Interim Results
23 December 2005 - 8:08PM
UK Regulatory
RNS Number:1576W
Compact Power Holdings PLC
23 December 2005
COMPACT POWER HOLDINGS PLC
ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the results for the six months ended 30 September 2005.
Results
I am very happy to report that this is the first time the Group has reported a
gross profit. Due to the significant increase in performance of our existing
Avonmouth facility, the Group earned a gross profit in the period of #185,000
(2004: loss of #141,000). Revenue for the period increased by 90% to #1,014,000
(2004: #534,000) as a result of increased throughput and higher gate fees at the
existing Avonmouth waste processing plant. Administration and development costs
reduced by 12% to #768,000 (2004: #873,000) however interest expense increased
to #119,000 (2004: #37,000) as a result of debt finance that has been obtained
over the last year to meet the working capital requirements of the Group. The
consolidated loss before tax for the six months ended 30 September 2005 was
#701,000 (2004: #1,048,000).
At 30 September 2005 the balance sheet shows aggregate shareholders' funds of
#390,000 (2004: #1,694,000) and includes #1,655,000 of debt finance (2004: nil).
In the six months to 30 September 2005 the Group drew down a further #450,000
(2004: nil) from a loan facility provided by Cooper Holdings Limited to assist
the Group with its working capital requirements. At the period end interest of
#22,000 had been accrued and a total of #600,000 had been drawn down from the
facility.
The Group had cash outflows in the period of #137,000 (2004: #112,000) and
expenditure remains tightly controlled during this difficult period while future
financing arrangements are being negotiated These arrangements include the
financing of the new plant at Avonmouth and a possible cash placing.
Shareholders' attention is drawn to Note 5 at the end of this statement in
relation to going concern.
Progress
Plans are advanced for the start of construction of the new Avonmouth plant in
the New Year and the negotiations for the finance are continuing. The Company
is ready to proceed with the project with Bristol City Council but is still
engaged in the due diligence process with DEFRA under the Government's New
Technologies Demonstrator Programme as a preferred bidder subject to contract.
In relation to the small-scale plant developed with QinetiQ for use in Royal
Navy ships and now undergoing land based trials, a collaboration has been formed
with Weir Strachan & Henshaw for its promotion in other applications in the
defence sector in the UK and abroad. This will form part of the offering for
integrated waste management systems which is already part of their core business
activity.
The Company has entered into an alliance with Organics Group plc for the
promotion of the technology in overseas markets. Organics Group is particularly
active in the Far East and this is expected to lead to programmes for projects
in various territories.
The pipeline for waste and biomass to energy project opportunities continues to
grow generally, with strong interest in various parts of the world. In some
cases the interest is in strategic partnerships involving programmes of projects
and in others the focus is on discrete projects. In all cases the parties are
recognizing the environmental and commercial benefits that the Compact Power
technology offers in providing sustainable solutions to local communities.
Outlook
There are very few advanced thermal technologies that have been operated for
significant periods under commercial conditions and Compact Power has gained
considerable credibility from its achievement in this respect. This is endorsed
by the level of interest coming from abroad and the quality of the companies
that we are dealing with. Therefore the issue we face is not "if" we shall
succeed in translating these opportunities into committed projects but "when".
The Company continues to enjoy the support of its largest shareholder and the
Directors are confident that the first quarter of 2006 will bear fruit in terms
of initiating one or more new projects including the new Avonmouth plant.
New projects may generate sufficient contribution to meet the Company's medium
term funding requirements. But if not, the Company would intend to raise equity
funds by 31 March 2006 to meet its requirements which could include the
repayment of the Cooper Holdings loan. The short term funding requirements of
the Company are currently being met by short term loan arrangements and may be
supplemented by a cash placing in the near future.
The loan from Cooper Holdings, after several agreed extensions, is currently due
for repayment on 31 December 2005. Cooper Holdings has agreed to a further
extension to 31 March 2006 in relation to #600,000 of the amount outstanding on
the basis that it will have the right to convert the loan into shares at the
price of any fundraising before repayment. The balance of the loan and interest
currently outstanding (#210,000) is intended to be discharged in the short term.
Cooper Holdings has also agreed that if the Company does proceed with a share
issue to meet its requirements as at the end of March 2006, it would intend to
support such an issue on terms to be agreed.
Nic Cooper
Chairman
23 December 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2005
Note Six months Six months
ended 30 ended 30 Year ended
September 2005 September 2004 31 March 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 1,014 534 1,506
Cost of sales (829 ) (675 ) (1,612 )
Gross profit / (loss) 185 (141 ) (106 )
Administrative expenses (768 ) (873 ) (1,476 )
Operating loss (583 ) (1,014 ) (1,582 )
Interest payable - group (119 ) (37 ) (141 )
Interest receivable - group 1 3 6
Loss on ordinary activities before taxation (701 ) (1,048 ) (1,717 )
Tax credit on loss on ordinary activities - 4 60
Loss on ordinary activities after taxation (701 ) (1,044 ) (1,657 )
Balance brought forward (17,445 ) (15,788 ) (15,788 )
Balance carried forward (18,146 ) (16,832 ) (17,445 )
Loss per share
Basic loss per 2p share 4 (2.4 ) p (3.6 ) p (5.8 ) p
The Group has no recognised gains or losses other than the loss for the above
financial period.
All activities are classed as continuing operations.
CONSOLIDATED BALANCE SHEET
as at 30 September 2005
As at 30 As at 30 As at
September 2005 September 2004 31 March
(restated) 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed Assets
Intangible assets 875 911 893
Tangible assets 1,616 1,755 1,686
2,491 2,666 2,579
Current Assets
Debtors 585 516 455
Cash at bank - 256 104
585 772 559
Creditors: Amounts falling due within one year (1,686 ) (744 ) (1,047 )
Net current (liabilities) /assets (1,101 ) 28 (488 )
Total assets less current liabilities 1,390 2,694 2,091
Creditors: Amounts falling due after one year (1,000 ) (1,000 ) (1,000 )
Net assets 390 1,694 1,091
Capital and reserves
Called-up equity share capital 583 583 583
Share premium 17,953 17,953 17,953
Own share reserve - (10 ) -
Profit and loss account (18,146 ) (16,832 ) (17,445 )
Equity Shareholders' funds 390 1,694 1,091
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 September 2005
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2005
2005 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Net cash outflow from operating activities (555 ) (1,054 ) (1,395 )
Returns on investments and servicing of finance
Interest received 1 3 6
Interest paid (33 ) (20 ) (88 )
Net cash flow from investments and servicing of (32 ) (17 ) (82 )
finance
Taxation - 32 136
Capital expenditure and financial investment
Purchase of tangible fixed assets - (45 ) (45 )
Investment in intangible fixed assets - - (28 ) (28 )
Research & development
Net cash outflow from capital expenditure and - (73 ) (73 )
financial investment
Net cash outflow before financing (587 ) (1,112 ) (1,414 )
Financing
Loan- Sale of Avonmouth Plant - 1,000 1,000
Loan- Cooper Holdings 5 450 - 150
Net cashflow from financing 450 1,000 1,150
Decrease in cash in the period (137 ) (112 ) (264 )
Notes:
1. Reconciliation of operating loss to net cash outflow from operating activities
Six months Six months Year ended
ended 30 ended 30 31 March
September 2005 September 2004 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating loss (583 ) (1,014 ) (1,582 )
Depreciation and amortisation 87 81 178
Increase in debtors (129 ) (171 ) (162 )
Increase in creditors 70 50 171
(555 ) (1,054 ) (1,395 )
2. Reconciliation of net cash flow to movement in net funds / (debt)
Six months Six months Year ended
ended 30 ended 30 31 March
September 2005 September 2004 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Decrease in cash (137 ) (112 ) (264 )
Cash inflow from debt financing (450 ) - (1,150 )
Movement in net (debt) / funds resulting from (587 ) (112 ) (1,414 )
cashflows
Non cash movements (19 ) - (3 )
Movement in net (debt) /funds in the period (606 ) (112 ) (1,417 )
Net (debt) / funds at beginning of period (1,049 ) 368 368
Net (debt) / funds at end of period (1,655 ) 256 (1,049 )
3. Analysis of net funds/(debt)
Cashflow Non cash Total
movements
#'000 #'000 #'000
At 1 April 2004 368 - 368
Cash flow (112 ) - (112 )
At 30 September 2004 256 - 256
Cash flow (1,302 ) - (1,302 )
Non cash movements - (3 ) (3 )
At 31 March 2005 (1,046 ) (3 ) (1,049 )
Cashflow (587 ) - (587 )
Non cash movements - (19 ) (19 )
At 30 September 2005 (1,633 ) (22 ) (1,655 )
4. Loss per share
The calculations of loss per share are based on the following losses and number
of shares:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Loss for the financial period 701 1,044 1,657
Number of shares Number of Number of
shares shares
Weighted average number of shares 29,160,961 28,650,961 28,655,796
5. Going Concern
The Group has relied, and continues to rely on the support of its major
shareholder, Cooper Holdings Limited, to meet its obligations as they fall due.
Cooper Holdings has confirmed its support until at least 31 March 2006. Short
term funding requirements are currently being met through short term loan
arrangements which may be supplemented by a cash placing in the near future.
Medium term working capital requirements are expected to be met from the new
Avonmouth project.
The Directors believe that the Group will be able to obtain sufficient funds and
therefore have prepared the interim financial statements on a going concern
basis.
6. Change in Accounting Policy
UITF 38, Accounting for ESOP Trusts was adopted during the prior year. Prior to
this the Company's own shares held by the Employee Benefit Trust were recognised
as assets and held as an investment of the Company and Group. The change in
accounting policy is to treat the shares held by the Employee Benefit Trust as a
deduction in arriving at shareholders' funds.
The effect of this change in accounting policy is to reduce shareholders' funds
by #10,000 as at 30 September 2004, For the year to 31 March 2005 the effect is
to increase shareholders' funds by #10,000. The change in accounting policy has
no effect on the loss attributable to shareholders for any period.
This interim report was approved by the Directors on 23 December 2005. The
financial information set out above does not constitute the Company's financial
statements for the period ended 30 September 2005 or 2004. The financial
information for the year ended 31 March 2005 is derived from the financial
statements for 2005, which have been delivered to the Registrar of Companies.
The auditors have reported on the 2005 financial statements; their report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
Compact Power Holdings plc
Yara House
St Andrews Road
Avonmouth
Bristol BS11 9HZ
www.compactpower.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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