TIDMWIND
RNS Number : 5599Z
Renewable Energy Generation Ltd
19 March 2012
19 March 2012
Renewable Energy Generation Limited
("REG" or the "Group")
Interim Results for the six months to 31 December 2011
RENEWABLE ENERGY GENERATION REPORTS STRONG MOMENTUM IN WIND AND
BIO-POWER PROJECTS
Financial highlights
-- Group revenues of GBP6.3m (H1 2011: GBP4.3m)
-- Group EBITDA of GBP1.6m (H1 2011: loss of GBP0.9m)
-- Profit before tax breakeven (H1 2011: loss of GBP1.9m)
-- Unrestricted cash resources of GBP19m as at 31 December 2011
-- Proposed interim dividend of 0.5p per ordinary share
Operational highlights
-- Planning committee approval for 10MW Denzell Downs Wind Farm
-- Construction underway at 10MW Sancton Hill Wind Farm
-- Construction commencing for 6MW South Sharpley site
-- REG Bio-Power's 2MW Leeds North plant begins operating under National
Grid STOR contract
-- Extension to STOR contract provides secure revenues until March
2014
-- GBP25m project financing completed
-- Receipt of deferred consideration for the sale of AIM Powergen
Corp.
Andrew Whalley, REG Chief Executive Officer said:
"REG has continued to make encouraging progress over the period.
We now have 41MWs of operational wind projects with a further 16MWs
under construction which will increase our output of renewable
energy by around 40%. In addition our development team is
delivering a growing number of exciting projects into the planning
system, highlighted by the approval last year for our 10MW scheme
at Denzell Downs in Cornwall.
"REG Bio-Power too has performed well and the recent contract
extension success with National Grid highlights the commercial
potential of that business to deliver flexible and green STOR
generation for the UK market.
"We remain optimistic that REG can continue to make a sound
contribution to overall UK Government renewable energy
targets."
A presentation to analysts will be held today at the offices of
City Profile at 9.30 am.
Enquiries:
Renewable Energy Generation Limited
Andrew Whalley, Chief Executive Officer
David Crockford, Finance Director +44 (0)1483 901
Ian Lawrence, Communications Manager 790
Smith & Williamson Corporate Finance Limited
(Nominated Adviser) +44 (0)117 376
Nick Reeve / Martyn Fraser 2213
Cenkos (Corporate Broker) +44 (0)20 7397
Bobbie Hilliam 8900
City Profile +44 (0)20 7448
Simon Courtenay / Abigail Genis 3244
Notes to editors
Renewable Energy Generation Ltd (REG) is a UK renewable energy
group. Its main business is the development, construction and
operation of wind farms and generating power from refined used
cooking oil.
REG Windpower: based in Truro and Bath, UK, it currently
operates ten wind projects in Cambridgeshire, Cornwall, County
Durham, Yorkshire, Cumbria and Gwynedd, with a total capacity of
41.15MW and has a development pipeline of over 1,000MW.
REG Bio-Power UK Ltd: based in Nottingham, UK: it operates
electricity generation plant fuelled by waste vegetable oil.
Headquartered in Jersey, REG was admitted to trading on AIM, a
market operated by the London Stock Exchange, in May 2005 (AIM:
WIND).
www.renewableenergygeneration.co.uk
Overview of period
Group revenues increased by 47% to GBP6.3m compared with the
corresponding period last year. As a result Group EBITDA improved
from a loss of GBP0.9m, in the same period last year, to a profit
of GBP1.6m, whilst the Group was pre tax breakeven compared with a
loss of GBP1.9m last year.
UK wind over the period was above expected long term averages.
REG's operational fleet generated output of 55,684MWh compared to
29,640MWh in the same period last year.
Installed capacity at December 2011 was 41.15MW, against 37.15MW
installed at December 2010. Construction of REG's new projects at
Sancton Hill in Yorkshire (10MW) and South Sharpley in County
Durham (6MW) remain on track and are expected to be operational by
Autumn 2012. The rise in fleet capacity to 57.15MW will ultimately
increase REG's annual average wind output by 41% to over 150,000MWh
per annum.
During the period we achieved a local authority planning
committee resolution to grant permission for a new five turbine
scheme at Denzell Downs in Cornwall. We are discharging a section
106 agreement here and subject to this, we expect this project to
move to construction early next financial year. Additionally a
number of new planning applications totalling 40MW have been
submitted to date and whilst it is difficult to predict with any
certainty the outcome of these submissions we believe they all have
a good chance of ultimate approval.
REG Bio-Power enjoyed an encouraging period, predominantly
through operation of its National Grid Short Term Operating Reserve
contract. As part of this growth REG Bio-Power's generating
capacity expanded through the addition of a 2MW plant at Leeds.
From the date of Leeds North's operation in August 2011 REG
Bio-Power has broadly broken even at the EBITDA level compared with
an EBITDA loss in the same period last year of GBP0.7m. Further
expansion of the REG Bio-Power portfolio can be expected as new
sites are permitted during 2012. As flagged to investors, this
growth will be achieved by leveraging REG Bio-Power's existing
portfolio.
During the period REG successfully refinanced three further
operational wind projects totalling 20.5MWs. This released GBP25m
of funds back to the Group. Whilst a proportion of these proceeds
have been reinvested into turbines and associated balance of plant
for the Sancton Hill and South Sharply projects, REG's balance
sheet retains over GBP19m in free cash.
The interim dividend is maintained at 0.5p per share and will be
paid on 26 April to shareholders on the register as at 30 March
2012.
The Government continues to assert a strong commitment to
onshore wind energy as a vital part of the UK's legally binding
emissions reductions targets. The recently proposed reduction in
tariff support, whilst unhelpful, is countered by ongoing
favourable capital cost trends and preserves our view that the
returns available to investors in the UK wind market remain
acceptable.
Unaudited interim consolidated income statement
For the six months to 31 December 2011
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Revenue 6,258 4,271 9,818
Cost of Sales (3,279) (2,805) (6,020)
-------------------------------------- ------------- ------------- ----------
Gross profit 2,979 1,466 3,798
-------------------------------------- ------------- ------------- ----------
Administrative expenses (2,300) (2,401) (4,881)
Exceptional administrative
expenses (note 2) (52) (249) (490)
Development costs (646) (1,135) (1,742)
Other operating income 12 - -
Group operating loss from continuing
activities (7) (2,319) (3,315)
Net finance revenue 14 389 333
Profit / (loss) on continuing
operations before tax 7 (1,930) (2,982)
Tax - 96 337
-------------------------------------- ------------- ------------- ----------
Profit / (loss) on continuing
operations after tax 7 (1,834) (2,645)
Discontinued operations
Loss from discontinued operations - - (373)
-------------------------------------- ------------- ------------- ----------
Profit / (loss) for the period 7 (1,834) (3,018)
Attributable to
-------------------------------------- ------------- ------------- ----------
Equity holders of the parent 7 (1,834) (3,018)
Non controlling interest - - -
Total 7 (1,834) (3,018)
Earnings per share for profit / (loss) attributable to the equity
holders of the Company during the period
- basic and diluted from
continuing activities 0.01p (1.78p) (2.56p)
- basic and diluted 0.01p (1.78p) (2.92p)
Unaudited interim consolidated balance sheet
As at 31 December 2011
31 December 31 December 30 June
2011 2010 2011
GBP'000 GBP'000 GBP'000
ASSETS (un-audited) (un-audited) (audited)
Non-current assets
Goodwill (note 4) 7,757 7,390 7,390
Development assets (note 4) 6,527 3,795 5,009
Property, plant and equipment
(note 5) 60,188 50,087 50,578
Deferred tax asset 342 - 342
74,814 61,272 63,319
Current Assets
Assets classified as held for
sale - 506 -
Inventories 357 222 153
Trade and other receivables 3,753 5,573 5,454
Intangibles 2,551 2,292 2,278
Restricted cash (note 6) 10,556 1,627 900
Cash and cash equivalents 19,045 6,016 14,901
----------------------------------- ------------- ------------- ----------
36,262 16,236 23,686
Total assets 111,076 77,508 87,005
----------------------------------- ------------- ------------- ----------
LIABILITIES
Non-current liabilities
Borrowings 33,812 - 10,421
Derivatives 2,082 - -
Other long term liabilities - 1,200 1,200
Deferred tax liabilities 380 58 380
----------------------------------- ------------- ------------- ----------
36,274 1,258 12,001
Current liabilities
Trade and other payables (note
7) 5,367 3,137 2,834
Borrowings 1,044 - 717
----------------------------------- ------------- ------------- ----------
6,411 3,137 3,551
----------------------------------- ------------- ------------- ----------
Total liabilities 42,685 4,395 15,552
----------------------------------- ------------- ------------- ----------
EQUITY
Share capital 10,325 10,325 10,325
Share premium 79,707 79,707 79,707
Share based payment reserve 1,227 1,139 1,179
Hedging reserve (2,118) - -
Retained earnings (21,300) (18,058) (19,758)
----------------------------------- ------------- ------------- ----------
Equity attributable to the equity
holders of the parent 67,841 73,113 71,453
----------------------------------- ------------- ------------- ----------
Non controlling interest 550 - -
----------------------------------- ------------- ------------- ----------
Total equity and liabilities 111,076 77,508 87,005
----------------------------------- ------------- ------------- ----------
Unaudited interim consolidated cash flow statement
For the six months to 31 December 2011
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Cash flows from operating activities
Net cash used in operations (578) (3,943) (2,032)
------------------------------------------ ------------- ------------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (9,517) (12,591) (16,041)
Proceeds from disposal of fixed
assets - - 480
Capitalised development costs (1,290) - (1,427)
Business combinations (note 2) (450) - -
Net proceeds from sale of subsidiary 2,329 3,609 3,604
Interest received 14 36 63
Movement in restricted cash accounts (9,655) 3,230 3,957
------------------------------------------ ------------- ------------- ----------
Net cash (used) in investing
activities (18,569) (5,716) (9,364)
------------------------------------------ ------------- ------------- ----------
Cash flows from financing activities
New borrowings (net of issue
costs) 23,957 - 11,138
Interest paid (366) - -
Repayment of borrowings (299) - -
Dividends paid to Company's shareholders - (1,549) (2,065)
------------------------------------------ ------------- ------------- ----------
Net cash generated/(used) from
financing activities 23,292 (1,549) 9,073
------------------------------------------ ------------- ------------- ----------
Net increase/ (decrease) in cash
and cash equivalents 4,144 (11,208) (2,323)
Cash at beginning of period 14,901 17,224 17,224
Cash at end of period 19,045 6,016 14,901
------------------------------------------ ------------- ------------- ----------
Unaudited statement of comprehensive income
For the six months to 31 December 2011
Six months Six months
ended 31 ended 31 Year ended
December December 30 June 2011
2011 2011
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Profit / (loss) for the period 7 (1,834) (3,018)
Other comprehensive income / - - -
(expenditure)
---------------------------------- ------------- ------------- --------------
Effective portion of change in
fair value cash flow hedges net (2,118) - -
of recycling
Total comprehensive income /
(expenditure) for the period
net of tax (2,111) (1,834) (3,018)
---------------------------------- ------------- ------------- --------------
Attributable to
---------------------------------- ------------- ------------- --------------
Equity holders of the parent (2,111) (1,834) (3,018)
---------------------------------- ------------- ------------- --------------
Non controlling interest - - -
---------------------------------- ------------- ------------- --------------
Total (2,111) (1,834) (3,018)
---------------------------------- ------------- ------------- --------------
Unaudited interim consolidated statement of changes in
equity
For the six months to 31 December 2011
Share
Share based Non controlling
Share premium payments Hedging Retained interest
capital account reserve reserve earnings Total Total
equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2011 10,325 79,707 1,179 - (19,758) 71,453 - 71,453
--------------------- --------- --------- ---------- --------- ---------- -------- ----------------- --------
Total comprehensive
income - - - (2,118) 7 (2,111) - (2,111)
--------------------- --------- --------- ---------- --------- ---------- -------- ----------------- --------
Share based
payments - - 48 - - 48 - 48
Dividend (note
3) - - - - (1,549) (1,549) - (1,549)
Acquisitions
of non controlling
interest with
a change of
control - - - - - - 550 550
At 31 December
2011 10,325 79,707 1,227 (2,118) (21,300) 67,841 550 68,391
--------------------- --------- --------- ---------- --------- ---------- -------- ----------------- --------
Notes to the un-audited interim consolidated financial
statements
1. Statement of compliance
While the financial information included in this unaudited
interim financial statement has been prepared in accordance with
the recognition and measurement criteria of International Financial
Reporting Standards (IFRSs), this announcement does not itself
contain sufficient information to comply with IFRS.
This interim financial statement has been prepared on the basis
of accounting policies adopted by the Group and set out in the
annual report and accounts for the year ended 30 June 2011. The
Group does not anticipate any change in these accounting policies
for the year ended 30 June 2012. As permitted, this interim report
has been prepared in accordance with the AIM rules and not in
accordance with IAS 34 "Interim financial reporting".
2. Business combinations
On 28 July 2011 the Group acquired a 66.67% controlling stake in
the ordinary share capital of REG Creagh JV Company Limited for
initial consideration of GBP450,000.
REG Creagh JV Company Limited is a strategic partnership with
Creagh Concrete to develop wind farms in Northern Ireland. At the
time of acquisition the primary asset of the company was a
conditional consent to build a 6MW wind farm.
Following clearance of the remaining planning conditions, a
further GBP550,000 of cash and REG shares to the value of
GBP100,000 will be paid bringing the maximum consideration to
GBP1,100,000. As at the 31 December 2011, GBP650,000 remains as
deferred consideration and is included within trade and other
payables.
The preliminary assessment of the assets acquired and goodwill
are as follows:
GBP'000
(un-audited)
Development assets (note 4) 1,283
Goodwill (note 4) 367
------------------------------------------------------- -------------
Total assets on acquisition 1,650
------------------------------------------------------- -------------
Total purchase consideration for controlling interest (1,100)
Non controlling interest (550)
------------------------------------------------------- -------------
Acquisition related costs
The Group incurred acquisition related costs of GBP52,000
related to external legal fees and due diligence costs. Under IFRS3
(Revised), the legal fees and due diligence costs have been
disclosed as exceptional administrative expenses in the Group's
consolidated income statement.
3. Dividends
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010
Declared and paid during the period GBP'000 GBP'000 GBP'000
on
ordinary equity shares
(un-audited) (un-audited) (audited)
Second interim dividend declared
and paid - 1,549 1,549
Second interim dividend declared 1,549 - -
and not paid (note 7)
First interim dividend declared
and paid - - 516
-------------------------------------- ------------- ------------- ----------
1,549 1,549 2,065
-------------------------------------- ------------- ------------- ----------
Proposed but not recognised as a liability at 31 December 2011
Equity dividends on ordinary shares:
First interim dividend declared
and paid - 0.5p 516 516 -
-------------------------------------- ------------- ------------- ----------
The dividend will be paid on 26 April 2012 to members on the
register on 30 March 2012. Shares will be marked ex-dividend on 28
March 2012.
4. Intangible assets
(un-audited) Development costs Goodwill Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2011 4,156 7,390 11,546
Additions 1,427 - 1,427
----------------------------------- ------------------ --------- --------
At 30 June 2011 5,583 7,390 12,973
Additions 2,882 367 2,699
Transfers to property, plant
and equipment (1,554) - (1,554)
----------------------------------- ------------------ --------- --------
At 31 December 2011 6,911 7,757 14,118
Amortisation and impairment
At 1 January 2011 361 - 361
Amortisation charge 33 - 33
Impairment charge 362 - 362
Reversal of prior year impairment (182) - (182)
----------------------------------- ------------------ --------- --------
At 30 June 2011 574 - 574
Amortisation charge 36 - 39
Transfers to property, plant
and equipment (229) - (229)
----------------------------------- ------------------ --------- --------
At 31 December 2011 384 - 384
Net book value
At 31 December 2011 6,527 7,757 14,284
----------------------------------- ------------------ --------- --------
At 30 June 2011 5,009 7,390 11,210
----------------------------------- ------------------ --------- --------
At 1 January 2011 3,795 7,390 8,760
----------------------------------- ------------------ --------- --------
Included within additions to development costs are internal
development costs of GBP160,000 (2011: GBPnil). Also included
within development costs is GBP1,283,000 acquired as part of the
acquisition of REG Creagh JV Company disclosed in note 2.
Following the successful planning decisions and commencement of
construction at Sancton Hill and South Sharpley, development costs
totalling GBP552,000 have been transferred to assets under
construction within Tangible Fixed Assets. A further GBP1,002,000
of costs and GBP229,000 of amortisation relating to 5 sites already
operational have also been transferred to Tangible Fixed
Assets.
5. Property, plant and equipment
Assets
Other in the Fixtures,
Operating generation course Freehold fittings
(un-audited) wind sites plant of construction land and equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2011 47,701 4,490 70 1,252 1,265 54,778
Additions 551 92 385 - 136 1,164
At 30 June 2011 48,252 4,582 455 1,252 1,401 55,942
Additions 118 118 9,505 - 99 9,840
Transfers from
Development costs 1,002 - 552 - - 1,554
Movements - 888 (888) - - -
At 31 December
2011 49,372 5,588 9,624 1,252 1,500 67,336
Depreciation
At 1 January 2011 4,238 252 - - 201 4,691
Depreciation charge 450 108 - - 115 673
At 30 June 2011 4,688 360 - - 316 5,364
Depreciation charge 1,337 121 - - 97 1,525
Transfers from
Development costs 229 - - - - 229
--------------------- ------------ ------------ ----------------- ---------- --------------- -------
At 31 December
2011 6,254 481 - - 413 7,148
Net book value
At 31 December
2011 43,098 5,107 9,624 1,252 1,087 60,188
--------------------- ------------ ------------ ----------------- ---------- --------------- -------
At 30 June 2011 43,564 4,222 455 1,252 1,085 50,578
--------------------- ------------ ------------ ----------------- ---------- --------------- -------
At 1 January 2011 43,463 4,238 70 1,252 1,064 50,087
--------------------- ------------ ------------ ----------------- ---------- --------------- -------
During the year an amount of GBP427,000 (2011 - GBPnil) of
borrowing costs were capitalised into assets in the course of
construction. Capitalisation of borrowing costs has increased as a
result of new additions being funded from debt.
Assets under construction at the period end included the 10MW
Sancton Hill wind farm in Yorkshire and the 6MW South Sharpley wind
farm in County Durham.
6. Restricted cash
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Amounts deposited as security for
letters of credit for settlement
of turbine acquisitions 6,003 1,627 -
Amounts placed as security for future 427 - -
operating costs
Amounts placed as security against 2,000 - -
maintenance contractor
Amounts placed as security for future
debt service costs 2,126 - 900
10,556 1,627 900
--------------------------------------- ------------- ------------- ----------
7. Trade and other payables
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Trade payables 806 2,309 1,617
VAT - - 80
Final dividend, paid 13 January 2012 1,549 - -
Deferred consideration 1,850 - -
Accruals 1,162 828 1,137
5,367 3,137 2,834
-------------------------------------- ------------- ------------- ----------
Included within deferred consideration is GBP1,200,000 which
relates to the acquisition of the St. Breock wind farm from E.ON
Climate and Renewables UK Operations Ltd and is payable on gaining
satisfactory planning permission to repower the site.
Also included within deferred consideration is GBP650,000 on the
acquisition of REG Creagh JV Limited, which is payable on financial
close.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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