IPSA Group PLC Unaudited results for the 12 months ended 31/03/16 (8654C)

TIDMIPSA

RNS Number : 8654C

IPSA Group PLC

30 June 2016

30 June 2016

IPSA GROUP PLC

('IPSA' or the 'Company')

Unaudited Results for the 12 month period ended 31 March 2016

IPSA, the AIM and Alt(x) dual listed independent power plant developer, today announces its unaudited interim results for the 12 month period ended 31 March 2016. This further unannounced interim period is provided following the change to the accounting reference date to 30 September as announced on 1 April 2016.

Highlights:

   --        Revenue of GBP2.5m (2015 - GBP3.6m). 
   --        Group loss after tax of GBP0.56m (2015 - GBP6.93m loss). 
   --        Sale of Newcastle Cogeneration Pty Limited. 

Commenting, Susan Laker, Chairman of IPSA, said:

"These are the last interims for IPSA Group PLC which include the operations of Newcastle Cogeneration (Pty) Limited ("NewCogen") which were sold in February 2016. The Company is now focusing its attentions on the sale of the balance of plant equipment held for sale in Italy and in finding a suitable reverse merger partner to maintain the quotations in London and Johannesburg."

For further information contact:

   Peter Earl, Director, IPSA Group PLC   [phone] 

James Joyce, James Bavister WH Ireland Ltd (Nominated Adviser and Broker) [phone]

   Riaan van Heerden, PSG Capital (Pty.) Limited, (South African Sponsors)   [phone] 

Or visit IPSA's website: www.ipsagroup.co.uk

CHAIRMAN'S STATEMENT

Following the extension of the Company's year-end, I am presenting to the shareholders of IPSA Group PLC (the "Group") a second unaudited interim statement covering the 12 month period to 31 March 2016.

As a result of the disposal of the Group's only operating company Newcastle Cogeneration Pty Limited ("Newcogen") on 29 February 2016, Newcogen's accounts have been included to that date. Since the effects of the disposal were already accounted for in the September Interims, the change in net assets relates to the release of certain provisions held in the Group's books pending completion. These provisions relate to directors' salaries, excess impairment provisions and foreign currency translation reserves that are no longer pertinent to the Company following the disposal of Newcogen.

The Company's financial position remains difficult and uncertain. The Company is reliant upon the forbearance of its creditors and notably EthosEnergy Italia SpA ('Ethos'), whilst it seeks to realise proceeds from the sale of assets held for resale, being ancillary plant held by the Company together with the receipt of funds due from Rurelec PLC in relation to deferred consideration.

The focus of the Company is to realise sufficient funds from these assets to repay all the Company's remaining creditors. However, there can be no guarantee that the Company will be successful in any sale or that the proceeds from the realisation of these assets will be sufficient to repay the creditors and the risk remains that the Company may need to be placed into administration, and consequently the shares will remain suspended.

Following the disposal of the Company's operating business on 29 February 2016, the Company is now an AIM Rule 15 cash shell and is seeking to conduct a reverse takeover. For the Company's shares to resume trading following the clarification of its financial position this would need to happen by 15 September 2016 for the Company to retain its AIM quotation. Furthermore it would need, under the terms of AIM Rule 15, to conclude a reverse takeover by 29 August 2016 to avoid its shares being suspended at that point if its shares had resumed trading prior to this date.

The board of IPSA has continued to focus on the disposal of the balance of plant, the proceeds of which, together with the receipt of the balance of funds due from Rurelec PLC, will be applied first to settle with our largest creditor, EthosEnergy, and our other creditors, who have all continued to show forbearance while we pursue these objectives. We are heavily reliant on the patience of our creditors to continue trading and as a consequence there remains a risk that the Company could be placed into administration if their patience runs out before these objectives can be achieved.

The Company's strategy, which was put in place under the outgoing chairman, continues to be to address the financial uncertainty of the Company as outlined above and to seek out a reverse merger partner prior to 29 August 2016 in accordance with AIM Rule 15.

On behalf of the shareholders I would like to thank the outgoing Chairman, Richard Linnell, and retiring directors Neil Bryson and Mark Otto for their stewardship of the Company over what have proved to be very testing times.

The new board will continue to work vigorously in pursuit of merger opportunities with a view to settling outstanding creditors and providing shareholders with value through a reverse merger that would allow the dual listings to be maintained in the permitted timetable. Although no prospective candidate has been identified, I hope to be in a position to provide shareholders with further information in due course.

I would like to thank creditors, shareholders and the outgoing directors for their support over the period under review.

Susan Laker

Chairman

IPSA GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

for the 12 month period ended 31 March 2016

 
                                    Notes    12 months     6 months   12 months 
                                               31/3/16      30/9/15     31/3/15 
                                             unaudited    unaudited     audited 
                                               GBP'000      GBP'000     GBP'000 
 Revenue                                         2,517        1,748       3,649 
 
 Cost of Sales                                 (3,077)      (1,712)     (3,804) 
 
 Gross Profit/(Loss)                             (560)           36       (155) 
 
 Administrative Expenses                       (1,012)        (629)     (1,482) 
 
 Operating Loss                                (1,572)        (593)     (1,637) 
 
 Other Expense                        3          (203)         (67)        (78) 
 Impairment on NewCogen 
  Investment Reversal/(Increase)                 1,241          438     (5,144) 
 
 Net Finance Expense                              (24)         (24)        (74) 
 
 Loss Before Tax                                 (558)        (246)     (6,933) 
 
 Tax Expense                                         -            -           - 
 
 Loss After Tax                                  (558)        (246)     (6,933) 
 
 Other Comprehensive 
  Income: 
 
 Exchange Differences 
  on                                           (5,683)            -       (118) 
 Translation of Foreign 
  Operation 
 
 Total Comprehensive 
  Loss                                         (6,241)        (246)     (7,051) 
 Attributable to Equity 
 Shareholders 
 
 Loss per ordinary 
  share (basic and 
  headline)                           4        (0.19p)      (0.23p)     (6.45p) 
 

IPSA GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)

at 31 March 2016

 
                              Notes      31/3/16      30/9/15    31/3/15 
                                       unaudited    unaudited    audited 
                                         GBP'000      GBP'000    GBP'000 
 Assets 
 Non-current Assets 
 Property, Plant 
  and Equipment                                -        1,916      1,916 
 
 Current Assets 
 Trade and Other 
  Receivables                              1,916        3,732      3,421 
 Cash and Cash Equivalents                     2           37          3 
                                           1,918        3,769      3,424 
 
 Non-current Assets 
  Classified as Assets 
  Held for Sale                 5          4,000        4,000      4,000 
 
 Total Assets                              5,918        9,685      9,341 
 
 Equity and Liabilities 
 
 Equity Attributable to Equity Holders 
  of the Parent: 
 Share Capital                             2,150        2,150      2,150 
 Share Premium Account                    26,767       26,767     26,767 
 Foreign Currency 
  Reserve                                      -      (5,843)    (5,843) 
 Profit and Loss 
  Reserve                               (28,072)     (22,077)   (21,831) 
 
 Total Equity                                845          997      1,243 
 
 Current Liabilities 
 Trade and Other 
  Payables                      6          4,653        7,486      7,152 
 Borrowings                                  420        1,202        946 
                                           5,073        8,688      8,098 
 
 Total Equity and 
  Liabilities                              5,918        9,685      9,341 
 

IPSA GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

for the 12 month period ended 31 March 2016

 
                                   12 months     6 months   12 months 
                                     31/3/16      30/9/15     31/3/15 
                                   unaudited    unaudited     audited 
                                     GBP'000      GBP'000     GBP'000 
 Loss for the Period                   (558)        (246)     (6,933) 
 Add back: Net Finance 
  Expense                                 24           24          73 
 Adjustments for: 
 Depreciation and Impairment             257          257       4,472 
 Group IAS 10 Write Down 
  re: Post                             (257)        (257)       1,311 
 Unrealised Exchange Losses                -            -        (30) 
 Change in trade and Other 
  Receivables                             91        (311)         153 
 Change in trade and Other 
  Payables                             (673)          334         311 
 
 Cash used in operations             (1,116)        (198)       (642) 
 

 Interest paid                          (62)          (6)        (13) 
 
 Net cash used in operations         (1,178)        (204)       (655) 
 
 Cash flows from Investing 
  Activities 
 Sale/(Purchase) of Plant 
  and Equipment                        1,916            -        (99) 
                                       1,916            -        (99) 
 Cash flow from Financing 
  Activities 
 Loans Received                          759          586         729 
 Loans Repaid                        (1,532)        (348)        (33) 
                                       (773)          238         696 
 
 (Decrease) / Increase 
  in Cash and Cash Equivalents          (35)           34        (58) 
 
 Cash and Cash Equivalents 
 at start of period                       37            3          61 
 Cash and cash equivalents 
 at end of period                          2           37           3 
 

IPSA GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

for the 12 month period ended 31 March 2016

 
                            Share      Share     Foreign      Profit     Total 
                          Capital    Premium    Currency    and Loss    Equity 
                                     Account     Reserve     Reserve 
                          GBP'000    GBP'000     GBP'000     GBP'000   GBP'000 
 
 At 01.04.14                2,150     26,767     (5,725)    (14,898)     8,294 
 
 Loss for the Period            -          -           -       (746)     (746) 
 Exchange Differences           -          -       (348)           -     (348) 
 Total Recognised 
  Expense                       -          -       (348)       (746)     (348) 
 for the Period 
 
 At 30.09.14                2,150     26,767     (6,073)    (15,644)     7,200 
 
 Loss for the Period            -          -           -     (6,187)   (6,187) 
 Exchange Differences           -          -         230           -       230 
 Total Recognised 
  Expense                       -          -         230     (6,187)   (5,957) 
 for the Period 
 
 At 01.04.15                2,150     26,767     (5,843)    (21,831)     1,243 
 
 Loss for the Period            -          -         160       (558)     (398) 
 Exchange Differences           -          -       5,683     (5,683)         - 
 Total Recognised 
  Expense                       -          -       5,843     (6,241)     (398) 
 for the Period 
 
 At 31.03.16                2,150     26,767           -    (28,072)       845 
 

Notes to the unaudited Interim Statement for the 12 month period ended 31 March 2016

1. Basis of Preparation

These condensed consolidated interim financial statements do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 March 2015 were derived from the statutory accounts for that period which have been delivered to the Registrar of Companies. Those accounts, which contained a qualified audit report, did not contain any statements under Sections 489(2) or (3) of the Companies Act 2006. The financial information contained in this interim statement has been prepared in accordance with all relevant International Financial Reporting Standards ("IFRS") as adopted by the European Union in force and expected to apply to the Group's results for the year ending 31 March 2015 and on interpretations of those Standards released to date.

2. Accounting Policies

These condensed consolidated interim financial statements have been prepared in accordance with the Group's IFRS accounting policies. These policies are set out in the Group's financial statements for the year ended 31 March 2015.

3. Other (Expense)/Income

 
                           12 months   6 months   12 months 
                             31/3/16    30/9/15     31/3/15 
                             GBP'000    GBP'000     GBP'000 
 Exchange Gains(1)                69         69         288 
 Storage and Insurance 
  Costs(2)                     (272)      (136)       (366) 
 
 Total                         (203)       (67)        (78) 
 

(1) Exchange gains/(losses) arising on the EUR denominated unpaid balance owing to EthosEnergy Italia SpA ("EthosEnergy") in respect of the refurbishment costs of the Turbines;

(2) Storage and insurance costs in respect of the Turbines and balance of plant;

4. Loss per Share

 
                               12 months    6 months   12 months 
                                 31/3/16     30/9/15     31/3/15 
 Average number of shares         107.5m      107.5m      107.5m 
 in issue during the period 
 
 Loss for the Period           GBP0.558m   GBP0.246m   GBP6.933m 
 
 Loss per ordinary share 
  - basic and headline             0.19p       0.23p       6.45p 
 Loss per ordinary share 
  - diluted                        0.19p       0.23p       6.45p 
 

5. Assets Held for Sale

This comprises directors' valuation of the balance of plant which was not sold to Rurelec PLC and is currently available for sale.

6. Trade and other payables

Trade and other payables include:

a) An amount of GBP3.7 million claimed by EthosEnergy in respect of the balance due for refurbishment work completed in 2008, plus storage charges and interest.

b) An accrual of GBP0.2 million in respect of remuneration due to the directors and which is subject to a waiver agreed in February 2016.

7. Disposal of Blazeway

The disposal of Blazeway Engineering Limited ("Blazeway") was announced on 28 January 2016 for a total consideration of GBP1.9m. The sale includes 100% of the share capital of NewCogen, loss making owner of the Group's only operational asset. Under IFRS accounting standards the directors consider this an adjusting event relating to IAS 10 - Events After the Reporting Period, as the Group no longer expects to receive the future cash flows of the disposed entities. It is therefore appropriate that entity and consolidation adjustments are made to the carrying value of Blazeway to reflect the sale proceeds. The directors recognise that following this fundamental disposal, IPSA will become a cash shell and under AIM rule 15 will be deemed to be an investing company.

The Board of Directors approved this interim statement on 30 June 2016. This interim statement has not been audited.

Copies may be obtained from 17(th) Floor, Millbank Tower, 21-24 Millbank, London SW1P 4QP or from the IPSA website www.ipsagroup.co.uk

About IPSA:

IPSA Group PLC is a British company established to develop power generation projects in Southern Africa. It is managed by a team with a strong track record in developing power projects worldwide and with considerable experience in Southern Africa.

IPSA floated on the AIM market of the London Stock Exchange in September 2005 and obtained a dual listing on the Alt(x) market of the Johannesburg Stock Exchange in October 2006.

Date: 30 June 2016

This information is provided by RNS

The company news service from the London Stock Exchange

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June 30, 2016 11:15 ET (15:15 GMT)