23 Feb 2012 07:00
SeaEnergy PLC
("SeaEnergy" or the "Company")
23 February 2012
Appointment of Chief Executive, other board changes, plans for return of value, confirmation of strategy and review of executive remuneration
SeaEnergy today announces the appointment of a permanent Chief Executive, together with further details of a proposed return of value to shareholders, its future business plans, certain other board changes and a review of executive remuneration.
Highlights:
·; Appointment of John Aldersey-Williams as Chief Executive Officer, with immediate effect, complementing the recent appointment of David Sigsworth as Non-Executive Chairman.
·; A focus on building and acquiring complementary service businesses, including the provision of operations and maintenance to offshore wind farms and the vessels from which to provide these services. The strategy is composed of three primary areas:
o The operation and maintenance of vessels from which to deliver offshore wind farm technicians to their work site;
o The acquisition of existing profitable services business which have the potential to add value synergistically; and
o The development within the existing group of additional business services for the energy industry.
·; Following the sale of SeaEnergy Renewables Limited ("SERL") the board intends to recommend a return of value to shareholders of 10p per ordinary share or £6.9m in total, subject to the completion of the financial audit and shareholder approval at this year's AGM.
·; Recommended changes to executive directors' remuneration packages to reflect the new corporate strategy and to provide longer term incentives and individual performance bonuses.
Board changes and employment terms
The Board is pleased to announce the immediate appointment of John Aldersey-Williams as Chief Executive. The Board also announces that Steven Bertram has taken up the position of Commercial Director. Chris Moar remains as Finance Director, Steven Lampe remains as a Non-Executive Director and David Laing becomes Senior Non-Executive Director.
With David Sigsworth's recent appointment as Non-Executive Chairman, the Company has now split the roles of Chairman and Chief Executive in accordance with best practice.
Strategy
As announced in January, the Board reviewed the alternatives for the future of the Company in the light of the sale of SERL and a full evaluation of the market opportunities which it undertook in the second half of 2011. Several scenarios including the winding up of the Company and the distribution of all proceeds to shareholders were considered by the Board, which concluded, however, that the strategy of continuing to develop an energy services business provided the best prospects for maximising shareholder value by building net asset value and generating both profits and cash to enable the Company to recommence paying regular dividends in time.
The Company described a focus on the building and acquiring of complementary service businesses, including the provision of operations and maintenance to offshore wind farms and the vessels from which to provide these services.
This strategy will comprise three principal elements: the operation of vessels from which to deliver offshore wind farm technicians to their work site; the acquisition of existing profitable services businesses which have the potential to add value synergistically; and the development within the existing group of additional business services for the energy industry, with a strong focus in each case on building synergies between business streams.
Operations and Maintenance (O&M) vessels
SeaEnergy has developed an innovative vessel design which offers a much higher level of safe access to offshore wind turbines than is currently possible. There is significant interest in this concept from turbine manufacturers and wind farm developers and the Company awaits the first opportunity to participate in a tender for the deployment of a vessel in the North Sea. The Company is actively marketing this vessel concept and expects to participate in a number of tenders during the course of this year.
The Company is also in discussion with industry partners with a view to reducing its capital exposure in delivering this concept, while still benefiting from the value created from both the technological development and future operations.
This vessel concept has been validated by Det Norske Veritas, the Norwegian ship classification society, which has used the SeaEnergy design as the basis for a class definition for offshore wind farm support vessels. The concept was also commended in the Carbon Trust's recent Offshore Wind Accelerator - Access Competition, and its further development is attracting funding support from Scottish Enterprise.
Over time, SeaEnergy plans to develop additional complementary and value-adding services which can be delivered from its vessels which will assist offshore wind farms in delivering energy at the lowest cost.
These services will involve both acquisitions of revenue generative and profitable companies, and the development of new business streams within the existing group.
Acquisitions
Based on the considerable experience and expertise of its senior executives, as well as the market presence and credibility generated while SERL was a member of its group, SeaEnergy has an excellent understanding of the needs of offshore energy developers and wind turbine manufacturers.
The Company is applying this market knowledge to identify appropriate acquisition candidates, whose offerings will complement SeaEnergy's planned O&M business, and where integration within the larger SeaEnergy group has the potential to create development opportunities for those acquisition candidates themselves.
Organic business development
In addition to acquiring existing businesses, the Company plans to develop additional complementary services businesses, drawing on the expertise and wide networks of the executive team to identify and secure appropriate business opportunities and individuals.
Return of value to shareholders
Following the disposal of SERL, the Company announced its intention to consider making a return of value to shareholders following a court sanctioned restructuring of the balance sheet and completion of the audit of the Company's accounts to 31 December 2011. The balance sheet restructuring was completed and court approval was announced late in 2011, and the audit is expected to be completed towards the end of March.
The Board has resolved that, subject to the completion of the audit, it intends to recommend a return of value of 10 pence per share, amounting to a total of £6.9 million. The final structure of the return will be determined after further consultation with the Company's advisers and will be fully described in the Annual Report and the notice calling the 2012 Annual General Meeting at which approval of that recommendation will be sought.
Taking account of the undistributable Special Reserve which was created as a condition of the court approval, the Board expects that a return of £6.9 million will be close to the maximum allowable at the current time under company law and represents a significant proportion of the net realisation made from the sale of SERL.
It is the Board's intention to make this return as soon as is practicable following approval of the Board's recommendation at the AGM.
The Company has previously announced that it plans to realise, over time, the value of its legacy oil and gas holdings which are considered to be non-core. The Board intends to distribute of a proportion of the proceeds of these future disposals allowing shareholders to benefit directly from the group's realisations.
The balance of the cash resources of the Company remaining after the proposed 2012 return of value will be applied in pursuing the core business strategy.
Remuneration policy
The Board's Remuneration Committee has reviewed executive remuneration in light of the Company's revised business strategy in order to more properly align the interests of shareholders and executive directors.
Changes have been proposed which reduce the base level of executive director salaries, introduce individual performance bonus arrangements and provide long term incentives. Further details will be disclosed in the Annual Report which will accompany notice of the 2012 AGM when director's contracts of employment will be available for inspection in the ordinary course.
A long term incentive programme is being proposed to replace the previous profit bonus arrangement and the Remuneration Committee believes that such a programme, along with revised salary and annual bonus provisions will provide the better alignment already described.
David Sigsworth, Non-Executive Chairman, said:
"We are pleased to be able to announce the Company's intention to make a significant return of value to shareholders, together with more detail on our strategy and the team which will deliver it. We believe that this is an exciting moment for SeaEnergy and its shareholders, as it moves forward with a new focus to deliver sustainable shareholder returns".
John Aldersey-Williams, Chief Executive Officer, said:
"I am honoured to have been appointed to this role, and I'm looking forward to making this strategy a successful, sustainable reality."
For further information contact:
SeaEnergy PLC
John Aldersey-Williams, Chief Executive Officer +44 1224 748480
Investec
James Grace, David Flin +44 20 7597 4000
Pelham Bell Pottinger
Mark Antelme, Philippe Polman +44 20 7861 3232
www.seaenergy-plc.com
Notes for Editors:
1. SeaEnergy PLC is an AIM listed company, which was first listed as Ramco Energy plc on the USM in 1984, and was also listed on the American Stock Exchange between 1997 and 2000. It changed its name to SeaEnergy PLC in 2008, to reflect its emerging focus on the renewables sector.
2. Over the last 35 years, the company has had interests in oilfield services, oilfield development, offshore wind farm development and has most recently been developing a business in offshore wind farm services.
3. John Aldersey-Williams graduated from Cambridge University with a degree in Geological Sciences in 1984. After a period as a geologist in the oil industry, during which he completed an MBA, he joined J. Henry Schroder Wagg & Co. Limited (now part of the Citigroup), as an investment banker in a specialist energy team. He returned to the oil industry, firstly in a wide-ranging commercial role at British-Borneo Petroleum Syndicate PLC, and latterly at Texaco, where his last position was Fiscal Manager, responsible for all aspects of financial planning, reporting and control for Texaco's North Sea producing business unit. In 2001, he founded Redfield Consulting, a consulting firm which has been active in the renewables and carbon capture and storage sectors. Key clients for Redfield were SeaEnergy PLC, the European Marine Energy Centre, Talisman Energy and the Scottish Government. John has been a non-executive director of SeaEnergy PLC since 2009 and consultant to SeaEnergy PLC since 2007.
4. Steven Bertram has been with SeaEnergy since 1986 and became Finance Director in 1991 and Managing Director in 2005. During his time as Finance Director, he guided Ramco's financial affairs from its original USM listing through its international offer and listing on the American Stock Exchange in 1997 and its move to AIM. Most recently, he was instrumental in finalising and completing the sale of SERL to Repsol Nuevas Energias Limited. Steven has an MA Honours degree in Economics with Accountancy from Aberdeen University and qualified as a Chartered Accountant with Arthur Young in 1984.