germany. We are confident that
by using a single technology (Spanner in-line systems) across all
three of our sites we will be able to increase plant up-time as
well as operating performance. We will also benefit from economies
of scale in fuel ordering and preparation, staff training and spare
parts ordering.
I am delighted that the acquisition of Forest Fuels is now
firmly on our agenda. Forest Fuels has around 10% of the UK wood
fuels market and it supplies wood pellet and wood chip to an
installed boiler base of over 1,000. We have been working with
Forest Fuels to secure further ESCO opportunities for AMPIL and to
develop chip drying facilities on existing Forest Fuels depots,
both of which will earn development fees for AMP. The recent
regulations regarding fuel quality have helped to stimulate the
market for forced dried wood chip and AMP's strategy, which is
focussed on using surplus heat at its CHP plants to dry wood chip
for onward sale, will provide the Forest Fuels team with a
significant capability to sell high quality wood chip into a
growing biomass boiler market.
Our biomass boiler pipeline of ESCO opportunities is running
ahead of budget and we have recently announced securing funding of
our pipeline through the successful GBP4.8m fund raising into
AMPIL. A further GBP5m is at the final heads of terms stage and we
are confident that this will be deployed before the end of this
financial year allowing AMP to generate further development
fees.
I would like to thank our shareholders, management and staff for
their continued commitment and hard work.
Neil Eckert
Executive Chairman
29 September 2015
Independent Review Report to Aggregated Micro Power Holdings
plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2015 which comprises the condensed
consolidated statement of comprehensive income, the condensed
consolidated statement of financial position, the condensed
consolidated cash flow statement, the consolidated statement of
changes in equity and the related notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
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Our report has been prepared in accordance with the terms of our
engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2015 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
Location
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number
OC305127).
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2015
Six months Six months
ended ended
30 Jun 2015 30 Jun 2014
Unaudited Unaudited
Note GBP GBP
Continuing operations
Revenue 627,275 146,036
Cost of sales (599,698) (59,269)
Gross profit 27,577 86,767
Administrative expenses (1,914,025) (1,467,003)
Impairment loss 4 (2,792,005) -
Fair value adjustment on deferred contingent
consideration 11 - (397,114)
------------------------------------------------ ----- --------------------------- -----------------------
Total administrative expenses (4,706,030) (1,864,117)
--------------------------- -----------------------
Loss from operations (4,678,453) (1,777,350)
Finance income 17,800
Finance expense (35,943) (56,410)
--------------------------- -----------------------
Loss before tax (4,696,596) (1,833,760)
Tax credit - 54,148
--------------------------- -----------------------
Loss for the period from continuing operations (4,696,596) (1,779,612)
Loss on discontinued operations, net of tax - (4,999)
Loss and total other comprehensive loss for
the period (4,696,596) (1,784,611)
=========================== =======================
Loss per share attributable to the ordinary equity holders
of the parent
Continuing and discontinued operations basic
(pence) 7 (18.3p) (11.2p)
Continuing operations basic (pence) 7 (18.3p) (11.2p)
Condensed consolidated statement of financial position
As at 30 June 2015
30 Jun 30 Jun 31 Dec 2014
2015 2014
Unaudited Unaudited Audited
(As restated)
Note GBP GBP GBP
Non-current assets
Property, plant and equipment 4,9 2,860,551 5,935,316 5,050,491
Total non-current assets 2,860,551 5,935,316 5,050,491
--------------- ---------------------- -----------------
Current assets
Inventories 15,992 50,584 347,543
Trade and other receivables 1,548,760 681,031 1,397,249
Cash and cash equivalents 1,835,517 166,544 4,727,078
Total current assets 3,400,269 898,159 6,471,870
--------------- ---------------------- -----------------
Total assets 6,260,820 6,833,475 11,522,361
--------------- ---------------------- -----------------
Current liabilities
Trade and other payables 5 432,981 997,912 828,766
Loans and borrowings 5 6,800 569,857 173,874
Total current liabilities 439,781 1,567,769 1,002,640
--------------- ---------------------- -----------------
Non-current liabilities
Loans and borrowings 5 757,231 893,006 759,317
Deferred contingent consideration 8,11 1,873,810 1,191,342 1,873,810
Total non-current liabilities 2,631,041 2,084,348 2,633,127
--------------- ---------------------- -----------------
Total liabilities 3,070,822 3,652,117 3,635,767
--------------- ---------------------- -----------------
Net assets 3,189,998 3,181,358 7,886,594
--------------- ---------------------- -----------------
Equity attributable to equity holders of the company
Paid up share capital 6 128,473 80,973 128,473
Share premium 6 9,484,658 5,152,475 9,484,658
Merger reserve 6 6,648,126 7,103,105 6,648,126
Other reserves 6 4,546,180 - 4,546,180
Retained deficit (17,617,439) (9,155,195) (12,920,843)
--------------- ---------------------- -----------------
Total equity 3,189,998 3,181,358 7,886,594
--------------- ---------------------- -----------------
The financial statements were approved by the Directors on
29/09/15 and signed on their behalf by:
Richard Burrell, Chief Executive Officer
Interim condensed consolidated statement of changes in
equity
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As at 30 June 2015
Six month Share Share Retained Merger Other Total
ended 30 June capital premium deficit reserve reserves
2014
GBP GBP GBP GBP GBP GBP
Equity as at 1
January
2014 as
previously
stated 77,687 4,496,412 (7,484,189) 7,897,333 - 4,987,243
Prior year
adjustment
(Note 9) - - 113,605 - - 113,605
--------------- ----------------- ---------------------- ------------------ ------------------ -------------
Restated
equity as at
1 January
2014 77,687 4,496,412 (7,370,584) 7,897,333 - 5,100,848
Issue of share
capital 3,286 656,063 - - - 659,349
Total
comprehensive
loss
for the
period - - (1,784,611) - - (1,784,611)
Merger reserve - - - (794,228) - (794,228)
Equity as at
30 June 2014 80,973 5,152,475 (9,155,195) 7,103,105 - 3,181,358
=============== ================= ====================== ================== ================== =============
Issue of share
capital 47,500 4,603,885 - - 4,848,615 9,500,000
Loss for the
period - - (3,765,648) - - (3,765,648)
Share issue
cost - (271,702) - - (302,435) (574,137)
Merger reserve - - - (454,979) - (454,979)
Equity as at
31 December
2014 128,473 9,484,658 (12,920,843) 6,648,126 4,546,180 7,886,594
=============== ================= ====================== ================== ================== =============
Equity as at 1
January
2015 128,473 9,484,658 (12,920,843) 6,648,126 4,546,180 7,886,594
Total
comprehensive
loss
for the
period - - (4,696,596) - - (4,696,596)
--------------- ----------------- ---------------------- ------------------ ------------------ -------------
Equity as at
30 June 2015 128,473 9,484,658 (17,617,439) 6,648,126 4,546,180 3,189,998
=============== ================= ====================== ================== ================== =============
Share capital: Nominal value of shares issued.
Share premium: Amount subscribed for share capital in excess of the
nominal value.
Retained deficit: All other net losses and transactions with owners
(e.g. dividends) not recognised elsewhere.
Merger reserve: Created on the issue of shares on acquisition of its
subsidiary accounted for in line with the
Company's Act 2006 provisions.
Other reserve: Amount raised through the use of a cashbox structure.
Consolidated statement of cash flows
For the six months ended 30 June 2015
Six months ended Six months ended
30 Jun 2015 30 Jun 2014
(As restated)
Unaudited Unaudited
Note GBP GBP
Operating activities
Loss for the period before tax (4,696,596) (1,784,611)
Adjustments for:
Interest Income (17,800) -
Tax credit received - (54,148)
Impairment loss 2,792,005 -
Fair value adjustment on financial
liabilities
at fair value through profit
and loss - 397,114
Gain on disposal of subsidiary (6,699)
Profit on disposal of FA (1,013) -
Interest expense 32,797 56,410
Depreciation of property, plant
and equipment 125,619 30,329
(1,764,988) (1,361,605)
Movement in foreign exchange 275 18
(Increase)/decrease in inventories 331,551 (38,281)
(Increase)/decrease in trade
and other receivables (491,847) (203,958)
Increase/(decrease) in trade
and other payables (395,785) 510,377
(555,806) 268,156
------------------------------- ------------------------
Cash generated from operations (2,320,794) (1,093,449)
------------------------------- ------------------------
Income taxes (paid)/Subsidy
received 439,322 54,148
Net cash flows from operating
activities (1,881,472) (1,039,301)
------------------------------- ------------------------
Investing activities
Purchase of property, plant
and equipment (826,671) (600,827)
Proceeds from sale of subsidiary - 508,458
Bank Interest received 18,536 -
Net cash used in investing activities (808,135) (92,369)
------------------------------- ------------------------
Financing activities
Proceeds from issue of shares - 659,349
Proceeds from borrowings - 548,241
Payments of borrowings - (245,989)
Payments of interest on borrowings (198,554) (2,090)
Payments of finance lease (3,400) (3,400)
Net cash used in financing activities (201,954) 956,111
------------------------------- ------------------------
Net decrease in cash and cash
equivalents (2,891,561) (175,559)
Cash and cash equivalents at
beginning of period 4,727,078 342,103
Cash and cash equivalents at
end of period 1,835,517 166,544
=============================== ========================
Notes to condensed consolidated financial statements
For the six months ended 30 June 2015
1. Basis of preparation
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs). The accounting policies applied
by the Group in this financial information are the same as those
applied by the Group in its financial statements for the year ended
31 December 2014 and which will form the basis of the 2015
financial statements.
A number of new and amended standards have become effective for
periods beginning on 1 January 2015; however none of these is
expected to materially affect the Group.
The Group's results are currently not materially affected by
seasonal variations.
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The comparative financial information presented herein for the
year ended 31 December 2014 does not constitute full statutory
accounts for that period. The Group's annual report and accounts
for the year ended 31 December 2014 have been delivered to the
Registrar of Companies. The Group's independent auditor's report on
those statutory accounts was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
The financial information for the half-years ended 30 June 2014
and 30 June 2015 is unaudited.
2. Use of estimates and judgements
There have been no material revisions to the nature and amount
of changes in estimates of amounts reported in the annual financial
statements 2014.
3. Segmental information
The Group operates in one business and geographic segment, being
renewable energy projects in the United Kingdom only.
Notes to condensed consolidated financial statements
(continued)
For the six months ended 30 June 2015
4. Property, plant and equipment (restated, note 9)
Assets Plant & Computer Motor Total
Under Construction Machinery Equipment Cars
GBP GBP GBP GBP GBP
Cost
As at 1 January 2014
(note
9) 5,489,218 334,742 2,217 39,841 5,866,018
Additions for 2014 2,059,172 10,560 903 38,000 2,108,635
Disposals for 2014 (17,923) (594,216) - (43,174) (655,313)
Impairment (2,224,661) - - - (2,224,661)
Transfer (399,757) 396,424 - 3,333 -
As at 31 December
2014 4,906,049 147,510 3,120 38,000 5,094,679
Additions for the
period 825,161 1,510 - 826,671
Disposals for the
period - (98,987) - - (98,987)
Impairment - (2,792,005) - - (2,792,005)
Transfer (4,795,479) 4,795,479 - - -
As at 30 June 2015 935,731 2,051,997 4,630 38,000 3,030,358
-------------------- ---------------- ----------------- -------------- -------------------
Depreciation
As at 1 January 2014 - 20,557 1,500 11,384 33,441
Charge for the year
2014 - 16,935 485 11,931 29,351
Disposal for the
period - (2,257) - (16,347) (18,604)
As at 31 December
2014 - 35,235 1,985 6,968 44,188
Charge for the period - 121,443 377 3,799 125,619
Disposals for the - - - - -
period
As at 30 June 2015 - 156,678 2,362 10,767 169,807
-------------------- ---------------- ----------------- -------------- -------------------
Net book value
As at 1 January 2014 5,489,218 314,185 717 28,457 5,832,577
==================== ================ ================= ============== ===================
As at 31 December
2014 4,906,049 112,275 1,135 31,032 5,050,491
==================== ================ ================= ============== ===================
As at 30 June 2015 935,731 1,895,319 2,268 27,233 2,860,551
==================== ================ ================= ============== ===================
Impairment of Low Plains
The revised carrying value of Low Plains is based on the
differential in value between the expected refurbished value of the
plant using new Spanner in line systems and the expected cost of
the refurbishment. The refurbished value is calculated at
GBP7,525,345 based on a 10% discount rate of expected future
earnings and the cost of the refurbishment is estimated at
GBP5,004,225, resulting in a revised carrying value of
GBP2,521,120. The implied impairment is GBP2,792,005 being the
difference between the current net book value (GBP5,313,125) and
the revised carrying value (GBP2,521,120).
Low Plains has been depreciated on a straight line basis since
January 2015 over an assumed useful economic life of 20 years in
line with the duration of the RHI subsidy. Low Plains received RHI
accreditation on the 28 January 2015.
Notes to condensed consolidated financial statements
(continued)
For the six months ended 30 June 2015
5. Financial instruments
Financial liabilities Financial liabilities
measured at amortised at fair value through
costs profit and loss
Jun 2015 Dec 2014 Jun 2015 Dec 2014
GBP GBP GBP GBP
Current financial liabilities
Trade payables 257,692 546,630 - -
Other payables 175,289 217,511 - -
Interest payable - 165,758 - -
Obligations under finance
lease 6,800 8,116 - -
----------- ----------- ----------- -----------
439,781 938,015
=========== =========== =========== ===========
Jun 2015 Dec 2014 Jun 2015 Dec 2014
GBP GBP GBP GBP
Non-current financial liabilities
Deferred contingent consideration - - 1,873,810 1,873,810
Obligations under finance
lease 17,000 19,086 - -
Loans 740,231 740,231 - -
----------- ----------- ----------- -----------
757,231 759,317 1,873,810 1,873,810
=========== =========== =========== ===========
6. Share capital
No of shares Issued capital
Nos. GBP
Ordinary shares of GBP0.005 each
As at 30 June 2014 16,194,502 80,973
As at 31 December 2014 25,694,502 128,473
As at 30 June 2015 25,694,502 128,473
-------------------- -----------------
Notes to condensed consolidated financial statements
(continued)
For the six months ended 30 June 2015
7. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year:
Six months Six months
ended ended
30 Jun 2015 30 Jun 2014
Unaudited Unaudited
GBP GBP
Loss attributable to equity holders of
the Company (4,696,596) (1,784,611)
Weighted average number of shares 25,694,502 15,906,055
Continuing and discontinued operations
basic (pence) (18.3p) (11.2p)
Continuing operations basic (pence) (18.3p) (11.2p)
8. Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions.
The Directors and senior management of the Company and the
subsidiaries within the Group who meet the definition of "Key
Management personnel" under IAS 24 are considered to be related
parties.
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