26 Jun 2009 07:00
NATURE GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
Nature Group ("Nature" or the "Group"), a provider of port reception facilities and waste water treatment solutions for the oil, marine and process industries announces its preliminary unaudited results for the year ended 31 December 2008.
Financial highlights
Revenue up by 50% to £3,379,086 (2007: £2,254,234)
Profit before tax up by 30% to £512,604 (2007: £391,984)
Earnings per share up 36% to 1.754p per share (2007: 1.29p)
Cash flow from operations increased to £479,250 (2007: £265,044)
Net cash balances of £614,807 (2007: £268,375)
Operational highlights
Strong progress in existing operations
Opportunities for regional and international expansion
Acquisition on 22 December 2008 of the 50% of Gibraltar port reception facilities not already owned
Move into operating profit by Norway offshore rig based treatment operations
Strengthened operational management
Richard Eldridge, Chief Executive, Nature Group plc, commented:
"Whilst our goal, year on year, is to at least maintain the current rate of revenue growth, 2009 will prove to be a year of consolidation, although excitingly the 100% integration of our Gibraltar operation will increase turnover substantially, with a strong boost to earnings. Overall overheads are anticipated to increase more slowly than 2008, subject to potential additional investment in new territories during the year. However a continued build of senior technical, operational and financial staff will be needed. The Group has available a number of growth opportunities and our investment focus will be on those with the strongest commercial potential."
"Trading for the first five months of the current financial year has been satisfactorily in line with our expectations despite growth of revenues during early 2009 in Gibraltar being adversely affected by storms and port congestion. The Board remains confident for the outlook for 2009."
For further information please visit www.investnature.co.uk or contact:
| Richard Eldridge | Nature Group PLC | Tel: 018 4153 3611 |
| Tony Rawlinson / Aaron Smyth | Dowgate Capital Advisers Ltd | Tel: 020 7492 4777 |
| Philip Dumas / Spencer Moulton | Dowgate Capital Stockbrokers Ltd | Tel: 020 7492 4799 |
Chairman's Statement
Introduction
2008 was a year of significant growth for the Group. The substantial increase in revenue and profit was driven by an increase in recurring core earnings within the Group. The acquisition of the remaining interest in the Gibraltar operations, not already owned by the Group, will provide further impetus to growth in 2009.
Despite the recent Global slowdown, the outlook for the Group remains positive as it generates increased revenues from existing operations and installations in the field, together with new contracts and joint ventures both in existing markets and as importantly in new markets and locations. Our growth prospects and financial position are underpinned by strong cash generation as demonstrated by net cash balances at the year end.
Financial Performance
The revenue of each division of the Group increased satisfactorily in the year ended 31 December 2008, resulting in Group revenue increasing to £3.38 million (2007: £2.25 million). On the basis of full consolidation of port waste operations, the 2008 revenue would have reflected a total of £4.4 million.
Operating profit margins (before plant depreciation) were maintained in the region of 45% to 50%, while the increase in administrative costs reflects the Group's investment in staff in both Gibraltar and Norway, and costs of marketing to a number of locations in the Mediterranean and Middle East, together with the North Sea region. The increase in depreciation reflects the investment in installations and commencement of operations of the offshore treatment unit in Norway.
As a result, Group net profit after tax was £454,346 (2007: £312,111), reflecting continued progress in establishing a core level of recurring earnings within the Group. Cash flow from wholly owned operations increased to £479,250 from £265,044 in 2007.
During the year, the Group acquired the 50% in Slop Oil Reception and Treatment Ltd ("SORT") it did not already own for a consideration of 14,040,486 new shares. The acquisition will immediately provide a beneficial increment in earnings for 2009.
Basic earnings per share for 2008 increased by 35% to 1.754p compared with 1.291p in the previous year.
As at 31 December 2008, the Group had net cash balances of £614,807, built through a combination of increased operating profits and the inclusion of £157,292 from SORT.
Port Reception Facilities
In Gibraltar the enlarged team successfully grew the tonnage of oil waste handled by 69% to 58,089 tonnes, despite the disruption caused by completion of our refurbishment and expansion programme, including new bund walling and the installation of a new steam generating boiler powered by our own recovered oil. The Gibraltar "storm of the century" which overran the outer jetties of the Port and damaged our facility in October 2008, also shut down our waste water treatment plant for some weeks. Our principal operating barge over recent years, the "Humber Dawn", successfully underwent its compulsory 5 year Special Survey towards the year end. The growth achieved by the successful teamwork of our Gibraltar staff deserves our thanks for their efforts and commitment to the performance of a 24 hour port service and reception capability. To facilitate the further growth of our operations in Gibraltar and enable increased interface to other regional locations providing waste input to Gibraltar, we recently acquired a fully refurbished, double hulled, 1000 tonne coastal tanker now renamed the "Humber Mist", a photograph of which will be included in the printed annual accounts.
In Norway, SAR Treatment ("SART"), our 40% owned associate company at the Norsea Port Base in Tananger, generated direct revenues to the Group from both a new bio unit supplied and rented from NTS to increase treatment capacity, and from continued technical support. This new unit enabled the SART business to remain open when the original bio treatment equipment suffered from a build up of sludge in 2008, requiring it to be shut down and cleaned. The loss of anticipated volume increases at SART in 2008 was inevitable. SART itself, servicing oil industry waste waters, did not achieve a profit in 2008 due partly to pricing constraints within the oil industry waste delivery chain, and partly to operational problems. However, current performance of SART is progressing well, due to greater capacity and new management, with a significant increase in its throughput and contribution of earnings to the Group projected for 2009.
Offshore Treatment Operations
The offshore treatment unit, wholly-owned by the Group's Norwegian subsidiary Northern Treatment, achieved useful operational and commercial success in its 4 months trial on the Transocean Arctic rig, and is continuing on a series of campaigns into 2009. The company itself made an operating profit after depreciation - a creditable performance in its first full operating year. An excellent offshore operating team has been created and is a credit to the Group. Our thanks to our General Manager and his team.
Onshore Treatment Operations
The success in developing and installing specific water treatment units demonstrating solutions to client problems both onshore and offshore continued to generate increased revenue. The bio treatment units installed in Denmark for Grundfos provide regular income to the Group for process chemicals and technical support.
The containerised treatment unit ordered in July 2008 by Halliburton for an onshore site in Kazakhstan successfully completed it's UK Final Acceptance Test in January 2009 and was dispatched to Kazakhstan 10 days later. A revenue and earnings contribution is included in 2008 for this project, with a balancing contribution for 2009. The commissioning of this unit requested by Halliburton for August 2009 provides the opportunity for discussion on possible further projects in the Asia region.
Tank Monitoring and Telemetry
Our new personnel in Norway in 2008 provided access to new business opportunities including a tank monitoring contract with one of the largest international oil and gas service companies involving approximately 150 tanks in 6 different locations in Norway. This contract was completed in 2008, and has led to further enquiries for additional work in its sector.
Group Strategy
Our strategy is to expand the Nature Group based on the skills and operational performance proven in Gibraltar and Norway, with deployment on a wider geographical basis.
Dividend Policy
In the letter to shareholders convening the Extraordinary General Meeting in March 2009, the Board announced its intention to initiate a dividend policy. Performance permitting, it is still our intention to report further on this matter when our 2009 half-yearly results are announced towards the end of September this year.
Outlook
We are pleased with the progress of the Group in achieving its objectives over the past year, particularly in a changing and challenging environment. Our change of name to Nature Group PLC in March this year, followed by the adoption of the name Nature Port Facilities in Gibraltar, reflect our belief in the Group's future. Operations in Gibraltar and Norway are progressing well, although the development of further Norwegian opportunities may require strategic partnering in that region in order to meet growing demand in the oil industry for our waste water treatment solutions. I look forward to reporting on the further development of our port operations in the near future.
Finally, a thank you to all Group staff for their contribution during the past year.
Richard Eldridge
Chairman
25 June 2008
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2008
| Unaudited Year to 31/12/08 £ | Audited Year to 31/12/07 £ | |
| Turnover | ||
| Continuing operations | 1,715,736 | 1,030,888 |
| Joint ventures | 1,663,350 | 1,223,346 |
| 3,379,086 | 2,254,234 | |
| Operating Costs | ||
| Continuing operations | (958,814) | (517,375) |
| Joint ventures | (909,852) | (616,019) |
| Operating Profit | 1,510,420 | 1,120,840 |
| Other income | 13,294 | 18,962 |
| Administrative Costs | (649,049) | (559,307) |
| Depreciation and goodwill amortisation | (339,773) | (164,015) |
| Finance costs | (22,288) | (24,496) |
| Profit on ordinary activities before taxation | 512,604 | 391,984 |
| Taxation on profit on ordinary activities | (58,258) | (79,873) |
| Surplus for the financial period | 454,346 | 312,111 |
| Basic earnings per share | 1.754p | 1.291p |
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2008
| Unaudited Year to 31/12/08 £ | Audited Year to 31/12/07 £ | |
| Non Current Assets | ||
| Intangible assets | 561,294 | 152,172 |
| Tangible assets | 3,413,366 | 678,762 |
| Investments | 163,798 | 1,954,553 |
| Deferred tax | 31,366 | 85,047 |
| 4,169,824 | 2,870,534 | |
| Current assets | ||
| Stock | 91,684 | 0 |
| Debtors | 872,545 | 305,780 |
| Balance at Bank | 614,807 | 268,375 |
| Creditors: Amounts falling due within one year | (838,342) | (323,304) |
| Net current assets | 740,694 | 250,851 |
| Creditors: Amounts falling due after one year | (216,838) | (227,085) |
| Net assets | 4,693,680 | 2,894,300 |
| Capital and Reserves | ||
| Called up share capital | 77,720 | 49,239 |
| Share premium | 3,233,799 | 1,978,636 |
| Capital reserve | 2,925,520 | 2,864,130 |
| Profit and loss account | (1,543,359) | (1,997,705) |
| Shareholder Funds | 4,693,680 | 2,894,300 |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2008
| Unaudited Year to 31/12/08 £ | Audited Year to 31/12/07 £ | |
| Net cash flow from operating activities: | ||
| Profit for the year | 512,604 | 391,984 |
| Depreciation | 139,639 | 9,539 |
| (Increase) in stock | (91,684) | 0 |
| (Increase) / Decrease in debtors | (566,765) | (74,548) |
| (Decrease) / Increase in creditors | 485,456 | (49,780) |
| (Decrease) / Increase in minority interests | 0 | (12,151) |
| 479,250 | 265,044 | |
| Investing activities: | ||
| Acquisition of intangible fixed assets | (14,492) | (9,111) |
| Acquisition of tangible fixed assets | (166,741) | (248,483) |
| Increase in investments | 0 | (238,697) |
| Financing activities: | ||
| Issuing of ordinary share capital | 48,415 | 287,720 |
| Increase in cash balances | 346,432 | 56,473 |
| Movement in cash balances: | ||
| Balance at bank at 1 January 2008 | 268,375 | 211,902 |
| Net cash inflow | 346,432 | 56,473 |
| Balance at bank at 31 December 2008 | 614,807 | 268,375 |
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
These unaudited results have been prepared on the basis of the accounting policies adopted in the accounts to 31 December 2008.
2. Earnings per share
The calculation of basic profit per share has been based on the profit for the year and the average 25,906,377 Ordinary Shares in issue throughout the period. The comparatives have been restated to reflect the consolidation in 2008 to be comparable.
3. AIM compliance committee
In accordance with AIM Rule 31 the Company is required to have in place sufficient procedures, resources and controls to enable its compliance with the AIM Rules; seek advice from its nominated adviser ("Nomad") regarding its compliance with the AIM Rules whenever appropriate and take that advice into account; provide the Company's Nomad with any information it requests in order for the Nomad to carry out its responsibilities under the AIM Rules for Companies and the AIM Rules for Nominated Advisers; ensure that each of the Company's directors accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and ensure that each director discloses without delay all information which the Company needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that information is known to the director or could with reasonable diligence be ascertained by the director.
In order to ensure that these obligations are being discharged, the Board has established a committee of the Board (the "AIM Committee"), chaired by Richard Eldridge, a director of the Company.
4. Distribution of the Annual Report
A copy of the Annual Report and Financial Statements will be sent to all shareholders on or around 8 July 2009 and its provision will be announced. Further copies will be available to the public from the Company Secretary at the Company's registered address at Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW or from the Group website, www.investnature.co.uk.