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28 Sep 2011 07:00
28 September 2011 | |||||||
GEM BioFuels Plc | |||||||
("GEM" or the "Company") | |||||||
Interim Result for the six months ended 30 June 2011 | |||||||
GEM BioFuels Plc (AIM: GBF) today announces its interim financial results for the six months to 30 June 2011. | |||||||
REPORT OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER | |||||||
We are pleased to announce the interim results of GEM BioFuels Plc ("GEM" or the "Company") for the 6 months ended 30 June 2011 and following is our report to shareholders for the period. | |||||||
GEM is a bio fuels plantation company which manages 55,700 hectares of Jatropha plantations in Madagascar, which it has planted since the commencement of operations in 2005. It also has exclusive access to 40,000 hectares of natural mature Jatropha forest as well as access to significant additional areas of such forest. | |||||||
The Company and its wholly-owned subsidiary (together the "Group") are focused on maintaining and developing its current plantations to enable it to provide sustainable feedstock for the global biofuel, biochemical and energy markets, where there is increasing demand. GEM is currently analysing ways of introducing additional bio fuel products with a number of strategic partners to capitalise on its substantial land bank of 495,000 hectares in Madagascar. Not only is this land suitable for a range of products, but Madagascar is very well placed geographically for a number of commercial markets for these products. | |||||||
Operational Review | |||||||
GEM carried out no additional plantation work during the 2010/11 season, the focus being on maintaining the existing plantation areas for production as they mature GEM continues to focus on its target of establishing of large-scale, long-term, sustainable plantations under company management in Madagascar providing a socially acceptable solution for the energy market. Its product is non edible, grows on marginal land, requires very low amounts of water and does not compete with food crops. | |||||||
Financial Review | |||||||
In the 6 months ended 30 June 2011, the Group's loss on ordinary activities after taxation was £302,517 (2010: £608,097), or a loss per ordinary share of 0.67p (2010: 1.99p). | |||||||
The Group's cash balance at the end of the period was £99,307 (2010: £14,562). | |||||||
During the period, the Company has raised £412,500 through a private placement of non-interest bearing Loan Notes that are convertible into fully-paid, ordinary shares of the Company. This placement involved the raising of £200,000 in new cash and the reduction of creditors through the capitalisation of £212,500 in outstanding "salary obligations". | |||||||
We continue to work on a larger capital raising round which we expect to complete prior to the end of the current financial year. | |||||||
Staff | |||||||
We have reduced staff significantly in order to conserve our cash and without the continuing effort and dedication of those remaining we could not have made or continue to make any progress on bringing our plans to fruition in the future. | |||||||
Outlook | |||||||
The Company's outlook is positive and centred around looking at ways to capitalise on its experience, land bank and environment to participate in the expanding biofuels and energy markets, | |||||||
Further to the announcement made on 12 August 2011, the Company is continuing to seek additional funding and is in active discussions with a number of parties, including both financial investors and strategic partners. Such funding is necessary for the Company to continue with its business plan and to enable it to exploit its existing assets and further develop its operations. | |||||||
Despite market conditions, the Company is hopeful of bringing one or more of these discussions to a positive conclusion. A further update will be provided once discussions have reached a conclusion. | |||||||
Enquiries
GEM Biofuels Plc
| Shore Capital and Corporate | |
Paul Benetti Chief Executive Officer | Dru Danford/ Stephane Auton | |
+61 (0) 407 039 379
| +44 (0) 20 7408 4090
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Interim Consolidated Statements of Comprehensive Income | |||||||||
for the six months ended 30 June 2011 |
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Unaudited Six Months Ended 30 June 2011 | Unaudited Six Months Ended 30 June 2010 | Audited Year Ended 31 December 2010 |
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Group revenue | 0 | 17,895 | 20,247 |
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Cost of sales | 0 | (14,042) | (15,421) |
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Gross profit | 0 | 3,853 | 4,826 |
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Administrative expenses | (238,550) | (459,518) | (807,134) |
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Finance income | 96 | 102 | 216 |
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Other gains and losses | 1,247 | (151,403) | 63,369 |
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Finance costs | (241) | (1,131) | (2,031) |
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Loss before tax | (237,448) | (608,097) | (740,754) |
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Tax expense | 0 | 0 | 0 |
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LOSS FOR THE YEAR/PERIOD | (237,448) | (608,097) | (740,754) |
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Exchange differences in translation of foreign operations | (65,069) | 182,075 | (32,832) |
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TOTAL COMPREHENSIVE LOSS FOR THE YEAR/PRIOD | (302,517) | (426,022) | (773,586) |
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Loss per ordinary share |
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Basic and diluted loss per ordinary share (pence) | 0.67 | 1.99 | 2.21 |
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Interim Consolidated Statements of Financial Position
as at 30 June 2011 | |||||||
Unaudited 30 June 2011 | Unaudited 30 June 2010 | Audited 31 December 2010 | |||||
ASSETS | |||||||
Non current assets | |||||||
Goodwill | 982,749 | 1,043,601 | 1,016,241 | ||||
Property, plant and equipment | 15,829 | 32,906 | 23,692 | ||||
Biological assets | 816,253 | 866,796 | 921,765 | ||||
1,814,831 | 1,943,303 | 1,961,698 | |||||
Current assets | |||||||
Inventories | 0 | 28,684 | 0 | ||||
Vat refundable | 6,371 | 9,058 | 15,218 | ||||
Cash and cash equivalents | 99,307 | 14,562 | 8,190 | ||||
Receivables | 8,697 | 0 | 8,993 | ||||
Other assets | 8,655 | 214 | 8,969 | ||||
123,029 | 52,518 | 41,370 | |||||
TOTAL ASSETS | 1,937,860 | 1,995,821 | 2,003,068 | ||||
LIABILITIES | |||||||
Current liabilities | |||||||
Trade and other payables | 326,060 | 446,440 | 501,251 | ||||
Convertible note | 412,500 | 0 | 0 | ||||
TOTAL LIABILITIES | 738,560 | 446,440 | 501,251 | ||||
NET CURRENT ASSETS/(LIABILITIES) | (615,531) | (393,922) | (459,881) | ||||
NET ASSETS | 1,199,300 | 1,549,381 | 1,501,817 | ||||
EQUITY | |||||||
Issued capital | 353,515 | 316,015 | 353,515 | ||||
Share premium reserve | 4,999,556 | 4,737,056 | 4,999,556 | ||||
Currency translation reserve | 126,814 | 406,790 | 191,883 | ||||
Share option reserve | 686,524 | 686,524 | 686,524 | ||||
Accumulated losses | (4,967,109) | (4,597,003) | (4,729,661) | ||||
TOTAL EQUITY | 1,199,300 | 1,549,382 | 1,501,817 | ||||
Interim Statement of Changes in Equity
for the six months ended 30 June 2011
Share Capital | Share Premium | Currency Translation Reserve | Share Option Reserve | Accumulated Losses | Total | |
Balance as at 31 December 2009 (Audited) | 316,015 | 4,737,056 | 224,715 | 686,524 | (3,988,907) | 1,975,403 |
Total comprehensive loss for the period | 0 | 0 | 182,075 | 0 | (608,097) | (426,022) |
Balance as at 30 June 2010 | 316,015 | 4,737,056 | 406,790 | 686,524 | (4,597,004) | 1,549,381 |
Issue of shares during the period | 37,500 | 262,500 | 300,000 | |||
Total comprehensive loss for the period | 0 | 0 | (214,907) | 0 | (132,657) | (347,564) |
Balance as at 31 December 2010 (Audited) | 353,515 | 4,999,556 | 191,883 | 686,524 | (4,729,661) | 1,501,817 |
Total comprehensive loss for the period | 0 | 0 | (65,069) | 0 | (237,448) | (302,517) |
Balance as at 30 June 2011 | 353,515 | 4,999,556 | 126,814 | 686,524 | (4,967,109) | 1,199,300 |
Interim Consolidated Cash Flow Statement
for the six months ended 30 June 2011
Unaudited Six Months Ended 30 June 2011 | Unaudited Six Months Ended 30 June 2010 | Audited Year Ended 31 December 2010 | |||
Cash flows from operating activities | |||||
Cash used in operations | (44,917) | (55,537) | (403,303) | ||
Cash flows from investing activities | |||||
Purchases of property, plant and equipment | 0 | (2,604) | (13,845) | ||
Interest received | 96 | 102 | 216 | ||
Interest paid | (241) | (1,131) | (2,032) | ||
Net cash used in investing activities | (145) | (3,633) | (15,661) | ||
Cash flows from financing activities | |||||
Proceeds from issue of shares | 0 | 0 | 300,000 | ||
Proceeds from issue of convertible notes | 200,000 | 0 | 0 | ||
Net cash provided by financing activities | 200,000 | 0 | 300,000 | ||
Net increase in cash and cash equivalents | 154,938 | (59,170) | (118,964) | ||
Cash and cash equivalents at the beginning of the year/period | 8,190 | 102,940 | 102,940 | ||
Effects of exchange rate changes in the balance of cash held in foreign currencies | (63,821) | (29,208) | 24,214 | ||
Cash and cash equivalents at the end of the year/period | 99,307 | 14,562 | 8,190 | ||
Notes to the Interim Results |
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for the six months ended 30 June 2011 |
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1. GENERAL INFORMATION |
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GEM BioFuels Plc is a company domiciled and incorporated in the Isle of Man with company registration number 115011C. The Company's ordinary shares are traded on AIM. |
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The consolidated accounts for GEM BioFuels Plc and its subsidiary (the "Group") have been prepared for the six months ended 30 June 2011. |
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The Company's registered address is 33 Athol St, Douglas, Isle of Man IM1 1LB. |
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The functional currency of the Company is United States dollars ("USD") as is the currency of the primary economic environment in which the Company operates. The consolidated financial statements are presented in Pounds Sterling (Presentation currency) for the convenience of readers. The translation between the functional and presentational currency is in accordance with the Group's stated policy. |
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2. BASIS OF PREPARATION |
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The Group interim financial statements are prepared on the historical cost basis. |
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The financial information for the six months ended 30 June 2011 is unaudited and has been prepared in accordance with the accounting policies set out in the Group's Annual Report for the year ended 31 December 2010 ("Annual Report") and should be read in conjunction with the Annual Report. The financial information for the six months ended 30 June 2010 is also unaudited and the results have not been reviewed by the Group's Auditors. The financial information relating to the year ended 31 December 2010 has been extracted from the full report for that year. The report of the Auditors on the 2010 accounts was unqualified. |
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Where necessary, the comparatives have been reclassified from the previously reported interim results to take into account any presentational changes made in the Annual Report. |
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These interim financial statements were approved by the board of directors on 27 September 2011. |
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3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
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In the process of applying the Group's accounting policies, which are described in note 2., the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements. |
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Impairment of goodwill - Following a detailed review of the business combination acquired, the Directors are satisfied that the carrying amount of the goodwill is justified and no impairment loss is to be recognised at the period end. In making their assessment, the Directors have made certain assumptions which underpin the value. Refer to note 12. of the Annual Report for details of the assumptions made. |
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Impairment of biological assets - Following a review of the Group's plantation and forest assets, the Company has determined that as at 30 June 2011 the biological asset will be measured at the cost of initial planting as little biological transformation had occurred at 30 June 2011 and accordingly cost reflected the best approximation of fair value. Further, the Group's interest in wild forests continues to be carried at nil value. In making their assessment, the Directors have made certain assumptions which underpin the value. Refer to note 13. of the Annual Report for details of the assumptions made. |
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4. SEGMENT REPORTING |
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The Group's primary reporting format is its geographical segment, while its secondary reporting format is its business segment. |
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The Group has one geographical segment being Madagascar. |
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The Group has one business segment, which is the production of feedstock for the biodiesel and bio-chemicals industries. |
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5. NET FINANCING (EXPENSE)/INCOME |
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Unaudited Six Months Ended 30 June 2011 | Unaudited Six Months Ended 30 June 2010 | Audited Year Ended 31 December 2010 |
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Interest income from financial institutions | 96 | 102 | 216 |
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Gross interest expense | (241) | (1,131) | (2,031) |
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Net financing income | (145) | (1,029) | (1,815) |
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6. INCOME TAX EXPENSE |
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The Income Tax (Amendment) Act 2006 provides that a standard zero rate of tax will apply to the company in the Isle of Man for 2006/07 and subsequent years of assessment. Therefore no provision for liability of Isle of Man income tax has been included in these accounts. |
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The Company's subsidiary pays tax at the rate of 30% on its taxable profits. No tax charge has been recorded in the current period in respect of the operations of the subsidiary due to losses arising. A deferred tax asset has not been recognised in respect of these losses due to the unpredictability of the future income streams of the company. |
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7. LOSS PER ORDINARY SHARE |
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Unaudited Six Months Ended 30 June 2011 | Unaudited Six Months Ended 30 June 2010 | Audited Year Ended 31 December 2010 |
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Loss for the year | 237,448 | 608,097 | 750,754 |
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Weighted average number of shares | 35,351,501 | 30,601,501 | 33,476,501 |
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Loss per ordinary share -basic | 0.67 | 1.99 | 2.21 |
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-diluted | 0.67 | 1.99 | 2.21 |
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The number of shares in issue at 30 June 2011 was 35,351,501 (2010: 31,601,501). For the purpose of calculating the diluted loss per share, options have not been included as the share options are not dilutive. |
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8. NOTES TO THE CASH FLOW STATEMENT |
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Unaudited Six Months Ended 30 June 2011 | Unaudited Six Months Ended 30 June 2010 | Audited Year Ended 31 December 2010 |
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Loss for the year/period | (237,448) | (608,097) | (740,754) |
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Adjustments for: |
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Finance costs | 241 | 1,131 | 2,032 |
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Foreign exchange gain | (1,247) | 151,403 | (63,369) |
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Interest income received and receivable | (96) | (102) | (216) |
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Depreciation of property, plant and equipment | 7,188 | 17,409 |
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Operating cash flows before movements in working capital | (238,550) | (448,477) | (784,898) |
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Increase in inventories | 0 | (17,501) | 31,657 |
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Decrease/(increase) in other assets | 156,324 | 44,025 | (30,173) |
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Increase/(decrease) in payables | 37,309 | 366,416 | 380,111 |
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Net cash used in operating activities | (44,917) | (55,537) | (403,303) |
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9. SUBSEQUENT EVENTS |
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There were no events that occurred subsequent to 30 June 2011. |
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10. AVAILABILITY OF THIS REPORT |
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This Interim Report is available from the Company's website at www.gembiofuels.com. |
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