5 Jan 2018 07:00
This announcement contains inside information
5 January 2018
redT energy plc
("redT" or the "Company")
Update on Camco business activities
redT energy plc (AIM:RED), the energy storage technology company, provides the following update on the Company's legacy Camco business units. The Company confirms that in line with its strategy of focusing on the continued development and commercialisation of its core redT energy storage solutions business, the Board has elected to cease Camco Carbon activity and has divested its interest in the Camco Africa investment advisory business. This move completes redT's transition to a pure-play energy storage company.
The African continent remains a key market for redT's energy storage machines, and the Company's activity in the region remains unaffected by the divestment of the UK based Camco Africa investment advisory business.
Camco Carbon activity, which is centred on ad hoc EU ETS Compliance Services, will cease effective from 10th January 2018, with no new carbon contracts taken on by the Company post this date. The Camco Carbon business produced revenue of €6.8m in the year to 31 December 2016, and €2.6m in the six months to 30 June 2017, with a small marginal net positive EBITDA being achieved in both periods. As such the cessation of Camco Carbon activity will have no material ongoing EBITDA impact on the Company.
redT also confirms the divestment of the Company's holding in its legacy Camco Africa investment advisory business, Camco Africa Limited ("CAL"). redT has entered into a share purchase agreement with CAL, through which CAL will acquire the Company's entire holding of 850 ordinary shares (representing 85 per cent of CAL's issued share capital) for nominal consideration of €0.01 per share in cash (the "Share Buy-Back"). CAL, through its subsidiary Camco Management Ltd, has a contract until 2020 to act as manager of the Renewable Energy Performance Platform ("REPP"), which aims to support African renewable energy projects smaller than 25MW through the provision of project development funding, results based finance and technical and financial assistance.
The Board of redT remains focused on the continued development of redT's energy storage business and as CAL has already been identified as non-core to the Company's future development and performance, it has concluded that it is in the best interests of redT's shareholders to divest its shareholding in CAL at this time.
CAL generated revenue of €2.1m in the year to 31 December 2016, and €0.8m in the six months to 30 June 2017. Whilst with ongoing operational trading activity CAL has achieved EBITDA break-even in both periods, it is projected to have a negative cash impact on the Company in future periods. As such the divestment will have no initial material EBITDA impact on the Company, however with a cash saving expected in future periods.
Scott McGregor, who has a 5 per cent interest in the issued share capital of CAL, and Michael Farrow are directors of both CAL and redT energy plc and consequently the Share Buy-Back constitutes a related party transaction under the AIM Rules. The Directors of redT (with the exception of Scott McGregor and Michael Farrow) consider, having consulted with the Company's nominated adviser, that the terms of the Share Buy-Back are fair and reasonable in so far as the Company's shareholders are concerned.
Scott McGregor, CEO, redT energy commented:
"Our redT energy storage solutions business has been the core focus of the Group since its restructure as redT energy plc in 2015.
Today's announcement confirms our focus as a pure-play energy storage company, on our rapidly expanding energy storage business and the natural, orderly divestment of our legacy and non-core business activities."
Enquiries:
redT energy plc | +44 (0)20 7061 6233 |
Scott McGregor, Chief Executive Officer |
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Joe Worthington, Investor & Media Relations |
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Cenkos Securities (Nominated Advisor & Broker) | +44 (0)131 220 9100 |
Derrick Lee |
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VSA Capital (Investor Relations Advisor) Andrew Monk |
+44 (0)20 3005 5000 |
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Celicourt Communications (Financial PR) Mark Antelme Jimmy Lea Ollie Mills | +44 (0)20 7520 9266 |
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Notes to Editors
About redT energy
redT energy plc is an energy solutions company specialising in durable energy storage machines which create revenue alongside reliable, low-cost renewable generation for businesses, industry and electricity distribution networks. Using proprietary vanadium redox flow technology to store energy in liquid, redT's machines can be run continually with no degradation: charging and discharging for over 25 years, matching the lifespan of renewable assets in on-grid, off-grid and weak-grid settings.
redT's energy storage solutions, developed over the past 15 years, address today's changing energy market by providing a flexible platform for time shifting surplus renewable power, securing electricity supplies and earning revenue through grid services. The company has customers in the UK, Europe, sub-Saharan Africa, Australia and Asia Pacific. redT energy plc is listed on the London Stock Exchange (AIM:RED) and has offices in the UK, Africa and the USA.
For more information, visit www.redTenergy.com
For sales, press or investor enquiries, please contact the redT team on +44 (0)20 7061 6233