TIDMNGR
RNS Number : 9675K
Nature Group PLC
28 September 2016
Nature Group PLC
("Nature" or the "Company" or the "Group")
Unaudited Interim Results for the 6 months to 30 June 2016
Nature Group PLC (AIM:NGR), the provider of port reception
facilities and waste treatment solutions for the oil, marine and
process industries, announces its interim results for the six
months ended 30 June 2016.
Financial Performance*
-- Revenues for the period of GBP6.2million (H1 2015: GBP8.3 million)
-- Underlying pre-tax loss for the period of GBP0.42 million (H1 2015: profit GBP0.06 million)
-- Underlying earnings per share for the period of -0.53 pence (H1 2015: 0.03 pence)
-- Cash balance as at 30 June 2016 GBP0.33 million (H1 2015: GBP2.44 million)
*Excludes revenue and cost from discontinued operations in
Gibraltar as Nature Port Reception Facilities Limited ("NPRF"),
which previously operated the Group's reception, treatment and
storage facility for maritime waste in Gibraltar, is classified as
held for sale and revenue and cost from discontinued operations of
Nature Shipping Agency Limited ("NSA") in Gibraltar (as the entity
was sold on 4 March 2016), Nature Environmental Technologies
Limited ("NETL") in UK and Nature Group Trading Limited ("NGTL") in
Jersey as these are currently being liquidated. Underlying results
exclude non-trading incidental items.
Operational Performance
Group
-- Cost reduction programme progressed
o Centralisation of executive management functions across all
divisions in Rotterdam (The Netherlands).
o Closure of Cornwall office and Gibraltar operation reflecting
both our drive for greater efficiency and the reduced operations in
those geographies.
-- Completed financing with Comerica Bank for the Group's operations in Houston.
-- Finalised the buy-out of T. C. Curl, previous Joint Venture
partner of the Group's operations in Houston, Nature Environmental
& Marine Services, LLC ("NEMS").
-- Proposed disposal of Nature Port Reception Facilities Limited
("NPRF"), the Group's wholly owned subsidiary in Gibraltar,
continues to progress with all outstanding third party consents now
received.
Maritime
-- Consistent performance of Rotterdam operations and
commencement of collection of Annex 5 waste.
-- Activity level in Houston lower than planned due to lack of
offshore related waste, with barge activities commencing from June
onwards in Houston area.
Oil and Gas
-- The Group has been active in the North Sea, Canada, Brazil and Tanzania during the period.
-- Operations on available projects have continued to progress
well, notwithstanding the reduced number of active drilling
operations which continues to impact Nature's market.
-- The Group anticipates continued operations in Brazil and
Tanzania, as well as new operations to start in the 2nd half of
2016 in the North Sea area.
-- Norwegian operation further streamlined and the Group is now
well positioned to capture future projects as a result of the
successful yard trial in Aberdeen.
-- 2 sets (CTU / STU) currently in operation in Brazil and Norway and 1 OTU in Tanzania.
-- 4 sets (each set consisting of 1 CTU and 1 STU) and 2
individual STUs currently available for deployment
Berend van Straten, Chairman of Nature Group, commented:
"The Groups results over the first six months of the year have
been disappointing. In this period of continued weakness and
uncertainty in the oil market, it is clear that we have not been
able to realise our ambition to deploy more units. We can, however
see increased interest in our offshore service offering from
operators and continue to believe that demand for our services will
improve.
We will remain active to get our cost to a structurally
acceptable level without compromising on our key expertise. We are
confident of concluding the sale of our entity in Gibraltar in the
near future. If concluded successfully, we will be able to complete
the restructuring of the Group and will have a stronger balance
sheet allowing us to focus on growing our Maritime activities in
Houston and Rotterdam and broaden our service offering in our Oil
and Gas division".
For further information contact:
Nature Group PLC
Jan Vesseur, CEO Tel: + 31 646287896
Maarten Smits, CFO Tel: + 31 613820780
Berend van Straten, Tel: + 31 626805605
Chairman
Cenkos Securities
plc
Neil McDonald Tel: +44 (0)131 220 9771 /
+44 (0)207 397 1953
Beth McKiernan Tel: +44 (0)131 220 9778 /
+44 (0)207 397 1950
Nature Group is traded on the AIM market, (ticker: NGR).
www.ngrp.com
Chairman's Statement
We are pleased to announce the unaudited interim results for the
six months to 30 June 2016. As we pointed out in our statement at
the time of the full year report, after a difficult 2015, actions
were taken to improve the adverse results which are beginning to
pay off. As well as the previously-reported closure of certain
operations in our Maritime and Engineering divisions, our main
challenge this half year has been to improve the performance of our
operations in Portugal, which have been under pressure since the
oil price collapse. We expect a more positive performance in the
second half for this operation.
The financial loss reported for the first half of the year does
not reflect the considerable work undertaken by the board and
management team in strengthening our core structure. Both the
operations in Cornwall and Gibraltar were closed towards the end of
the reporting period and we will only see the full impact of
related cost savings in the second half of 2016. New personnel,
coupled with an ongoing overhaul of our controls, reporting and
business appraisals will, we believe, together with cost savings
lead to an improvement in our financial performance in the second
half of 2016 and beyond.
For the Oil and Gas division, we are strengthened in our belief
we have the right product for the offshore drilling market,
delivering a key environmental, safety and cost consideration in a
market that is increasingly interested in these three drivers. The
strong interest from both rig owners and operators in our product
and services confirms this and we expect to be able to take
advantage of such opportunities as the market improves.
As previously announced, Nature Group is in the process of
selling NPRF, its subsidiary in Gibraltar. Although this process is
not yet finalised and remains subject to, amongst other things,
continued negotiation and the entry of the parties into definitive,
binding agreements, we are pleased with the recent progress made.
The expected sale proceeds would add to our working capital and
improve the balance sheet of the Group. However, shareholders are
advised that there can be no certainty that the proposed sale will
be concluded on the terms agreed under the earlier letter of intent
or at all.
The Group is currently involved in ongoing litigation concerning
waste brought into the Netherlands and shipped by its subsidiary
International Slob Disposal ("ISD") to an external treatment
facility in the Rotterdam port in 2010 (prior to Nature Group's
acquisition of ISD. ISD sought and received the approval of the
Port Inspection Authorities in Rotterdam at the time and acted on
the representations of its customer regarding the waste being
collected and discharged. The Group has received legal advice in
support of its position and the Directors believe that it is
unlikely that the case will be successful.
Executive Directors' Statement
During the period under review we further rationalised the
organisation and we are simplifying the corporate structure of the
Group. The interim financial statements exclude revenue and cost
from discontinued operations in Gibraltar as NPRF is classified as
held for sale. These interim financial statements also exclude
revenue and cost from discontinued operations via entities NSA in
Gibraltar as the entity was sold on 4 March 2016, NETL in the UK
and NGTL in Jersey as these are currently being liquidated. We
continue to review all entities in the Group and aim to further
simplify the corporate structure going forward.
Overview of Financial Performance - Continuing operations
Compared to management's expectations our consolidated financial
performance in the first six months of 2016 was disappointing.
However, we have made significant progress in reducing costs and in
improving the organisational efficiency of the Group such that,
when we consider the ongoing activities of the Group in the absence
of such costs and discontinued operations, the performance is more
encouraging and allows for greater optimism for the future.
The Group generated sales from continuing operations of GBP6.2m
(H1 2015: GBP8.3) with a related Loss Before Tax (LBT) of GBP0.88m
(2015 LBT: GBP0.15m). A significant negative impact on LBT came
from the unrealised foreign exchange loss on a Euro-Pound
intercompany loan (Loss GBP0,33m). The LBT of GBP0.88m includes
GBP0.53m of both trading and non-trading incidentals some of which
are related to further restructuring so that the Group has a
"clean" trading LBT of GBP0.35m (2015: LBT: GBP0.15m).
Furthermore, after deducting start-up costs incurred in relation
to our Oil & Gas division in the UK and our Maritime division
in the US, the pro-forma normalised Loss Before Tax is GBP0.18m. We
believe this more accurately represents the financial performance
of the activities of the Group in the first half of 2016 that will
continue to contribute to the financial performance of the Group in
the remainder of 2016.
This loss of GBP0.18m is partly attributed to our activity in
Portugal, where we suffered the effect of the rapid drop in the oil
price at the beginning of 2016. We have taken action to ensure that
this will not continue to affect performance and expect activities
in Portugal to be profitable in the second half of the year.
Overview of Financial Performance - Discontinued operations
Our Gibraltar operations, where we ceased all activities in
January 2016, incurred costs of GBP0.4m for regular salary
expenses, rent and maintenance cost. At the end of the period two
staff remained on payroll and we aim to close the entity entirely
during the last quarter of 2016 to stem any further losses. The
cost of closing the engineering outfit and corporate office in
Cornwall and the operating cost of the other entities that are
being liquidated is GBP0.3m, taking the total cost incurred in
discontinued operations to GBP0.7m.
Operational Review
Rotterdam:
The first six months of 2016 show a consistent level of business
but we did not benefit from volumes collected from one-off jobs, as
we did in 2015. Overall, our treated volume in the first six months
was 73k m(3) compared to 112k m(3) (2015) and 56k m(3) (2014). We
started as planned with the Marpol Annex 5 collections which allows
us to expand our service offering to our customers. We are
consistent in our ambition to grow our operations in Rotterdam and
we are also looking at opportunities to move into the ports of
Amsterdam and Antwerp.
Houston:
The start of the year in Houston was difficult due to the
decrease in work related to the offshore business and we worked
hard to replace this with other Maritime waste streams. The Group
has 25 years of barging experience and we intend to deploy our
expertise in this area, having started with barging operations in
Houston from June onwards. Additionally, we will start with a tank
cleaning activity in Corpus Christy in September.
We are pleased to have completed a financing structure
consisting of a term loan and a working capital facility with
Comerica bank, which will support the growth ambitions we have for
the region.
On September 19(th) the Group announced that it had reached
agreement with T.C. Curl, the original founder of the business in
Houston, to buy his remaining shares in our US entity, NEMS. Mr
Curl will continue to work on behalf of the Group as a business
development consultant, focussing on particular segments of the
business where his experience is invaluable. His activities and
role as CEO for the local entity will be taken over by Koen
Zuyderwijk, Managing Director for North-America. In November 2015,
NEMS started processing maritime waste through a new
USDA-authorised autoclave system, which processes solid waste
received from oceangoing vessels that visited foreign waters before
calling at the Texas Gulf Coast and eliminates the need to haul it
to third party processors. This allows a significant cost saving in
processing fees and truck time.
Portugal:
As expected, the business model for the Group's operations in
Portugal came under pressure due to the closure of Gibraltar and
the low prices for the recovered oil. Whilst the first six months
have been loss making, the Group has now reached agreement with
third parties on bringing sufficient volumes to the operation,
which will allow it to recuperate at least some of these losses.
Management will continue to look at alternatives for improving the
results of this operation. Additionally, we are pleased with a
consultancy contract that we secured for the design and
construction of a modular waste-oil treatment facility, to be
installed in a port reception facility in the Mediterranean.
Oil and Gas
As previously stated, the lower oil price has in fact
strengthened our proposition of low costs, improved environmental
impact and reduced safety risks. However, due to the significant
reduction in the number of drilling operations, the number of
projects on which we are currently operating has decreased. As a
matter of precaution, we reduced on a temporary basis the team in
the Stavanger office using a governmental temporary redundancy
scheme.
The Group is currently active in Brazil, Norway and Tanzania and
expects to start some new projects towards the end of 2016. We have
4 sets (1 CTU / 1 STU) and 2 individual STU's available for
deployment and can add new units quickly if needed. At the same
time, we have addressed the market from different angles
(particularly IOC's as well as rig owners) and also different
geographies. We are confident that all these measures will
eventually result in more units operationally in the field but it
will remain difficult in the current environment to give clear
indications when this will happen.
Cash and Capital Expenditure
During 2016 our cash position, inclusive of cash held at
discontinued operations deteriorated further from GBP0.53m at 31
December 2015 to GBP0.36m at 30 June 2016. We will see a positive
effect in the remainder of 2016 from increased business across the
board and as we secured new and/or extended financing agreements
with local banks in the Netherlands, Norway and Houston. The total
cash and cash equivalent position as at September 22(nd) stands at
GBP0.7m with a further GBP0.3m that can be drawn on working capital
facilities in operating entities.
During the first half of 2016 fixed assets were sold, acquired
and upgraded throughout the Group. In Rotterdam we refurbished our
vessels (all expensed) and in Houston we upgraded our existing
trucks and purchased several new trucks. This had a negative effect
on both our cash position and our results but will support our
operational efficiency going forward and allow us to continue to
serve our customers in a safe and reliable manner.
Outlook
We are optimistic that, based on the successful yard trials in
Aberdeen and the inquiries we are receiving from rig owners and
operators, new projects in the Oil and Gas division will
materialise. However, the full effect of these new projects we will
see only from 2017 onwards. We expect the Houston business to grow
based on the new tank cleaning and barging activities. We see an
increase in contracts signed with ship-management, commercial
operators and charterers for waste removal services in both our
Rotterdam and Houston locations evidencing we can use our leading
position in Rotterdam to get global contracts. As indicated above,
we are also confident about the effect we will see of the changes
we have made in Portugal.
With both divisions growing again, we are optimistic about
several future opportunities for our company. New ports (Amsterdam,
Antwerp, New Orleans), consultancy based on our technical expertise
and new products and services across the board all offer growth
potential.
Consolidated Statement of Comprehensive Unaudited Unaudited Audited
Income June
For the half year to 30 June 2016 30 June 30 June year
to
2016 2015 2015
GBP GBP GBP
Continuing operations
Revenue 6,166,292 8,301,763 16,273,810
Cost of sales (3,668,381) (5,906,309) (10,963,725)
----------- ----------- ------------
Operating profit 2,497,911 2,395,454 5,310,085
Interest income - - 5,025
Other expense - - (359,990)
Share based payments - (45,013) (110,746)
Administrative costs (2,911,854) (2,083,741) (6,505,018)
Depreciation and amortisation (445,259) (378,895) (805,173)
Finance costs (20,780) (35,874) (82,295)
Gain recognised on disposal of
interest in former subsidiary - - 136,299
----------- ----------- ------------
Loss before taxation (879,981) (148,069) (2,411,813)
Income tax expense 110,319 (60,417) 131,844
----------- ----------- ------------
Loss for the year and total comprehensive
income for the year from continuing
operations (769,662) (208,486) (2,279,969)
----------- ----------- ------------
Discontinued operations
Loss for the year and total comprehensive
income for the year from discontinued
operations (601,127) (52,847) (1,575,988)
----------- ----------- ------------
Loss for the year and total comprehensive
income for the year (1,370,788) (261,333) (3,855,957)
=========== =========== ============
Attributable to:
Owners of the parent
Loss for the year from continuing
operations (769,662) (208,486) (2,279,969)
Loss for the year from discontinued
operations (601,127) (52,847) (1,575,988)
----------- ----------- ------------
Loss for the year attributable
to owners of the parent (1,370,788) (261,333) (3,855,957)
Non-controlling interest
Loss for the year from continuing
operations 125,173 48,495 143,958
Loss for the year attributable
to owners of the non-controlling
interest 125,173 48,495 143,958
----------- ----------- ------------
Loss for the year and total comprehensive
income for the year attributed
to owners (1,245,615) (212,838) (3,711,999)
=========== =========== ============
Earnings per share (pence)
From continuing operations:
Basic (0.813) (0.263) (2.876)
Diluted (0.813) (0.263) (2.810)
From discontinued operations:
Basic (0.758) (0.067) (1.988)
Diluted (0.758) (0.067) (1.943)
-------------------------------------------------- ----------- ----------- ------------
Loss after tax, before share based
payments (1,245,615) (167,826) (3,601,253)
Excluding share based payments (0.813) (0.212) (4.542)
-------------------------------------------------- ----------- ----------- ------------
Unaudited Unaudited Audited
Consolidated Balance Sheet as 30 June 30 June 31 December
at 30 June 2016 asSheet 2016 2015 2015
GBP GBP GBP
Assets
Non-current assets
Plant, vessels and equipment 6,303,694 5,660,652 5,923,210
Goodwill 961,489 1,177,822 907,563
Other intangible assets assets 129,022 36,329 139,815
Investment in associated company 308,446 250 308,446
Deferred tax assets e 264,202 104,971 4,222
------------ ------------ ------------
Total non-current assets 7,966,853 6,980,024 7,283,256
------------ ------------ ------------
Current assets
Insurance recoveries on 3rd
party claims - 4,284,583 -
Corporate taxes 121,864 113,297 203,148
Stocks and work in progress 1,470,253 492,501 1,185,630
Trade and other receivables 5,397,481 6,232,565 5,716,738
Cash and cash equivalents 328,855 2,444,521 278,369
------------ ------------ ------------
7,318,453 13,567,467 7,383,885
Assets classified as held for
sale 5,903,509 - 6,618,693
------------ ------------ ------------
Total assets 21,188,815 20,547,491 21,285,834
------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables (3,683,426) (2,977,409) (4,740,419)
Bank loans and overdrafts (642,888) (998,335) (778,989)
Corporate taxes (390,784)
Provision for 3rd party claims (4,284,583)
------------ ------------ ------------
(4,717,098) (8,260,327) (5,519,408)
Liabilities directly associated
with assets classified as held
for sale (5,111,259) - (5,398,664)
------------ ------------ ------------
(9,828,357) (8,260,327) (10,918,072)
------------ ------------ ------------
Non-current liabilities
Term loans (2,920,396) (785,316) (1,964,628)
------------ ------------ ------------
Net assets 8,440,062 11,501,848 8,403,134
============ ============ ============
Equity
Called up share capital 158,561 158,561 158,561
Share premium account 22,019,285 21,953,617 21,953,617
Share option reserve 110,746 45,013 110,746
Capital reserve 2,925,520 2,925,520 2,925,520
Foreign currency translation
reserve 324,200 (1,379,152) (1,017,848)
Profit and loss account (17,248,549) (12,503,776) (16,002,934)
------------ ------------ ------------
8,289,763 11,199,783 8,127,662
Equity attributable to owners
of the Group 8,289,763 11,199,783 8,127,662
Non-controlling interest 150,299 302,065 275,472
------------ ------------ ------------
Total equity attributable to
equity shareholders 8,440,062 11,501,848 8,403,134
============ ============ ============
Consolidated Cash Flow Statement
at 30 June 2016 asSheet
For the half year to 30 June
2016
Reconciliation of loss before Unaudited Unaudited Audited
taxation to net cash flow 30 June 30 June 31 December
from operating activities 2016 2015 2015
GBP GBP GBP
Loss for the year before
taxation (1,576,255) (178,087) (3,917,766)
Adjustments for:
Depreciation and amortisation 504,446 541,880 1,336,429
Decrease/(Increase) in stock (284,623) 1,080,156 387,027
Decrease in debtors 1,099,299 347,337 528,820
Increase in creditors (1,089,716) (1,756,874) 842,095
Foreign exchange differences 587,822 (104,939) 192,154
Share based payments - 45,013 110,746
----------- ----------- ------------
Net cash flow from operating
activities (759,026) (25,514) (520,495)
Investing activities:
Net increase in investments - - (308,196)
Acquisition of tangible fixed
assets (392,782) (534,267) (3,723,465)
Acquisition of intangible
fixed assets - (3,932) (115,785)
Proceeds from disposals of
fixed assets 34,761 1,932,653 3,029,360
Financing activities:
Proceeds from bank borrowings 955,768 1,088,578
(Decrease) / increase in
cash balances (161,278) 1,368.940 (550,003)
=========== =========== ============
Analysis of cash and cash --
equivalents during the year:
Balance at start of year 525,578 1,075,581 1,075,581
(Decrease) / increase in
cash and cash equivalents (161,278) 1,368,940 (550,003)
----------- ----------- ------------
Balance at end of year 364,300 2,444,521 525,578
=========== =========== ============
1. The calculation of earnings per share has been based on the
loss for the period and the average 79,280,655 Ordinary Shares in
issue throughout the period.
2. These unaudited results have been prepared on the basis of
the accounting policies adopted in the accounts to 31 December
2015.
3. The Cash Flow Statement incorporates both continuing
operations as discontinued operations but does not provide a split
as in the Consolidated Balance Sheet and Consolidated Statement of
Comprehensive Income.
4. The interim report to 30 June 2016 was approved by the
Directors on 26 September 2016. The report will be available to the
public on the Nature Group website via www.naturegroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBAARNVAKUAR
(END) Dow Jones Newswires
September 28, 2016 02:00 ET (06:00 GMT)
Nature Grp (LSE:NGR)
Historical Stock Chart
From Apr 2024 to May 2024
Nature Grp (LSE:NGR)
Historical Stock Chart
From May 2023 to May 2024