Last checked at 25 Nov 2011 07:00
25 November 2011
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Preliminary Results for the year ended 30 June 2011
The Parkmead Group plc, a new independent oil and gas company, is pleased to report its preliminary results for the year ended 30 June 2011.
HIGHLIGHTS
·; Proven oil and gas team recruited to deliver the Group's growth plans
·; Acquisition of a strategic stake in the Platypus gas field and Possum gas prospect offering near term drilling and significant upside potential
·; Joint venture created with DEO Petroleum plc, providing a strong and focused alliance for growth in the UK Central North Sea
·; Revenue increased 58% to £3.75 million (2010: £2.36 million)
·; Total Assets rose to £12.33 million at 30 June 2011 (£11.34 million at 30 June 2010)
·; Cash balances of £1.3 million as at 30 June 2011
·; The Group is now fully funded following the provision of a shareholder loan for £8 million
Parkmead's Executive Chairman, Tom Cross commented:
"The last year has been a period of strategic transformation for the Group. I am delighted to have become Parkmead's Executive Chairman and relish the opportunity to drive the business forward into an exciting new chapter of its development. 2011 has been a successful year and I believe we are now well positioned with the essential skills and resources to build a significant new independent oil and gas company.
I am pleased to report on Parkmead's improved operating capability for the year to 30 June 2011. The Group's Turnover and Gross Profit both increased substantially and Net Assets have also increased.
We remain focused on the pursuit of value-adding acquisitions, at both asset and corporate levels, in line with the Group's strategy. The Board is pleased to be able to report that our first asset transaction in our core target market was completed earlier this month. In addition, the Group is now fully funded for its forward programme of drilling activities and is well positioned to capitalise on further strategic opportunities."
For enquiries please contact:
The Parkmead Group plc | 01224 622200 |
Tom Cross, Executive Chairman | tom.cross@parkmeadgroup.com |
Donald MacKay, Chief Financial Officer | Donald.mackay@parkmeadgroup.com |
Kathryn Ramsay, Investor Relations | kathryn.ramsay@parkmeadgroup.com |
Charles Stanley Securities | 020 7149 6000 |
Nominated Adviser & Broker | |
Marc Milmo / Carl Holmes | |
College Hill | 020 7457 2020 |
Nick Elwes |
Chairman's Statement
As Parkmead embarks upon this important new phase I am pleased to share with you the Group's ambitious strategy for growth, our progress to date and our financial performance for the year to 30 June 2011. The Group's Turnover and Gross Profit both increased substantially, Net Assets have also increased and the Group remains well funded.
Vision and Strategy
The Parkmead Board is working to build a significant new independent oil and gas company, on an accelerated basis, using a proven business model. The Group will draw on the experience of its core oil and gas team, which has a strong technical and commercial background, to exploit exploration and production opportunities.
The Group will focus on both asset and corporate level transactions as it looks to add exploration and production assets to its portfolio. Parkmead's team has been tasked with identifying and completing transactions in the Group's currently preferred geographies of Europe and Africa.
The Parkmead team will utilise its detailed technical knowledge of certain proven and frontier areas to identify and acquire assets and participate in licensing rounds. In addition, it will seek to use its existing government and industry relationships to access ground floor acreage positions. A disciplined deal culture exists within the oil and gas team. This will ensure that the assets in which the Group invests will be in line with the Parkmead strategy and will serve towards maximising shareholder value. The core team has an excellent track record for commercial innovation and successful acquisitions.
During November 2011, the Group completed its first acquisition in the UK North Sea in line with its philosophy of acquiring known properties, in this case the Platypus gas field and Possum gas prospect. The Parkmead technical and commercial experts have a long history and detailed knowledge of these assets making these an ideal first acquisition for the Group.
Parkmead will look to form joint-ventures with companies where the Group can achieve aligned strategies in a particular asset or area of operation. These partnerships will focus on the key strengths of each company. During 2011, Parkmead formed a strategic alliance with DEO Petroleum plc covering specific areas in the Central North Sea. Parkmead and DEO will combine exploration and development skills to target acquisition opportunities and jointly participate in the UKCS 27th Licensing Round.
Results
The Group's revenue has increased significantly in 2011 to £3.7 million (2010: £2.4 million). The increase in turnover was driven by revenue generated from Aupec, highlighting Aupec's strength in its core fields of valuation, benchmarking and energy sector economics. Revenues generated to 30 June 2011 represent the Group's first full year of trading following the acquisition of Aupec by Parkmead in November 2009. Following the investment in a substantial new exploration and production team to deliver Parkmead's growth plans, the Group's operating loss for the year was £3.6 million (2010: £1.5 million). A profit from the realisation of available-for-sale financial assets of £0.11 million resulted from the sale of shares in Prevx Group Limited. The loss after tax was £3.6 million (2010: £1.5 million).
A profit of £1.73 million from discontinued operations was recognised from the value of the deferred consideration due, which was paid in full during the year, from the sale of Quayside Corporate Services Limited in 2007.
Total comprehensive income for the year was £35k (2010: £113k).
The Group's total assets increased to £12.3 million (2010: £11.3 million), including increased available-for-sale financial assets of £7.1 million (2010:£5.4 million) and increased cash and cash equivalents of £1.3 million (2010: £0.3 million). The total current liabilities decreased to £1.1 million (2010: £2.8 million) mainly due to decreased payables of £0.8 million (2010: £2.7 million).
The Group's net asset value increased to £9.0 million (2010: £8.5 million). Some 5,965,925 new ordinary shares were issued on the exercise of options, bringing the Group's total ordinary shares in issue to 609,601,823 (2010: 603,635,898).
As at 30 June 2011 Parkmead remained debt free.
The Board is focused on building a portfolio of high potential oil and gas interests and therefore is not recommending the payment of a dividend in 2011 (2010: nil).
Investments
The Group's principal investment is in Faroe Petroleum plc ("Faroe") (LSE AIM: FPM.L.). As at 30 June 2011 the value of this investment had increased by some 37% to £7.05 million (30 June 2010: £5.15 million).
Faroe's share price rose from 118p to 160p over the 12 months to 30 June 2011, following a successful year for the company. Faroe enjoyed significant exploration success with the Maria oil discovery in the Norwegian Sea, which it subsequently traded with Petoro AS for a number of oil and gas producing assets in Norway. Further production was added to the company through the acquisition of an 18.0% interest in the Blane oil field from ENI UK Limited and ENI ULX Limited.
Faroe completed a placing of 37,718,024 new ordinary shares at a placing price of 165 pence per ordinary share in November 2010. The placing raised £62.2 million of new funding. Parkmead holds 4,377,039 ordinary shares in Faroe representing 2.1% of the issued share capital of Faroe. We remain of the view that Faroe has significant medium and long-term upside. The investment is held as available-for-sale and the increase in its value has been reflected in equity.
During the year, the Group disposed of its holding in Prevx Group Limited, a private technology company. A profit of £0.11 million was realised from the sale of this asset.
Outlook
The Directors of Parkmead are confident that attractive opportunities exist in our key target areas and, with the appointment of our proven oil and gas team, the Group now has the technical and commercial capabilities to exploit these opportunities in order to maximise shareholder value. In addition, the Board is pleased to report that Parkmead's first asset deal in the UK North Sea was completed earlier this month. Coinciding with this acquisition, Parkmead secured a flexible shareholder loan of £8 million ensuring the Group is now fully funded for its forward programme of drilling activities and well positioned to capitalise on further strategic opportunities.
Parkmead's wholly-owned subsidiary, Aupec, continues to perform well and the Directors believe that the Group will benefit from the experience, technical capabilities and relationships that have been built up over more than 25 years of success within Aupec.
The last 12 months has been a period of significant development within Parkmead and the Board remains focused on the pursuit of value-adding acquisitions, at both asset and corporate levels, in line with the Group's strategy. We will continue to update shareholders as we make further progress.
Tom Cross
Executive Chairman
24 November 2011
Group income statement
For the year ended 30 June 2011
Note | 2011 | 2010 | |
£ | £ | ||
Continuing operations | |||
Revenue | 3,745,565 | 2,364,151 | |
Cost of sales | (2,016,418) | (1,549,671) | |
Gross profit | 1,729,147 | 814,480 | |
Other operating income | 7,951 | - | |
Administrative expenses | (5,310,345) | (2,274,291) | |
Operating loss | (3,573,247) | (1,459,811) | |
Finance income | 12,417 | 531,403 | |
Finance costs | (797) | (6,739) | |
Profit on sale of available-for-sale financial assets | 112,388 | 74,396 | |
Amounts written off available-for-sale financial assets and loans | - | (539,995) | |
Other losses on financial assets at fair value through profit or loss | (927) | (8,033) | |
Loss before taxation | (3,450,166) | (1,408,779) | |
Taxation | (139,470) | (85,773) | |
Loss for the year from operations | (3,589,636) | (1,494,552) | |
Discontinued operations | |||
Gain/(loss) for the year from discontinued operations | 1,732,247 | (108,825) | |
Loss for the year attributable to the equity holders of the Parent | (1,857,389) | (1,603,377) | |
Loss per share (pence) | |||
Continuing operations Basic and diluted | 2 | (0.59) | (0.29) |
Continuing and discontinued operations Basic and diluted | 2 | (0.31) | (0.31) |
Group and company statement of comprehensive income
For the year ended 30 June 2011
Group |
Company | ||||
2011 £ | 2010 £ | 2011 £ | 2010 £ | ||
Loss for the year | (1,857,389) | (1,603,377) | (1,434,087) | (2,057,345) | |
Other comprehensive income | |||||
Available-for-sale financial assets | |||||
Fair value gain on available-for-sale financial assets | 1,892,634 | 1,716,492 |
1,892,634 |
1,716,492 | |
1,892,634 | 1,716,492 | 1,892,634 | 1,716,492 | ||
Income tax relating to components of other comprehensive income | |||||
Other comprehensive income for the year, net of tax | 1,892,634 | 1,716,492 |
1,892,634 |
1,716,492 | |
Total comprehensive income for the year attributable to the equity holders of the Parent | 35,245 | 113,115 |
458,547 |
(340,853) | |
Group and company statement of financial position
As at 30 June 2011
Group | Company | |||||
2011
| 2010
| 2011
| 2010
| |||
£ | £ | £ | £ |
| ||
Non-current assets |
| |||||
Property, plant and equipment | 128,557 | 60,778 | 77,295 | 16,072 |
| |
Goodwill | 2,173,532 | 2,173,532 | - | - |
| |
Other intangible assets | 43,657 | 99,106 | - | - |
| |
Investment in subsidiary and joint ventures | - | - | 3,902,817 | 3,883,353 |
| |
Available-for-sale financial assets | 7,064,017 | 5,384,124 | 7,064,017 | 5,384,124 |
| |
Trade and other receivables | - | 33,320 | - | 94,715 |
| |
Deferred tax assets | - | 101,574 | - | - |
| |
Total non-current assets | 9,409,763 | 7,852,434 | 11,044,129 | 9,378,264 |
| |
| ||||||
Current assets |
| |||||
Trade and other receivables | 1,650,105 | 3,199,194 | 197,334 | 206,834 |
| |
Other financial assets | - | 878 | - | 878 |
| |
Cash and cash equivalents | 1,274,198 | 291,869 | 749,539 | 6,661 |
| |
Total current assets | 2,924,303 | 3,491,941 | 946,873 | 214,373 |
| |
| ||||||
Total assets | 12,334,066 | 11,344,375 | 11,991,002 | 9,592,637 |
| |
| ||||||
Current liabilities |
| |||||
Current portion of capital lease obligations | - | (1,043) | - | (1,043) |
| |
Trade and other payables | (761,570) | (2,737,838) | (383,768) | (1,445,640) |
| |
Current tax liabilities | - | (66,097) | - | - |
| |
Provisions | (338,089) | (1,959) | (324,063) | (1,959) |
| |
Total current liabilities | (1,099,659) | (2,806,937) | (707,831) | (1,448,642) |
| |
| ||||||
Non-current liabilities |
| |||||
Other liabilities | (2,219,226) | - | (2,219,226) | - |
| |
Deferred tax liabilities | (7,924) | (26,829) | - | - |
| |
Total non-current liabilities | (2,227,150) | (26,829) | (2,219,226) | - |
| |
| ||||||
Total liabilities | (3,326,809) | (2,833,766) | (2,927,057) | (1,448,642) |
| |
| ||||||
Net assets | 9,007,257 | 8,510,609 | 9,063,945 | 8,143,995 |
| |
| ||||||
Equity attributable to equity holders |
| |||||
Called up share capital | 18,658,349 | 18,652,383 | 18,658,349 | 18,652,383 |
| |
Share premium | 2,907,986 | 2,647,059 | 2,907,986 | 2,647,059 |
| |
Merger reserve | - | (952,109) | - | 1,454,546 |
| |
Employee benefit trust reserve | (1,128,008) | (1,128,008) | (1,128,008) | (1,128,008) |
| |
Foreign exchange reserve | - | 7,377 | - | 7,377 |
| |
Revaluation reserve | 264,680 | (1,182,639) | 264,680 | (1,182,639) |
| |
Retained deficit | (11,695,750) | (9,533,454) | (11,639,062) | (12,306,723) |
| |
Total Equity | 9,007,257 | 8,510,609 | 9,063,945 | 8,143,995 | ||
Group statement of changes in equity
For the year ended 30 June 2011
Share capital | Share premium | Merger reserve | Employee Benefit Trust reserve | Foreign exchange reserve | Revaluation reserve | Retained earnings | Total |
| |||
£ | £ | £ | £ | £ | £ | £ | £ |
| |||
At 1 July 2009 | 18,417,089 | - | (952,109) | (1,128,008) | 157,382 | (2,892,904) | (8,008,195) | 5,593,255 | |||
Loss for the year | - | - | - | - | - | - | (1,603,377) | (1,603,377) | |||
Fair value gain on available-for-sale financial assets | - | - | - | - | 6,227 | 1,710,265 | - | 1,716,492 | |||
Total comprehensive income for the year | - | - | - | - | 6,227 | 1,710,265 | (1,603,377) | 113,115 | |||
Foreign exchange loss on available-for-sale financial asset recognised in profit or loss on derecognition | - | - | - | - | (156,232) | - | - | (156,232) | |||
Issue of new ordinary shares | 235,294 | 2,647,059 | - | - | - | - | - | 2,882,353 | |||
Share-based payments | - | - | - | - | - | - | 78,118 | 78,118 | |||
At 30 June 2010 | 18,652,383 | 2,647,059 | (952,109) | (1,128,008) | 7,377 | (1,182,639) | (9,533,454) | 8,510,609 | |||
Loss for the year | - | - | - | - | - | - | (1,857,389) | (1,857,389) | |||
Fair value gain on available-for-sale financial assets | - | - | - | - | - | 1,892,634 | - | 1,892,634 | |||
Total comprehensive income for the year | - | - | - | - | - | 1,892,634 | (1,857,389) | 35,245 | |||
Transfer of reserves on impaired available-for-sale financial assets | - | - | - | - | (7,377) | (445,315) | 453,127 | 435 | |||
Transfer of reserves on discontinued activities | - | - | 952,109 | - | - | - | (952,109) | - | |||
Issue of new ordinary shares | 5,966 | 260,927 | - | - | - | - | - | 266,893 | |||
Share-based payments | - | - | - | - | - | - | 194,075 | 194,075 | |||
At 30 June 2011 | 18,658,349 | 2,907,986 | - | (1,128,008) | - | 264,680 | (11,695,750) | 9,007,257 | |||
Company Statement of changes in equity
For the year ended 30 June 2011
Share capital | Share premium | Merger reserve | Employee Benefit Trust reserve | Foreign exchange reserve | Revaluation reserve | Retained earnings | Total | ||
£ | £ | £ | £ | £ | £ | £ | £ | ||
At 1 July 2009 | 18,417,089 | - | 1,454,546 | (1,128,008) | 157,382 | (2,892,904) | (10,327,496) | 5,680,609 | |
Loss for the year | - | - | - | - | - | - | (2,057,345) | (2,057,345) | |
Fair value gain on available-for-sale financial assets | - | - | - | - | 6,227 | 1,710,265 | - | 1,716,492 | |
Total comprehensive income for the year | - | - | - | - | 6,227 | 1,710,265 | (2,057,345) | (340,853) | |
Foreign exchange loss on available-for-sale financial asset recognised in profit or loss on derecognition | - | - | - | - | (156,232) | - | - | (156,232) | |
Issue of new ordinary shares | 235,294 | 2,647,059 | - | - | - | - | - | 2,882,353 | |
Share-based payments | - | - | - | - | - | - | 78,118 | 78,118 | |
At 30 June 2010 | 18,652,383 | 2,647,059 | 1,454,546 | (1,128,008) | 7,377 | (1,182,639) | (12,306,723) | 8,143,995 | |
Loss for the year | - | - | - | - | - | - | (1,434,087) | (1,434,087) | |
Fair value gain on available-for-sale financial assets | - | - | - | - | - | 1,892,634 | - | 1,892,634 | |
Total comprehensive income for the year | - | - | - | - | - | 1,892,634 | (1,434,087) | 458,547 | |
Transfer of reserves on impaired available-for-sale financial assets | - | - | - | - | (7,377) | (445,315) | 453,127 | 435 | |
Transfer of reserves on discontinued activities | - | - | (1,454,546) | - | - | - | 1,454,546 | - | |
Issue of new ordinary shares | 5,966 | 260,927 | - | - | - | - | - | 266,893 | |
Share-based payments | - | - | - | - | - | - | 194,075 | 194,075 | |
At 30 June 2011 | 18,658,349 | 2,907,986 | - | (1,128,008) | - | 264,680 | (11,639,062) | 9,063,945 | |
Group and company statement of cashflows
For the year ended 30 June 2011
Group | Company | |||||||
2011 | 2010 | 2011 | 2010 | |||||
Note | £ | £ | £ | £ | ||||
Cashflows from operating activities | ||||||||
Continuing activities | 3 | (1,091,202) | (2,613,588) | (2,718,159) | (462,728) | |||
Taxation paid | (121,560) | (124,288) | - | - | ||||
Net cash (used in) operating activities | (1,212,762) | (2,737,876) | (2,718,159) | (462,728) | ||||
Cash flow from investing activities | ||||||||
Interest received | 3,442 | 14,075 | 3,292 | 13,575 | ||||
Proceeds from sale of subsidiary | 1,969,449 | - | 1,969,449 | - | ||||
Proceeds from sale of investments | 94,968 | 439,083 | 94,968 | 439,083 | ||||
Acquisition of subsidiary net of cash acquired | - | 1,558,808 | - | (1,000,000) | ||||
Dividend received from subsidiary | - | - | 1,206,311 | - | ||||
Acquisition of investments | - | (1,458,315) | - | (1,458,315) | ||||
Acquisition of intangible assets | (34,223) | (7,834) | - | - | ||||
Acquisition of property, plant and equipment | (108,909) | (20,264) | (84,164) | (4,240) | ||||
Proceeds from sale of property, plant and equipment | 5,331 | - | 5,331 | - | ||||
Net cash generated by/(used in) investing activities | 1,930,038 | 525,553 | 3,195,187 | (2,009,897) | ||||
Cash flow from financing activities | ||||||||
Issue of ordinary shares | 266,893 | - | 266,893 | - | ||||
Interest paid | (797) | (179) | - | - | ||||
Finance lease principal payments | (1,043) | (12,521) | (1,043) | (12,521) | ||||
Net cash generated by/(used in) financing activities | 265,053 | (12,700) | 265,850 | (12,521) | ||||
Net increase/(decrease) in cash and cash equivalents | 982,329 | (2,225,023) | 742,878 | (2,485,146) | ||||
Cash and cash equivalents at beginning of year | 291,869 | 2,516,892 | 6,661 | 2,491,807 | ||||
Cash and cash equivalents at end of year | 1,274,198 | 291,869 | 749,539 | 6,661 | ||||
Notes to the financial information for the year ended 30 June 2011
1. Basis of preparation of the financial statements
The financial information set out in this announcement does not comprise the Group and Company's statutory accounts for the years ended 30 June 2011 or 30 June 2010.
The financial information has been extracted from the audited statutory accounts for the years ended 30 June 2011 and 30 June 2010. The auditors reported on those accounts; their reports were unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.
The statutory accounts for the year ended 30 June 2010 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 June 2011 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
The accounting policies are consistent with those applied in the preparation of the interim results for the period ended 31 December 2010 and the statutory accounts for the year ended 30 June 2010, which have been prepared in accordance with International Financial Reporting Standards ("IFRS").
2. Loss per share
Loss per share attributable to equity holders of the Company arise from continuing and discontinued operations as follows:
2011 | 2010 | |||
Loss per 0.01p ordinary share from continuing operations (pence) | ||||
Basic and diluted | (0.59p) | (0.29p) | ||
Profit/(loss) per 0.01p ordinary share from discontinued operations (pence) | ||||
Basic | 0.28p | (0.02p) | ||
Diluted | 0.26p | (0.02p) | ||
Loss per 0.01p ordinary share from total operations (pence) | ||||
Basic and diluted | (0.31p) | (0.31p) |
The calculations were based on the following information:
2011 | 2010 | ||||
£ | £ | ||||
(Loss)/profit attributable to ordinary shareholders | |||||
Continuing operations | (3,589,636) | (1,494,552) | |||
Discontinued operations | 1,732,247 | (108,825) | |||
Total | (1,857,389) | (1,603,377) | |||
Weighted average number of shares in issue | |||||
Basic weighted average number of shares | 605,525,848 | 522,411,079 | |||
Dilutive potential ordinary shares | |||||
Share options | 55,939,513 | - |
Loss per share is calculated by dividing the loss for the year by the weighted average number of ordinary shares outstanding during the year. Potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of continuing and total operations diluted earnings per share.
Diluted loss per share
Loss per share requires presentation of diluted loss per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. For a loss making company with outstanding share options, net loss per share would only be decreased by the exercise of share options.
3. Notes to the statement of cashflows
Reconciliation of operating loss to net cash flow from continuing operations
Group | Company | |||||
2011 | 2010 | 2011 | 2010 | |||
£ | £ | £ | £ | |||
Operating loss | (3,573,247) | (1,459,811) | (4,496,395) | (1,950,034) | ||
Depreciation | 37,119 | 162,081 | 18,930 | 151,767 | ||
Amortisation | 89,672 | 124,075 | - | - | ||
Impairment of loans/investments | 96,467 | - | 96,467 | - | ||
Foreign exchange on receivables | 435 | - | 435 | - | ||
Gain on disposal of fixed assets | (1,318) | 3,251 | (1,318) | 3,251 | ||
Provision for share based payments | 2,144,186 | 78,118 | 2,123,722 | 78,118 | ||
(Increase)/decrease in receivables | 1,508,140 | (3,116,336) | 9,652 | 583,739 | ||
Increase/(decrease) in payables | (1,728,786) | 1,596,694 | (791,756) | 672,091 | ||
Increase/(decrease) in other provisions | 336,130 | (1,660) | 322,104 | (1,660) | ||
Net cash flow from operations | (1,091,202) | (2,613,588) | (2,718,159) | (462,728) | ||
4. Approval of this preliminary announcement
The preliminary report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the report in accordance with the AIM rules issued by the London Stock Exchange.
This announcement was approved by the Board of Directors on 24 November 2011.
5. Posting of annual report and accounts
Copies of the Annual Report and Accounts will be posted to shareholders shortly. The Annual Report and Accounts will be made available to download, along with a copy of this announcement, on the investor relations section of the Company's website www.parkmeadgroup.com