4 Jun 2008 07:00
The Greenhouse Fund Limited
("Greenhouse" or "the Fund")
Preliminary Announcement of Unaudited Results for the year ended 31 December 2007
The Greenhouse Fund Limited (AIM:GHF), the Jersey domiciled closed-ended investment company, today reports its unaudited results for the year ended 31 December 2007.
Highlights:
Additional investment, post period end, brings Greenhouse's stake in Molectra to 64.3 per cent.
Post period end, Molectra announces first commercial contract
Significant additional pipeline of potential sales at Molectra
Net Asset Value of 9.32 p per share
Cash of £6.03m
Roger Maddock, Non-executive Director commented, "I am delighted that Molectra has achieved commercial production since the period end, which is a key step for the company. It validates the technology and can act as a stepping-stone to further commercial success. Development of the process and technology will continue, but Molectra has now made the difficult and significant transition from an award winning technology with potential to a real commercial entity.
The continuing global move towards more stringent green regulation and companies' desire to obtain green credentials underwrite the commercial progress made by Molectra. The recent contract win and a very encouraging pipeline of potential future orders, from differing sectors and geographies, give great cause for optimism. As a result, we are actively considering additional funding routes to further capitalise upon Molectra's potential that I hope will lead to significant shareholder value in the future."
For further information please contact:
| Greenhouse Advisor Limited |
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| Rodger Sargent | +44 20 7355 7660 |
| Paul Gazzard | +44 20 7355 7660 |
|
|
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| Matrix Corporate Capital LLP |
|
| Stephen Mischler | +44 20 7925 3393 |
| Tim Graham | +44 20 7925 7852 |
| Threadneedle Communications Ltd. |
|
| Graham Herring | +44 20 7936 9605 |
CHAIRMAN'S STATEMENT
These unaudited results for The Greenhouse Fund Limited ("Greenhouse") cover the year to 31 December 2007. Greenhouse is a Jersey domiciled closed-ended investment company, established to invest principally in sustainable environmental technologies to create a portfolio of investment holdings in the Environmental Sector.
Greenhouse has, to date, made a number of investments in Molectra Australia Pty Ltd, the Australian based business that re-cycles and recovers materials including crumb rubber, oil and carbon from used vehicle tyres and has also acquired five technology sub-licences and certain intellectual property assets from Virotec International Ltd.
Financial Performance
As at 31 December 2007, Greenhouse had net assets of £14.47m (2006: £13.81m), including cash of £6.03m (2006: £8.17m) and investments of £7.64m (2006: £5.66m). The loss for the period was £0.7m (2006: £0.3m) and the period end Net Asset Value was 9.3p per share (2006: 8.9p). The loss increased due to additional due diligence costs, largely on uncompleted transactions, compared to the previous period.
Portfolio Update
Molectra Australia Pty Ltd ("Molectra")
Molectra has developed a sustainable process that re-cycles and recovers materials including crumb rubber, oil and carbon from used vehicle tyres. The technology has been developed over the last 10 years and has won many international awards and prizes during this time, including the 2007 DaimlerChrysler Australian Environmental Research Award.
In March 2007, Greenhouse provided additional funding of £1,200,000 by way of a further convertible loan note. In July 2007, Greenhouse converted both this loan note and another convertible loan note of £750,000, following which it held 57.5 per cent of Molectra. Accordingly, Molectra became a subsidiary and its results have been consolidated into the Fund's results for the first time.
In addition to these investments, on 2 August 2007, Greenhouse agreed to provide Molectra with a drawdown facility of up to AUD$4,500,000 (£1,888,000).
Greenhouse's investments have enabled Molectra's pilot plant to be scaled up so that it now has the capacity to process up to 250,000 tyres per year and has provided the infrastructure required to enable the implementation of the process on a larger scale.
On 15 April 2008, following the period covered by these accounts, Greenhouse announced that it had converted all outstanding loans that it had provided to Molectra into ordinary shares of Molectra. This included the conversion of AUD$1,700,000 (£795,000), the amount drawn down by Molectra under the AUD$4,500,000 loan facility.
As a result, following this conversion, Greenhouse's stake in Molectra rose to 64.3 per cent.
Also following the period covered by these accounts, the Board was pleased to see commercial production commencing at Molectra's production facility in Brisbane, Australia and was delighted that the first commercial shipment of anti-cast strips, made from recycled rebounded crumb rubber, was delivered to the HorseFabulous Products & Equipment company for distribution across Australasia. These anti-cast strips weigh about 4kg each and are produced for the equine market to protect horses in their stables. They are often a requirement under equine insurance contracts. The shipment is pursuant to the contract win, announced on 10 March 2008, which should take Molectra to breakeven.
A number of other contracts are at various stages of negotiation. Any contract wins may require additional capital expenditure to meet demand, so a number of funding options are currently being considered.
Other Investments
On 29 June 2006 Greenhouse acquired five Bauxsol technology sub-licences and certain intellectual property assets from Virotec International Ltd. Greenhouse is currently considering the strategic options available to maximise shareholder value including the possible disposal of the Bauxsol technology sub-licences.
Cash
Retained cash and equivalents was £6.03m at 31 December 2007.
The Future
We are delighted that Molectra has achieved commercial production since the period end, which is a key step for the company. It validates the technology and can act as a stepping-stone to further commercial success. Development of the process and technology will continue, but Molectra has now made the difficult and significant transition from a company with an award winning technology with potential to a real commercial entity.
The continuing global move towards more stringent green regulation and companies' desire to obtain green credentials underwrite the commercial progress made by Molectra. The recent contract win and a very encouraging pipeline of potential future orders, from differing sectors and geographies, give great cause for optimism. As a result, we are actively considering additional funding routes to further capitalise upon Molectra's potential that I hope will lead to the creation of significant shareholder value in the future.
Roger Maddock
Non-Executive Director
The Greenhouse Fund Limited
THE GREENHOUSE FUND LIMITED
UNAUDITED SUMMARISED CONSOLIDATED INCOME STATEMENT
For the year ended 31 DECEMBER 2007
| Year ended 31 December | Period ended 31 December | ||
| Note | 2007 | 2006 | |
| £ | £ | ||
| Revenue | |||
| Deposit interest income | 364,607 | 372,948 | |
| Bank interest income | 15,874 | 14,110 | |
| Other income | 12,704 | - | |
| Total revenue | 393,185 | 387,058 | |
| Operating expenses | |||
| Management fees | (196,000) | (190,093) | |
| Other operating expenses | (1,132,602) | (375,042) | |
| Amortisation of intangible assets | (388,982) | (126,738) | |
| Depreciation of property, plant and equipment | (57,990) | - | |
| Total operating expenses | (1,775,574) | (691,873) | |
| Gains on re-measurement of investment loans carried at fair value through profit and loss | 658,436 | - | |
| Net loss for the year | (723,953) | (304,815) | |
|
| |||
| Attributable to: | |||
| Equity holders of the company | (474,840) | (304,815) | |
| Minority interest | (249,113) | - | |
| (723,953) | (304,815) | ||
| Basic and diluted loss per share (pence) | (0.31) | (0.22) | |
All transactions arise from continuing operations.
THE GREENHOUSE FUND LIMITED
UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2007
| Note | 2007 | 2006 | |
| £ | £ | ||
| Non-current assets | |||
| Intangible assets | 9,419,800 | 4,942,801 | |
| Property, plant and equipment | 588,400 | - | |
| Investments held at fair value through profit and loss | - | 718,874 | |
| 10,008,200 | 5,661,675 | ||
| Current assets | |||
| Other receivables | 222,975 | 38,181 | |
| Cash and cash equivalents | 6,031,970 | 8,169,101 | |
| 6,254,945 | 8,207,282 | ||
| Total assets | 16,263,145 | 13,868,957 | |
| Current liabilities | |||
| Trade and other payables | (623,015) | (56,795) | |
| (623,015) | (56,795) | ||
| Non-current liabilities | |||
| Deferred income tax liabilities | (1,168,979) | - | |
| Net assets | 14,471,151 | 13,812,162 | |
| Capital and reserves | |||
| Share capital | 14,116,977 | 14,116,977 | |
| Translation reserve | 15,219 | - | |
| Retained earnings | (779,655) | (304,815) | |
| Minority interests | 1,118,610 | - | |
| Shareholders' funds | 14,471,151 | 13,812,162 | |
| Net asset value per Ordinary share (pence) | 9.32 | 8.90 | |
THE GREENHOUSE FUND LIMITED
UNAUDITED SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 DECEMBER 2007
| 2007 | 2006 | ||
| £ | £ | ||
| Cash inflow from operating activities | |||
| Net loss for period the year | (723,953) | (304,815) | |
| Amortisation | 388,982 | 126,738 | |
| Depreciation | 57,990 | - | |
| Non-cash movement: gains on re-measurement of investment loans carried at fair value through profit and loss | (658,436) | - | |
| Decrease/(Increase) in other receivables | 9,897 | (38,181) | |
| Increase in other payables | 511,570 | 56,795 | |
| Net cash outflow from operating activities | (413,950) | (159,463) | |
| Cash flow from investing activities | |||
| Purchase of property, plant and equipment | (261,270) | - | |
| Purchase of unlisted investments | - | (718,873) | |
| Purchase of intangibles | (269,028) | (569,540) | |
| Purchase of subsidiary net of cash acquired | (1,105,192) | - | |
| Loans to subsidiary undertakings | (87,691) | - | |
| Net cash outflow from investing activities | (1,723,181) | (1,288,413) | |
| Cash flow from financing activities | |||
| Issue of Ordinary shares | - | 10,072,250 | |
| Sales commission and formation costs paid | - | (455,273) | |
| Net cash outflow from financial activities | - | 9,616,977 | |
| Net (decrease)/increase in cash and cash equivalents | (2,137,131) | 8,169,101 | |
| Cash and cash equivalents at 1 January 2007 | 8,169,101 | - | |
| Cash and cash equivalent at 31 December 2007 | 6,031,970 | 8,169,101 | |
THE GREENHOUSE FUND LIMITED
UNAUDITED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 DECEMBER 2007
| Share capital | Translation reserve | Retained earnings | Total equity attributable to equity holders | Minority Interests | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 13 December 2005 | - | - | - | - | - | - |
| Total recognised income and expenditure for the period (loss for the year) | - | - | (304,815) | (304,815) | - | (304,815) |
| Issue of ordinary shares | 14,572,250 | - | - | 14,572,250 | - | 14,572,250 |
| Less: admission costs | (455,273) | - | - | (455,273) | - | (455,273) |
| At 31 December 2006 | 14,116,977 | - | (304,815) | 13,812,162 | - | 13,812,162 |
| Net income recognised directly to equity (exchange difference on translation of foreign subsidiary) | - | 15,219 | - | 15,219 | - | 15,219 |
| Loss for the year | - | - | (474,840) | (474,840) | (249,113) | (723,953) |
| Total recognised income and expense for the year | - | 15,219 | (474,840) | (459,621) | (249,113) | (708,734) |
| Share of minority interests on acquisition | - | - | - | - | 1,367,723 | 1,367,723 |
| Balance at 31 December 2007 | 14,116,977 | 15,219 | (779,655) | 13,352,541 | 1,118,610 | 14,471,151 |
THE GREENHOUSE FUND LIMITED
NOTES TO THE UNAUDITED PRELIMINARY ANNOUNCEMENT
For the year ended 31 DECEMBER 2007
1 Earnings per share
The earnings per Ordinary share is based on the net loss for the year of £474,840 (2006: £304,815) and on 155,225,000 (2006: 137,341,906) weighted average Ordinary shares in issue during the year.
The diluted return per Ordinary share is based on the net loss for the year and 155,225,000 (2006: 137,341,906) shares.
2 Net asset value per share
The asset value per ordinary share is based on the net assets attributable to equity shareholders of £14,471,151 and on 155,225,000 ordinary shares in issue at the year end.
3 Publication of non-statutory accounts
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.
The summarised consolidated balance sheet at 31 December 2007 and the summarised consolidated income statement, summarised consolidated cash flow statement and associated notes for the year then ended have been extracted from the 2007 financial statements.
Those financial statements have not yet been delivered to the registrar of companies, nor have the auditors reported on them.