REH.L Regulatory News (REH)

Renewable Energy Holdings plc

("Renewable Energy Holdings" or the "Company")

Interim Report for the six months ended 30 June 2015

Renewable Energy Holdings announces its interim results for the six months to 30 June 2015, which are set out below. A copy is available to download from the Company's website www.reh-plc.com

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Chairman's statement

For the six months ended 30 June 2015

Once again the main activity in the half year has been directed towards the planning application for the Mynydd y Gwynt windfarm project in mid Wales and to attempt to sell the Polish windfarm project.

Financial performance

The Group made a loss from Operations of £291k, slightly higher than the previous year and partly due to the appointment in December 2014 of a full time finance director (now outsourced again). Finance costs on the Utilico loans were £483k and with ongoing costs in Poland of £27k the Loss for the Period was £801k.

Wales

The planning examination process closed on 20th May 2015 and a decision is due by 20th November 2015. The Examiner submitted his recommendation to the Secretary of State for Energy and Climate Change on 20th August 2015 in accordance with the statutory timetable.

We have previously reported that if consent is granted the windfarm would need to be connected to the proposed mid Wales hub substation, however the outcome of the mid Wales conjoined public inquiry has thrown the future of that substation into serious doubt. The inquiry considered five proposed wind farms in mid Wales, with four of them connecting to the hub, but DECC has refused planning consent for all four. Presently no decision has been made on the future of the hub and we are keeping in close communication with SP Manweb and others.

On 18th June the Secretary of State for Energy and Climate Change, Amber Rudd, said: "we are driving forward our commitment to end new onshore wind subsidies and give local communities the final say over any new windfarms. Onshore wind is an important part of our energy mix and we now have enough subsidised projects in the pipeline to meet our renewable energy commitments".

The status of our project in relation to this statement and its eligibility for subsidy is unclear. Whilst the consent decision will be made this year, the grid substation delays mean it probably will not be connected before 2020. It is looking increasingly unlikely that any 2020 onshore wind projects will be allowed access to future Contract for Difference rounds. The Minister's view, as stated above, is that onshore wind must survive without subsidy support. We and others within the renewables industry feel that we still have some way to go to achieve this condition. At the very least the uncertainty of wholesale electricity prices makes financing for windfarm projects, and therefore their valuations for sale, very difficult.

We are, however, pleased to see that the Welsh Government recognises that onshore wind is a vital component in meeting carbon reduction targets and that windfarms provide an economic benefit to rural communities not just in the construction phase but throughout their operation. We are encouraged by the supportive written statement on onshore wind issued by Edwina Hart AM, Minister for Economy, Science and Transport and Carl Sargeant AM, Minister for Natural Resources on 21st September 2015.

Poland

We have continued to market the project but have yet to attract a buyer. Although we noted some progress with the Polish Energy Act in our year end accounts, there has been no further progress in finalising the details of the auction system. These ongoing issues have not helped to stimulate the market.

Carnegie Wave Energy Limited ("CWE")

The Perth Wave Energy Project demonstrator at Garden Island (CETO 5) continues to operate, allowing CWE to gain experience of operating and maintaining the CETO technology. In parallel CWE continues to develop a CETO 6 Project with a 3 unit array with 3MW total capacity and a 2017 target date. Two sites are being considered including Garden Island, Western Australia and Wave Hub, Cornwall UK.

Going Concern and Future Funding

The Directors are of the opinion that, utilising the remainder of the current loan support from Utilico, the Company has sufficient resources to enable it to continue to operate until the planning decision is made. Should consent be received future funding would then be necessary. However factors such as the grid situation in mid Wales and assessments of the likelihood of qualifying for any financial support mechanism for onshore windfarms will all be considered together with the Company's current indebtedness by any potential funder. If no further funding were to be available the Group would likely commence liquidation.

David Weir

Chairman

September 2015

Interim consolidated income statement

For the six months ended 30 June 2015

Interim consolidated statement of comprehensive income

For the six months ended 30 June 2015

Consolidated statement of changes in equity

For the six months ended 30 June 2015

Consolidated statement of changes in equity

For the six months ended 30 June 2014

Consolidated statement of changes in equity

For the year ended 31 December 2014

Consolidated balance sheet

As at 30 June 2015

Interim consolidated cash flow statement

For the six months ended 30 June 2015

Notes to the interim consolidated financial information 

For the six months ended 30 June 2015

1. Basis of preparation

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively IFRSs).

The principal accounting policies used in preparing the interim results are those the Company expects to apply in its Financial Statements for the year ended 31 December 2015 and are unchanged from those disclosed in the Company's audited Annual Report and Financial Statements for the year ended 31 December 2014 which are available at www.reh-plc.com.

In assessing the going concern basis of preparation of the financial information for the period ended 30 June 2015, the Directors have taken into account the status of current negotiations on the sale of assets, forecasts and projections through to June 2016. The Directors consider that the Group has sufficient facilities for its ongoing operations and therefore have continued to adopt the going concern basis in preparing the June 2015 financial results.

While the financial information included in this consolidated interim financial information has been prepared in accordance with the AIM Rules for Companies and with IFRSs, this interim consolidated financial information does not itself contain sufficient information to comply fully with IFRSs. As permitted, the Company has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements.

The financial information for the six months ended 30 June 2015 and 30 June 2014 is unaudited and does not constitute the Company's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2014 has, however, been derived from the statutory financial statements for that period. The auditors' report on those accounts was unqualified and did not contain a statement under section 15.4 of the Isle of Man Companies Act 1982. Without qualifying their report, the auditors drew attention by way of emphasis of matter, the disclosures relating to the Group's ability to continue as a going concern.

2. Discontinued operations

Plan to dispose of wind farm project

On 30 April 2012 the Group announced the orderly sale of its assets and the return of cash to shareholders. The Group is actively seeking a buyer for its Polish wind farm project. It is the Director's judgement that the Polish wind farm project meets the criteria under IFRS 5 "Non Current Assets and Discontinued Operations" to be classified as held for sale. Accordingly the Group's Polish operations have been presented as discontinued operations.

Analysis of loss for the period from discontinued operations

The results of the discontinued operations (i.e. the Polish wind farm project) included in the Consolidated income statements are set out below. The comparative loss and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued in the current year.

3. Segmented information