AUG.L Regulatory News (AUG)

16 Mar 2005 07:01

Augean Plc16 March 2005 16 March 2005 AUGEAN PLC Interim Results for the period from incorporation on 6th August 2004 to 31st December 2004 Augean plc ( the " Company " ) is the UK's market leader in hazardous waste. Highlights • Successful IPO in September 2004, raising £2m through the placing of 1.6m shares at 125p per share • Acquisition of Atlantic Waste Holdings for approximately £80m, two months after IPO • Acquisition of Zero Waste Holdings for approximately £26m, two months after IPO • Raising of £100m through the successful placing of 55,555,556 new ordinary shares at 180p per share • Hazardous waste licence extension from 100,000 tonnes per annum to 500,000 tonnes per annum at Augean North • Financial results for the period reflects the costs of running the Company prior to completing the acquisitions and do not benefit from any significant trading activity of the newly acquired subsidiaries given the proximity of the acquisitions to the Christmas holiday period. Turnover at £878,000, operating loss of £408,000, loss per share of 4.8p John Huntington, CEO of Augean plc said: "It has been a busy first six months since Augean's incorporation. My team hasdelivered two significant acquisitions ahead of schedule, which makes theCompany the leading hazardous waste business in the UK market. "In the short term, management is focussed on extracting full value forshareholders from the acquisitions, whilst continuing to investigate otheracquisition opportunities in the UK hazardous waste market." For further information, call: John Huntington, CEO, Augean plc01937 844 980 Jonathon Brill/Billy Clegg, Financial Dynamics020 7831 3113 Chairman's statement Augean plc ("Augean" or "the Company") was admitted to AIM on 10 September 2004,following the placing of 1.6m ordinary shares of 10p each at 125 pence raising£2 million. Augean was formed to acquire and manage businesses in the UK wastemanagement and water supply sectors. Central to the Company's strategy was thebelief of the Directors that both these sectors were likely to see a period ofconsolidation and changes in ownership as a result of regulatory and legislativechange; public awareness and concern over environmental issues; the need forincreased efficiency; and the rising cost of debt. In the Initial Admission Document, the Directors set a target of implementing aninitial acquisition within six months of admission to AIM, followed by furtheracquisitions over an 18 month period. In relation to the UK waste sector, theDirectors expected the likely scale of Augean's first acquisition would be inthe range of £25 - £100 million but it was anticipated that larger opportunitieswould also be investigated. In November 2004, two months after the IPO, Augean announced the acquisition ofthe entire issued share capital of Atlantic Waste Holdings Limited for aconsideration of approximately £80,000,000. It also entered into severalconditional agreements which resulted in Augean acquiring the issued sharecapital of Zero Waste Holdings Limited for an initial consideration ofapproximately £4,500,000. Augean also repaid loan notes of approximately£21,218,000 (including accrued interest). The acquisitions were funded through a £100,000,000 cash placing of 55,555,556new Ordinary Shares of 10p each placed at 180p per share. Each of the acquisitions constituted a reverse takeover and the shares werere-admitted to AIM on 15 December 2004. In January 2005, Atlantic Waste wasre-named Augean South and Zero Waste was re-named Augean North. Augean South and Augean North, between them, own and operate two of only fourwidely permitted, operational hazardous waste landfill sites in the UK. The two sites are geographically well positioned to capture a significant shareof all hazardous waste arising in the eastern half of England, including a highproportion of hazardous waste arising in London and the south-east of England. In January 2005 the Company opened its headquarters at Rudgate Court, Walton,Near Wetherby West Yorkshire, well located to serve both operational sites ofthe business. The Directors have now taken a decision to concentrate Augean solely on thewaste industry. As a result, Keith Tozzi will shortly be resigning as adirector. Augean South Augean South consists of two operating landfill sites. King's Cliffe is a widerange permitted hazardous waste site. Thornhaugh is an operating non-hazardouswaste site which it is proposed will also include two monocells for stablenon-reactive hazardous waste, once the relevant permits have been issued. TheDirectors anticipate that these permits will be issued later this year. Augean North Augean North consists of two landfill sites in the North East of England. PortClarence is a wide range permitted hazardous waste site. Marks Quarry is anon-hazardous waste site reaching the end of its licensed period. In March 2005 the Company announced a hazardous waste licence extension from100,000 tonnes per annum to 500,000 tonnes per annum at Augean North's PortClarence site. In addition, the Company purchased the royalty agreement on thesite. Financials The results for this period reflect the costs of running the Company prior tomaking the acquisitions and do not benefit from any significant trading activityof the newly acquired subsidiaries given the proximity of the completion of theacquisitions to the Christmas holiday period. Outlook The year commencing 1 January 2005 has started well with trading in the firstfew months being in line with management's expectations. The changes in legislation have created a unique opportunity and once thedisposal of hazardous waste is policed in accordance with the legislation,management expects to see further volume and price increases. Effective policingof the disposal of hazardous waste is one of the most important factors for thebusiness going forward. The directors will continue to investigate cost effective alternative treatmentmethods for hazardous waste and the possibility of acquiring complementary wastebusinesses. The Company's statutory reporting date has been established as 31December 2005 and the Group will announce further interim results covering thesix months to 30 June 2005. David Williams, Chairman, Augean plc Summarised Consolidated Profit and Loss AccountFor the Period 6 August 2004 to 31 December 2004 6 August 2004 to 31 December 2004 Note Unaudited £000's Turnover 1 878Cost of Sales 641 --------Gross Profit 237Other Operating Charges 645 --------Operating Loss (408)Interest Receivable 27Interest Payable (11) --------Loss on Ordinary Activities before Taxation (392)Tax on loss on OrdinaryActivities - --------Retained Loss for theperiod (392) ===== Loss per share 2 Pence -------- Basic and diluted 4.8 -------- Summarised Consolidated Balance SheetAs at 31 December 2004 As At 31 December 2004 £000'sFixed AssetsIntangible Assets 51,614Tangible Assets 59,491 --------- 111,105 ---------Current AssetsStock 1Debtors 6,174Cash 9,814 --------- 15,989 Creditors: Amounts falling due within one year 12,956 --------- Net Current Assets 3,033 --------- Total Assets Less Current Liabilities 114,138 Creditors: Amounts falling due after one year 379 --------- 113,759Provisions for Liabilities and Charges 1,430 --------- Net Assets 112,329 =======Capital and Reserves Called up Share Capital 6,599Share Premium Account 106,122Profit and Loss Account (392) --------- 112,329 ====== Summarised Consolidated Cash Flow StatementFor the period 6 August 2004 to 31 December 2004 6 August 2004 to 31 December 2004 Note Unaudited £000's Net cash outflow from Operating Activities 3 (444) ---------Return on Investments and Servicing of FinanceInterest Received 27Interest Paid (11) ---------Net cash inflow from Return on Investmentsand Servicing of Finance 16 --------- Capital Expenditure and Financial InvestmentPurchase of tangible fixed assets (154)Acquisitions (87,275) ---------Net cash outflow from Capital Expenditure andFinancial Investments (87,429) ---------FinancingIssued Share Capital 97,671 ---------Net cash inflow from Financing 97,671 ---------Increase in cash 4 9,814 ====== Notes to the Interim Financial Statement For the period 6 August 2004 to 31 December 2004 1. TURNOVER Turnover shown in the profit and loss account represents the sales invoicedduring the period including landfill tax but excluding value added tax andrelates to the turnover of the acquired businesses from the date of acquisition. 2. LOSS PER SHARE £000's Loss per share has been calculated on the loss of: 392 === The weighted average number of shares used was 8,172,942. The basic and dilutedloss per share is identical as all potential ordinary shares are anti-dilutiveas a result of the losses attributable to ordinary shareholders. 3. NET CASH OUTFLOW FROM OPERATING ACTIVITIES £000's Operating Loss (408)Depreciation 197Amortisation of Goodwill on Consolidation 202Increase in Provisions 12Decrease in Debtors 154Decrease in Creditors (601) --------- Net cash outflow from operating activities (444) ===== 4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT OF FUNDS £000's Increase in cash 9,814Net funds on incorporation and acquisitions - --------- Net funds at 31 December 2004 9,814 ===== 5. INTERIM REPORT This interim report has been prepared using accounting policies that areconsistent with those set out in the Admission Document of the Company dated 19November 2004. This information is provided by RNS The company news service from the London Stock Exchange