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Unaudited Results for the 6 month period ended 30 September 2014
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
2014
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 2014.
Highlights:
- Revenue of £1.9m (2013 - £2.1m) comprising electricity sales
of £1.5m (2013 - £1.5m) and steam sales of £0.4m (2013 – £0.6m)
- Group loss after tax of £0.75m (2013 - £1.96m profit)
- Plans for expansion of plant in South Africa progressing
well.
Commenting, Richard Linnell, Chairman of IPSA, said:
“Whilst this half year has been disappointing due to the loss
of steam sales, the planned reconfiguration of the plant which
this forces on us will prepare us to increase our electricity
output at a time when it will be much needed”.
CHAIRMAN'S STATEMENT
I am pleased to present to the shareholders of IPSA Group PLC
(the “Group”) the results for the half year ending 30 September
2014.
In operating terms the Group has performed in line with
expectations with Group turnover at £1.9m million (2013 £2.2m).
At Newcastle Cogeneration (Pty) Limited (“NewCogen”) in ZAR
terms, total sales increased from ZAR 32.5m to ZAR 33.7m.
Steam sales fell from ZAR 9.2m to ZAR 3.1m as a result of
changes in demand. The value of electricity sold increased
from ZAR 23.2m to ZAR 30.6m as a result of the completed
maintenance programme and the operations from the newly
installed Deutz engine. The plant sold 27.5 GWh and 21.5
thousand tonnes of steam during the period. The Group
recorded a loss of £0.75m (2013 – profit of £1.96m).
The devaluation of the Rand continues to impact results as we
report in sterling, reducing turnover and cost of sales.
The balance of the purchase price owed by Rurelec PLC in
respect of the turbine sale in 2013, amounting to £3.2m, is
expected to be paid in the first half of 2015. We continue to
hold further balance of plant, valued at £4 million, which we
expect to sell in due course.
The Group’s only significant liability, with the exception of
the £1.2m owing to the directors in respect of salaries accrued
but unpaid, remains an amount owing to Ethos Energy Italia SpA
(formerly Turbocare) of £4.2 million. The dispute with
Turbocare was settled pursuant to an agreement announced on 29
October 2014, which required payment of €3m on or before 21
November 2014. This payment has not been made. However,
further to our announcement on 29 December 2014, we expect to
receive the deferred consideration due from Rurelec PLC early
in 2015. The Company is managing the working capital of the
Group which will remain tight until the receipt of the deferred
consideration and the sale of the balance of plant.
Effective 1 April 2014, the electricity price decreased by1.73
per cent. per annum, in accordance with the MTPPP contract,
including an 8 per cent reduction in the tariff 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. Recent announcements indicate that the
MTPPP contract will be extended in April 2015. However,
details of the pricing and term of the extension have not been
made public.
NewCogen has implemented plans to expand its generating
capacity through the installation of new gas engines, and the
first 1.2 MW of additional capacity was successfully
commissioned in April 2014. The new capacity, operates at a
significantly higher efficiency than that of the current plant
in open cycle, without requiring an increase in fixed costs. A
further 3 MW of engines have been shipped to the site and are
awaiting installation, and will be available under the new PPA
arrangements.
I would like to thank Peter Earl for stepping in as acting CEO
following the sad death of Phil Metcalf in November. The
management is coping well with the challenges of picking up the
reins of the business Phil held so ably since 2011.
Richard Linnell
Chairman
30 December 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) for the 6 month period ended 30 September 2014
Notes 6 months 6 months 12 months
30/9/14 30/9/13 31/3/14
unaudited unaudited audited
£’000 £’000 £’000
Revenue 1,888 2,165 3,707
Cost of sales (1,930) (2,254) (4,664)
Gross loss (42) (89) (957)
Administrative (690) (736) (1,388)
expenses
Operating loss (732) (825) (2,345)
Profit on sale of 3 - 3,187 3,166
non-current asset
held for sale
Other income / 4 17 (285) (282)
(expense)
Finance expense (32) (122) (171)
(Loss) / profit (747) 1,955 368
before tax
Tax expense - - -
(Loss) / profit after (747) 1,955 368
tax
Other comprehensive
income:
Exchange differences (348) (961) (1,714)
on
translation of
foreign operation
Total comprehensive (1,095) 994 (1,346)
loss /
profit attributable
to equity
Shareholders
(Loss)/profit per 5 (0.69p) 1.82p 0.34p
ordinary share (basic
and headline)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited) at 30 September 2014
Notes 30/9/14 30/9/13 31/3/14
unaudited unaudited audited
£’000 £’000 £’000
Assets
Non-current assets
Property, plant and 7,154 7,480 7,738
equipment
Current assets
Trade and other 3,556 4,663 3,575
receivables
Investments 6 - 1,063 -
Cash and cash 64 57 61
equivalents
3,620 5,783 3,636
Non-current assets 7 4,000 4,000 4,000
classified as assets
held for sale
Total assets 14,774 17,263 15,374
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 (6,072) (4,972) (5,725)
reserve
Profit and loss (15,644) (13,311) (14,898)
reserve
Total equity 7,201 10,634 8,294
Current liabilities
Trade and other 8 6,648 6,571 6,842
payables
Borrowings 925 58 238
7,573 6,629 7,080
Total equity and 14,774 17,263 15,374
liabilities
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the 6 month period ended 30 September 2014
6 months 6 months 12 months
30/9/13 30/9/13 31/3/14
unaudited unaudited audited
£’000 £’000 £’000
(Loss) / profit for (746) 1,955 368
the period
Add back: net finance 32 122 171
expense
Add back: profit on - (3,187) (3,166)
sale of asset
held for re-sale
Adjustments for:
Depreciation and 284 305 1,328
impairment
Unrealised exchange (272) 537 133
losses
Change in trade and 20 113 181
other receivables
Change in trade and 47 (1,084) (530)
other payables
Cash used in (635) (1,239) (1,515)
operations
Interest paid (5) (122) (133)
Net cash used in (640) (1,361) (1,648)
operations
Cash flows from
investing
Activities
Purchase of plant and - (575) (2,537)
Equipment
Cash from sale of 3 - 10,872 12,935
asset
held for sale
Costs associated with - - (1,230)
assets held for resale
- 10,297 9,168
Cash flow from
financing
Activities
Loans received 694 - 200
Loans repaid (51) (8,979) (7,759)
643 (8,979) (7,559)
Increase / (decrease) 3 (43) (39)
in cash and cash
equivalents
Cash and cash 61 100 100
equivalents
at start of period
Cash and cash 64 57 61
equivalents
at end of period
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited) for the 6 month period ended 30 September 2014
Share Share Foreign Profit and Total equity
capital premium currency loss reserve
Account reserve
£’000 £’000 £’000 £’000 £’000
At 1.4.13 2,150 26,767 (4,011) (15,266) 9,640
Profit for the - - - 1,955 1,955
period
Exchange - - (961) - (961)
differences
Total - - (961) 1,955 994
recognised
expense
for the
period
At 30.9.13 2,150 26,767 (4,972) (13,311) 10,634
Loss for the - - - (1,587) (1,587)
period
Exchange - - (753) - (753)
differences
Total - - (753) (1,587) (2,340)
recognised
expense
for the
period
At 31.3.14 2,150 26,767 (5,725) (14,898) 8,294
Loss for the - - - (746) (746)
period
Exchange - - (347) - (347)
differences
Total - - (347) (746) (1,093)
recognised
expense
for the
period
At 30.9.14 2,150 26,767 (6,072) (15,644) 7,201
Notes to the unaudited Interim Statement for the 6 month period
ended 30 September 2014
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 2014 were derived from the statutory
accounts for that period which have been delivered to the
Registrar of Companies. Those accounts, which contained a
qualified 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 2015 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 2014.
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 $25m (£16.1m) of which £10.9m was
paid in cash, £1m paid in shares and £3.2m of the original
£4.2m deferred consideration remains outstanding 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. No provision has been made in
respect of the claim Iris is pursuing through the Malaysian
Courts in connection with their non-refundable deposit pursuant
to the terminated equipment sale agreement in 2012.
4. Other income / 6 months 6 months 12 months
(expense) 30/9/14 30/9/13 31/3/14
£’000 £’000 £’000
Exchange gains / 225 (131) 32
(losses)1
Profit on sale of - - 44
shares
Storage and insurance (208) (154) (358)
costs2
Total 17 (285) (282)
1 Exchange gains/(losses) arising on the € denominated unpaid
balance owing to Turbocare in respect of the refurbishment
costs of the Turbines;
2 Storage and insurance costs in respect of the Turbines and
balance of plant;
5. Loss per share 6 months 6 months 12 months
30/9/14 30/9/13 31/3/14
Average number of 107.5m 107.5m 107.5m
shares
in issue during the
period
(Loss) / profit for (£0.746m) £1.955m £0.378m
the period
(Loss) / profit per (0.69p) 1.82p 0.34p
ordinary share - basic
and headline
(Loss)/ profit per (0.69p) 1.79p 0.34p
ordinary share -
diluted
6. Investments
At 30.09.13 there were 8.5m ordinary shares in Rurelec PLC
which formed part of the consideration received in exchange for
the sale of the Turbines. These were sold between 30.09.13 and
31.3.14.
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 £4.2 million claimed by Turbocare in respect of
the balance due for refurbishment work completed in 2008, plus
storage charges and interest.
b) An accrual of £1.2 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 2015.
The Board of Directors approved this interim statement on 30
December 2014. 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, 17th Floor, Millbank Tower,
21-24 Millbank, London SW1P 4QP.
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
30 December 2014
For further information contact:
Peter Earl, CEO, IPSA Group PLC +44 (0)20 7793 7676
Elizabeth Shaw, Finance Director, IPSA Group PLC +44 (0)20
7793 7676
James Joyce , WH Ireland Ltd (Nominated Adviser and Broker) +44
(0)20 7220 1666
Riaan van Heerden, PSG Capital (Pty.) Limited, (South African
Sponsors) +27 11 797 8400
Or visit IPSA's website: www.ipsagroup.co.uk
Date: 30/12/2014 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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