Eco (atlantic) Regulatory News (ECO)

7 Sep 2007 07:01

EcoSecurities Group plc07 September 2007 THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE,PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITEDSTATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF IRELAND OR ANYJURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL ECOSECURITIES GROUP PLC Interim Results for the six months ended 30 June 2007 Dublin, Ireland - EcoSecurities Group plc ("EcoSecurities", or the "Company"),one of the world's leading companies in the business of sourcing, developing andtrading carbon credits from greenhouse gas emission reduction projects, todayannounces its interim results for the six months ended 30 June 2007. Highlights • Further progress in origination - Clean Development Mechanism ("CDM") portfolio gross contract volume increased to 178 million CERs at 30 June 2007 a net increase of 22 million CERs or 14% since year end 2006. • On a net entitlement basis, adjusting for contract type, the CER portfolio has grown by 29 million tonnes or 23% to 156 million tonnes at 30 June 2007. • Significant project implementation progress - at 30 June 2007, 164 PDDs were completed, 164 projects had been submitted to validation, 97 had completed the validation process and 71 were registered with the CDM Executive Board. .These results were achieved despite the continuing challenges and delays related to the CDM project cycle. • Of the 433 projects in the portfolio, 355 were financed, 127 were under construction and 149 were operational. • 34 million CERs had been sold forward at 30 June 2007, representing expected total forward CER revenue of €410m and net trading margin of €181m through to 2013. • During the period, the Group generated first half revenues of €5.6m driven by sales of CERs and the Group's initial VER sales which, combined, totalled 90% of revenues. • Strategic investment by Credit Suisse to underpin development of long term relationship with Credit Suisse's energy franchise. Current Trading and Outlook • CDM portfolio gross contract volume increased to 185 million CERs at 5 September 2007 a net increase of 29 million CERs or 18.6% since year end 2006. In addition, the Group contracted projects expected to generate up to 6.8 million CERs, which have not yet been incorporated into the portfolio pending completion of a CDM due diligence process. • On a net entitlement basis, the CER portfolio has grown to 163.3 million tonnes at 5 September 2007. • At 5 September 2007, the number of projects submitted for validation had increased to 215. • The post-2012 CDM portfolio gross contract volume increased to 109.6 million CERs at 5 September 2007 increased from 86 million CERs reported in May 2007. The post-2012 CDM portfolio volume relates to potential production of CERs from the Group's projects after 2012 and is incremental to the CDM portfolio. • The Group has built its global VER portfolio at 5 September 2007 to 4.3 million tonnes, further adding to its carbon credit volumes. • As the Group grows and expands operations into new markets, it is in the process of adding to its senior management team. • The Group's cash balance as of 5 September 2007 was approximately €130m, which reflects proceeds of the Credit Suisse subscription in June and an institutional placing in July. Mark Nicholls, Chairman, commented: "EcoSecurities continued to make significantprogress in the first half of 2007, and further strengthened its leadershipposition in the carbon markets. The Group continued to make progress indeveloping its CDM carbon credit portfolio and initiated new activities toexpand into the voluntary carbon markets, the US market, project investments andsecondary trading of CERs. The Group's achievements during the period wereenhanced by further development of the carbon markets and strengthening pricesfor carbon credits." "The continued development of the carbon market and of the Group's operations todate in 2007 gives the Board confidence for continued growth this year andbeyond." Analyst Meeting The Group is holding a meeting/conference call for analysts today at 0830 BST.Analysts wishing to participate should contact Ged Brumby at Citigate DeweRogerson on +44 (0)20 7638 9571 (ged.brumby@citigatedr.co.uk) for furtherdetails. For further information please contact: EcoSecurities Group plcBruce Usher, CEO (07.09.07) +44 (0) 20 7638 9571Pedro Moura Costa, COO and President (Thereafter) +353 1613 9814 Citigate Dewe Rogerson +44 (0) 20 7638 9571Kevin Smith / Ged Brumby Notes to Editors CDM = Clean Development Mechanism, the provision of the Kyoto Protocol thatgoverns project level carbon credit transactions between developed anddeveloping countries CER = Certified Emission Reduction, carbon credits created by Clean DevelopmentMechanism projects. One CER corresponds to 1 tonne of CO2e emission reductions EU ETS = European Union Emissions Trading Scheme, a market based "cap and trade"system for green house gases adopted by the European Union member states EcoSecurities is one of the world's leading companies in the business oforiginating, developing and trading carbon credits. EcoSecurities structures andguides greenhouse gas emission reduction projects through the Kyoto Protocol,working with both project developers and buyers of carbon credits. EcoSecurities works with companies in developing and industrialising countriesto create carbon credits from projects that reduce emissions of greenhousegases. EcoSecurities has experience with projects in the areas of renewableenergy, agriculture and urban waste management, industrial efficiency, andforestry. With a network of offices and representatives in 36 countries on fivecontinents, EcoSecurities has amassed one of the industry's largest and mostdiversified portfolios of carbon projects. EcoSecurities also works with companies in the developed world to assist them inmeeting their greenhouse gas emission compliance targets. Utilising its highlydiversified carbon credit portfolio, EcoSecurities is able to structure carboncredit transactions to fit compliance buyers' needs, and has executedtransactions with both private and public sector buyers in Europe, North Americaand Japan. Working at the forefront of carbon market development, EcoSecurities has beeninvolved in the development of many of the global carbon market's most importantmilestones, including developing the world's first CDM project to be registeredunder the Kyoto Protocol. EcoSecurities' consultancy division has been at theforefront of significant policy and scientific developments in this field.EcoSecurities has been recognised as the world's leading greenhouse gas advisoryfirm over the last five years by reader surveys conducted by EnvironmentalFinance Magazine. EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker ECO).Additional information is available at www.EcoSecurities.com. Chairman's Statement EcoSecurities continued to make significant progress in the first half of 2007,and further strengthened its leadership position in the carbon markets. TheGroup continued to make progress in developing its CDM carbon credit portfolioand initiated new activities to expand into the voluntary carbon markets, the USmarket, project investments and secondary trading of CERs. The Group'sachievements during the period were enhanced by further development of thecarbon markets and strengthening prices for carbon credits. To expand its core business and develop new markets, EcoSecurities completed a€100m equity financing with Credit Suisse and institutional investors in Europeand the United States during June and July. The strategic relationship withCredit Suisse is expected to provide opportunities for the Company and CreditSuisse to globally co-operate on a broad range of projects focusing on, but notlimited to, carbon credit and emission reduction origination and trading. Webelieve the relationship represents a significant endorsement of the strength ofEcoSecurities' business, strategy and track record. External developments helped maintain a high profile for the problems of globalwarming and underline the opportunities in the carbon markets. Substantiallytighter National Allocation Plans ("NAPS") proposed for Phase II of the EU ETS,discussions on climate change at the G8 and pending legislation in the US, allbode well for continued attention to, and growth in, the carbon markets. Given the continued growth of the Group and its expansion plans both organicallyand through acquisition, EcoSecurities intends to add to its senior managementteam. As part of this, announced today, Claire Heeley, formerly Company Secretary ofUnited Drug plc, assumes the role of Company Secretary based in Dublin withimmediate effect. Ms. Heeley is a Chartered Accountant and had previously servedwith United Drug since 2002, and prior to that was with KPMG for several years. Also, the Group intends to appoint a number of experienced non-executivedirectors in due course to support the continued expansion of the business. The continued development of the carbon market and of the Group's operations todate in 2007 gives the Board confidence for continued growth this year andbeyond. Executive Directors' Review for the six months ending 30 June 2007 The first half saw a further period of rapid growth and intensive developmentactivity in the carbon market. The Group's geographic reach and depth ofexpertise enabled it to grow its CER portfolio by 22 million tonnes during thefirst half, building on its industry leadership status. The Group's marketshare remained significant, with 71 of the 722 projects registered by the CDMExecutive Board ("CDM EB") at 30 June 2007 being implemented by EcoSecurities,despite the delays and challenges related to the CDM registration process. TheGroup continued to commercialise its carbon credit portfolio, selling forward afurther 5 million CERs during the period, which is expected to generate anadditional €28m in net trading margins for the Group. Costs and cash controlsremain a key focus for the Group. The Group began to expand into related markets, leveraging its strong reputationand track record. Progress was made in developing business within the US andinternational voluntary carbon markets, in building a post-2012 carbon creditportfolio, in secondary CER trading, and project investments. Origination During the period, the Group brought 80 new projects into its CDM portfolio andby the end of June 2007, there were 433 projects capable of generating 178million tonnes of CERs through 2012. In line with the Group's policy ofcontinually assessing the projects within the portfolio for expected CERgeneration, this total takes into account volume adjustments. As projectsprogress through the CDM implementation cycle and begin operating, an increasedamount of information becomes available to support estimates of project volumesand individual project performance. The CDM project portfolio remains highlydiversified by geography, technology and CDM methodology. Projects were locatedin 36 countries and encompassed 18 different technologies at period end. On a net basis to EcoSecurities, adjusting for contract type (principal, projectdevelopment or agency), the portfolio grew from 127 million tonnes to 156million tonnes. Further progress was made in developing new markets during the period,particularly in the Middle East and Eastern Europe. The Group established apresence in Kiev, Bern and Tokyo during the first half. After opening an officein the Middle East in late 2006, the Group entered a strategic partnership withthe Dubai Multi Commodities Centre ("DMCC") to develop CDM projects in theregion. So far this year, the performance of Group offices in China, Africa andMexico has been particularly strong. The strategic relationship with Credit Suisse is expected to bolster originationefforts through Credit Suisse's extensive network of clients, and provides afacility for the origination of emission reduction projects of up to €1.0bn,offering a credit support structure for EcoSecurities to contract projects whichpreviously were unattainable. The Group has (i) built upon its post-2012 CDM portfolio, (ii) entered thevoluntary market and began to contract US and international VERs, and (iii)acquired (1) million CERs in the secondary market, all of which are in additionto building the core CDM portfolio to 178 million CERs. Implementation Despite numerous delays experienced in external validation of projects,obtaining host country approval and the processing of projects by the CDM EB,the number of projects registered by the Group increased from 53 to 71 duringthe first half of the year, making it the largest portfolio of registeredprojects in the world. These registered projects are capable of producing 22million CERs by 2012 which is up by 6 million CERs since year end. At period end, 164 projects had completed Project Design Documents ("PDDs"), 97had been validated and 128 had received Host Nation Approval. A total of 149projects in EcoSecurities portfolio were operating at 30 June 2007, 127 were inconstruction and a total of 355 were financed. Key highlights of the CDM project implementation process for the Group includedthe registration of Al-Shaheen, the first gas flaring capture project in theMiddle East, located offshore of Qatar, and the Company's first projectregistrations in Thailand after the Thai government issued its first projectapprovals. Furthermore, VERs from CDM projects yet to be registered were verified duringthe first half for sale to voluntary market buyers. This opens a new window ofmarket opportunity for the Company from its existing CDM portfolio and helpsallay the problem of delays in the CDM registration process. Commercialisation The Group continued to make progress in the commercialisation of CERs in theperiod. A total of 34 million CERs had been sold forward at 30 June 2007, upfrom 29 million at the end of 2006. This represents expected total forward CERrevenues of €410m and net trading margin of €181m through 2013. The Group'ssales of CERs were intentionally restricted earlier in the year due to lower CERprices, but sales increased along with higher CER prices later in the period. CER prices strengthened in the second quarter of 2007, after a weak start to theyear. Substantially tighter EU ETS Phase II NAPs were largely completed in thesecond quarter, with only seven smaller nations continuing to negotiate with theEU. These countries are proposing incremental emission allowance allocationsrepresenting 4% of the maximum annual amount of allowances that could be issuedby the EU. Demand for both CERs and VERs from voluntary buyers has grown both in Europe andthe United States. The Group made its first VER sales during the first half.Voluntary buyers are also purchasing CERs to offset their carbon footprint,generating stronger pricing than compliance related purchases in the EU andJapan. The UNFCCC's International Transaction Log (ITL), the central hub of thesettlement system which will deliver traded allowances from seller to buyers, isnow expected to be launched in December 2007. When the ITL launches, and as thevolume of issuance of CERs from registered projects increases, the growth oftrading in the secondary market is expected to increase significantly with theimproved transferability of CERs. The Group is well positioned to takeadvantage of this with its ability to trade with project operators quickly andefficiently in most CDM countries. Investment The Group's investment activities continued to expand in 2007 with commitmentsfor up to an additional €3 million being agreed during the first half. Theinvestments made primarily take the form of secured, advance payments for CERswhich enable the Group to increase its CER production as well as providing anattractive return on capital. Investments in projects also continued to growduring the period, with the Group committing to fund further N2O projectsalongside landfill gas and small hydro projects. Additional resources are beingdeployed to increase the scope of emission reduction related investment andbusiness development opportunities generated through the Group's worldwidemarket presence. Consulting As announced previously, the Group acquired the business of Trexler Climate +Energy Services ("TC+ES"), an internationally recognised leader in the emergingfield of climate change risk management, which was merged with EcoSecurities'existing Consulting group to create EcoSecurities Global Consulting Servicesdivision. Simultaneously, the Consulting group is evolving from a business witha sole emphasis on CDM project documentation and methodology development forexternal clients, to one which will in the future focus much more intensivelyon: 1) participating in relevant public policy debates; 2) using corporatestrategy consulting to establish key relationships for EcoSecurities goingforward; and 3) serving as an internal intelligence management function. It willalso continue to support the Group's other business units as it has in the past. Financial Income statement Group revenue rose to €5.6m for the first half of 2007, €4.8m was derived by thesale of 283,200 CERs, acquired via the Group's primary and secondary CERportfolio, and 37,500 VERs. Consulting revenue during the first half of 2007 waslower than expected due to the focus on internal CDM project implementation andthe change in focus of the consulting unit. Gross margins on carbon creditsales were 33% during the period reflecting a mix of costs and pricing for CERsand VERs in relation to the Group's core CDM, secondary trading and voluntarymarket activities. Administrative expenses during the period grew to €14.7m from €9.1m in 2006 andwere in line with management's expectations, and reflecting the costs andinvestments made in continuing to build and operate the Group's worldwidenetwork. The primary business expense related to staff and associated costs, asheadcount increased 63% to 260 at 30 June 2007 from 160 at 30 June 2006. Financing income totalled €1.2m, which represented interest earned on short-termbank deposits. Financing costs totalled €0.7m, which were comprised of intereston short term debt and unrealised foreign exchange differences on the Group'sfinancial assets and liabilities. While the Group as a whole operated at a loss,it incurred a tax charge of €1.1m during the first half due to taxes at thesubsidiary company level. The net loss increased to €13.2m in 2007 from €8.7min 2006 which resulted from higher costs of continued growth and higher levelsof activity. Balance sheet Intangible assets increased by €1.1m during the year reflecting the Group'spolicy of capitalising identifiable costs of CDM project implementation andproject investments. These costs are then amortised based on expected futureCER flows from the projects to which they relate. 229,000 CERs were either verified or verified and issued during the first halfand remained in inventory at the end of the period. Current and non currenttrade receivables of €7m reflect amounts relating to sales of CERs in thecurrent and prior period pending the establishment of the InternationalTransaction Log to complete settlement of these sales. The balance of tradereceivables pertain to receivables from the consulting business of €0.2m,advance payment for the purchase of CERs of €0.8m and other receivables relatedto business operations of €2.8m.. In total during the first half, 21 CDM project investments were made in China,Mexico, Indonesia and Tunisia with commitments amounting to €3m which increasedboth fixed assets and receivables. Completed investments in project relatedequipment totalled €0.7m. A further €1.2m was invested in project relatedtransactions to secure the rights to CERs. The number of projects and CERswhich the Group has secured without the need for upfront payments has beengreater than anticipated during the period which has conserved capitalresources. The cash balance at 30 June 2007 was • 79.9m, reflecting the €44m Credit Suissesubscription which closed at the end of the period. As previously noted, afurther €54m placement was completed in July, shortly after the period end. Cash flow The development of the Group's overseas operations resulted in operating cashoutflows of €20.6m during the first half. A portion of CDM projectimplementation activities resulted in cash outflows of €0.9m which werecapitalised. The remaining cash outflow from investing activities totalled €1.3mwhich consisted of other project related investments, costs due to the expansionof the Group's infrastructure and the acquisition of TC+ES. In respect offinancing cash flows, the Group raised new equity of €44m from Credit Suisseduring the period, as discussed above. Current Trading CDM portfolio gross contract volume had increased to 185 million CERs at 5September 2007, a net increase of 29 million CERs or 18.6% since year end 2006.On a net entitlement basis, the CER portfolio has grown by 36 million tonnes or28% to 163 million tonnes at 5 September 2007. Project origination has beenparticularly successful in China, the Middle East and Africa in the renewableenergy and fuel switch sectors over recent months. Also, a contract with PLN,the national utility company in Indonesia, for geothermal and hydro projects wasannounced in August. Despite increasing competition for larger projects, the Group has maintained itsorigination success and continues to build a good origination pipeline. As at 5 September 2007, 222 PDDs were completed, 215 projects had been submittedfor validation, 102 had completed the validation process and 74 were registeredwith the CDM Executive Board. Of the 456 projects in the portfolio, 382 werefinanced, 294 were under construction and 145 were operational The Company's first N2O abatement project in China has commenced carbon creditgeneration after the completion of baseline monitoring. This project is one ofEcoSecurities' largest N2O projects and is expected to produce 2.3 million CERsby the end of 2012. Several other projects are progressing through the baselinedetermination process at present. To date EcoSecurities has pre-sold 35 million CERs, predominantly to largecorporate and government buyers. The expected net trading margin on currentforward CER sales of 35 million tonnes now totals €191m. While pricing has beenstrong over the summer at an average of €16 for the Company, volumes have beenseasonally low. Recently, CER prices have been increasing in relation to European Allowanceprices. Substantially tighter National Allocation Plans proposed for Phase IIof the EU ETS, and the fact that many EU ETS regulated companies are consideringswapping their capacity to utilise CERs for compliance obligations in exchangefor their EUA allocations, have contributed to this positive trend. The post-2012 CDM portfolio gross contract volume increased to 109.6 millionCERs at 5 September 2007, a net increase of 24 million since May 2007. Thisreflects efforts by the Group to contract for post-2012 volumes from bothexisting and new projects. The Group had built its global VER portfolio at 5 September 2007 to 4.3 milliontonnes, further adding to its carbon credit volumes. The portfolio is comprisedof pre-registration CDM projects and US projects, predominantly in the methanecapture and industrial gas abatement sectors. The voluntary market is alsogrowing due to interest on the part of non-regulated corporate buyers in Europeand through pre-compliance demand in the US. In view of growth in the market, and following the financing in June and July,EcoSecurities has begun to devote additional resources to expansion into newmarkets for VERs, secondary CER trading and to expand its investment andacquisition related activities the result of which will be a small increase inthe cost base for the year. Outlook Prospects for the remainder of 2007 are positive, given the Group's leadingposition in the carbon market, strong financial resources and strategicrelationships. The Group's core business model - the global origination,implementation and commercialisation of carbon credits under the CDM - continuesto concentrate on the considerable opportunities available. The Group intends tocontinue to grow the volumes of carbon credits contracted and to consideracquisitions, which would add further scale to its diversified portfolio.Furthermore, as highlighted at the time of the recent fundraising, EcoSecuritiesintends to make further investments in US market expansion, secondary CERtrading, voluntary markets and emission reduction and clean energy projectinvestments. CONSOLIDATED INCOME STATEMENT 6 months to 30 6 months to 30 Year to June June 31 Dec 2007 2006 2006 (Unaudited) (Unaudited) (Audited) €000 €000 €000Revenue 5,593 841 3,073 Cost of sales (3,491) (542) (1,374) Gross profit 2,102 299 1,699 Administrative expensesGeneral (14,656) (9,359) (22,998)IPO preparation expenses - 277 277Total (14,656) (9,082) (22,721) Loss before financing costs (12,554) (8,783) (21,022) Financing costs (713) (853) (856)Finance income 1,238 1,237 2,405 Loss before tax (12,029) (8,399) (19,473) Income tax expense (1,157) (259) (573) Loss for the period (13,186) (8,658) (20,046) Loss all attributable to:Equity holders of the Company (13,186) (8,658) (20,046) (13,186) (8,658) (20,046)Earnings per shareBasic and fully diluted (14.16) (9.40) (21.74) CONSOLIDATED STATEMENT OF RECOGNISED INCOME ANDEXPENSE 6 months to 6 months to Year to 30 June 30 June 31 Dec 2007 2006 2006 (Unaudited) (Unaudited) (Audited) •'000 •'000 •'000Loss for the period (13,186) (8,658) (20,046) Currency translation reserve movement (163) 47 (22) Total recognised income and expense for theperiod (13,349) (8,611) (20,068) Attributable to:Equity holders of the Company (13,349) (8,611) (20,068) (13,349) (8,611) (20,068) CONSOLIDATED BALANCE SHEET 6 months to 6 months to Year to 30 June 30June 31 Dec 2007 2006 2006 (Unaudited) (Unaudited) (Audited)Assets •'000 •'000 •'000Non-current assetsIntangible fixed assets 4,550 450 3,412Property, plant and equipment 3,450 890 2,463Trade and other receivables 5,031 1,072 531Total non-current assets 13,031 2,412 6,406 Current assetsStock and work in progress 2,670 48 -Trade and other receivables 5,808 2,300 5,020Cash and cash equivalents 79,902 70,933 60,452Total current assets 88,380 73,281 65,472 Total assets 101,411 75,693 71,878Shareholders' equityIssued capital 256 231 232Share premium 118,908 76,410 76,446Share based payment reserve 1,058 426 663Currency translation reserve (237) (5) (74)Other reserves (573) (573) (573)Retained earnings (38,195) (13,631) (25,009)Total equity 81,217 62,858 51,685 LiabilitiesNon-current liabilitiesInterest bearing loans and borrowings - 8,166 -Trade and other payables 3,409 - 3,040Deferred tax liabilities 58 4 58Total non-current liabilities 3,467 8,170 3,098 Current liabilitiesInterest bearing loans and borrowings 7,559 - 7,582Trade and other payables 7,685 4,420 8,885Current tax creditors 1,483 245 628Total current liabilities 16,727 4,665 17,095 Total liabilities 20,194 12,835 20,193 Total equity and liabilities 101,411 75,693 71,878 CONSOLIDATED CASH FLOW STATEMENT 6 months to 6 months to Year to 30 June 30 June 31 Dec 2007 2006 2006 (Unaudited) (Unaudited) (Audited) •'000 •'000 •'000 Loss for the financial period/year (13,186) (8,658) (20,046)Income tax expense 1,157 259 573Finance income (1,239) (1,237) (2,405)Finance costs 713 853 856Depreciation and amortisation 374 71 252Project costs transferred to inventory - - 125Change in stock (2,399) (48) -Change in trade and other receivables (5,558) (1,157) (3,981)Change in trade and other payables (923) 2,045 9,626Profit on disposal of fixed assets - - 140Share based payment 394 138 385Foreign exchange differences (244) 59 (294)Interest paid (404) (209) (428)Interest received 1,016 1,231 2,170Tax (paid)/refunded (302) (128) -Net cash outflow from operating activities (20,601) (6,781) (13,027) Cash flows from investing activitiesAcquisition of businesses (185) - -Project advances and development expenditure - (895) -Purchase of property, plant and equipment (1,213) (809) (2,673)Purchase of intangible fixed assets (798) (370) (3,487)Net cash outflow from investing activities (2,196) (2,074) (6,160) Cash flows from financing activitiesGross proceeds from the issue of ordinary share 43,618 48 85capitalShare sale transaction costs (1,319) - -Admission costs paid - (2,200) (2,222)Repayment of borrowings - - (300)Net restricted cash deposits (8,722) (6,916) (5,824)Net cash (used)/generated in financing activities 33,577 (9,068) (8,261) Net change in cash and cash equivalents 10,780 (17,923) (27,448) Cash and cash equivalents at start of period 54,045 82,565 82,565 Foreign exchange on cash and cash equivalents (52) (1,208) (1,072) Cash and cash equivalents at end of period 64,773 63,434 54,045 NOTES TO THE FINANCIAL INFORMATION 1. General information EcoSecurities Group plc and its subsidiaries (together the Group) originate,trade, develop and invest in emission reduction projects. The Group also offersconsulting and advisory services. It operates through a global network ofsubsidiaries, branch offices and representatives. 2. Basis of preparation The information in this document does not include all of the disclosuresrequired by International Financial Reporting Standards in full annual statutoryaccounts and it should be read in conjunction with the Group's annual financialstatements for the year ended 31 December 2006. The accounting policies adopted are consistent with those followed in thepreparation of the Group's annual financial statements for the year ended 31December 2006. 3. Share capital In the period to 30 June 2007 the number of shares in issue increased by9,917,082 to 102,574,370, reflecting the purchase of shares by Credit Suisse,the exercise of employee share options and the issue of shares to the vendors ofTrexler Climate + Energy Services (note 6.). 4. Reserves Currency Share based Other Retained translation payment reserves earnings reserve reserve •'000 •'000 •'000 •'000At 1 January 2007 73.9 (663.5) 572.6 25,009.2Loss for the period - - - 13,185.9Foreign exchange translation differences 163.2 - - -Employee share option scheme - value of services provided - (394.0) - - At 30 June 2007 237.1 (1,057.5) 572.6 38,195.1 ECOSECURITIES GROUP PLCNOTES TO THE FINANCIAL INFORMATION 5. Cash and cash equivalents 6 months to 6 months to Year to 30 June 30 June 31 Dec 2007 2006 2006 (Unaudited) (Unaudited) (Audited) •'000 •'000 •'000 Cash at bank and in hand 9,940 2,210 4,410Short-term deposits 54,833 61,224 49,635Cash and cash equivalents for the 64,773 63,434 54,045purposes of the cash flow statementRestricted cash 15,129 7,499 6,407Cash and cash equivalents 79,902 70,933 60,452 6. Acquisition of Trexler Climate + Energy Services On 27 February 2007, a subsidiary company agreed to acquire the trade and assetsof Trexler Climate + Energy Services Incorporated, a company incorporated in theUnited States, for a consideration comprising cash and shares in EcoSecuritiesGroup plc partially conditional on the future performance of the business. Assets valued at $625k were acquired for consideration of $250k in cash and thebalance in shares in EcoSecurities plc. This information is provided by RNS The company news service from the London Stock Exchange