TIDMWIND
RNS Number : 6475O
Renewable Energy Generation Ltd
15 October 2012
15 October 2012
Renewable Energy Generation Limited
("REG", "the Company" or "the Group")
Preliminary Results for the year ended 30 June 2012
RENEWABLE ENERGY GENERATION HITS INVESTMENT TARGET AS FUTURE
ACTIVITY ACCELERATES
Renewable Energy Generation Limited (AIM: WIND), the renewable
energy group, today announces its preliminary results for the year
ended 30 June 2012.
Financial Year Highlights
-- Revenue of GBP12.1 million (2011: GBP9.8 million)
-- Adjusted EBITDA(1) GBP2.7m (2011: GBP0.1m)
-- Loss after tax of GBP1.8 million (2011: loss of GBP3.0 million)
-- Second round of asset financing raises GBP25 million loan
-- Cash and cash equivalents of GBP9.6 million (2011: GBP14.9 million)
-- Proposal to pay final dividend of 1.5p per Ordinary Share (2011:
1.5p)
Operational highlights
-- Construction of 10MW Sancton Hill site and 2MW Leeds North Bio-Power
site
-- Planning permission granted for 10MW Denzell Downs wind farm
-- National Grid Short Term Operating Reserve contract extended
-- Construction at South Sharpley (6MW) and Orchard End (4MW) wind
farms underway
Post year end events
-- Provisional approval gained for re-powering of 10MW St Breock wind
farm
-- Third round of asset financing raises GBP16 million
(1) Earnings before interest, taxation, depreciation and
amortisation ("EBITDA") is equal to the Group's continuing
operating loss before exceptional items, share based payments,
interest, taxation, depreciation and amortisation.
REG Chief Executive Officer Andrew Whalley said:
"This year has seen us over-achieve against our three-year
target to commit GBP100m of investment in UK renewable
projects.
Alongside successful construction of energetic new sites, we
have also made considerable progress with planning submissions over
the past 12 months and are well-positioned to significantly expand
our operating portfolio."
A presentation to equity analysts will be held today at 9.30 am
at the offices of City Profile, Augustine House, 6A Austin Friars,
London, EC2N 2HA. Please contact Abigail Genis if you would like to
attend.
ENDS
Enquiries:
Renewable Energy Generation Limited
Andrew Whalley, Chief Executive Officer
David Crockford, Finance Director
Ian Lawrence, Communications Manager +44 (0)1483 901 790
Smith & Williamson Corporate Finance Limited
(Nominated Adviser)
Nick Reeve / Martyn Fraser +44 (0)117 376 2213
Cenkos (Corporate Broker)
Bobbie Hilliam/Max Hartley +44 (0)20 7397 8900
City Profile
Simon Courtenay/Abigail Genis +44 (0)20 7448 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 11 wind projects in Cambridgeshire, Cornwall, County
Durham, Yorkshire, Cumbria and Gwynedd, with a total capacity of
51.15MW and has a development pipeline of over 1,000MW.
REG Bio-Power UK Ltd: based in Nottingham, UK: it operates
electricity generation plant powered by fuel recovered from used
cooking 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
Chairman's Statement
Global Context
The term "Ecosterity" emerged during the past year as
deteriorating public finances around the globe led governments,
most notably in the developed economies, to prioritise urgent
fiscal imperatives over important but longer-term issues such as
environmental sustainability. Nevertheless global investment in
renewable energy increased 17% to a new record of $257bn in 2011 of
which developing countries made up 35%.
Uncertainty over future policy support in Europe and the US
combined with over-supply as new manufacturing capacity came on
stream in the solar and wind power sectors and this weighed heavily
on clean energy equity markets, which fell 40% in 2011 and
recovered only partially in the early part of 2012. Ironically,
developers like REG, which benefit from improving contractual terms
for equipment associated with this over-capacity, suffered from the
same overarching market sentiment. In REG's case there remains a
clear gap between the Discounted Cash Flow value of its assets and
its market capitalisation- which currently appears to recognise
value in its operating assets only and ignores the tangible value
of consented projects and those under construction.
Governments such as the UK's have recently tried to clarify
specific issues for investors, as they anticipate the impact of
policy confusion on the ability to attract scarce capital to energy
infrastructure needed urgently to meet the rapidly emerging and
conflicting priorities of energy security, economy, affordability
and sustainability for a growing global population.
Legally-binding EU targets oblige the UK to meet 20% of its
total energy consumption from renewable sources by 2020, compared
with only a 3% contribution existing when it was set in 2009.
The Government is focusing most of its compliance effort on the
electricity industry with an aim to take renewably produced
electricity to 30% of total energy supplied by 2027. It has set
targets of 13GW of onshore wind capacity by 2020, up from about 5GW
installed today, and 18GW of offshore wind, about 10 times current
operational. These targets are not without controversy and the past
year has witnessed high profile campaigns of disinformation,
presenting them as unaffordable. In reality, onshore wind energy
subsidies added less than GBP5 per year to household energy bills
last year according to the UK's energy regulator OFGEM.
Our Performance and Outlook
We made good progress towards, and will comfortably exceed our
objective announced in 2009, to commit GBP100m to renewable
projects during the three year period ending December 2012. The
momentum gained in achieving this target positions us well for the
next stage of our growth. By the end of 2012 we will have 57.15MW
of operational wind plant and 8MW of Bio-Power projects with a
further 4MW of wind plant under construction. More significantly,
if we maintain our three-year planning success rate we will in the
next three years continue to add significantly to our operating
fleet.
We expect to be capable of funding this programme without
resorting to additional equity raising. We have demonstrated our
ability to access debt at competitive rates and to date we have
re-financed three tranches of our operational projects which we had
built with all-equity, raising GBP53m. We maintain a prudent
attitude to leverage and intend to keep gearing at Group level to
manageable levels. Thus we expect to commence next year the
construction of our pipeline of recently consented projects with
our current equity, complemented by prudent project finance.
We remain confident that we can extract value for shareholders
and energy users alike from amongst the chaotic conditions of
energy policy which prevail in the UK. With no credible remedy yet
for the electricity supply security risks arising from the forced
retirement of one-fifth of its power stations for environmental and
age reasons by 2015, we expect the UK's wholesale power prices to
rise. By not fixing PPAs beyond the pinch point of 2015 the wind
business is structured to benefit from higher prices. Furthermore,
our proven ability to develop diesel engine power stations whilst
attracting high subsidies via the Renewable Obligation subsidy
scheme by using the bio-fuel which we manufacture from used cooking
oil (UCO), lends itself perfectly to the National Grid Operator's
need for highly flexible "stand-by" and "peaking" plant. Such plant
will be required throughout and beyond the next decade's capacity
tightness as more wind and other intermittent sources of renewable
energy come into operation.
Our favourable experience in the past year with two plants
contracted to National Grid Company's (NGC) short term operating
reserve programme underpins our strategy to continue to bid for
further STOR contracts. We expect to extend our small fleet by a
further four plants in partnership with one of the world's leading
diesel engine manufacturers following their positive validation of
operation on UCO in the past year. We consider this business to be
symbiotic with our wind operations and we plan a modest expansion
of it, having significantly improved the annual operating cash
performance of our existing 8MW fleet.
We welcome the Government enthusiasm for renewable energy
schemes where local people benefit from the power produced.
However, we believe that better mechanisms are needed than the
proposed Contracts for Differences to unlock the potential of
community-supported schemes. We will though, continue to invest
much effort in engaging with local communities in the manner which
has supported our success rate and their interests.
Your Board continues to be alert to the balance of shareholder
benefit between reinvesting and distributing earnings. In view of
the continued strength of asset building opportunities available to
the Company, we propose to pay a final dividend of 1.5p per
ordinary share (2011: 1.5p) in respect of the past year.
Chief Executive's Statement
Strategic Overview and Review of the Year
When REG successfully sold its Canadian business in 2009 it was
with the objective of committing GBP100m to new UK onshore
renewables projects by the end of 2012. We are now approaching the
end of this three year programme and I set out in this report how
we have performed against that commitment and what our targets are
for the future.
Since the end of 2009 we have commissioned 18.5MW of new wind
generation projects, repowered an existing site to 12MW and
acquired a 4.95MW operating project.
In total, we closed the year with 51.15MW of wind projects in
operation, with an annual expected output of 134,000MWh compared to
21.3MW and 50,000MWh when we started out on our 3 year plan. Taking
into consideration our consented pipeline we have been able to
complete the programme started in 2009.
Additionally we have 10MW of new plant under construction, 7
wind sites totalling around 36MW moving to construction and
potentially over 40MW of STOR projects available for construction.
We have built a business with a strong revenue stream delivering
positive operational cash flows and able, through its balance
sheet, to deliver significant growth into the future.
However, this growth has not been achieved easily. The truth is
that developing, building and owning wind farms is an immensely
complex business. The regulatory and political backdrop to the
sector is not easy whilst developing large infrastructure projects
in a responsible and safe manner is never less than challenging.
Nonetheless I think we can look back on the last three years with
some satisfaction.
Our current development business has been structured in order to
deliver, given average consenting rates in the UK, around 20-40MW
of new projects per annum; that is to say projects that are
"buildable" and thus readily deliver value for REG shareholders. We
will continue to target an "all in" development expenditure around
GBP4m per annum, or to put it another way around GBP125,000 per
consented MW. Of course we hope that we will exceed these targets
but development is a volatile and somewhat unpredictable business
and some years we will perform well, others less well. But if our
median annual goal of 30MW is achieved, your Company should
generate sound shareholder value.
Over the last three years REG Bio-Power has undertaken a
programme of research and development which has been fallow in
terms of profits, but fruitful in terms of laying the foundation
stones for creating shareholder value. REG Bio-Power is a unique
business providing a vital service for National Grid in the UK,
owning plant that can be started remotely running on our patented
fuel made from recycled cooking oil. Volatility on the UK
electricity system is likely to increase over coming years as
variable supply, including wind, grows. So the STOR market will
grow substantially and REG Bio-Power should be well placed to take
advantage.
So what of the next three years? REG now has a stable operating
base and an experienced team of professionals. We are awaiting
planning decisions on almost 70MW of new projects whilst we
anticipate submitting a further 70MW of projects in the coming
year. Although our ability to all equity finance projects will
inevitably diminish as we invest capital into our operational base,
REG's current equity position remains strong.
Wind - Operational Overview of Year
Our new 10MW project at Sancton Hill in the East Riding of
Yorkshire was completed in June 2012 on time and slightly below
budget.
The project utilises five Vestas V80 Gridstreamer 2MW turbines
and, in an average wind year, delivers around 28,000MWh of energy
to the local grid. REG's next completed project will be the 6MW
South Sharpley Wind Farm in County Durham, again utilising Vestas
Gridstreamer turbines. This project is well advanced and is
expected to be exporting power by November 2012. This will be
followed by the 4MW Orchard End wind farm. Utilising two Vestas
V90s, amongst the largest onshore wind turbines in the UK, this
project is expected to be complete by March 2013. South Sharpley
and Orchard End wind farms will increase REG's operational wind
farms to thirteen, totalling 61MW of capacity and producing in
excess of 160,000MWh of clean electricity per annum.
This will place REG amongst the top fifteen owners of onshore
wind projects in the UK.
I am pleased to report that turbine availability for the year
was excellent and at 97.1% allowed us to maximise the more
favourable national wind conditions pertaining in this period
relative to the unusually calm conditions during 2010/11.
We have invested significant effort in enhancing our operational
systems to manage our larger portfolio and it is anticipated that
the systems, processes and controls we have implemented are fully
scalable to match the Company's growth plans.
Wind - Project Development
During the year we submitted eight new planning applications
totalling 68.8MWs and lodged a planning appeal for a 12MW proposal.
For the current financial year, the focus will be on enhancing the
planning prospects of those schemes in the planning system,
targeting a further nine planning applications totalling some 70MW,
including our first projects in Scotland, while lodging and
managing further planning appeals where this is necessary.
Following the year end we were pleased to announce the receipt
of a planning permission for repowering our existing 4.95MW wind
farm at St. Breock in Cornwall into a new 10MW wind farm. The site
was purchased from E.ON in June 2010 with a view to repower and we
were delighted to repeat our success in repowering sites as
witnessed at Goonhilly in 2010.
During the year our 10MW project at Denzell Downs received a
planning consent. This project is currently the subject of a legal
challenge but we have always planned to build Denzell Downs
alongside our repowered project at St Breock, the two projects
being geographically close. Therefore assuming the legal challenge
to Denzell Downs is dealt with speedily by the courts, then both it
and St Breock should move to construction during 2013.
Significant progress has been made this year to advance our
development portfolio into the formal planning system. At the year
end we were awaiting determination for 76MW of capacity across
eight projects.
This year has also seen us widen the geographic spread of our
development drive. Two projects in South Wales have entered the
planning system and two in Scotland have advanced into the public
domain with applications expected in 2013. Additionally we acquired
a two-thirds stake in a scheme in Northern Ireland which is now
moving towards construction. Planning success in these areas will
not only give the Company access to excellent wind resource but
also further protect the operating portfolio from localised
fluctuations in wind speed.
Bio-Power - Operational Overview of the Year
The performance of REG Bio-Power has improved dramatically as a
result of tight cost control and the successful commissioning of a
new 2MW project in Leeds utilising five Volvo Penta diesel engines
operating on REG Bio's patented refined waste cooking oil. This
project provides short term operating reserve ("STOR") for National
Grid and increased REG Bio's operating plant to 8MWs. Both our
existing 6MW plant at Bentwaters and Leeds North were utilised
somewhat more than expected over the course of the year and this
resulted in an adjusted EBITDA loss of GBP244,000 over the year, a
significant improvement on the adjusted EBITDA loss last year of
GBP1,013,000.
Our own waste cooking oil collection business processed 2.2
million litres of used cooking oil into our bioliquid, LF100, with
almost 70% coming from our own customer base. We continued to
expand the collection business and volumes within the Public
Sector, signing contracts covering a further 80 Local Authority
Household Recycling Centres and taking the total number of HRC
sites to over 420. Collection volumes also increased from the
commercial contracts we have with a number of food processing
companies.
To date our power plants have all been built using engines
operating at 400kW. In 2012, we successfully tested LF100 with two
other engine manufacturers using engines rated at up to 2MW, a
development which will allow us to build and operate STOR sites
with a much larger MW capacity than at present. The STOR market is
forecast to double between now and 2020 and REG Bio-Power is
ideally placed to take advantage of this expansion.
Several industries, including oleochemical, polyurethane and
lubrication, use premium-priced virgin vegetable oils in their
production processes as a substitute for fossil oils. LF100 as our
bioliquid is recovered from a waste and is therefore more
sustainable than virgin vegetable oil. In 2011/12, we sold over
600,000 litres of LF100 under contract to two companies, who
produce sustainable building cladding and specialist industrial
metalworking fluids, as a replacement for virgin vegetable oil.
The political environment
At a policy level, the period has been dominated by discussion
of the new National Planning Policy Framework (NPPF), the
Government's Localism agenda and the Renewable Obligation
re-banding. While the emergence of the NPPF has seen previous
guidance swept aside, a commitment to sustainable development
remains at the core of the new policy. There is scant evidence to
date to suggest a fundamental shift in onshore wind schemes'
prospects of success at appeal following the introduction of the
new guidance.
Localism demands considerable attention be paid to early and
thorough engagement with parish or community councils and the local
population. However given the historic low rate of consent at local
planning authority level for onshore wind farms compared to other
forms of development, this has been an essential ingredient of the
process for wind developers for a number of years.
Similarly the need to demonstrate tangible benefits to the
communities hosting wind farms has been highlighted at Governmental
level over the last year. We have adopted a standard Community Fund
contribution of GBP4,000 per installed MW of capacity; typically
administered by a third party over the project's operating life. An
element of flexibility has been maintained, allowing the sum to be
front-loaded if suitable capital projects are identified for
funding.
This was put into practice this year at Sancton Hill in
Yorkshire. Construction of the 10MW site commenced in November 2011
and simultaneously the first GBP70,000 was released into the
Community Fund. Among a range of local good causes supported, the
first tranche of funding enabled local volunteers to complete an
11-year project to return Sancton Village Hall to use. Close
liaison throughout the construction and early operation period has
engendered a more harmonious relationship with the host community
than would otherwise have been the case.
Group Financial Highlights
Wind speeds this year were in line with P50 estimates and this,
together with improved results from REG Bio, resulted in revenues
of GBP12.1m (2011: GBP9.8m) with adjusted EBITDA of GBP2.7m (2011:
nil). Pre tax losses narrowed from GBP3.0m in 2011 to GBP2.0m this
year.
Our expenses this year were GBP5.0m, 6% more than the GBP4.7m we
spent last year. We have been conscious that in establishing the
cost base of the Company to develop a significant portfolio of
operating assets as quickly as possible, we must work hard to hold
our expense ratio at a satisfactory level. We anticipate that
expenses will be approximately the same this current year.
As a result of investing GBP17.2m in new projects year end free
cash declined from GBP14.9m to a still healthy GBP9.6m. This is a
sound achievement when it is realised that our latest three wind
projects with capital investment of over GBP22m have been financed
entirely using our own equity.
In order to finance future growth we closed a second project
financing with the Co-operative Bank. This covered the 20.5MW of
wind projects at Goonhilly, High Haswell and Loscar. The debt is a
fifteen year GBP25m facility at a fixed rate of 5.5%. This led to
an increase in net debt to GBP16.3m (2011: GBP4.7m net cash) as the
strategy of gearing from a position of all equity progresses.
Restricted cash increased from GBP0.9m last year to GBP8.6m at
the end of the period. Much of this restricted cash is the balance
of the turbine contract relating to South Sharpley and Orchard End,
effectively meaning the majority of our upcoming construction cash
flows are fully funded.
(1) Adjusted earnings before interest, taxation, depreciation
and amortisation ("EBITDA") is equal to the Group's continuing
operating loss before exceptional administrative costs, share based
payments, interest, taxation, depreciation and amortisation.
Health and Safety
REG aims to adhere to best practice in the industry and health
and safety underpins all of our projects, both development and
operational. REG has been nominated for the CIR Risk Magazine
Transformation Award 2012 which is testament to the effort that has
been made in this extremely important area.
Staff
REG's staff have, once again, worked ceaselessly in an often
difficult environment. They continue to perform over and above the
call of duty and I and the Board are indebted to them for their
dedication.
Post Year End Activity
On 3 October 2012 it was announced that the Group had completed
the project financing of two wind farms; Sancton Hill (10MW) and
South Sharpley (6MW).
The project financing is for GBP16m repayable over 10 years at a
rate fixed at 5.7% and is provided by The Co-operative Bank. Funds
from the loan are drawn down in two tranches, GBP9.7m on 3 October
2012, and GBP6.3m on the commercial operation date of the South
Sharpley wind farm, expected to be by the end of the calendar
year.
Outlook
It has now been seven years since REG listed on the London Stock
Exchange's AIM Market. Whilst we have declared over GBP18.5m in
dividends for our shareholders in that period, it is apparent that
there remains a wide disparity between the intrinsic value of the
Company and its share price. Therefore the next period of growth
for REG must be balanced by a need to return some of the benefits
of this growth to our patient shareholders.
Overall REG remains in sound health. The environment for
consenting and then building onshore wind projects will remain,
rightly, challenging but REG is well placed to exploit its market
leading position.
Consolidated Income Statement
For the year ended 30 June 2012
2012 2011
GBP000 GBP000
Revenue 12,108 9,818
Cost of sales (6,968) (6,020)
-------------- --------------
Gross profit 5,140 3,798
--------------------------------------- --------------- ---------------
Administrative expenses (4,980) (4,701)
Exceptional administrative expenses (462) (670)
--------------------------------------- --------------- ---------------
Total administrative expenses (5,442) (5,371)
Development costs (1,029) (1,742)
-------------- --------------
Group trading loss (1,331) (3,315)
Other operating income 125 -
-------------- --------------
Group operating loss from continuing
operations (1,206) (3,315)
Finance revenue 41 333
Finance costs (791) -
-------------- --------------
Loss on continuing operations before
taxation (1,956) (2,982)
Tax credit 159 337
-------------- --------------
Loss for the year from continuing
operations (1,797) (2,645)
Discontinued operations
Loss for the year from discontinued
operations - (373)
-------------- --------------
Loss for the year (1,797) (3,018)
Loss for the year attributable to:
Equity holders of the parent (1,797) (3,018)
Non-controlling interests - -
-------------- --------------
(1,797) (3,018)
Loss per share (pence)
Basic and diluted LPS from continuing
operations (1.74p) (2.56p)
Basic and diluted LPS on loss for
the year (1.74p) (2.92p)
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2012
2012 2011
GBP000 GBP000
Loss for the year (1,797) (2,645)
Effective portion of changes in fair
value of cash flow hedges:
Foreign currency letters of credit (161) -
Interest rate swaps (2,661) -
Taxation on financial instruments 677 -
-------------- --------------
Other comprehensive income (net of (2,145) -
taxation)
-------------- --------------
Total comprehensive income for the
period (3,942) (2,645)
Loss for the year attributable to:
Equity holders of the parent (3,942) (2,645)
Non-controlling interests - -
-------------- --------------
(3,942) (2,645)
Consolidated Balance Sheet
For the year ended 30 June 2012 2012 2011
GBP000 GBP000
ASSETS
Non-current assets
Goodwill 7,390 7,390
Development costs 7,682 5,009
Property, plant and equipment 67,205 50,578
Deferred tax asset 941 342
---------------- ----------------
83,218 63,319
---------------- ----------------
Current assets
Inventories 242 153
Trade and other receivables 4,395 5,454
Intangibles 2,362 2,278
Restricted cash 8,582 900
Cash and cash equivalents 9,566 14,901
---------------- ----------------
25,147 23,686
---------------- ----------------
Total assets 108,365 87,005
LIABILITIES
Current liabilities
Trade and other payables 4,949 2,834
Borrowings 1,356 717
---------------- ----------------
6,305 3,551
Non-current liabilities
Borrowings 33,137 10,421
Derivative financial instruments 2,661 -
Other long term liabilities - 1,200
Deferred tax liabilities 113 380
---------------- ----------------
35,911 12,001
---------------- ----------------
Total liabilities 42,216 15,552
---------------- ----------------
EQUITY
Share capital 10,330 10,325
Share premium 79,707 79,707
Share based payment reserve 1,311 1,179
Hedging reserve (2,145) -
Retained earnings (23,604) (19,758)
---------------- ----------------
Total equity attributable to the
Company's equity holders 65,599 71,453
Non-controlling interests 550 -
---------------- ----------------
Total equity 66,149 71,453
---------------- ----------------
Total equity and liabilities 108,365 87,005
Consolidated Cash Flow statement
For the year ended 30 June 2012
2012 2011
GBP000 GBP000
Cash flows from operating activities
Net cash generated/(used) in operating
activities 671 (2,032)
Cash flows from investing activities
Purchase of property, plant and equipment (17,211) (16,041)
Proceeds from disposal of fixed assets - 480
Capitalised development costs (3,283) (1,427)
Acquisition of subsidiaries (450) -
Net proceeds from sale of subsidiary 2,329 3,604
Interest received - 63
Movement in restricted cash accounts (7,682) 3,957
---------------- ----------------
Net cash used in investing activities (26,297) (9,364)
Cash flows from financing activities
New bank loans raised (net of issue
costs) 23,892 11,138
Repayment of borrowings (717) -
Interest paid (including interest rate (819) -
swap)
Dividends paid to the Company's equity
shareholders (2,065) (2,065)
---------------- ----------------
Net cash generated from financing activities 20,291 9,073
Net decrease in cash and cash equivalents (5,335) (2,323)
Cash at the beginning of the year 14,901 17,224
---------------- ----------------
Cash at end of year 9,566 14,901
Consolidated Statement of Changes in Equity
For the year ended 30 June 2012
Share
Share based Non
Share premium payment Retained Hedging controlling Total
capital account reserve earnings reserve interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2010 10,325 79,707 1,102 (14,675) - - 76,459
Loss for the
year and total
comprehensive
income - - - (3,018) - - (3,018)
---------- ---------- ---------- ---------- ---------- ---------- ------------
Share based payments - - 77 - - - 77
Dividend - - - (2,065) - - (2,065)
---------- ---------- ---------- ---------- ---------- ---------- ------------
At 30 June 2011 10,325 79,707 1,179 (19,758) - - 71,453
Loss for the
year - - - (1,797) - - (1,797)
Effective portion of
changes in fair value
of cash flow hedges:
Foreign currency
letters of credit - - - - (161) - (161)
Interest rate
swaps - - - - (2,661) - (2,661)
Taxation - - - - 677 - 677
---------- ---------- ---------- ---------- ---------- ---------- ------------
Total comprehensive
income - - - (1,797) (2,145) - (3,942)
---------- ---------- ---------- ---------- ---------- ---------- ------------
Issue of new
equity 5 - - - - - 5
Share based payments - - 148 - - - 148
Reserves transfer - - (16) 16 - - -
Dividend - - - (2,065) - - (2,065)
Sale of
non-controlling
interest - - - - - 550 550
---------- ---------- ---------- ---------- ---------- ---------- ------------
At 30 June 2012 10,330 79,707 1,311 (23,604) (2,145) 550 66,149
Notes
1. Report & Accounts
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards as
issued by the IASB as they apply to the financial statements of the
Group for the year ended 30 June 2012. The accounting policies
which follow set out those policies which apply in preparing the
financial statements for the year ended 30 June 2012 and are
consistent with those applied for the year ended 30 June 2011.
The Group financial statements are presented in Sterling and all
values are rounded to the nearest thousand pounds (GBP) except when
otherwise indicated.
The financial information in this announcement which was
approved by the Board of Directors does not constitute the Group's
statutory accounts for the years ended 30 June 2011 or 2012 but is
derived from those accounts.
The auditors have reported on the 2012 accounts and their report
was unqualified and did not draw attention to any matters by way of
emphasis.
This preliminary announcement is based on the Report &
Accounts which are prepared in accordance with IFRS. However, this
announcement does not, in itself, contain enough information to
comply with IFRS'.
This statement is not being posted to shareholders. The Report
& Accounts for the year ended 30 June 2012, together with
notice the Notice of Meeting will be posted to shareholders in due
course. Further copies will be available on request from, The
Company Secretary, Renewable Energy Generation Limited, Elizabeth
House, 9 Castle Street, St Helier, Jersey, JE4 2QP, or on-line from
www.renewableenergygeneration.co.uk
This document contains forward-looking statements. The
forward-looking statements reflect the knowledge and information
available to the Group during the preparation and up to the
publication of this document. By their very nature, these
statements depend on circumstances and relate to events that may
occur in the future thereby giving a degree of uncertainty.
Therefore nothing in this document should be construed as a profit
forecast by the Group.
2. Going Concern
A review of business activity and future prospects of the Group
are covered in the Chairman's and Chief Executive Officer's
statement. Detailed information regarding the Group's current
facility levels, liquidity risk and maturity dates are provided in
note 25 of the full Report & Accounts.
The continued strategy of the Group to replace a proportion of
cash equity in its operational wind portfolio with long term non
recourse bank finance has allowed the Group to release cash for
onward investment in its growing portfolio of consented renewable
energy projects. As a result, the immediate cash flow needs of the
Group are covered by its current cash balances. Given that the debt
is secured against operating sites, with a known history of
operating costs, the key assumption in satisfying covenants is wind
volumes. Covenant compliance is maintained with wind volumes in the
lowest 10% of long term statistical averages. Over the 12 year term
of this debt this is considered remote, and the Group has the
ability to inject equity into the projects if wind volumes are
below covenant levels.
Going forward, the preference will be to continue to finance
future construction with non recourse debt.
The Board has reviewed the Group's forecasts and budgets over
the next 36 months and are satisfied that current cash balances in
combination with cash generation from operating activities will
provide sufficient liquidity for the Group. Accordingly the
accounts have been prepared on the going concern basis.
3. Exceptional administrative costs
2012 2011
GBP000 GBP000
Loss on disposal on repower of Goonhilly - (275)
Legal and professional fees relating to
offer to acquire the group - (95)
Acquisition costs(1) (64) (120)
Impairment of intangible development costs(2) (398) (180)
-------------- --------------
(462) (670)
(1) Transaction costs connected to the acquisition of a
controlling interest in REG Creagh JV Company Limited have been
written off to the consolidated statement of comprehensive income.
The details of the transaction are given in note 32 of the full
Report and Accounts.
(2.) Following the Group's annual impairment reviews, the
Directors considered that GBP398,000 (2011 - GBP180,000) of
capitalised development costs were impaired due to a current
assessment of the respective planning prospects.
4. Dividends per share
2012 2011
Declared and paid during the GBP000 GBP000
period
Equity dividends on ordinary shares
Final paid for 2011 of 1.5p (2010 - 1.5p) per
ordinary share 1,549 1,549
Interim Dividend for 2012 paid of 0.5p (2011
- 0.5p) per ordinary share 516 516
-------------- --------------
2,065 2,065
A final dividend of 1.5p per ordinary share, amounting to
GBP1,549,000 has been proposed by the Directors. The proposed
dividend has not been recognised as a liability as at 30 June 2012.
The dividend is subject to shareholder approval at the Annual
General Meeting on 7 December 2012 and will be paid on 9 January
2013 to shareholders on the record at 7 December 2012. The shares
will go ex-dividend on 5 December 2012.
5. Events subsequent to the balance sheet date
On 1 October it was announced the Strategic Planning Committee
of Cornwall Council had voted to grant planning permission for a
10MW wind farm. The application was for five 100 metre turbines to
replace the existing eleven turbines erected on St Breock Downs in
1994.
On 3 October 2012 it was announced that the Group had completed
the project financing of two wind farms; Sancton Hill (10MW) and
South Sharpley (6MW).
The project financing is for GBP16m repayable over 10 years at a
fixed rate of 5.7% and is provided by The Co-operative Bank. Funds
from the loan are drawn down in two tranches, GBP9.7m on 3 October
2012, and GBP6.3m on the commercial operation date of the South
Sharpley wind farm, expected to be by the end of the calendar
year.
6. Annual General Meeting
The Annual General Meeting will be held at Elizabeth House, 9
Castle Street, St Helier, Jersey, Channel Islands on 7 December
2012 at 9.30 a.m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FFUFWEFESELS
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