TIDMPPG
RNS Number : 5402U
Plutus PowerGen PLC
19 January 2017
Plutus PowerGen Plc / Ticker: PPG / Index: AIM
19 January 2017
PLUTUS POWERGEN PLC ("Plutus" or the "Company")
Interim Results for the Six Month Period Ended 31 October
2016
Plutus PowerGen PLC (AIM: PPG), the AIM listed power company
focused on the development, construction and operation of flexible
electricity and gas power generation in the UK, announces its
interim results for the six-month period ended 31 October 2016.
Highlights
Highly active period during which Plutus expanded its growth
prospects and laid the ground for its first 20 MW flexible energy
site to become operational post period end in November 2016:
-- Maiden profit of GBP3,035 for the period compared with a loss
of GBP189,937 in the same period last year
-- 86% increase in revenues - GBP675,000 delivered during the
period compared with GBP362,500 in the same period last year
-- GBP3 million asset financing facility committed for Attune
Energy Limited, which holds the operational 20MW site, by Lombard
North Central plc ("Lombard")
-- Annualised management fees of GBP1.35 million from nine
funded FlexGen projects, representing 180MW of capacity
-- Targeting at least 120 MW to be operational and an additional
120 MW post planning by the end of 2017, including new initiative
with gas fuelled plants
-- Sites under management with capacity of 180MW to date
-- Success in the Capacity Market Auction post period end for a
further three 20MW sites with planning, bringing the total Capacity
Market contracts awarded to 120MW
-- Post-period end, indicative partnership agreed with Big Six
utility company to fund 20% of future renewable fuel and gas
powered projects
-- Total pipeline (including FlexGen and Gas) remains at over 700MW
-- Gas sites being sought - several under review and two in the planning process
Executive Chairman's Report
I am delighted to report our maiden profit; this can be
attributed to the careful planning and implementation of our
business plan and very close control of cash and disbursements for
expenses regarding the nine companies funded by Rockpool
Investments LLP ("Rockpool Investee Companies") in which we have a
45% stake and receive GBP150,000 from each Company by way of a
management contract. This represents an important milestone for the
Company and continues the positive trend over the past three years.
We therefore have a profit per share compared with a loss per share
in the comparable period last year. In addition to continuing to
progress and develop the nine Rockpool Investee Companies' sites,
the management team has been focused on putting into place the
mechanisms by which we will now be able to diversify into gas
fuelled power generation, as well as developing FlexGen
opportunities; this includes the sourcing and evaluation of
potential sites, the planning process and connections, and the
obtaining of the finance for us to be able to develop the gas
sites. I am pleased to report that on all fronts this is
progressing well.
This period has again been a very busy one for the Group and the
Directors continue to be active in securing deals to enable the
Group to have at least five sites in operation and a further six
power generation sites (including gas) in the post planning and
construction stages by the end of 2017. We have many opportunities
available to us for both FlexGen and gas sites and, in respect of
gas, we have two sites already in the planning process.
Strategically we aim to largely develop gas sites in the future
although we will still seek to develop FlexGen and similar sites
where the situation is favourable. As Phil Stephens mentions below
in the Chief Executive's Review, we continue to investigate
alternative liquid fuels and combustion technologies that will
reduce emissions to negligible levels for our existing and future
FlexGen sites which is strategically very important for the
Group.
We were very pleased to announce that, since the period end, the
Company has received an offer from a leading 'Big Six'
multinational utility company to fund up to 20% of any 20MW
renewable fuel or gas powered flexible energy projects going
forward. This fits well with the Company's strategy to deliver
projects in which it holds an 80% interest and this relationship is
envisaged to provide sufficient equity to allow PPG to develop
majority owned assets going forward. We are also in negotiations
with other interested parties to inject equity into new projects
going forward on a similar basis to the 'Big Six' multinational
utility company. The Board remains confident that it will be able
to fund its portion of the development costs via debt, particularly
given the endorsement of this major energy and services company,
and it continues discussions with a range of parties in respect to
majority owned sites developed in the future. Additionally, the
bond that the Company is now ready to proceed and we will be
officially launching in the first six months of this year. This
belief is also underpinned by the Company's recent involvement in
the securing of GBP3 million of asset financing from Lombard for
Attune Energy Limited, the company established to hold our first
project, to fund the development of the recently commissioned
project in Plymouth. Additionally, in respect to the proposed bond
we announced our intention to list in February 2016, it is now
ready to proceed and we will be officially launching in the first
six months of this year.
In June, we were delighted to appoint Tim Cottier as
Non-Executive Director, Tim is a Chartered Accountant who brings a
wealth of commercial and advisory experience to the Board of
Directors.
Significant events during the period under review and post
period end
The Group has substantially reduced losses for the period under
review and we are delighted to report our maiden profit in
comparison with the same period in the last financial year. It
represents an important milestone for the Company and continues the
positive trend over the past three years. We therefore have
positive earnings per share compared with a loss per share in the
comparable period last year. We have management revenues now being
generated from nine sites totalling GBP1.35million on an annualised
basis.
Our continued success in the Capacity Market Auction with a
further three 20MW sites with planning, totalling 60MW being
awarded in December 2016 contributes materially to each investee
Company's revenues and valuation. The sites for which the Capacity
Mechanism Contracts have recently been awarded are held through
Equivalence Energy, Precise Energy and Valence Power; companies
which have been established to hold the projects and to which PPG
has been appointed as manager. These sites, where PPG has an
interest of 45%, are equity funded through PPG's relationship with
Rockpool. A total of six Capacity Mechanism Contracts totalling
120MW have now been awarded to Rockpool Investee Companies. Each
operational site awarded a Capacity Mechanism Contract in the
latest round will receive an additional GBP450,000 in revenue per
annum for a period of 15 years, commencing 2020.
Outlook
In conclusion, the Group has had a very successful first half
and I would like to thank all the staff and Directors for their
considerable efforts and support, together with our army of
advisors and consultants, who assist us in developing and executing
both our FlexGen and gas pipelines.
As we move into 2017 the Directors view the year ahead with
confidence, as we continue the execution of the Rockpool Investee
Companies' site build out and seek to develop our strategy of
diversification into gas fuelled power generation sites in the
future.
Charles Tatnall
Executive Chairman
19 January 2017
Chief Executive's Review
Summary of the Business
Plutus is a company operating in the flexible stand-by power and
gas power generation sector. The Group provides the management
infrastructure and expertise to operate power plants which provide
flexible electricity generation and gas power generation in the UK.
Power thus generated is sold to a utility company via a Power
Purchase Agreement ("PPA"). Plutus has an equity interest in and
receives fees from the management of the entities established to
manage each facility
Flexible energy is becoming increasingly necessary and prominent
in the UK as our energy mix changes to include renewables, which by
their very nature provide power intermittently; wind turbines
provide power when the wind blows, and solar when the sun shines.
Combined with this intermittency, larger carbon intensive sources
of generation are being retired, meaning that the supply-demand
margin is tightening. Therefore, National Grid and the Big Six need
consistent and reliable sources of generation to balance the grid
when intermittent generation is unable to meet the demand and
therefore prevent brownout/ blackouts as the UK's supply margin
tightens. The Group's decentralised flexible generation can be
rapidly deployed to meet this varying demand and is therefore
valuable in maintaining system frequency balance and avoiding the
potential for supply interruptions.
Corporate Developments
Click here to view the Interim Results
http://www.rns-pdf.londonstockexchange.com/rns/5402U_-2017-1-18.pdf
Of the 220MW under development, 20MW (1 site) is operational,
120MW (6 sites including the operational site) have secured
planning permission and 100MW (5 sites) have been submitted for
planning. We continue to develop our remaining pipeline together
with our partners, which now includes a diversification towards
gas-powered sites, two of which are in the process of submission
for planning.
We continue to engage and respond to the various Government
initiatives and reviews which are seeking to secure the UK's energy
future. While these inevitably create some uncertainty, the
structural fundamentals of the market remain and the Board
continues to have a positive outlook that these initiatives will
provide additional opportunities for flexible electricity
generation facilities such as ours.
As outlined in the Chairman's Report, our FlexGen projects are
run using a renewable fuel, which together with the fact that the
projects are only switched on for a very short period of time per
year, means that our carbon footprint is relatively low. However,
we are environmentally minded and to supplement our strategy of
diversification into gas, we continue to investigate alternative
liquid fuels and combustion technologies that will reduce emissions
to negligible levels. We hope to be able to provide substantive
updates in this regard later in the year.
Significantly, our first facility came on stream in November
2016, in time for this year's TRIAD season and this has been
running reliably and effectively. We are planning to build a
further five sites (or 100MW) during 2017, with these sites coming
on stream for the 2018 TRIAD season, subject to connection. We also
expect the final three planning permissions for the Rockpool
Investee Companies by the end of Q2 2017, meaning that we will be
well on the way to fulfilling our obligations under those
arrangements.
On funding for the sites other than those allocated to the
Rockpool Investee Companies, we have secured equity funding from a
'Big Six' multinational utility company for up to 20% of each site.
The balance is expected to come from a mixture of mainstream and
mezzanine debt funding, either directly into the SPV (special
purpose vehicle) to be established for each site or via Plutus.
Work continues on these funding streams and we look forward to
updating the market in due course.
Financial review
Highlights
6 months ended 6 Months ended
31 October 31 October Improvement
2016 2015 %
GBP GBP
Revenue 675,000 362,500 86%
Operating Profit/(Loss) 3,035 (189,937) u
Profit/(Loss)
per share (pence
per share) 0.00 (0.03) u
The Group's net profit for the period was GBP3,035 (6 months
ended 31 October 2015: loss of GBP183,937). This profitable trend
is expected to continue during the remainder of the financial year.
The loss for the equivalent period last year also included a
provision for planning and associated costs for sites that may not
proceed of GBP69,591. The Company continues to control costs as
tightly as possible. Finance costs from the convertible loans were
GBP13,525 (6 months ended 31 October 2015: GBP13,629). For the six
months, administration expenses were GBP658,440 (6 months ended 31
October 2015: GBP532,808), an increase of 23.5% that reflects the
increased activity of the Company, which is more than offset by
management fees receivable.
During the past two years, the Company has disbursed
considerable sums of money in respect of planning applications and
associated costs such as environmental reports and emissions
reports together with deposits for grid connections. Essentially,
the Company funds all costs associated with each 20MW site up until
the point that it achieves planning permission. At this stage, in
the case of the Rockpool Investee Companies, the site is accepted
by that investee company and the sums expended on that site are
reimbursed to Plutus by the Rockpool Investee Company. Net
reimbursable expenses continue to reduce from the Rockpool Investee
Companies as more planning permissions are achieved and these are
expected to be reduced to a negligible value by the end of 2017 as
planning permissions for the remaining Rockpool Investee Companies
are achieved.
Cash and short-term investments as at 31 October 2016 totalled
GBP45,084. Management fees from the Rockpool Investee Companies are
received monthly when they fall due. The Directors believe the
Company has sufficient working capital for the foreseeable
future.
Events after the reporting period
The Company received planning permission for the development of
two 20MW renewable fuel powered energy generation sites in
Stowmarket, Suffolk. This brings the total number of 20MW sites
which have planning permission for the development of renewable
fuel powered energy generation projects to seven (equal to 140MW)
and we have a further five sites (100MW) in planning.
The Company also successfully brought its first power generation
project in Plymouth into operation after the period end and in time
for this year's TRIAD season. The site is now operating at full
output and Attune Energy Limited is successfully generating
revenues as expected. This is a transformational milestone for the
Company, acting as proof-of-concept in respect of Plutus' strategy
to become a predominant player in the flexible energy generation
market, and providing Attune Energy Limited with immediate exposure
to its revenue streams, including:
-- Short Term Operating Reserve (STOR)
-- Firm Frequency Response (FFR)
-- TRIAD
-- Merchant power sales (PPAs)
Attune Energy Limited, in which we have a 45% interest and from
which we receive a management fee of GBP150,000 per annum, operates
the Plymouth site, which also holds a Capacity Mechanism Contract
for 15 years starting in 2019 and is pre-qualified for next year's
2017 Capacity Mechanism Contract.
Phil Stephens
Chief Executive Officer
19 January 2017
Contact Details:
Plutus PowerGen PLC
Charles Tatnall, Executive Chairman Tel: +44 (0)20 7582 6598
Phil Stephens, Chief Executive Officer
James Longley, Chief Financial Officer
SP Angel Corporate Finance LLP
(Nominated adviser and broker)
Ewan Leggat Tel: +44 (0)20 3470 0470
Laura Harrison
St Brides Partners Limited
Elisabeth Cowell Tel: +44 (0)20 7236 1177
Isabel de Salis
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 OCTOBER 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2016 2015 2016
GBP GBP GBP
-------------------------------- -------------- -------------- ----------------
Continuing operations
Revenue 675,000 362,500 887,500
-------------------------------- -------------- -------------- ----------------
Gross profit 675,000 362,500 887,500
Administration expenses (658,440) (532,808) (1,267,588)
Finance costs (13,525) (13,629) (27,688)
-------------------------------- -------------- -------------- ----------------
Profit/(Loss) before
taxation 3,035 (183,937) (407,776)
Taxation - - -
-------------------------------- -------------- -------------- ----------------
Profit/(Loss) for the
period and total comprehensive
income 3,035 (183,937) (407,776)
Basic and fully diluted
profit/loss per share
Continuing and total
operations 0.00p (0.03p) (0.07p)
-------------------------------- -------------- -------------- ----------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 OCTOBER 2016
Called
up Share
share premium Other Retained Total
capital account reserves deficit equity
GBP GBP GBP GBP GBP
--------------------------- ---------- ---------- ------------- ----------------- ----------
Balance at
1 May 2015 1,376,950 6,334,076 97,963 (7,050,194) 758,795
Total comprehensive
income for the
period - - - (183,937) (183,937)
Credit to equity
in respect of
share-based compensation
charge - - 17,535 - 17,535
Balance at
31 October 2015 1,376,950 6,334,076 115,498 (7,234,131) 592,393
Total comprehensive
income for the
period - - - (223,839) (223,839)
Issue of share
capital 120,000 660,000 - - 780,000
Credit to equity
in respect of
share-based compensation
charge - - 17,535 - 17,535
Balance at
30 April 2016 1,496,950 6,994,076 133,033 (7,457,970) 1,166,089
Total comprehensive
income for the
period - - - 3,035 3,035
Balance at
31 October 2016 1,496,950 6,994,076 133,033 (7,454,935) 1,169,124
--------------------------- ---------- ---------- ------------- ----------------- ----------
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2016 2015 2016
GBP GBP GBP
------------------------------ ---------------- ---------------- ----------------
ASSETS
Non-current assets
Goodwill 1,085,000 485,000 1,085,000
Investments 152 47 152
------------------------------ ---------------- ---------------- ----------------
Total non-current assets 1,085,152 485,047 1,085,152
------------------------------ ---------------- ---------------- ----------------
Current assets
Trade and other receivables 530,482 455,159 417,980
Cash and cash equivalents 45,084 36,382 222,608
------------------------------ ---------------- ---------------- ----------------
Total current assets 575,566 491541 440,588
------------------------------ ---------------- ---------------- ----------------
Total assets 1,660,718 976,588 1,525,740
LIABILITIES
Current liabilities
Trade and other payables 291,594 196,891 166,288
Borrowings 200,000 16,000 16,000
Total current liabilities 491,594 212,891 182,288
------------------------------ ---------------- ---------------- ----------------
Non-current liabilities
Convertible loan notes - 171,304 177,363
------------------------------ ---------------- ---------------- ----------------
Total non-current liabilities - 171,304 177,363
------------------------------ ---------------- ---------------- ----------------
Total liabilities 491,594 384,195 359,651
Net assets/(liabilities) 1,169,124 592,393 1,166,089
------------------------------ ---------------- ---------------- ----------------
EQUITY
Share capital 1,496,950 1,376,950 1,496,950
Share premium account 6,994,076 6,334,076 6,994,076
Loan note equity reserve 23,657 23,657 23,657
Share option and warrant
reserve 109,376 91,841 109,376
Retained losses (7,454,935) (7,234,131) (7,457,970)
------------------------------ ---------------- ---------------- ----------------
Total equity 1,169,124 592,393 1,166,089
------------------------------ ---------------- ---------------- ----------------
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2016 2015 2016
GBP GBP GBP
--------------------------------- ------------ ------------ ----------
Loss before tax 3,035 (183,937) (407,776)
Share-based compensation
charge - 17,535 35,070
Loan note interest charge 13,525 13,629 27,688
--------------------------------- ------------ ------------ ----------
Operating cash flow before
movements in working capital 16,560 (152,773) (345,018)
Increase in receivables (112,502) (177,152) (139,973)
Increase/(decrease) in payables 126,418 53,822 23,219
--------------------------------- ------------ ------------ ----------
Net cash used in operating
activities 30,476 (276,103) (461,772)
--------------------------------- ------------ ------------ ----------
Investing activities
Investment in associated
undertakings - - (105)
--------------------------------- ------------ ------------ ----------
Net cash used in investing
activities - - (105)
--------------------------------- ------------ ------------ ----------
Financing activities
Proceeds of share issues - - 180,000
Interest paid (8,000) (8,000) (16,000)
--------------------------------- ------------ ------------ ----------
Net cash generated from
financing activities (8,000) (8,000) 164,000
--------------------------------- ------------ ------------ ----------
Net increase/(decrease)
in cash and cash equivalents 22,476 (284,103) (297,877)
Cash and cash equivalents
at beginning of year 22,608 320,485 320,485
--------------------------------- ------------ ------------ ----------
Cash and cash equivalents
at end of year 45,084 36,382 22,608
--------------------------------- ------------ ------------ ----------
NOTES TO THE INTERIM REPORT
1. Basis of preparation
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The Company's statutory financial statements
for the period ended 30 April 2016, prepared under International
Financial Reporting Standards (IFRS), have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) and on the same
basis and using the same accounting policies as used in the
financial statements for the year ended 30 April 2016. The interim
financial statements have not been audited or reviewed in
accordance with the International Standard on Review Engagement
2410 issued by the Auditing Practices Board.
The financial statements have been prepared on a going concern
basis under the historical cost convention.
The Directors believe that the going concern basis is
appropriate for the preparation of the financial statements as the
Company is in a position to meet all its liabilities as they fall
due.
2. Earnings per share
The calculation of basic and diluted earnings per share is based
on the profit for the period of GBP3,035 (2015: Loss GBP183,937)
and a weighted average number of ordinary shares of 691,428,935
(2015: 571,428,935). The number of shares used in the calculation
of the diluted loss per share is the same as that used for the
basic loss per share for the current period, as the exercise of
options would be anti-dilutive.
3. Share Capital
Number Number Share
of of Premium
Ordinary Value Deferred Value GBP
shares GBP shares GBP
----------------------- ----------------- ------------- ---------------- ------------- ---------------
Issued and
fully paid
At 1 May 2016
and 31 October
2016 (ordinary
shares of 0.1p) 691,428,935 691,429 16,439,210 805,521 6,994,076
----------------------- ----------------- ------------- ---------------- ------------- ---------------
4. Dividend
No interim dividend will be paid.
Copies of the interim report can be obtained from: The Company
Secretary, Plutus PowerGen PLC, 27/28 Eastcastle Street, London W1E
8DH and are available to view and download from the Company's
website: www.plutuspowergen.com
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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