Mast
Energy Developments PLC
(Incorporated in England and
Wales)
(Registration Number:
12886458)
Share code on the LSE:
MAST
ISIN: GB00BMBSCV12
("MED" or "MAST" or "the
Company")
Unaudited interim results for the
six-month period ended 30 June 2024
Dated 30
August 2024
MAST Energy Developments
PLC ('MED' or the 'Company') the UK-based multi-asset
owner, developer and operator in the rapidly growing flexible power
market, is pleased to announce its unaudited interim results for the six months ended 30
June 2024.
Overview of key highlights during the interim
period and to date:
·
Gross profit margin improved period-on-period as
a result of start of optimisations at Pyebridge, including first
Capacity Market contract income.
·
Successful in pre-qualification to bid for
additional new Capacity Market ("CM") contracts, being T-1
(2024/2025 delivery year) and T-4 (2027/2028 delivery year) for its
Pyebridge site ('Pyebridge'). The Capacity Market bid
auctions, which were held in February 2024, resulted in Pyebridge
getting contractual clearing prices of £35.79/kW/pa for the T-1
contract, and £65.00/kW/pa for the T-4 contract
respectively.
·
Signed a Project Finance funding agreement
with RiverFort Global Opportunities PCC
Limited ("RiverFort"), with Pyebridge as the borrower, with an
initial funding facility up to £4,000,000 (the "RiverFort
Facility"), with a cumulative total net draw of c. £2.1m to date.
Refer to RNS announcement dated 28 February 2024 for more
details.
·
Pyebridge was taken out of care &
maintenance, and a comprehensive improvement and refurbishment
works programme ("Works Programme") was executed. The Works
Programme consisted of two main phases, each addressing key areas
of the facility to optimise operations and income
generation.
·
The first phase of the Works Programme addressed
the requirement to meet the Satisfactory Performance Days ("SPD")
obligation set by the Electricity Market Reform Delivery Body ('EMR
DB') for Pyebridge's existing T-1 Capacity Market ("CM") contract.
All required SPD tests were completed successfully, which meant
that Pyebridge could continue receiving the current CM contract's
associated gross profit margin income of
c. £308,000 which is paid and received monthly in
arrears.
·
The second phase of the Works Programme,
currently in process, focusses on the complete overhaul of each of
the Pyebridge site's 3x 2.7MW Jenbacher reciprocal turbine engines.
Thus far, the first genset's overhaul has been successfully
completed, and the second genset's overhaul has officially
commenced.
·
First refurbished genset achieves
c. £57k revenue for July 2024 in the first month of
operation, resulting in revenue per MW month of c. £21,000,
and outperforming market with 40% margin. Refer to RNS announcement
dated 7 August 2024 for more details.
·
The Company paid down £325,000 on the outstanding
balance on convertible loan notes held by RiverFort via a director
loan purchase agreement and a placing, and also secured funding of
£325,000 via a new non-convertible fixed
term loan with RiverFort for on-going working capital
purposes.
This announcement contains inside information for the
purposes of the UK version of the Market Abuse Regulation
(EU No. 596/2014) as it forms part
of United Kingdom
domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('UK
MAR'). Upon the publication of this announcement, this inside
information is now considered to be in the public
domain.
ENDS
For further information please
visit www.med.energy
or contact:
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Pieter Krügel
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info@med.energy
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MAST Energy Developments
PLC
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CEO
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Jon Belliss
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+44 (0)20 7399 9425
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Novum Securities
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Corporate Broker
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DIRECTORS, OFFICERS AND PROFESSIONAL
ADVISERS
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BOARD OF DIRECTORS:
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Louis Lodewyk Coetzee
(Non-Executive Chairman)
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Pieter Krügel (Chief Executive
Officer)
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Paul Venter (Non-Executive
Director)
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Dominic Traynor (Non-Executive
Director)
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REGISTERED OFFICE AND
BUSINESS
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Salisbury House
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ADDRESS:
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London Wall
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London
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EC2M 5PS
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COMPANY SECRETARY:
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Noel Flannan O'Keeffe
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Salisbury House
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London Wall
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London
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EC2M 5PS
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PLACE OF INCORPORATION:
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England & Wales
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AUDITORS:
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Crowe U.K. LLP
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55 Ludgate Hill
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London
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EC4M 7JW
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BROKERS:
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Novum Securities
Limited
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2nd Floor
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7-10 Chandos Street
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London
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W1G 9DQ
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REGISTRAR:
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Link Group
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Unit 10, Central Square
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29 Wellington Street
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Leeds
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LS1 4DL
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SOLICITORS:
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Druces LLP
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Salisbury House
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London Wall
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London
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EC2M 5PS
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PRINCIPLE BANKERS:
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Barclays Bank PLC
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1 Churchill Place
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Canary Wharf
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London E14 5HP
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STOCK EXCHANGE LISTING:
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London Stock Exchange: Main Market
(Share code:
MAST)
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WEBSITE:
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www.med.energy
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DATE OF INCORPORATION:
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17 September 2020
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REGISTERED NUMBER:
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12886458
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DIRECTORS' STATEMENT
We are pleased to present our
Interim Report for the six-months ending 30 June 2024.
The Company's activities during
the first half of 2024 principally focused on getting its Pyebridge
site ("Pyebridge") back into operation following a period of care
and maintenance. The initial phase of these works (the "Works
Programme") was successfully completed during Q1 2024 permitting
operations and revenue generation to resume in April 2024. The
second phase of the Works Programme, which is currently in process,
is focused on optimising the site performance by overhauling each
of Pyebridge's 3x 2.7MW gensets. The Company is presently
carrying out refurbishment of the second genset which is
anticipated to be completed during Q4 2024.
The Pyebridge Works Programme was
enabled by an important Project Finance funding agreement for up to
£4 million signed between the Company, its wholly owned subsidiary,
Pyebridge Power Ltd ("Pyebridge Power") and RiverFort Global
Opportunities PCC Limited ("RiverFort") during February 2024, with
a cumulative total net draw of c. £2.1m to date. Refer to RNS
announcement dated 28 February 2024 for more details.
During Q1 2024, the Company
announced that it had terminated its joint venture agreement with
Proventure Holdings (UK) Limited ("Proventure") for material breach
of its contractual joint venture payment obligations to MED. The
Company is now well along the path of recovery, not least assisted
by the RiverFort Project Finance agreement noted
earlier.
While the focus during the period
has been on the optimisation of Pyebridge to enhance its revenue
generating potential, the Company is also maintaining its
shovel-ready development projects, Bordesley, Hindlip, Rochdale and
Stather in good standing and continues to explore project financing
options to expedite construction and is also exploring alternative
options that may best realise return on investment to date by the
Company on these projects.
Below follows a description of
progress and activities at the respective sites:
Pyebridge:
Apart from various T-4 CM
contracts, which will all formally start in the future, Pyebridge
currently has an active T-1 CM contract, with a gross profit income
value of c. £308k. The official start date of this T-1 CM
contract was 1 October 2023, and it will end on 30 September 2024.
During this period, Pyebridge receives the annual contracted income
of c. £308k per annum, paid out monthly.
As part of the contracted CM
agreement, at least three Satisfactory Performance Days ('SPDs')
must be executed before the end of April 2024, to prove that the
site can supply the agreed upon electricity export capacity should
the National Grid need it. As part of the first phase of the
Refurbishment Works Programme, Engines 1 and 2 received critical
components and the necessary servicing to be able to generate the
5.4MW required to meet the SPD obligation, which was satisfactorily
met at the end of April 2024 and means that Pyebridge will continue
to receive the CM income, paid out monthly, until 30 September
2024.
After developing a comprehensive
CM auction bid strategy, the Company participated in the CM auction
in March 2024 and it successfully secured a T-1 CM Contract at
£35.79/kW/annum, which will generate approximately £183,000 in
additional income for the site during the October 2024 - September
2025 period. Additionally, the Company also cleared a T-4 CM
Contract at £65/kW/annum, resulting in an estimated £322,000 in
extra income for the site for the period October 2027 - September
2028.
A major overhaul was successfully
completed on the first of the 3x 2.7MW gensets at Pyebridge during
June 2024, and the second genset's overhaul has officially
commenced. The overhaul works will ensure that the gensets operate
at the maximum capable efficiency, and reliability. The first
overhauled genset achieved
c. £57k revenue in first month of operation (inclusive of
initial ramp-up period), resulting in
revenue per MW month of c. £21,000, and outperforming market
with 40% margin.
In addition to the expected
enhanced revenue generation via Pyebridge's PPA with Statkraft, the
overhaul of the 2nd genset enables Pyebridge to apply
for its next T-1 CM contract in the upcoming CM pre-qualification
assessment window and subsequent bid auction for the 2025/2026
delivery year, at an enhanced generation capacity. It will result
in increased contractual gross profit margin income received from
that contract.
Once the work on the second genset
has been completed, Pyebridge will have two completely refurbished
2.7MW gensets operating and generating at optimum capacity and
performance, which should have a direct positive impact regarding
the site's PPA revenue generation. The plan remains to overhaul the
remaining 3rd genset in due course, in order to maximise
full reliability, efficiency and revenue generating ability of the
Pyebridge site in the most cost-efficient manner.
The Project Finance with RiverFort
has enabled the successful completion of the first genset's
overhaul, as well the commencement of the 2nd genset's
overhaul, and MED is appreciative of RiverFort's ongoing support as
its asset-level strategic funding partner, in order to grow the
business.
MED's other existing sites
In addition to Pyebridge, MED has
a portfolio of other sites that are under development. The
following MED sites, Hindlip (7.5MW), Bordesley (5MW)
and Rochdale (4.5MW) are each construction-ready, with
all the requirements for a flexible generation site in place and in
good standing, most notably fully specified EPC and O&M offers,
planning consent, gas connection offer, grid connection offer and
construction management plan. Subject to capex funding, these sites
could immediately continue with their construction phase with an
expected timeline to commercial operations date of around 12 months
from receipt of funding, to go into production and revenue
generation.
Looking forward
MED remains committed to growing a
portfolio of sites providing green focused energy generation with a
capacity of 100 MW in the short- to medium term. This growth
will be achieved through identified sites and the acquisition of
new sites, similar to Pyebridge.
Principle Risk
Refer to Note 16 of the RNS for
our assessment of the Principle Risks.
Related Parties
Refer to Note 14 of the RNS for
key relationships and disclosure of Related Parties.
Financial summary of the MAST Energy Developments PLC
Group
The following information is
included to highlight the financial performance of the Group for
the six months ended.
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Description
|
Six (6)
months
ended
30 June
2024
|
Six (6)
months ended 30 June
2023
|
Year ended 31 December
2023
|
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(Unaudited)
|
(Unaudited)
|
(Audited)
|
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(£)
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(£)
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(£)
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Revenue
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202,258
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198,438
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341,207
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Cost of sales
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(85,599)
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(125,008)
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(223,838)
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Administrative expenses
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(312,600)
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(472,611)
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(941,941)
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Listing and capital raising
fees
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(79,617)
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(94,436)
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(464,853)
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Project expenditure
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(185,487)
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(224,667)
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(343,718)
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Impairments and fair value
adjustments
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-
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(86,558)
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(1,857,604)
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Other
income
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-
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128,050
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40,375
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Finance income
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-
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1,117
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Finance costs
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(31,010)
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(96,958)
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(90,139)
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Loss for the period
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(492,055)
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(773,750)
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(3,539,394)
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Group revenue is £202,258 for the
six-month period ended 30 June 2024. Revenue is mainly derived from
the Pyebridge T-1 Capacity Market payments and from electricity
generation at this site. Revenue is marginally higher for the
period ended June 2024 compared to the previous interim financial
reporting period. It is due to the Pyebridge Works Programme and CM
payments. As the Company's projects and operations continue to move
from development to commercial production, the growth in revenue is
expected to increase.
The overall decrease in loss
period-on-period, as disclosed in the table above and in the
statement of comprehensive income, is mainly owing to the following
reasons:
•
Increase in gross profit margin, due to
optimisation of the Pyebridge site, including first Capacity Market
contract income.
•
Decrease in administrative expenses due to
stringent cost control, including decreased directors' fees and
consulting services.
•
Decrease in project expenditure recognised in the
Statement of Comprehensive Income as the overhaul costs incurred by
Pyebridge during the period are of capital nature.
•
Impairments/fair value adjustments were not
required in the current period.
•
Finance fees were lower in 2024 due to the lower
implementation fees on external loans obtained.
There have been no dividends
declared or paid during the current interim financial period (31
December 2023: £ Nil, 30 June 2023: £ Nil).
RESPONSIBILITY STATEMENT
We confirm to the best of our
knowledge that:
a) the condensed
set of financial statements has been prepared in accordance with
IAS 34 'Interim Financial Reporting';
b) the Directors'
Statement includes a fair review of the information required by the
Disclosure and Transparency Rule DTR 4.2.7R (indication of
important events during the six months);
c) the
Directors' Statement includes a fair review of the information
required by the Disclosure and Transparency Rule DTR 4.2.8R
(disclosure of related party transactions and changes therein);
and
d) this report
contains certain forward-looking statements with respect to the
operations, performance and financial condition of the Group. By
their nature, these statements involve uncertainty since future
events and circumstances can cause results and developments to
differ materially from those anticipated.
The forward-looking statements
reflect knowledge and information available at the date of
preparation of this financial report and the Company undertakes no
obligation to update these forward-looking statements.
Nothing in this financial report
should be construed as a profit forecast.
The board of directors all confirm
their combined agreement to this statement.
Board of Directors
Louis Lodewyk Coetzee
(Non-Executive Chairman)
Pieter Krügel (Chief Executive
Officer)
Paul Venter (Non-Executive
Director)
Dominic Traynor (Non-Executive
Director)
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
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|
|
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Six (6)
months ended 30 June
2024
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Six (6)
months ended 30 June
2023
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Year ended
31 December
2023
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|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
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|
|
Note
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£
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£
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£
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|
|
|
|
|
|
|
Revenue
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|
202,258
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198,438
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341,207
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|
Cost of sales
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|
(85,599)
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(125,008)
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(223,838)
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Gross profit
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|
116,659
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73,430
|
117,369
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|
Administrative expenses
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|
(312,600)
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(472,611)
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(941,941)
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|
Listing and other corporate
fees
|
|
(79,617)
|
(94,436)
|
(464,853)
|
|
Project expenditure
|
|
(185,487)
|
(224,667)
|
(343,718)
|
|
Impairments and fair value
adjustments
|
|
-
|
(86,558)
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(1,857,604)
|
|
Operating loss
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|
(461,045)
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(804,842)
|
(3,490,747)
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|
Other income
|
|
-
|
128,050
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40,375
|
|
Finance income
|
|
-
|
-
|
1,117
|
|
Finance costs
|
|
(31,010)
|
(96,958)
|
(90,139)
|
|
Loss before tax
|
|
(492,055)
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(773,750)
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(3,539,394)
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Taxation
|
|
-
|
-
|
-
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Loss for the
period
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|
(492,055)
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(773,750)
|
(3,539,394)
|
|
|
|
|
|
|
|
Other comprehensive
Income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the
period
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|
(492,055)
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(773,750)
|
(3,539,394)
|
|
|
|
|
|
|
|
Loss
for the period
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
Attributable to the owners of the
parent
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
Attributable to the non-controlling
interest
|
|
|
-
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
Attributable to the owners of the
parent
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
Attributable to the non-controlling
interest
|
|
|
-
|
|
|
|
|
|
|
|
|
Loss Per Share
|
|
|
|
|
|
Basic loss per share
(pence)
|
6
|
(0.14)
|
(0.34)
|
(1.51)
|
|
Diluted loss per share
(pence)
|
6
|
(0.14)
|
(0.34)
|
(1.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE
2024
|
|
|
|
|
|
|
30 June
2024
|
30 June
2023
|
31 December
2023
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
Note
|
£
|
£
|
£
|
|
Assets
|
|
|
|
|
|
Non‑current assets
|
|
|
|
|
|
Property, plant, and
equipment
|
7
|
2,828,155
|
2,454,389
|
2,080,869
|
|
Intangible assets
|
8
|
397,779
|
1,795,683
|
397,779
|
|
Total non-current assets
|
|
3,225,934
|
4,250,072
|
2,478,648
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
|
131,723
|
78,565
|
122,649
|
|
Cash and cash
equivalents
|
|
251,988
|
8,804
|
252
|
|
Total current assets
|
|
383,711
|
87,369
|
122,901
|
|
|
|
|
|
|
|
Total assets
|
|
3,609,645
|
4,337,441
|
2,601,549
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called up share capital
|
9
|
426,354
|
232,207
|
263,854
|
|
Share premium account
|
9
|
13,345,777
|
12,745,924
|
13,183,277
|
|
Share reserve
|
|
81,329
|
-
|
81,329
|
|
Common control reserve
|
10
|
383,048
|
383,048
|
383,048
|
|
Warrant and share based payment
reserve
|
10
|
380,741
|
58,424
|
380,741
|
|
Non-controlling interest
acquired
|
10
|
(4,065,586)
|
(4,065,586)
|
(4,065,586)
|
|
Retained deficit
|
|
(11,122,727)
|
(7,845,528)
|
(10,611,172)
|
|
Attributable to equity holders of
the parent
|
|
(571,064)
|
1,508,489
|
(384,509)
|
|
Non-controlling interest
|
|
-
|
-
|
-
|
|
Total equity
|
|
(571,064)
|
1,508,489
|
(384,509)
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Lease liability
|
|
407,587
|
292,826
|
405,390
|
|
Other financial
liabilities
|
12
|
1,286,671
|
494,447
|
318,925
|
|
Total current
liabilities
|
|
1,694,258
|
787,273
|
724,315
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Loans from related
parties
|
11
|
880,422
|
1,231,535
|
849,253
|
|
Trade and other
payables
|
|
620,172
|
494,100
|
941,688
|
|
Other financial
liability
|
12
|
958,911
|
307,559
|
444,365
|
|
Lease liability
|
|
4,714
|
8,485
|
4,205
|
|
Derivative
liability
|
12
|
22,232
|
-
|
22,232
|
|
Total current liabilities
|
|
2,486,451
|
2,041,679
|
2,261,743
|
|
Total
liabilities
|
|
4,180,709
|
2,828,952
|
2,986,058
|
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
3,609,645
|
4,337,441
|
2,601,549
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
|
|
|
Share
Capital
|
Share
Premium
|
Share
Reserve
|
Warrant and share based
reserves
|
Common Control
Reserve
|
Non-controlling interest
acquired
|
Retained
deficit
|
Total
|
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
|
Balance at 31 December 2022
|
|
217,453
|
12,653,607
|
-
|
-
|
383,048
|
(4,065,586)
|
(7,071,778)
|
2,116,744
|
|
Total comprehensive loss for the
period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(773,750)
|
(773,750)
|
|
Warrants issued during the
year
|
|
-
|
-
|
-
|
58,424
|
-
|
-
|
-
|
58,424
|
|
Partial settlement of convertible
loan notes in shares
|
|
14,754
|
92,317
|
-
|
-
|
-
|
-
|
-
|
107,071
|
|
Balance at 30 June 2023
|
|
232,207
|
12,745,924
|
-
|
58,424
|
383,048
|
(4,065,586)
|
(7,845,528)
|
1,508,489
|
|
Total comprehensive loss for the
period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,765,644)
|
(2,765,644)
|
|
Warrants issued during the
year
|
|
-
|
-
|
-
|
322,317
|
-
|
-
|
-
|
322,317
|
|
Director's loan repayable in
shares
|
|
-
|
-
|
81,329
|
-
|
-
|
-
|
-
|
81,329
|
|
Loan with holding company settled
in shares
|
|
31,647
|
437,353
|
-
|
-
|
-
|
-
|
-
|
469,000
|
|
Balance at 31 December 2023
|
|
263,854
|
13,183,277
|
81,329
|
380,741
|
383,048
|
(4,065,586)
|
(10,611,172)
|
(384,509)
|
|
Loss for the Period
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(492,055)
|
(492,055)
|
|
Issued during the year
|
|
162,500
|
162,500
|
-
|
-
|
-
|
-
|
-
|
325,000
|
|
Share issue costs
|
|
|
|
|
|
|
|
(19,500)
|
(19,500)
|
|
Balance at 30 June 2024
|
|
426,354
|
13,345,777
|
81,329
|
380,741
|
383,048
|
(4,065,586)
|
(11,122,727)
|
(571,064)
|
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOW
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
2024
|
Six months ended 30 June
2023
|
Year ended
31 December
2023
|
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
|
£
|
£
|
£
|
|
Cash flows from operating activities
|
|
|
|
|
|
Loss for the period before taxation
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
Adjustments:
|
|
|
|
|
|
Non-cash interest
accrued
|
|
31,003
|
96,958
|
88,731
|
|
Depreciation
|
|
30,046
|
45,784
|
74,542
|
|
Loss on revaluation of
derivatives
|
|
-
|
86,558
|
86,558
|
|
Warrants issued
|
|
-
|
58,424
|
-
|
|
Other non-cash items
|
|
-
|
-
|
369
|
|
Management and administrative fees
accrued from related parties
|
|
31,170
|
-
|
-
|
|
Impairment of intangible
assets
|
|
-
|
-
|
1,397,904
|
|
Impairment of PPE
|
|
-
|
-
|
459,700
|
|
Implementation fee on reprofiling
of convertible loan notes
|
|
-
|
-
|
48,950
|
|
|
|
(399,836)
|
(486,026)
|
(1,382,640)
|
|
Movement in working capital
|
|
|
|
|
|
Decrease in debtors
|
|
(9,074)
|
58,236
|
14,152
|
|
(Decrease) / Increase in
creditors
|
|
(321,516)
|
193,775
|
641,363
|
|
|
|
(330,590)
|
252,011
|
655,515
|
|
Net cash outflows from operating
activities
|
|
(730,426)
|
(234,015)
|
(727,125)
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
Property, plant and equipment
acquired
|
|
(777,332)
|
-
|
-
|
|
Net
cash flows from investing activities
|
|
(777,332)
|
-
|
-
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
Lease liability repaid
|
|
(16,433)
|
(24,115)
|
(39,292)
|
|
Proceeds from convertible loan
notes
|
|
1,627,107
|
85,800
|
85,800
|
|
Repayments of convertible loan
notes
|
|
(156,681)
|
-
|
-
|
|
Implementation fee on CLN
reprofiling - non-cash item
|
|
-
|
48,950
|
-
|
|
Proceeds from director's
loan
|
|
-
|
-
|
81,329
|
|
Proceeds from shareholders
loan
|
|
-
|
-
|
86,615
|
|
Shares issued net of share issue
costs
|
|
305,500
|
-
|
380,741
|
|
Net
cash flows financing activities
|
|
1,759,493
|
110,635
|
595,193
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
|
251,735
|
(123,380)
|
(131,932)
|
|
Cash and cash equivalents at
beginning of period
|
|
252
|
132,184
|
132,184
|
|
Cash and cash equivalents at end of
the period
|
|
251,987
|
8,804
|
252
|
|
|
|
|
|
|
|
|
| |
NOTES TO THE UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2024
Note 1: General information
MAST Energy Developments PLC
('MAST' or 'MED' or the 'Company') is
incorporated in England & Wales as a public limited
company. The Company's registered office
is located at Salisbury House, London Wall, London, EC2M
5PS.
The principal activity of MAST,
through its subsidiaries (together the 'Group'), is to acquire and
develop a portfolio of flexible power plants in the UK and become a
multi-asset operator in the rapidly growing reserve power
market.
The Group currently has five
projects in its portfolio referred to as Pyebridge, Rochdale,
Bordersley, Hindlip Lane (ADV 001) and Stather Road (ARL
018).
Note 2: Statement of preparation
The condensed consolidated interim
financial statements are prepared on the historical cost basis,
unless otherwise stated. The Group's accounting policies used in
the preparation of condensed consolidated interim financial
statements are consistent with those used in the annual financial
statements for the year ended 31 December 2023, except for the
adoption of new or amended standards applicable from 1 January
2024, which had no material impact on the condensed consolidated
financial statements of the Group.
The condensed consolidated interim
financial statements of the Company have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and Accounting Standard IAS 34,
'Interim Financial Reporting', as adopted by the UK.
The interim report does not
include all of the notes of the type normally included in an annual
financial report. Accordingly, this report is to be read in
conjunction with the annual report for the period ended 31 December
2023, which has been prepared in accordance with UK-adopted
international accounting standards, and any public announcements
made by MED PLC during the interim reporting period.
The condensed consolidated interim
financial statements of the Group are presented in Pounds Sterling,
which is the functional and presentation currency for the Group and
its related subsidiaries.
The condensed consolidated interim
financial statements do not represent statutory accounts within the
meaning of section 435 of the Companies Act 2016.
The condensed consolidated interim
financial statements have not been audited or reviewed by the
Group's auditors thus no assurance is provided therein.
The Directors acknowledge they are
responsible for the fair presentation of these condensed
consolidated interim financial statements.
Note 3: Consolidation
The consolidated interim financial
statements comprise the financial statements of MAST Energy
Developments PLC and its subsidiaries over which the Company has
control as at 30 June 2024.
Control is achieved when the
Company:
·
has the power over the investee;
·
is exposed, or has rights, to variable return
from its involvement with the investee; and
·
has the ability to use its power to affect its
returns.
In assessing control, potential
voting rights that are currently exercisable or convertible are
taken into account. Subsidiaries are fully consolidated from the
date that control commences until the date that control ceases.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group. Intragroup balances and any unrealised gains or losses or
income or expenses arising from intragroup transactions are
eliminated in preparing the Group financial statements, except to
the extent they provide evidence of impairment.
The Group accounts for business
combinations using the acquisition method of accounting.
The Group applied merger
accounting for the common control transaction that occurred during
the creation of the group between Kibo Mining (Cyprus) Limited,
Kibo Energy PLC and MAST Energy Projects Limited. The common
control reserve of £383,048 has not changed during the six month
period ended 30 June 2024 (30 June 2023: £383,048 and 31 December
2023: £383,048.
Note 4: Going
concern
The financial results have been
prepared on the going concern basis of accounting that contemplates
the continuity of normal business activities and the realisation of
assets and the settlement of liabilities in the normal course of
business.
In performing the going concern
assessment, the Board considered various factors, including the
availability of cash and cash equivalents, data relating to working
capital requirements for the foreseeable future, cashflows from
operational activities, available information about the future, the
possible outcomes of planned events, changes in future conditions,
geopolitical events, and the responses to such events and
conditions that would be available to the Board.
The Board has, inter alia,
considered the following specific factors in determining whether
the Group is a going concern:
·
The total comprehensive loss for the six-month
period ended 30 June 2024 of £492,055 (six months ended 30 June
2023 of £773,750 and year ended 31 December 2023 of
£3,539,394);
·
Cash and cash equivalents readily available to
the Group in the amount of £251,988 in order to pay its creditors
and maturing liabilities in the amount of £2,486,451 (of which
£880,422 is from related parties) as and when they fall due
and meet its operating costs for the ensuing twelve
months;
·
Whether the Group has available cash resources,
or equivalent short term funding opportunities in the foreseeable
future, to deploy in developing and growing existing operations or
invest in new opportunities; and
·
A funding agreement with an initial funding
facility up to £4,000,000 with RiverFort Global Opportunities PCC
Limited ('RiverFort") and a total drawdown to date of £ 2,1m was
advanced and received under the facility of which £1,6m was
received during the six month period ended 30 June 2024 and the
remainder subsequent to period end. Follow-on drawdowns
are at RiverFort's discretion and conditional on
an agreed budget and restructuring of the Company's
liabilities.
The
Directors have evaluated the Group's liquidity requirements to
confirm the Group has adequate cash resources to continue as a
going concern for the foreseeable future. Considering the net
current liability position, the Directors have reviewed the
financial projections to 30 August 2025. Based on the assumption
that further drawdowns on the GBP 4m facility with RiverFort are
available to the Company as and when required, as well as the
successful electricity generation by Pyebridge, the Company will
have a positive cash balance for the period. Unforeseen challenges
with either of the aforementioned cause a risk that the Company may
not be able to meet its current liabilities without another cash
injection. In the event further funding cannot be secured, the
Group may experience continuous cash shortfalls over the next 12
months. A severe but plausible financial projection was also
reviewed, whereby further drawdowns are not successful. Under this
scenario the Group experiences cash shortfalls throughout the
forecast period.
In response to the net current
liability position, to address future cash flow requirements,
detailed liquidity improvement initiatives have been identified and
are being pursued. Implementation is regularly monitored in order
to ensure the Group is able to alleviate the liquidity constraints
in the foreseeable future. Cost saving
measures were identified and implemented on operational
expenditure. Further, from April 2024 a reduction in Directors'
remuneration has been implemented.
The Group has identified the below
options in order to address the liquidity risk the Group faces on
an ongoing basis. The ability of the Group to continue as a going
concern is dependent on the successful implementation or conclusion
of one or more of the below:
·
The successful drawdown on the funding facility
of £4,000,000 with RiverFort. There are terms and conditions
limiting the drawdown which have to be adhered to.
·
Successful cash generation from the Pyebridge
power-generation facilities in order to achieve net-cash positive
contributions toward the larger Group.
·
Raising of short- and medium-term working capital
and project capex funding, by way of capital placings.
·
Successful conclusion of current funding
opportunities of the Group with strategic funders regarding the
funding of specific projects and/or the business.
·
Obtaining debt funding or other funding
instruments such as credit loan notes to fund MED
projects.
·
Successful subordination of the Kibo Mining
(Cyprus) Limited loan, resulting in the deferral of loans payable
in the foreseeable future beyond a 12-month period after sign-off
of these financial statements.
Although there is no guarantee,
the Directors are confident that the above matters will be
successfully implemented and have a reasonable expectation that the
Group will be able to raise sufficient financing to support its
ongoing development and commercialisation activities to continue in
operational existence in the next 12 months.
Note 5: Segmental reporting
The Group discloses segmental
analysis based on its different operations, being Bordersley,
Rochdale and Pyebridge.
|
30
June 2024
|
Bordersley
|
Rochdale
|
Pyebridge
|
ADV001 Hindlip
Lane
|
ARL018 Stather
Road
|
Treasury and
Investment
|
Group
|
|
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
Revenue
|
-
|
-
|
202,258
|
-
|
-
|
-
|
202,258
|
|
Cost of sales
|
-
|
-
|
(85,599)
|
-
|
-
|
-
|
(85,599)
|
|
Depreciation
|
-
|
-
|
(29,252)
|
-
|
-
|
(794)
|
(30,046)
|
|
Profit/ (Loss) before tax
|
(20,704)
|
(5,966)
|
(84,614)
|
(16,566)
|
(6,317)
|
(357,888)
|
(492,055)
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
50,167
|
91,264
|
3,285,219
|
43,418
|
1,999
|
137,578
|
3,609,645
|
|
Total liabilities
|
(390,477)
|
(43,424)
|
(1,577,113)
|
(61,022)
|
(138,460)
|
(1,970,213)
|
(4,180,709)
|
|
30
June 2023
|
Bordersley
|
Rochdale
|
Pyebridge
|
ADV001 Hindlip
Lane
|
ARL018 Stather
Road
|
Treasury and
Investment
|
Group
|
|
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
Revenue
|
-
|
-
|
198,438
|
-
|
-
|
-
|
198,438
|
|
Cost of sales
|
-
|
-
|
(125,008)
|
-
|
-
|
-
|
(125,008)
|
|
Depreciation
|
(3,918)
|
-
|
(39,817)
|
(1,254)
|
-
|
(795)
|
(45,784)
|
|
Profit/ (Loss) before tax
|
(46,200)
|
(19,893)
|
18,330
|
(12,603)
|
(29,698)
|
(683,686)
|
(773,750)
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
286,958
|
92,808
|
2,050,929
|
127,858
|
13,345
|
1,765,543
|
4,337,441
|
|
Total liabilities
|
(256,806)
|
(25,731)
|
(145,668)
|
(127,398)
|
(30,012)
|
(2,243,337)
|
(2,828,952)
|
|
31
December 2023
|
Bordersley
|
Rochdale
|
Pyebridge
|
ADV001 Hindlip
Lane
|
ARL018 Stather
Road
|
Treasury and
Investment
|
Group
|
|
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
Revenue
|
-
|
-
|
341,207
|
-
|
-
|
-
|
341,207
|
|
Cost of sales
|
-
|
-
|
(223,838)
|
-
|
-
|
-
|
(223,838)
|
|
Administrative and other
expenses
|
(37,736)
|
(9,377)
|
(46,424)
|
(14,302)
|
(20,313)
|
(1,319,017)
|
(1,447,169)
|
|
Impairment
|
(1,649,206)
|
-
|
-
|
-
|
(208,398)
|
-
|
(1,857,604)
|
|
Depreciation
|
(11,941)
|
-
|
(58,504)
|
-
|
(2,509)
|
(1,588)
|
(74,542)
|
|
Project costs
|
(27,972)
|
(23,396)
|
(173,631)
|
(38,434)
|
(5,743)
|
-
|
(269,176)
|
|
Other income
|
|
|
126,933
|
|
|
(86,558)
|
40,375
|
|
Loss before tax
|
(1,726,855)
|
(32,773)
|
(34,257)
|
(52,736)
|
(236,963)
|
(1,407,163)
|
(3,490,747)
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
392,155
|
91,134
|
2,020,584
|
9,163
|
117,215
|
28,702
|
2,601,549
|
|
Capital expenditure
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total liabilities
|
(389,225)
|
(38,391)
|
(174.537)
|
(25,979)
|
(139,276)
|
(2,218,650)
|
(2,986,058)
|
As the Group currently operates
solely from the United Kingdom, consequently there is no segmented
disclosure with regard to different geographic areas of
operation.
Note 6: Loss per share
Basic loss per share
The basic loss and weighted
average number of ordinary shares used for calculation purposes
comprise the following:
|
Basic loss per share
|
|
30 June
2024 (£)
|
30
June 2023 (£)
|
31 December 2023
(£)
|
|
Loss for the period attributable
to equity holders of the parent
|
|
(492,055)
|
(773,750)
|
(3,539,394)
|
|
|
|
|
|
|
|
Weighted average number of
ordinary shares for the purposes of basic loss per share
|
|
340,131,101
|
226,629,075
|
234,172,196
|
|
|
|
|
|
|
|
Basic loss per ordinary share
(pence)
|
|
(0.14)
|
(0.34)
|
(1.51)
|
|
|
|
|
|
|
The Group has no dilutive
instruments in issue as at period end.
Note 7: Property, plant and equipment
|
|
|
Land
|
Plant &
Machinery
|
Right of use
assets
|
Computer
Equipment
|
Asset under construction
|
Total
|
|
Cost
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
Opening Cost as at 1 January 2023
|
602,500
|
1,665,429
|
355,883
|
4,766
|
-
|
2,628,578
|
|
Change in lease
|
-
|
-
|
(52,664)
|
-
|
-
|
(52,664)
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Transfer between
classes
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Closing Cost as at 30 June 2023
|
602,500
|
1,665,429
|
303,219
|
4,766
|
-
|
2,575,914
|
|
|
|
|
|
|
|
|
|
Change in lease
|
-
|
-
|
114,938
|
-
|
|
114,938
|
|
Transfer between
classes
|
-
|
(126,800)
|
-
|
-
|
126,800
|
-
|
|
Change in lease
|
|
|
|
|
|
|
|
Closing Cost as at 31 December 2023
|
602,500
|
1,538,629
|
418,157
|
4,766
|
126,800
|
2,690,852
|
|
Additions
|
|
745,117
|
|
|
32,215
|
777,332
|
|
Closing Cost as at 30 June 2024
|
602,500
|
2,283,746
|
418,157
|
4,766
|
159,015
|
3,468,185
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation ("Acc Depr")
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
Opening Acc Depr as at 1 January 2023
|
-
|
(52,632)
|
(22,358)
|
(751)
|
-
|
(75,741)
|
|
|
-
|
|
|
|
|
|
|
Depreciation
|
-
|
(39,817)
|
(5,173)
|
(794)
|
-
|
(45,784)
|
|
|
-
|
|
|
|
-
|
|
|
Closing Acc Depr as at 30 June 2023
|
-
|
(92,449)
|
(27,531)
|
(1,545)
|
-
|
(121,525)
|
|
|
|
|
|
|
|
|
|
Depreciation
|
-
|
(18,687)
|
(9,276)
|
(795)
|
-
|
(28,758)
|
|
Impairment
|
-
|
-
|
(381,350)
|
-
|
(78,350)
|
(459,700)
|
|
Closing Acc Depr as at 31 December 2023
|
-
|
(111,136)
|
(418,157)
|
(2,340)
|
(78,350)
|
(609,983)
|
|
|
|
|
|
|
|
|
|
Depreciation
|
-
|
(29,252)
|
-
|
(794)
|
-
|
(30,046)
|
|
|
|
|
|
|
|
|
|
Closing Acc Depr as at 30 June 2024
|
-
|
(140,388)
|
(418,158)
|
(3,134)
|
(78,350)
|
(640,030)
|
|
|
|
|
|
|
|
|
|
Carrying Value
as
at:
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
(£)
|
|
30 June 2023
|
602,500
|
1,572,980
|
275,688
|
3,221
|
-
|
2,454,389
|
|
31 December 2023
|
602,500
|
1,427,493
|
-
|
2,426
|
48,450
|
2,080,869
|
|
30 June 2024
|
602,500
|
2,143,358
|
-
|
1,632
|
80,665
|
2,828,155
|
|
|
The Group has a lease contract for
land it shall utilise to construct a 5MW gas-fuelled power
generation plant. The land is located at Bordersley, Liverpool St.
Birmingham.
The lease of the land has a lease
term of 20 years, with an option to extend for 10 years, which the
Group has opted to include due to the highly likely nature of
extension as at the time of the original assessment.
The Group has another lease
contract for land where it shall construct a 2.4MW gas-fuelled
power generation plant. The land is located at Stather Road,
Flixborough. The lease term is 25 years.
The Group's obligations under its
leases are secured by the lessor's title to the leased assets. The
Group's incremental borrowing rate ranges between 8.44% and
10.38%.
Note 8: Intangible assets
Intangible assets consist of
separately identifiable assets or intellectual property (Bordersley
Power), acquired either through business combinations or through
separate asset acquisitions. These intangible assets are recognised
at the respective fair values of the underlying asset acquired or,
where the fair value of the underlying asset acquired is not
readily available, the fair value of the consideration.
The following reconciliation
serves to summarise the composition of intangible assets as at
period end:
|
Group
|
Rochdale Power
(£)
|
Bordersley
Power
(£)
|
ARL018 Stather Road
(£)
|
ADV001 Hindlip Lane
(£)
|
Total
(£)
|
|
Carrying value as at 1 January 2023
|
150,273
|
1,306,422
|
91,482
|
247,506
|
1,795,683
|
|
Carrying value as at 30 June 2023
|
150,273
|
1,306,422
|
91,482
|
247,506
|
1,795,683
|
|
Impairment
|
-
|
(1,306,422)
|
(91,482)
|
-
|
(1,397,904)
|
|
Carrying value as at 31 December 2023
|
150,273
|
-
|
-
|
247,506
|
397,779
|
|
Carrying value as at 30 June 2024
|
150,273
|
-
|
-
|
247,506
|
397,779
|
Intangible assets are amortised
once commercial production commences over the remaining useful life
of the project, which is estimated to be 20 years, depending on the
unique characteristics of each project.
Until such time as the underlying
operations commence production, the Group performs regular
impairment reviews to determine whether any impairment indicators
exist.
One or more of the following facts
or circumstances indicate that an entity should test an intangible
asset for impairment:
•
The period for which the entity has the right to
develop the asset has expired during the period or will expire in
the foreseeable future;
•
The substantial expenditure on the asset in
future is neither planned nor budgeted.
•
Sufficient data exists to indicate that, although
a development in the specific area is likely to proceed, the
carrying amount of the development asset is unlikely to be
recovered in full from successful development or by
sale.
Note 9: Share Capital
The called-up and fully paid share
capital of the Company is as follows:
|
|
|
30 June
2024
(£)
|
30 June
2023
(£)
|
31 December 2023
(£)
|
|
Allotted, issued and fully paid shares
|
|
|
|
|
|
|
|
|
|
|
|
(Jun 2024: 426,354,067 Ordinary
shares of £0.001 each)
|
|
426,354
|
-
|
-
|
|
(Jun 2023: 232,207,643 Ordinary
shares of £0.001 each)
|
|
-
|
232,207
|
-
|
|
(Dec 2023: 263,854,067 Ordinary
shares of £0.001 each)
|
|
-
|
-
|
263,854
|
|
|
|
426,354
|
232,207
|
263,854
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
Ordinary Share Capital
(£)
|
Share Premium
(£)
|
|
|
|
|
|
|
|
Balance at 31 December 2022
|
|
217,452,729
|
217,453
|
12,653,607
|
|
Partial settlement of outstanding
shareholder loan
|
|
14,754,914
|
14,755
|
92,317
|
|
Balance at 30 June 2023
|
|
232,207,643
|
232,208
|
12,745,924
|
|
Partial settlement of outstanding
shareholder loan
|
|
31,646,424
|
31,646
|
437,353
|
|
Balance at 31 December 2023
|
|
263,854,067
|
263,854
|
13,183,277
|
|
Issue of shares
|
|
162,500,000
|
162,500
|
162,500
|
|
Balance at 30 June 2024
|
|
426,354,067
|
426,354
|
13,345,777
|
During the six months ended 30
June 2024 the Company paid down £325,000
on the outstanding balance on convertible loan notes held by
RiverFort via a director loan purchase agreement and a
placing. No shares were issued in lieu of
payment of outstanding amounts (30 June 2023: £107,071 and 31
December 2023: £576,071).
Note 10: Reserves
Common control reserve
On 17 September 2020, the Company
became the legal parent of Sloane Developments Limited following
completion of the acquisition of the entire issued share capital of
Sloane Developments Limited from Kibo Mining Cyprus Limited, a
wholly owned subsidiary of Kibo Energy PLC. Following the
completion of the acquisition, the ultimate holding company, being
Kibo Energy PLC, retained control over Sloane Developments
Limited.
As MED is only an investment
holding company, incorporated for the purposes of raising capital
funding for its investee projects, and the majority shareholder
before and after the acquisition continues to be Kibo Energy PLC,
the transaction is considered to be a common control transaction,
outside the scope of IFRS 3, and seen as a capital reorganisation,
where predecessor valuation accounting was applied with regard to
the incorporation of historic financial information.
The common control reserve is the
result of the predecessor valuation accounting which was applied as
a result of the common control transaction.
Non-controlling interest acquired
On 31 July 2020, Sloane
Developments Limited, MAST
Energy Projects Limited and St. Anderton on Vaal
Limited entered into the Share Exchange Agreement relating to the
acquisition by Sloane Developments Limited of the remaining 40% of
the issued share capital of MAST
Energy Projects Limited. Under the Share Exchange
Agreement, the Company will pay St Anderton on Vaal Limited the sum
of £4,065,586 payable by the issue of 36,917,076 ordinary shares of
£0.001 each in the Company. Completion of the Share Exchange
Agreement was subject to and conditional upon the Admission of MAST
Energy Developments Limited to the London Stock
Exchange.
Following completion of the IPO on
14 April 2021, the Group acquired the remaining equity interest in
MAST Energy Projects Limited for the consideration equal to
36,917,076 shares at a total value of £4,065,586. As the
controlling stake in the entity had already been acquired, the
transaction was seen as a transaction with owners and the financial
impact recognised directly in equity of £4,065,586.
The rationale for the transaction
was to acquire the remaining equity within MAST Energy Projects
Limited in order to have the exclusive see-through equity interest
in the Bordersley project, held in the form of royalty and revenue
agreements between MAST Energy Projects Limited and Bordersley
Power Limited, from which MED could restructure the Group through
its special purpose vehicles (SPVs).
Warrant and share based payment reserve
On 7 May 2024, MAST Energy
Developments PLC entered into warranty agreements with financial
institutions as part of convertible loan note financial
instruments.
The following warrants were in
issue as at 30 June 2024:
|
Date of
grant
|
Issue date
|
Expiry
date
|
Exercise
price
|
Number
Granted
|
Warrants
exercisable
|
|
18/05/2023
|
18/05/2023
|
18/05/2026
|
2.00p
|
2,255,656
|
2,255,656
|
|
18/05/2023
|
18/05/2023
|
18/05/2026
|
2.00p
|
2,255,656
|
2,255,656
|
|
18/05/2023
|
18/05/2023
|
18/05/2027
|
0.89p
|
20,575,813
|
20,575,813
|
|
18/05/2023
|
18/05/2023
|
18/05/2027
|
1.77p
|
20,575,813
|
20,575,813
|
|
18/05/2023
|
18/05/2023
|
18/05/2027
|
0.89p
|
20,575,812
|
20,575,812
|
|
18/05/2023
29/05/2024
|
18/05/2023
29/05/2024
|
18/05/2027
29/05/2027
|
1.77p
0.2p
|
20,575,812
9,750,000
|
20,575,812
9,750,000
|
|
|
|
|
|
96,564,562
|
96,564,562
|
|
|
Group
30 June
2024
|
Group
30 June
2024
|
|
|
Quantity
|
(£)
|
|
|
|
|
|
Opening balance as at 1 January 2023
|
-
|
-
|
|
New warrants issued
|
86,814,562
|
58,424
|
|
Closing balance as at 30 June 2023
|
86,814,562
|
58,424
|
|
Adjustment of warrants
|
-
|
322,317
|
|
Closing balance as at 31 December 2023
|
86,814,562
|
380,741
|
|
New warrants issued
|
9,750,000
|
-
|
|
Closing balance as at 30 June 2024
|
96,564,562
|
380,741
|
|
|
|
|
Note 11: Loan from related parties
|
|
Group
30 June
2024
(£)
|
Group
30 June
2023 (£)
|
Group
31 December
2023 (£)
|
|
Amounts falling due within one year:
|
|
|
|
|
Kibo Mining (Cyprus)
Limited
|
849,253
|
1,231,535
|
849,253
|
|
Kibo Energy PLC - Management and
administration services accrued
|
31,169
|
-
|
-
|
|
|
880,422
|
1,231,535
|
849,253
|
The loan is unsecured, carries
interest at 0% and is repayable on demand. The carrying value of
loans from related parties equals their fair value due mainly to
the short-term nature of the liability.
Note 12: Other financial liabilities
|
|
Group
30 June
2024
(£)
|
Group
30 June
2023
(£)
|
Group
31 December
2023 (£)
|
|
|
|
|
|
|
Amounts falling due within one year:
|
|
|
|
|
Convertible loan notes
|
774,890
|
307,559
|
444,100
|
|
Derivative liability
|
22,232
|
-
|
22,232
|
|
Director's loan accrued
interest
|
265
|
-
|
265
|
|
RiverFort Global
Advance
|
183,756
|
|
|
|
|
981,143
|
307,559
|
466,597
|
|
Amounts falling due between one year and five
years:
|
|
|
|
|
Convertible loan notes
|
-
|
494,447
|
318,925
|
|
RiverFort Global
Advance
|
1,286,671
|
|
|
|
|
1,286,671
|
494,447
|
318,925
|
|
|
2,267,814
|
802,006
|
785,522
|
Convertible loan notes
Short-term loans relate to two
unsecured loan facilities from the institutional investor, which
are repayable either through the issue of ordinary shares or
payment of cash by the Company.
These facilities have repayment
periods of between 12 and 24 months.
Derivatives
The derivative liability is
derived from the convertible loan notes. The convertible feature
within the convertible loan notes enables the noteholders to
convert the notes into a fixed number of shares at the Fixed
Premium Payment Price ('FPPP'). This price does have variability,
although the FPPP is set at the reference Price. In the event that
a share placing occurs at below the reference Price, the FPPP will
be the share placing price (round down - feature). The conversion
includes an embedded derivative as its value moves in relation to
the share price (through a placing price) and it is not related to
the underlying host instrument, the debt. The effect is that the
embedded derivative is accounted for separately at fair
value.
Note 13: Related parties
Related parties of the Group
comprise subsidiaries, significant shareholders and the
Directors.
Relationships
Board of Directors/ Key Management
|
Name
|
Relationship (Directors of:)
|
|
Paul Venter
|
PSCD Power 1 Ltd
|
|
Louis Coetzee
|
Kibo Energy PLC and Katoro Gold
PLC
|
|
Dominic Traynor
|
Druces LLP
|
|
Pieter Krügel
|
Chief Executive Officer
|
Other entities over which Directors/Key Management or their
close family have control or significant
influence:
|
Kibo Energy PLC:
Ultimate shareholder:
|
Kibo Energy PLC is a significant
shareholder of MAST Energy Developments PLC.
Kibo Energy PLC
|
|
Significant shareholders:
|
PSCD Power 1 Ltd
Kibo Mining (Cyprus) Limited (a
wholly owned subsidiary of Kibo Energy PLC)
|
MAST Energy Developments PLC is a shareholder of the
following companies and, as such, are considered related
parties:
Directly held subsidiaries:
Sloane
Developments Limited
Bordersley Power
Limited
Pyebridge Power Limited
Rochdale Power Limited
ARL 018 Limited
ADV 001 Limited
Sloane Energy Ltd
Balances and transactions
|
Name
|
Balance at
30 June
2024
(£)
|
Balance at
30 June
2023
(£)
|
Balance at
31 December
2023 (£)
|
|
Kibo Energy PLC - Loan from related
parties owing
|
849,253
|
1,231,535
|
849,253
|
|
Kibo Energy PLC - Management and
administration services accrued
|
31,170
|
|
32,130
|
|
Paul Venter - Director's loan owing
(share reserve)
|
81,329
|
|
81,329
|
|
Paul Venter - Director's loan owing
accrued interest
|
265
|
|
265
|
|
Katoro Gold PLC - Receivable for
management services paid on Katoro's behalf
|
2,721
|
|
21,140
|
|
Druces LLP - Supplier balance for
professional services
|
86,315
|
|
143,732
|
Note 14: Post Statement of Financial Position
events
The Company has completed its
Second Phase work programme regarding the refurbishment of the
first of the Pyebridge site's three Jenbacher gensets, within
budget and expected timeline. The refurbished genset
commenced commercial operational running on 1 July 2024 and is
generating revenue via the Pyebridge site's PPA with
Statkraft. The MED management team in conjunction with its
O&M contractor is monitoring the performance of the refurbished
genset carefully to ensure optimal performance. Pyebridge has 3x
2.7MW gensets in operation (thus 8.1MW total), although, only one
of which has been fully refurbished and is operating at optimum
capacity. The next step in the 2nd Phase work programme is to
perform the overhaul of the 2nd of the site's gensets, and
Pyebridge signed an engineering works contract with the Pyebridge
site's O&M contractor in August 2024, regarding the full
long-block overhaul of the 2nd genset, and certain further
essential improvements to the site.
Note 15: Commitments and contingencies
The Group does not have
identifiable material commitments and contingencies as at the
reporting date.
Note 16: Principle risks
The realisation of the various
projects is dependent on the successful completion of technical
assessments, project development and project implementation and is
subject to a number of significant potential risks summarised as
follows, and described further below:
•
Funding risks;
•
Regulatory risks;
•
Commodity risks;
•
Development and construction risks;
•
Staffing and key personnel risks; and
•
Information technology risks.
Funding risks
There can be no assurance that
funds will continue to be available on reasonable terms, or at all
in future, and that projects will be completed within the
anticipated timeframes to supplement cashflows through operational
activities. Any equity funding may be subject to shareholder
approvals in line with legal and regulatory requirements as
appropriate. Refer to note 4 for a detailed description around
funding risks in the going concern assessment.
Regulatory risks
The United Kingdom power sector
has undergone a number of considerable regulatory changes over the
last few years and is now at a state of transition from large
fossil-fuel plants to a more diverse range of power generation
sources including renewables, small, distributed plants and new
nuclear. As a result, there is greater regulatory involvement in
the structure of the UK power market than has been the case over
the last 20 years. Therefore, there remains a risk that future
interventions by Ofgem or Government could have an adverse impact
on the underlying assets that the Group manages and/or owns.
The Company continually monitors this risk and,
where possible, acts proactively to anticipate and mitigate any
regulatory changes that may have an adverse impact on the ongoing
financial viability of its projects. In order to monitor compliance
with evolving UK government energy regulations, the Company
subscribes to relevant environmental and energy regulation bodies
updates which management reviews and makes recommendations to the
Board in terms of mitigation that may be required should it become
aware of any pending regulatory changes that may threaten the
economic viability of its projects.
Commodity Risks
The assets that the Group manages
and owns will receive revenue from the sale of energy to the
wholesale market or to end users at a price linked to the wholesale
power market price. Fluctuations in power prices going forward will
affect the profitability of the underlying reserve power assets.
The Group will also use its skills, capabilities and knowledge of
the UK power market in order to optimise these wholesale revenues.
The Group's ability to effectively manage price risk and maximise
profitability through trading and risk management techniques will
have a considerable impact on revenues and returns.
Development and Construction Risks
The Group will continue to develop
new project sites that includes obtaining planning permission,
securing land (under option to lease or freehold), and obtaining
gas and grid connections. The Group will also oversee the
construction of these projects where needed.
Risks to project delivery include
damage or disruption to suppliers or to relevant manufacturing or
distribution capabilities due to weather, natural disaster, fire,
terrorism, pandemic, strikes or other reasons that could impair the
Groups ability to deliver projects on time.
Failure to take adequate steps to
mitigate the likelihood or potential impact of development and
construction setbacks, or to effectively manage such events if they
occur, could adversely affect the Group's business or financial
results. There are inherent risks that the Group may not ultimately
be successful in achieving the full development and construction of
every site and sunk costs could be lost. However, the risk is
mitigated as the Group targets shovel ready sites that adhere to
specific requirements, coupled with an experienced senior
management team.
Staffing and Key Personnel Risks
Personnel are our only truly
sustainable source of competitive advantage and competition for key
skills is intense, especially around science, technology,
engineering and mathematics (STEM) disciplines. While the Group has
good relations with its employees, these relations may be impacted
by various factors. The Group may not be successful in attracting,
retaining, developing, engaging and inspiring the right people with
the right skills to achieve our growth ambitions, which is why
staff are encouraged to discuss with management matters of interest
to the employees and subjects affecting day-to-day operations of
the Group.
Information Technology Risks
The Group relies on information
technology ('IT') in all aspects of its business. Any significant
disruption or failure, caused by external factors, denial of
service, computer viruses or human error could result in a service
interruption, accident or misappropriation of confidential
information. Process failure, security breach or other operational
difficulties may also lead to revenue loss or increased costs,
fines, penalties, or additional insurance requirements. The Group
continues to implement more cloud-based systems and processes, and
improve cyber security protocols and facilities to mitigate the
risk of data loss or business interruption.
Note 17: Use of estimates and judgements
The preparation of financial
statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources.
In particular, there are
significant areas of estimation, uncertainty and critical
judgements in applying accounting policies that have the most
significant effect on the amounts recognised in the financial
statements.
Estimation uncertainty:
Information about estimates and
assumptions that may have the most significant effect on
recognition and measurement on assets, liabilities and expenses is
provided below:
Impairment assessment of investments in subsidiaries,
property plant and equipment and intangible
assets
In applying IAS 36, impairment
assessments are performed whenever events or changes in
circumstances indicate that the carrying amount of an asset or CGU
may not be recoverable.
A cash-generating unit (CGU) is
defined as the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows from
other assets or groups of assets.
Estimates are made in determining
the recoverable amount of assets which includes the estimation of
cash flows and discount rates used. In estimating the cash flows,
management bases cash flow projections on reasonable and
supportable assumptions that represent management's best estimate
of the range of economic conditions that will exist over the
remaining useful life of the assets. The discount rates used
reflect the current market assessment of the time value of money
and the risks specific to the assets for which the future cash flow
estimates have not been adjusted.
During the period no impairments
have been identified.
Useful life of intangible assets
Amortisation is charged on a
systematic basis over the estimated useful lives of the assets
after taking into account the estimated residual values of the
assets. Useful life is either the period of time over which the
asset is expected to be used or the number of production or similar
units expected to be obtained from the use of the asset.
Leases - Estimating the incremental borrowing
rate
The Group cannot readily determine
the interest rate implicit in the lease, therefore, it uses its
incremental borrowing rate (IBR) to measure lease liabilities. The
IBR is the rate of interest that the Group would have to pay to
borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The IBR therefore reflects
what the Group 'would have to pay', which requires estimation when
no observable rates are available or when they need to be adjusted
to reflect the terms and conditions of the lease. The Group
estimates the IBR using observable inputs (such as market interest
rates) when available and is required to make certain
entity-specific estimates.
Useful life of property, plant and
equipment
The depreciable amounts of assets
are allocated on a systematic basis over their useful lives. In
determining the depreciable amount, management makes assumptions in
respect of the residual value of assets based on the expected
estimated amount that the entity would currently obtain from
disposing the asset, after deducting the estimated costs of
disposal. If an asset is expected to be abandoned, the residual
value is estimated at nil. In determining the useful lives of
assets, management considers the expected period of use of assets,
expected physical wear and tear, legal or similar limits of assets
such as rights, condition and location of the asset as well as
obsolescence.
Environmental rehabilitation provisions
The Company recognises that its
activities require it to have regard to the potential impact that
it, its subsidiaries and partners may have on the environment.
Where energy development projects are undertaken, care is taken to
limit the amount of disturbance and where any remediation works are
required, they are carried out as and when required.
Once commercial production is
undertaken, the Group ensures adequate provisions or
rehabilitation, and decommissioning is made in accordance with the
relevant laws and regulations.
Fair value estimation of financial
instruments
The determination of fair value
for financial instruments involves significant judgment and
estimation, particularly where observable market data is not
available. The fair value measurements are categorized within a
three-level hierarchy based on the observability of the inputs used
in the valuation. For financial instruments classified within Level
3 of the fair value hierarchy, where unobservable inputs are
significant, the valuation process involves the use of assumptions
about market participant behavior, including estimates of future
cash flows, discount rates, and other factors that may vary with
economic conditions. Management regularly reviews these
estimates and assumptions to ensure that they reflect current
market conditions and are reasonable and supportable. Only Level 1
and 2 inputs were provided for the financial instrument for the six
month periods ended 30 June 2024 and 30 June 2023 and the year
ended 31 December 2023
Warrants
For such grants of share options
or warrants qualifying as equity-settled share-based payments, the
fair value as at the date of grant is calculated using the
Black-Scholes option pricing model, taking into account the terms
and conditions upon which the options or warrants were granted. The
amount recognised as an expense is adjusted to reflect the actual
number of share options or warrants that are likely to vest, except
where forfeiture is only due to market-based conditions not
achieving the threshold for vesting.
Critical judgements:
Information about critical
judgements that may have the most significant effect on recognition
and measurement on assets, liabilities and expenses is provided
below:
Going Concern
The Groups current liabilities
exceed its current assets as at 30 June 2024, which contributes
significantly to the material uncertainty related to the going
concern assumption applied in preparation of the financial
statements. In determining whether or not the Group is able to
continue as a going concern for the foreseeable future, management
applies judgement in identifying the matters that give rise to the
existence of the material uncertainty and in developing responses
thereto in order to address the risk of material uncertainty. Refer
Note 4.
Note 18: Financial instruments - Fair value and risk
management
The Group's principal financial
instruments comprise cash. The main purpose of these financial
instruments is to provide finance for the Group's operations. The
Group has various other financial assets and liabilities such
as other receivables and trade payables, which arise directly
from its operations.
It is, and has been throughout the
2024 and 2023 financial period, the Group's policy not to undertake
trading in derivatives. The Group may however recognise derivative
liabilities arising from convertible instruments.
The main risks arising from the
Group's financial instruments are credit risk, liquidity risk,
interest rate risk and capital risk. Management reviews and agrees
policies for managing each of these risks which are summarised
below.
|
Financial instruments
are:
|
Balance at
30 June
2024
(£)
|
Balance at
30 Jun
2023
(£)
|
Balance at
31 Dec
2023
(£)
|
|
Financial assets at amortised cost
|
|
|
|
|
Trade and other
receivables
|
131,723
|
78,565
|
122,649
|
|
Cash
|
251,988
|
8,804
|
252
|
|
|
|
|
|
|
Total financial assets
|
383,711
|
87,369
|
122,901
|
|
|
|
|
|
|
Financial liabilities at amortised cost
|
|
|
|
|
Loans from related
parties
|
(880,422)
|
(1,231,535)
|
(849,253)
|
|
Trade payables
|
(620,172)
|
(494,100)
|
(941,688)
|
|
Lease liability
|
(412,301)
|
(301,311)
|
(409,595)
|
|
Other financial
liabilities
|
(1,470,692)
|
-
|
-
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or
loss
|
|
|
|
|
Other financial
liabilities
|
(774,890)
|
(802,006)
|
(763,290)
|
|
CLN Derivative
liabilities
|
(22,232)
|
-
|
(22,232)
|
|
|
|
|
|
|
Total financial liabilities
|
(4,180,709)
|
(2,828,952)
|
(2,986,058)
|
|
Total financial instruments
|
(3,796,998)
|
(2,741,583)
|
(2,863,157)
|
Fair value measurement and fair value
hierarchy
Credit risk refers to the risk
that a counter party will default on its contractual obligations
resulting in financial loss to the Group. As the Group has minimal
sales to third parties, this risk is limited.
The fair value of financial
instruments is determined using the following fair value hierarchy,
which categorizes the inputs used in valuation techniques into
three levels:
·
Level 1: Quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date.
·
Level 2: Inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
either directly or indirectly. This includes:
o Quoted prices for similar assets or liabilities in active
markets.
o Quoted prices for identical or similar assets or liabilities
in markets that are not active.
o Inputs other than quoted prices that are observable for the
asset or liability (e.g., interest rates, yield curves, credit
spreads).
o Market-corroborated inputs.
·
Level 3: Unobservable inputs for the asset or
liability. This level applies to fair value measurements where
observable inputs are not available, requiring the use of
significant judgment or estimation. These inputs reflect the
entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability.
The fair value hierarchy has been
applied to the financial instruments as follows:
|
Financial instruments
are:
|
Balance at
30 June
2024
(£)
|
Balance at
30 Jun
2023
(£)
|
Balance at
31 Dec
2023
(£)
|
|
Financial assets at amortised cost
|
|
|
|
|
Level 2 inputs
|
383,711
|
87,369
|
122,901
|
|
|
|
|
|
|
Total financial assets
|
383,711
|
87,369
|
122,901
|
|
|
|
|
|
|
Financial liabilities at amortised cost
|
|
|
|
|
Level 2 inputs
|
(3,383,587)
|
(2,026,946)
|
(2,200,536)
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or
loss
|
|
|
|
|
Level 1 inputs
|
(797,122)
|
(802,006)
|
(785,522)
|
|
|
|
|
|
|
Total financial liabilities
|
(4,180,709)
|
(2,828,952)
|
(2,986,058)
|
|
Total financial instruments
|
(3,796,998)
|
(2,741,583)
|
(2,863,157)
|
Credit risk
Credit risk refers to the risk
that a counter party will default on its contractual obligations
resulting in financial loss to the Group. As the Group has minimal
sales to third parties, this risk is limited.
The Group's financial assets
comprise receivables and cash and cash equivalents. The credit risk
on cash and cash equivalents is limited because the counterparties
are banks with high credit-ratings assigned by international credit
rating agencies. The Group's exposure to credit risk arise from
default of its counterparty, with a maximum exposure equal to the
carrying amount of cash and cash equivalents in its consolidated
statement of financial position.
The Group does not have any
significant credit risk exposure to any single counterparty or any
Group of counterparties having similar characteristics. The Group
defines counterparties as having similar characteristics if they
are connected or related entities.
The expected credit losses for the
Group are £Nil for the six-month period ended 30 June 2023 (June
and December 2023: £Nil).
Financial assets exposed to credit
risk at period end were as follows:
|
Financial assets are:
|
Balance at
30 June
2024
(£)
|
Balance at
30 Jun
2023
(£)
|
Balance at
31 Dec
2023
(£)
|
|
Trade and other
receivables
|
131,723
|
78,565
|
122,649
|
|
Cash
|
251,988
|
8,804
|
252
|
|
|
|
|
|
|
Total financial assets
|
383,711
|
87,369
|
122,901
|
Liquidity risk management
Ultimate responsibility for
liquidity risk management rests with the Board of Directors, which
has built an appropriate liquidity risk management framework for
the management of the Group's short, medium and long-term funding
and liquidity management requirements.
The Group manages liquidity risk
by maintaining adequate reserves and by continuously monitoring
forecast and actual cash flows and matching the maturity profiles
of financial assets and liabilities. Cash forecasts are regularly
produced to identify the liquidity requirements of the
Group.
The Group's financial liabilities'
contractual cashflows as at 30 June 2024 were:
|
Group (£)
|
Within 1
year
|
Later than 1 year but within
5 years
|
Later than 5
years
|
|
At
30 June 2024
|
|
|
|
|
Loans from related
parties
|
-
|
-
|
-
|
|
Trade and other payables
|
620,172
|
-
|
-
|
|
Other financial
liabilities
|
958,911
|
1,286,671
|
-
|
|
Lease Liabilities
|
39,826
|
159,304
|
835,379
|
|
|
1,579,083
|
1,445,975
|
835,379
|
|
|
|
|
|
|
At
30 June 2023
|
|
|
|
|
Loans from related
parties
|
-
|
-
|
-
|
|
Trade and other payables
|
494,100
|
-
|
-
|
|
Other financial
liabilities
|
307,559
|
494,447
|
-
|
|
Lease Liabilities
|
39,826
|
159,304
|
866,989
|
|
|
841,485
|
653,751
|
866,989
|
|
At
31 December 2023
|
|
|
|
|
Loans from related
parties
|
-
|
-
|
-
|
|
Trade and other payables
|
941,688
|
-
|
-
|
|
Other financial
liabilities
|
318,925
|
444,365
|
-
|
|
Lease Liabilities
|
39,826
|
159,304
|
851,812
|
|
|
1,300,439
|
603,669
|
851,812
|
Interest rate risk
The Group and Company does not
have significant exposure to the risk of changes in market interest
rates relating to holdings of cash and short term
deposits.
It is the Group and Company's
policy as part of its management of the budgetary process to place
surplus funds on short term deposit in order to maximise interest
earned.
Group Sensitivity Analysis:
Currently no significant impact
exists due to possible interest rate changes on the Company's
interest bearing instruments.
Capital risk management
The Group manages its capital to
ensure that entities in the Group will be able to continue as a
going concern while maximising the return to stakeholders through
the optimisation of the debt and equity balance.
The Group manages its capital
structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust its capital structure,
the Group may adjust or issue new shares or raise debt. No changes
were made in the objectives, policies or processes during the
six-moth period ended 30 June 2024. The capital structure of the
Group consists of equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained losses as
disclosed in the consolidated statement of changes in
equity.
Fair values
The carrying amount of the Group
and Company's financial assets and financial liabilities recognised
at amortised cost in the financial statements approximate their
fair value. For those assets held at fair value (such as CLN
derivative liabilities), they are remeasured at the reporting
date.
Hedging
At 30 June 2023, the Group had no
outstanding contracts designated as hedges.
