Final Results

RNS Number:2885Z
KP Renewables PLC
29 June 2007


FOR IMMEDIATE RELEASE                                               29 June 2007


                               KP Renewables Plc


            PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006

                              CHAIRMAN'S STATEMENT

Shareholders will already be aware that the year to 31 December 2006 was a
particularly difficult one for the company. As I explained in my Interim
Statement for the period to 30 June 2006, refinancing problems that arose during
the year led to the suspension of the company's shares and eventually to serious
questions as to whether the company could survive. As a result, it was decided
that the only way to retain some residual value and some hope of future recovery
for creditors and shareholders was to put the company through a Company
Voluntary Arrangement ("CVA") and to restructure and refinance the company on
that basis.

The terms of the CVA and refinancing were outlined in my Interim Statement and
more fully set out in the Circular to Shareholders dated 16 March 2007. I am
pleased to report that the CVA was approved by creditors and shareholders and,
following the restructuring of the company's share capital, a placing took place
through which #750,000 was eventually raised, as opposed to #575,000 as
indicated in the Interim Statement.

As a result, the company is now able to revive its business plan, seek to
resuscitate existing projects and to identify new opportunities principally in
the renewable energy field, albeit at this stage at a relatively low-key level.
The company continues to have the benefit of an experienced team with strong
connections in the renewables field, both at Board and consultants' level, and
is confident of identifying new and viable businesses and projects in the coming
months. The Board believes that, with increasing interest in this sector and
with the help of advisers and brokers, the company will be in a good position to
raise the necessary finance as and when such viable propositions are identified.

I should meanwhile explain in greater detail the background and reasons for the
problems experienced in 2006. Good progress was made in the early months of the
year in terms of identifying suitable opportunities for investment and
development, and the company entered into a number of significant development
agreements. The Chief Executive's Report for the year to 31 December 2005
identified a range of potentially large and exciting projects in which the
company was involved. However, it was also made clear that progressing these
opportunities would require additional financing and that this was being
actively sought at the time of the announcement of the 2005 results in June
2006. The company's development programme was in fact severely restricted by
shortage of funds. As I explained in the Interim Statement, this was in large
part attributable to the illness and subsequent death of the company's founder
and Chief Executive Officer, Dr James Watkins, who had been leading the fund
raising efforts.

The Board remained hopeful that the company could generate value from its
portfolio of projects while continuing negotiations for the injection of new
capital. However, in the absence of new investment, the Board concluded that
there were insufficient resources to devote to these projects to bring them to
fruition. Indeed, the financial uncertainties surrounding the company were such
that, on 21 September

2006, the Board requested that the company's shares be suspended from trading on
AIM pending a decision on refinancing.

In the months following the suspension, the Board, with the active assistance of
its advisers, conducted a review of all the available options, including the
sale of the company's interest in certain projects and further negotiations for
new investment, and concluded that the only route forward for creditors and
shareholders was to propose a CVA as referred to above, whereby the creditors of
the company would be asked to materially compromise the amounts owed to each
and, conditional on the creditors agreeing to be so compromised, to raise new
equity capital.

The creditors and shareholders of the Company approved the proposed CVA, which
was put to them on 10 April 2007. Under the terms of the CVA, creditors will now
receive either a payment of 4p in the # in cash or, at the option of individual
creditors, a cash payment of 2p in the # plus an allotment of shares to the
equivalent value of 2p in the #. As I explained in my Interim Statement, those
creditors of the Company who elected for the cash and shares option are entitled
to 60% of any net proceeds which may flow from the existing portfolio of
projects over a three year period on a pro rata basis, subject to a maximum of
100% of each creditor's CVA claim.

Further to the approval of the CVA, the company completed a placing to raise
#750,000. The details of the reorganisation of the share capital and the placing
were given in my Interim Statement and are summarised in the Post Balance Sheet
Events note in these accounts. The placing was effected at 1p per share in the
consolidated form, resulting in the issue of 75,000,000 shares. After taking
account of the issue of a further 6,500,000 in settlement of related costs, the
number of shares in issue is 83,829,483.

The results for the period under review, which reveal a loss before tax of
#2.88m, are largely of academic interest in view of the events described above.
The loss was exacerbated by the need to make a charge of #1.1m against assets
that the Board considered no longer had any value. This charge principally
related to pre-payments made in respect of the Power Purchase Agreements
("PPAs") referred to in the Chief Executive's Report for the year ended 31
December 2005. In view of the fact that two of the PPAs expired during 2006 and
the remaining one contained provisions for cancellation in the event of a
company administration and in any case would require substantial investment well
beyond the level now or at any time available to the Company, it was thought
appropriate to make a full provision against the carrying value of the PPAs and
the related intangible asset.

David Lloyd-Jacob, Stephen Drummond and Paul Goodrow resigned as directors
shortly before the events described above. I am pleased to inform you that Peter
Redmond and Richard Armstrong, who advised the company on its reorganisation and
assisted in the fundraising, joined the Board on completion of the steps taken
to place the company on a firmer footing. Mr Redmond and Mr Armstrong both have
extensive experience in the small cap sector of AIM and have particular
experience in restructuring and relaunching smaller quoted companies that have
fallen into difficulties. I am pleased to report that Dr David Lindley, who has
wide experience and expertise in the renewables sector, will remain on the Board
and I will continue as Chairman.

The company will continue to operate in the renewable energy sector and the
immediate priority of the Board will be to attempt to crystallise value from
some of the existing projects in a cost effective manner. There is a portfolio
of eight biomass and thirteen wind projects where the Company had entered into
development agreements. The company is reviewing these projects to establish
whether they can be profitably revived. Although it is too early to comment in
detail, the Directors are confident that some of them will in due course bear
fruit. It has always been part of the company's strategy to develop certain
projects to a point where they could be "sold on" and this in the short term
will continue, both in relation to existing projects and in relation to certain
new projects that the Directors are beginning to investigate. While the
company's business will initially be limited in scale, it is likely to be in
shareholders' best interests for consideration to be given either to a
significant further fund raising to support investment in a sizable project or
to the acquisition of another larger business. The Directors will be actively
considering these alternatives in the coming months.

To all intents and purposes, the company has now been relaunched and your Board
hopes to build some value both for previous and for new shareholders.
Accordingly, the Directors will propose a change of name to Clear Skies Energy
Plc at the forthcoming Annual General Meeting of the company, a notice of which
is enclosed with these accounts.

I would like to take this opportunity to thank shareholders for their continued
support. The Board is confident that it will now be able to progress the
development of the business of the company, building on the stability achieved
in recent months.


John Bryant
Chairman

28 June 2007


Contacts:
KP Renewables Plc
John Bryant, Chairman                                 Tel: [phone]

Merchant Capital Limited
Peter Redmond                                         Tel: [phone]





CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2006

                                                       2006               2005
                                                         #                   #

Administrative expenses and operating loss        2,876,102)         (1,968,099)
Investment income                                    10,023              30,267
Interest paid                                             -              (1,548)
                                                  ----------         -----------
Loss for the year                                (2,866,079)         (1,939,380)
                                                  ==========         ===========
Loss per share                                        6.15p               4.46p
                                                  ==========         ===========





CONSOLIDATED BALANCE SHEET
As at 31 December 2006

                                                    2006                  2005
                                                      #                     #
ASSETS

Non-current assets
Goodwill                                             -                       -
Investment on product development                    -                  217,796
                                                --------             -----------
                                                     -                  217,796
                                                --------             -----------
Current assets
Project development costs                        13,505                       -
Trade and other receivables                      38,380               1,023,974
Cash and cash equivalents                        12,436               1,100,181
                                              ----------             -----------
                                                 64,321               2,124,155
                                              ----------             -----------

Total assets                                     64,321               2,341,951
                                              ==========             ===========

EQUITY AND LIABILITIES

Share capital                                   465,897                 465,897
Share option reserve                            244,000                 244,000
Share premium                                 3,734,347               3,734,347
Accumulated losses                           (5,026,410)             (2,160,331)
                                              ----------             -----------
Total equity                                   (582,166)              2,283,913
                                              ----------             -----------
Current liabilities
Trade and other payables                        646,487                  58,038
                                              ----------             -----------
Total equity and liabilities                     64,321               2,341,951
                                              ==========             ===========



CONSOLIDATED CASHFLOW STATEMENT
As at 31 December 2006

                                                     2006                  2005
                                                       #                     #

Net cash flow from operating activities
Cash flow from operating activities            (2,658,306)           (1,362,104)
Interest paid                                           -                (1,548)
                                                 ---------           -----------
                                               (2,658,306)           (1,363,652)
Movement in working capital
Increase in project development costs             (13,505)                    -
Decrease in receivables                           985,594              (315,754)
Increase in payables                              588,449               (78,622)
                                                 ---------           -----------
Net cash used in operating activities          (1,097,768)           (1,758,028)
                                                 =========           ===========
Cash flows from investing activities
Interest received                                  10,023                30,267
Acquisition of subsidiary                               -                     -
                                                 ---------           -----------
Net cash from investment activities                10,023                30,267
                                                 =========           ===========
Cash flows from financing activities
Loan from parent                                        -               (20,000)
Proceeds from issue of share capital                    -             2,837,202
                                                 ---------           -----------
Net cash from financing activities                      -             2,817,202
                                                 =========           ===========
Net decrease in cash                           (1,087,745)            1,089,441

Cash and cash equivalents at beginning of       1,100,181                10,740
year
                                                 ---------           -----------
Cash and cash equivalents at end of year           12,436             1,100,181
                                                 =========           ===========



Notes to the Financial Statements

1.       Basis of Preparation

The financial information set out above does not constitute the Company's
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The balance sheet at 31 December 2006 and the profit and loss account and cash
flow statement for the year then ended have been extracted from the Company's
audited financial statements. The auditors report on those financial statements
is unqualified and does not contain statements under sections 237(2) or (3) of
the Companies Act 1985.


2.       Taxation

No charge to taxation arose due to the losses incurred during the year.

At 31 December 2006, the group had a deferred tax asset (using a tax rate of
30%) of approximately #1,500,000, (2005 - #648,000) in respect of unused tax
losses. In view of the fact that the group currently has limited income
generating activities the directors do not consider it appropriate to recognise
this asset.


3.       Loss per Share

                                                      2006              2005
Loss for the financial year
attributable to ordinary shareholders             #2,866,079        #1,939,380

Basic losses per share                                  6.15p             4.46p


Basic losses per share has been calculated by dividing the loss for the
financial year attributable to shareholders by 46,589,663 being the weighted
average number of shares in issue during the year (2005 - 43,524,396). The
impact of shares held in option schemes has not been disclosed as this would be
anti-dilutive.


4.       Publication of Accounts


The financial statements will be posted to the Registrar of Companies and
shareholders today. Copies will also be available from the Company's registered
office: Aldermary House, 10-15 Queen Street, London EC4N 1TX.




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