RED.L Regulatory News (RED)

24 September 2014

Camco Clean Energy plc

("Camco Clean Energy" or the "Company")

Interim Results 2014

Camco Clean Energy plc (AIM: CCE), the clean energy and energy storage company,today announces its results for the six months to 30 June 2014.

Highlights:

· Signing of manufacturing agreement with Jabil Circuit Inc. ("Jabil") and REDT Clean Energy Storage ("REDT")

o On track to deliver first customer units in Q1 2015

· Africa Clean Energy business jointly appointed as investment advisor to the prestigious Green Africa Power LLP ("GAP") fund

· Two operating US biogas assets continue to perform well

· Portfolio of US carbon credits delivering in 2014 as anticipated with further additional deliveries expected before the end of the year providing a useful contribution to cash flow

· Significantly reduced net loss of €1.0m (H1 2013: net loss €2.7m), result comfortably ahead of management expectations

· Cash and cash equivalents of €3.0m (FY 2013: €4.5m) not including the proceeds of €1.9m received in July 2014 from the placing and open offer

· Revenue earned in the period of €4.8m (H1 2013: €5.0m) and gross profit of €2.5m (HY 2013: €2.5m) reflecting an increase from US activities including the Twin Falls Facility acquired at the end of 2013 and the start of the refocusing of the Africa activities towards higher margin activity

Scott McGregor, CEO of Camco Clean Energy, said:

"This has been a period of considerable transformation for Camco. Our commercial developments in 2014 have so far exceeded the upper end of our expectations and our three business units have very exciting prospects. We look forward to the future with a high degree of confidence and are very excited about the opportunities in the pipeline. We will continue to focus on a tight control of costs so that the growth we anticipate from our core businesses flows through to results for the benefit of all shareholders."

Enquiries:

Chief Executive's Review

OVERVIEW

We are very pleased with the corporate developments achieved in 2014 and we are excited about the prospects for all three of our core business units.

The signing of the manufacturing agreement with Jabil Circuit Inc. has given our REDT Storage business the cost effective manufacturing platform required to achieve volume commercial sales and we look forward to the first customer units being delivered in Q1 next year.

During the period our Africa Clean Energy business was jointly appointed as investment advisor to the prestigious GAP fund and a number of projects are under evaluation. We are actively looking at adding further complementary mandates to build on our over 25 years' expertise in the region and sector, enhancing our position as a leading manager in that area.

In addition, our two operating US biogas assets continue to perform well. In particular the Twin Falls Facility is trading well ahead of the Board's expectations at the time of acquisition at the end of 2013. Finally, our portfolio of US carbon credits are delivering in 2014 as anticipated with further additional deliveries expected before the end of the year, providing a contribution to cash flow.

We have recorded a significantly reduced loss as a result of tight cost control, a full period of income from the Jerome and Twin Falls Facilities, and a contribution from the legacy CER Carbon Business.

FINANCIAL HIGHLIGHTS for the period ending 30 June 2014

· Significantly reduced net loss of €1.0m (H1 2013: net loss €2.7m); result comfortably ahead of management expectations.

· Cash and cash equivalents of €3.0m (FY 2013: €4.5m) not including the proceeds of €1.9m received in July 2014 from the placing and open offer.

· Revenue earned in the period of €4.8m (H1 2013: €5.0m) and gross profit of €2.5m (HY 2013: €2.5m) reflecting an increase from US activities including the Twin Falls Facility acquired at the end of 2013 and the start of the refocusing of the Africa activities towards higher margin activity (e.g. the recently announced investment advisory mandate for GAP), the benefits of which will start to come through in the second half of 2014.

· Administration expenses across the Group reduced to €3.4m (HY 2013: €4.8m). Administration expenses include depreciation on the Jerome and Twin Falls facilities of €0.5m (H2 2013: €0.4m solely in respect to the Jerome Facility).

2014 OPERATIONAL HIGHLIGHTS

· REDT* Clean Energy Storage

o Manufacturing agreement (the "Agreement") signed with Jabil, one of the world's leading manufacturing solutions companies.  Agreement provides a scale manufacturing capability that enables REDT to accelerate its market deployment plans and expects to be in a position to commence commercial sales in the near future. Jabil contracted detailed technical due diligence, patent rights protection and market demand research on REDT's product prior to entering into the Agreement.

o Completion of the concept design of production optimised range of REDT products. The modular production range will allow REDT to provide systems for customers across multiple storage applications from 5kW to 5MW power batteries and from three hours to 12 hours of stored energy.

o Production of the units for the Gigha 1.26MWh contract has been moved to Jabil's manufacturing facility and the product design changed from a bespoke building design to seven 15kW-180kWh containerised units. The change in design has significant advantages for the project and also allows REDT to accelerate the commoditisation of its large scale product range, a process which could otherwise have taken up to two years.

o Supply materials have been ordered for the first ten customer production 5-30kWh units.

· Africa Clean Energy

o Jointly selected by GAP as Investment Advisors for an African renewables investment fund following a highly competitive process

o Growing pipeline of similar complementary activities giving confidence that alongside GAP, the business can be transitioned towards higher margin activity validating Camco Clean Energy's extensive experience in the African renewables sector.

· US Clean Energy

o Twin Falls Facility (acquired in December 2013) trading ahead of forecasts made at the time of acquisition; Jerome Facility also performing to expectations.

o Portfolio of agricultural methane methodology carbon credits ("CCOs") starting to issue in volume with further material issuances expected in the second half of the year

* Camco Clean Energy plc, on a fully diluted basis, has an economic interest of 49% in REDT.

OUTLOOK

We look forward to the future with a high degree of confidence and are very excited about the opportunities in the pipeline. We will continue to focus on a tight control of costs so that the growth we anticipate from our core businesses flows through to results for the benefit of all shareholders.

Financial Review

Change in segmentation for presentation of financial results

To reflect the change in focus of the business since the completion of the restructuring at the end of 2013, the Group reports these results in new segments being US Activities, Africa Activities, REDH (CCE) Activities and Group. The segments are described in more detail in the relevant sections below.

Overall Group result

The Group reported a significantly reduced total comprehensive loss of €1.0m (H1: loss of €2.8m) which was principally due to a fall in administration expenses of €1.5m from H1 2013 to H1 2014.

Gross profit remained at €2.5m (H1 2013: €2.5m) and €7.0m in FY 2013) after an increase in income from US Activities, a reduction from Africa Activities and a only small decrease in Group Activities notwithstanding that the income generating element of Group Activities was effectively in hibernation in H1 2014 (as opposed to being active in H1 2013).

US Activities segment

The US Activities segment comprises our US Clean Energy projects business (being the Jerome Facility and Twin Falls facility), the US Carbon activities as well as the wider US project development activities.

US Clean Energy projects business

Revenue for the Jerome Facility was €1.03m (HY 2013: €0.92m excluding a one-off receipt received in 2013 of €0.3m in connection with the 2012 operation of the facility) and other income was €0.14m (HY 2013: €0.15m) reflecting the amortisation of deferred income in connection with the grant received in 2012. Cost of sales were €0.40m (HY 2013: €0.41m). Administration expenses were €0.53m (HY 2013: €0.55m) which includes depreciation of €0.43m (HY 2013: €0.45m). Interest expense for the period was €0.37m (HY 2013: €0.39m).

We were extremely pleased with the operation of the Twin Falls Facility with revenue being €0.43m in the first six months of our ownership. Cost of sales were €0.24m and administration expenses were €0.12m which includes depreciation of €0.06m.

As with 2013, we do continue to expect to see seasonality in the revenue from power generated from the Jerome facility with the second half of the year benefiting from the higher prices set out in the power purchase agreement. We also anticipate this being the case with the Twin Falls Facility.

Interest paid on the outstanding loan balance secured against the Jerome Facility was €0.37m (H1 2013: €0.4m) and amortization reduced to €0.10m (H1 2013 €0.19m) increasing the net cash generated by the facility.

US Carbon

The US Carbon business recorded revenues of €0.86m (H1 2013 €nil) and cost of sales of €0.45m (H1 2013 €nil) giving a gross profit of €0.41m.This revenue derives from the sale of credits delivered from the agricultural methane projects issued under the California Program (California Carbon Offsets - "CCOs").

As we referred to in our annual results, the CCOs under the agricultural methane methodology only started to be issued as CCOs towards the end of the second half of 2013 with the majority of our agricultural methane methodology credits having not had CCOs issued by the end of 2013. As we anticipated, such issuances have started to occur in H1 2013 and we have already been notified of further material issuances in H2 2014. Our policy remains to sell CCOs when they are issued and where possible lock-in in advance prices to mitigate potential CCO risk.

Africa Activities segment

The Africa Activities segment contains the clean energy consulting operation in Africa as well as the costs associated with setting up the recently won GAP mandate (with associated income from H2 2014).

The Africa Clean Energy Consulting business includes the five Group offices in Africa, the principle ones being Dar es Salaam (Tanzania), Johannesburg (South Africa) and Nairobi (Kenya).

Revenue for the period was €0.81m (H1 2013: €1.73m) and cost of sales were €0.33m (H1 2013: €0.85m). Administration expenses were €0.65m (H1 2013: €0.73m). In addition, there was a write back of a tax provision of €0.68m. At the end of the year, the Africa Clean Energy Consulting business had work in progress of €0.7m (FY 2013: €0.5m), deferred income of €0.1m (FY 2013: €0.2m) and direct project cost accruals of €0.2m (FY 2013: €0.2m). The major portion of the work in progress balance was received in cash by the end of August 2014.

The H1 2014 administration expenses include internal costs of c€0.1m incurred in refocusing the Africa activities towards higher margin activity (e.g. the recently announced investment advisory mandate for GAP which was secured in the first half of the year). Revenue will be earned in H2 2014 and beyond from these activities.

REDH (CCE) segment

The REDH (CCE) Activity reflects the portion of the Group's overhead spent on managing the REDH business.

In H1 2013 and FY 2013, the Group did not directly allocate internal cost to this activity and the prior year comparative numbers reflect limited external costs incurred and typically recovered from REDH.

However, as a result of the increasing focus on, and importance of, REDH, significant additional time and resource is being dedicated to this business. This segment reflects such internal cost but does not take account of the actual trading activities of REDH itself.

Group segment

The Group segment reflects the remaining Group costs as well as the legacy carbon business from which to date we have still been able to generate income and cash flow to help offset the overhead activities.

This segment recorded a gross profit of €0.74m (H1 2013: €0.56m) on revenues of €1.61m (H1 2013: €1.83m). This reflects income from our hibernated CDM carbon business and the EU ETS compliance services business.

Administration expenses were €0.89m (H1 2013: €2.61m) which in part reflects certain of these costs now being allocated to the REDT (CCE) Segment but the majority of the difference from strict cost control.

Share of income from REDH

For H1 2014, REDH recorded revenues of €1.15m with cost of sales of €0.74m leading to a gross profit of €0.41m. Administration expenses were €0.33m leading to a net profit if €0.07m. The Group's share of this profit is €0.04m. This income and activity reflect the work being done principally on the1.26MWh utility storage facility contract on the island of Gigha which is expected to continue until June 2015.

Cash and cash equivalents

At 30 June 2014, the Group had cash and cash equivalents of €3.0m (FY 2013: €4.5m) and no unsecured loans (FY 2013: €Nil).

This balance includes cash held in a debt reserve account in relation to the Jerome Facilityof €1.175m (FY 2013: €1.0m) which is not available to the Group for general working capital purposes.

The key movements in cash during H1 2014 were: the repayment of borrowings (€0.1m); receipt from disposal of plant, property & equipment (€0.1m); interest paid (€0.4m); and cash absorbed from operations (€1.1m).

Consolidated Statement of Financial Position

 at 30 June 2014

Consolidated Statement of Financial Position (continued)

 at 30 June 2014

Consolidated Statement of Comprehensive Income

for the six months to 30 June 2014

Consolidated Statement of Comprehensive Income

for the six months to 30 June 2014

Consolidated Statement of Changes in Equity (continued)

for the 6 months to 30 June 2014

Consolidated Statement of Changes in Equity

for the six months to 30 June 2013

Consolidated Statement of Changes in Equity (continued)

for the year ended 31 December 2013

Consolidated Statement of Cash Flow

for the six months to 30 June 2014

Notes to the Consolidated Statement of Cash Flow

Notes

Significant accounting policies

Camco Clean Energy plc (the "Company") is a public company incorporated in Jersey under Companies (Jersey) Law 1991. The address of its registered office is Channel House, Green Street, St Helier, Jersey JE2 4UH. The consolidated interim financial report of the Company for the period from 1 January 2014 to 30 June 2014 comprises of the Company and its subsidiaries (together the "Group").

Basis of preparation

The annual financial statements of the Group for the year ended 31 December 2013 have been prepared in accordance with IFRSs as adopted by the EU ("Adopted IFRSs"). The interim set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU. The interim set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the company's published consolidated financial statements for the year ended 31 December 2013. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2013.

This interim financial information has been prepared on the historical cost basis. The accounting policies applied are consistent with those adopted and disclosed in the annual financial statements for the period ended 31 December 2013. The accounting policies have been consistently applied across all Group entities for the purpose of producing this interim financial report.

The financial information included in this document does not comprise of statutory accounts within the meaning of Companies (Jersey) Law 1991. The comparative figures for the financial year ended 31 December 2013 are not the company's statutory accounts for that financial year within the meaning of Companies (Jersey) Law 1991. Those accounts have been reported on by the company's auditors and delivered to the Jersey Financial Services Commission. The report of the auditors was unqualified.

Estimates

The preparation of the interim financial report in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Restatement

During the prior year, a decision was taken by management to disclose income from the US Government Grant separately. In the Consolidated Statement of Comprehensive Income, €145,000 was reclassified from Revenue to Other Income in HY 2013.

During the year, a reclassification error was noted in the Statement of Comprehensive Income. Management took the decision to reduce Other Income by €181,000 and reduce the Share of loss of equity accounted investees by the same amount.

1 Segmental Reporting

Operating segments

The Group comprises of the following reporting segments:

1. US Activities: In America, CCE develops and designs and also builds, owns and operates (BOO) biogas projects generating energy from organic waste. The company also develops Californian offset projects. CCE currently owns the Jerome and Twin Falls facilities which produce sustainable energy generated by using agricultural methane from dairy farms.

2. Africa Activities: CCE Africa manages investment of public and private finance into clean energy projects. CCE has five offices across Africa and an office in London which provides consulting services, finance and develops clean energy projects across Africa. Currently this segment operates an investment advisory mandate to manage a debt facility for Green Africa Power (GAP).

3. REDH (CCE): The REDH (CCE) segment comprises aspects of the Group's overheads allocated to the management and development of the REDT energy storage business.

4. Other: This segment contains all remaining Group costs in addition to the Group's remaining carbon business.

Inter segment transactions are carried out at arm's length.