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Unaudited Results for the 6 month period ended 30 September 2013
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 “Group”)
Unaudited Results for the 6 month period ended 30 September
2013
IPSA, the AIM and AltX 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 2013.
Highlights:
- Revenue of GBP2.1m (2012 - GBP2.5m) comprising electricity
sales of GBP1.5m (2012 - GBP2.1m) and steam sales of
GBP0.6m (2012 – GBP0.4m)
- Group profit after tax of GBP1.96m (2012 - GBP1.3m loss),
after recognising profit of GBP3.2m on sale of turbines
- Plans for expansion of plant in South Africa progressing
well
Commenting, Richard Linnell, Chairman of IPSA, said:
“With a program in place now to install additional capacity at
our Newcastle site, starting early in 2014, we will be able to
deliver the maximum we can under the existing PPA with ESKOM
and position the company for securing future PPAs. This gives
a much better platform for developing and growing the business
in South Africa, which is excellent to see”.
CHAIRMAN'S STATEMENT
I am pleased to present to the shareholders of IPSA the
results for the half year ending 30 September 2013, and
include the recognition of the sale of the two remaining 701
DU turbines (the “Turbines”).
In operating terms the Group has performed satisfactorily.
Group turnover at GBP2.1 million is almost the same as in the
same period last year. In ZAR terms, total sales increased
from ZAR 32.0m to ZAR 32.5m, with the increase in the sales of
steam (up from ZAR 5.0m to ZAR 9.2m) offset by a reduction in
the amount of electricity sold (down from ZAR 26.9m to ZAR
23.2m) due to essential maintenance work on one of the
turbines.
The Group recorded a profit of GBP1.96m (2012 – loss of
GBP1.32m) in the period as a result of booking a profit of
GBP3.2m following the sale in June of the remaining 2
turbines.
The balance of the purchase price owing on the sale of the
Turbines (USD6.5 million/GBP4.2 million) at the balance sheet
date is expected to be paid in the first half of 2014, well
before the June 2015 longstop date in the contract. Following
the decision to acquire 3.5 MW of generating equipment from
one of Rurelec’s subsidiaries announced in November, the
amount due from Rurelec has now been reduced by GBP1 million.
We continue to hold further balance of plant, valued at GBP4
million, which will be sold in due course.
The Group’s only significant liability, with the exception of
the GBP1.3m owing to the directors in respect of salaries
accrued but unpaid, remains an amount owing to Turbocare SpA
part of which is under dispute but which has been fully
provided for in the accounts at GBP4.3 million.
Effective 1 April 2013, the electricity price increased by 8
per cent per annum, in accordance with the MTPPP contract. In
April 2014 NewCogen will experience an 8 per cent fall in the
price it receives for the electricity it generates as a result
of the pricing structure built into the contract. NewCogen
selected a termination date of March 2015 in order to avoid a
further phased reduction in contract prices offered under the
MTPPP tender terms.
In order to mitigate the reduced electricity price under the
existing contract NewCogen has implemented plans to expand its
generating capacity through the installation of new gas
engines. The new capacity, which will operate at a
significantly higher efficiency than that of the current plant
without requiring an increase in fixed costs, will enable
NewCogen to maximise the commercial potential of its existing
MTPPP contract with Eskom. It will also allow us to supply
increased generating capacity under the Department of Energy's
new PPA programme which will come into effect ahead of the
expiry of the current contract.
We will continue to examine and develop more efficient
generation solutions going forward to leverage our generating
licence, grid connection and gas availability at the site
where we have been operating now for over 6 years. I am also
confident that there are a number of similar opportunities in
South Africa which can also be developed along similar lines.
Richard Linnell
Chairman
20th December 2013
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) for the 6 month period ended 30 September 2013
Notes 6 months 6 months 12 months
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
GBP’000 GBP’000 GBP’000
Revenue 2,165 2,474 4,327
Cost of sales (2,254) (2,485) (5,247)
Gross loss (89) (11) (920)
Administrative (736) (783) (1,037)
expenses
Operating loss (825) (794) (1,957)
Profit on sale of 3 3,187 - -
non-current asset
held for sale
Other (expense) / 4 (285) (274) 566
income
Finance expense (122) (252) (485)
Profit / (loss) 1,955 (1,320) (1,876)
before tax
Tax expense - - -
Profit / (loss) after 1,955 (1,320) (1,876)
tax
Other comprehensive
income:
Exchange differences (961) (718) (977)
on translation of
foreign operation
Total comprehensive 994 (2,038) (2,853)
profit / (loss)
attributable to
equity shareholders
Profit / (loss) per 5 1.82p (1.23p) (1.74p)
ordinary share (basic
and headline)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited) at 30 September 2013
Notes 30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
GBP’000 GBP’000 GBP’000
Assets
Non-current assets
Property, plant and 7,480 9,741 8,376
equipment
Current assets
Trade and other 4,663 704 582
receivables
Investments 6 1,063 - -
Cash and cash 57 147 100
equivalents
5,783 851 682
Non-current assets 7 4,000 15,712 15,712
classified as assets
held for sale
Total assets 17,263 26,304 24,770
Equity and
liabilities
Equity attributable to equity holders of the
parent:
Share capital 2,150 2,150 2,150
Share premium 26,767 26,767 26,767
account
Foreign currency (4,972) (3,752) (4,011)
reserve
Profit and loss (13,311) (14,710) (15,266)
reserve
Total equity 10,634 10,455 9,640
Current liabilities
Trade and other 8 6,571 7,492 7,336
payables
Borrowings 58 8,357 7,794
6,629 15,849 15,130
Total equity and 17,263 26,304 24,770
liabilities
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the 6 month period ended 30 September 2013
6 months 6 months 12 months
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
GBP’000 GBP’000 GBP’000
Profit / (loss) for 1,955 (1,320) (1,876)
the period
Add back: net finance 122 252 485
expense
Add back: profit on (3,187) - -
sale of asset
held for re-sale
Add back: deposit on - - (1,935)
sale of asset held for
sale
Adjustments for:
Depreciation and 305 368 1,675
impairment
Unrealised exchange 537 243 427
losses
Change in trade and 113 112 233
other receivables
Change in trade and (1,084) (322) (515)
other payables
Cash used in (1,239) (667) (1,506)
operations
Interest paid (122) - (3,243)
Interest received - - 34
Net cash used in (1,361) (667) (4,715)
operations
Cash flows from
investing
Activities
Purchase of plant and (575) - (384)
Equipment
Cash from sale of 3 10,872 - -
asset held for sale
Deposit on assets held - - 1,935
for resale
10,297 - 1,551
Cash flow from
financing activities
Loans received - 779 4,799
Loans repaid (8,979) - (1,570)
(8,979) 779 3,229
(Decrease) / increase (43) 112 65
in cash and cash
equivalents
Cash and cash 100 35 35
equivalents at start
of period
Cash and cash 57 147 100
equivalents at end of
period
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited) for the 6 month period ended 30 September 2013
Share Foreign Profit and
Share Premium Currency loss Total
Capital Account Reserve reserve equity
GBP’000 GBP’000 GBP’000 GBP’000 GBP’000
At 1.4.12 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
Loss for the - - - (556) (556)
period
Exchange - - (259) - (259)
differences
Total recognised - - (259) (556) (815)
expense
for the period
At 31.3.13 2,150 26,767 (4,011) (15,266) 9,640
Profit for the - - - 1,955 1,955
period
Exchange - - (961) - (961)
differences
Total recognised - - (961) 1,955 994
expense for the
period
At 30.9.13 2,150 26,767 (4,972) (13,311) 10,634
Notes to the unaudited Interim Statement for the 6 month
period ended 30 September 2013
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 2013 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, 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 2014 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 2013.
3. Profit on sale of non-current asset
On 10 June 2013, the Company sold the Turbines to Rurelec PLC
for a total consideration of D25m (GBP16.1 million) of which
GBP10.9 million was paid in cash, GBP1m paid in shares and
GBP4.2 million is deferred but due no later than 10 June 2015.
Rurelec PLC is a company controlled by Sterling Trust Ltd, a
significant shareholder in the Company. P Earl and E Shaw are
directors of Rurelec PLC. The transaction was done at market
value.
4. Other (expense) / income
6 months 6 months 12 months
30/9/13 30/9/12 31/3/13
GBP’000 GBP’000 GBP’000
Exchange (losses) / (131) 59 (459)
gains(1)
Storage, legal and
insurance costs(2) (154) (149) (410)
Costs associated re
loan for turbines(3) - (184) (500)
Deposit received on - 1,935
turbine(4)
Total (285) (274) 566
(1) Exchange (losses)/gains arising on the Euro denominated
unpaid balance owing to Turbocare in respect of the
refurbishment costs of the Turbines;
(2) Storage, legal and insurance costs in respect of the
Turbines and balance of plant;
(3) Charges, including legal fees, levied by Standard Bank PLC
in connection with their loan;
(4) During the year to 31 March 2013, a conditional contract
under English Law was entered into for the sale of the
Turbines under which the prospective purchaser, Iris Eco Power
Sdn Berhad (“Iris”), paid a non-refundable deposit of D3.1m
(GBP1.9m). The contract was terminated in February 2013 after
Iris failed to perform in accordance with its terms in a
reasonable timeframe. Iris has issued a claim in the Malaysian
courts against the Company for the recovery of the deposit
(D3.1m) and consequential losses (D9.8m). Based on the legal
advice previously obtained, the Board considers the claim to
be entirely without merit.
5. Loss per share
6 months 6 months 12 months
30/9/13 30/9/12 31/3/13
Average number of 107.5m 107.5m 107.5m
shares in issue
during the period
Profit/(loss) for the GBP1.955m GBP(1.320m) GBP(1.876m)
period
Profit/(loss) per 1.82p (1.23p) (1.74p)
ordinary share -
basic and headline
Profit/(loss) per 1.79p (1.23p) (1.74p)
ordinary share -
diluted
6. Investments
8.5m ordinary shares in Rurelec PLC which formed part of the
consideration received in exchange for the sale of the
Turbines.
7. Assets held for sale
This comprises directors’ valuation of the balance of plant
which was not sold to Rurelec PLC and is currently available
for sale.
8. Trade and other payables
Trade and other payables include:
a) An amount of GBP4.3 million claimed by Turbocare in respect
of the balance due for refurbishment work completed in 2008,
plus storage charges and interest. Included within the GBP4.3
million is an amount of GBP2.0 million of VAT which the
directors regard as erroneously charged. The Company is in
discussions with Turbocare with the objective of reaching a
negotiated settlement of the amounts claimed.
b) An accrual of GBP1.3 million in respect of remuneration due
to the directors and which is subject to agreements which
anticipate payment in full by the end of June 2014.
The Board of Directors approved this interim statement on 20
December 2013. 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, 27-29 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.
London
20 December 2013
For further information contact:
Phil Metcalf, CEO, IPSA Group PLC +44 (0)20 7793 7676
Elizabeth Shaw, Finance Director, IPSA Group PLC +44 (0)20
7793 7676
James Joyce and Nick Field, WH Ireland Ltd (Nominated Adviser
and Broker) +44 (0)20 7220 1666
Riaan van Heerden, PSG Capital (Pty) Limited, (South African
Sponsors) +27 21 887 9602
Or visit IPSA's website: www.ipsagroup.co.uk
Date: 20/12/2013 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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