HYR.L Regulatory News (HYR)

24 Mar 2005 07:00

HydroDec Group plc24 March 2005 24 March 2005 HydroDec Group plc Final results HydroDec Group plc ("HydroDec", "Company" or "Group") today announces its FinalResults for the period ended 31 December 2004. The Company was incorporated on23 July 2004 so no prior period results are included for comparative purposes. Chairman's statement for the period ended 31 December 2004 I am pleased to present the first set of accounts for HydroDec Group plc, whichcover the period 23 July to 31 December 2004. On 6 August 2004 a cash shell,Vert-eco Group plc, floated on AIM raising gross £3 million. The Vert-ecoBoard's intention was to acquire businesses within the environmental protectionand renewable energy industries. Having considered a number of possibilities,the Board decided that HydroDec Development Corporation ('HDC') ideally suitedthese criteria and on 21 December 2004, the £7,400,000 acquisition of HDC wascompleted. In addition, gross £1,035,000 was raised via placing and theCompany's name was changed to HydroDec Group plc. HDC was incorporated in 2000, as a subsidiary of Virotec International Ltd, andsince 20002, it has focussed on commercialising the HydroDec technology, amodified oil re-refining process. The technology utilises an advanced form ofcatalytic hydrogenation, and is based upon standard oil and petrochemicalindustry packed bed hydrogenation processes, together with patented intellectualproperty that prevents the deactivation of the catalyst by hydrogen chloride andsimilarly reactive by-products. This means that toxic, chlorinated organic waste, such as Dioxins, Furans, DDT,DDD, DDE, PCB, Chlorobenzene, Chlorophenol and HCB/HCBD can be destroyed in anenvironmentally safe, zero-emission, closed-loop process that has no direct airemissions. The technology has also been used to treat a variety of thesechlorinated organic wastes, commonly referred to as "Persistent OrganicsPollutant" (POP's). The technology was created by CSIRO (the Commonwealth Scientific and IndustrialResearch Organisation) that granted HydroDec an exclusive fifteen-year worldwidelicence to commercially exploit the technology. Current trading and prospects Since June 2004, a 3,000 litre per day HydroDec plant has been operating inYoung, New South Wales, principally re-refining PCB contaminated transformeroils for Australian power utilities. Due to the acquisition completing so closeto the Company's year-end, the accounts reflect only 10 days of trading of theconsolidated entity, and therefore show minimal trading activity. Whilst thetechnology has to date only been used to treat contaminated transformer oils,the Board believes it has many other potential applications. The balance sheetshows the strong cash position of the Company, which will allow The Board toaggressively pursue its expansion plans. On 14 February 2005, the Board announced that £1,000,000 has been committed tothe construction of a new HydroDec plant capable of processing 20,000 litres perday of speciality oils and/or chlorinated organic wastes. The company is in theprocess of finalising the design specifications and anticipates that plantconstruction will commence in Australia within six weeks, with the overallconstruction period being approximately nine months. When fully operational, thenew plant will produce a near seven-fold increase in HydroDec's processingcapacity. The Board believes that as environmental issues become more prevalent inpolitical and every-day thinking, HydroDec's model becomes increasinglycompelling. As far the Board are aware, there is no other technology that canperform such processes with virtually zero resultant harm to the environment.This not only has financial benefits, for example, the company receives grantsfrom governments to encourage such technology, but it also provides clients withtremendous public relation opportunities. HydroDec's clients and prospectiveclients not only save money and potential liability by remedying their pollutionissues, they are also perceived by the communities within the areas that arebeing treated as being socially responsible by using green technology to remedyany contamination they may have caused. Socially aware behaviour such as this isbecoming an increasingly important area of modern business, particularly forlarge, multi-national companies, many of which are HydroDec's target market. The Board continues to negotiate and undertake testing on behalf of clientsaround the world, both within the transformer oil sector and other feedstocksectors. I look forward to reporting to you on the progress of thesenegotiations in the coming year. John GunnNon-executive Chairman23 March 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the period ended 31 DECEMBER 2004 Note 2004 £ Turnover - Cost of sales - Gross profit - Administrative expenses (39,956) Operating loss (39,956) Interest receivable 33,092 Loss on ordinary activities before taxation 2 (6,864) Tax on profit on ordinary activities 3 - Loss for the period (6,864) Loss per share 4 (0.01p) All transactions arise from continuing operations. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2004 Note 2004 £Fixed assetsIntangible assets 7,866,003Tangible assets 293,322 8,159,325 Current assetsDebtors 18,882Cash at bank and in hand 3,014,263 3,033,145 Creditors: amounts falling due within one year (295,796) Net current assets 2,737,349 Total assets less current liabilities 10,896,674 Capital and reservesCalled up share capital 782,500Share premium account 10,117,483Profit and loss account (3,309) Equity shareholders' funds 10,896,674 CONSOLIDATED CASH FLOW STATEMENTFor the period ended 31 DECEMBER 2004 Note 2004 £ Net cash inflow from operating activities 5 202,312 Returns on investments and servicing of financeBank interest receivable 33,092 AcquisitionsPurchase of investment (including costs) (721,124)Repayment of loan on acquisition (500,000)Net cash outflow acquisition (1,221,124) FinancingIssue of new shares 4,309,998Costs of share issue (310,015)Net cash inflow from financing 3,999,983 Increase in cash 6 3,014,263 NOTES TO THE FINAL RESULTS 1. BASIS OF PREPARATION The financial statements have been prepared in accordance with applicable accounting standard and under the historical cost convention. This announcement was approved by the Directors on 23 March 2005. The financial information set out in the announcement does not constitute the Company's statutory accounts for the period ended 31 December 2004. 2. LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION The loss on ordinary activities before taxation is stated after charging: 2004 £ Auditors' remuneration: Audit services 5,000 Non-audit services - advice on accounting matters 5,000 Additionally, Grant Thornton have been paid £51,649 included in the cost of acquisition of the subsidiary and £10,000 offset against the share premium account, in respect of corporate finance services. 3. TAX ON LOSS ON ORDINARY ACTIVITIES No tax charge arises for the period and there are no adjusting items between the profits for accounting and taxation purposes. Subject to agreement with the Inland Revenue, the group has UK losses of approximately £6,864 for relief against future trading profits. 4. LOSS PER SHARE The calculated of the basic loss per share is based on the loss attributable to ordinary shareholders of £6,864 divided by the weighted average number of shares in issue during the year. The weighted average number of shares used in the calculations are set out below: 2004 Number of Shares 79,468,173 5. RECONCILIATION OF OPERATING LOSS TO OPERATING CASH FLOWS 2004 £ Operating loss (39,956) Increase in debtors (10,199) Increase in creditors 252,467 Net cash inflow from operating activities 202,312 6. ANALYSIS OF CHANGES IN NET FUNDS At 23 Jul At 31 Dec 2004 Cash flow 2004 £ £ £ Cash in hand - 3,014,263 3,014,263 7. Copies of this announcement will be available for collection from the Company's offices at 4th Floor, French Railways House, 178 - 180 Piccadilly, London W1J 9EN End This information is provided by RNS The company news service from the London Stock Exchange