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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Energy Asset | LSE:EAM | London | Ordinary Share | GB00B06LR386 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.15 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:2786T Energy Asset Management PLC 29 April 2008 Energy Asset Management Plc (the "Company") Final results for the year ended 31 December 2007 Highlights The Company: * has seen the number of installations and systems gaining momentum * has started benefitting from high operational gearing * consequently has since February 2008 achieved monthly profitability * consequently has now achieved monthly positive cash flow * is now ready to exploit a fast growing market which is being driven by both public and government awareness of the need for energy efficiency * has successfully raised further working capital to expand IT system and to fund accelerated expansion Chairman's Statement I have previously reported that we have been successful in negotiating and winning contracts at a greater rate than previously anticipated. This continues to be the case. However, the mobilisation of these contracts as previously advised has throughout 2007 been at a slower rate than we had anticipated, primarily because when dealing with major corporates there is typically a thorough and prolonged legal and implementation process to undertake. As a result, in the 12 months to 31 December 2007 the Group made a loss after taxation of GBP 1,051,289 (2006 - loss GBP 2,782,270) representing a loss per share of 0.39p (2006 - loss 1.35p per share). Nevertheless, during the year we have demonstrated we can successfully conclude trials, win potentially substantial contracts from both gas suppliers and gas users and also complete the installation of metering systems within demanding timeframes. We have also seen the number of systems installations gaining momentum and can now report that due to the flexibility within our business portfolio the Group has since February 2008 achieved monthly profitability and is also trading on a positive cash flow basis. Contract Awards During 2007 we signed several multi-utility contracts covering major high street retailers, the public sector and also a leading Gas Transporter. Following the successful implementation of its electricity metering project with Woolworth's, services provided by Energy Assets Limited ("EAL", a wholly-owned subsidiary of EAM) were extended to include gas metering and data collection services, including the installation and management of a SMS-enabled gas metering solution. This is now completed. Similar success has been achieved on the Marks and Spencer gas meter data collection contract. This has been successfully completed and has now been extended to incorporate gas meter exchanges for a further 100 sites. Such is the success of the gas metering project this has now been extended to specific Marks and Spencer electricity metering sites and water metering sites. Installations are nearly completed. EAL's success with Woolworth's and Marks and Spencer has generated interest from other similar high street retail groups and we are presently at varying levels of negotiations with a number of these retail groups, with trials underway in some cases. Our strategic alliance with IMServ, a subsidiary of Invensys Plc, has in addition introduced several high street and blue chip names to our portfolio, ranging from Local Authorities to public service and leading financial institutions. These prospects are existing customers of IMServ and we therefore anticipate a smooth transition into these customers. EAL have recently successfully completed a significant gas meter exchange and data collection programme on behalf of a major Local Authority. The directors believe that this programme will be extended to position EAL as the Local Authority's 1st choice metering services provider. Such was the success of this programme that EAL has been highly recommended to other adjacent Public Sector groups and Local Authorities. Energy Suppliers EAL has signed further long term contracts with established energy suppliers for the provision of new and exchange metering services, data collection and management services. Such contracts have high future potential in light of the possibility that some of these suppliers are considering major AMR projects that may require substantial numbers of meter exchanges. Others A unique opportunity has been presented to EAL to collaborate with an independent gas transporter. This opportunity introduces EAL to the potential of 15,000-20,000 new domestic, industrial and commercial metering installations on an annual basis. Medium term contracts have been signed and implementation is underway. This opportunity also extends to "smart metering" and the potential to become involved in social housing and fuel poverty projects which all attract Government grant funding. This one project in isolation has the ability to deliver EAL's original expectations and objectives over the coming 3 years. The timetable incurred in negotiating and implementing contracts has been protracted. However, the level of contract gain activity has proven to be at a much higher rate than previously anticipated. As a result and as previously indicated, further to the trading statement made on 7 December 2007, the Company issued 54,000,000 new ordinary shares at 1 pence per share to raise gross proceeds of GBP 540,000 on 16 January 2008. The Group is increasingly able to deliver its clients a complete energy solution addressing both electricity and gas remote automated meter reading. This is encouraged by proposed Government legislation announced in a White Paper and so we can progress forward on a much firmer base and with increased confidence. The rate of installation is continuing to increase on a monthly basis and expected to grow substantially in 2008 and 2009 on the basis purely of signed contracts and clients' expectations. As previously stated the Group has high operational gearing and as our activity grows so should cash and profit generation. We are operating in a market sector that has great prospects supported by both public and Government awareness and support of the need for energy efficiency. It has been a tough and hard mountain to climb but as we get nearer the top we are excited at what we see ahead. We are also excited and encouraged at the potential alliances and contracts we are in the course of discussing and negotiating and can only look forward to reporting to you our progress and to thank you for your patience and support. Stephen J Barclay CHAIRMAN 29 April 2008 Consolidated income statement- by function of expense for the year ended 31 December 2007 Year ended Year ended 31 December 31 December 2007 2006 GBP GBP Revenue 667,860 20,768 Cost of sales (360,374) (10,664) ---------- ---------- Gross Profit 307,486 10,104 Operating expenses (1,363,668) (2,811,165) ---------- ---------- Operating loss (1,056,182) (2,801,061) Finance income 4,893 18,791 ---------- ---------- Loss before taxation (1,051,289) (2,782,270) Taxation - - ---------- ---------- Loss after taxation (1,051,289) (2,782,270) ---------- ---------- Retained loss for the period (1,051,289) (2,782,270) ---------- ---------- Attributable to Equity holders of the Company (1,058,734) (2,774,375) Minority interest 7,445 (7,895) ---------- ---------- Retained loss for the period (1,051,289) (2,782,270) ---------- ---------- Loss per share basic and diluted (0.39)p (1.35)p Consolidated balance sheet at 31 December 2007 31 December 31 December 31 December 31 December 2007 2007 2006 2006 GBP GBP GBP GBP Assets Non current assets Property, plant and equipment 476,092 20,405 Intangible assets - Goodwill 745,475 745,475 ---------- --------- Total non current assets 1,221,567 765,880 Current assets Trade and other receivables 95,200 53,335 Cash and cash equivalents 17,101 249,095 Inventories 131,984 9,360 ---------- --------- Total current assets 244,285 311,790 --------- ---------- Total Assets 1,465,852 1,077,670 --------- ---------- Equity and liabilities attributable to equity holders of the Company Share capital and reserves Issued capital 2,787,684 2,467,684 Share premium account 1,163,929 1,083,929 Reserves (3,526,468) (2,580,880) ---------- --------- 425,145 970,733 Minority interest - (7,445) --------- ---------- Total equity 425,145 963,288 --------- ---------- Non - current liabilities Borrowings 425,374 - Current liabilities Borrowings 40,605 - Trade and other payables 574,728 114,382 --------- ---------- Total current liabilities 615,333 114,382 --------- ---------- --------- ---------- Total equity and liabilities 1,465,852 1,077,670 --------- ---------- Statement of changes in equity Share Capital Share Premium Reserves Minority Total Equity Interest Group GBP GBP GBP GBP GBP Balance at 1 January 2007 2,467,684 1,083,929 (2,580,880) (7,445) 963,288 Loss for year attributable to equity holders _ _ (1,058,734) _ (1,058,734) Loss for year attributable to minority interest _ _ _ 7,445 7,445 Share based payments _ _ 113,146 _ 113,146 Shares issued 320,000 80,000 _ _ 400,000 Balance at 31st December 2007 2,787,684 1,163,929 (3,526,468) _ 425,145 Consolidated cash flow statement For the year ending 31 December 2007 Year to Year ended 31 December 31 December 2007 2006 GBP GBP Cash flows from operating activities Operating loss for the year as per income statement (1,056,182) (2,801,061) Depreciation of non current assets 22,576 33,175 Impairment of goodwill - 1,734,544 Share based payments 113,146 218,381 -------------- ---------- (920,460) (814,961) Movements in working capital Increase in trade and other receivables (41,865) (37,045) Increase in inventories (122,594) (9,360) Increase/(decrease) in trade and other payables 460,316 (13,868) -------------- ---------- Net cash applied to operations (624,603) (875,234) Cash flows from investing activities Interest received 4,893 18,791 Net purchase of subsidiary undertaking - (260,190) Cash acquired with subsidiary - 4,353 Purchase of non current assets (478,263) (53,580) -------------- ---------- Net cash outflow from investing activities (473,370) (290,626) Cash flows from financing activities Net proceeds from issue of equity shares 400,000 1,102,577 Inflow from new leases 475,853 - Capital element of finance lease rental payments (9,874) - -------------- ---------- Net cash flows from financing activities 865,979 1,102,577 -------------- ---------- Net decrease in cash and cash equivalents (231,994) (63,283) Cash and cash equivalents at the beginning of financial period 249,095 312,378 -------------- ---------- Cash and cash equivalents at end of period 17,101 249,095 -------------- ---------- Notes on the Preliminary Results 1. The financial information incorporated in this announcement does not constitute full statutory financial statements within the meaning of the Companies act 1985. Full financial statements for the year ended 31 December 2007 will be filed with the Registrar of Companies in due course. 2. Key accounting policies Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards, as approved by the European Union, IFRIC interpretations and parts the Companies Act 1985 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. If in the future such estimates and assumptions which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into account presentational changes. The Group has assessed pronouncements issued by the International Accounting Standards Board that were in issue but not in force at 31 December 2007. IFRS 8 - Operating segments. IFRIC 11 / IFRS 2 - Group and treasury share transactions. IFRIC 12 - Service concession arrangements. IFRIC 13 - Customer loyalty programmes. IFRIC 14 / IAS 19 - The limit on a defined benefit asset, minimum funding requirement and their interaction. The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Group. Basis of consolidation The financial statements of the Company and its Group undertakings have been consolidated to 31 December 2007.The results and cash flows of subsidiary undertakings are included in the income statement and consolidated cash flow statement from the date of acquisition. 3. Tax on loss on ordinary activities Tax charge for the year No taxation arises on the result for the year because of the trading loss. Factors affecting the tax charge for the year The tax charge for the year does not equate to the loss for the period at the standard rate of UK small companies corporation tax of 19%. The differences are explained below: Year ended Year ended 31 December 31 December 2007 2006 GBP GBP Loss for the year before taxation (1,051,289) (2,782,270) ------------ ---------- Loss for the year before tax multiplied by the applicable rate of UK small companies corporation tax of 19% (199,745) (528,631) Depreciation in excess of capital allowances (18,428) 3,758 Expenses not deductible for tax 29,910 339,490 Tax losses for the year not relieved 188,263 185,383 ------------ ---------- - - ------------ ---------- Factors affecting the tax charge of future years Tax losses available to be carried forward by the Group at 31 December 2007 against future profits are estimated at #1,967,000. There is an unprovided deferred tax asset based on these losses of #551,000. It is difficult to determine with certainty when the available tax losses will be utilised. Therefore, the element of the potential deferred tax asset relating to available tax losses has not been recognised in the financial information. 4. Loss per share The calculation of basic loss per share is based on the loss attributable to equity holders of GBP 1,058,734 (31 December 2006 - loss GBP 2,774,375) divided by the weighted average number of ordinary shares in issue being 271,403,999 (31 December 2006: 205,497,607) during the year. As the Company has incurred a loss for the year, no option or warrant is potentially dilutive, and hence basic and diluted loss per share are the same. 54,000,000 new ordinary shares were issued after the year end. If these shares had been issued prior to 31 December 2007, this would have altered the weighted average number of ordinary shares in issue as calculated above. 5. Property, plant and equipment Office Meters & Total Equipment Loggers GBP GBP GBP Cost Opening balance as at 1 January 2007 53,580 - 53,580 Additions in year 5,670 472,593 478,263 Closing balance as at 31 December 2007 59,250 472,593 531,843 Depreciation Opening balance as at1 January 2007 33,175 - 33,175 Charge in year 7,907 14,669 22,576 Closing balance as at 31 December 2007 41,082 14,669 55,751 Net book value as at 1 January 2007 20,405 - 20,405 ----------- ----------- ---------- Net book value as at 31 December 2007 18,168 457,924 476,092 ----------- ----------- ---------- Gas meters and data loggers are leased to customers via financing arrangements using third party finance companies. Under these arrangements, the Group sells gas meters and data loggers for cash to the finance company and at the same time customers enter into contracts with the Group for the provision, installation and maintenance of the gas metering and ancillary equipment together with data provision services as applicable. Under the terms of a deed of assignment between the Group, the customer and the finance company, customers are required to make regular payments to the finance company who in turn remit the funds to the Group. Under the customer contracts with the Group, the Group is required to maintain the gas meters and data loggers for the duration of the contract. At the end of the contract between the finance company and the Group, the Group has the option to buy back the gas meters and data loggers from the finance company at a nominal amount. The Directors currently intend to exercise their option to acquire these units and lease them directly to customers over their remaining useful economic life. Accordingly, the Directors have accounted for these units so that the Financial Statements reflect the substance of the transaction, rather than its legal form, as follows: i. Gas meters and data loggers initially purchased by the Group and sold to the finance companies are included in fixed assets at their purchase price, which includes installation costs and attributable overheads where appropriate. Such assets are depreciated over the Directors' estimate of their useful economic life. ii. In accordance with the terms of the finance agreement between the Group and the finance company, the Group assigns its title and interest to the assets and the customer rentals to the finance company for the duration of the lease agreement. The Group is however required to insure and maintain the assets over the duration of the lease agreement and administer the collection of the rental payments from the customer. The Group indemnifies the finance company for all amounts due under the terms of the lease and customer agreements. The rental charge for gas meters and data loggers, together with data provision services, is recognised in the income statement over the period in which the customer has use of the assets and data services are provided. 6. Share capital 31 December 31 December 2007 2006 GBP GBP Authorised 500,000,000 Ordinary shares of 1p each 5,000,000 5,000,000 Allotted, issued and fully paid 278,768,383 Ordinary shares of 1p each 2,787,684 2,467,684 On 26 March 2007 the Company issued 32,000,000 new ordinary shares of 1p at an issue price of 1.25p each, to raise GBP 400,000 before expenses. Options No options were granted during the year ended 31 December 2007 or subsequent to the date of approval of the financial statements Warrants No warrants were granted during the year ended 31 December 2007 or subsequently to the date of approval of the financial statements 7. Post balance sheet events On 16 January 2008 the Company issued 54,000,000 new ordinary shares of 1p each at par to raise GBP 540,000 before expenses. These shares rank pari passu with all existing issued ordinary shares. 8. Registered Office and copies of Financial Statements The registered office of the Company is 3 Hardman Square, Spinningfields, Manchester M3 3EB. Copies of the Annual Report and Financial Statements, will be mailed to shareholders along with the notice of the AGM shortly. Notice is hereby given that the Annual General Meeting of Energy Asset Management Plc will be held at 1 Westferry Circus, Canary Wharf, London E14 4HA on 26 June 2008. Enquiries Energy Asset Management Plc Stephen Barclay, Chairman Tel: 07767 444114 Alan McKeating, Managing Director Tel: 07843 231372 Ruegg & Co Limited, Nominated Adviser Brett Miller/ Gavin Burnell Tel 0207 584 3663 This information is provided by RNS The company news service from the London Stock Exchange END FR UWONRWSRSUAR
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