31 Jul 2018 15:37
NATURE GROUP PLC
("Nature Group" or the "Company")
Posting of Annual Reports & Accounts
Nature Group PLC (the "Group") (AIM:NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, confirms that it has posted its Report and Accounts for the twelve months ended 31 December 2017 (the "Annual Report") to shareholders. The Annual Report can be downloaded from, Nature's website: www.ngrp.com.
Printed copies of the Annual Report can also be requested.
The adjourned Annual General Meeting in relation to Resolution 1 (to receive and consider the report of directors and the financial statements of teh Company) will be held at Nature Group, Torontostraat 20, 3197KN Rotterdam-Botlek, The Netherlands at 5pm CET on Tuesday 31st of July.
For further information:
Nature Group PLC
Andreas Drenthen, CEO Tel: + 31 653261484
Berend van Straten, Chairman Tel: + 31 626805605
Cenkos Securities plc
Neil McDonald Tel: +44 (0)131 220 9771 / +44 (0)207 397 1953
Beth McKiernan Tel: +44 (0)131 220 9778 / +44 (0)207 397 1950
Pete Lynch Tel: +44 (0)131 220 9772
Nature Group is traded on the AIM market, (ticker: NGR). www.ngrp.com
Final Results for the Year ended 31 December 2017
Nature Group, (AIM: NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, announces its results for the year ended 31 December 2017.
2017 Financial Performance from Continuing Operations*
• Revenues decreased by 15% to £10.1 (2016: £11.9m)
• Underlying loss before tax decreased to -£1.9 (2016: -£2.5m)
• Underlying earnings per share ("EPS") of -2.6p (2016: -2.8p)
• Year-end cash balances increased by £0.04m
Chairman's statement
The year 2017 was supposed to be the turn-around year for Nature. Overhead costs had been reduced and the Company was well positioned with maritime operations in Rotterdam and Houston and Oil & Gas activities in both Aberdeen and Stavanger.
Unfortunately, the cash generated from the sale of our Gibraltar assets in January was insufficient to provide funds to invest in growth and cost saving opportunities. To this was added delays in securing new contracts in the Oil and Gas business, particularly in the UK sector in the North Sea, and delay in shutting down our operations in Portugal. The combination of these events resulted in significant losses in the first half of 2017 and meant we failed to deliver on the Board's promise to return to profitability in 2017. The Board could not ignore the consequences of this, as part of a determined drive to reduce overheads, the CEO and CFO left the Group in July, the Amsterdam office was closed and the Oil & Gas Division was identified for divestment.
Andreas Drenthen was re-instated as CEO and Rene Verbruggen joined the board and brought a wealth of experience and focus. Andreas Drenthen's revived attention to the Rotterdam operations yielded further improvements in profitability - more revenue was made in Rotterdam in the last 3 Months of the year than in the previous 9 Months.
The decision to sell the Oil and Gas operations was a difficult decision as the Group over the years had invested significant funds in the business and had built a reputation for superior technology and operational excellence. Negotiations have been entered into with a prospective purchaser but at this point it would be premature to indicate when a sale will be completed. Should the sale of the division not be completed soon, the Board is considering closing down the Stavanger and Aberdeen operations and selling the assets of the division to interested prospective buyers.
The Maritime operations in Rotterdam are showing continued strong performance in the first 6 Months of 2018 and it is expected that this trend will continue. Our operations in Houston are picking up and through the cooperation with Ramky it is expected that the road to profitability should be reached in 2019. In Oman, plans are being made to build a waste water treatment facility in the port of Sohar.
The need to match our overhead with a reduced base of business operations is forcing us to look very carefully at how we can mitigate some of the costs associated with being an AIM listed Company without losing the benefits. Looking forward the Board is therefore considering to de-list the Company as soon as the sale of the Oil & Gas division has been completed. Following this, the Board is considering to sell the remaining components if a market conform price can be achieved. This, and the release of the funds that are being kept in escrow in 2019, may maximize shareholder value, which will be paid out as dividend to our respective shareholders.
The Board would like to express their appreciation to the Nature employees and its affiliates for their commitment and loyalty during these uncertain times. Our employees have been working with the Board to make the necessary changes in our goal to restore the profitability of the Group. I want to thank our many shareholders for their patience, perseverance and trust during the difficult times we have had. We look forward to maximizing shareholder value during the remaining Months of this year.
Berend van Straten
Chairman of the Board
31 July 2017
Executive directors' statement
2017 has been another challenging year for the Nature Group. The continuing downturn in the Oil & Gas sector had a significant impact on our Divisional and Group financial performance. Within our Oil & Gas Division the number of offshore operations and projects declined as many offshore drilling operations were cancelled. This slowdown also had a knock on effect on the maritime operations in Houston which suffered from the revenue segment derived from offshore supply vessels operating in the Gulf.
The proceeds from the sale of our redundant site in Gibraltar at the beginning of 2017 was very welcome although this still did not give the Group the headroom it needed to adequately finance its operations. Frustratingly, a residual value of £694,500 is held in escrow until the beginning of 2019.
The board made the decision to generate additional funds from the identification of selective divestments. Nature's partner in the Middle East, Ramky, was looking to expand its activities in the USA. Having identified our Houston operation as fitting their objectives this led to Ramky acquiring a 50% shareholding in the second half of 2017.
The overall loss in revenues was significant, and although there are some signs of recovery in the oil price, this hasn't resulted in more drilling operations until the second quarter of 2018 and as such the outlook remains poor. The maritime operation in Houston is showing signs of revival, as the team has done an outstanding job by getting more maritime contracts than ever before. Volumes are rising and outlook for the coming year is promising. In Rotterdam volumes of vessel-and cargo-related liquid waste were stable. In 2017 we started collecting Annex V waste (solid/galley waste), as a new service to our customers, as there was only one company servicing the Rotterdam port. We started collecting with one barge and have managed to get more and more contracts to collect Annex V waste and in 2018 will start using a second, chartered, barge. Despite the start-up costs we managed to break-even this new service in 2017 and foresee a further growth and contribution to the bottom-line in 2018.
The operational and management changes we have made in the Maritime Division, particularly in Rotterdam, are looking encouraging and giving us optimism for the future of these activities. As a service based operation for waste management we see a more stable and predictable revenue flow for this business. This contrasts with the volatility we see in the contracting model for Oil and Gas revenues. As the Group cannot sustain the continued losses in this sector the division needs to be divested at the earliest opportunity. Once this divestment has succeeded there only remains one operation in Rotterdam, next to the 50% shareholding in the Houston operation and further strategic options need to be taken.
Andreas Drenthen
CEO
31 July 2017
Consolidated statement of comprehensive income
Year ended 31 December 2017
Continuing operations | Notes | Audited year to 2017
£ | Audited year to 2016 restated (see note 1) £ |
Revenue | 1,4 | 10,127,196 | 11,990,529 |
Cost of sales |
| (7,283,070) | (7,332,730) |
Operating profit |
| 2,844,126 | 4,657,799 |
Other income/(expense) |
| - | (203,961) |
Share based payments | 15 | 66,382 | 3,699 |
Administrative costs | 24 | (3,925,274) | (5,814,627) |
Depreciation and amortisation |
| (512,362) | (1,141,913) |
Finance costs |
| (109,090) | (35,650) |
Share of net (loss)/profit of associates and joint ventures accounted for using the equity method |
| (263,197) | - |
Loss before taxation | 2 | (1,899,415) | (2,534,653) |
Income tax (expense)/gain | 3 | (164,037) | 285,013 |
Loss for the year from continuing operations |
| (2,063,452) | (2,249,640) |
Discontinued operations |
|
|
|
Loss after tax for the year from discontinued operations | 17 | (1,289,722) | (1,345,163) |
Loss for the year |
| (3,353,174) | (3,594,803) |
Attributable to: |
|
|
|
Equity holders of the parent: |
|
|
|
Loss for the year from continuing operations |
| (2,063,452) | (2,202,273) |
Loss for the year from discontinued operations |
| (1,231,170) | (1,212,976) |
Loss for the year attributable to equity holders of the parent |
| (3,294,622) | (3,415,249) |
Non-controlling interest: |
|
|
|
Loss for the year from continuing operations |
| - | (47,367) |
Loss for the year from discontinued operations |
| (58,552) | (132,187) |
Loss for the period attributable to owners of non-controlling interest |
| (58,552) | (179,554) |
Loss for the year |
| (3,353,174) | (3,594,803) |
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in subsequent periods (net of tax): |
|
|
|
Exchange differences on translation of foreign operations |
| 217,539 | 1,231,875 |
|
|
|
|
Total comprehensive loss for the year, net of tax |
| (3,135,635) | (2,362,928) |
|
|
|
|
Attributable to: |
|
|
|
Equity holders of the parent |
| (3,077,083) | (2,183,374) |
Non-controlling interest |
| (58,552) | (179,554) |
|
| (3,135,635) | (2,362,928) |
Earnings per share (pence) |
|
|
|
From continuing operations: |
|
|
|
Basic | 16 | (2.603) | (2.778) |
From discontinued operations: |
|
|
|
Basic | 16 | (1.553) | (1.530) |
|
|
|
|
Loss after tax, before share based payments |
| (3,361,004) | (3,418,948) |
|
|
|
|
Continued operations excluding share based payments | 16 | (2.603) | (2.778) |
The notes on pages 18 to 45 are an integral part of these consolidated financial statements.
Consolidated balance sheet
At 31 December 2017
Assets | Notes | Audited as at 2017
£ | Audited as at 2016 restated (see note 1) £ |
Non-current assets |
|
|
|
Plant, vessels and equipment | 5 | 4,262,394 | 8,341,330 |
Goodwill | 6 | - | 1,238,137 |
Other intangible assets | 6 | 17,113 | 17,680 |
Investment in associated company | 7 | 940,136 | 308,446 |
Deferred tax assets | 3 | - | 478,508 |
Long term receivables | 8 | 1,287,488 | - |
Total non-current assets |
| 6,507,131 | 10,384,101 |
Current assets |
|
|
|
Insurance recoveries on 3rd party claims | 20 | 1,651,572 | 1,593,352 |
Corporate taxes |
| - | 86,978 |
Stocks and work in progress |
| 10,655 | 79,234 |
Trade and other receivables | 10 | 2,205,859 | 3,369,337 |
Cash and cash equivalents | 19 | 314,569 | 383,642 |
|
| 4,182,655 | 5,512,543 |
Assets classified as held for sale | 4,18 | 1,411,044 | 6,387,737 |
Total assets |
| 12,100,830 | 22,284,381 |
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade and other payables | 11 | (1,386,159) | (6,678,378) |
Corporate taxes |
| (23,975) | - |
Bank loans and overdrafts | 12,19 | (777,617) | (1,186,456) |
Provision for 3rd party claims | 20 | (1,651,572) | (1,593,352) |
|
| (3,839,323) | (9,458,186) |
Liabilities directly associated with assets classified as held for sale | 4,18 | (2,981,863) | (5,608,227) |
|
| (6,821,186) | (15,066,413) |
Non-current liabilities |
|
|
|
Deferred tax liability | 3 | (361,080) | (386,907) |
Provisions | 20 | (333,556) | - |
Term loans | 13 | (1,847,274) | (1,220,277) |
|
| (2,541,910) | (1,607,184) |
Net assets |
| 2,737,734 | 5,610,784 |
Equity |
|
|
|
Called up share capital | 14 | 158,561 | 158,561 |
Share premium account | 14 | 21,953,617 | 21,953,617 |
Share option reserve | 15 | 40,665 | 107,047 |
Capital reserve |
| 2,866,130 | 2,866,130 |
Foreign currency translation reserve |
| 431,566 | 214,027 |
Profit and loss account |
| (22,712,805) | (19,418,183) |
|
| 2,737,734 | 5,881,199 |
Amounts recognised directly in equity relating to assets classified as held for sale |
| - | - |
Equity attributable to owners of the Group |
| 2,737,734 | 5,881,199 |
Non-controlling interest | 9 | - | (270,415) |
Total equity attributable to equity shareholders |
| 2,737,734 | 5,610,784 |
Approved by the Board on 31 July 2018
Consolidated cash flow statement
Year ended 31 December 2017
| Audited year to 2017 | Audited year to 2016 restated (see note 1) |
Reconciliation of operating profit to net cash flow from operating activities | £ | £ |
|
|
|
Loss for the year before taxation | (2,800,715) | (3,891,015) |
|
|
|
Adjustments for: |
|
|
Depreciation and amortisation | 943,843 | 1,150,457 |
Decrease in stock | 76,766 | - |
Decrease in debtors | 1,594,600 | 1,798,041 |
(Decrease)/increase in creditors | (2,642,963) | 1,657,936 |
Foreign exchange differences | 387,642 | 1,200,254 |
Decrease in reserves due to share based payments | - | (3,699) |
Impairment of fixed assets | 1,693,263 | 120,066 |
Other non-cash movements | (512,919) | - |
Net cash flow from operating activities | (1,260,483) | 2,032,040 |
Investing activities: |
|
|
Acquisition of tangible assets | (374,218) | (2,017,372) |
Disposal of tangible assets | 2,483,050 | 48,456 |
Acquisition of intangible assets | - | (166,478) |
Disposal of intangible assets | 1,121,034 |
|
Financing activities: |
|
|
Repayments of (bank) borrowings | (1,931,495) | (336,884) |
Proceeds from investments by non-controlling interest | - | - |
Increase / (Decrease) in cash balances | 37,888 | (440,238) |
|
|
|
Analysis of cash and cash equivalents during the year: |
|
|
Balance at start of year | (693,649) | (253,411) |
Effect of exchange differences opening balance cash and cash equivalents | (23,715) |
|
Increase/(Decrease) in cash and cash equivalents | 37,888 | (440,238) |
Balance at end of year | (679,476) | (693,649) |
The notes on pages 18 to 45 are an integral part of these consolidated financial statements.