Rurelec PLC Comment on Share Price (6140W)
August 19 2020 - 8:18AM
UK Regulatory
TIDMRUR
RNS Number : 6140W
Rurelec PLC
19 August 2020
Rurelec PLC
("Rurelec" or the "Company")
Comment on Share Price
The Directors of the Company note the recent movement in the
Company's share price and confirm that they know of no reason for
the share price movement.
General Update
By way of a general update, the Directors of the Company refer
to the audited results of the Company for the year ended 31
December 2019, which were released to the market on 1 June 2020
("Financial Results Announcement").
As set out in the Financial Results Announcement, the highlights
for the twelve months ended 1 June 2020 were:
" Operating loss GBP3.1 million (2018: loss GBP2.9 million).
Loss before tax GBP4.4 million (2018: loss GBP0.6 million).
2019 had seen a marked improvement in the Group's liquidity
position, current liabilities have fallen to GBP0.5 million (2018:
GBP2.0 million).
The Group was able to settle the outstanding GBP1.2m repayment
of BPAC secured debt principal during 2019 whilst limiting the
decrease in net cash to GBP214k (2018: increase GBP188k).
The main drivers for the loss before tax of GBP4.4 million were
a provision of GBP2.0 million (2018: GBPnil) against the 701
turbines, and foreign exchange losses of GBP1.3 million (2018:
gains GBP1.7 million).
Write downs of assets by GBP2.0 million (2018: GBPNil) to values
the directors believe can be supported in current market
conditions.
Administration expenses of GBP1.2 million (2018: GBP1.5 million)
reduced due to further employment cost savings and a reduction in
professional fees.
Total loss per share 0.79p (2018: 0.11p).
Net Asset Value per share 3.7p (2018: 4.4p)."
As also set out in the Financial Results Announcement:
"The Group has started to benefit from being on a more secure
financial footing. December 2019 marked the first time since 2008
that the Group has received loan repayments due from the holding
company of our joint venture operation of GBP0.5 million. This
follows the completion of the major maintenance programme carried
out at the Argentinian plant in late 2018 and early 2019. The total
cash remittances by EdS to the Group and PEL described above amount
to GBP2.2 million which compares to total debt repayments by EdS of
GBP2.0 million in 2018. In addition, EdS ended the year with cash
reserves of GBP1.7 million (2018: GBP0.5 million).
To date, the COVID-19 pandemic has had little impact on the
Group. The Group's Head Office in London has operated on a remote
basis and the EdS plant in Argentina is situated in a region which
has to date had very little incidence of the virus. EdS's power
generation is considered part of an essential industry, and it has
implemented procedures and protocols to allow as near to normal
safe working practices in place. Output and profitability to the
end of April 2020 are in line with expectations, whilst cash
remittances are above forecast for 2020 year to date and higher
than for the same period in 2019.Notwithstanding the above, it is
not considered possible to estimate the long-term financial impact
of COVID-19 on the already-weak Argentinian economy at the present
time, nor to anticipate the economic and fiscal measures that the
Argentinian Government will impose.
As previously announced on 19 November 2019, the new Agreement
reached with the Group's 50:50 joint venture partner in the
Argentinian operation has established a framework regulating future
cash repayments. However, the Resolution 220/2007 Power Purchase
Agreement ("PPA") expires in September 2020, and will be superseded
by a new tariff or, at worst case, be sold on the energy spot
market. At the date of this report, the outcome remains
uncertain.
The year 2019 has seen a marked improvement in the Group's
liquidity position. The improvements in the performance of the
Argentinian asset, and the relationship with our joint venture
partner, have been encouraging. However, the effect of the current
poor state of the Argentinian economy, and the uncertainty around
the renegotiation of the Resolution 220 PPA later this year do cast
a shadow over future performance".
Capital Reorganisation and Capital Reduction
As also set out in the Financial Results Announcement, the
Company proposed to progress a Capital Reorganisation and Capital
Reduction, subject to relevant approvals. This proposal was
approved by shareholders at the AGM on 30 June 2020 and the
reduction of capital was approved by the High Court of Justice on
14 August 2020 (as set out in the announcement of that date). A
further update will be made when the Court Order has been
successfully filed at Companies House and the Reduction of Capital
becomes effective .
For further information please contact:
Rurelec PLC W H Ireland (Nomad & Broker)
Simon Morris, Director Katy Mitchell
Andy Coveney, Director Lydia Zychowska
Tel: 020 7549 2839/40 Tel: 020 7220 1666
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END
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