27 Sep 2012 07:00
For release | 07:00 | 27 September 2012 |
The TEG GROUP PLC (AIM: TEG)
("TEG" or "the Company")
INTERIM RESULTS
The TEG Group PLC, the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, announces its interim results for the
half-year ended 30 June 2012.
Highlights
Financial
·; Period of transition for the Group, with a refocusing of the business on its operating sites, further cost reductions and, since the period end, a successful financial close on the Dagenham project.
·; Underlying trading at the group's own plant operations has been strong.
·; Half-year revenue for period was £5,617,000 (2011 interim: £9,333,000) and the Group loss was £1,795,000 (2011: £798,000), reflecting the loss of the North East Wales contract and delays to the fourth facility in Manchester and at Dagenham.
·; Group recorded a gross profit of £1,268,000 (2011 interim: £2,345,000 profit).
·; The Group cash balance as at 30 June 2012 was £1,101,000.
·; No dividend is recommended.
Operations
Group Plant Operations
·; Revenues and profit margins from the Group's own plant operations have continued to grow impressively in 2012, reflecting the continuous growth in the waste market together with a reduction in competitor capacity following stricter regulatory enforcement.
·; Operational revenues grew by 15% in the first half of 2012, with the gross margin increasing from 18% to 24%. The volume of food and co-mingled waste grew by approximately 20%.
Projects
Dagenham Facility
·; Financial close achieved on the delayed Dagenham project delivering approx. £16m in revenues from an engineering, procurement and construction contract and a further £1.3m per annum of operating revenues (escalated annually) over the term of a 15-year operating and maintenance contract.
·; In addition, the Group retains a 24.5% shareholding in the newly created project company, TEG Biogas (London) Limited.
·; Project to be the first AD plant to be built in London and a flagship plant for the Company generating approx. 1.4MW of electricity, sufficient to power approx. 2,000 homes.
·; Project funding secured by the Foresight Group, with co-funding from other equity funders including UK and regional Governments, alongside bank debt funding - the Board believes a similar funding model could be used for further projects in development by the Group.
Greater Manchester Waste PFI Contract
·; Construction of the fourth and final facility (Bolton) is proceeding well with commissioning and handover scheduled for completion in Quarter 4 of 2013.
·; TEG has successfully achieved Take Over on all three facilities constructed to date, and all remain in full operation.
Perth AD Facility
·; Commissioning of the new AD facility at Perth, the Group's first, was successfully completed in the period and the plant is in full operation.
·; The plant processes 15,000 tonnes per annum of food waste and will generate approximately 0.7MW of electricity and 0.2 MW of heat, which will be utilised on site in the Binn Eco Park development.
·; The project was funded by Albion Ventures LLP ("Albion") and Zero Waste Scotland. The Group retains a 50% shareholding in the project.
Market Update
·; The fundamental drivers remain in place for continued market growth as obligations increase on waste producers to divert organic waste from landfill and statutory obligations are expected to increase annually until 2020.
·; Landfill Tax ("LFT") rose by £8.00 per tonne in April 2012, increasing the tax to a total of £64.00 per tonne with confirmation that LFT will rise by a further £8.00 per tonne pa until at least 2014.
·; TEG's policy to promote combined IVC and AD facilities and to offer additionally contained comprehensive organic waste services wherever possible is increasingly of interest following cost and subsidy cuts at local authority and the national level alongside more stringent regulatory rules on containment.
Commenting, Rory Maw, Non-Executive Chairman, The TEG Group Plc, said:
"The financial close of the Dagenham project was a significant milestone for the Group. Market demand for more organic capacity remains strong and with a secure funding position at the project level, the Group will be well placed to continue to take advantage of the expanding market. TEG maintains a strong pipeline of tender opportunities and assuming the funding structure for the Dagenham project can be replicated this will place the Group in a strong position."
"The good performance of the Group's own plant operations and the continued growth in this segment demonstrates that if TEG can secure the appropriate level of project funding and control its costs appropriately, it will further develop its secure and profitably successful operating platform. The Board is confident that the Group has an exciting future with a promising outlook for trading in the second half of 2012 and beyond."
ENDS
Contact:
| |
The TEG Group Plc | Tel: 01772 644980 |
Michael Fishwick, Chief Executive | www.theteggroup.plc.uk |
N+1 Brewin (Nomad & Broker) |
Tel : 0845 213 1000 |
Andrew Craig/Ben Wright | |
Peckwater PR |
Tel: 07879 458 364 |
Tarquin Edwards | tarquin.edwards@peckwaterpr.co.uk |
Editor's Notes:
TEG
TEG provides state of the art technology for handling organic wastes. Its in-vessel composting (IVC) system is one of the few approved technologies capable of treating animal by-product (ABP) waste and it is now providing an anaerobic digestion (AD) technology to produce power from food waste. Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost). The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs"). TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets. The TEG processes are an economic and sustainable alternative to landfill.
The TEG Silo Cage System
The Silo Cage system, one of the few technologies capable of treating this waste, is a natural process producing compost as an end product. The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease. TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.
General
Customers include local authorities, waste management companies, food processors, farmers and landowners. The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste. Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year.
Chairman's statement
I am delighted to present the Group's interim report for the half year ended 30 June 2012, the first report since my appointment in June of this year. It has been a period of transition for the Group, with a refocusing of the business on its operating sites, further cost reductions and, since the end of the half-year, a successful financial close on the Dagenham project. Underlying trading at the group's own plant operations has been strong.
Half year revenue for the period was £5,617,000 (2011: £9,333,000) and the Group loss was £1,795,000 (2011: £798,000). This performance reflects the loss and associated costs of the North East Wales contract and delays to the fourth facility in Manchester and at Dagenham, as previously announced. Overall, the Group recorded a gross profit of £1,268,000 (2011 interim: £2,345,000 profit).
The Group cash balance as at 30 June 2012 was £1,101,000,
Group Plant Operations
Revenues and profit margins from the Group's own plant operations have continued to grow impressively in 2012, reflecting the continuous growth in the waste market together with a reduction in competitor capacity following stricter regulatory enforcement.
Operational revenues grew by 15% in the first half of 2012 compared to the same period in 2011, with the gross margin increasing from 18% to 24%. The volume of food and co-mingled waste grew by approximately 20% though there was a short term reduction in pure green waste volumes brought about by the unusually wet weather. It is expected that the volume of pure green waste will return to expected levels in the second half of the year.
Greater Manchester Waste PFI Contract
Construction of the fourth and final facility (Bolton) is proceeding well. Construction will continue until Quarter 2 of 2013 with commissioning and handover scheduled for completion in Quarter 4 of 2013.
TEG has successfully achieved Take Over on all three facilities constructed to date, and all remain in full operation. Acceptance of these facilities by the client has still to be achieved and a number of retentions remain in place, however it is still expected that these retentions will be released progressively from the final quarter of 2012.
Perth AD Facility
Commissioning of the new AD facility at Perth, the Group's first, was successfully completed in the period and the plant is in full operation. The plant processes 15,000 tonnes per annum of food waste and will generate approximately 0.7MW of electricity and 0.2 MW of heat, which will be utilised on site in the Binn Eco Park development. The project was funded by Albion Ventures LLP ("Albion") and Zero Waste Scotland. The Group retains a 50% shareholding in the project.
Dagenham Project
The Group was delighted to reach financial close on its Dagenham project on 31 August 2012. Construction of the facility will commence in the fourth quarter of 2012. This project will bring approximately £16m in revenues to the Group from an engineering, procurement and construction contract and a further £1.3m per annum of operating revenues (escalating annually) over the term of a 15-year operating and maintenance contract. In addition, the Group retains a 24.5% shareholding in the newly created project company, TEG Biogas (London) Limited.
The project will be the first AD plant to be built in London and we expect it to be a flagship plant for the Group. It will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes. It will also produce over 36,000 tonnes per annum in AD digestate and 14,000 tonnes per annum in compost for agricultural use.
The project funding secured by the Foresight Group, also attracted co-funding from other equity funders including UK and regional Governments, alongside bank debt funding. The Board is very encouraged by the scope and range of funding sourced for the project and it believes a similar model could be used for further projects being developed by the Group.
No revenues were booked for this project in the half year results.
Strategic Activities
On 22 June 2012, the Group completed an Open Offer to raise approximately £2m before expenses to provide additional working capital for the business. The Board thanks shareholders for their continued support and is pleased that excellent progress has since been made with regards to the Dagenham project, securing significant future revenues for the Group.
Following the success with the funding of the Dagenham project, the Group continues to investigate further similar investment at the project level and is in discussion with a number of other potential investors. These funding options will be considered on a case-by-case basis.
Market Update
The fundamental drivers remain in place for continued market growth as obligations increase on waste producers to divert organic waste from landfill. These statutory obligations are expected to increase annually until 2020. Landfill Tax ("LFT") rose by £8.00 per tonne in April 2012, increasing the tax to a total of £64.00 per tonne, and Government has confirmed that LFT will rise by a further £8.00 per tonne per annum until at least 2014. This is expected to continue to stimulate market growth for the foreseeable future. In addition, the Scottish Assembly has passed legislation to introduce a complete ban on the landfill of organic waste in both the public and private sectors beginning in 2014.
The Board is pleased to note a continued significant interest in IVC, often alongside AD. Local Authority costs are often reduced by the collection of green and food wastes together, and this waste stream is better suited to IVC. Whilst there is continued market interest in energy generation from food waste and the strengthening of interest in technologies such as AD, this technology still relies upon Government subsidy in the form of either renewable obligation certificates (ROCs) or feed in tariffs (FITs). The level of subsidy available is under review by Government and may be reduced for future schemes. The impact of this on future AD schemes is uncertain and the Board believes this underlines the merit of the Group policy to promote combined IVC and AD facilities wherever possible, allowing the Group to offer a comprehensive organic waste service irrespective of policy on the levels of subsidy available.
The wider regulatory environment is now benefiting the Group, as its technology lends itself to the additional level of containment required by the regulators, which is now being enforced more generally. In addition, the regulators have introduced policies to reduce the level of low-grade green waste disposal. In time, this is expected to increase the volume of green waste diverted into the composting sector.
Future Prospects
The financial close of the Dagenham project was a significant milestone for the Group. Market demand for more capacity remains strong and with a secure funding position at the project level, the Group will be well placed to continue to take advantage of the expanding market. TEG maintains a strong pipeline of tender opportunities and assuming the funding structure for the Dagenham project can be replicated this will place the Group in a strong position. The good performance of the Group's own plant operations and the continued growth in this segment demonstrates that if TEG can secure the appropriate level of project funding and control its costs appropriately, it will be well placed to deliver a profitable and successful operating platform. The Board is confident that the Group has an exciting future with a promising outlook for trading in the second half of 2012 and beyond.
Rory Maw
Chairman
27 September 2012
Consolidated statement of comprehensive income
For the six months ended 30 June 2012
Unaudited | Unaudited | Unaudited | Unaudited | Audited | ||
Before | ||||||
exceptional costs | Exceptional costs | Total | Total | Total | ||
6 months ended 30 June 2012 | 6 months ended 30 June 2012 | 6 months ended 30 June 2012 | 6 months ended 30 June 2011 | Year ended 31 December 2011 | ||
Note | £'000 | £'000 | £'000 | £'000 | £'000 | |
Revenue | 3 | 5,617 | - | 5,617 | 9,333 | 17,871 |
Cost of sales | (4,349) | - | (4,349) | (6,988) | (13,391) | |
Gross profit | 1,268 | - | 1,268 | 2,345 | 4,480 | |
Administrative expenses | (2,814) | (91) | (2,905) | (2,958) | (5,762) | |
Exceptional impairment charges | - | - | - | - | (6,264) | |
Amortisation of intangible assets | (152) | - | (152) | (152) | (304) | |
Total administrative expenses | (2,966) | (91) | (3,057) | (3,110) | (12,330) | |
Operating loss | (1,698) | (91) | (1,789) | (765) | (7,850) | |
Finance income | 34 | - | 34 | 8 | 16 | |
Finance costs | (83) | - | (83) | (90) | (170) | |
Loss before tax | 3 | (1,747) | (91) | (1,838) | (847) | (8,004) |
Income tax | 43 | - | 43 | 49 | 388 | |
Loss for the period | (1,704) | (91) | (1,795) | (798) | (7,616) | |
Other comprehensive income | - | - | - | - | - | |
| Total comprehensive loss for the period |
(1,704) |
(91) | (1,795) |
(798) | (7,616) | |
Attributable to: | ||||||
Equity holders of the parent | ||||||
Retained loss | (1,704) | (91) | (1,795) | (798) | (7,616) | |
Loss per share | ||||||
Basic and diluted loss per share (pence) | 5 | (1.43) | (0.07) | (1.50) |
(1.05) | (7.90) |
Consolidated statement of financial position
As at 30 June 2012
Unaudited | Unaudited | Audited | ||
30 June 2012 | 30 June 2011 | 31 December 2011 | ||
Note | £'000 | £'000 | £'000 | |
ASSETS | ||||
Non-current assets | ||||
Goodwill | 3,883 | 6,152 | 3,883 | |
Intangible assets | 1,103 | 1,407 | 1,255 | |
Property, plant and equipment | 15,779 | 19,564 | 16,196 | |
Trade and other receivables | 993 | 700 | 1,000 | |
21,758 | 27,823 | 22,334 | ||
Current assets | ||||
Inventories | 382 | 517 | 555 | |
Trade and other receivables | 9,006 | 9,357 | 7,329 | |
Taxation receivable | 166 | - | 166 | |
Cash and cash equivalents | 1,101 | 1,520 | 1,557 | |
10,655 | 11,394 | 9,607 | ||
Total assets | 32,413 | 39,217 | 31,941 | |
LIABILITIES | ||||
Current liabilities | ||||
Trade and other payables | 7,406 | 10,471 | 6,477 | |
Taxation payable | - | 71 | - | |
Contingent consideration | - | 300 | - | |
Current portion of long-term borrowings | 386 | 781 | 421 | |
Current portion of deferred consideration | 200 | 206 | 253 | |
Provisions | 40 | - | 265 | |
8,032 | 11,829 | 7,416 | ||
Non-current liabilities | ||||
Long-term borrowings | 1,734 | 1,607 | 1,833 | |
Long-term deferred consideration | 610 | 851 | 684 | |
Deferred tax | 404 | 620 | 447 | |
Provisions | 30 | - | 50 | |
2,778 | 3,078 | 3,014 | ||
Total liabilities | 10,810 | 14,907 | 10,430 | |
Net assets | 21,603 | 24,310 | 21,511 | |
EQUITY | ||||
Equity attributable to equity holders of the parent | ||||
Share capital | 4 | 6,582 | 3,811 | 5,872 |
Share premium | 39,201 | 36,995 | 38,045 | |
Merger relief reserve | 886 | - | 886 | |
Other reserves | 1,082 | 1,039 | 1,061 | |
Retained losses | (26,148) | (17,535) | (24,353) | |
Total equity | 21,603 | 24,310 | 21,511 | |
| ||||
Consolidated statement of changes in equity
For the six months ended 30 June 2012
Share capital | Merger relief reserve | Share premium | Other reserves | Retained losses | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000
| |
Balance at 1 January 2011 | 3,781 | - | 36,876 | 1,005 | (16,737) | 24,925 |
Issue of share capital | 30 | - | - | - | - | 30 |
Premium on issue of share capital | - | - | 119 | - | - | 119 |
Recognition of share-based payments | - | - | - | 34 | - | 34 |
Transactions with owners | 30 | - | 119 | 34 | - | 183 |
Loss for the period and total comprehensive income | - | - | - | - | (798) | (798) |
Balance at 30 June 2011 | 3,811 | - | 36,995 | 1,039 | (17,535) | 24,310 |
Issue of share capital | 2,061 | - | - | - | - | 2,061 |
Premium on issue of share capital | - | 285 | 1,793 | - | - | 2,078 |
Issue costs | - | - | (142) | - | - | (142) |
Transfer from share premium | - | 601 | (601) | - | - | - |
Recognition of share-based payments | - | - | - | 22 | - | 22 |
Transactions with owners | 2,061 | 886 | 1,050 | 22 | - | 4,019 |
Loss for the period and total comprehensive income | - | - | - | - | (6,818) | (6,818) |
Balance at 31 December 2011 | 5,872 | 886 | 38,045 | 1,061 | (24,353) | 21,511 |
Issue of share capital | 710 | - | - | - | - | 710 |
Premium on issue of share capital | - | - | 1,419 | - | - | 1,419 |
Issue costs | - | - | (263) | - | - | (263) |
Recognition of share-based payments | - | - | - | 21 | - | 21 |
Transactions with owners | 710 | - | 1,156 | 21 | - | 1,887 |
Loss for the period and total comprehensive income | - | - | - | - | (1,795) | (1,795) |
Balance at 30 June 2012 | 6,582 | 886 | 39,201 | 1,082 | (26,148) | 21,603 |
Consolidated statement of cash flows
For the six months ended 30 June 2012
Unaudited | Unaudited | Audited | ||
6 months | 6 months | Year | ||
ended | ended | ended | ||
30 June 2012 | 30 June 2011 | 31 December 2011 | ||
£'000 | £'000 | £'000 | ||
Cash flows from operating activities | ||||
Loss after taxation | (1,795) | (798) | (7,616) | |
Adjustments for: | ||||
Depreciation | 711 | 880 | 1,661 | |
Amortisation of intangibles | 152 | 152 | 304 | |
Goodwill impairment charge | - | - | 2,269 | |
Property, plant and equipment impairment charge | - | - | 3,904 | |
Share based administrative expense | 21 | 34 | 56 | |
Taxation credit recognised in the statement of comprehensive income | (43) | (49) | (388) | |
Finance costs | 83 | 90 | 170 | |
Finance income | (34) | (8) | (16) | |
Profit on sale of property, plant and equipment | (33) | (14) | (65) | |
Increase in trade and other receivables | (1,670) | (2,805) | (1,077) | |
Decrease in inventories | 173 | 99 | 61 | |
Increase / (decrease) in trade payables | 929 | 2,604 | (1,184) | |
(Decrease) / increase in provisions for other liabilities | (245) | - | 90 | |
Cash (used in)/from operations | (1,751) | 185 | (1,831) | |
Interest paid | (60) | (61) | (111) | |
Taxation | - | (121) | (171) | |
Net cash (used in)/from operating activities | (1,811) | 3 | (2,113) | |
Cash flows from investing activities | ||||
Acquisition of business - deferred consideration | (150) | (150) | (300) | |
Purchase of property, plant and equipment | (299) | (1,406) | (2,464) | |
Proceeds from sale of property, plant and equipment | 38 | 56 | 73 | |
Interest received | 34 | 8 | 16 | |
Net cash (used in)/from investing activities | (377) | (1,492) | (2,675) | |
Cash flows from financing activities | ||||
Proceeds from issue of share capital | 1,866 | - | 3,696 | |
Repayment of loan | (3) | (86) | (173) | |
Payment of finance lease liabilities | (131) | (294) | (567) | |
Net cash from / (used in) financing activities | 1,732 | (380) | 2,956 | |
Net decrease in cash and cash equivalents | (456) | (1,869) | (1,832) | |
Cash and cash equivalents at beginning of period | 1,557 | 3,389 | 3,389 | |
Cash and cash equivalents at end of period | 1,101 | 1,520 | 1,557 |
Notes to the interim report
1. Nature of operations and general information
The principal activities of The TEG Group Plc and its subsidiaries ('the Group') are the design and production of Silo-cage composting plants and Anaerobic Digestion (AD) plants for sale to third party clients, and the design, build and operation of TEG owned waste recycling facilities.
The TEG Group Plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of TEG Group Plc's registered office, which is also its principal place of business, is Westmarch House, 42 Eaton Avenue, Buckshaw Village, Chorley, PR7 7NA. The TEG Group Plc's shares are listed on the Alternative Investment Market of the London Stock Exchange.
The TEG Group Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.
These consolidated condensed interim financial statements have been approved for issue by the Board of Directors on 27 September 2012.
The figures for 31 December 2011 are an abridged version of the Group's full financial statements and, together with other financial information contained in this interim report, which is unaudited, do not constitute statutory financial statements of the Group as defined in Section 434 of the Companies Act 2006. Statutory financial statements for the year ended 31 December 2011 have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors was unqualified and did not contain a statement under section 498 (2) or Section 498 (3) of the Companies Act 2006.
2. Basis of preparation
The Group's interim condensed consolidated financial statements are for the six months ended 30 June 2012 and have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS). 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 for the year ended 31 December 2011.
These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year 31 December 2011.
Following the open offer on 25 June 2012, the Group has considerable financial resources available. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The Directors have also prepared cash flow forecasts for the period until December 2013. As part of the preparation of these forecasts, the Directors have estimated the likely conversion of potential future contracts. Before entering into a contract, the Directors ensure that the Group has sufficient working capital facilities available to allow the completion of the contract. Based on these forecasts, the Directors have confirmed that there are sufficient cash reserves to fund the operations business for the period under review. After reviewing these forecasts, consideration of the Group's cash resources and other appropriate enquiries, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the interim statements.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.
3. Business segments
For management purposes, the Group is organised into the following operating segments: Operations segment and Projects segment. Prior to June 2011, the Group had been organised into build own and operate, IVC sales to third parties, AD sales to third parties, product management revenue and other corporate expenses. During the prior year, the organisational structure of the Group was restructured and the figures for the six months to June 2011 have been restated accordingly with build, own and operate and product management being reported with the Operations segment, whilst IVC and AD sales to third parties are now being reported within the Projects segment.
All revenues from external customers and non-current assets are attributable to, and located in, Great Britain.
In identifying its operating segments, management follows the Group's service lines which represent the main products and services provided by the Group. These operating segments are monitored and strategic decisions are made on the basis of segment operating results.
The Projects segment includes IVC and AD sales to third parties including the design, production and installation of plants for sale to third party clients. The Operations segment relates to facilities which are owned and operated by the Group. These sites process waste received from customers and manage the compost produced by the facilities. The Operations segment is also responsible for the maintenance and operating contracts carried out for third parties. The revenues and net result generated by each of the Group's operating segments are summarised as follows:
6 months to 30 June 2012
Operations | Projects | Other corporate expenses | Consolidated
| |
£'000 | £'000 | £'000 | £'000 | |
External revenue | 4,622 | 995 | - | 5,617 |
Gross profit | 1,115 | 153 | - | 1,268 |
Segment corporate expenses | (539) | (1,151) | (483) | (2,173) |
Depreciation | (694) | - | (17) | (711) |
Amortisation | (152) | - | - | (152) |
Segment loss before taxation | (270) | (998) | (500) | (1,768) |
Share-based payment expense | (21) | |||
Operating loss | (1,789) | |||
Finance income | 34 | |||
Finance costs | (83) | |||
Loss before taxation | (1,838) |
6 months to 30 June 2011
Operations | Projects | Other corporate expenses | Consolidated
| |
£'000 | £'000 | £'000 | £'000 | |
External revenue | 4,017 | 5,316 | - | 9,333 |
Gross profit | 723 | 1,622 | - | 2,345 |
Segment corporate expenses | (487) | (1,225) | (332) | (2,044) |
Depreciation | (829) | - | (51) | (880) |
Amortisation | (152) | - | - | (152) |
Segment (loss) / profit before taxation | (745) | 397 | (383) | (731) |
Share-based payment expense | (34) | |||
Operating loss | (765) | |||
Finance income | 8 | |||
Finance costs | (90) | |||
Loss before taxation | (847) |
Year to 31 December 2011
Operations | Projects | Other corporate expenses | Consolidated
| |||
£'000 | £'000 | £'000 | £'000 | |||
External revenue | 8,944 | 8,927 | - | 17,871 | ||
Gross profit | 1,834 | 2,646 | - | 4,480 | ||
Segment corporate expenses |
(1,110) |
(2,320) |
(615) |
(4,045) | ||
Impairment charges | (6,264) | - | - | (6,264) | ||
Depreciation | (1,613) | - | (48) | (1,661) | ||
Amortisation | (304) | - | - | (304) | ||
Segment (loss) / profit before taxation |
(7,457) |
326 |
(663) |
(7,794) | ||
Share-based payment expense | (56) | |||||
Operating loss | (7,850) | |||||
Finance income | 16 | |||||
Finance costs | (170) | |||||
Loss before taxation | (8,004) | |||||
4. Share Capital
On 25 June 2012, the Group converted 117,439,360 Ordinary Shares with a nominal value of £0.05 each into 117,439,360 Ordinary Shares with a nominal value of £0.01 each and 117,439,360 Deferred Shares with a nominal value of £0.04 each.
Immediately following this capital reorganisation, the Group issued 70,989,288 Ordinary Shares of £0.01 at a price of £0.03 per share, raising £2,129,000 before issue costs of £263,000.
6 months to 30 June 2012 | ||
Ordinary Shares of £0.05 each
| Number | £'000 |
At 1 January 2012 | 117,439,360 | 5,872 |
Capital reorganisation | (117,439,360) | (5,872) |
At 30 June 2012 | - | - |
Ordinary Shares of £0.01 each | ||
Number | £'000 | |
At 1 January 2012 | - | - |
Capital reorganisation | 117,439,360 | 1,174 |
Issue of shares | 70,989,288 | 710 |
At 30 June 2012 | 188,428,648 | 1,884 |
Deferred Shares of £0.04 each | ||
Number | £'000 | |
At 1 January 2012 | - | - |
Capital reorganisation | 117,439,360 | 4,698 |
At 30 June 2012 | 117,439,360 | 4,698 |
| ||
6 months to 30 June 2011
Ordinary Shares of £0.05 each | ||
Number | £'000 | |
At 1 January 2011 | 75,617,825 | 3,781 |
Issue of shares | 608,520 | 30 |
At 30 June 2011 | 76,226,345 | 3,811 |
Year to 31 December 2011 | ||
Ordinary Shares of £0.05 each
| Number | £'000 |
At 1 January 2011 | 75,617,825 | 3,781 |
Issue of shares | 41,821,535 | 2,091 |
As at 31 December 2011 | 117,439,360 | 5,872 |
The deferred shares have no voting rights. The shares are not entitled to any dividend or other distribution or to participate in any way in the income or profits of the Group.
5. Loss per share
6 months | 6 months | Year | |
ended | ended | ended | |
30 June 2012 | 30 June 2011 | 31 December 2011 | |
£'000 | £'000 | £'000 | |
Loss for the financial year after tax | (1,795) | (798) | (7,616) |
Adjustments to basic earnings | |||
Exceptional costs | 91 | - | 6,264 |
Underlying losses before exceptional costs | (1,704) | (798) | (1,352) |
Number | Number | Number | |
Weighted average number of shares for the purposes of basic, diluted and underlying losses per share | 119,439,058 | 76,017,902 | 96,334,294 |
Pence | Pence | Pence | |
Basic loss per share | (1.50) | (1.05) | (7.90) |
Diluted loss per share | (1.50) | (1.05) | (7.90) |
Basic underlying loss per share before exceptional costs | (1.43) | (1.05) | (1.40) |
Underlying losses per share has been disclosed to give a clear understanding of the Group's underlying trading performance. It has been calculated using the underlying earnings figures above and the weighted average number of ordinary shares above.
Diluted losses per share is equal to the basic loss per share as the share options in issue at 30 June 2012 are anti-dilutive in respect of the diluted loss per share calculation and have therefore not been included.