RED.L Regulatory News (RED)

24 Sep 2007 07:35

Camco International Ltd24 September 2007 Camco International Limited Interim Financial Report The Camco Group, a pioneering business in the sustainable energy and low carbonmarkets, is pleased to announce its Interim Financial results for the 6 monthsto 30 June 2007. Highlights as at 30 June 2007 Financial highlights: •Revenue of €1.97m (30 June 2006, nil) •Net loss after tax €5.02m including a non cash charge of €1.3m in respect of share compensation (30 June 2006, net loss after tax was €1.89m) •Lower than expected net cash outflow from operating activities of €4.78m (30 June 2006, €1.65m) •Net Cash position of €20.94m (30 June 2006, €28.59m) The Camco Group: •Camco International acquired ESD on 30 April 2007 for €13.78m. Bradshaw Consulting was acquired and integrated into the ESD business shortly after. •These acquisitions position the Camco Group to take advantage of opportunities that arise across the whole low carbon market from strategic planning through project development and carbon credit sales •In July 2007, the Group placed 15m shares, raising €16.8m to fund expansion into North America, the organic development of several new business areas and the development of a carbon asset pool to maximise carbon sales revenue. The Camco carbon assets business as at 30 June 2007: The table below highlights the progress Camco has made this year in developingthe contracted project portfolio. Overall growth 30 June 2007 31 Dec 2006 Increase(tonnes) Gross contracted portfolio 127.1m 102.9m 24% Camco tonnes in specie 34.4m 22.1m 56%(contracted to Camco) Operational performance 30 June 2007 31 Dec 2006 Increase PDD complete 105.8m 77.9m 36% LoA from Host Country 84.4m 43.0m 96% Registered 35.0m 2.8m 1150% First verification completed 16.0m 2.3m 596% Construction progress 30 June 2007 Financed 117.0m Under construction 47.3m Constructed but not yet 12.4moperational Operational 33.8m Commercial progress 30 June 2007 31 Dec 2006 Increase ERPA 46.0m 35.8m 28% Termsheet 43.6m 8.7m 401% •The portfolio is one of the largest and most mature in the carbon market, with credits scheduled for delivery from early in the Kyoto period. •There has been a 24% increase in contracted portfolio since year end. Registered projects have increased to 35.0m tonnes. •Projects with financing in place now total 117.0m tonnes (92% of the contracted portfolio). Projects operational, under construction or constructed total 93.5 (73.6%). •Camco holds the right or the option to acquire 34.4m carbon credits 'in specie'. The average purchase price of these tonnes is €6-7. •Camco secured the registration of the largest coal mine methane project. This project also won the prestigious Environmental Finance "Carbon Finance Transaction of the Year" award. •Camco was voted as "Carbon Developer of the Year" by the carbon industry The consultancy practice •The consultancy practice continues to expand. Up to 30 June, new contracts signed this year total €4.6m, including €0.9m for consultancy support to the Carbon Trust's local authority carbon management programme. This represents a 37% increase on the first 6 months of the previous year •Half year turnover was €4.4m (only 2 months post acquisition from 30 April €1.5m contributes to the Camco group) •Q2 saw the expansion of consulting services into China through ESD Sinosphere. We are seeing good integration benefits with carbon asset development and consulting teams working closely together in China, Africa and North America. Camco Ventures •Camco and Tudor Investment Corporation are working together to create the Climate Leaders' Joint Venture with an initial committed investment of $100m, an equity investment joint venture to finance projects that reduce greenhouse gas emissions and generate carbon credits. •Camco Ventures is developing several new services including voluntary credits from land use projects and carbon labelling of buildings Business progress highlights from 30 June to 21 September 2007 Post 30 June 2007, the portfolio has continued to grow. •The gross contracted portfolio is now 138.5m tonnes, up from 127.1m at 30 June 2007. •Camco's tonnes in specie have also increased from 34.4m to 36.4m. •Submitted for registration has increased by 8.6m tonnes, resulting in registration and submitted for registration at 21 September totaling 43.9m Consultancy sales have also increased with contracts signed totalling €7.4m. Jeff Kenna, Chief Executive, commenting on the company's performance, said: "This has been a good half-year where we have seen strong growth in ourportfolio. We have ensured that our portfolio remains of the highest quality, asevidenced by the registration this year of two of the largest clean energyprojects. The carbon market continues to mature. Industry pioneers such as Camco andrisk-seeking financial institutions are now being joined by traditionalinvestment banks - a sure sign that carbon is now firmly on the radar of largecorporates globally." - ENDS - Contact details For further information please contact: Camco International Limited +44 (0) 20 7256 7979 Jeff Kenna, Chief Executive Officer Scott McGregor, Chief Financial Officer Press Gavin Anderson Ken Cronin/Kate Hill +44 (0) 20 7554 1400 NOMAD KBC Peel Hunt Ltd +44 (0) 20 7418 8900Jonathan MarrenDavid Anderson Notes to editors The Camco Group is a pioneering business with an outstanding track record in thesustainable energy and low carbon markets. The Group consists of three businesssegments: The Camco carbon assets business is a leading project developer with one of theworld's largest carbon credit portfolios. We partner with companies to identify,develop and manage projects that reduce greenhouse gas emissions, and thenarrange the sale and delivery of carbon credits to international compliancebuyers and into the voluntary market. The consultancy practice includes ESD, The Edinburgh Centre for CarbonManagement (ECCM), Bradshaw Consulting and ESD Sinosphere. The businessescombine specialist technical, strategic and financial expertise and experienceaccrued over two decades. Camco Ventures works with project and technology developers, early stagebusinesses and investor groups to commercialise climate change mitigationtechnologies, projects and services Part of this business is the recentlyannounced Climate Leaders' Joint Venture. Chairman and Chief Executive's statement Strategy As indicated in our report at the end of 2006 the Board felt that the businesshad too narrow a focus on carbon development and monetisation and in toofocussed an arena (namely China and Russia). Whilst this business will bringgreat value over the next few years as the projects mature and the carbon valueis realised in cash there is no clarity as to what will happen post 2012.Accordingly we embarked on a horizontal development of the business resulting inthe acquisitions mentioned above. We believe that this now positions us to beactive in all aspects of carbon and other climate change activity on a globalbasis. It diversifies our earnings base geographically, by product and serviceand gives greater recurring income streams. The ESD acquisition also deepens our historic involvement with the environmentby 20 years and brings to us one of the most experienced groups of people inthis field in the world. It clearly positions us for a more global business andthis is underlined by our two US initiatives, the opening of Camco offices inDenver and Aspen, and the establishment (with one of our major shareholdersTudor) of the Climate leaders' Joint Venture. The development of the ESDSinosphere business in China underlines our commitment to growing our alreadylarge Chinese business. We shall continue to look for appropriate acquisitions on a world wide basisespecially where they leverage our existing business and client base, as was thecase with Bradshaw Consulting The key to acquisitions is successful integration and we would like to commendthe efforts made from top to bottom of the company to achieve this. It has addedmany further burdens to our hard working and dedicated staff for which the boardis most grateful Operational review We have seen strong growth in our portfolio, from 103m tonnes at 2006 year endto 127m tonnes by the end of June 2007. We have ensured that our portfolioremains of the highest quality, as evidenced by the registration this year ofseveral CDM-funded investments, including two of the largest clean energyprojects. We are also pleased that the Yangquan coal mine methane recovery and powergeneration project has been voted Carbon Finance Transaction of the Year byEnvironmental Finance Magazine. Camco has strong local presence in carbonorigination markets and proven expertise in managing the delivery of carbon credits. This has been critical to moving the projects through the regulatoryprocess, and in securing maximum value for investors. This has also beenrecognised by our peers; Camco was voted Project Developer of the Year 2007 inthe Point Carbon Awards.' Camco has secured the world's first successful validation of a Bio-dieselproject. This project is expected to produce 0.75m carbon credits and uses amethodology developed by KWI - one of our founding partners. The Group expanded operations by opening offices in North America and Malaysia.At the same time we have increased our resources in China, Russia and SouthAfrica. China and Russia remain the principal source of business for the carbonasset division. Our carbon advisory business continues to expand and allows us to provideadditional value to our clients including the identification of greenhouse gasmitigation projects. In South Africa, ESD is working for the National EnergyRegulator to look at policies to promote renewable electricity. Similar policyprojects are underway in Hungary, Bulgaria, Uganda and Tanzania. In the UK, ourwork on carbon management and low carbon property developments continues to growand with it the potential for the origination of voluntary carbon credits. The last quarter has seen the expansion of consulting services into China. InChina, Camco is working with the China Energy Research Institute to look atmarket-based mechanisms to reduce energy consumption in buildings. Camco, Tudor Investment Corporation and Gaian Capital have been working togetherover the summer to develop the Climate Leaders' Joint Venture with an initialcommitted investment of $100m, an equity investment joint venture to financeprojects that reduce greenhouse gas emissions and generate carbon credits. Splitbetween offices in London and New York, and with linkages to Camco and ESD teamsworldwide, the joint venture will be led by a dedicated team of experiencedprofessionals with expertise in low carbon clean energy project development,investment and finance. The formation of the Climate Leaders' Joint Venture isexpected to be finalised this year. In May ESD launched EPLABEL Online, a web site that allows the public sector tomeasure their building's C02 performance. From April 2008, all large publicbuildings in the EU must display an energy certificate to comply with the EnergyPerformance in Buildings Directive. In the UK, buildings are responsible forhalf of C02 emissions. Camco's joint venture EPES will offer an onlinecertification service to comply with the directive & help identify C02 reductionprojects. Our work on VERs from land use projects using the Plan Vivo methodology isexpanding with contracts in Tanzania and Rwanda to look at the feasibility ofgreenhouse gas abatement from land use changes. In Tanzania, the potential fromone region alone is 80m tonnes. We continue to grow our presence in existing markets whilst expanding into newkey markets. Camco now has 21 offices across the world, and staff of around 200.With JI regulations coming into effect in Russia, our Russian portfolio isgrowing and we have contracted 27 projects, which are expected to produce inexcess of 22m tonnes. We now have 17 staff in our Russian offices in Moscow andArkhangelsk. Our team in China now totals 43 and with over 60 projects in China, weanticipate continued growth in the monitoring and verifications team. We havealso commenced operations in Kuala Lumpur, Malaysia. The Group has openedoffices in Denver and Aspen, Colorado. Our North America growth plan envisagesat least 1 additional office to be operational before year end. Financial results Revenue for the period was €1.97m. €1.46m derived from the consultancy businessand €0.16m from the Ventures business in the 2 months since they were acquired,in addition to €0.35m from the carbon assets business. Camco takes aconservative approach to revenue recognition and carbon revenue is fromcontracts which have verified credits. The forecast revenues for the carbonasset business in 2007 are weighted to the 2nd half of the year as more of ourCDM projects are constructed Operating loss (excluding non-cash share compensation charge) is in line withexpectations for 30 June at €3.72m. Non-cash charges relating to sharecompensation totalled €1.3m. Net Loss after Tax for 30 June was €5.02m. Camcooperates a project development business which requires an outlay ofadministrative costs and working capital in the initial years of a project'sdevelopment, followed by revenues during the First Commitment Period of theKyoto Protocol, between 2008-2012. Net cash outflows from operating activities to 30 June were €4.78m. This issignificantly less that forecast due to tighter Group cash flow management andthrough performing more project development work internally rather thanoutsourcing (a major synergy following the ESD acquisition). Carbon Development Contract ("CDC") assets of €11.9m include €9.2m of assetscapitalised following acquisitions. Camco reassessed the carrying values of CDCsand deferred consideration from the acquisition of MCF Finance and Consultingand reduced them both by €1.5m. Camco maintains a conservative policy on costcapitalisation and only capitalises costs directly attributable to its projects. Camco had cash reserves of €20.94m at 30 June 2007. On 23 July 2007 Camco raisedfunds through a placing of new shares, the proceeds of which were approximately€16.8m. The Group is currently highly liquid, with significant cash resourcesavailable to develop the business. Our treasury policy is to hold this reservein low risk cash deposits. The Group implemented a foreign exchange policyduring 2007 to hold cash reserves in currencies matching operating expenditurein USD, EUR and GBP. The Group is funded almost entirely by equity which isconsidered appropriate given the status of the market and political risks facedby the business. Outlook The Group is well positioned to deliver revenues from the carbon creditportfolio in 2008 and beyond. Clarity surrounding the post 2012 Kyoto regulatory framework is stilldeveloping, and we would of course welcome increased certainty on this. We areseeing a strong political will to take action to develop a sustainable lowcarbon society. This gives us confidence that the market will continue todevelop, and that the multi-disciplinary Camco Group will be well placed to takeadvantage of the broad range of commercial opportunity that growth will offer. Finally, we would like to thank our management team and staff across the worldfor their continued hard work and dedication, to our founders for their supportand co-operation and finally to our clients and business partners. David Potter Jeff KennaChairman CEOCamco International 24th September 2007 Consolidated income statement for the 6 months to 30 June 2007 Acquisitions Continuing Total Continuing Continuing 6 months operations 6 months operations operations 6 months Period from Period from incorporation incorporation to 30 June to 30 June to 30 June to 30 June 2007 2007 2007 2006 to 31 December 2006 (unaudited) (unaudited) (unaudited) (unaudited) (audited) Notes •'000 •'000 •'000 •'000 •'000------------------------------------------------------------------------------------------------Revenue 1,619 349 1,968 - 830 Cost of sales (197) (371) (568) - (673) Grossprofit/(loss) 1,422 (22) 1,400 - 157 Administrationexpenses (1,192) (4,285) (5,477) (1,818) (4,945) Share-basedpayments 3 (39) (1,260) (1,299) (313) (577) Totaladministrationexpenses 2 (1,231) (5,545) (6,776) (2,131) (5,522) Profit/(loss)fromoperations 191 (5,567) (5,376) (2,131) (5,365) Finance income 4 - 605 605 238 1,450 Finance 4 (12) (164) (176) - (58)expense Loss fromequity accountedinvestments (22) - (22) - - Profit/(loss)before tax 157 (5,126) (4,969) (1,893) (3,973) Taxation - (52) (52) - (2) Profit/(loss)after tax 157 (5,178) (5,021) (1,893) (3,975) Attributableto: Equity holdersof the Company 119 (5,178) (5,059) (1,893) (3,975)Minorityinterest 38 - 38 - - 157 (5,178) (5,021) (1,893) (3,975) Basic anddiluted lossper share in •cents 5 0.09 (3.85) (3.76) (1.76) (3.42) -----------------------------------------------------------------------------------------------Consolidated statement of recognised income and expensefor the 6 months to 30 June 2007 6 months Period from Period from incorporation incorporation to 30 June 2007 to 30 June to 31 December 2006 2006 (unaudited) (unaudited) (audited) Notes •'000 •'000 •'000 Loss for theperiod (5,021) (1,893) (3,975) Exchange differences ontranslation of foreignoperations (4) - (22) Totalrecognised income andexpense for the period (5,025) (1,893) (3,997) Analysed to:Equity holders of the Company (5,063) (1,893) (3,997) Minorityinterest 38 - - (5,025) (1,893) (3,997)-------------------------------------------------------------------------------------------- Consolidated balance sheetsas at 30 June 2007 30 June 30 June 31 December 2007 2006 2006 * (unaudited) (unaudited) (audited) Notes •'000 •'000 •'000Assets Non-current assets Property, plant and equipment 569 119 304 Goodwill on acquisition 6 14,957 - 1,156 Other intangible assets 6 1,646 - - Carbon development contracts 7 11,929 8,823 10,751 Investments in equityaccounted 118 - -investees and joint ventures Total non-current assets 29,219 8,942 12,211 Current assets Work in progress 1,693 - - Trade and other receivables 4,660 360 1,608 Cash and cash equivalents 22,126 28,593 24,719 Total current assets 28,479 28,953 26,327 Total assets 57,698 37,895 38,538 --------------------------------------------------------------------------------Liabilities Current liabilities Bank overdraft (1,185) - - Trade and other payables (5,482) (1,448) (2,117) Deferred consideration 9 (141) - - Total current liabilities (6,808) (1,448) (2,117) Non-current liabilities Provisions (207) - (1,814) Deferred tax liabilities (472) - Deferred consideration 9 (2,388) - Total non-current liabilities (3,067) - (1,814) Total liabilities (9,875) (1,448) (3,931) Net assets 47,823 36,447 34,607------------------------------------------------------------------------------ Equity Share capital 10 1,511 1,299 1,299 Share premium 11 54,747 36,909 36,909 Share-based payment reserve 11 1,838 313 577 Retained earnings 11 (9,034) (1,893) (3,975) Translation reserve 11 (26) - (22) Own shares 11 (1,281) (181) (181) Total equity attributable toshareholders of the Company 47,755 36,447 34,607 Minority interest 11 68 - - Total equity 11 47,823 36,447 34,607 --------------------------------------------------------------------------------* As restated (see note 7). The restatement is unaudited. Consolidated cash flow statementsfor the 6 months to 30 June 2007---------------------------------------------- Continuing Continuing Continuing operations operations operations 6 months Period from Period from incorporation incorporation 30 June 30 June 2006 31 December 2007 2006 (unaudited) (unaudited) (audited) Notes •'000 •'000 •'000Cash flow fromoperating activities Revenue anddeferred incomereceived 2,626 - 313 Cash paid tosuppliers andemployees (7,939) (1,652) (6,231) Interest received 591 1 565 Interest paid (12) - - Income tax paid (44) - (1) Net cash flowfrom operatingactivities (4,778) (1,651) (5,354) ------------------------------------------------------------------------------- Cash flow frominvesting activities Payment foracquisition ofsubsidiaries 8 (5,295) - (366) Repayment ofloan notesissued foracquisition ofsubsidiary - (3,150) (3,150) Net(overdraft)/cash acquiredwithsubsidiaries 8 (985) 247 248 Payment forpurchase ofcarbon developmentcontracts - (896) (896) Payment forpurchase ofproperty, plant andequipment (126) (23) (330) Net cash flowfrom investingactivities (6,406) (3,822) (4,494)------------------------------------------------------------------------------ Cash flow fromfinancing activities Proceeds fromthe issue ofloan notes - 5,000 5,000 Repayment ofloan notes - (5,000) (5,000) Proceeds fromissuance ofshares 7,522 37,074 37,074 Costs ofraisingcapital - (2,931) (3,069) Net cash flowfrom financingactivities 7,522 34,143 34,005 -------------------------------------------------------------------------------Change in cashand cashequivalentsand bankoverdraft (3,662) 28,670 24,157 Opening cashand cashequivalents 24,719 - - Effect ofexchange ratefluctuations (116) (77) 562 Closing cashand cashequivalentsand bankoverdraft 20,941 28,593 24,719 ------------------------------------------------------------------------------- Notes to the financial statementsSignificant accounting policies Camco International Limited (the "Company") is a public company incorporated inJersey under Companies (Jersey) Law. The address of its registered office isChannel House, Green Street, St Helier, Jersey JE2 4UH. The consolidated interimfinancial report of the Company for the period from 1 January 2007 to 30 June2007 comprises the Company and its subsidiaries, associates and joint ventures(together the "Group").Basis of preparation The consolidated interim financial report for the six months ended 30 June 2007have been prepared under applicable International Financial Reporting Standardsadopted by the European Union ("IFRS") which include International AccountingStandards and interpretations issued by the International Accounting StandardsBoard and its committees, which are expected to be endorsed by the EuropeanUnion. They do not include all of the information required for full annualfinancial statements, and should be read in conjunction with the consolidatedfinancial statements of the Group as at and for the year ended 31 December 2006. This interim financial information has been prepared on the historical costbasis, except for financial assets available for sale which are held at fairvalue. The accounting policies applied are consistent with those adopted anddisclosed in the annual financial statements for the period ended 31 December2006. The accounting polices have been consistently applied across all Groupentities for the purpose of producing this interim financial report. The financial information included in this document does not comprise statutoryaccounts within the meaning of Companies (Jersey) Law 1991. The comparativefigures, before the restatement (note 7), for the financial period ended 31December 2006 are extracted from the statutory financial statements for thatperiod which have been filed with the Jersey Financial Services Commission andon which the auditor gave an unqualified report.Estimates The preparation of the interim financial report in conformity with IFRS requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and other factors that are believed to be reasonable under thecircumstances, the results of which form the basis of making the judgementsabout carrying values of assets and liabilities that are not readily apparentfrom 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 theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. 1 Segmental reporting Business segments Consulting Ventures Carbon Total Continuing Continuing operations operations 6 months * 6 months * 6 months 6 months Period from Period from incorporation incorporation to 30 June to 30 June to 30 June to 30 June to 30 June to 31 2007 2007 2007 2007 2006 December 2006 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (audited) •'000 •'000 •'000 •'000 •'000 •'000 Revenue 1,461 158 349 1,968 - 830 Cost of sales (197) - (371) (568) - (673) Grossprofit/(loss) 1,264 158 (22) 1,400 - 157 Administrationexpenses (852) (340) (4,285) (5,477) (1,818) (4,945) Share-basedpayments (39) - (1,260) (1,299) (313) (577) Totaladministrationexpenses (891) (340) (5,545) (6,776) (2,131) (5,522) Profit/(loss)fromoperations 373 (182) (5,567) (5,376) (2,131) (5,365) -----------------------------------------------------------------------------------------------------------------------Finance income - - 605 605 238 1,450 Finance expense (12) - (164) (176) - (58) Loss fromequityaccountedinvestments - (22) - (22) - - Profit/(loss)before tax 361 (204) (5,126) (4,969) (1,893) (3,973)Taxation - - (52) (52) - (2) Profit/(loss)after tax 361 (204) (5,178) (5,021) (1,893) (3,975)---------------------------------------------------------------------------------------------------------------------- Attributable to: Equity holdersof the Company 323 (204) (5,178) (5,059) (1,893) (3,975)Minorityinterest 38 - - 38 - - 361 (204) (5,178) (5,021) (1,893) (3,975) Basic anddiluted lossper share in •cents 0.24 (0.15) (3.84) (3.75) (1.76) (3.42) * Consulting and Ventures businesses contributed income and expense for only 2months of the period post acquisition of 30 April. Segment information is presented in respect of the Group's business segments.2 Administration expenses Administration expenses are 30 June 30 June 31 Decemberanalysed below. 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Depreciation of property, plant andequipment - owned assets 72 - 27 Share-based payments 1,299 313 577 Exceptional item - discretionary M&A - - 439expense Other administration expenses 5,405 1,818 4,479 Total administration expenses 6,776 2,131 5,522 Share Based Payments The Group operates two share-based incentive plans for its employees, the CamcoInternational Limited 2006 Executive Share Plan (the "Plan") and the Long-TermIncentive Plan (the "LTIP"). The charge for each scheme for the period is asfollows: 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Camco International Limited 2006Executive Share Plan 309 313 552 Long-Term Incentive Plan 282 - 25 Ordinary shares issued (note 12) 708 - - 1,299 313 577 Camco International Limited 2006 Executive Share Plan Under the Plan the Company, or the trustee of the Camco International LimitedEmployee Benefit Trust ("EBT"), can make awards of share options or conditionalrights to receive shares to selected Directors or key employees of the Companyor its subsidiaries. Purpose The purpose of the Plan is to reward Directors and key employees forservices provided pre-admission to AIM and to retain their services over thevesting period. The past services resulted in the successful flotation of theCompany on the AIM market. Service condition The service condition stipulates that the Director or keyemployee must provide continuous service over the vesting period. The number of awards made to Directors and key employees of the Company andamounts payable per share are set out below. 31 December 2006 30 June 2007 Awards Vesting in Awards Price outstanding period outstanding payable (per share) Number Number Number • Directors 642,858 (450,001) 192,857 0.05 Key employees 3,015,000 (955,000) 2,060,000 0.01 3,657,858 (1,405,001) 2,252,857 Options were granted to individual Directors and key employees at various datesbetween 10 February and 14 March 2006. No new options were granted in the periodand no options lapsed in the period. The options have an expiry date 10 yearsfollowing date of grant. All outstanding options will vest within 12 months. The fair value of each share option at grant was determined based on theBlack-Scholes formula. The inputs to this model are the same as outlined in theGroup's last financial statements. The Board has approved the LTIP under which Directors and employees are entitledto equity-settled payment following vesting periods after 31 December 2008 and2009 and upon certain market and non-market performance conditions being met forthe reporting periods ending 31 December 2008 and 2009. Purpose The purpose of the LTIP is to incentivise Directors and employees toensure profit and share price performance targets are met over the vestingperiods, the first of which ends on 31 December 2008. The LTIP will alignmanagement's objectives with those of the shareholders. Market-based performance condition The LTIP will vest at different levelsdepending on the Company's share price performance as compared with comparatorgroups over the vesting period. The comparator groups consist of a basket ofSmallCap companies at the grant date (adjusted for mergers, demergers anddelistings during the performance period). The Company's percentage rank is itsrank in a comparator group divided by the number of companies in the group atthe end of the performance period expressed as a percentage. If the Company'spercentage rank is less than 50% none of the shares vest. At a percentage rankof 50-70% half of the shares will vest, 70-85% three quarters of the shares willvest and 85-100% all the shares will vest. Non-market performance conditions The LTIP will vest at differing levelsdepending on the achievement of profit targets over the vesting period. Number of shares Outstanding atstart of theperiod 6,506,759 Granted 4,155,000 Forfeited (2,206,974) Outstanding at endof the period 8,454,785 2007 Weighted averageshare price atgrant (• cents) 82.9 Weighted averagefair value ofoption (• cents) 58.6 Exercise price (• cents) 1.0 Weighted averagelife at grant(years) 2.3--------------------------------------------------------------- 4 Net finance income 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Finance income Interest on bankdeposits 605 238 860 Exchange movements - - 590 605 238 1,450 -Finance expense Unwinding ofdiscount (31) - (58) Interest onoverdraft andborrowings (12) - - Exchange movements (133) - - (176) - (58) Net finance income 429 238 1,392 ---------------------------------------------------------------- 5 Loss per share 30 June 30 June 31 DecemberLoss per share 2007 2006 2006attributable toequity holders of (unaudited) (unaudited) (audited)the Company iscalculated asfollows. Cents Cents Cents per share per share per share Basic and dilutedloss per share (3.76) (1.76) (3.42) •'000 Loss used incalculation ofbasic and dilutedloss per share (5,059) (1,893) (3,975) Weighted averagenumber of sharesused incalculation 134,381,030 107,603,000 116,307,918-------------------------------------------------------------------------------- 6 Goodwill on acquisition and other intangible assets Goodwill on Other intangible Total acquisition assets 2007 2007 2007 •'000 •'000 •'000 Cost at 31December 2006 1,156 - 1,156 Acquisitions 13,801 1,685 15,486 Cost at 30 June 2007 14,957 1,685 16,642 Impairment & amortisation - - -at 31 December 2006 Impairment &amortisationcharge - (39) (39) Impairment &amortisation at 30June 2007 - (39) (39) Net book value at31 December 2006 1,156 - 1,156 Net book value at30 June 2007 14,957 1,646 16,603 ---------------------------------------------------------------------------------------------- Goodwill in the period arose on the acquisition of ESD Partners Limited and itssubsidiaries and Bradshaw Consulting Limited (note 8). 7 Carbon development contracts Total 2007 •'000 Cost at 31 December 2006 as previously state 12,389 Revision to provisional fair values at acquisition (1,498) Cost at 31 December 2006 as restated 10,891 Carbon development contract costs capitalised 1,331 Cost at 30 June 2007 12,222 Utilisation and write-down at 31 December 2006 (140) Write-down of CDC costs previously capitalised (153) Utilisation and write-down at 30 June 2007 (293) Net book value at 31 December 2006 as restated 10,751 Net book value at 30 June 2007 11,929------------------------------------------------------------------------------ The write-down was recognised following a review of the carrying amounts ofCDCs. Where the discounted future cash flows on the contract were deemedinsufficient to support the recoverability of the asset a write-down to thelower value was made. 8 Business combinations On 30 April 2007, the Group acquired 100% of the share capital of ESD PartnersLtd the holding company for the Energy for Sustainable Development Group ofcompanies (together "ESD"). The group is primarily engaged in the provision ofconsulting services in the field of climate change science and technology. Thetotal purchase consideration was €13,775,000. Acquiree's book Provisional Provisional values fair value acquisition adjustments amountsFair value ofidentifiable net assetsof ESD at date ofacquisition •'000 •'000 •'000 Customer relationshipsand contracts - 443 443 Property, plant andequipment 201 - 201 Investments in equityaccounted investees andjoint ventures 138 - 138 Trade and otherreceivables and otherassets 2,987 - 2,987 Overdraft (997) - (997) Trade and other payables (1,750) - (1,750) Provisions - (207) (207) Deferred tax liability - (124) (124) Minority interest reserve (30) - (30) Net identifiableassets/(liabilities)acquired 549 112 661 ------------------------------------------------------------------------------- Net cash out flow toacquire ESD •'000 Cash consideration 4,414 Acquisition costs 296 Overdraft acquired 997 Net cash out flow 5,707 Goodwill recognised onacquisition •'000 Cash consideration 4,414 Shares issued 9,065 Deferred consideration at 30 -April 2007 Acquisition costs 296 Total purchaseconsideration 13,775 Less fair value ofidentifiable net assetsacquired (661) Goodwill recognised onacquisition 13,114 The value placed by the Directors on ESD's personnel, history, reputation andsynergies gave rise to the goodwill on acquisition. ESD's personnel are the mostexperienced and technically astute in the business. ESD's history dates back to1989 when ESD commenced trading as one of the original environmental consultancyfirms. During this time, a reputation has been built that means ESD is now aglobal market leader in the provision of low carbon energy and sustainabledevelopment solutions. The main synergy identified is the access of the carbonproject development business to new clients and early access to new projects. In the period from date of acquisition on 30 April to 30 June 2007, ESD recordeda retained profit of €138,000. If ESD had been part of the Group from 1 January2007 the recorded retained profit would have been €284,000 with additionalrevenue of €2,976,000. The total purchase consideration does not include any deferred consideration. Atthis stage the Directors are of the opinion it is not possible to calculate areliable estimate of any deferred consideration which is dependant on the futureperformance of the ESD Ventures business. On 10 May 2007, the Group acquired 100% of the share capital of BradshawConsulting Limited ("BCL"), a company engaged in the development of software tomonitor and analyse carbon usage in industrial processes, for a total purchaseconsideration of €2,025,000. Acquiree's book Fair value Acquisition values adjustments amountsFair value ofidentifiablenet assets ofBCL at date ofacquisition •'000 •'000 •'000 Softwareproducts - 1,134 1,134 Customerrelationshipsand contracts - 108 108 Property,plant andequipment 22 - 22 Cash and cashequivalents 12 - 12 Trade andotherreceivables 212 - 212 Loan note 475 - 475 Trade andother payables (277) - (277) Deferred taxliability - (348) (348) Netidentifiableassets/(liabilities)acquired 444 894 1,338 Net cash outflow toacquire BCL •'000 Cashconsiderationpaid 585 Cash and cashequivalentsacquired (12) Net cash outflow 573 Goodwillrecognised onacquisition •'000 Cashconsiderationpaid 585 Shares issued 293 Foregivenessof loan note 475 Deferredconsiderationat 10 May 2007 672 Total purchaseconsideration 2,025 Less fairvalue ofidentifiablenet assetsacquired (1,338) Goodwillrecognised onacquisition 687 The value placed by the Directors on BCL's personnel and reputation gave rise tothe goodwill on acquisition. BCL's personnel designed and developed the softwareproducts identified above. They have also built a strong reputation forproviding IT and engineering based cost reduction solutions for operationalintegration in a wide range of industrial, manufacturing and commercialbusinesses. In the period from date of acquisition on 10 May to 30 June 2007, BCL recorded aprofit of €19,000. If BCL had been part of the Group from 1 January 2007 therecorded profit would have been €152,000 with additional revenue of €382,000. 9 Deferred consideration 2007 •'000 Balance at 31 December 2006 as previously stated 3,312 Revision to original purchase consideration of MCF (1,498) Balance at 31 December 2006 as restated * 1,814 Arising from acquisition in the period of BCL 672 Unwinding of discount 31 Exchange movements 12 Balance at 30 June 2007 2,529 * The restatement is unaudited. During the period, the Directors revised the deferred consideration on the MCFFinance and Consulting Co. Ltd ("MCF") acquisition following new informationrelated to the projects on which the deferred consideration is contingent. Thereassessment equates to a €1,498,000 reduction in the deferred considerationamount. The unwinding of the discount has been charged within net finance income(note 4). The deferred amount can be settled, at the Group's option, in cash orby issuing shares in the Company. Settlement will occur after more than 1 year. On 10 May 2007, the Group acquired 100% of the share capital of BradshawConsulting Limited (note 8). The total purchase consideration included deferredconsideration with a discounted value of €672,000 at date of acquisition. Theunwinding of the discount has been charged within net finance income (note 4).The deferred amount can be settled, at the Group's option, in cash or by issuingshares in the Company. €141,000 is due for settlement within 1 year. 10 Issued capital 2007 2007 Number •'000 '000 Authorised Ordinary shares of €0.01 1,250,000 12,500 Issued and fully paid Ordinary shares of €0.01 (all classified inshareholders' 151,073 1,511funds) 11 Equity 2007 2007 2007 2007 2007 2007 2007 2007 2007 Share Share Share-based Retained Translation Own shares Total equity Minority Total equity capital premium payment earnings reserve attributable interest reserve to shareholders of the Company •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance at 31December 2006 1,299 36,909 577 (3,975) (22) (181) 34,607 - 34,607 Totalrecognisedincome andexpense - - - (5,059) (4) - (5,063) 38 (5,025) Share-basedpayments - - 1,299 - - - 1,299 - 1,299 Issuance ofshares 212 17,838 32 - - (1,170) 16,912 - 16,912 Own shares - - (70) - - 70 - - - Acquisition ofminorityinterest - - - - - - - 30 30 Balance at 30June 2007 1,511 54,747 1,838 (9,034) (26) (1,281) 47,755 68 47,823-------------------------------------------------------------------------------------------------------------------Interim financial 2006 2006 2006 2006 2006 2006 2006 2006 2006 Share Share Share-based Retained Translation Own shares Total equity Minority Total equity capital premium payment earnings reserve attributable interest reserve to shareholders of the Company •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance at 8 February 2006 - - - - - - - - - Totalrecognisedincome andexpense - - - (1,893) - - (1,893) - (1,893) Share-basedpayments - - 313 - - - 313 - 313 Issuance of shares 1,299 39,978 - - - - 41,277 - 41,277 Costs incurredin the raisingof capital - (3,069) - - - - (3,069) - (3,069) Own shares - - - - - (181) (181) - (181) Balance at 30June 2006 1,299 36,90 313 (1,893) - (181) 36,447 - 36,447------------------------------------------------------------------------------------------------------------------- 2006 2006 2006 2006 2006 2006 2006 2006 2006 Share capital Share premium Share-based Retained Translation Own shares Total equity Minority Total payment reserve earnings reserve attributable interest equity to shareholders of the company •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance at 8 February 2006 - - - - - - - - - Totalrecognisedincome andexpense - - - (3,975) (22) - (3,997) - (3,997)Share-basedpayments - - 577 - - - 577 - 577 Issuance ofshares 1,299 39,978 - - - - 41,277 - 41,277 Costs incurredin the raisingof capital - (3,069) - - - - (3,069) - (3,069) own shares - - - - - (181) (181) - (181) Balance at 31December 2006 1,299 36,909 577 (3,975) (22) (181) 34,607 - 34,607 ----------------------------------------------------------------------------------------------------------------- The holders of ordinary shares are entitled to receive dividends as declaredfrom time to time and are entitled to one vote per share at meetings of theCompany. During the period the Company issued 21,174,629 ordinary shares for aconsideration of €18,050,000 settled in cash (€7,522,000), shares insubsidiaries (€9,358,000) and shares transferred to the EBT (€1,170,000). Thistransfer was made as part of the ESD acquisition to fund future and currentshare schemes.The shares held by the EBT had a market value of €4,630,000 at 30 June 2007. 12 Related parties The Group has various related parties stemming from relationships withshareholders, related business partners and key management personnel.Acquisition of Energy for Sustainable Development Limited ("ESD") Jeff Kenna is currently the Chief Executive Officer of the Company and wasformerly both a non-Executive Director of Company and CEO of ESD. As a result,the acquisition was regarded as a related party transaction. The directors ofCompany (with the exception of Jeff Kenna) consider, having consulted with KBCPeel Hunt Ltd in its capacity as the Company's nominated adviser, that the termsof the acquisition are fair and reasonable insofar as the Company's shareholdersare concerned. Shareholders and related business partners The founding shareholders who continue to hold a significant interest in theCompany and who provide services to the Group are ClearWorld Energy Limited("CWE") and the shareholders of KWI Consulting AG ("KWI"). Energy forSustainable Development Limited ("ESD") had a significant shareholding prior tothe ESD acquisition (note 8). CWE and ESD both provide support, management and environmental services to theGroup under a number of separate agreements. KWI provide environmental andaccountancy services to the Group. The amounts charged to administrationexpenses in respect of these services is shown in the table below. The related business partner is Consortia Partnership Limited ("Consortia") whohas been appointed Company Secretary. Michael Farrow, a non-executive Directorof the Company, is a Director of Consortia. Consortia also provide accountingservices to the Company. The amounts charged to administration expenses inrespect of these services is shown in the table below.Income statement 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) Administration expenses •'000 •'000 •'000 Clearworld Energy Limited 54 201 435 Energy for Sustainable DevelopmentLimited 238 235 559 Consortia Partnership Limited 74 29 63 KWI Consulting AG 23 15 33 Balance sheet 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) Trade and other payables •'000 •'000 •'000 Clearworld Energy Limited 9 - - Consortia Consulting 22 - 22 KWI Consulting AG - - 3 The Group's key management personnel comprises the Board of Directors whoseremuneration is shown below.Income statement 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Salaries, benefits, bonuses and fees 550 323 698 Share-based payments - ordinaryshares 708 - -issued Share-based payments - share optionsunder Executive Share Plan 73 40 91 Share-based payments - share optionsunder LTIP 31 - 12 Total remuneration 1,362 363 801 On 2 April 2007, a compromise agreement was signed with Tristan Fischer, theformer Chief Executive Officer of the Company. The agreement outlined acompensation package following the termination of his employment contract. Thecharges, all of which are included in this interim report and the table above,are as follows.Income statement 30 June 2007 (unaudited) •'000 Salaries, benefits, bonuses and fees 124 Share-based payments - ordinary shares issued (700,000 shares) 708 Share-based payments - share options under Executive Share Plan(192,857 shares) 38 Share-based payments - share options under LTIP (up to maximumof 750,000 shares) 22 Total compensation charge 892------------------------------------------------------------------------------ * subject to vesting conditions of Camco Group LTIP scheme (see note 3) There was a timing difference between the Group's payment of personal tax andnational insurance obligations resulting from the vesting of shares in itsrestricted stock scheme (note 3) and the reimbursement by members of the scheme(the sale of shares to enable reimbursement was delayed due to the Directorbeing in a close period hence restricted from trading). This resulted in anamount receivable from a Director at 30 June 2007. The amount was fullyreimbursed in July 2007.Balance sheet 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (unaudited) Trade and other receivables •'000 •'000 •'000 Receivable from key managementpersonnel 43 - - 13 Post balance sheet events Significant post balance sheet events relate to an additional placing of sharesand new business developments as outlined below.Climate Leaders' Joint Venture On 13 July 2007 the Company, together with Tudor Investment Corporation,announced that they have entered into a letter of intent to launch the ClimateLeaders' Joint Venture, an equity investment joint venture to finance projectsthat reduce greenhouse gas emissions and generate emissions reduction credits.Placing On 23 July 2007 the Company placed 15,077,706 million new ordinary shares of0.01 • cents each at a price of 75 pence per share. The amount raised wasapproximately €16.8m before expenses. The new funds, along with existing funds,will be used for growth opportunities such as US expansion, investment in theClimate Leaders' Joint Venture (see above) and development of new ventures. This information is provided by RNS The company news service from the London Stock Exchange