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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 |
From May 2019 to May 2024
TIDMHEGY
RNS Number : 2389H
Helius Energy Plc
18 June 2013
18 June 2013
Helius Energy plc
Interim results for the six months to 31(st) March 2013
Helius Energy plc(1) (AIM:HEGY) announces its interim results for the six months to 31(st) March 2013
Operational update for the period:
-- Rothes project remains on time with the reliability tests having been finished and performance trials in progress
-- ROC accreditation has been received -- Rothes project connected to the grid with first electricity generated and invoices issued
-- Contracts being finalised for the construction, fuel supply and electricity offtake for the Avonmouth project
-- Club of potential lenders engaged in due diligence for Avonmouth project level senior debt -- Heads of terms agreed for Avonmouth project equity -- Consenting process for Southampton project in progress
Financial update for the period:
Hot Features
Premium
31/3/13 31/3/12
Revenues GBP146k GBP151k
Gross profit GBP26k GBP20k
Administrative costs GBP652k GBP898k
Loss before tax GBP699k GBP644k
Invested in projects GBP1,637k GBP1,716k
Cash balance GBP4,717k GBP4,327k
During the period the Company completed a Placing of GBP5.6m (net) providing additional working capital
Commenting on the results, Dr Adrian Bowles, Chief Executive Officer said:
"We continue to make progress with our pipeline of biomass energy projects. The Rothes project is in the final stages of reliability testing, with ROC accreditation received and revenues being generated for the project from electricity output. This demonstrates the ability of the Company to develop, finance and deliver its projects. We continue to focus on the financing of the Avonmouth project, which we are targeting to finalise later in the financial year."
([1]) In this report, the "Company" shall mean Helius Energy plc and/or, where the context otherwise requires, any relevant subsidiary of Helius Energy plc
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 Richard Thomas/Jamie Lillywhite (as Nominated Adviser) James Black (as Corporate Broker) Kreab Gavin Anderson Tel: +44 (0) 20 7074 1800 Chris Philipsborn Anna Schoeffler
Notes to Editors:
Helius Energy plc was established to identify, 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.
Chairman's statement
I am pleased to report the Company's interim results for the six months ended 31st March 2013, during which period we have continued to build upon our previous successes and to make progress in the development of our pipeline of biomass energy projects.
The Rothes project remains on time and on budget and commissioning activities are progressing to plan with electricity being generated and invoiced for. Throughout the period we have continued to focus on finalising contracts and financing arrangements for the Avonmouth project. Progress has been challenging due to the difficult nature of both debt and equity markets, in part due to uncertainty around Government policy. Our planning team continue to work on preparing a formal planning application for the Southampton project which we expect to submit later in the year.
Rothes project
The Rothes project is currently in the commissioning phase and has been delivered on time and within the original budget. First electricity was generated in January this year and ROC accreditation was received in April 2013. It is expected that the plant will enter commercial operation within the next month.
Avonmouth project
During the period we have agreed heads of terms with an equity provider for the entire equity requirements of the project. These heads allow for development fees, management service fees and an ongoing interest in the plant. 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. We are aiming to finalise all contract terms along with the financing for the project later in the financial year at which point we aim to secure development fees to provide the working capital required to ensure that the Company is able to continue to meet its project development and corporate costs going forward.
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 later this year
Outlook
The Rothes project is expected to enter commercial operation in the next month.
In light of the success of the financing and construction of the Rothes Project and the progress made so far with the Avonmouth project, the Company will continue to develop and review its project pipeline and to focus on its immediate funding requirements, and in particular the raising of debt and equity within the project company, Helius Energy Gamma Ltd, for Avonmouth project. The Company expects to secure a development fee from the Avonmouth project at financial close that will provide working capital for the Company.
Finally, on behalf of myself and the Board, I would like to thank all of our employees for their continuing hard work and support.
John M Seed
Chairman
Financial and operational update
Our strategy is to retain an ongoing interest in projects in addition to receiving development fees.
During the development phase of our projects we do not receive income. Our strategy remains one of focusing the Company's resources on delivering projects to financial closure and managing each project's implementation and construction.
During the first six months of this financial year the key financial indicators were as follows:
The Company recorded revenues of GBP146k relating to management service agreements it has with the Rothes project and separately with the distillers involved in the project. This represents a slight reduction on the previous year due to less chargeable support being provided to the project in the latter stages of construction.
Administration costs, excluding share based payments (GBP0.1m), for the period were GBP0.7m compared with GBP0.9m for the corresponding period last year, reflecting cost reduction measures implemented in 2011 and 2012. The Board continues to review costs to ensure that cash is focused on project development activities.
The Company reported a loss before taxation of GBP699k for the six months ended 31(st) March 2013, compared with a loss of GBP644k for the corresponding period in the previous year.
The results for the six months ended 31(st) March 2012 included the benefit of a GBP358k increase in the value of the earn-out asset and subsequent deed of amendment signed with RWE Innogy in January 2011. The deed of amendment expired in 2012 and at this point the 'earn out' balance was impaired to a value of GBPnil in the 2012 results.
Net cash outflow before financing activities in the period was GBP2.9m, of which GBP1.6m was invested in projects, compared with a net cash outflow of GBP2.5m for the corresponding period in the previous year.
The cash balance at 31st March 2013 was GBP4.7m (31st March 2012: GBP4.3m). The cash balance included receipts of GBP5.6m (net) from a placing of shares that was made in order to provide additional working capital required to support the development of projects. The Company is aiming to secure a development fee from the Avonmouth project to provide general working capital for company operations and project development activities in 2014 and beyond.
The property, plant and equipment balance as at the 31st March 2013 was GBP10.9m which represents the development costs for projects and is expected to be recoverable. This balance was made up of GBP7m relating to the Avonmouth project and GBP3.9m 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 9 through 11 of the Annual Report for the financial year ended 30 September 2012, and are summarised below.
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:
-- 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.
-- 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.
-- Being able to negotiate contracts for construction and fuel supply that allow project finance to be secured.
-- 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.
-- 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.
-- 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.
-- 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.
-- 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 (LTIP) schemes linked to project and individual performance.
Corporate governance
The Company continues, to the extent practicable and appropriate for a company of its size and constitution, to comply with applicable corporate governance rules and best practice provisions for companies set out in the UK Combined Code on Corporate Governance, and 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 2013
Note Six Months Ended Six Months Ended Year Ended 30
31 March 2013 31 March 2012 September 2012
GBP GBP GBP
Continuing Operations
Revenue 145,935 151,108 309,713
Cost of sales (120,127) (131,582) (269,104)
Gross profit 25,808 19,526 40,609
Other administrative
expenses (652,936) (898,484) (1,644,805)
Share-based payment
costs (55,105) (140,532) (108,410)
Impairment of property,plant
and equipment - - (1,086,491)
----------------------------- ---- ---------------- ---------------- ---------------
Total administrative
expenses (708,041) (1,039,016) (2,839,706)
Impairment of the earn
-out receivable 6 - - (8,800,000)
----------------------------- ---- ---------------- ---------------- ---------------
Operating loss (682,233) (1,019,490) (11,599,097)
Finance income 4 556 375,747 761,830
Finance expenses 4 (17,449) - -
----------------------------- ---- ---------------- ---------------- ---------------
Share of post-tax loss
from Joint Venture 8 - - (3,875)
----------------------------- ---- ---------------- ---------------- ---------------
Loss Before Tax (699,126) (643,743) (10,841,142)
Tax expense - - -
loss for the Period
ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
COMPANY (699,126) (643,743) (10,841,142)
Other comprehensive - - -
income net of tax
Share of other comprehensive
income net of tax from
Joint Venture 8 (83,683) (467,497) (818,862)
TOTAL COMPREHENSIVE
loss for the Period
ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
COMPANY (782,809) (1,111,240) (11,660,004)
Basic loss per share
attributable to equity
holders of the parent
company (pence) 3 (0.50) (0.51) (8.34)
Diluted loss per share
attributable to equity
holders of the parent
company (pence) 3 (0.50) (0.51) (8.34)
----------------------------- ---- ---------------- ---------------- ---------------
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 2013
Note 31 March 2013 31 March 2012 30 September
2012
GBP GBP GBP
NON-CURRENT ASSETS
Property, plant and
equipment 10,912,721 8,470,024 9,292,890
Investment in joint
venture 8 6,959,524 7,398,447 7,043,207
------------- -------------- -------------
Total Non-Current Assets 17,872,245 15,868,471 16,336,097
CURRENT ASSETS
Loans and receivables - 8,618,852 -
Trade and other receivables 844,569 329,119 662,360
Cash and cash equivalents 4,717,265 4,327,550 1,969,784
------------- -------------- -------------
Total Current Assets 5,561,834 13,275,521 2,632,144
TOTAL ASSETS 23,434,079 29,143,992 18,968,241
CURRENT LIABILITIES
Trade and other payables (571,691) (594,591) (996,392)
Total Current Liabilities (571,691) (594,591) (996,392)
TOTAL LIABILITIES (571,691) (594,591) (996,392)
------------- -------------- -------------
TOTAL NET ASSETS 22,862,388 28,549,401 17,971,849
------------- -------------- -------------
Total capital and reserves attributable to equity holders of the parent company
Note 31 March 2013 31 March 2012 30 September
2012
GBP GBP GBP
Share capital 1,828,100 1,325,203 1,328,537
Share premium reserve 16,681,756 11,563,076 11,563,076
Capital redemption reserve 10,130 10,130 10,130
Merger reserve 410,833 410,833 410,833
Cash flow hedge reserve (3,420,133) (2,985,085) (3,336,450)
Retained earnings 7,351,702 18,225,244 7,995,723
------------- -------------- -------------
TOTAL EQUITY 22,862,388 28,549,401 17,971,849
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 March 2013
Six Months Ended 31 March 2013 Six Months Ended 31 March 2012 Year Ended
GBP GBP 30 September 2012
GBP
---------------------------------- ------------------------------ ------------------------------ ------------------
Operating Activities
Net loss after tax (699,126) (643,743) (10,841,142)
Impairment of property, plant and
equipment - - 1,086,491
Depreciation 16,706 18,599 36,349
Finance income (556) (375,747) (761,830)
Finance expenses 17,449 - -
Share of post-tax loss from joint
venture - - 3,875
Share option costs 55,105 140,532 108,410
Impairment of the earn-out
receivable - - 8,800,000
---------------------------------- ------------------------------ ------------------------------ ------------------
cashflow from operations before
changes in working capital (610,422) (860,359) (1,567,847)
(Increase)/decrease in trade and
other receivables (182,209) 28,435 (304,806)
(Decrease)/Increase in trade and
other payables (424,701) (139,487) 262,314
---------------------------------- ------------------------------ ------------------------------ ------------------
Net Cash used in Operating
Activities (1,217,332) (971,411) (1,610,339)
---------------------------------- ------------------------------ ------------------------------ ------------------
Investing Activities
Purchase of property, plant and
equipment (1,636,537) (1,715,694) (3,642,801)
Cash received from earn-out deed
of amendment - 200,000 400,000
Interest received 556 17,460 22,395
---------------------------------- ------------------------------ ------------------------------ ------------------
Net cash used in investing
activities (1,635,981) (1,498,234) (3,220,406)
---------------------------------- ------------------------------ ------------------------------ ------------------
Financing Activities
Net Share issue 5,618,243 6,242,322 6,245,656
Interest paid and finance expenses (17,449) - -
---------------------------------- ------------------------------ ------------------------------ ------------------
Net cash from financing activities 5,600,794 6,242,322 6,245,656
---------------------------------- ------------------------------ ------------------------------ ------------------
Net increase in cash and cash
equivalents 2,747,481 3,772,677 1,414,911
Cash and cash equivalents at the
beginning of the period 1,969,784 554,873 554,873
---------------------------------- ------------------------------ ------------------------------ ------------------
CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD 4,717,265 4,327,550 1,969,784
---------------------------------- ------------------------------ ------------------------------ ------------------
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 2013
2013 Capital Share Share Merger Cash flow Retained Total
Redemption Capital Premium Reserve hedge reserve Earnings
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
------------ ---------- ----------- --------- --------------- ---------- -----------
2012 Capital Share Share Merger Cash flow Retained
Redemption Capital Premium Reserve hedge reserve Earnings Total
Reserve
GBP GBP GBP GBP GBP GBP GBP
Changes in equity
At 1 October
2011 10,130 915,742 5,730,215 410,833 (2,517,588) 18,728,455 23,277,787
Loss for the
period - - - - - (10,841,142) (10,841,142)
Other comprehensive
income - - - - (818,862) - (818,862)
------------ ---------- ----------- --------- --------------- ------------- -------------
Total comprehensive
loss for the
period - - - - (818,862) (10,841,142) (11,660,004)
Issue of Share
Capital - 412,795 6,141,921 - - - 6,554,716
Capital raised
costs - - (309.060) - - - (309,060)
Share-based payments - - - - - 108,410 108,410
------------ ---------- ----------- --------- --------------- ------------- -------------
At 30 September
2012 10,130 1,328,537 11,563,076 410,833 (3,336,450) 7,995,723 17,971,849
------------ ---------- ----------- --------- --------------- ------------- -------------
2012 Capital Share Share Merger Cash flow Retained
Redemption Capital Premium Reserve hedge reserve Earnings Total
Reserve
GBP GBP GBP GBP GBP GBP GBP
Changes in equity
At 1 October
2011 10,130 915,742 5,730,215 410,833 (2,517,588) 18,728,455 23,277,787
Loss for the
period - - - - - (643,743) (643,743)
Other comprehensive
income - - - - (467,497) - (467,497)
------------ ---------- ----------- --------- --------------- ----------- ------------
Total comprehensive
loss for the
period - - - - (467,497) (643,743) (1,111,240)
Issue of Share
Capital - 409,461 6,141,921 - - - 6,551,382
Capital raised
costs - - (309,060) - - - (309,060)
Share-based payments - - - - - 140,532 140,532
------------ ---------- ----------- --------- --------------- ----------- ------------
At 31 March 2012 10,130 1,325,203 11,563,076 410,833 (2,985,085) 18,225,244 28,549,401
------------ ---------- ----------- --------- --------------- ----------- ------------
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 2012, 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 2013 and 31 March 2012 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 2012 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 has 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 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 2012. We do not anticipate any further changes for the year ended 2013.
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:
Six Months Ended Six Months Year Ended
31 March 2013 Ended 30 September
GBP 31 March 2012 2012
GBP GBP
Loss
Loss used in calculating
basic and diluted loss per
share for the period (699,126) (643,743) (10,841,142)
Number of shares
Weighted average number of
ordinary shares for the purpose
of basic loss per share 139,715,769 127,374,063 129,958,110
Effect of employee share - - -
options
--------------------------------- ---------------- --------------- -------------
Weighted average number of
ordinary shares for the purpose
of diluted loss per share 139,715,769 127,374,063 129,958,110
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
Six Months Ended Six Months Year Ended
31 March 2013 Ended 30 September
GBP 31 March 2012 2012
GBP GBP
Finance income
Bank interest receivable 556 17,460 22,395
Unwinding of discount from
the sale of the Stallingborough
project - 358,287 739,435
---------------- --------------- -------------
556 375,747 761,830
---------------- --------------- -------------
Finance expenses
Interest payable (2,449) - -
Finance Fee (15,000) - -
---------------- --------------- -------------
(17,449) - -
---------------- --------------- -------------
The unwinding of the discount from the sale of the Stallingborough project represents the increased value of the earn-out based upon the discount made in September 2010.
5 Property, Plant and Equipment
During the six months ended 31 March 2013 the Company has capitalised development spend of GBP1.6 million (six months ending 31 March 2012: GBP1.7 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.
During the September 2010 financial year, the Company was involved in extensive negotiations with RWE for a Deed of Amendment to the original earn-out arrangement. The Deed outlined that in the event that construction contracts were awarded later than September 2011, additional payments of GBP100,000 would become due for each quarter of delay. At an agreed date with RWE the Deed of Amendment becomes invalid and the original earn-out arrangement is reinstated, although no repayments of monies received at signature or as a consequence of quarterly delays are payable.
In arriving at a discounted value of GBP8,460,565 as at September 2011, the Board made the assumption that a total payment of GBP9,300,000 would be received, based on contracts being awarded by RWE in September 2012. The revised valuation was therefore made up of the GBP100,000 initial payment, GBP8,800,000 at the point of contracts being awarded and GBP400,000 of delay payments. The original effective interest rate for the transaction of 9% had been applied to the payments.
The revised carrying value and resultant entries in the Consolidated Statement of Comprehensive Income are shown in the table below:
Earn out as at 30 September 2011 8,460,565 Cash received from earn-out deed of amendment (400,000) Unwinding of discount on September 2011 calculation (finance income) 739,435 Impairment of the earn-out receivable (8,800,000) Earn out as at 30 September 2012 - ----------------------------------------------------- ------------
The Company was notified by RWE Innogy in September 2012 that RWE Innogy wished to revert to the original earn-out provisions of the 2008 sale and purchase agreement in respect of the Stallingborough project. The board considered that the revision provided 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 30th September 2012. The Board still considers this treatment to be appropriate at 31 March 2013.
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.
2012
GBP
Investment at 30 September 2011 7,865,944
Share of other comprehensive income in joint venture
relating to the transfer of the initial carrying
amount of property,plant and equipment 213,798
Share of other comprehensive income in joint venture
relating to losses on cash flow hedges as at 31
March 2012 (681,295)
------------------------------------------------------ ----------
Investment at 31 March 2012 7,398,447
------------------------------------------------------ ----------
2013
GBP
Investment at 30 September 2012 7,043,207
Share of other comprehensive income in joint venture
relating to the transfer of the initial carrying
amount of property,plant and equipment 457,657
Share of other comprehensive income in joint venture
relating to losses on cash flow hedges as at 31
March 2013 (541,340)
------------------------------------------------------ ----------
Investment at 31 March 2013 6,959,524
------------------------------------------------------ ----------
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 September2012 30 September
2013 2013 2012 2012 2012
----------------------- ------------- ----------- ------------- ----------- ----------------- -------------
Property, plant
and equipment 54,608,873 50% 32,778,141 50% 45,639,956 50%
Other current
assets 2,620,351 50% 2,501,062 50% 2,534,984 50%
Long term assets - 50% - 50% - 50%
Current liabilities (4,038,856) 50% (3,760,369) 50% (5,826,119) 50%
Long term liabilities (35,235,854) 50% (13,556,570) 50% (24,394,307) 50%
Financial instruments
relating to cash
flow hedges (6,840,266) 50% (5,970,170) 50% (6,672,899) 50%
----------------------- ------------- ----------- ------------- ----------- ----------------- -------------
Loss - - - - (7,750) (3,875)
Other comprehensive
income relating
to cash flow hedges (167,367) (83,683) (934,994) (467,497) (1,637,723) (818,862)
----------------------- ------------- ----------- ------------- ----------- ----------------- -------------
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 2013 of GBP0.1m.
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 2013 the bank provided a fair value of the outstanding portion of the forward contract and this analysis resulted in a total liability of GBP0.2m 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. This will reduce to nil through the construction period with the benefit being recognised in the future reporting periods.
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 2013 the bank provided a valuation on the outstanding portion of the forward contracts resulting in a total liability of GBP6.6m to Helius CoRDe Ltd.
During the period ended 31 March 2013 Helius CoRDe contractors have completed installation of major plant and equipment, including boiler, turbine / generator, fuel handling, and evaporator together with associated control building and civil works. The site has been energised and connected to the 33kv grid. The project is still within budget, commissioning has started as programmed during the fourth quarter of 2012 and the plant is expected to enter commercial operation in 2013.
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 17(th) June 2013.
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 6JL
+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 6EF
This information is provided by RNS
The company news service from the London Stock Exchange
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