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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Helius Eng | LSE:HEGY | London | Ordinary Share | GB00B1GF9F36 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMHEGY
RNS Number : 8587K
Helius Energy Plc
30 June 2014
30 June 2014
Helius Energy plc
Interim results for the six months to 31(st) March 2014
Helius Energy plc (AIM:HEGY) announces its interim results for the six months to 31(st) March 2014
Operational update for the period:
-- CoRDe plant generated 32,158Mwh of electricity during the period and received 67,221 tonnes of draff, and 208,385 tonnes of pot ale for processing
-- Material progress on the detailed negotiations for Avonmouth equipment supply, construction and fuel supply contracts
-- Her Majesty's Treasury announced that the Avonmouth project has been pre-qualified for a guarantee under the Infrastructure UK guarantee scheme
-- Macquarie Group has been retained as the Company's advisor for the raising of project-level equity for the Avonmouth project
Financial update for the period:
-- Revenues of GBP110k (corresponding period prior year GBP146k) -- CoRDe plant contributed profits of GBP66k (corresponding period prior year zero) -- Gross profit of GBP1k (corresponding period prior year GBP26k) -- Administrative costs GBP674k (corresponding period prior year GBP652k) -- Loss before tax of GBP674k (corresponding period prior year loss of GBP699k) -- GBP800k invested into projects in the period (corresponding period prior year GBP1.6m) -- Cash balance of GBP1.1m (corresponding period prior year GBP4.7m)
Commenting on the results, Adrian Bowles, Chief Executive Officer said:
"The Rothes project is in commercial operation and generating profits, demonstrating our ability to develop and operate projects. We continue to make progress with the financing of the Avonmouth project. We still hope to reach financial close but, as disclosed in the full-year results announcement in respect of the financial year ended 30(th) September 2013, the delay means that the Company needs to secure further corporate funding in the near future to meet its working capital requirements."
For more information please contact:
Helius Energy plc Tel: +44 (0) 20 7723 6272
Adrian Bowles, Chief Executive Officer
Alan Lyons, Chief Financial Officer
Numis Securities Ltd Tel: +44 (0) 20 7260 1000
Jamie Lillywhite (as Nominated Adviser)
James Black (as Corporate Broker)
Citigate DeweRogerson Tel: +44 (0) 20 7638 9571
Chris Gardner
Malcolm Robertson
Notes to Editors:
Helius Energy plc was established to develop, own and operate biomass fired renewable electricity generation plants. These will help meet the growing need for reliable power from renewable sources.
Helius possesses a significant combination of knowledge of renewable energy markets, biomass energy technologies, biomass fuel sources, project development, implementation and operation of power generation plants.
Helius' 65MW project at Stallingborough was sold to RWE in 2008. Its 7.2MW plant in Rothes, Scotland, a joint venture with the Combination of Rothes Distillers Limited and Rabo Project Equity B.V., entered commercial operation in July 2013.
Chairman's statement
I am pleased to report the Company's interim results for the six months ended 31st March 2014, during which period we have reported our first profits from our share in the Rothes project as we move from being a development company into a company that has ownership in operating plants as well as developing new projects. We expect to retain some form of ownership in future projects which will increase our recurring income from both management service agreement fees and profit share.
Throughout the period we have primarily focused on the operational performance of the Rothes project and finalising contracts and financing arrangements for the Avonmouth project. Progress on the latter has been challenging due to the difficult nature of both debt and equity markets.
Rothes project
The Rothes project is now fully operational and exporting electricity to the grid. Each month the plant processes around 47,000 tonnes of distillery residues producing around 2,200 tonnes of pot ale syrup for distribution into the animal feed market. The plant provides an essential disposal route for distillery residues and produces significantly reduced CO2 emissions when compared with some other disposal routes. All of these activities allow the plant to generate revenues of around GBP1m per month depending on electricity and animal feed prices.
During the period, the Company received management service income of GBP0.1m from the project under its ongoing management services agreement with the project, slightly less than the corresponding period in the previous year as a consequence of our obligations under the operational Management Services Agreement being less than they were in the construction phase. The Company's share of profits generated by the plant for the period were GBP0.1m and have the potential to improve in the second half of the year as a consequence of improved operational performance and higher power prices given the prices over the reporting period have been unseasonably low.
Avonmouth project
During the period we have continued to progress contract negotiations with suppliers and contractors and progressed due diligence work with a group of banks to secure the debt required to provide funding for the project. Macquarie has been appointed as financial adviser to assist the board in securing project-level equity and the Company is working to achieve this at the earliest opportunity.
Although progress has proved more difficult than expected, it remains our aim to finalise all contract terms, along with the financing for the project, later in the year at which point we expect to secure development fees, which are necessary to provide the working capital required for Helius to meet its longer term development and corporate costs.
Southampton project
We commenced the statutory consultation for this project in November 2010 and have received a high level of local interest in our proposals. Taking account of the feedback from the consultation we are preparing an amended scheme which will be used as the basis for a full application to the National Infrastructure Directorate of the Planning Inspectorate for a Development Consent Order.
Outlook
The Rothes project is expected to continue to generate profits and these have the potential to improve as a consequence of improved plant performance and electricity prices. The Company's share of circa 50% of these profits will be reported in the financial statements.
The Company will continue to develop and review its project pipeline and to focus on its immediate funding requirements. In particular, we will work towards raising project debt and equity in 2014 to fund the construction of the Avonmouth project. At financial close of the project, we expect development fees to be paid to Helius Energy plc, providing working capital for the Company. Although good progress is currently being made in negotiating the terms of project debt and equity, as disclosed in the Company's full year results announcement in respect of the financial year ended 30(th) September 2013 the delay in reaching financial close means that the Company needs to raise further corporate funding in the near future to meet its working capital requirements.
John M Seed
Chairman
Financial and operational update
Our strategy is to develop projects, secure development fees for the development of those projects and to retain an ongoing interest in those projects, generating long term recurring income from both management service agreements and shareholdings in developed assets.
We do not receive income from development activities until we reach financial close at which point we expect to secure development fees and margin. During the period we have focused the Company's resources on progressing the Avonmouth project to financial close, providing support to the Rothes project through our management service agreement, and optimising the operational performance of the Rothes project.
During the first six months of this financial year the key financial indicators were as follows:
The Company recorded revenues of GBP110k related to the management service agreement it has with the Rothes project, these revenues were slightly lower than the corresponding period in the previous year due to the obligations within the operational phase management services agreement being less than those in the build phase agreement, although the Company has continued to provide active support to the project during its initial months of operation.
Gross profit during the period was GBP1k compared with GBP27k in the corresponding period last year. This is due to labour costs associated with providing support to the project outside of the scope of the management services agreement on a non-chargeable basis. These are not expected to continue in the longer term and are viewed by the Company as an investment as it seeks to ensure the project's operational performance is optimised.
Administration costs, excluding share based payments (GBP0.1m), for the period were GBP0.7m, compared with GBP0.7m for the corresponding period last year. The Board continues to review costs to ensure that cash is focused on project development activities.
The Company reported a loss before taxation of GBP674k for the six months ended 31(st) March 2014, compared with a loss of GBP699k for the corresponding period in the previous year. The Company benefited from a profit of GBP66k from Helius CoRDe the JV formed to operate the Rothes project.
Net cash outflow before financing activities in the period was GBP1.4m, of which GBP0.8m was invested in projects, compared with a net cash outflow of GBP2.9m for the corresponding period in the previous year.
The cash balance at 31st March 2014 was GBP1.1m (31st March 2013: GBP4.7m). The Company expects to secure a development fee from the Avonmouth project at the point of financial close and this is expected to provide cash that will provide general working capital for company operations and project development activities in 2014 and beyond.
The Directors continue to review sources of finance although at the time of the approval of the financial statements there are no agreements in place. Should financial close not be achieved and if the Group is unable to secure additional funding, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that may be required if the Company was unable to continue as a going concern.
The property, plant and equipment balance as at the 31st March 2014 was GBP13.0m which represents the development costs for projects and is expected to be recoverable. This balance was made up of GBP9.0m relating to the Avonmouth project and GBP4.0m relating to the Southampton project.
Principal risks and uncertainties
A comprehensive analysis of the risks associated with project development are set out in more detail on pages 7 through 9 of the Annual Report for the financial year ended 30 September 2013, and are summarised below.
Work on securing the debt and equity package is progressing and the project is pre-qualified under the UK Treasury guarantee scheme. Macquarie has been appointed as financial adviser to assist the Board in securing project-level equity and the Company is working to achieve this at the earliest opportunity. We still hope to reach financial close but, as disclosed in the full-year results announcement in respect of the financial year ended 30(th) September 2013, the delay means that the Company needs to secure further corporate funding in the near future to meet its working capital requirements. The key risk the Company faces at the current time is that it fails to secure such additional working capital.
Various issues, relating to energy project development, pose risks which may lead to circumstances having a substantial adverse effect on the Company's business, financial condition, trading performance and prospects. Such issues include:
o Continued dependence on the ability of the Company to locate, select, develop and realise appropriate opportunities. Suitable opportunities may not be located and projects may not be successful.
o Securing the necessary consents may be subject to delays beyond the Company's control, which may subsequently cause any or all of the projects to be delayed or aborted. There is also no guarantee that any or all of the necessary consents will be granted.
o Being able to negotiate contracts for construction and fuel supply that allow project finance to be secured.
o The availability of feedstock for the Company's projects is affected by various factors, including climate change, crop productivity, ecological impacts, socio-economic factors, pests (and related phytosanitary restrictions), shipping availability, sustainability criteria and labour shortages.
o Foreign sourced supplies are subject to special risks that may disrupt markets, including the risk of war, terrorism, civil disturbances, embargo, and government activities. There can be no assurance that the Company will not experience difficulties in connection with future foreign supplies and, in particular, adverse effects from foreign currency fluctuations, shipping markets and international inflationary effects that potentially will have a negative impact on the cost of both construction and fuel for biomass plants.
o The Company could be adversely affected if any of its operations failed to comply with EU, UK and local environmental and health and safety laws and regulations. Failure or inability to comply with any such statutes or regulations could result in civil or criminal liability, the limitation, suspension or termination of operations, imposition of clean up costs, fines or penalties and large expenditures, which may adversely affect the Company's business results from operations or financial condition.
o The Company could be adversely affected by any changes to, or replacement of, the Renewables Obligation regime if such a change caused a reduction in revenues from Renewables Obligation Certificates.
o The Company could be adversely affected by adverse changes to the project debt finance and/or equity markets leading to the inability to secure finance for its projects.
The Company's plans are exposed to electricity market price risk through variations in the wholesale price of electricity and biomass material. In April 2011, Helius CoRDe Limited entered forward contracts for both electricity and biomass material along with forward contracts for interest and exchange rates. These contracts were all required to secure project finance for the project.
The Company believes that its future success will greatly depend upon the continuing ability to raise debt and equity to support the development and construction of its projects, and upon the expertise and continued services of certain key executives and technical personnel, including, in particular, the Executive Directors and key senior managers. The Company benchmarks remuneration levels of key staff against similar positions in other small capitalisation companies and has put in place share option and Long Term Incentive Plan schemes linked to project and individual performance.
Corporate governance
Throughout the period the Board has sought to comply with a number of the provisions of the UK Corporate Governance Code (the Code) in so far as it considers them to be appropriate to a company of the size and nature of the Company. The directors make no statement of compliance with the Code overall and do not 'explain' in detail any aspect of the Code with which they do not comply. The Company continues to keep its overall system of internal control under review.
The Company has a Remuneration Committee and an Audit Committee which are both chaired by the Company's senior independent non-Executive Director, William Rickett.
Each of those committees is regulated by terms of reference which are kept under review and which reflect good corporate governance practice.
Condensed Consolidated Statement of Comprehensive Income - unaudited
For the six months Ended 31 March 2014
Note Six Months Six Months Year Ended Ended 31 March Ended 31 March 30 September 2014 2013 2013 GBP GBP GBP ---------------------------------------- ------- ---------------------- --------------- ------------- Continuing Operations Revenue 110,316 145,935 276,949 Cost of sales (109,549) (120,127) (246,355) Gross profit 767 25,808 30,594 Other administrative expenses (674,274) (652,936) (1,319,388) Share-based payment costs (65,827) (55,105) (29,403) Total administrative expenses (740,101) (708,041) (1,348,791) Operating loss (739,334) (682,233) (1,318,197) Finance income 4 - 556 3,341 Finance expenses 4 - (17,449) (17,449) -------------------------------------------------- --------- ---------- --------------- ------------- Share of post-tax profit/(loss) from Joint Venture 8 65,833 - (105,036) -------------------------------------------------- --------- ---------- --------------- ------------- Loss Before Tax (673,501) (699,126) (1,437,341) Tax expense - - - loss for the Period ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY (673,501) (699,126) (1,437,341) Other comprehensive income net of tax - - - Share of other comprehensive income net of tax from Joint Venture 8 315,312 (83,683) 1,216,801 TOTAL COMPREHENSIVE loss for the Period ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY (358,189) (782,809) (220,540) ---------- --------------- ------------- Basic loss per share attributable to equity holders of the parent company (pence) 3 (0.37) (0.50) (0.89) Diluted loss per share attributable to equity holders of the parent company (pence) 3 (0.37) (0.50) (0.89) -------------------------------------------------- --------- ---------- --------------- -------------
The above condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Condensed Consolidated Statement of Financial Position - unaudited
As At 31 March 2014
Note 30 September 31 March 2014 31 March 2013 2013 GBP GBP GBP NON-CURRENT ASSETS Property, plant and equipment 13,034,937 10,912,721 12,274,890 Investment in joint venture 8 8,536,117 6,959,524 8,154,972 ------------- ------------- -------------- Total Non-Current Assets 21,571,054 17,872,245 20,429,862 CURRENT ASSETS Trade and other receivables 1,052,759 844,569 1,076,462 Cash and cash equivalents 1,056,274 4,717,265 2,431,174 ------------- ------------- -------------- Total Current Assets 2,109,033 5,561,834 3,507,636 TOTAL ASSETS 23,680,087 23,434,079 23,937,498 CURRENT LIABILITIES Trade and other payables (573,494) (571,691) (538,543) ------------- ------------- -------------- Total Current Liabilities (573,494) (571,691) (538,543) TOTAL LIABILITIES (573,494) (571,691) (538,543) ------------- ------------- -------------- TOTAL NET ASSETS 23,106,593 22,862,388 23,398,955 ------------- ------------- -------------- Total capital and reserves attributable to equity holders of the parent company Share capital 1,828,100 1,828,100 1,828,100 Share premium reserve 16,681,756 16,681,756 16,681,756 Capital redemption reserve 10,130 10,130 10,130 Merger reserve 410,833 410,833 410,833 Cash flow hedge reserve (1,804,337) (3,420,133) (2,119,649) Retained earnings 5,980,111 7,351,702 6,587,785 ------------- ------------- -------------- TOTAL EQUITY 23,106,593 22,862,388 23,398,955 ------------- ------------- --------------
The above Condensed Consolidated Statement of Financial Position should be read in conjunction with accompanying notes.
Condensed Consolidated Statement of Cash Flows - unaudited
For the six months Ended 31 Year Ended March 2014 Six Months Ended 31 March 2014 Six Months Ended 31 March 2013 30 September 2013 GBP GBP GBP ------------------------------- --------------------------------- ------------------------------ ------------------ Operating Activities Net loss after tax (673,501) (699,126) (1,437,341) Depreciation 6,135 16,706 29,377 Finance income - (556) (3,341) Finance expenses - 17,449 17,449 Share of post-tax (profit)/loss from joint venture (65,833) - 105,036 Share option costs 65,827 55,105 29,403 cashflow from operations before changes in working capital (667,372) (610,422) (1,259,417) Decrease/(increase) in trade and other receivables 23,703 (182,209) (414,102) Increase/(decrease) in trade and other payables 34,951 (424,701) (457,849) ------------------------------------- --------------------------- ------------------------------ ------------------ Net Cash used in Operating Activities (608,718) (1,217,332) (2,131,368) ------------------------------------- --------------------------- ------------------------------ ------------------ Investing Activities Purchase of property, plant and equipment (766,182) (1,636,537) (3,011,377) Interest received - 556 3,341 ------------------------------------- --------------------------- ------------------------------ ------------------ Net cash used in investing activities (766,182) (1,635,981) (3,008,036) ------------------------------------- --------------------------- ------------------------------ ------------------ Financing Activities Net Share issue - 5,618,243 5,618,243 Interest paid and finance expenses - (17,449) (17,449) Net cash from financing activities - 5,600,794 5,600,794 ------------------------------------- --------------------------- ------------------------------ ------------------ Net (decrease)/increase in cash and cash equivalents (1,374,900) 2,747,481 461,390 Cash and cash equivalents at the beginning of the period 2,431,174 1,969,784 1,969,784 ------------------------------------- --------------------------- ------------------------------ ------------------ CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 1,056,274 4,717,265 2,431,174 ------------------------------------- --------------------------- ------------------------------ ------------------
The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
Condensed Consolidated Statement of Changes in Equity-unaudited For the six months ending 31 March 2014
Capital Redemption Share Share Premium Merger Cash flow Retained Reserve Capital Reserve hedge Earnings Total 2014 reserve GBP GBP GBP GBP GBP GBP GBP Changes in equity At 1 October 2013 10,130 1,828,100 16,681,756 410,833 (2,119,649) 6,587,785 23,398,955 Loss for the period - - - - - (673,501) (673,501) Other comprehensive income - - - - 315,312 - 315,312 ---------- --------------- ----------- --------- ------------ ---------- ----------- Total comprehensive loss for the period - - - - 315,312 (673,501) (358,189) Share-based payments - - - - - 65,827 65,827 At 31 March 2014 10,130 1,828,100 16,681,756 410,833 (1,804,337) 5,980,111 23,106,593 ---------- --------------- ----------- --------- ------------ ---------- ----------- Capital Redemption Share Share Premium Merger Cash flow Retained Reserve Capital Reserve hedge Earnings Total 2013 reserve GBP GBP GBP GBP GBP GBP GBP Changes in equity At 1 October 2012 10,130 1,328,537 11,563,076 410,833 (3,336,450) 7,995,723 17,971,849 Loss for the period - - - - - (1,437,341) (1,437,341) Other comprehensive income - - - - 1,216,801 - 1,216,801 ------- ------------------- ----------- -------- ------------ ------------ ------------ Total comprehensive loss for the period - - - - 1,216,801 (1,437,341) (220,540) Issue of Share Capital - 499,563 5,495,199 - - - 5,994,762 Capital raised costs - - (376,519) - - - (376,519) Share-based payments - - - - - 29,403 29,403 At 30 September 2013 10,130 1,828,100 16,681,756 410,833 (2,119,649) 6,587,785 23,398,955 ------- ------------------- ----------- -------- ------------ ------------ ------------ Capital Redemption Share Share Premium Merger Cash flow Retained Reserve Capital Reserve hedge Earnings Total 2013 reserve GBP GBP GBP GBP GBP GBP GBP Changes in equity At 1 October 2012 10,130 1,328,537 11,563,076 410,833 (3,336,450) 7,995,723 17,971,849 Loss for the period - - - - - (699,126) (699,126) Other comprehensive income - - - - (83,683) - (83,683) --------- ------------------- ----------- --------- ------------ ---------- ----------- Total comprehensive loss for the period - - - - (83,683) (699,126) (782,809) Issue of Share Capital - 499,563 5,495,199 - - - 5,994,762 Capital raised costs - - (376,519) - - - (376,519) Share-based payments - - - - - 55,105 55,105 At 31 March 2013 10,130 1,828,100 16,681,756 410,833 (3,420,133) 7,351,702 22,862,388 --------- ------------------- ----------- --------- ------------ ---------- -----------
The cash flow hedge reserve relates to the share of the movements of the cash flow hedges in the Helius CoRDe, a joint venture. Further details are provided in note 8
Notes to the unaudited condensed consolidated financial statements
1 Accounting Policies
Basis of Preparation
The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 September 2013, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
The interim financial information for each of the six month periods ended 31 March 2014 and 31 March 2013 has not been audited and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The information for the year ended 30 September 2013 does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006, but is based on the statutory financial statements for that year, on which the auditors have reported. Their audit report was unqualified, although it did include an emphasis of matter regarding going concern, and did not contain a statement under Section 498 (2) or (3) Companies Act 2006. This interim financial report has neither been audited nor reviewed pursuant to the International Standard on Review Engagements (UK and Ireland) 2410.
The interim financial report has been prepared on the going concern basis. As noted in the Chairman's statement, in order to continue to pursue the Company's development activities the Company will need to raise additional corporate funding in order to progress the Avonmouth project to financial close, at which point it expects to secure development fees from its Avonmouth project to provide working capital for 2014 and beyond. The Company is progressing with due diligence to allow it to secure the necessary debt and equity funding for the Avonmouth project and is looking at a range of different alternatives in this regard. At the point of funding being finalised, the Directors expect to secure a development fee, and, based on progress so far consider it appropriate to prepare the condensed consolidated interim financial statements on a going concern basis. The need for additional working capital is caused by the delay we have experienced.
The interim financial report has been prepared using accounting policies that are consistent with those used in the preparation of the full financial statements to 30 September 2013. We do not anticipate any further changes for the year ended 2014.
2 Business Segments
The Chief Operating Decision Maker is defined as the board of Directors.
Management considers that the Company's project activity constitutes one operating and reporting segment, as defined under IFRS 8. Management review the performance of the Company by reference to total results against budget.
The total profit measures are the operating loss and the loss for the year, both disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by management and the figures in the Company financial statements. All of the revenues generated relate to projects and are wholly generated within the UK. Accordingly there are no additional disclosures provided to the primary statements.
3 Loss Per Share
The calculation of the loss per share is based on the following data:
Year Ended Six Months Ended Six Months Ended 30 September 31 March 2014 31 March 2013 2013 GBP GBP GBP Loss Loss used in calculating basic and diluted loss per share for the period (673,501) (699,126) (1,437,341) Number of shares Weighted average number of ordinary shares for the purpose of basic loss per share 182,809,982 139,715,769 161,321,909 Effect of employee share options - - - ----------------------------------------- -------------- ---------------- --------------- Weighted average number of ordinary shares for the purpose of diluted loss per share 182,809,982 139,715,769 161,321,909
The loss per ordinary share and diluted loss per share are equal because share options are only included in the calculation of diluted earnings per share if their issue would decrease the net profit per share or increase the net loss per share. The bonus effect of options has been excluded from the number of shares used in the diluted EPS calculation as those options are antidilutive.
4 Finance Income and expenses Year Ended Six Months Ended Six Months Ended 30 September 31 March 2014 31 March 2013 2013 GBP GBP GBP Finance income Bank interest receivable - 556 3,341 ---------------- ---------------- ------------- - 556 3,341 ---------------- ---------------- ------------- Finance expenses Interest payable - (2,449) (2,449) Finance Fee - (15,000) (15,000) ---------------- ---------------- ------------- - (17,449) (17,449) ---------------- ---------------- ------------- 5 Property, Plant and Equipment
During the six months ended 31 March 2014 the Company has capitalised development spend of GBP0.8 million (six months ending 31 March 2013: GBP1.6 million).
6 Loans and Receivables
Sale of the Stallingborough project / Deed of amendment to earn-out arrangement
During the year ending 30 September 2008, Helius Energy plc disposed of the Stallingborough project (otherwise refererred to as Helius Energy Alpha Ltd (Alpha)) to RWE Innogy (UK) Ltd (RWE). The transaction included a cash payment of GBP28.1m, and, a deferred amount of consideration, payable through an earn-out arrangement equal to 13% of the post tax profits generated by the project during its first 24 years of commercial operation.
The board considered that there was objective evidence of significant delay of receipt of cash under the agreement and carried out an impairment review. Management considered that there was such uncertainty in the key assumptions used in the original terms of contract, in particular on the date of construction, that the present value of estimated future cash flows was considered to be GBPnil at 30 September 2012. The Board still considers this treatment to be appropriate at 31 March 2014.
7 Share capital
At a General meeting on 6 March 2013 a resolution was passed to raise approximately GBP6.0 million (gross), GBP5.6m (net) by way of a firm placing and open offer of New Ordinary Shares at 12 pence per share . Admission of the 49,956,349 new ordinary shares to trading on AIM occurred on 7 March 2013.
8 Investment in Joint Venture
As at 30 September 2010 Helius CoRDe Limited was accounted for as a subsidiary. On the 13 April 2011 the Company reached financial close on the CoRDe project securing GBP42.5million of debt funding from Lloyds Banking Group and the Royal Bank of Scotland plc, along with an equity investment for new shares in Helius CoRDe Limited of GBP9.3 million at project level by Rabo Project Equity BV. The result of the funding and introduction of a contractual arrangement between Helius Energy plc, Rabo Project Equity BV and The Combination of Rothes Distillers' Ltd was a loss of control and Helius Energy plc now holds 50% + 1 non-controlling share in a Joint Venture at an investment cost of GBP7.9 million.
Helius Energy plc values its shareholding in the joint venture initially at fair value, and then in subsequent periods, adjusts the carrying amount of the investment to reflect the company's share of the joint venture's results which include any comprehensive income relating to cashflow hedges.
2013 GBP Investment at 30 September 2012 7,043,207 Share of other comprehensive income in joint venture relating to cash flow hedges (83,683) Investment at 31 March 2013 6,959,524 ------------------------------------------------- ---------------------- 2014 GBP Investment at 30 September 2013 8,154,972 Share of other comprehensive income in joint venture relating to cash flow hedges 315,312 Share of profit 65,833 ---------------------------------------------------------- ------------- Investment at 31 March 2014 8,536,117 ------------------------------------------------- ----------------------
The Joint Venture, which is unlisted, results and assets / liabilities , are as follows:
Helius Helius Helius Helius Helius Helius CoRDe Ltd PLC share CoRDe Ltd PLC share CoRDe Ltd PLC share 31 March 31 March 31 March 31 March 30 September2013 30 September 2014 2014 2013 2013 2013 ----------------------- ------------- ----------- ------------- ----------- ----------------- ------------- Property, plant and equipment 55,702,367 50% 54,608,873 50% 56,850,251 50% Other current assets 6,656,019 50% 2,620,351 50% 10,588,897 50% Long term assets - 50% - 50% - 50% Current liabilities (2,479,828) 50% (4,038,856) 50% (8,660,865) 50% Long term liabilities (42,002,450) 50% (35,235,854) 50% (41,033,840) 50% Financial instruments relating to cash flow hedges (3,608,673) 50% (6,840,266) 50% (4,239,297) 50% ----------------------- ------------- ----------- ------------- ----------- ----------------- ------------- Profit/(loss) 131,665 65,833 - - (210,071) (105,036) Other comprehensive income relating to cash flow hedges 630,624 315,312 (167,367) (83,683) 2,433,602 1,216,801 ----------------------- ------------- ----------- ------------- ----------- ----------------- -------------
As a requirement of the project finance facility, the CoRDe joint venture company entered into hedging agreements for foreign currency and interest rates in order to mitigate any risk associated with volatility in those rates. Hedge accounting has been applied to the instruments, with changes in the fair values of the effective portion of the instruments between reporting periods being taken through other comprehensive income statement of the Joint Venture. The Group has recognised its share of the movement in the period to 31 March 2014 of GBP0.3m.
The hedging policy adopted by the project company is as follows:
Foreign currency
In order to ensure no variability in construction costs the project company entered a forward contract for 36,793,500 euros on the 13 April 2011 at a rate of 1.1238. On the 31 March 2014 the bank provided a fair value of the outstanding portion of the forward contract and this analysis resulted in a total liability of GBP17k to Helius CoRDe Ltd.This liability is recognised as a derivative financial liability in the balance sheet of the joint venture with changes in fair value recognised in other comprehensive income.
Interest rates
In order to mitigate changes in interest rates the project company entered a forward contract for 100% of interest charges through the construction period and 75% of the interest costs through the 12 year repayment period on 13 April 2011 based on the forward LIBOR rate. The fixed rate leg of the swap is 4.26% against the floating LIBOR rate. On the 31 March 2014 the bank provided a valuation on the outstanding portion of the forward contracts resulting in a total liability of GBP3.6m to Helius CoRDe Ltd.
During the period ended 31 March 2014 the construction and commissioning of the Combined Heat and Power plant and Evaporator plant was completed, and the plants were taken over by Helius CoRDe, having successfully passed their performance tests. The business is now in full operational and commercial operation. Forecasts for the input supply of distillery by-products are above expectations and output electricity and pot ale syrup sales volumes are being maximized around this. The directors are optimistic about the future performance of the business.
Statement of Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
i) The condensed consolidated interim financial information has been prepared in accordance with IAS34 as adopted by the European Union; and
ii) The interim financial report includes a fair review of the information required by the FSA's Disclosure and Transparency Rules (4.27 R and 4.28 R).
The interim financial report was authorised for issue on 29(th) June 2014.
Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein
Advisors and general information
Country of incorporation
England & Wales
Legal form
Public limited company
Directors
John Seed (non-executive Chairman)
Dr Adrian Bowles (Chief Executive Officer)
Alan Lyons (Chief Financial Officer)
Christopher Corner (Commercial Director)
William J Ingram Hill (Chief Operating Officer)
Angus MacDonald OBE (non-executive Director)
William Rickett CB (non-executive Director)
Alastair Salvesen CBE (non-executive Director)
Company Secretary
William J Ingram Hill
Registered and Head Office
Helius Energy plc
242 Marylebone Road
London NW1 6JQ
+44 (0) 20 7723 6272
Company Number
5745512
Solicitors
Burges Salmon LLP
One Glass Wharf
BS2 0ZX
Auditors
BDO LLP
1 Bridgewater Place
Water Lane
Leeds LS11 5RU
Nominated Advisers and Brokers
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London EC4M 7LT
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham BR3 4TU
Bankers
Barclays Bank plc
71 Grey Street
Newcastle upon Tyne NE1
This information is provided by RNS
The company news service from the London Stock Exchange
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