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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Plutus Powergen Plc | LSE:PPG | London | Ordinary Share | GB00B1GDWB47 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.025 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPPG
RNS Number : 3477D
Plutus PowerGen PLC
09 October 2018
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.
Plutus PowerGen Plc / Ticker: PPG / Index: AIM
9 October 2018
PLUTUS POWERGEN PLC
("Plutus", the "Group" or the "Company")
Final Results
Plutus PowerGen (AIM: PPG) the AIM listed power company focused on the development and operation of flexible energy generation ('FlexGen') projects in the UK, announces its results for the year ended 30 April 2018.
OVERVIEW
-- Continued focus on the development, construction and operation of flexible power generation facilities in the UK to mitigate the current and forecast risk of an energy deficit
-- Commissioned and successfully operating 120MW comprising six 20MW sites
-- All six sites hit the TRIADs available to them and generated good cash flow to assist in paying down development debt
-- Strategic shift to the development of higher margin gas operations - substantial pipeline, potentially more than 300MW, from relationship with Reliance Energy
-- 40MW of potential gas sites under site assembly in-house with a view to entering planning in the next few months
-- Relative economic certainty achieved post Ofgem and other governmental reviews enabling positive dialogue with potential funders for the gas sites
-- Agreement with Rockpool post year end to develop one gas site in Medway to be shared between the remaining three co-investment companies - circa GBP12.5 million total investment
CHAIRMAN'S STATEMENT
This has been a year of executing our business plan and building up our co-owned FlexGen investments, particularly regarding our six 44.5% owned FlexGen sites. We remain positive as the market in which we operate has relative certainty for the future which enables us to plan and seek investment in a more stable environment.
Phil Stephens
It was with great sadness for all the board and everybody who knew him, his family, friends and colleagues, that we announced our late CEO, Phil Stephens, passed away this summer. He made an enormous contribution to the success of our ompany and with his quiet charm and ready smile, he turned his hand and intellect to all matters to do with the day-to-day operations of the Company and its investments. He was pivotal in all our dealings with DEFRA, OFGEM and the subsequent Judicial Review. Phil's contribution to discussions with financiers and his contribution at board meetings will be greatly missed. His strength of character and strong intellect has guided the Company through some difficult waters to achieve what it has today. This includes six successfully operating FlexGen sites comprising of 120MW with over GBP35 million of equity funding and debt funding from Lombard and Rockpool Investments LLP with one gas site with Rockpool to commence development shortly. Phil has left the Company in a strong position to continue his legacy.
Key areas of focus
We currently have six 20MW FlexGen sites successfully operating with our investment partner, Rockpool. All six sites hit the TRIADs available to them during the winter period and the revenue from that alone, of around GBP5 million, will be used to pay down construction debt and ultimately enhance the value attributable to shareholders when the sites are eventually sold. Our primary operational focus has therefore been on the continued execution and delivery of these six sites in which we have an economic interest of circa 44.5% each. This winter, following OFGEM's review of TRIADs, we will achieve 66% of last year's income into each investment. This is assuming we hit all the TRIADs, which will again be applied to paying down the development debt of each company. Each company will also continue to generate revenue from the sale of electrons, as income from STOR (Standby Operating Reserve), FFR (Firm Frequency Response), FR (Fast Response) and CM (Capacity Mechanism) which are applied for each year on an annual basis until the 15-year index linked contract commences for each site.
If we were permitted, under accounting rules, to include our share of the nine companies co-owned with Rockpool, our net assets would be at least GBP12.5 million greater than disclosed in the balance sheet. Our share of the profit, as well as loss from the six operating sites, would have added GBP3.041 million to our turnover and GBP1.622 million to our income statement.
The Group is now concentrating on the development of gas fuelled power generation. The management team has been working to develop and progress a pipeline of gas-powered sites in which we intend to hold a majority stake, and therefore be permitted to consolidate the income statement and balance sheet into our accounts, providing more visibility of our operations. Typically, a gas site will cost around GBP12.5 million and it is likely to be operating for between 1500-2500 hours per annum and will normally operate in peak hours and when it is profitable to do so.
Strategy and financing
With respect to the FlexGen sites, our strategy is, alongside Rockpool, to either sell these or to make an offer for the 55.5% we do not already own, or a combination thereof. The sales process has not yet started but is likely to do so during 2019.
During the year we have received an offer, subject to contract, from an EPC (Engineering, Procurement and Construction) provider for mezzanine loan finance of up to 10% of the capital costs per gas-peaker site. We have also received non-binding indicative terms from an asset finance institution for an initial GBP25 million. Currently, we are in advanced discussions with various finance providers to provide a suite of financial facilities for the proposed gas sites, which will enable us to enjoy an equity majority of each site developed whilst maintaining our policy of limiting dilution to shareholders as far as possible.
The board has put on hold the Company's earlier planned GBP50 million bond raise because of the obligation for potential gas site portfolio funding partners to take a first charge against the Company and its assets.
Dividend
We do not propose to pay a dividend for the foreseeable future as we plan to reinvest all internally generated funds.
Outlook
I would like to thank our staff and the Directors for their valued efforts, as well as our partners and advisors who provide invaluable support in developing our operations. We have a robust pipeline, with 40MW being developed in-house and expected to enter planning in the next few months. We have 20MW about to commence development with Rockpool and a total gas pipeline at various stages of development of around 300MW. We are making good progress with financing, as reported above, and we look forward to securing sufficient finance to commence building up our gas sites in the coming few months, on which we will update shareholders accordingly. Therefore, we look forward with increased confidence and certainty in the markets in which we operate.
Charles Tatnall
Executive Chairman
9 October 2018
CHIEF EXECUTIVE'S REVIEW
I write this review with great sadness following the death of our late CEO, Phil Stephens, in August this year. Phil leaves big shoes to fill and he is sadly missed by all the members of the board. At this stage, no decision has been made on a permanent replacement and so I shall carry out the role for the time being.
We are currently concentrating on the funding and development of gas sites. Given that the regulatory climate to raise the finance is now more certain, we hope to expedite this strategy.
Whilst a great deal of work has been going on behind the scenes, there has not been much which we could meaningfully report to shareholders during the period. However, I have detailed below what has been happening during the past 12 months and our future plans.
Operations
The year ended 30 April 2018 has been a challenging one, not least because of the DEFRA, OFGEM and other regulatory reviews, but also due to the climate these have created in our operating market over the past two years. The capacity market clearing price has fallen to a degree where it is almost negligible and no longer forms a material part of a lender's view of financial projections and income upon which they may rely on to fund the build out of projects such as ours.
OFGEM decided to enforce its decision of March 2017 to step down TRIAD payments and this was upheld in the Judicial Review which reported in June this year. No appeal is being made to this decision. Consequently, the 2017 TRIAD "season" (from 1 November to 28 February each year) was the last 100% TRIAD and this falls to 66% in winter 2018 and 33% in winter 2019. However, there are still monies to be received from "locational payments" and as we are located, and intend to locate, in the best and highest yielding locations, we expect to receive around 20% of the original TRIAD. These payments are likely to rise at or beyond inflation making it still a worthwhile but not as substantial a source of revenue.
With regard to our existing operations co-invested with Rockpool, all the above has had a similar effect on revenues with the added difficulty that new emissions rules have been introduced by DEFRA via its MCPD (Medium Combustion Plant Directive) which became law in January 2018. The new regulations are expected to provide 43% of the sulphur dioxide emissions reduction, 9% of the reduction for particulate matter, and 22% of the nitrogen oxides emissions reduction needed to meet the UK's 2030 targets. Adjustments such as fitting selective catalytic reduction systems are therefore being made to our engines so that the emissions from our six plants comply with the new rules. This will cost between GBP300,000 to GBP500,000 per site, which is manageable given that each of the six companies operating the sites have sufficient cash resources to implement the changes in a timely manner. In addition to the foregoing, other changes are being considered for the existing FlexGen sites that will, if implemented, give more flexibility to their operation and further assist in reducing emissions. Such changes should also assist in enhancing the value of the sites.
Notwithstanding the environment in which we operate, the six 20MW FlexGen sites, totalling 120MW, have had a successful year to 30 April 2018, are all profitable and hitting their TRIADs. These sites had a combined revenue of GBP6.835 million in the year ended 30 April 2018 and an EBITDA of GBP3.645 million, none of which could be consolidated into our accounts. However, we have decided not to revalue our investments at this time, ahead of changes to each site, as outlined above, that are in the process of being carried out and we feel it is appropriate that such changes are implemented or are in the course of being implemented before any revaluation of our investments takes place.
We are exploring opportunities to maximise the value of our six FlexGen sites, with a view to an eventual sale. Rockpool has agreed to purchase one gas site with planning, connections, an option to lease and Capacity Mechanism from Reliance Energy. This is likely to complete shortly at which time we will be able to commence the development of the site. The site is to be shared between the three remaining companies. Inclusive of all costs and fees, the average site costs in the region of GBP12.5 million to develop. Gas sites run for many more hours per annum than FlexGen sites and these "gas peakers" will sell their electricity generated on a merchant basis. Hours run vary from 1500-2500 hours per annum.
With the uncertainty in the market, it was challenging to obtain the appropriate funding for our plans for gas sites. However, with the reviews now complete, funders have been able to view the market with greater certainty and it has become apparent there is an appetite for both equity and debt. The directors have been working hard to obtain funding in order that we may commence development of our planned gas sites. We are in talks with several interested parties for equity, debt and mezzanine funding and, as reported in the Chairman's Statement, we feel that we are close to receiving formal offers.
More reliance is now placed on a strong PPA (Power Purchase Agreement). As these sites run many more hours each year and such flexible gas peakers have a considerably higher revenue and EBITDA than the FlexGen sites, each site is projected to be profitable and is expected to offer a good IRR to all providers of finance. In addition, despite all the various industry reviews, our returns are still anticipated to be in line with our previously budgeted returns, demonstrating robust IRRs for all interested parties. The loss of much of the TRIAD income is expected to be offset by firmer prices in the balancing markets. This has already been evidenced when the National Grid sought to physically balance the grid and the market for flexible power as suppliers seek to balance their retail power books and mitigate energy price volatility.
As the UK moves towards a low-carbon economy, the way the National Grid operates the electricity system as a nation is evolving; its focus is on building a smart, flexible system that makes the best use of all the energy resources available to meet its customers' needs in a balanced, efficient and economical way. To this end, last June, it launched a review of all markets that affect us, and which seek to make the balancing markets in which we compete more dynamic and closer to real-time. The results of this thorough review will have a profound effect on the markets in which we operate as we must bid for more services via auctions. Therefore, we need to have the ability to compete in as many services that may be available to us currently and with regard to the future gas pipeline. The consultations and trials will be continuing for some time yet and well into 2020.
Outlook
We are in dialogue with several parties for various forms of finance. Some discussions are more advanced than others, but we have received indicative terms from two parties to date. We believe we are close to receiving further indicative term sheets and your board is working hard to convert these terms sheets into firm offers and thereafter financial close. As soon as this is achieved, we will be able to progress our plans for gas powered peaking sites and the potential profits from these sites will enable us to view the future with confidence. The ultimate sale of the legacy Rockpool interests will, if our valuations are achieved, add significantly to our cash resources and assist in developing the plan for our gas pipeline.
James Longley
Interim Chief Executive Officer
9 October 2018
Group Statement of Comprehensive Income
For the year ended 30 April 2018
Hot Features
Premium
2018 2017
Note GBP GBP
---------------------------------------- ---- ----------- -----------
Continuing operations
Revenue 1,350,000 1,350,000
---------------------------------------- ---- ----------- -----------
Gross profit 1,350,000 1,350,000
Administrative expenses (1,513,022) (1,261,424)
Share based payments (289,338) (31,276)
Other operating expenses 8 (50,153) (236,164)
---------------------------------------- ---- ----------- -----------
Operating loss (502,513) (178,864)
Interest charge on loan note 17 (12,000) (22,637)
Other interest payable (52,670) -
---------------------------------------- ---- ----------- -----------
Loss before tax 6 (567,183) (201,501)
Tax 9 - -
---------------------------------------- ---- ----------- -----------
Net loss attributable to equity holders
of the Company
and total comprehensive loss (567,183) (201,501)
---------------------------------------- ---- ----------- -----------
Earnings per share (pence per share):
Basic and diluted loss per share from
continuing
and total operations 10 (0.08)p (0.03)p
---------------------------------------- ---- ----------- -----------
There are no items of other comprehensive income.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company pro t and loss account. The total comprehensive loss for the parent company for the year was GBP499,350 (2017: profit of GBP35,987).
Group and Company Statements of Financial Position
For the year ended 30 April
2018 Group Company
------------------------ ----------------------------
2018 2017 2018 2017
Note GBP GBP GBP GBP
--------------------------------- ---- ----------- ----------- --------------- -----------
Non-current assets
Goodwill 13 1,085,000 1,085,000 - -
Investments in subsidiaries 11 - - 1,098,333 1,098,333
Investments 12 152 152 152 152
--------------------------------- ---- ----------- ----------- --------------- -----------
1,085,152 1,085,152 1,098,485 1,098,485
--------------------------------- ---- ----------- ----------- --------------- -----------
Current assets
Trade and other receivables 14 146,627 268,738 368,017 455,871
Cash and cash equivalents 15 136,416 71,609 78,207 71,609
--------------------------------- ---- ----------- ----------- --------------- -----------
283,043 340,347 446,224 527,480
--------------------------------- ---- ----------- ----------- --------------- -----------
Total assets 1,368,195 1,425,499 1,544,709 1,625,965
Current liabilities
Trade and other payables 16 (254,538) (229,635) (64,309) (131,191)
Borrowings 17 (100,000) (200,000) (100,000) (200,000)
--------------------------------- ---- ----------- ----------- --------------- -----------
(354,538) (429,635) (164,309) (331,191)
--------------------------------- ---- ----------- ----------- --------------- -----------
Net current (liabilities)/assets (71,495) (89,288) 281,915 196,289 --------------------------------- ---- ----------- ----------- --------------- ----------- Non-current liabilities Borrowings 17 - - - - --------------------------------- ---- ----------- ----------- --------------- ----------- Total liabilities (354,538) (429,635) (164,309) (331,191) --------------------------------- ---- ----------- ----------- --------------- ----------- Net assets 1,013,657 995,864 1,380,400 1,294,714 --------------------------------- ---- ----------- ----------- --------------- ----------- Equity Share capital 18 1,529,450 1,496,950 1,529,450 1,496,950 Share premium account 19 7,241,576 6,994,076 7,241,576 6,994,076 Share option and warrant reserve 20 445,628 140,652 445,628 140,652 Loan note equity reserve 21 23,657 23,657 23,657 23,657 Retained losses 22 (8,226,654) (7,659,471) (7,859,911) (7,360,561) --------------------------------- ---- ----------- ----------- --------------- ----------- Equity attributable to owners of the Company 1,013,657 995,864 1,380,400 1,294,774 --------------------------------- ---- ----------- ----------- --------------- -----------
Group Statement of Changes in Equity
For the year ended 30 April 2018
Share Loan note
Share Share option equity Retained
capital premium reserve reserve losses Total
GBP GBP GBP GBP GBP GBP
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2016 1,496,950 6,994,076 109,376 23,657 (7,457,970) 1,166,089
-------------------------- --------- --------- -------- --------- ----------- ---------
Comprehensive
income for the
year - - - - (201,501) (201,501)
Credit to equity
in respect of
share-based compensation
charge - - 31,276 - - 31,276
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2017 1,496,950 6,994,076 140,652 23,657 (7,659,471) 995,864
-------------------------- --------- --------- -------- --------- ----------- ---------
Comprehensive
income for the
year - - - - (567,183) (567,183)
Credit to equity
in respect of
share-based compensation
charge - - 304,976 - - 304,976
Issue of share
capital 32,500 247,500 - - - 280,000
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2018 1,529,450 7,241,576 445,628 23,657 (8,226,654) 1,013,657
-------------------------- --------- --------- -------- --------- ----------- ---------
Company Statement of Changes in Equity
For the year ended 30 April 2018
Share Loan note
Share Share option equity Retained
capital premium reserve reserve losses Total
GBP GBP GBP GBP GBP GBP
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2016 1,496,950 6,994,076 109,376 23,657 (7,396,548) 1,227,511
-------------------------- --------- --------- -------- --------- ----------- ---------
Comprehensive
income for the
year - - - - 35,987 35,987
Credit to equity
in respect of
share-based compensation
charge - - 31,276 - - 31,276
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2017 1,496,950 6,994,076 140,652 23,657 (7,360,561) 1,294,774
-------------------------- --------- --------- -------- --------- ----------- ---------
Comprehensive
income for the
year - - - - (499,350) (499,350)
Credit to equity
in respect of
share-based compensation
charge - - 304,976 - - 304,976
Issue of share
capital 32,500 247,500 - - - 280,000
-------------------------- --------- --------- -------- --------- ----------- ---------
At 30 April 2018 1,529,450 7,241,576 445,628 23,657 (7,859,911) 1,380,400
-------------------------- --------- --------- -------- --------- ----------- ---------
Group and Company Statements of Cash Flow
For the year ended 30 April 2018
Group Company
------------------ -------------------
2018 2017 2018 2017
Note GBP GBP GBP GBP
------------------------------ ---- -------- -------- --------- --------
Net cash generated by/(used
in) operating activities 26 (50,523) 65,001 (203,234) 38,038
------------------------------ ---- -------- -------- --------- --------
Investing activities
Net repayments by/(advances
to) subsidiary undertaking - - 94,502 29,196
------------------------------ ---- -------- -------- --------- --------
Net cash generated from/(used
in) investing activities - - 94,502 29,196
------------------------------ ---- -------- -------- --------- --------
Financing activities
Proceeds of share issues 180,000 - 180,000 -
Interest paid (64,670) (16,000) (64,670) (16,000)
------------------------------ ---- -------- -------- --------- --------
Net cash (used in)/generated
from financing activities 115,330 (16,000) 115,330 (16,000)
------------------------------ ---- -------- -------- --------- --------
Net increase/(decrease)
in
cash and cash equivalents 64,807 49,001 6,598 51,234
Cash and cash equivalents
at beginning of year 71,609 22,608 71,609 20,375
------------------------------ ---- -------- -------- --------- --------
Cash and cash equivalents
at end of year 15 136,416 71,609 78,207 71,609
------------------------------ ---- -------- -------- --------- --------
Notes to the Financial Statements
For the year ended 30 April 2017
1 - General information
Plutus PowerGen plc is a Company incorporated in the United Kingdom under the Companies Act 2006. These financial statements are prepared on a going concern basis and presented in pounds sterling which is the currency of the primary economic environment in which the Group operates.
2 - Statement of compliance
The financial statements comply with IFRS as adopted by the European Union. The following new and revised Standards and Interpretations have been adopted in the current period by the Group for the first time and do not have a material impact on the Group.
IFRS 12 Disclosures of interests in other entities
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect on the financial statements of the Group.
3 - Significant accounting policies
Basis of preparation
The consolidated financial statements of Plutus PowerGen plc (the "Company") and its subsidiaries (the "Group") have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union ("EU") applied in accordance with the provisions of the Companies Act 2006.
IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Standards Interpretations Committee ("IFRS IC") and there is an ongoing process of review and endorsement by the European Commission.
The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at amortised cost, as explained in the accounting policies below.
Basis of consolidation
The Group's consolidated financial statements incorporate the financial statements of Plutus PowerGen plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the year end date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each year end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and where they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Revenue
Revenue is measured at the fair value of the consideration received or receivable.
Revenue is derived from the provision of management services which are invoiced on a monthly basis and are recognised in the period to which they relate.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Financial assets are classified into the following specified categories: 'available for sale investments', 'loans and receivables' and 'cash and cash equivalents'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Available for sale investments
Investments are designated as available-for-sale financial assets if they do not have fixed maturities and fixed or determinable payments, and management intends to hold them for the medium to long-term. Financial assets that are not classified into any of the other categories are also included in the available-for-sale category.
Investments are initially measured at fair value plus incidental acquisition costs. Subsequently, they are measured at fair value in accordance with IAS 39. In respect of quoted investments, this is either the bid price at the period end date or the last traded price, depending on the convention of the exchange on which the investment is quoted, with no deduction for any estimated future selling cost. Unquoted investments are valued by the Directors using primary valuation techniques such as recent transactions, last price or net asset value.
Gains and losses on measurement are recognised in other comprehensive income except for impairment losses and foreign exchange gains and losses on monetary items denominated in a foreign currency, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.
The Group assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired. An impairment loss is recognised if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. A significant or prolonged decline in the fair value of a security below its cost shall be considered in determining whether the asset is impaired.
When a decline in the fair value of a financial asset classified as available-for-sale has been previously recognised in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss is removed from other comprehensive income and recognised in profit or loss. The loss is measured as the difference between the cost of the financial asset and its current fair value less any previous impairment.
Fair Value Measurements:
The Group holds investments that are measured at fair value at the end of each reporting period using the IFRS 7 fair value hierarchy as set out below.
Level 1 - valued using quoted prices in active markets for identical assets.
Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.
Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.
The share capital account represents the amount subscribed for shares at nominal value.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
The share option reserve represents the fair value, calculated at the date of grant, of options unexercised at the balance sheet date.
The loan note equity reserve represents the fair value, calculated at issuance of the loan notes.
Retained losses include all current and prior period results as disclosed in the statement of comprehensive income.
Financial liabilities
Financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. All interest related charges are recognised as an expense in finance cost in the income statement using the effective interest rate method.
The Group's financial liabilities comprise trade and other payables and borrowings.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.
Borrowings represent convertible loans that are accounted for as compound instruments. The fair value of the liability portion of the convertible loan notes is determined using a market interest rate for an equivalent non-convertible loan note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the loan notes. The remainder of the proceeds is allocated to the conversion option, which is recognised and included in shareholders' equity, net of tax effects, and is not subsequently re-measured.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.
Share-based payments
The Group has applied the requirements of IFRS 2 'Share-based Payments'.
The Group issues equity-settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity settled share based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
4 - Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group's accounting policies
In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; or in the period of the revision and future periods if the revision affects both current and future periods.
(i) Going concern
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Company can continue in operational existence for the foreseeable future. The Group had cash and cash equivalents of GBP136,416 and net current liabilities of GBP118,567 as at 30 April 2018, and incurred a loss of GBP461,766 for the year then ended.
The Directors have based their opinions on a cash flow forecast, which assumes that sufficient revenue will be generated for working capital purposes and that operating costs will be kept to a minimum until adequate revenue streams are secured. In addition future plans for the Group will be funded externally through a mix of debt and equity financing, which at the time of signing the accounts had not yet been completed. So whilst there are uncertainties, the Directors continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.
(ii) Classification of investments as available for sale
Note 11 describes the investments in nine operating companies where the Group's shareholdings exceed 20% as 'Available for Sale Investments'. Based on the contractual agreements between the Group and other investors, the Group does not have any power to appoint or remove board of directors members of the investees. Therefore the Directors of the Company concluded that the Group does not have significant influence over these companies.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are set out below.
(i) Share options
In order to calculate the charge for share-options as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its Black-Scholes option pricing model as set out in note 23.
(i) Impairment of goodwill
Determining whether goodwill is impaired required an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the future cash flows are less than expected, a material impairment loss may arise.
5 - Business segments
In accordance with IFRS 8, the Group is required to define its operating segments based on the internal reports presented to its Chief Operating decision maker in order to allocate resources and assess performance. The Chief Operating decision maker is the Chief Executive. There is only one continuing class of business, being the investment in the natural resources sector.
Given that there is only one continuing class of business, operating within the UK, no further segmental information has been provided.
6 - Loss for the year
Loss for the year from continuing operations has been arrived at after charging:
2018 2017
GBP GBP
---------------------------------------------------- --------- -------
Operating lease expense in respect of property 97,157 75,426
Employee costs - including share-based compensation
costs
(see note 7) 1,202,712 738,354
---------------------------------------------------- --------- -------
The analysis of auditors' remuneration is as follows:
2018 2017
GBP GBP
-------------------------------------------- ------ ------
Fees payable to the Group's auditor for the
audit of the Group's annual accounts 22,000 20,000
-------------------------------------------- ------ ------
Other services pursuant to legislation:
- tax services 1,750 2,000
-------------------------------------------- ------ ------
Total non-audit fees 1,750 2,000
-------------------------------------------- ------ ------
7 - Employee costs (including Directors)
2018 2017
GBP GBP
-------------------------------------------- --------- -------
Salaries and fees 908,000 733,672
Employee share option charge 273,700 -
Employer's national insurance contributions 5,374 4,682
-------------------------------------------- --------- -------
1,202,712 738,354
-------------------------------------------- --------- -------
The average monthly number of employees (including Executive Directors) employed by the Group during the year was 5, all of whom were involved in management and administration activities (2017:4).
8 - OTHER OPERATING EXPENSES
2018 2017
GBP GBP
------------------------------------------ ------ -------
Pre-planning project expenses written off 50,153 236,164
50,153 236,164
------------------------------------------ ------ -------
9 - Tax
2018 2017
GBP GBP
------------ ---- ----
Current tax - -
Deferred tax - -
------------ ---- ----
- -
------------ ---- ----
Corporation tax is calculated at 19% (2017: 19.9%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:
Tax reconciliation
2018 2017
GBP GBP
--------------------------------------------- --------- ---------
Loss before tax (567,183) (201,501)
--------------------------------------------- --------- ---------
Tax at UK corporation tax rate of 19% (2017:
19.9%) (107,765) (45,845)
Effects of:
Expenses not deductible for tax purposes 29,075 8,161
Tax losses carried forward 78,690 37,684
--------------------------------------------- --------- ---------
Total tax charge - -
--------------------------------------------- --------- ---------
Deferred tax assets of approximately GBP572,690 (2017: GBP494,000) have not been recognised as the Directors consider there to be insufficient evidence that the assets will be recovered.
10 - Earnings per share
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
In order to calculate diluted loss per share, the weighted average number of ordinary shares in issue was adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. Dilutive potential ordinary shares include share options granted to employees and Directors where the exercise price (adjusted according to IAS 33) is less than the average market price of the Company's ordinary shares during the year.
IAS 33 'Earnings per share' requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. Only options that are 'in the money' are treated as dilutive and net loss per share would not be increased by the exercise of such options.
2018 2017
Loss GBP GBP
---------------------------------------------- ----------- -----------
Loss for the purposes of basic and diluted
earnings per share:
Continuing and total operations (567,183) (201,501)
---------------------------------------------- ----------- -----------
Number of shares Number Number
---------------------------------------------- ----------- -----------
Weighted average number of ordinary shares
for the purposes of basic
and diluted loss per share 715,593,319 691,428,935
---------------------------------------------- ----------- -----------
Earnings per share - basic and diluted, pence
per share (0.08) (0.03)
---------------------------------------------- ----------- -----------
11 - Investments in subsidiaries
The Group holds the following investments in subsidiary undertakings:
Percentage of
Country of ordinary shares Principal
Subsidiary Incorporation held activity
---------------------- ------------------ ---------------- ----------------------
Plutus Energy Limited England and Wales 100% Management services
to the electricity
generating entities
(Note 11)
Electricity generation
NRS Power Limited England and Wales 100% (dormant)
Electricity generation
FC PowerGen Limited England and Wales 100% (dormant)
Electricity generation
KI Power Limited England and Wales 100% (dormant)
Electricity generation
LF FlexGen Limited England and Wales 100% (dormant)
Electricity generation
Swallow Energy Limited England and Wales 100% (dormant)
The carrying value of the investments in the Company is as follows:
2018 2017
GBP GBP
------------------------------------------------ --------- ---------
At 1 May 1,098,333 1,085,000
Reclassification of investment in Plutus Energy
Limited - 13,333
Purchase of investments - -
------------------------------------------------ --------- ---------
1,098,333 1,098,333
------------------------------------------------ --------- ---------
12 - Available for sale investments
Available for sale investments comprise investments in nine operating entities. As explained in Note 4, these investments are not equity accounted for as the Group does not meet the criteria for exerting significant influence as set out in IAS 28.
All investments are classified as Level 3 under the IFRS 7 fair value hierarchy as set out under Fair Value Measurements within Note 3
2018 2017
Level 3 investments GBP GBP
----------------------------------------- ---- ----
Brought forward 152 152
Purchase of investments (see note below) - -
----------------------------------------- ---- ----
152 152
----------------------------------------- ---- ----
The details of investments classified as available for sale are as follows:
Percentage of
Country of ordinary shares Principal
Investment Company Incorporation held activity
---------------------- ------------------ ---------------- ----------------------
Attune Energy Limited England and Wales 45.5% Electricity generation
Flexible Generation
Limited England and Wales 44.9% Electricity generation
Balance Power Limited England and Wales 44.9% Electricity generation
Equivalence Energy
Limited England and Wales 45.0% Electricity generation
Precise Energy Limited England and Wales 45.1% Electricity generation
Valence Power Limited England and Wales 44.7% Electricity generation
Portman Power Limited England and Wales 45.3% Electricity generation
Reliance Generation
Limited England and Wales 45.6% Electricity generation
Selectgen Limited England and Wales 45.7% Electricity generation
13 - Goodwill
2018 2017
GBP GBP
------------------------------------------------ --------- ---------
Brought forward 1,085,000 1,085,000
On issue of deferred consideration shares (Note
18) - -
------------------------------------------------ --------- ---------
Carried forward at 30 April 2018 1,085,000 1,085,000
------------------------------------------------ --------- ---------
Goodwill arises on acquisition of a 100% of the equity of Plutus Energy Limited ("PEL").
The recoverable amount is determined based on value-in-use calculations which uses cash flow projections based on financial budgets approved by the Directors covering a five-year period, and a discount rate of 12% per annum.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates of 10% which is based on the average growth for 5 years covered by the projections. The Directors believe that any reasonably possible change in key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.
The Directors have reviewed the carrying value of goodwill as at 30 April 2018 and consider that no impairment provision is required.
The Directors continue to review goodwill on an on-going basis and where necessary in future periods will request external valuations to further support the valuation basis.
14 - Trade and other receivables
Group Company
---------------- ----------------
2018 2017 2018 2017
GBP GBP GBP GBP
------------------------------- ------- ------- ------- -------
Trade receivables 1,546 28,339 - -
Amounts due from subsidiary
undertakings - - 313,368 407,870
Expenses rechargeable to
operating entities 19,144 192,398 - -
Other receivables 98,110 24,633 30,359 24,633
Prepayments and accrued income 27,827 23,368 24,290 23,368
------------------------------- ------- ------- ------- -------
146,627 268,738 368,017 455,871
------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of trade and other receivables approximates to their fair value.
15 - Cash and cash equivalents
Group Company
--------------- --------------
2018 2017 2018 2017
GBP GBP GBP GBP
-------------------------- ------- ------ ------ ------
Cash and cash equivalents 136,416 71,609 78,207 71,609
-------------------------- ------- ------ ------ ------
136,416 71,609 78,207 71,609
-------------------------- ------- ------ ------ ------
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
16 - Trade and other payables
Group Company
---------------- ---------------
2018 2017 2018 2017
GBP GBP GBP GBP
----------------------------- ------- ------- ------ -------
Trade payables 133,728 135,524 8,195 56,341
Other payables 73,144 19,361 8,448 100
Accruals and deferred income 47,666 74,750 47,666 74,750
----------------------------- ------- ------- ------ -------
254,538 229,635 64,309 131,191
----------------------------- ------- ------- ------ -------
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The Directors consider that the carrying amount of trade and other payables approximates to their fair value. No trade payables were older than 90 days.
17 - Borrowings
Group and Company
Convertible loans
On 22 December 2014 the Company issued GBP200,000 convertible loan notes, repayable on 18 December 2016 if not converted into shares prior to that date, and bearing interest at 8% p.a, payable quarterly in arrears. In December 2016 the terms of the loan were amended so that the loan notes are repayable on demand.
The net proceeds from the issue of the loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company as follows:
The Directors estimate the fair value of the liability component of the loan notes at 30 April 2018 to be approximately GBP100,000 (2017: GBP200,000). This fair value has been calculated by discounting the future cash flows at the market rate of 8%.
2018 2017
GBP GBP
-------------------------------------------- --------- -------------
Liability component brought forward 200,000 193,363
Loan Notes converted to Equity (100,000) -
Interest charge for the period 12,000 22,637
Interest paid (12,000) (16,000)
-------------------------------------------- --------- -------------
Liability component of convertible loans at
30 April 2018 100,000 200,000
Other loans - -
-------------------------------------------- --------- -------------
Total borrowings 100,000 200,000
-------------------------------------------- --------- -------------
Current liabilities 100,000 200,000
Non-current liabilities - -
-------------------------------------------- --------- -------------
100,000 200,000
-------------------------------------------- --------- -------------
18 - Share capital
2018 2018 2017 2017
Number GBP Number GBP
---------------------------- ----------- --------- ----------- ---------
Issued and fully paid
Ordinary shares of GBP0.001
each 723,928,935 723,929 691,428,935 691,429
Deferred shares of GBP0.049
each 16,439,210 805,521 16,439,210 805,521
---------------------------- ----------- --------- ----------- ---------
Total 1,529,450 1,496,950
---------------------------- ----------- --------- ----------- ---------
Share issues
Nominal
value
Ordinary shares Number GBP GBP
----------------------------------- ----------- ------- -------
Issued shares on 30 April 2015 571,428,935 0.001 571,429
Issue of shares 120,000,000 0.001 120,000
----------------------------------- ----------- ------- -------
Issued ordinary shares on 30 April
2016
and 30 April 2017 691,428,935 0.001 691,429
Issue of shares 32,500,000 0.001 32,500
----------------------------------- ----------- ------- -------
Issued ordinary shares on 30 April
2018 723,928,935 0.001 723,929
----------------------------------- ----------- ------- -------
On 1 February 2016 the following share issues took place:
-- 20,000,000 shares were issued for cash at 0.9p per share on the exercise of warrants.
-- 100,000,000 shares were issued at 0.6p per share as deferred consideration in accordance with the amended agreement for the acquisition of Plutus Energy Limited.
On 19 May 2017 the following share issues took place:
-- 20,000,000 shares were issued for cash at 0.9p per share on the exercise of warrant
On 29 November 2017 the following share issues took place:
-- 12,500,000 shares were issued for cash at 0.8p per share on the conversion of convertible loan stock
19 - Share premium account
Share premium account GBP ------------------------------------------- --------- Balance at 30 April 2015 6,334,076 Premium arising on issue of equity shares 660,000 ------------------------------------------- --------- Balance at 30 April 2016 and 30 April 2017 6,994,076 Premium arising on issue of equity shares 247,500 ------------------------------------------- --------- Balance at 30 April 2018 7,241,576 ------------------------------------------- ---------
20 - Share option and warrant reserve
GBP
--------------------------- -------
Balance at 30 April 2015 74,306
Share-based payment charge 35,070
--------------------------- -------
Balance at 30 April 2016 109,376
--------------------------- -------
Share-based payment charge 31,276
--------------------------- -------
Balance at 30 April 2017 140,652
Share-based payment charge 304,976
--------------------------- -------
Balance at 30 April 2018 445,628
--------------------------- -------
21 - loan note equity reserve
GBP
----------------------------------------------------- ------
Balance at 30 April 2016, 30 April 2017 and 30 April
2018 23,657
----------------------------------------------------- ------
22 - group retained losses
GBP
-------------------------------- -----------
Balance at 30 April 2015 (7,050,194)
Comprehensive loss for the year (407,776)
-------------------------------- -----------
Balance at 30 April 2016 (7,457,970)
Comprehensive loss for the year (201,501)
-------------------------------- -----------
Balance at 30 April 2017 (7,659,471)
Comprehensive loss for the year (567,183)
-------------------------------- -----------
Balance at 30 April 2018 (8,226,654)
-------------------------------- -----------
23 - Share options and warrants
Options
On 8 March 2013, options over, in aggregate, 14,310,000 ordinary shares of 0.1 pence were granted to the Directors of the Company. Each option carries the right to subscribe to one new Ordinary Share in the capital of the Company at a price of 0.675p per Ordinary Share, being the closing mid-market price of the Company's ordinary shares on 8 March 2013. These options vest over a period of three years from the date of the Grant, with a third of the options vesting on the first, second and third anniversaries of the Grant respectively. These options are exercisable for a period of ten years from the date of the Grant subject to the vesting conditions.
The fair value of the options was calculated using the Black-Scholes model and the Group recognised total expenses of GBP304,976 (2017: GBPnil) related to the grant of these options during the year. The inputs to the Black-Scholes model were as follows:
2013 Issue:
Grant date share price 0.675p Exercise share price 0.675p Risk free rate 2.5% Expected volatility 50% Option life 10 years Calculated fair value per share 0.420p
2017 Issue:
Grant date share price 1.485p Exercise share price 1.485p Risk free rate 2.5% Expected volatility 50% Option life 10 years Calculated fair value per share 0.746p
The table below summarises the share options extant during the year:
Number of
Number options
of options Issued Exercised Lapsed at Exercisable
at 30 April in in the in 30 April at 30 April Exercise Expiry
2017 the year year the year 2018 2018 price date
------------ ---------- --------- --------- ---------- ------------ -------- ----------
9,540,000 - - - 9,540,000 9,540,000 0.675p 8.03.2023
------------ ---------- --------- --------- ---------- ------------ -------- ----------
- 60,000,000 - - 60,000,000 50,000,000 1.485p 19.05.2020
------------ ---------- --------- --------- ---------- ------------ -------- ----------
69,540,000 59,540,000
------------ ---------- --------- --------- ---------- ------------ -------- ----------
Warrants
On 22 August 2014, warrants over, in aggregate, 40,000,000 ordinary shares of 0.1 pence each ("Director Warrants") were issued to James Longley and Charles Tatnall, directors of the Company. Each warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at a price of 0.9p per Ordinary at any time prior to 22 August 2016.
On 28 May 2015, warrants over, in aggregate, 30,075,207 ordinary shares of 0.1 pence each ("Rockpool Warrants") were issued to Rockpool LLP, an advisor to the Company. Each warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at a price of 1.15p per ordinary share at any time between 27 May 2018 and 27 May 2021.
The fair value of the warrants was calculated using the Black-Scholes model and the Group recognised total expenses of GBP31,276 (2017: GBP31,726) in relation to the issue of the Rockpool warrants during the year. The inputs to the Black-Scholes model were as follows:
Rockpool Warrants Director Warrants
Grant date share price 0.8p 0.6p
Exercise share price 1.15p 0.9p
Risk free rate 2% 2%
Expected volatility 50% 50%
Life of warrant 6 years 2 years
Calculated fair value
per share 0.312p 0.095p
The table below summarises the share warrants extant during the year:
Number of Number of warrants warrants at Issued Exercised Lapsed at Exercisable 30 April in in the in 30 April at 30 April Exercise Vesting Expiry 2017 the year year the year 2018 2018 price date date ---------- --------- ---------- --------- ---------- ------------ -------- ---------- ---------- 20,000,000 - 20,000,000 - - - 0.9p 22.08.2014 27.08.2017 30,075,207 - - - 30,075,207 - 1.15p 27.05.2018 27.05.2021 ---------- --------- ---------- --------- ---------- ------------ -------- ---------- ---------- 50,075,207 - 20,000,000 - 30,075,207 - ---------- --------- ---------- --------- ---------- ------------ -------- ---------- ----------
24 - Financial instruments
Categories of financial instruments
Carrying value
----------------
2018 2017
GBP GBP
--------------------------------------------- ------- -------
Financial assets
Investments designated as available for sale
on initial recognition 152 152
Trade receivables 1,546 28,339
Cash and cash equivalents 136,416 71,609
--------------------------------------------- ------- -------
138,114 100,100
--------------------------------------------- ------- -------
Financial liabilities at amortised cost:
Convertible unsecured loan notes 100,000 200,000
Trade and other payables 254,538 154,885
--------------------------------------------- ------- -------
354,538 354,885
--------------------------------------------- ------- -------
25 - Risk management objectives and policies
The Group's finance function monitors and manages the financial risks relating to the operations of the Group. These risks include credit risk, liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effects of these risks, in accordance with the Group's policies approved by the Board of Directors, which provide written principles on interest rate risk, credit risk and the investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for any purpose.
Capital risk management
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
-- to support the Group's growth; and -- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The capital structure consists of capital and reserves and convertible loan notes, for capital management purposes.
Interest rate risk
The Group's exposure to interest rate risk is limited to the interest payable on the convertible unsecured loan notes, which are at fixed rates of interest.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group's principal financial assets are bank balances and cash and other receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
26 - Notes to the cash flow statement
Group Company
-------------------- -------------------
2018 2017 2018 2017
GBP GBP GBP GBP
----------------------------------- --------- --------- --------- --------
(Loss)/profit before tax (567,183) (201,501) (499,350) 35,987
Share-based compensation
charge 304,976 31,276 304,976 31,276
Interest payable 64,670 - 64,670 -
Project expenses written
off 50,153 - 50,153 -
Loan note interest charge - 22,637 - 22,637
Operating cash flow before
movements
in working capital (147,384) (147,588) (79,551) 89,900
Decrease/(increase) in receivables 71,958 149,242 (56,801) (24,471)
Increase/(decrease) in payables 24,903 63,347 (66,882) (27,391)
----------------------------------- --------- --------- --------- --------
Net cash generated by/(used
in) operating activities (50,523) 65,001 (203,234) 38,038
----------------------------------- --------- --------- --------- --------
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
27 - Operating lease arrangements
The Group and Company as lessee
2018 2017
GBP GBP
---------------------------------------------- ------ ------
Minimum lease payments under operating leases
recognised
as an expense in the year 97,157 58,000
---------------------------------------------- ------ ------
Minimum future lease payments under non-cancellable operating lease agreements:
2018 2017
GBP GBP
------------------ ------ ------
Due within 1 year 47,700 47,700
------------------ ------ ------
28 - Related party transactions
During the year ended 30 April 2018 GBP215,500 (2017: GBP145,500) fees were paid to Tatbels Limited in respect of Charles Tatnall's services as Executive Chairman.
During the year ended 30 April 2018, fees of GBP215,500 (2017: GBP116,750) were paid to Dearden Chapman Accountants Limited in respect of James Longley's services as Chief Financial Officer.
During the year ended 30 April 2018, fees of GBP358,000 were paid to Ennerco Limited in respect of services rendered by Phil Stephens and Paul Lazarevic and in 2017 fees of GBP158,167 were paid to PPT Capital Limited in respect of services rendered by Phil Stephens and Paul Lazarevic. Phil Stephens and Paul Lazarevic were both directors of Ennerco Limited during the year. Also in 2017 fees of GBP72,375 were paid to Helvic Limited, GBP26,500 to Ennerco Limited, and GBP12,000 to Catmandoo Limited, in respect of services rendered by Paul Lazarevic and Phil Stephens.
During the year ended 30 April 2018 fees of GBP22,000 (2017: GBP13,133) were paid to Kinloch Corporate Finance Limited in respect of Tim Cottier's services as an independent non-executive director and of which Tim Cottier was a director.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2018 2017
GBP GBP
----------------------------- ------- -------
Short-term employee benefits 913,374 738,354
----------------------------- ------- -------
913,374 738,354
----------------------------- ------- -------
In addition to the information disclosed in Note 23, movement on warrants held by the Directors is as follows:
James Longley Charles Tatnall
Exercise Number of Number of
price Vesting date warrants warrants
--------------------- -------- ------------ ------------- ---------------
At 30 April 2015 0.9 27.08.2017 20,000,000 20,000,000
Exercised during the
year 0.9 27.08.2017 (10,000,000) (10,000,000)
--------------------- -------- ------------ ------------- ---------------
At 30 April 2016 and
30 April 2017 0.9 27.08.2017 10,000,000 10,000,000
Exercised during the
year 0.9 27.08.2017 (10,000,000) (10,000,000)
--------------------- -------- ------------ ------------- ---------------
At 30 April 2018 - - - -
--------------------- -------- ------------ ------------- ---------------
On 1 February 2016, 10,000,000 shares were issued at 0.9p per share to each of Charles Tatnall and James Longley on the exercise of warrants. The aggregate of the amount of gains made by each director on the exercise of warrants is GBP20,000. On 19 May 2017, 10,000,000 shares were issued at 0.9p per share to each of Charles Tatnall and James Longley on the exercise of warrants. The aggregate of the amount of gains made by each director on the exercise of warrants is GBP20,000.
29 - Events after the year end
There have been no material events since the year end.
Director Dealings
Following the warrant exercise, the interests of the Directors in the issued share capital of the Company before and after the issue of the New Ordinary Shares is as follows:
Percentage interest
Existing interest Total interest in the issued
in ordinary in ordinary ordinary share
shares of Number of New shares of capital of the
Name 0.1p each Ordinary Shares 0.1p each Company
----------------- ------------------ ----------------- ------------------ --------------------
Executors
of Philip
Stephens 88,012,823 - 91,762,823 12.37%
Paul Lazerevic 82,203,379 - 85,953,379 11.55%
Charles Tatnall 75,500,000 - 75,500,000 10.61%
James Longley 67,500,000 - 67,500,000 9.49%
----------------- ------------------ ----------------- ------------------ --------------------
ENDS
For further information, please visit www.plutuspowergen.com, or contact:
Charles Tatnall Plutus PowerGen Plc Tel: +44 (0) 20 8720
6562
Email: ctatnall@btinternet.com
David Foreman Cantor Fitzgerald Europe Tel: +44 (0) 207 894
7000
--------------------------- --------------------------------
Richard Salmond Cantor Fitzgerald Europe Tel: +44 (0) 207 894
7000
--------------------------- --------------------------------
Isabel de Salis St Brides Partners Limited Tel: +44 (0) 20 7236
1177
--------------------------- --------------------------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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