TIDMREAC
RNS Number : 6769S
React Energy PLC
23 December 2016
23 December 2016
REACT Energy plc
("REACT" or the "Company")
Final Results and Notice of AGM
REACT, the renewable energy developer and operator focusing on
the production of clean energy in the UK and Ireland, today
announces its audited final results for the year ended 30 June
2016.
The Annual Report is available for viewing on the Company's
website www.reactenergyplc.com.
REACT also announces that the Annual General Meeting of the
Company will be held at the Cork International Airport Hotel, Cork,
on 31 January, 2017 at 11.00 a.m.
The Notice of the AGM is being posted to shareholders today and
copies are available on the Company's website
www.reactenergyplc.com.
For further information:
+353 (0) 21
REACT Energy plc 2409 056
Gerry Madden / Brendan Halpin
Strand Hanson Limited - Nomad +44 (0) 20
& Broker 7409 3494
James Harris / Richard Tulloch
/ Ritchie Balmer
About REACT:
REACT Energy plc is committed to operating clean electricity and
heat generation plants in the UK and Ireland. The Company seeks to
identify, build, own and operate renewable projects and possesses
significant knowledge of energy markets, clean technologies, fuel
sources, project development, project finance and project delivery.
REACT currently has four operational clean energy plants generating
revenue from the sale of electricity and heat. The generation of
clean electricity and heat from sustainable sources has the
potential to address the key energy challenges of energy security
and carbon commitment and provide strong returns on capital
employed.
The Company is quoted on AIM and trades as REAC. Further
information on the Company can be found at
www.reactenergyplc.com.
REACT Energy plc
Chairman and Chief Executive's Report
The Company presents the 2016 Annual Report, which gives an
update on the activities of the Company over the 2016 financial
period as well as updating on recent activities, including, as
announced on 12 December 2016, an increase in amount and extension
of an existing loan facility with EBIOSS to cover working capital
requirements of the Company.
EBIOSS is an industrial engineering group and is involved in the
engineering, construction, project development and operation of
waste-to-synthesis gas plants. It operates at an international
level and owns a state of the art technology and differential
positioning in designing and construction of waste gasification
power plants with power capacity from 500 kilowatts ("kWs") to 10
megawatts ("MWs"). EBIOSS has developed its own technology, the
EQTEC Gasifier Technology (EGT) by which different types of waste
are transformed into synthesis gas. This leading technology on
waste gasification has made possible the design construction and/or
operation of waste gasification plants in Spain, France, Germany,
India, Italy and Bulgaria among other countries, for third party
international energy groups and for use by EBIOSS itself. EBIOSS is
quoted on Mercado Alternativo Bursátil ("MAB"), the alternative
market of the Spanish Stock Exchanges.
Whilst the Company continues to execute on its strategy, general
market conditions continue to impact investment sentiment. As a
result of this ongoing uncertainty, and to ensure that the Company
continues to have in place the necessary resources to meet this
dynamic business environment, the Board continuously reviews the
Company's strategy, cost base and financing structures to ensure it
is well positioned and appropriately capitalised to take advantage
of opportunities that present in the sector in which it
operates.
During the financial year in question the Company also:
-- Exited the Examinership process in July 2015
-- Recommenced trading of the Company's shares on AIM
-- Secured a EUR750,000 loan facility in January from EBIOSS
which the Company has now fully utilised.
-- Secured GBP1m in funding by way of a Secured Loan facility
with EcoFinance (GLI) Limited which included a refinancing of a
number of existing debt facilities with Altair Group Investment
Limited.
-- Entered into an agreement in December with EBIOSS to purchase
its EGT technology with a power output of 4MW, which NBL will use
in the repowering of the Newry Biomass gasification project
-- The gasification equipment purchased from EBIOSS cost
EUR4.963 million (subsequently increased to EUR5.150 million and
will form part of an Engineer, Procure and Construct ("EPC")
contract to be signed between NBL and EQTEC Iberia ("EQTEC"), a
subsidiary of EBIOSS, in respect of the Newry Project. REACT has
granted EQTEC exclusivity to provide gasification technology as
part of EPC contracts for its biomass gasification project pipeline
in the UK
-- NBL applied and received confirmation from The Office of Gas
and Electricity Markets ("Ofgem") that they have been granted an
extension to 31 March 2018 for the Renewables Obligation ("RO")
registration of the Newry Project
-- Gained planning approval for the construction and operation
of an energy recovery facility using EGT at Clay Cross in
Derbyshire by Clay Cross Biomass Limited a company in which REACT
has a 90% interest, subject to finalising a Section 106 agreement
pursuant to the conditions set out in the report by the planning
authorities
-- Continued to operate its wind turbine at Pluckanes and three biomass heat projects in the UK
Post period end:
-- In October 2016, signed conditional heads of agreement with
several parties to potentially fund, through a combination of
equity and debt, the circa GBP11.2 million repowering of the NBL
4MW biomass gasification project using EGT
-- It was announced on 12 December 2016 that the terms of the
working capital facility with EBIOSS had been amended by agreement
between that parties such that the amount of the facility was
increased by EUR600,000 to EUR1,350,000 and the repayment date of
the increased facility was extended to 7 January 2018. The
increased facility is to cover the working capital requirements of
the Company.
REACT Energy plc
Chairman and Chief Executive's Report - continued
Current Trading and Prospects
The Company is a clean energy project developer and operator.
The Company seeks to take projects from "Greenfield" (greenfield
land) stage to "Shovel Ready" stage (projects where planning and
development is advanced enough that, given sufficient funding,
construction can begin within a very short time frame) with turnkey
construction contracts and financial packages in place. Debt and
equity partners are then sought to fund the construction phase in
return for a share of the project equity.
The Company develops and builds projects currently using wood
and waste wood as the sustainable fuel source. The core focus has
been on converting biomass or wood into clean electricity and heat.
This was based primarily on the technology available to convert the
fuel into power and the level of government subsidies available
specifically for biomass fuel and the relevant conversion
technology.
In reporting its interim results for the six months to 31
December 2015, the Company stated that the political and regulatory
environment within the UK continued to be challenging, with a lack
of direction and continued changes to the long-term support
mechanisms available for renewable energy projects developed under
the Electricity Market Review (EMR), with the introduction of
Contracts for Difference (CfD) in place of the Renewables
Obligation (RO) regime. As part of its ongoing cooperation and
collaboration with EBIOSS Energy, the Company has reviewed its
strategy for developing and operating clean energy power plants in
the UK.
Overview of the UK Renewable Energy Market
The UK developed its renewable energy sector based on the
Renewables Obligation (RO), a quota scheme that led to the only
publicly subsidised electricity investments in the UK after the
1989 privatisation era. In 2010, the UK government also introduced
the Feed in Tariff (FIT) scheme for supporting small scale
low-carbon installations up to a maximum capacity of 5MW.
Post 2014, the UK's electricity sector is governed by the
Electricity Market Reform (EMR). Based on the EMR, all electricity
investments are publicly subsidised with the fossil-fuel sectors
receiving subsidies by way of the capacity market and the renewable
energy sector by way of the Contracts for Difference (CfDs) scheme.
Having announced the closing of the RO Scheme, the last projects
under the RO Scheme, which needed confirmation of a "grace period"
from Ofgem, must be completed before 31 March 2018. The UK
Government published, in November 2016, a draft of the Budget
Notice ahead of the CfD allocation round opening in April 2017.
This set an overall budget for total support payments for projects
delivered in the two years from the middle of 2021 to 2023 and also
set out strike prices for the various less well established
technologies including advance conversion technologies, such as
advanced gasification.
Overview of the UK Energy from Waste Market
The UK has, over the past ten years, seen a transformation in
its management of household waste. This has been most marked within
local authorities as they make the transition from landfill to
recycling / composting and energy recovery. The waste market is now
moving towards what is termed 'merchant' projects. These are
projects which utilise private, specialist fuel supply such as
refuse derived fuel (RDF), municipal solid waste (MSW), commercial
and industrial waste and waste wood. RDF or solid recovered fuel /
specified recovered fuel (SRF) is a fuel produced by shredding and
dehydrating municipal solid waste (MSW) with a waste converter
technology. In addition, these merchant projects tend to utilise
new advanced conversion technologies and include specialist sub
sectors, like advanced gasification.
REACT Energy plc
Chairman and Chief Executive's Report - continued
Gasification is a process that converts organic or fossil based
carbonaceous materials at elevated temperatures with controlled
amounts of oxygen into carbon monoxide, hydrogen, carbon dioxide
and methane. It is a well-known technology, and its advanced use
with mixed waste feedstock is continually evolving. By its nature
"energy from waste" bridges two sectors both of which are evolving.
It has its roots firmly in waste management but is becoming of
increasing importance to energy generation.
Waste management is changing to be much less about how society
get rid of things it no longer wants and more about managing
discarded resources back into the economy. Likewise, energy
generation is evolving to make best use of renewables, novel fuels
and different energy outputs always with an eye to energy security.
The need to meet 2020 landfill diversion targets for biodegradable
waste has been a major driver for waste policy and infrastructure
development in the UK over the last ten years. The landfill tax is
a key instrument to meeting the target along with other policies
and initiatives. There are wider societal and environmental
benefits associated with energy generation and use that will drive
energy policy and impact on energy from waste. Energy from waste in
particular has the potential to deliver low carbon energy in a
cost-effective way and as a non-intermittent source helps provide
energy security.
The term 'energy from waste' (commonly abbreviated to EfW)
covers a range of different processes and technologies and
describes a number of treatment processes and technologies used to
generate a usable form of energy and which also reduce the solid
volume of residual waste. This energy can be in the form of
electricity, heating and/or cooling or a combination of these
forms. Conversion treatments are processes which convert residual
waste or RDF/SRF into a more useable form of energy such as heat or
electricity. These processes include gasification such as the
EGT.
By choosing the right location, the right technology and the
right processing, energy from waste can help to deliver much needed
long-term affordable, low carbon and secure energy.
The EGT can operate economically over a wider range of scales
and is therefore potentially more flexible and has the potential to
generate much greater efficiencies through a range of outputs.
The UK faces a potential energy gap, with the margin of supply
over demand expected to diminish to very-thin levels from 2015
onwards. The scheduled closure of old nuclear facilities has not
been matched by the construction of replacement new-build nuclear
sites and/or other power station facilities.
Local Authority managed waste going for combustion with energy
recovery rose 13% to 5.5 million tonnes in 2012/13 and has more
than doubled in the last ten years. A 2010 survey found only 2% of
commercial and industrial waste was combusted with energy recovery
in England. In 2012, 24 Energy from Waste plants operating in
England were treating almost 4 million tonnes of residual MSW and
SRF. In 2010, the combustion of the biodegradable component of MSW
provided 6.2% of the UK's total renewable electricity generation
and 4.7% of total combined renewable heat and electricity
generation. Waste derived renewable electricity from thermal
combustion in England is forecast to grow from the current 1.2
terrawatt hours ("TWh") to between 3.1TWh and 3.6TWh by 2020.
REACT and EBIOSS Energy have entered into mutually beneficial
business arrangements over the last year with the objective of
working closer together to avail of opportunities initially in the
UK EfW market.
REACT Energy plc
Chairman and Chief Executive's Report - continued
Current project portfolio
Newry
As noted above, NBL entered into an agreement with EBIOSS Energy
to purchase its EGT, with a power output of 4MW, which NBL will use
in the repowering of the Newry biomass plant. The equipment has
been delivered and is currently on site in Newry.
Once financial close on the repowering of the Newry biomass
plant is achieved, the Company expects that the plant will be able
to again export electricity to the grid within 15 months (i.e. pre
31 March 2018).
NBL applied and received confirmation from Ofgem that they have
granted an extension to 31 March 2018 for the RO registration of
the Newry biomass plant, at which point the plant will need to have
been repowered and commissioned, which the Company intends it will
have been.
The Company announced on 11 October 2016 that it has signed
conditional heads of agreement with several parties to potentially
fund, through a combination of equity and debt, the repowering of
the plant. The heads of agreement envisage a total investment of up
to GBP11.2 million to be made both directly, and indirectly through
REACT, into NBL.
The terms of the heads of agreement between the parties are
legally binding, however, are subject to the completion of, inter
alia, legal, financial and technical due diligence, which has
commenced and is expected to be completed shortly. The terms
therefore may change from that set out in the heads of agreement.
There can be no guarantee that definitive agreements will be
concluded on the terms currently envisaged or at all, or on the
timetable envisaged.
If it was not possible to reach agreement with the parties, the
Company, in partnership with EBIOSS Energy and its subsidiary
EQTEC, using their combined resources, would commission the project
to a basic level to ensure that the ROCs are registered for the
plant by 31 March 2018. In this scenario, the plant having been
commissioned to basic standards, would be refinanced with third
party funders and completed in full.
Enfield, London
The Enfield Biomass project is a 12MW biomass gasification
project located in Enfield, London. The project has secured full
planning and permitting approval and is ready to construct. The
Company obtained an updated planning permission for converting
60,000 tonnes per annum of Grade C wood waste in January 2014. An
environmental permit was received April 2012.
As part of the Examinership process, the Company ceased to
pursue the legal action, which was announced on the 3 June 2015, in
relation to the Enfield Biomass Limited property lease agreement
and has agreed to the revocation of the existing lease on that
site. The site has currently been put up for sale by the existing
landlord. The Company intends to open discussions with a new owner
in relation to the future of this site and further updates will be
made as and when appropriate.
REACT Energy plc
Chairman and Chief Executive's Report - continued
Clay Cross
On 12 April 2016, the Company announced that the Regulatory
Planning Committee of Derbyshire County Council (the "Committee")
voted in favour, on 11 April 2016, to approve the construction and
operation of an energy recovery facility at Clay Cross Facility in
Derbyshire (the "Clay Cross Facility") by Clay Cross Biomass
Limited ("Clay Cross Biomass"), a company in which REACT has a 90%
interest, subject to finalising an agreement under Section 106 of
the Town and Country Planning Act 1990 pursuant to the conditions
set out in the report to the Committee.
Clay Cross Biomass anticipates utilising the EGT, the same
technology that the Company is installing at Newry Biomass, to
power the plant as part of the EPC contract for the construction of
the Clay Cross Facility. Once commissioned, the Clay Cross Facility
is expected to convert approximately 80,000 tonnes per annum of
construction and demolition (C&D) waste wood, which is
currently sent to landfill, to generate up to 12MW of electrical
energy, sufficient to provide electricity for over 18,000 homes,
and up to 14MW of thermal energy per annum.
The Company is currently in preliminary discussions to secure
finance for the construction of the Clay Cross Facility and
estimates that it will take approximately 18 months from obtaining
finance to the final commissioning of the plant. The expected cost
to develop the Clay Cross Facility is approximately GBP50
million.
Biomass Heat
The Company owns 30% of a special purpose vehicle ("SPV") set up
with Equitix ESI Finance Limited ("Equitix") and receives
development and on-going management fees from it. The SPV currently
operates three biomass heat projects in the UK.
Renewable Heat Incentive (RHI) is the primary incentive scheme
in operation for these projects. The digression in RHI tariffs for
boilers below 200kw range is impeding progress on projects within
the pipeline and represents a continuing challenge to completion of
project financing.
Wind Electricity Generation
In Ireland, the Company is currently operating a cash generating
800kW Enercon wind turbine in Pluckanes, County Cork. This plant
was financed by company equity and bank debt provided by AIB Bank
plc and has a 15-year Power Purchase Agreement with Viridian Energy
Limited.
The Company is advancing the project pipeline with the intention
to finance a number of small-scale projects together via company
equity and bank financing, thereby creating a small-scale wind
portfolio. The return on capital employed for each project will be
assessed to ensure an adequate return. The Company is also working
on creating a master supply agreement with a turbine manufacturer
arising from wind measurement and site analysis.
Future strategy
The overall business strategy of the Group is to focus on taking
advantage of the significant opportunities in the Energy from Waste
Market in the UK.
REACT Energy plc
Chairman and Chief Executive's Report - continued
Financial position
FY 2016 Financials
-- Loss of EUR1.540 million versus a profit of EUR5.319 million
in 2015 (EUR0.091 million loss related to continuing operations in
2015)
-- Loss for the year includes net foreign exchange losses of
EUR0.164 million and interest costs of EUR0.603 million
-- Loss per share of 0.015 cents versus a profit of 0.173 cents in 2015
-- At 30 June 2016, total cash and cash equivalents were
EUR0.324 million versus EUR0.211 million in 2015
Post FY 2016 Financials
-- Further drawdown of EUR175,000 on loan facility from EBIOSS
together with an increase in facility size from EUR750,00 to
EUR1,350,000 and extension of the term to 7 January 2018
Outlook
After what has been a very tough 18 months for everyone, thanks
to the major support of the Company's existing stakeholders and new
investor EBIOSS, the Company now has the potential to take
advantage of the opportunities presenting themselves in the UK
Energy from Waste market and in turn advance its pipeline of
projects throughout the UK.
The Company looks forward to updating its shareholders in the
future on further developments as the Company further builds its
position in the Energy from Waste market.
Dermot O'Connell Gerry Madden
Chairman Chief Executive
REACT Energy plc
Consolidated statement of profit or loss
for the financial year ended 30 June 2016
Notes 2016 2015
EUR EUR
Revenue 246,864 279,966
Cost of sales - (10,145)
Gross profit 246,864 269,821
Operating expenses
Administrative expenses (712,468) (2,293,489)
Share of fair value of previously
held equity interest in
Newry Biomass Limited - 2,335,810
Impairment of property,
plant and equipment (307,759) (336,532)
Foreign currency losses/(gains) (163,721) 218,518
Operating (loss)/profit (937,084) 194,128
Finance costs (602,975) (285,342)
Finance income 15 -
Loss before taxation (1,540,044) (91,214)
Income tax credit - -
Loss for the year from continuing
operations (1,540,044) (91,214)
Profit arising from the
derecognition of discontinued
operations - 5,307,258
Profit for the year on discontinued
operations - 103,375
Net profit for the year
from discontinued operations - 5,410,633
(Loss)/profit for the year (1,540,044) 5,319,419
(Loss)/profit attributable
to:
Owners of the company (1,041,035) 5,320,045
Non-controlling interest (499,009) (626)
(1,540,044) 5,319,419
2016 2015
EUR per EUR per
share share
Basic (loss)/earnings per
share:
From continuing operations 2 (0.015) (0.003)
From continuing and discontinued
operations 2 (0.015) 0.173
Diluted (loss)/earnings
per share:
From continuing operations 2 (0.015) (0.003)
From continuing and discontinued
operations 2 (0.015) 0.069
REACT Energy plc
Consolidated statement of other comprehensive income
for the financial year ended 30 June 2016
2016 2015
EUR EUR
(Loss)/Profit for the financial
year (1,540,044) 5,319,419
Other comprehensive income
and expense
Items that may be reclassified
subsequently to profit or
loss
Exchange differences arising
on retranslation
of foreign operations (603,466) (683,068)
(603,466) (683,068)
Total comprehensive income
and expense for the year (2,143,510) 4,636,351
Attributable to:
Owners of the company (1,327,723) 4,592,909
Non-controlling interests (815,787) 43,442
(2,143,510) 4,636,351
REACT Energy plc
Consolidated statement of financial position
At 30 June 2016
2016 2015
ASSETS EUR EUR
Non-current assets
Property, plant and equipment 10,799,870 7,201,844
Investments in joint ventures - -
Financial assets - -
Total non-current assets 10,799,870 7,201,844
Current assets
Amounts due under construction
contracts 150,847 150,847
Trade and other receivables 158,029 141,799
Cash and cash equivalents 324,195 211,346
Total current assets 633,071 503,992
Total assets 11,432,941 7,705,836
EQUITY AND LIABILITIES
Equity
Share capital 17,453,246 13,006,149
Share premium 21,863,190 20,713,637
Retained earnings - deficit (40,139,172) (38,811,449)
Deficit attributable to the
owners of the company (822,736) (5,091,663)
Non-controlling interests 1,639,780 2,455,567
Total equity 817,044 (2,636,096)
Non-current liabilities
Borrowings 3,379,621 -
Total non-current liabilities 3,379,621 -
Current liabilities
Trade and other payables 5,425,146 4,440,615
Borrowings 1,811,130 5,901,317
Total current liabilities 7,236,276 10,341,932
Total equity and liabilities 11,432,941 7,705,836
REACT Energy plc
Consolidated statement of cash flows
for the financial year ended 30 June 2016
2016 2015
EUR EUR
Cash flows from operating activities
(Loss)/profit for the financial
year (1,540,044) 5,319,419
Adjustments for:
Depreciation of property, plant
and equipment 73,272 78,607
Profit on disposal of property,
plant and equipment - (5,576)
Share of fair value of previously
held equity interest in Newry
Biomass Limited - (2,335,810)
Impairment of property, plant
and equipment 307,759 336,532
Impairment of amounts due from
customers under construction
contracts (1,246) 26,777
Unrealised foreign exchange movements (583,265) (334,659)
Increase in provision for impairment
of trade and other receivables - 34,423
Gain on de-recognition of subsidiary
undertakings - (5,307,258)
Operating cash flows before working
capital changes (1,743,524) (2,187,545)
Decrease/(Increase) in:
Amounts due from customers under
construction contracts - (55,963)
Trade and other receivables 134,273 (147,189)
(Decrease)/increase in:
Amounts due to customers under
construction contracts - (129,197)
Trade and other payables 155,891 1,479,741
Cash used in operating activities (1,453,360) (1,040,153)
Finance costs 602,975 285,342
Finance income (15) -
Income taxes (paid)/refunded (6) 2,705
Net cash used in operating activities (850,406) (752,106)
Cash flows from investing activities
Additions to property, plant
and equipment (311,490) (425,882)
Proceeds from sale of property,
plant and equipment - 277,707
Interest received 15 -
Net cash inflow from acquisition
of subsidiaries - (1)
Net cash inflow on derecognition
of subsidiaries - 165,991
Net cash (used in)/generated
from investing activities (311,475) 17,815
Cash flows from financing activities
Proceeds from borrowings 2,101,631 444,052
Repayments of borrowings (15,000) (18,750)
Loan issue costs (484,476) -
Share issue costs (128,081) -
Interest paid (199,885) (47,181)
Net cash generated from financing
activities 1,274,189 378,121
Net increase/(decrease) in cash
and cash equivalents 112,308 (356,170)
Cash and cash equivalents at
the beginning of the financial
year 211,341 567,511
Cash and cash equivalents at
the end of the financial year 323,649 211,341
REACT Energy plc
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2016
1. Basis of Preparation and Going Concern
The Group's consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union ('EU') and effective at 30
June 2016 for all periods presented as issued by the International
Accounting Standards Board.
The consolidated financial statements are prepared under the
historical cost convention except for certain financial assets and
financial liabilities which are measured at fair value. The
principal accounting policies set out below have been applied
consistently by the parent company and by all of the Company's
subsidiaries to all periods presented in these consolidated
financial statements.
The financial statements of the parent company, REACT Energy plc
have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union ('EU')
effective at 30 June 2016 for all periods presented as issued by
the International Accounting Standards Board and Irish Statute
comprising the Companies Act, 2015.
The Group incurred a loss of EUR1,540,044 (2015: profit of
EUR5,319,419) during the year, and had net current liabilities of
EUR6,603,205 (2015: EUR9,837,940) and net assets of EUR817,044
(2015: net liabilities of EUR2,636,096) at 30 June 2016.
Development of, and revenue generation from, the principal
assets of the Company will require additional financing which is
expected to be sourced in due course.
The Company announced on 12 December 2016 that a EUR750,000 loan
facility secured in January 2016 from EBIOSS has now been fully
utilised. It was also announced that the terms of the facility had
been amended by agreement between that parties such that the amount
of the facility was increased by EUR600,000 to EUR1,350,000 and the
repayment date of the increased facility was extended to 7 January
2018. The increased facility is to cover the working capital
requirements of the Company.
The Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of
the financial statements. The validity of the going concern basis
is dependent upon additional financing being obtained for the
development of, and revenue generation from, the principal assets
of the Company and to provide ongoing general working capital. As
no definite funding has been received on a number of developments
of the Group, a material uncertainty exists in relation to the
Company and the Group's ability to continue as a going concern.
The Directors believe that progress towards securing finance has
been made. The Directors have a reasonable expectation that the
Company will source this financing and the Group will have adequate
resources to continue in operational existence for the foreseeable
future. For these reasons the Directors continue to adopt the going
concern basis of accounting in preparing the financial statements.
The financial statements do not include any adjustments that would
result if the Group was unable to continue as a going concern.
The Group continues to invest capital in developing and
expanding its portfolio of clean energy projects. The nature of the
Group's development programme means that the timing of funds
generated from developments is difficult to predict. Management
have prepared financial forecasts to estimate the likely
cash requirements of the Group over the next 12 months. The
forecasts include certain assumptions with regard to the costs of
ongoing development projects, overheads and the timing and amount
of any funds generated from developments. The forecasts indicate
that during this period the Group will require additional funds to
continue with its activities and its planned development
program.
REACT Energy plc
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2016
1. Basis of Preparation and Going Concern - continued
Whilst the strategy is to build, own and operate plants, once a
site has been secured and planning and permitting obtained the
Group would be in a position, if it so chose, to monetise the value
of the project.
2. (LOSS)/EARNINGS PER SHARE 2016 2015
Basic (loss)/earnings per share EUR per EUR per
share share
From continuing operations (0.015) (0.003)
From discontinued operations - 0.176
Total basic (loss)/earnings
per share (0.015) 0.173
Diluted (loss)/earnings per
share
From continuing operations (0.015) (0.003)
From continuing and discontinued
operations (0.015) 0.069
The loss and weighted average number of ordinary shares used in
the calculation of the basic and diluted (loss)/earnings per share
are as follows:
2016 2015
EUR EUR
(Loss)/profit for year attributable
to equity holders of the parent (1,041,035) 5,320,045
Profit for the year from discontinued
operations used in the calculation
of basic earnings per share
from discontinued operations - 5,410,633
Losses used in the calculation
of basic loss per share from
continuing operations (1,041,035) (90,588)
Weighted average number of ordinary
shares for
the purposes of basic (loss)/earnings
per share 69,684,580 30,669,522
Weighted average number of ordinary
shares for
the purposes of diluted (loss)/earnings
per share 69,684,580 42,990,834
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were included in the
2015 diluted earnings per share calculation but were excluded in
2016 as they were anti-dilutive.
2016 2015
Share warrants in issue 35,245,833 1,142,248
Convertible loans in issue 9,166,667 11,179,064
Total anti-dilutive shares 44,412,500 12,321,312
REACT Energy plc
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2016
3. EVENTS AFTER THE BALANCE SHEET DATE
Increase and extension of Loan Facility
The Company announced on 12 December 2016 that a EUR750,000 loan
facility secured in January 2016 from EBIOSS has now been fully
utilised. It also announced that the terms of the facility had been
amended by agreement between the parties such that the amount of
the facility was increased by EUR600,000 to EUR1,350,000 and the
repayment date of the increased facility was extended to 7 January
2018. The increased facility is to cover the working capital
requirements of the Company.
Project finance Heads of Agreement
On 11 October 2016, the Company announced that it had signed
conditional heads of agreement with several parties to potentially
fund, through a combination of debt and equity, the repowering of
its 4MW biomass gasification project located in Newry, Co. Down,
Northern Ireland ("Newry Biomass") and owned by its 50.02%
subsidiary, Newry Biomass Limited ("NBL").
The Heads of Agreement envisage a total investment of up to
GBP11.2 million to be made both directly and indirectly through the
Company, into NBL, through a combination of debt and equity. If an
agreement is concluded, the equity component of the investment is
to be provided by a sub fund of the Ethika Fund SICAV Plc, a
Professional Investor Fund ("Ethika"), and Kyotherm SAS, a
France-based equity investor in biomass, geothermal energy and
energy saving projects. Under the terms of the Heads of Agreement,
Ethika is also to procure the debt financing for the
repowering.
The terms of the Heads of Agreement between the parties are
legally binding, however, are subject to the completion of, inter
alia, legal, financial and technical due diligence, which is
currently under way and is expected to be completed before the end
of the calendar year, and therefore may change from that set out in
the Heads of Agreement. There can be no guarantee that definitive
agreement will be concluded on the terms currently envisaged or at
all, or on the timetable envisaged.
There is a possibility that the equity component of the
investment may require, inter alia, shareholder approval; however,
this will not be known until the conclusion of the due diligence
exercise. In the event that shareholder approval is required, the
Company will prepare and send the necessary documentation to the
shareholders to convene a general meeting of the Company to approve
the proposals.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMMZZGFDGVZG
(END) Dow Jones Newswires
December 23, 2016 02:00 ET (07:00 GMT)
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