TIDMWIND
RNS Number : 9823W
Renewable Energy Generation Ltd
04 February 2013
4 February 2013
Renewable Energy Generation Limited
("REG" or the "Group")
Interim Results for the six months to 31 December 2012
RENEWABLE ENERGY GENERATION REPORTS A STRATEGIC RELATIONSHIP
WITH BLACKROCK AND A STRONG PIPELINE OF FUTURE PROJECTS
Financial highlights
-- Group revenues of GBP6.5m (H1 2012: GBP6.3m)
-- Group EBITDA(1) of GBP1.4m (H1 2012: GBP1.6m)
-- Cash inflow from operating activities GBP1.5m (H1 2012: outflow
GBP0.6m)
-- Unrestricted cash resources of GBP10m as at 31 December 2012
(H1 2012: GBP19m)
-- Proposed interim dividend of 0.5p per ordinary share (H1 2012:
0.5p)
Operational highlights
-- Cornwall Council grants planning permission for 10MW St Breock
Repower project
-- Turbines ordered for 6MW Burnthouse Farm in Cambridgeshire
-- Project financing completed for 10MW Sancton Hill and 6MW
South Sharpley wind farms
-- Circa 80MW of wind projects awaiting determination in the
UK planning system
Post period end events
-- Announcement of strategic partnership between REG and BlackRock
-- Sale of two operating projects, 10MW Sancton Hill and 6 MW
Orchard End to BlackRock for a total enterprise value of GBP32.1m
-- Initiation of asset management agreement, under which REG
will manage certain wind farms for BlackRock in return for
an asset management fee
(1) Earnings before interest, taxation, depreciation and
amortisation ("EBITDA") is equal to the Group's continuing
operating profit before exceptional items, share based payments,
interest, taxation, depreciation and amortisation.
Andrew Whalley, REG Chief Executive Officer said:
"REG ended the half year with 80MW in the planning system
awaiting a decision, testimony to the efforts of our development
division to progress projects towards determination."
"Cornwall Council's approval of our project to repower St Breock
Wind Farm represents a major success during the period and we
anticipate this highly energetic scheme entering construction later
in 2013".
"The announcement of a strategic alliance with BlackRock heralds
an exciting future for REG while the initial sale of two operating
projects demonstrates the ongoing value of well-sited, well-managed
wind farms."
A presentation to analysts will be held today at the offices of
City Profile at 9.30am.
ENDS
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
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 twelve wind projects in Cambridgeshire, Cornwall, County
Durham, Yorkshire, Cumbria and Gwynedd, with a total capacity of
57.15MW 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
During the period a planning application to repower St Breock
Wind Farm in Cornwall was approved at local authority level. REG
purchased this highly energetic site in 2010 with the intention of
replacing the existing 11 turbines with modern machines capable of
generating significantly more energy. Achieving planning permission
at committee level is a notable achievement given the low consent
rates at this stage in England and will allow us to progress the
project into construction in 2013.
Further planning submissions in the period mean REG is awaiting
decisions on 80MW across 10 schemes. It is anticipated that a
further 60 to 70MW of applications will follow by the year end.
A 6MW site at Burnthouse Farm in Cambridgeshire entered
construction late in the period and is anticipated to become
operational in the summer of 2013.
Electricity production at REG's operational fleet of wind farms
climbed to 64,004MWh compared to 55,684MWh in the corresponding
period last year. This is due in part to the availability
throughout the period of the Sancton Hill site which came online in
June 2012.
Post period end REG completed the sale of operating projects at
Sancton Hill (10MW) and South Sharpley (6MW) to BlackRock NTR
Renewable Power Fund for a total enterprise value of GBP32.1m. This
results in upfront cash consideration of GBP16.15m, contingent
deferred consideration of GBP0.65m and BlackRock assuming project
debt of GBP15.3m. Additionally it is intended that a further 4MW
wind farm will be sold to BlackRock in spring 2013.
The transaction also includes the establishment of an Asset
Investment Agreement, which provides a framework for future
co-operation between REG and BlackRock, enabling REG to continue to
recycle capital to fund future growth and enhance returns to
investors.
Additionally a long-term Asset Management Agreement (AMA) with
BlackRock provides REG with a new high-quality income stream. The
AMA, signed on normal commercial terms, allows REG to continue to
manage Sancton Hill and South Sharpley in return for an asset
management fee. The same arrangement will apply to any other wind
farms REG sells to BlackRock and may apply to sites BlackRock
acquires from other sources.
The interim dividend is maintained at 0.5p per share and will be
paid on 8 April 2013 to shareholders on the register as at 22 March
2013.
Unaudited interim consolidated income statement
For the six months to 31 December 2012
Six months Six months Year to
to 31 December to 31 December 30 June
2012 2011 2012
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Revenue 6,466 6,258 12,108
Cost of Sales (3,714) (3,279) (6,968)
-------------------------------------- ---------------- ---------------- ----------
Gross profit 2,752 2,979 5,140
-------------------------------------- ---------------- ---------------- ----------
Administrative expenses (2,698) (2,300) (4,980)
Exceptional administrative
expenses (note 7) (501) (52) (462)
Development costs (411) (646) (1,029)
Other operating income 20 12 125
Group operating loss from continuing
activities (838) (7) (1,206)
Net finance (cost)/revenue (866) 14 (750)
Profit / (loss) on continuing
operations before tax (1,704) 7 (1,956)
Tax 200 - 159
-------------------------------------- ---------------- ---------------- ----------
Profit / (loss) on continuing
operations after tax (1,504) 7 (1,797)
Attributable to
-------------------------------------- ---------------- ---------------- ----------
Equity holders of the parent (1,504) 7 (1,797)
Non controlling interest - - -
Total (1,504) 7 (1,797)
(Loss) / earnings per share attributable to the equity holders
of the Company during the period
- basic and diluted from
continuing activities (1.46p) 0.01p (1.74p)
- basic and diluted (1.46p) 0.01p (1.74p)
Unaudited interim consolidated balance sheet
As at 31 December 2012
31 December 31 December 30 June
2012 2011 2012
GBP'000 GBP'000 GBP'000
ASSETS (un-audited) (un-audited) (audited)
Non-current assets
Goodwill (note 3) 7,390 7,390 7,390
Development assets (note 3) 9,476 6,894 7,682
Property, plant and equipment
(note 4) 53,758 60,188 67,205
Deferred tax asset 1,278 342 941
71,902 74,814 83,218
Current Assets
Assets classified as held for
sale (note 7) 19,978 - -
Inventories 271 357 242
Trade and other receivables 2,891 3,753 4,395
Intangibles 2,208 2,551 2,362
Restricted cash (note 5) 6,107 10,556 8,582
Cash and cash equivalents (note
5) 9,924 19,045 9,566
----------------------------------- ------------- ------------- ----------
41,379 36,262 25,147
Total assets 113,281 111,076 108,365
----------------------------------- ------------- ------------- ----------
LIABILITIES
Current liabilities
Trade and other payables (note
6) 4,196 5,367 4,949
Liabilities directly associated
with assets classified as held
for sale (note 7) 9,482 - -
Borrowings 1,760 1,044 1,356
----------------------------------- ------------- ------------- ----------
15,438 6,411 6,305
----------------------------------- ------------- ------------- ----------
Non-current liabilities
Borrowings 32,082 33,812 33,137
Derivatives 3,233 2,082 2,661
Deferred tax liabilities - 380 113
----------------------------------- ------------- ------------- ----------
35,315 36,274 35,911
Total liabilities 50,753 42,685 42,216
----------------------------------- ------------- ------------- ----------
EQUITY
Share capital 10,330 10,325 10,330
Share premium 79,707 79,707 79,707
Share based payment reserve 1,465 1,227 1,311
Hedging reserve (2,867) (2,118) (2,145)
Retained earnings (26,657) (21,300) (23,604)
----------------------------------- ------------- ------------- ----------
Equity attributable to the equity
holders of the parent 61,978 67,841 65,599
----------------------------------- ------------- ------------- ----------
Non controlling interest 550 550 550
----------------------------------- ------------- ------------- ----------
Total equity and liabilities 113,281 111,076 108,365
----------------------------------- ------------- ------------- ----------
Unaudited interim consolidated cash flow statement
For the six months to 31 December 2012
Six months Six months Year to
to to 30 June
31 December 31 December 2012
2012 2011
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Cash flows from operating activities
Net cash generated/(used) in
operations 1,509 (578) 671
------------------------------------------ ------------- ------------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (6,252) (9,517) (17,211)
Capitalised development costs (1,991) (1,290) (3,283)
Business combinations - (450) (450)
Net proceeds from sale of subsidiary - 2,329 2,329
Interest received - 14 -
Movement in restricted cash accounts 1,739 (9,655) (7,682)
------------------------------------------ ------------- ------------- ----------
Net cash used in investing activities (6,504) (18,569) (26,297)
------------------------------------------ ------------- ------------- ----------
Cash flows from financing activities
New borrowings (net of issue
costs) 8,809 23,957 23,892
Interest paid (948) (366) (717)
Repayment of borrowings (680) (299) (819)
Dividends paid to Company's shareholders (1,549) - (2,065)
------------------------------------------ ------------- ------------- ----------
Net cash generated from financing
activities 5,632 23,292 20,291
------------------------------------------ ------------- ------------- ----------
Net increase/ (decrease) in cash
and cash equivalents 637 4,144 (5,335)
Cash at beginning of period 9,566 14,901 14,901
Cash at end of period 10,203 19,045 9,566
------------------------------------------ ------------- ------------- ----------
Unaudited statement of comprehensive income
For the six months to 31 December 2012
Six months Six months
ended 31 ended 31 Year ended
December December 30 June 2012
2012 2011
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Profit / (loss) for the period (1,504) 7 (1,797)
Other comprehensive income / - - -
(expenditure)
---------------------------------- ------------- ------------- ---------------
Effective portion of change in
fair value cash flow hedges net
of recycling (722) (2,118) (2,145)
Total comprehensive income /
(expenditure) for the period
net of tax (2,226) (2,111) (3,942)
---------------------------------- ------------- ------------- ---------------
Attributable to
---------------------------------- ------------- ------------- ---------------
Equity holders of the parent (2,226) (2,111) (3,942)
---------------------------------- ------------- ------------- ---------------
Non controlling interest - - -
---------------------------------- ------------- ------------- ---------------
Total (2,226) (2,111) (3,942)
---------------------------------- ------------- ------------- ---------------
Unaudited interim consolidated statement of changes in
equity
For the six months to 31 December 2012
Share
Share based Non controlling
Share premium payments Hedging Retained interest
capital account reserve reserve earnings Total
equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2012 10,330 79,707 1,311 (2,145) (23,604) 550 66,149
--------------------- ---------- ---------- ---------- ---------- ----------- ----------------- --------
Total comprehensive
income - - - (722) (1,504) - (2,226)
--------------------- ---------- ---------- ---------- ---------- ----------- ----------------- --------
Share based
payments - - 154 - - 154
Dividend (note
2) - - - - (1,549) - (1,549)
Acquisitions
of non controlling
interest with
a change of
control - - - - - - -
At 31 December
2012 10,330 79,707 1,465 (2,867) (26,657) 550 62,528
--------------------- ---------- ---------- ---------- ---------- ----------- ----------------- --------
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 2012. The
Group does not anticipate any change in these accounting policies
for the year ended 30 June 2013. 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. Dividends
Six months Six months Year to
to to 30 June
31 December 31 December 2012
2012 2011
Declared and paid during the period GBP'000 GBP'000 GBP'000
on
ordinary equity shares
(un-audited) (un-audited) (audited)
Final dividend declared and paid 1,549 1,549 1,549
Interim dividend declared and paid - - 516
-------------------------------------- ------------- ------------- ----------
1,549 1,549 2,065
-------------------------------------- ------------- ------------- ----------
Proposed but not recognised as a liability at 31 December 2012
Equity dividends on ordinary shares:
Interim dividend declared and paid
- 0.5p 516 516 -
-------------------------------------- ------------- ------------- ----------
The dividend will be paid on 8 April 2013 to members on the
register on 22 March 2013. Shares will be marked ex-dividend on 20
March 2013.
3. Intangible assets
(un-audited) Development costs Goodwill Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2012 7,278 7,390 14,668
Additions 1,684 - 1,684
Transfers to property, plant
and equipment (492) - (492)
------------------------------ ------------------ --------- --------
At 30 June 2012 8,470 7,390 15,860
Additions 1,991 - 1,991
Transfers to property, plant
and equipment (197) - (197)
------------------------------ ------------------ --------- --------
At 31 December 2012 10,264 7,390 17,654
Amortisation and impairment
At 1 January 2012 384 - 384
Amortisation charge 6 - 6
Impairment charge 398 - 398
At 30 June 2012 788 - 788
At 31 December 2012 788 - 788
Net book value
At 31 December 2012 9,476 7,390 16,866
------------------------------ ------------------ --------- --------
At 30 June 2012 7,682 7,390 15,072
------------------------------ ------------------ --------- --------
At 1 January 2012 6,894 7,390 14,284
------------------------------ ------------------ --------- --------
Included within additions to development costs are internal
development costs of GBP200,000 (2012: GBP160,000).
4. Property, plant and equipment
(un-audited) Assets
Other in the Fixtures,
Operating generation course Freehold fittings
wind sites plant of construction land and equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2012 49,372 5,588 9,624 1,252 1,500 67,336
Additions 35 30 8,007 - 158 8,230
Transfers from
Development costs 219 - 273 - - 492
Movements 11,694 48 (11,742) - - -
At 30 June 2012 61,320 5,666 6,162 1,252 1,658 76,058
Additions 877 (37) 5,490 - 336 6,666
Movements 6,531 - (6,531) - - -
Transfers from
Development costs - - 197 - - 197
Assets classified
as held for sale (18,704) - - - - (18,704)
At 31 December
2012 50,024 5,629 5,318 1,252 1,994 64,217
Depreciation
At 1 January 2012 6,254 481 - - 413 7,148
Depreciation charge 1,442 146 - - 117 1,705
At 30 June 2012 7,696 627 - - 530 8,853
Depreciation charge 1,412 42 - 152 1,606
At 31 December
2012 9,108 669 - - 682 10,459
Net book value
At 31 December
2012 40,916 4,960 5,318 1,252 1,312 53,758
--------------------- ------------ ------------ ----------------- ---------- --------------- ---------
At 30 June 2012 53,624 5,039 6,162 1,252 1,128 67,205
--------------------- ------------ ------------ ----------------- ---------- --------------- ---------
At 1 January 2012 43,098 5,107 9,624 1,252 1,087 60,188
--------------------- ------------ ------------ ----------------- ---------- --------------- ---------
During the period an amount of GBP414,000 (2012 - GBP427,000) 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.
5. Cash
Six months Six months Year to
to to 30 June
31 December 31 December 2012
2012 2011
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Amounts deposited as security for
letters of credit for settlement
of turbine acquisitions 1,822 6,003 4,075
Amounts placed as security for project
finance 3,020 2,583 2,507
Amounts placed as security against
maintenance contractor 2,000 2,000 2,000
---------------------------------------- ------------- ------------- ----------
Restricted cash 6,842 10,556 8,582
Restricted cash included in disposal (735) - -
group held for sale
---------------------------------------- ------------- ------------- ----------
6,107 - -
Cash and cash equivalents 10,203 19,045 9,566
Cash included in disposal group held (279) - -
for sale
---------------------------------------- ------------- ------------- ----------
9,924 19,045 9,566
6. Trade and other payables
Six months Six months Year to
to to 30 June
31 December 31 December 2012
2012 2011
GBP'000 GBP'000 GBP'000
(un-audited) (un-audited) (audited)
Trade payables 931 806 1,400
Final dividend - 1,549 -
Deferred consideration 1,850 1,850 1,850
Accruals and other creditors 1,415 1,162 1,643
4,196 5,367 4,949
------------------------------ ------------- ------------- ----------
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.
7. Post balance sheet events
On 22 January 2013, the Group's 6MW South Sharpley Wind Farm in
County Durham entered commercial electricity production. Under the
terms of the project financing with The Co-operative Bank the group
drew down the second and final tranche of GBP6.3m from the loan
agreement.
On 23 January 2013, the Group disposed of two newly built wind
farms at Sancton Hill (10MW) and South Sharpley (6MW) to for a
total enterprise value of GBP32.1m, resulting in upfront cash
consideration of GBP16.15m, contingent deferred consideration of
GBP0.65m and the buyer assuming project net debt of GBP15.3m.
GBP'000
(un-audited)
Net assets held for sale at 31 December 2012 10,496
Post balance sheet increase in assets held for sale 1,058
Post balance sheet liabilities associated with assets
held for sale (5,867)
Net assets of disposal group 5,687
As at 31 December 2012 GBP501,000 of fees (2012: GBPnil) in
respect of the disposal have been charged to the income
statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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