HYR.L Regulatory News (HYR)

15 Sep 2005 07:00

HydroDec Group plc15 September 2005 15 September 2005 HYDRODEC GROUP PLC INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005 CHAIRMAN'S STATEMENT These accounts cover the six month period to 30 June 2005 for Hydrodec Group plc("Hydrodec"). HydroDec's technology is a modified oil re-refining process. Itutilises an advanced form of catalytic hydrogenation, and is based upon standardoil and petrochemical industry packed bed hydrogenation processes, together withpatented intellectual property that prevent the deactivation of the catalyst.This means that a variety of Persistent Organics Pollutants or POP's can betreated in an environmentally safe, zero-emission process with no direct airemissions. As previously announced, there was no revenue generated during the period, whichproduced an operating loss of £682,893, and the Company had net assets of£10,123,406, including cash of £2,210,150. On 31 August 2005, Hydrodec announced the completion of the acquisition of OilTreatment Services Pty Ltd ("OTS"), its joint venture partner and the EPAlicensed site located in Young, New South Wales, Australia. It is Hydrodec'sintention to create a world-class centre of excellence at this location toshowcase its advanced technology for transformer oil regeneration, PCB treatmentand the re-refining of specialty oils. The OTS business includes two certified transformer oil analysis laboratories,one based at the Young site, a mobile oil regeneration plant, mobile transformerretro-fill plant, customer management software and systems, a web basedtransformer and oil monitoring and reporting system, product distributionmechanisms and an EPA licensed site with offices and oil storage facilitieswhere the existing 3,000 litres per day Hydrodec plant operates. The previouslyannounced development of the 20,000 litre a day plant continues and, whenoperational, this plant will be based in Young. The combined business consolidates Hydrodec as a premium quality transformer oilsupplier and establishes it as a sustainable commodity and service provider. Theacquisition also provides Hydrodec with a location to further develop and expandits Persistent Organic Pollutants division. As a result of this short-term concentration in Australia, there is norequirement for a permanent presence in London and therefore the roles of ChrisNash (CEO), and Philip Newell (FD), are no longer necessary and they have leftthe Company. The duties of the CEO are now being undertaken by Mark McNamara(Chief Operating Officer) who, with recently the appointed Brian Davies (GeneralManager), are responsible for the day-to-day activities at Young. RodgerSargent, a Non-executive Director is the new Finance Director, a role he haspreviously filled. Environmental issues continue to be key factors in the global political andeconomic arenas. Recent natural disasters and oil price fluctuations illustratethe commercial potential that Hydrodec's technology has. The Board continues toinvestigate new geographic and feedstock marketplaces and testing on behalf ofmajor potential clients continues. With its new base, Hydrodec is ideally placedto utilise its technology and I look to the future with great optimism. John GunnNon-executive Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT For the 6 months ended 30 June 2005 Note (Unaudited) (Unaudited) 6 months ended 6 months ended 30 June 31 December 2005 2004 £ £ Turnover - - Cost of sales - - Gross profit - - Administrative expenses (682,893) (39,956) Operating loss (682,893) (39,956) Share of loss of associate (54,934) - Interest receivable 31,992 33,092 Loss on ordinary activities before and after taxation (705,835) (6,864) Loss retained for the period (705,835) (6,864) Loss per shareBasic 4 (0.45)p (0.01)p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Unaudited) (Unaudited) 6 months 6 months ended ended 30 June 31 December 2005 2004 £ £ Loss for the financial period (705,835) (6,864)Currency differences (14,999) 3,555 Total recognised losses (720,834) (3,309) CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 Note (Unaudited) (Unaudited) As at As at 30 June 31 December 2004 2005 £ £Fixed assetsIntangible 6 7,669,353 7,866,003Tangible assets 378,901 293,322 8,048,254 8,159,325 Current assetsDebtors 136,804 18,882Cash at bank and in hand 2,210,150 3,014,263 2,346,954 3,033,145 Creditors: amounts falling due within one year (271,802) (295,796) Net current assets 2,075,152 2,737,349 Total assets less current liabilities 10,123,406 10,896,674 Capital and reservesCalled up share capital 782,500 782,500Share premium account 10,065,050 10,117,483Profit and loss account (724,144) (3,309) Equity shareholders' funds 7 10,123,406 10,896,674 CASH FLOW STATEMENT For the 6 months ended 30 June 2005 Note (Unaudited) (Unaudited) 6 months 6 months ended ended 30 June 31 December 2005 2004 £ £ Net cash (outflow)/inflow from operating activities 8 (652,336) 202,312 Returns on investments and servicing of financeInterest received 340 33,092 Taxation - - Capital expenditure and financial investmentPayments to acquire tangible fixed assets (99,683) -Purchase of investment - (721,124)Repayment of loan on acquisition - (500,000) (99,683) (1,221,124) FinancingIssue of new shares - 4,309,998Share issue costs (52,434) (310,015) (52,434) 3,999,983 (Decrease)/increase in cash 9 (804,113) 3,014,263 NOTES TO THE INTERIM REPORT For the 6 months ended 30 June 2005 1. Basis of Preparation The interim financial statements have been prepared in accordance withapplicable accounting standards and under the historical cost convention. Theprincipal accounting policies of the Group have remained unchanged from thoseset out in the Group's 31 December 2004 annual report and financial statements.The interim financial statements have not been reviewed by the Group's auditors. 2. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefigures for the period ended 31 December 2004 have been extracted from thestatutory financial statements which have been filed with the Registrar ofCompanies. The auditors' report on those financial statements was unqualifiedand did not contain a statement under Section 237(2) of the Companies Act 1985. 3. TAXATION There is no tax charge for the interim period. 4. EARNINGS PER SHARE 6 months ended 6 months ended 30 June 2005 31 December 2004 £ £ Loss for the financial period 705,835 6,864 Number Number of shares of shares Weighted average number of shares in issue 156,600,000 79,468,173 For basic earnings per share (0.45)p (0.01)p 5. DIVIDENDS No dividends have been paid or proposed for the period. 6. INTANGIBLE FIXED ASSETS (Unaudited) £CostAt 1 January 2005 and 30 June 2005 7,866,003 AmortisationAt 1 January 2005 -Charge for the period 196,650 At 30 June 2005 196,650 Net book valueAt 30 June 2005 7,669,353 At 31 December 2004 7,866,003 The goodwill arises on the acquisition of Hydrodec Development Corporation PtyLimited and is being amortised over its estimated useful life of 20 years. 7. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS (Unaudited) £ Loss for the financial period (705,835)Share issue costs (52,434)Currency transaction differences (14,999) (773,268)Opening shareholders' funds 10,896,674Closing shareholders' funds 10,123,406 8. NET CASH(OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (Unaudited) (Unaudited) 6 months ended 6 months ended 30 June 31 December 2005 2004 £ £ Operating loss (682,893) (39,956)Depreciation 14,013 -Amortisation of goodwill 196,650 -Increase in debtors (86,270) (10,199)(Decrease)/increase in creditors (93,836) 252,467 Net cash (outflow)/inflow from operating activities (652,336) 202,312 9. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Unaudited) (Unaudited) 6 months 6 months ended ended 30 June 31 December 2005 2004 £ £ (Decrease)/increase in cash in the period (804,113) 3,014,263Net funds at the beginning of the period 3,014,263 - Net funds at the end of the period 2,210,150 3,014,263 10. POST BALANCE SHEET EVENTS On 31 August 2005 it was announced the acquisition of Oil Treatment Services PtyLtd ("OTS"), Hydrodec's joint venture partner and the EPA licensed site inYoung, New South Wales, Australia was completed. The OTS business includes two certified transformer oil analysis laboratories,one based at the Young site, a mobile oil regeneration plant, mobile transformerretro-fill plant, customer management software and systems, a web basedtransformer and oil monitoring and reporting system, product distributionmechanisms and an EPA licensed site with offices and oil storage facilitieswhere the existing 3,000 litres per day Hydrodec plant operates. The consideration payable for OTS was satisfied by the issue of 6,495,402 newordinary shares ("Ordinary Shares") at an issue price of 22.2p per share. Acash sum may also be payable depending on the working capital position of OTS asat the completion date. In addition, 1,004,598 new Ordinary Shares were issued,at an issue price of 22.2p per share, to various third parties in satisfactionof sums owed by OTS to such third parties. As a result of this short-term concentration in Australia, there is norequirement for a permanent presence in London and therefore the roles of ChrisNash (CEO), and Philip Newell (FD), are no longer necessary and their employmentand directorships with the Company ceased with immediate effect. The duties of the CEO are being undertaken by Mark McNamara (Chief OperatingOfficer) who, with the recently appointed Brian Davies (General Manager), areresponsible for the day-to-day activities at Young. Rodger Sargent, aNon-executive Director is the new Finance Director, a role he has previouslyfilled. This information is provided by RNS The company news service from the London Stock Exchange