Wrap Text
Unaudited results for the 6 month period ended 30
September 2012
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA ISIN GB00BOCJ3F01
JSE Share Code IPS ISIN GB00BOCJ3F01
("IPSA" or "the company")
UNAUDITED RESULTS FOR THE 6 MONTH PERIOD ENDED 30 SEPTEMBER
2012
IPSA, the AIM (primary listing) and AltX (secondary listing)
dual listed independent power plant developer with operations
in Southern Africa, today announces its unaudited interim
results for the 6 month period ended 30 September 2012.
Highlights:
Revenue of GBP2.5m (2011 - GBP1.9m) comprising electricity
sales of GBP2.1m (2011 - GBP1.7m) and steam sales of
GBP0.4m (2011 – GBP0.2m)
Group after tax loss of GBP1.3m (2011 - GBP2.6m loss)
As announced on 19 November, contracts for the sale of the
remaining 2 turbines have been exchanged at a gross price
of USD31.0m
Commenting, Richard Linnell, Chairman of IPSA, said:
“The plant in South Africa remains fully operational and,
although output is still below full capacity, the plant is cash
generative. We expect to add additional capacity by early 2013.
We believe this will make the plant profitable, covering both
operating costs and depreciation, and contribute towards the
Company’s administrative overheads.
It is also most encouraging that the lengthy negotiations on
the sale of the remaining two turbines have resulted in the
exchange of new contracts, as approved by our key creditors.
The working capital position will be significantly improved
once the sale of the turbines is completed and the sale
proceeds received”.
For further information contact:
Phil Metcalf, CEO, Elizabeth Shaw, COO,
IPSA Group PLC +44 (0)20 7793 5615
John Llewellyn-Lloyd, Harry Stockdale
Execution Noble & Company Ltd +44 (0)20 7456 9191
Harry Ansell, James Joyce
W H Ireland Ltd +44 (0)20 7220 1666
Riaan van Heerden,
PSG Capital (Pty.) Ltd, +27 (0)21 887 9602
Or visit IPSA's website: www.ipsagroup.co.uk
CHAIRMAN'S STATEMENT
I am pleased to report the Company's interim results for
the six month period to 30 September 2012. The results are
broadly in line with our expectations. The net loss after
tax for the period was GBP1.3m (2011 - GBP2.6m loss),
giving a basic loss per share of 1.23p (2011 - loss per
share 2.43p). The operating loss for the period under
review was GBP0.8m (2011 - GBP0.8m). Other net expense,
comprising legal fees and storage costs associated with the
turbines, a final adjustment on the Sasol ‘take-or-pay’
settlement and unrealised exchange gains was GBP0.3m (2011
- GBP1.0m).
Revenues of GBP2.5m (2011 - GBP1.9m) during the period
comprise sales of electricity amounting to GBP2.1m (2011 -
GBP1.7m) and sales of steam amounting to GBP0.4m (2011 -
GBP0.2m).
NewCogen
During the six months to 30 September 2012, 25.2 million
kWh of electricity was sold to Eskom under the MTPPP
contract, up 22 per cent compared with 20.7 million kWh for
the same period last year. Steam sales totalling 38,174
tonnes were supplied to Karbochem under an interim steam
contract, more than double the 16,231 tonnes of steam in
same period last year. An additional short term steam
contract was agreed with Lanxess for October and this will
increase Steam sales in the next period.
In accordance with the terms of the MTPPP contract,
electricity pricing remained the same during the period,
with the next adjustments due in April 2013. Following a
2.8 per cent increase in the gas price as of 1 October
2012, margins will be slightly eroded. Gas volumes
purchased remain within the take or pay obligations under
the contract.
In July 2012, we settled our long running dispute with
Sasol Gas Ltd for ZAR7.0m, relieving the Company from this
obligation. This benefit was reflected in our 31 March 2012
results.
The Turbines
The Company has announced that it has exchanged contracts
for the two remaining Siemens Westinghouse 701 DU gas
turbines for a consideration of USD31.0m (approximately
GBP19.4m at current exchange rates). The purchaser has
already paid a non-refundable deposit of USD3.1m in cash.
The Directors anticipate that, following receipt of all the
proceeds, the Company will be in a position to settle with
all its creditors very shortly after completion of the
sale, and that there will be GBP2.8m cash remaining after
allowing for immediate working capital requirements and
repayment of the GBP5.1m of loan principal and accrued but
unpaid interest and legal and other fees due to Standard
Bank PLC and approximately GBP11.0m of other liabilities,
including trade payables, loans, accrued interest and
amounts due to TurboCare SPA for the refurbishment and
storage of the turbines. Once the sale proceeds have been
received and completion has occurred, we expect to record a
pre-tax book profit on the sale of the last two turbines of
approximately GBP3.6m (based on current exchange rates).
Other Projects
The Directors are maintaining an active interest in
developing further generation capacity in southern Africa,
where there are increasing opportunities for Independent
Power Producers, and each potential project is being
assessed on a case by case basis against a background of
increasing demand and wholesale electricity prices.
Conclusion
Once the sale of the turbines has completed, allowing
settlement of all Company obligations and outstanding
debts, we are looking to build upon our presence in the IPP
market within South Africa and further afield in southern
Africa.
Richard Linnell
Chairman
London
29th November 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) for the 6 month period ended 30 September 2012
Notes 6 months 6 months 12 months
30/9/12 30/9/11 31/3/12
unaudited unaudited audited
GBP’000 GBP’000 GBP’000
Revenue 2,474 1,884 4,371
Cost of sales (2,485) (2,128) (4,438)
Gross loss (11) (244) (67)
Administrative (783) (543) (1,380)
expenses
Operating loss (794) (787) (1,447)
Profit on sale of non- - - 6,116
current asset
Other (expense) / 3 (274) (966) 2,200
income
Finance expense (252) (860) (1,227)
(Loss) / profit before (1,320) (2,613) 5,642
tax
Tax expense - - -
(Loss) / profit after (1,320) (2,613) 5,642
tax
Other comprehensive
income:
Exchange differences (718) (1,014) (980)
on translation of
foreign operation
Total comprehensive (2,038) (3,627) 4,662
(loss) / profit
attributable to equity
shareholders
(Loss) / earnings per 4 (1.23p) (2.43p) 5.25p
ordinary share (basic,
diluted and headline)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited) at 30 September 2012
Notes 30/9/12 30/9/11 31/3/12
unaudited unaudited audited
GBP’000 GBP’000 GBP’000
Assets
Non-current assets
Property, plant and 5 9,741 11,394 11,070
equipment
Current assets
Trade and other 704 957 816
receivables
Cash and cash 6 147 2,690 35
equivalents
851 3,647 851
Non-current assets 7 15,712 34,279 15,712
classified as assets
held for sale
Total assets 26,304 49,320 27,633
Equity and liabilities
Equity attributable to equity holders of the parent:
Share capital 2,150 2,150 2,150
Share premium account 26,767 26,767 26,767
Foreign currency (3,752) (3,068) (3,034)
reserve
Profit and loss (14,710) (21,645) (13,390)
reserve
Total equity 10,455 4,204 12,493
Current liabilities
Trade and other 7,492 24,113 7,814
payables
Borrowings 8 8,357 21,003 7,326
15,849 45,116 15,140
Total equity and 26,304 49,320 27,633
liabilities
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the 6 month period ended 30 September 2012
6 months 6 months 12 months
30/9/12 30/9/11 31/3/12
unaudited unaudited audited
GBP’000 GBP’000 GBP’000
(Loss) / profit for (1,320) (2,613) 5,642
the period
Add back net finance 252 860 1,227
expense
Add back profit on - - (6,116)
sale of asset held for
sale
Adjustments for:
Depreciation 368 420 809
Write down value of - - 780
turbine equipment
Translation and 243 (156) 464
unrealised exchange
adjustments
Change in trade and 112 7 2,150
other receivables
Change in trade and (322) 1,564 (16,400)
other payables
Cash (used in) / (667) 82 (11,444)
generated from
operations
Interest paid - (2) (8)
Net cash (used in) / (667) 80 (11,452)
generated from
operations
Cash flows from
investing activities
Sale / (purchase) of - 6 (1)
plant and equipment
Proceeds from sale of - - 22,912
asset held for sale
Deposit on assets held - 1,910 1,257
for resale
- 1,916 24,168
Cash flow from
financing activities
Loans received 779 661 1,359
Loans repaid - - (14,073)
779 661 (12,714)
Increase in cash and 112 2,657 2
cash equivalents
Cash and cash 35 33 33
equivalents at start
of period
Cash and cash 147 2,690 35
equivalents at end of
period
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited) for the 6 month period ended 30 September 2012
Share Share Foreign Profit and Total
capital premium currency loss equity
Account reserve reserve
GBP’000 GBP’000 GBP’000 GBP’000 GBP’000
At 1.4.11 2,150 26,767 (2,054) (19,032) 7,831
Loss for the - - - (2,613) (2,613)
period
Exchange - - (1,014) - (1,014)
differences
Total recognised - - (1,014) (2,613) (3,627)
expense for the
period
At 30.9.11 2,150 26,767 (3,068) (21,645) 4,204
Profit for the - - - 8,255 8,255
period
Exchange - - 34 - 34
differences
Total recognised - - 34 8,255 8,289
expense for the
period
At 31.3.12 2,150 26,767 (3,034) (13,390) 12,493
Loss for the - - - (1,320) (1,320)
period
Exchange - - (718) - (718)
differences
Total recognised - - (718) (1,320) (2,038)
expense for the
period
At 30.9.12 2,150 26,767 (3,752) (14,710) 10,455
Notes to the unaudited Interim Statement for the 6 month period
ended 30 September 2012
1. Basis of preparation
These condensed consolidated interim financial statements do
not constitute statutory accounts within the meaning of Section
435 of the Companies Act 2006. The comparative figures for the
year ended 31 March 2012 were derived from the statutory
accounts for that period which have been delivered to the
Registrar of Companies. Those accounts which contained an
unqualified audit report, with an emphasis of matter paragraph
on going concern, did not contain any statements under sections
489(2) or (3) of the Companies Act 2006. The financial
information contained in this interim statement has been
prepared in accordance with all relevant International
Financial Reporting Standards (“IFRS”) as adopted by the
European Union in force and expected to apply to the Group’s
results for the year ending 31 March 2013 and on
interpretations of those Standards released to date.
2. Accounting policies
These condensed consolidated interim financial statements have
been prepared in accordance with the Group’s IFRS accounting
policies. These policies are set out in the Group’s financial
statements for the year ended 31 March 2012.
3. Other income / 6 months 6 months 12 months
(expense) 30/9/12 30/9/11 31/3/12
GBP’000 GBP’000 GBP’000
Exchange gains(1) 218 107 326
Storage, legal and (149) (1,073) (256)
insurance costs(2)
Costs associated re (184) - (320)
loan for turbines(3)
Write down value of - (780)
turbine equipment(4)
Adjustment on gas take (159) - 3,230
or pay contract(5)
Total (274) (966) 2,200
1) Exchange gains arising on the Euro denominated amount owing
to Turbocare in respect of the refurbishment costs of the
Siemens gas turbines which were originally acquired for the
Coega project and are now held as an ‘asset held for sale’;
2) Storage, legal and insurance costs in respect of the storage
of the Siemens gas turbines pending their sale (see note 7
below);
3) These costs represent charges, including legal fees, levied
by Standard Bank PLC in connection with their loan
4) When the turbines were acquired in 2007, the Company also
acquired some ancillary equipment at a cost of GBP1.2m. The
equipment is for sale and has written-down to GBP400k which
represents the directors’ estimate of the current realisable
value.
5) The adjustment in the current period results from the
weakening of the ZAR vs. GBP between March 2012 when the
provision was released and the rate in August when the claim
was actually settled.
4. Loss per share 6 months 6 months 12 months
30/9/12 30/9/11 31/3/12
Average number of 107.5m 107.5m 107.5m
shares in issue
during the period
(Loss) / profit for GBP(1.320m) GBP(2.613m) GBP5.642m
the period
(Loss) / earnings per (1.23p) (2.43p) 5.25p
ordinary share
(basic, diluted and
headline)
5. Property, plant and equipment
Property, plant and equipment comprises the electricity
generating plant in South Africa owned by NewCogen. The change
in the value since 31 March 2012 comprises depreciation of
GBP0.4m and an exchange adjustment of GBP1m due to the
weakening of the ZAR versus Sterling between 31 March 2012 and
30 September 2012.
6. Cash and cash equivalents
At 30 September 2011, cash and cash equivalents included USD4m
(GBP2.6m) in respect of deposits received on the turbine sales.
These funds were transferred to Standard Bank PLC and Turbocare
as part repayment of the amounts owing to Standard Bank PLC and
Turbocare.
7. Assets held for sale
At 30 September 2012 and 31 March 2012, these assets comprise 2
(30 September 2011 – 4) of the Siemens gas turbines which were
acquired in 2007 for the proposed Coega project in South
Africa. As previously reported, the Board decided, in view of
the delay in that project, that the turbines should be sold. In
January 2012, 2 of the turbines were sold. Contracts for the
sale of the remaining two turbines were exchanged in November
2012. Deposits totalling USD3.1m have been received and the
balance of USD27.9m is due to be paid on completion.
8. Borrowings
Included within borrowings are the following loans:
a) Amount due to Standard Bank of GBP4.9m, including accrued
interest and legal fees (30/9/11 - GBP18.5m, 31/3/12 -
GBP4.6m). In March 2008, the Company obtained a bank loan of
GBP15.0m from Standard Bank PLC to finance the final instalment
payment for the purchase of the 4 Siemens gas turbines. The
loan was originally repayable in September 2009 and is now
repayable on demand although Standard Bank PLC have agreed not
to demand repayment pending completion of the sales contract
referred to in 7 above.
b) Loan note of GBP0.8m, including accrued interest (30/9/11 -
GBP0.7m, 31/3/12 - GBP0.7m). On 5 March 2010, the Company
issued a GBP0.7m unsecured loan note, with interest payable at
6%. The loan note was originally repayable by 31 January 2011.
The repayment date has since been formally extended to 31 July
2013. As repayment is now overdue, interest is accruing at 8%.
Holders of the loan notes are entitled to subscribe for a total
of 6.5m ordinary shares at a price of 5p per share or such
lower price at which any future ordinary shares are issued
prior to exercise.
c) Other loans of GBP2.6m, including interest (30/9/11 -
GBP1.9m, 31/3/12 - GBP2.0m), comprising unsecured loans, with
interest rates of between 5% and 12%. The lenders have
informally agreed to extend the repayments dates pending sale
of the remaining 2 turbines.
The Board of Directors approved this interim statement on 29th
November 2012. This interim statement has not been audited.
Copies of this announcement are being sent to all shareholders
on the register at today’s date. Copies may be obtained from
the Company’s registered office, 5th Floor, Prince Consort
House, Albert Embankment, London SE1 7TJ.
About IPSA:
IPSA Group PLC is a British company established to develop
power generation projects in southern Africa. It is managed by
a team with a strong track record in developing power projects
worldwide and with considerable experience in southern Africa.
IPSA floated on the AIM market of the London Stock Exchange in
September 2005 and obtained a dual listing on the AltX market
of the Johannesburg Stock Exchange in October 2006.
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