Plutus PowerGen Plc / Ticker: PPG / Index: AIM

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR').  Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

 

14 September 2017

Plutus PowerGen plc ('PPG' or 'the Company')

Final Results

 

Plutus PowerGen plc, the AIM listed power company focused on the development, construction and operation of flexible power generation facilities in the UK, announces its final results for the year ended 30 April 2017.

 

Highlights

 

·      Milestone year, with the commissioning of first site and generation of revenue in excess of £1.35 million

·      Maiden profit before development site write-offs

·      Commissioning and successful operation of first 20MW facility at Plymouth, with construction proceeding at five further facilities to be connected by year end

·      Including post year end, all Rockpool co-owned sites are either operating, in or about to commence construction, amounting to a total of 180MW

·      Strategic shift to the development of higher margin gas operations - 80MW in planning

·      Post year end joint venture agreed to develop battery storage sites

·      Positive outlook post Ofgem review, and favourable energy dynamic due to energy supply deficit and imbalances - UK power prices peaked above £1,500 per MW hour

·      Strong pipeline of future gas and battery sites expected to significantly increase revenue and profitability

 

Charles Tatnall, Executive Chairman of the Company, said: "We are delighted with the progress we have made as we look to build on our early successes in the FlexGen arena and expand our business model into gas powered generation and power storage.  We are now at an inflection point with one site in operation and all nine of the Rockpool sites in, or about to commence, construction.  With the development of higher margin gas sites, of which 80MW is already in planning, and further expansion into the energy storage arena, I am truly excited about the future. We remain extremely positive about the future for Plutus with the changes in UK power generation energy mix creating imbalances in supply and therefore market opportunities for our operations in FlexGen, Gas powered generation and power storage. We have a proven business model and are executing our strategy with further exciting opportunities in the pipeline."

 

Chairman's Statement

 

In a year that saw our first site become operational, I am pleased to report our maiden trading profits, indicating the viability of our business model and our confidence in our pipeline.

 

Key areas of focus

With the commissioning of our inaugural project in Plymouth in November 2016, I am delighted to report that we generated a maiden profit at the half year and a trading profit at the year end, before write offs with regard to irrecoverable disbursements for sites that are not going ahead for various reasons. Such reasons include planning permission not being achieved, overly expensive or impractical connections for a variety of reasons such as location expense or likely construction difficulties. Nevertheless, at the time of writing we now have all nine sites with Rockpool in various stages of development; one of which is operating, a further five are currently being built and should be operating by the New Year, with the balance to be built out in 2018. Our primary operational focus has therefore been on the continued execution and delivery of the nine sites equity funded by Rockpool Investments LLP of which we have a 44.5% interest in each.

 

As a complement to our green diesel projects, the group is now diversifying into gas fuelled power generation and battery powered energy storage projects, which may also be used in conjunction with SolarFlex and gas-powered generation sites. The management team has been working to develop and progress a pipeline of gas powered sites in which we intend to hold majority stakes of typically 80% but may also be joint ventures. We retain complete flexibility in financing projects going forward but aim to ensure that all future gas sites operated via new companies, typically holding 20MW each as before, are able to be consolidated in our accounts.  With this in mind, we recently launched a £50 million bond advised by Bedford Row Capital, to be listed in Frankfurt, that is about to be marketed to investors. The bond is to fund the 'equity' portion of each site; each site has a typical capacity of 20MW, is held in a special purpose vehicle, and will normally have 20-40% of equity, with the balance funded with asset or project finance.

 

Market context

There has been some uncertainty in the market on account of regulatory reviews from DEFRA and Ofgem (read more in the Market Overview below). In light of these reviews and the proposed phasing out of Triad payments over the next three years, we have remodelled the existing businesses and future gas operated sites. We are still able to achieve a reasonable IRR for FlexGen projects and a very good IRR (well in excess of 20%) for all gas projects, which will likely operate for a longer number of hours per annum.

 

The underlying drivers of overall supply and demand for power have not changed, however, and we believe that the markets for STOR and FFR, for example, will firm over the coming years. The power supply mix to the National Grid will also mean that there will be many opportunities to trade electrons in future, due to the peaks and troughs in the market. Over winter 2016/17, Attune Energy Ltd (our site in Plymouth) could have earned c.£1.5-£1.8m by taking advantage of market prices when these spiked. Because of commitments to FFR, Triad and STOR, we have not always been able to take advantage of such fluctuations, but expect to be in a better position to do so with gas powered sites. Attune Energy operated very successfully during last winter with an above budget operating profit.

 

Strategy

In addition to our planned focus on installing gas engine capacity and the bond to finance this, we are looking at the use of power storage, i.e. batteries or capacitor technologies, in conjunction with our gas sites, which will open up FFR markets and other fast response tariffs to gas. Our strategy with respect to the green diesel sites is - alongside Rockpool - to either sell these after the end of the EIS qualification period or to make an offer for the 55.5% we do not already own. Our relationship with a leading Big Six multinational utility company to fund up to 20% of any 20MW renewable fuel or gas powered flexible energy projects going forward fits ideally with the Company's strategy to deliver projects in which it holds an 80% interest, and this relationship is envisaged to provide sufficient equity to allow PPG to develop majority owned assets while maintaining its policy of limiting dilution to shareholders as far as possible. It also gives us additional flexibility in funding our various project types going forward including Gas, SolarFlex and Battery Power Storage.

 

Dividend

We do not propose to pay a dividend as we plan to reinvest all internally generated funds for the foreseeable future.

 

Outlook

At the end of a busy and productive year, I wish to thank the staff and Directors for their valued contributions, as well as our partners and advisors, who provide invaluable support in developing our operations. In February 2017, we appointed Cantor Fitzgerald Europe as Nominated Advisor and Broker to the Company with whom we also look forward to a long and fruitful relationship.

 

We have a robust pipeline, with 240MW in the active pipeline (building, planned and expected planning) and a total pipeline of all types of generation and storage of around 700MW. In light of the foregoing, we view the year ahead with confidence, and look forward to securing planning permission on our pipeline of gas and battery sites and building out that portfolio over the coming years.

 

Charles Tatnall

Executive Chairman

13 September 2017

 

 

CHIEF EXECUTIVE'S REVIEW

 

We continue to roll out our model, which is designed to address fundamental market drivers and to be resilient in the face of current regulatory uncertainty.

 

Highlights

The last year saw the achievement of two related milestones for Plutus Powergen. Our first site - Attune Energy in Plymouth - came online in November 2016 and, as a result of meeting the three Triad periods, the site was profitable over the small number of hours it generated. Secondly, as a result of securing access to planning for the Rockpool sites, the Company was pleased to be able to report achieving our maiden trading profit before development site write offs at the year end.

 

We have made good progress with the installation of power generation projects, and will have 6 operational facilities representing 120MW of capacity by the end of 2017. We have the remaining three Rockpool sites with planning and anticipate having these built in time for next winter.

 

Further sites will be based on gas powered engines (see Strategy, below). We have submitted planning applications for 80MW of gas capacity, and have a total pipeline of gas, (mains and LNG), and battery sites of 700MW.

 

In last December's capacity auction, we were awarded Capacity Mechanism contracts for three 20MW sites and have entered a further eight sites for the next auction in February 2018.

 

Market context

There remains regulatory uncertainty in the market. In March 2017, Ofgem published a 'minded to' decision, which it confirmed recently. From the winter of 2020/21, this would reduce the embedded benefits received by distribution connected generators such as PPG to the residual charge. While this change settles down, there is concern among industry participants that price volatility will increase, which in turn will lead to higher energy prices.  Additionally, third party analysis indicates that generators generating for the Triad market have acted to depress volatility over the winter - or peak demand - months. The effect of increased volatility over the winter months, when demand is high, increases the risk that energy prices will spike.  While there is a price cap of £1,500/MWh, there are plans in place for this to be raised to £3,000 initially and then to £6,000 per MWh. This cost must either be absorbed by suppliers or passed on to the consumer, but we may be able to benefit from such spikes.

 

Despite Ofgem's decision, our returns are still anticipated to be at or above our base case projections. Any loss of Triad income is expected to be offset by firmer prices in the balancing markets as National Grid seeks to physically balance the grid and the market for flexible power as suppliers seek to balance their retail power books and mitigate energy price volatility.

 

The outcome of DEFRA's consultation on lower emissions limits was delayed by the general election until just recently, but we are confident of being able to comply with the proposed new rules without any material impact on investor returns.  The proposed outcomes in relation to the transposition into UK law of the Medium Combustion Plant Directive (MCPD) will require us to fit selective catalytic reduction (SCR) or other measures to reduce the NOx from our green fuel fleet, but the cost of this is manageable.  We continue to monitor and be involved in the consultation process.

 

National Grid launched a review in June of all markets which seeks to make the balancing markets in which we compete more dynamic and closer to real-time. Over the next 18 months National Grid plans to rationalise the number of markets they operate for balancing, and also be more transparent with the data and the way that they balance. They also want to make the markets more real time: a day ahead FFR market and STOR, and an in-day trading market around frequency response. They are consulting about shifting the market away from auctions to a traded market, to trade capacity in the same way as the market trades electrons. These changes will cement the role of local, reliable, flexible generation in the UK energy mix.

 

Notwithstanding this uncertainty and likely changes to the way that value will be distributed in the market, the fundamental drivers remain the same. Insufficient base load power generation capacity is being installed. No large gas power stations are being built, and still no nuclear, yet demand for energy is increasing and becoming more reliant on renewable sources to meet it. The proposed withdrawal of new petrol and diesel cars from the roads by 2040 will further increase demand for power for charging electric vehicles.

 

A key indicator of the importance of flexible generation is that energy suppliers are finding ever more inventive ways to access that capacity.  These solutions range from innovative procurement arrangements, through to co-investment.  Additionally, some suppliers are starting to develop innovative solutions, such as using existing energy market contracts to hypothecate or match up demand and supply, so consumers can be more certain of the price in a highly volatile market.  This is a good thing for big power consumers or local communities that are a little off grid or can organise to capitalise on such opportunities, but the net effect is that the remaining market may become even more volatile, resulting in further separation between the energy rich and energy poor.

 

Objectives and strategy

Our original objective was to have 200MW of generating capacity within three years.  By the end of this calendar year we will have 120MW installed and operational, and the remaining three renewable diesel sites operational in time for next winter.  This means we will have achieved 180MW of renewable diesel sites - or 90% of our target - after four years, through some very challenging times from a regulatory and financing perspective.

 

Our most significant strategic shift is our decision to diversify into gas powered engines.  We started this process in the new year, and now have 80MW of projects in planning and a further 120MW in the pre-planning stage.  This means that we are aiming for around 200MW of gas-fired generation over the next two to three years, and we continue develop our overall pipeline of 700MW further.

 

There are several factors that favour gas for use in flexible generation:

·      More hours of running

·      Lower levels of pollution, in terms of NOx, CO2 and CO, and SOx;

·      Negligible soot and particulate emissions, and no smoke or odour in exhaust gases;

·      Similar levels of efficiency as green fuel engines;

·      Greater reliability, allowing higher maintenance intervals and thus reducing costs as well as waste oil;

·      Reduced noise and vibration;

·      The ability to operate on a wide range of gaseous fuels, from mains gas and LNG through to digester gas derived from the anaerobic digestion of sewage and other organic wastes.

 

Each gas-powered site, which will take approximately eight months to construct, is anticipated to generate an EBITDA of up to £3m per year when Capacity Mechanism payments commence.

 

With gas engines, the economics are such that they are able to run merchant to take advantage of peak prices as well as assist suppliers in managing volatility in their retail power books.  Looking back over history, peak energy prices suggest these facilities would need to run in the range of 1200-1400 hours per year.  Since volatility drives peak energy prices, these numbers may well increase. 

 

We are beginning to look at hybrid technologies whereby both the gas and green fuel sites would be fitted with a storage (or exhaustible) capability, such as batteries. Combining firm and exhaustible generation on the same site allows us to compete in more real-time markets, which is the strategic direction in which National Grid is consulting to implement these markets. We will be piloting these technologies on our sites once we have established the economic and technical cases.

 

SolarFlex, which seeks to co-locate firm generation and intermittent generation sources, and investigate installing exhaustible generation to build 'real-world' operational data sets, remains part of our strategy however has been slower to come to fruition as prospective partners have not yet decided their preferred approach.  We continue to explore this approach and remain confident we can demonstrate the value to solar operators as our hybrid sites establish themselves.

 

Outlook

We have a healthy pipeline, and will continue to progress with our strategy to develop, build, own and operate flexible generation capacity.  The renewable green diesel sites for Rockpool are secured, with five to be connected by the end of the year and the remaining three by the end of next.  We are beginning our gas journey with 80MW in planning with the aim to meet our initial target of 200MW.  Although we are closing the chapter on renewable diesel fuel, we will seek to make those assets more valuable by retrofitting appropriate storage technology as it becomes economic.

 

Despite some regulatory question marks, we remain confident that our FlexGen model is a key part of the solution to the challenges ahead as a result of the structural changes to the UK's energy mix.

 

Phil Stephens

Chief Executive Officer

13 September 2017

 

 

SUSTAINABILITY

 

Our flexible, standby sites facilitate the UK's increasing reliance on renewable energy.

 

By plugging intermittency gaps from renewable energy power generation in a cost-effective manner, our sites will assist in enabling further decarbonisation of the UK energy sector.

 

Our FlexGen facilities are anticipated to run for no more than 150 hours per year in 60-minute blocks of time during peak demand, and may not exceed 300 hours as a result of the commitments made in the planning permission process. Despite providing valuable standby generating capacity, each facility is expected to be switched off for more than 97% of the time, ensuring that annualised emissions are minimal. Our facilities will conform to all UK and EU air quality standards.

 

Our Rockpool co-investment power generation sites are fired with green renewable fuel from HVO (hydrogenated vegetable oil), which reduces the environmental impact and also stimulates the development of such fuels by providing a proven market. Relative to conventional diesel, this fuel eliminates sulphur oxides (SOx), reduces nitrogen oxides (NOx) by c.30% and reduces particulates.

 

We also continually evaluate other types of green fuel and look at technology to add to our generators to comply with the more stringent requirements associated with the incoming Medium Combustion Plant Directive.

 

OUR MARKET

 

Despite a considerable degree of regulatory uncertainty, the fundamental drivers of demand for flexible electricity generation remain, on account of structural changes to the UK's power generation mix.

 

Increasing volatility

As high carbon sources of energy continue to be retired, renewable power generation has come to account for close to 30% of the UK's energy supply. With the Government's commitment to closing all coal-fired power stations by 2025, and with new gas or nuclear power stations at least 10 to 15 years away from coming online, reliance on diverse and intermittent sources of energy embedded within the distribution network (notably wind and solar) is set to increase.  The lower proportion of energy generated from reliable 'baseload' sources has led to increasing challenges in the balancing of supply and demand. As the energy mix changes, there is reduced availability of flexibility in the Balancing Mechanism, and/or this is becoming more costly to access.

 

Continuing tight capacity margins

Capacity margins - the difference between peak electricity demand and the capacity available to meet this - have become tighter in recent years. For winter 2016/17, National Grid continue to warn of tight margins and the volume procured in the Capacity Market remains sizeable. The scheduled closure of coal power stations, coupled with uncertainty and delays in respect of nuclear and gas sites, are likely only to exacerbate these issues.

 

Changing need for balancing services

As system operator, National Grid is responsible for ensuring that the UK electricity system has sufficient supply to match demand, and operates balancing services to continuously match supply to demand to avoid frequency distortions, brownouts or blackouts.

 

The current markets are complex, unclear and not future-proof, and not accessible to all potential providers. The changing energy mix and the increasing need for cost-effective flexibility means a review of the current markets is required.

 

As outlined in its System Needs and Product Strategy (SNAPS) proposal in June 2017, National Grid aims to have in place, by 2021, a smart, flexible system that harnesses all available energy sources - a simple, transparent marketplace for new and established providers and technology types. By simplifying balancing services and improving the sharing of information, the objective is to remove barriers to allow better use to be made of distributed energy sources.

 

National Grid also recently introduced an Enhanced Frequency Response market, for very rapid response such as could be provided by battery storage units. Battery storage remains markedly higher cost than other short-term generation solutions and has technological limitations. As a result, this new market is likely to complement, rather than remove demand from existing frequency response markets.

 

MARKET DRIVERS FAVOUR FLEXIBLE POWER GENERATION

In the context of the structural changes to the UK energy sector outlined above and the resulting challenges, flexible power generation plays a vital role in supporting the pillars of the UK's energy strategy, as summarised in the table below.

 

Keeping the lights on	Network support • Improve operational capability by lowering demands on the network • Support the distribution system and provide an important tool to accommodate intermittency of renewable sources Frequency control • Maintain system frequency within operating parameters by generating very quickly, supporting local balancing System inertia improvement • Lower the risk of failure by increasing the inertia on the system Short run back up capacity • Add small scale capacity that can run when larger assets fail
Affordable	Best value to the consumer • Derive all revenue through market-delivered processes • Provide opportunity for reduced connection costs by sharing Grid connections with solar
Low carbon	A system that allows the wider decarbonisation of energy • Provide operational 'cover' for renewables • Give network operators fine tuning capability rather than large scale capacity

 

Unlike large power stations, which connect to the high voltage transmission grid, most flexible generating assets connect directly to local distribution networks. This is known as embedded generation, and confers several advantages that result in lower consumer bills, as well as generators earning a premium over wholesale electricity prices:

 

·      Reduced charges: Although embedded generation providers are subject to local distribution network fees, they avoid charges relating to transmission use, distribution system use and system balancing. Embedded generation also reduces the need for investment in the transmission and distribution networks, and saves costs associated with operating and maintaining existing infrastructure.

·      Reduced thermal losses;

·      Reduced regulation: embedded generation is not subject to regulatory burdens such as the Carbon Price Floor and Climate Change Levy.

 

Embedded generation also generally reduces the volume from balancing energy and hence can reduce the cost of balancing the system on a half hourly basis. Controllable plants such as generators also facilitate management of intermittency at a local level, allowing greater deployment of renewable generation assets than would otherwise be viable.

 

The operational benefits and cost efficiencies in the form of avoided charges are typically shared between suppliers and the local producers they contract with, and ultimately benefit consumers through reduced energy bills.

 

OUR BUSINESS MODEL

Our multi-revenue stream model is founded upon the development of 20MW flexible generation facilities, funded through a combination of equity and asset finance via dedicated investments and subsidiaries.

 

WHAT WE DO

We are applying our management expertise to the establishment of a group of subsidiaries and investments active in the development, construction and operation of stand-by flexible electricity generation sites in the UK.

 

We sell power to energy suppliers and the National Grid via several mechanisms, and our sites are expected to operate during periods of peak electricity demand or grid instability.

 

HOW WE OPERATE

Proven, modular generation technology

We use established, reliable technology based on containerised generators, fired with renewable green fuel and - going forward - gas, and possibly in conjunction with battery storage or independent battery storage projects. Treated as embedded generation, our unmanned gensets supply the local low voltage distribution network and are switched on remotely, reaching full output, depending on generation power type, within 10-150 seconds. Each plant generally has a maximum generating capacity of 20MW. This is optimal for two reasons:

• The planning thresholds - and therefore construction timescales - are reduced; and

• The emissions fall below a European threshold, thereby reducing compliance costs and risk.

 

Non-dilutive finance model

By setting up a dedicated entity for each site, we have limited medium-term dilution to existing holding company shareholders. The first nine sites have been financed with equity from clients of Rockpool in each of the nine investment entities established for this purpose, and have advance assurance from Her Majesty's Revenue and Customs to benefit from EIS-related tax benefits. PPG has a 44.5% stake in each of these entities, and currently derives revenue from a management contract with each site. From November 2015, EIS was closed off to new standby power generation projects. Future projects will be held in separate subsidiary companies, in which PPG will seek to obtain an interest of 80%, however PPG may enter into joint ventures or other flexible financing options, the principle generally being that the accounts of each vehicle will be capable of consolidation into the group accounts.

 

KEY RELATIONSHIPS AND STAKEHOLDERS IN OUR BUSINESS

The keys to success are land, asset funding and grid connection, and we enjoy constructive relationships with partners in each of these core aspects.

 

Land and Planning

Property developers: we work with developers to identify suitable sites across the UK.

Land owners: we are able to secure attractive sites through our relationships with land owners such as London & Devonshire Trust, with whom we also have a battery storage Joint Venture, and Associated British Ports.

Reliance Energy: we have an established relationship with Reliance Energy, who is working with us to secure sites for gas engines and SolarFlex.

 

Funding

Debt markets: there are emerging opportunities to provide development capital for management contracts.

Banks: we have strong relationships with a number of banks and other financial institutions to provide debt financing, including JCB.

Third party investors: we continue to work with other potential and credible investors, including a 'Big 6' utility group with whom we agreed an indicative partnership to fund 20% of future projects.

Investors: PPG was readmitted to AIM in August 2014 to capitalise on the opportunity in flexible power generation and intends to raise further funding from a £50m bond issue to enable us to develop further sites.

 

Connections and Contracts

National Grid: we will secure STOR and FFR contracts with National Grid for our facilities, and we have secured Capacity Market contracts for five sites and are applying for a further eight sites in the Capacity Market Auction in February 2018.  We are also entering T-1 CM auction for the 6 facilities that will be operational by 1st October 2018.

Energy suppliers: we have negotiated Power Purchase Agreements (PPAs) with two national suppliers.

Connection business: we have relationships with a number of connection businesses with regard to connections on our sites and the contestable and non-contestable connection costs.

 

HOW WE CREATE VALUE

Our model is based upon multiple revenue streams. The current mechanisms for generating revenue from power sales are outlined in the table below. Although the precise mechanisms are subject to review as part of National Grid's consultation into Systems Needs and Product Strategy, the strategic importance of flexible generation means that the outcome is thought unlikely to be unfavourable to embedded power generators. The consultation is scheduled for completion by the end of 2018.

 

Aside from earning revenue from the supply energy, we have a management contract with each Rockpool investor-funded site, which generates revenue of £150,000 per site per year. Under the terms of these contracts, we manage the asset, from identifying the site, obtaining planning permission, to managing the connection, construction and operation of the plant.

 

Sources of revenue from energy supply:

 

Mechanism	Overview	Counterparty
STOR	The Short-Term Operating Reserve is a mechanism used by National Grid to balance the UK's power supply at short notice. The STOR allows required electricity supply to be decreased (by incentivising major consumers to reduce demand) or increased, by calling on a pool of stand-by power generators. Under the terms of two-year contracts, National Grid pays STOR providers for making their capacity available, as well as for delivery of electricity.	National Grid
Firm Frequency Response (FFR)	FFR is a service procured by National Grid to manage system frequency, the system-wide signal that indicates whether energy supply exceeds demand or vice versa. FFR allows a provider to supply a service to reduce demand or increase generation, when instructed by National Grid. FFR is procured via monthly tender. To take part, generators must be able to deliver a minimum of 10MW, and be capable of responding within 30 seconds and for sufficient duration. Similar to STOR, providers are paid for availability as well as for utilisation. PPG will compete in the static market, whereby energy change occurs at a pre-set frequency and remains at a set level. The addition of exhaustible (battery) power to PPG's generators would allow access to the dynamic FFR market, where energy changes in line with system frequency.	National Grid
Triad	Triad is the scheme under which the National Grid charges energy suppliers' significant sums according to their use of the high voltage transmission network during Triad periods - the three half-hour periods of highest demand in a year, identified after the winter. The principal means for National Grid to cover its costs, Triad also serves to incentivise users to limit consumption during peak periods, thereby easing the need for investment in the transmission system. Through the PPA, energy supply companies pay flexible generators of electricity to supply power to local distribution networks during anticipated peak periods (both for the power generated and for Triad avoidance), as their generation reduces demand on the transmission network. Generators must operate during each of the Triad periods to be eligible for payments. Ofgem's 'minded to' decision of June 2017 will see Triad benefits earned by small embedded generators such as PPG reduced to close to zero by the winter of 2020/21, effectively reducing over four years as to 100%, 66%, 33% and zero. There are likely, however, to be residual payments which could amount to up to 20% of the original Triad which will still make it a worthwhile income stream. This is not budgeted for in our remodelled projections post the 'minded to' decision	Energy Suppliers
Power Purchase Agreements (PPA)	This is simply sales of generated power; when operating with an objective of Triad avoidance, power is sold under a PPA, typically to a large UK energy supplier. PPAs are typically of a 5+ year duration.	Energy Suppliers
Capacity Market	To ensure long-term security of supply, the Capacity Market provides financial incentives to bring forward new investment while maximising existing generation capabilities. The structure of CM ensures technology neutrality, meaning that the lowest cost technologies that will guarantee capacity will be awarded 1, 3 and 15-year contracts, depending on the level of capex incurred. These capacity contracts are procured through a reverse auction, run by National Grid. Generators who are successful in the auction will benefit from a regular, predictable and index-linked revenue stream for every hour they are available. The capacity obligation means providers must be available to deliver energy when needed or face penalties.	UK Government (via National Grid)

 

Investment Case

We have addressed the financing and costs of FlexGen sites before and below demonstrates the projected costs and illustrative returns that may be achieved from a typical gas site:

 

Component/activity                                        Approx % of total costs

Planning and site assembly                              5-10%

Electrical equipment and storage                    25-30%

Gas connection/supply                                     5-10%

Civil engineering/construction                        25-30%

Generators                                                            25-30%

 

Financial Information

Standard Projected Financials for a single 20MW Gas site:

Full Year (£'000)	1	2	3	4	5
Turnover	2,454	4,489	4,754	5,285	6,192
EBITDA	1,192	2,311	2,508	2,973	3,826
Cash flow	1,192	2,312	2,306	2,754	3,605

There are significant and detailed assumptions behind these projections which have been reviewed and modelled by banks and financial institutions willing to lend to our projects. These projections have satisfied their own internal tests with regard to their sensitivity modelling and provide third party validation of our detailed model.

 

Financial projections for 10 new gas sites funded from £50m bond or other funding (100% owned):

Full Year	No of Sites	EBITDA
1	3	£3,576,689
2	6	£10,511,445
3	9	£18,034,178
4	10	£24,567.293

The potential for the group to generate excellent returns and cash flow is clearly demonstrated above.

 

OUR STRATEGY

We have continued to make progress against our strategic priorities. We will achieve 90% of our goal to reach 200MW of flexible generation by the end of 2017, a significant achievement given the fast-evolving market in which we operate and the evolution of our business model towards gas power generation and battery storage.

 

Strategic Priority	Progress
Bring online standalone FlexGen sites - Nine Rockpool-funded investee company green diesel sites	Green Fuel The facility in Plymouth came online in November 2016. By the end of 2017 we will have 120MW of operational capacity, and the remaining three sites already have secured planning permission.  Rockpool has indicated that they will realise their investment in the nine flexgen sites when the EIS qualification period expires. This will give us the opportunity to make an offer for the shares we do not own or sell our shares in each site alongside Rockpool
- Majority-owned (non-EIS) gas powered sites	80MW of gas powered sites are at the planning stage, and we have a further 160MW in the pipeline. Our goal is to develop at least four sites per year.
Derive revenue from multiple sources	As well as from the secured management contracts for each Rockpool site, we generate income in our investments from different markets for flexible power, although the precise nature of these may be subject to regulatory change. Triad: Our Plymouth site earned attractive returns by hitting three Triad periods since becoming operational in November 2016. If Ofgem's 'minded to' decision is implemented, this would reduce the Triad benefit received by small embedded generators such as PPG to close to zero from the winter of 2020/21. Capacity Market: PPG has been awarded a total of five Capacity market contracts for 15 years and one annual contract to date. This year the Company is applying for eight 15-year contracts (four FlexGen and four Gas) and six one-year contracts Power Purchase Agreement: We have Power Purchase Agreements (PPAs) with two national suppliers and are in detailed negotiations with a third. FFR: Via our subsidiaries and investee companies, we intend to build power generation units which reach full response within 30 seconds and can sustain supply for 30 minutes, allowing us to compete in the static FFR market. STOR and FFR are mutually exclusive, although PPG may bid for both types and run FFR outside STOR hours. Management contracts: PPG has been granted nine management contracts by the entities financed with equity from clients of Rockpool Investments. Under these agreements, PPG receives monthly payments equivalent to £150,000 per annum for each investee company. STOR: We intend to secure STOR contracts with National Grid for our facilities.
Continue to pursue our limited dilution investment model, holding majority stakes in non-EIS funded, standalone flexible generation sites with outside investors where attractive	We intend to own majority stakes (typically 80%) in individual entities for future development sites. With that objective, we are in the process of raising £50 million gross through the issue of a 7% five-year bond issue to be listed in Frankfurt. The net proceeds of this will - in conjunction with our existing cash resources and asset finance - be used to assist in the development of ten 20MW gas powered flexible generation sites.
Explore viability of battery, capacitor or inertial energy storage	Over the medium to longer-term, our strategy is to explore commercialisation of storage technologies on our green fuel, SolarFlex and gas sites, to compete in more real-time markets and allow us to access potentially more attractive returns.
Progress SolarFlex sites (co-located solar and FlexGen facilities)	We have held promising talks with several solar farm operators to establish SolarFlex sites (with shared connections for solar and non-intermittent generators) and are awaiting their response.

 

FINANCIAL REVIEW

 

The Group has achieved considerable growth in fees received during the year, contributing materially to substantially reduced losses and attributable losses per share. 

 

The year ended 30 April 2017 is our second full year of operations in the business of the development and operation of flexible energy generation projects, which play a crucial role in the changing UK energy mix as renewable generation replaces carbon intensive generation. 2017 has been a year of continued progress for the Group in the execution of its business plan. Throughout the year we had nine management contracts in place with Rockpool investee companies, each generating £150,000 per annum of fee income which represented an annualised fee income of £1,350,000 for the year ended 30 April 2017.

 

In addition to the nine Rockpool companies, we continue to make progress towards the Company's plan to add further capacity in the form of gas powered generation sites, with 80MW in planning, a further 120-150MW of viable gas sites in the pipeline for next year and circa 80MW of battery storage schemes in conjunction with LDT.  Each site will be a subsidiary of the Company and will ordinarily hold up to 20MW of generating capacity. The Company will also seek to introduce outside investors so as to maintain its anti-dilution funding model in the Holding Company and will normally seek to maintain a shareholding of at least 80%. Our relationship with a leading Big Six multinational utility company to fund up to 20% of any 20MW renewable fuel or gas powered flexible energy projects going forward fits ideally with the Company's strategy to deliver projects and will provide us with extra financing flexibility. Such sites will have the ability to be fully consolidated in the Group's accounts, which will see a strengthening of the Group's balance sheet and the earnings of each subsidiary will be consolidated into the profit and loss account of the Group.

 

The Company has recently launched a £50 million (gross) five-year 7% bond, listed in Frankfurt, to give maximum flexibility to the suite of funding options available to it. The bond, once fully funded, will enable the Company to build up to a further ten new majority owned sites, which together with the Big Six multinational utility company, assists in maximising our financing capability and flexibility. We will be in a good financial position to develop the majority owned portfolio of gas powered, solarflex and battery storage sites.

 

During the year under review the Group increased its revenue to £1,350,000 (2016: £887,500), a rise of 52%, from the award of management contracts from the Rockpool investee companies. These fees are expected to continue under current management contracts at an annualised rate of £1.35 million in future periods. Plutus Energy Limited, our 100% owned operating subsidiary, will earn management fees from all future sites, in addition to our existing portfolio.  Administrative expenses have increased marginally to £1,292,700 (2016: £1,187,998). There are other operating expenses of £236,164 (2016: £79,590) in the year under review. These relate to write offs of expenses disbursed for sites not going forward for various reasons. There will be no further write offs with regard to Rockpool co-investee companies as all nine sites are now allocated and are in various stages of construction and development. Sites may continue to be pursued which do not go forward for various reasons but we expect to be able to minimise such write offs in the future. Because of these write offs the Group has made a loss after taxation of £201,501 (2016: £407,776) and consequently the basic and diluted loss per share from continuing operations was 0.03p (2016: 0.07p). However, if we discount the other non-recurring operating expenses attributable to site construction not proceeding, the Group would have made a maiden profit for the year ended 30 April 2017 of £34,663 (2016: Loss of £328,186), a positive turnaround in pro forma net profits of £362,849.

 

After the year end, James Longley and Charles Tatnall each exercised 10,000,000 warrants in the Company with a net cash benefit of £180,000. In addition, a new Group share option scheme was implemented after the financial year end. The 2017 Share Option Scheme is designed to incentivise the Directors as Plutus changes direction towards gas, solarflex and battery powered flexgen projects, of which the Company has an overall 700MW pipeline. This is the first share option scheme to be implemented since the reverse acquisition of Plutus Energy Limited in August 2014. Since then, minimal shareholder dilution has been incurred as a result of external equity financing as the Company has ensured that the ongoing development of the Rockpool funded portfolio of 180MW of FlexGen sites have been financed entirely through external equity and debt thus far.

 

Post year end, the Company granted an aggregate of 60,000,000 share options with an exercise price of 1.485p pursuant to the 2017 Share Option Scheme, all vesting in three equal annual instalments. 15,000,000 Options were granted to each of Paul Lazarevic, James Longley, Phil Stephens and Charles Tatnall on 18 May 2017. Charles Tatnall and James Longley also each hold 4,770,000 existing share options, which were awarded prior to the reverse acquisition of Plutus Energy. All of the Directors have indicated that they will not sell any shares that they hold for at least the next eighteen months. Following the issue of options and exercise of warrants, there are a total of 69,540,000 options in the Company outstanding, representing approximately 9.8% of the Company's issued share capital.

 

Cash was £71,609 at the year-end (2016: £22,608). Trade and other payables increased to £229,635 (2016: £166,288), due largely to the increased level of activity, particularly with regard to the site planning, lease and connection processes. Our ongoing overheads will be covered by management fees. In addition to which we will have the proceeds from the bond raise coming in to fund new sites and generate further management fees together with the consolidated operations. Overall, the Company is in a good situation financially and will continue to manage cash flow, accounts receivable and accounts payable in a fair and reasonable manner within the Group resources.

 

Group net assets at the year-end were £995,864 (2016: £1,166,089), a decrease of £170,225 (14.6%) due to net losses in the year generated from other operating costs from site costs written off.

 

Key Performance Indicators

The key performance indicators are set out below:

	2017	2016	Change %
Turnover	£1,350,000	£887,500	+52%
Cash and cash equivalents	£71,609	£22,608	+217%
Closing share price	1.23p	0.925p	+33%
Earnings per share	(0.03)p	(0.07)p	+57%

 

Principal risks and uncertainties

The Board regularly reviews the risks facing the Company and seeks to exploit, avoid or mitigate those risks as appropriate.

 

Financial risk management objectives and policies

Financial risk management objectives and policies of the Company are set out in note 24 to the financial statements.

 

Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Company can continue in operational existence for the foreseeable future. The Group had cash and cash equivalents of £71,609 and net current liabilities of £89,288 as at 30 April 2017, and incurred a loss of £201,501 for the year then ended.

 

The Directors have based their opinions on a cash flow forecast, which assumes that sufficient revenue will be generated for working capital purposes and that operating costs will be kept to a minimum until adequate revenue streams are secured. In addition future plans for the Group will be funded externally through a mix of debt and equity financing. So the Directors continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.

 

James Longley

Director

13 September 2016

 

 

For the year ended 30 April 2017

	Note	2017 £	2016 £
Continuing operations
Revenue		1,350,000	887,500
Gross profit		1,350,000	887,500
Administrative expenses		(1,292,700)	(1,187,998)
Other operating expenses	8	(236,164)	(79,590)
Operating loss		(178,864)	(380,088)
Interest charge on loan note	17	(22,637)	(27,688)
Loss before tax	6	(201,501)	(407,776)
Tax	9	-	-
Net loss attributable to equity holders of the Company and total comprehensive loss		(201,501)	(407,776)
Earnings per share (pence per share):
Basic and diluted loss per share from continuing and total operations	10	(0.03)p	(0.07)p

 

There are no items of other comprehensive income.

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company profit and loss account.  The total comprehensive income for the parent company for the year was £35,987 (2016: loss £389,426).

Group Statement of Changes in Equity

For the year ended 30 April 2017

 

	Share capital £	Share premium £	Share option  reserve £	Loan note equity reserve £	Retained losses £	Total £
At 30 April 2015	1,376,950	6,334,076	74,306	23,657	(7,050,194)	758,795
Comprehensive income for the year	-	-	-	-	(407,776)	(407,776)
Credit to equity in respect of share-based compensation charge	-	-	35,070	-	-	35,070
Issue of share capital	120,000	660,000	-	-	-	780,000
At 30 April 2016	1,496,950	6,994,076	109,376	23,657	(7,457,970)	1,166,089
Comprehensive income for the year	-	-	-	-	(201,501)	(201,501)
Credit to equity in respect of share-based compensation charge	-	-	31,276	-	-	31,276
At 30 April 2017	1,496,950	6,994,076	140,652	23,657	(7,659,471)	995,864

 

Company Statement of Changes in Equity

For the year ended 30 April 2017

 

	Share capital £	Share premium £	Share option  reserve £	Loan note equity reserve £	Retained losses £	Total £
At 30 April 2015	1,376,950	6,334,076	74,306	23,657	(7,007,122)	801,867
Comprehensive income for the year	-	-	-	-	(389,426)	(389,426)
Credit to equity in respect of share-based compensation charge	-	-	35,070	-	-	35,070
Issue of share capital	120,000	660,000	-	-	-	780,000
At 30 April 2016	1,496,950	6,994,076	109,376	23,657	(7,396,548)	1,227,511
Comprehensive income for the year	-	-	-	-	35,987	35,987
Credit to equity in respect of share-based compensation charge	-	-	31,276	-	-	31,276
At 30 April 2017	1,496,950	6,994,076	140,652	23,657	(7,360,561)	1,294,774

 

 

Group and Company Statements of Financial Position

For the year ended 30 April 2017

 

		Group		Company
	Note	2017 £	2016 £	2017 £	2016 £
Non-current assets
Goodwill	13	1,085,000	1,085,000	-	-
Investments in subsidiaries	11	-	-	1,098,333	1,085,000
Investments	12	152	152	152	152
		1,085,152	1,085,152	1,098,485	1,085,152
Current assets
Trade and other receivables	14	268,738	417,980	455,871	473,929
Cash and cash equivalents	15	71,609	22,608	71,609	20,375
		340,347	440,588	527,480	494,304
Total assets		1,425,499	1,525,740	1,625,965	1,579,456
Current liabilities
Trade and other payables	16	(229,635)	(166,288)	(131,191)	(158,582)
Borrowings	17	(200,000)	(16,000)	(200,000)	(16,000)
		(429,635)	(182,288)	(331,191)	(174,582)
Net current (liabilities)/assets		(89,288)	258,300	196,289	306,389
Non-current liabilities
Borrowings	17	-	(177,363)	-	(177,363)
Total liabilities		(429,635)	(359,651)	(331,191)	(351,945)
Net assets		995,864	1,166,089	1,294,774	1,227,511
Equity
Share capital	18	1,496,950	1,496,950	1,496,950	1,496,950
Share premium account	19	6,994,076	6,994,076	6,994,076	6,994,076
Share option and warrant reserve	20	140,652	109,376	140,652	109,376
Loan note equity reserve	21	23,657	23,657	23,657	23,657
Retained losses	22	(7,659,471)	(7,457,970)	(7,360,561)	(7,396,548)
Equity attributable to owners of the Company		995,864	1,166,089	1,294,774	1,227,511

 

The financial statements of Plutus PowerGen plc, registered number 5859612, were approved by the Board of Directors and authorised for issue on 13 September 2017. They were signed on its behalf by:

 

James Longley

Director

 

Group and Company Statements of Cash Flow

For the year ended 30 April 2017

 

		Group		Company
	Note	2017 £	2016 £	2017 £	2016 £
Net cash generated by/(used in) operating activities	26	65,001	(461,772)	38,038	(203,486)
Investing activities
Investment in associated undertakings		-	(105)	-	(105)
Net repayments by/(advances to) subsidiary undertaking		-	-	29,196	(260,519)
Net cash generated from/(used in) investing activities		-	(105)	29,196	(260,624)
Financing activities
Proceeds of share issues		-	180,000	-	180,000
Interest paid		(16,000)	(16,000)	(16,000)	(16,000)
Net cash (used in)/generated from financing activities		(16,000)	164,000	(16,000)	164,000
Net increase/(decrease) in cash and cash equivalents		49,001	(297,877)	51,234	(300,110)
Cash and cash equivalents at beginning of year		22,608	320,485	20,375	320,485
Cash and cash equivalents at end of year	15	71,609	22,608	71,609	20,375

 

Notes to the Financial Statements

For the year ended 30 April 2017

 

1.    General information

Plutus PowerGen plc is a Company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 41 of the full Report & Accounts. The nature of the Group's operations and its principal activities are set out in the Strategic Report on pages 13 to 14 of the full Report & Accounts and in the Chairman's Statement on pages 2 to 3.

These financial statements are prepared on a going concern basis and presented in pounds sterling which is the currency of the primary economic environment in which the Group operates.

2.    Statement of compliance

The financial statements comply with IFRS as adopted by the European Union.  The following new and revised Standards and Interpretations have been adopted in the current period by the Group for the first time and do not have a material impact on the Group.

         IFRS 12           Disclosures of interests in other entities

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect on the financial statements of the Group.

 

3.    Significant accounting policies

Basis of preparation

The consolidated financial statements of Plutus PowerGen plc (the "Company") and its subsidiaries (the "Group") have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union ("EU") applied in accordance with the provisions of the Companies Act 2006.

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the International Financial Standards Interpretations Committee ("IFRS IC") and there is an ongoing process of review and endorsement by the European Commission.

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at amortised cost, as explained in the accounting policies below.

Basis of consolidation

The Group's consolidated financial statements incorporate the financial statements of Plutus PowerGen plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the year end date.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each year end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and where they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Revenue

Revenue is measured at the fair value of the consideration received or receivable.

Revenue is derived from the provision of management services which are invoiced on a monthly basis and are recognised in the period to which they relate.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Financial assets are classified into the following specified categories: 'available for sale investments', 'loans and receivables' and 'cash and cash equivalents'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Available for sale investments

Investments are designated as available-for-sale financial assets if they do not have fixed maturities and fixed or determinable payments, and management intends to hold them for the medium to long-term. Financial assets that are not classified into any of the other categories are also included in the available-for-sale category.

Investments are initially measured at fair value plus incidental acquisition costs. Subsequently, they are measured at fair value in accordance with IAS 39. In respect of quoted investments, this is either the bid price at the period end date or the last traded price, depending on the convention of the exchange on which the investment is quoted, with no deduction for any estimated future selling cost. Unquoted investments are valued by the Directors using primary valuation techniques such as recent transactions, last price or net asset value.

Gains and losses on measurement are recognised in other comprehensive income except for impairment losses and foreign exchange gains and losses on monetary items denominated in a foreign currency, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.

The Group assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired. An impairment loss is recognised if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. A significant or prolonged decline in the fair value of a security below its cost shall be considered in determining whether the asset is impaired.

When a decline in the fair value of a financial asset classified as available-for-sale has been previously recognised in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss is removed from other comprehensive income and recognised in profit or loss. The loss is measured as the difference between the cost of the financial asset and its current fair value less any previous impairment.

Fair Value Measurements:

The Group holds investments that are measured at fair value at the end of each reporting period using the IFRS 7 fair value hierarchy as set out below.

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

The share capital account represents the amount subscribed for shares at nominal value.

The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The share option reserve represents the fair value, calculated at the date of grant, of options unexercised at the balance sheet date.

The loan note equity reserve represents the fair value, calculated at issuance of the loan notes.

Retained losses include all current and prior period results as disclosed in the statement of comprehensive income.

Financial liabilities

Financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. All interest related charges are recognised as an expense in finance cost in the income statement using the effective interest rate method.

The Group's financial liabilities comprise trade and other payables and borrowings.

Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.

Borrowings represent convertible loans that are accounted for as compound instruments. The fair value of the liability portion of the convertible loan notes is determined using a market interest rate for an equivalent non-convertible loan note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the loan notes. The remainder of the proceeds is allocated to the conversion option, which is recognised and included in shareholders' equity, net of tax effects, and is not subsequently re-measured.

Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Share-based payments

The Group has applied the requirements of IFRS 2 'Share-based Payments'.

The Group issues equity-settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity settled share based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

 

4.    Critical accounting judgements and key sources of estimation uncertainty

Critical judgements in applying the Group's accounting policies

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. 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 the estimate is revised if the revision affects only that period; or in the period of the revision and future periods if the revision affects both current and future periods.

(i) Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Company can continue in operational existence for the foreseeable future. The Group had cash and cash equivalents of £71,609 and net current liabilities of £89,288 as at 30 April 2017, and incurred a loss of £201,501 for the year then ended.

The Directors have based their opinions on a cash flow forecast, which assumes that sufficient revenue will be generated for working capital purposes and that operating costs will be kept to a minimum until adequate revenue streams are secured. In addition future plans for the Group will be funded externally through a mix of debt and equity financing, which at the time of signing the accounts had not yet been completed. So whilst there are uncertainties, the Directors continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.

(ii) Classification of investments as available for sale

Note 11 describes the investments in nine operating companies where the Group's shareholdings exceed 20% as 'Available for Sale Investments'. Based on the contractual agreements between the Group and other investors, the Group does not have any power to appoint or remove board of directors' members of the investees. Therefore, the Directors of the Company concluded that the Group does not have significant influence over these companies.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are set out below.

(i) Share options

In order to calculate the charge for share-options as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its Black-Scholes option pricing model as set out in note 23.

(i) Impairment of goodwill

Determining whether goodwill is impaired required an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the future cash flows are less than expected, a material impairment loss may arise.

 

5.    Business segments

In accordance with IFRS 8, the Group is required to define its operating segments based on the internal reports presented to its Chief Operating decision maker in order to allocate resources and assess performance. The Chief Operating decision maker is the Chief Executive. There is only one continuing class of business, being the investment in the natural resources sector.

Given that there is only one continuing class of business, operating within the UK, no further segmental information has been provided.

 

6.    Loss for the year

Loss for the year from continuing operations has been arrived at after charging:

	2017 £	2016 £
Operating lease expense in respect of property	75,426	63,839
Employee costs - including share-based compensation costs (see note 7)	738,354	766,010

 

The analysis of auditors' remuneration is as follows:

	2017 £	2016 £
Fees payable to the Group's auditor for the audit of the Group's annual accounts	20,000	17,500
Other services pursuant to legislation:
- tax services	2,000	2,000
Total non-audit fees	2,000	2,000

 

7.    Employee costs (including Directors)

	2017 £	2016 £
Salaries and fees	733,672	752,091
Employee share option charge	-	3,794
Employer's national insurance contributions	4,682	10,125
	738,354	766,010

The average monthly number of employees (including Executive Directors) employed by the Group during the year was 4, all of whom were involved in management and administration activities (2016:4).

Details of Directors' remuneration and gains on the exercise of share options can be found in the section of the Directors' Remuneration Report of the full Report & Accounts.

 

8.    OTHER OPERATING EXPENSES

	2017 £	2016 £
Pre-planning project expenses written off	236,164	79,590
	236,164	79,590

 

9.    Tax

	2017 £	2016 £
Current tax	-	-
Deferred tax	-	-
	-	-

 

Corporation tax is calculated at 20% (2016: 20%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

Tax reconciliation

	2017 £	2016 £
Loss before tax	(201,501)	(405,426)
Tax at UK corporation tax rate of 20% (2016: 20%)	(40,300)	(81,085)
Effects of:
Expenses not deductible for tax purposes	8,161	10,650
Tax losses carried forward	32,139	70,435
Total tax charge	-	-

 

Deferred tax assets of approximately £494,000 (2016: £458,000) have not been recognised as the Directors consider there to be insufficient evidence that the assets will be recovered.

 

10.  Earnings per share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

In order to calculate diluted loss per share, the weighted average number of ordinary shares in issue was adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. Dilutive potential ordinary shares include share options granted to employees and Directors where the exercise price (adjusted according to IAS 33) is less than the average market price of the Company's ordinary shares during the year.

IAS 33 'Earnings per share' requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. Only options that are 'in the money' are treated as dilutive and net loss per share would not be increased by the exercise of such options.

Loss	2017 £	2016 £
Loss for the purposes of basic and diluted earnings per share: Continuing and total operations	(201,501)	(405,426)
Number of shares	Number	Number
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share	691,428,935	602,254,768
Earnings per share - basic and diluted, pence per share	(0.03)	(0.07)

 

11.  Investments in subsidiaries

The Group holds the following investments in subsidiary undertakings:

Subsidiary	Country of Incorporation	Percentage of ordinary shares held	Principal activity
Plutus Energy Limited	England and Wales	100%	Management services to the electricity generating entities (Note 12)
LF Flexgen Limited	England and Wales	100%	Electricity generation (dormant)
KI Power Limited	England and Wales	100%	Electricity generation (dormant)
FC Powergen Limited	England and Wales	100%	Electricity generation (dormant)
NRS Power Limited	England and Wales	100%	Electricity generation (dormant)
GW Power Limited	England and Wales	80%	Electricity generation (dormant)

 

The carrying value of the investments in the Company is as follows:

	2017 £	2016 £
At 1 May	1,085,000	485,000
Reclassification of investment in Plutus Energy Limited	13,333	-
Purchase of investments	-	600,000
At 30 April	1,098,333	1,085,000

 

12.  Available for sale investments

Available for sale investments comprise investments in nine operating entities. As explained in Note 4, these investments are not equity accounted for as the Group does not meet the criteria for exerting significant influence as set out in IAS 28.

All investments are classified as Level 3 under the IFRS 7 fair value hierarchy as set out under Fair Value Measurements in the full Report & Accounts.

Level 3 investments	2017 £	2016 £
Brought forward	152	47
Purchase of investments (see note below)	-	105
	152	152

The details of investments classified as available for sale are as follows:

 

Investment Company	Country of Incorporation	Percentage of ordinary shares held	Principal activity
Attune Energy Limited	England and Wales	44.5%	Electricity generation
Flexible Generation Limited	England and Wales	44.5%	Electricity generation
Balance Power Limited	England and Wales	44.5%	Electricity generation
Equivalence Energy Limited	England and Wales	44.5%	Electricity generation
Precise Energy Limited	England and Wales	44.5%	Electricity generation
Valence Power Limited	England and Wales	44.5%	Electricity generation
Portman Power Limited	England and Wales	44.5%	Electricity generation
Reliance Generation Limited	England and Wales	44.5%	Electricity generation
Selectgen Limited	England and Wales	44.5%	Electricity generation

 

13.  Goodwill

	2017 £	2016 £
Brought forward	1,085,000	485,000
On issue of deferred consideration shares (Note 18)	-	600,000
Carried forward at 30 April 2017	1,085,000	1,085,000

Goodwill arises on acquisition of a 100% of the equity of Plutus Energy Limited ("PEL").

The recoverable amount is determined based on value-in-use calculations which uses cash flow projections based on financial budgets approved by the Directors covering a five-year period, and a discount rate of 12% per annum.

Cash flows beyond the five-year period are extrapolated using the estimated growth rates of 10% which is based on the average growth for 5 years covered by the projections. The Directors believe that any reasonably possible change in key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

The Directors have reviewed the carrying value of goodwill as at 30 April 2017 and consider that no impairment provision is required.

The Directors continue to review goodwill on an on-going basis and where necessary in future periods will request external valuations to further support the valuation basis.

 

14.  Trade and other receivables

	Group		Company
	2017 £	2016 £	2017 £	2016 £
Trade receivables	28,339	-	-	-
Amounts due from subsidiary undertakings	-	-	407,870	437,066
Expenses rechargeable to operating entities	192,398	394,450	-	-
Other receivables	24,633	4,600	24,633	4,600
Prepayments and accrued income	23,368	18,930	23,368	18,930
	268,738	417,980	455,871	457,929

The Directors consider the carrying amount of trade and other receivables approximates to their fair value.

 

15.  Cash and cash equivalents

	Group		Company
	2017 £	2016 £	2017 £	2016 £
Cash and cash equivalents	71,609	22,608	71,609	20,375
	71,609	22,608	71,609	20,375

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

 

16.  Trade and other payables

	Group		Company
	2017 £	2016 £	2017 £	2016 £
Trade payables	135,524	82,665	56,341	74,959
Other payables	19,361	20,273	100	20,273
Accruals and deferred income	74,750	63,350	74,750	63,350
	229,635	166,288	131,191	158,582

Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The Directors consider that the carrying amount of trade and other payables approximates to their fair value. No trade payables were older than 90 days.

 

17.  Borrowings

Group and Company

Convertible loans

On 22 December 2014, the Company issued £200,000 convertible loan notes, repayable on 18 December 2016 if not converted into shares prior to that date, and bearing interest at 8% p.a, payable quarterly in arrears.  In December 2016, the terms of the loan were amended so that the loan notes are repayable on demand.

The net proceeds from the issue of the loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company as follows:

The Directors estimate the fair value of the liability component of the loan notes at 30 April 2017 to be approximately £200,000 (2016: £193,363). This fair value has been calculated by discounting the future cash flows at the market rate of 8%.

	2017 £	2016 £
Liability component brought forward	193,363	181,675
Interest charge for the period	22,637	27,688
Interest paid	(16,000)	(16,000)
Liability component of convertible loans at 30 April 2017	200,000	193,363
Other loans	-	-
Total borrowings	193,363	193,363
Current liabilities	200,000	16,000
Non-current liabilities	-	177,363
	200,000	193,363

 

18.  Share capital

	2017 Number	2017 £	2016 Number	2016 £
Issued and fully paid
Ordinary shares of £0.001 each	691,428,935	691,429	691,428,935	691,429
Deferred shares of £0.049 each	16,439,210	805,521	16,439,210	805,521
Total		1,496,950		1,496,950

Share issues

Ordinary shares	Number	Nominal value £	£
Issued shares on 30 April 2015	571,428,935	0.001	571,429
Issue of shares	120,000,000	0.001	120,000
Issued ordinary shares on 30 April 2016 and 30 April 2017	691,428,935	0.001	691,429

 

19.  Share premium account

Share premium account	£
Balance at 30 April 2015	6,334,076
Premium arising on issue of equity shares	660,000
Balance at 30 April 2016 and 30 April 2017	6,994,076

 

20.  Share option and warrant reserve

	£
Balance at 30 April 2015	74,306
Share-based payment charge	35,070
Balance at 30 April 2016	109,376
Share-based payment charge	31,276
Balance at 30 April 2017	140,652

 

21.  loan note equity reserve

	£
Balance at 30 April 2016 and 30 April 2017	23,657

 

22.  GROUP Retained losses

	£
Balance at 30 April 2015	(7,050,194)
Comprehensive loss for the year	(407,776)
Balance at 30 April 2016	(7,457,970)
Comprehensive loss for the year	(201,501)
Balance at 30 April 2017	(7,659,471)

 

23.  Share options and warrants

Options

On 8 March 2013, options over, in aggregate, 14,310,000 ordinary shares of 0.1 pence were granted to the Directors of the Company. Each option carries the right to subscribe to one new Ordinary Share in the capital of the Company at a price of 0.675p per Ordinary Share, being the closing mid-market price of the Company's ordinary shares on 8 March 2013. These options vest over a period of three years from the date of the Grant, with a third of the options vesting on the first, second and third anniversaries of the Grant respectively. These options are exercisable for a period of ten years from the date of the Grant subject to the vesting conditions.

The fair value of the options was calculated using the Black-Scholes model and the Group recognised total expenses of £nil (2016: £3,794) related to the grant of these options during the year. The inputs to the Black-Scholes model were as follows:

Grant date share price                                        0.675p

Exercise share price                                           0.675p

Risk free rate                                                        2.5%

Expected volatility                                              50%

Option life                                                            10 years

Calculated fair value per share                         0.420p

The table below summarises the share options extant during the year:

Number of options at 30 April 2016	Issued in the year	Exercised in the year	Lapsed in the year	Number of options at 30 April 2017	Exercisable at 30 April 2017	Exercise price	Expiry date
9,540,000	-	-	-	9,540,000	9,540,000	0.675p	8.03.2023

 

Warrants

On 22 August 2014, warrants over, in aggregate, 40,000,000 ordinary shares of 0.1 pence each ("Director Warrants") were issued to James Longley and Charles Tatnall, directors of the Company. Each warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at a price of 0.9p per Ordinary at any time prior to 22 August 2016.

On 28 May 2015, warrants over, in aggregate, 30,075,207 ordinary shares of 0.1 pence each ("Rockpool Warrants") were issued to Rockpool LLP, an advisor to the Company. Each warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at a price of 1.15p per ordinary share at any time between 27 May 2018 and 27 May 2021.

The fair value of the warrants was calculated using the Black-Scholes model and the Group recognised total expenses of £31,276 (2016: £31,726) in relation to the issue of the Rockpool warrants during the year. The inputs to the Black-Scholes model were as follows:

	Rockpool Warrants	Director Warrants
Grant date share price	0.8p	0.6p
Exercise share price	1.15p	0.9p
Risk free rate	2%	2%
Expected volatility	50%	50%
Life of warrant	6 years	2 years
Calculated fair value per share	0.312p	0.095p

 

The table below summarises the share warrants extant during the year:

Number of warrants at 30 April 2016	Issued in the year	Exercised in the year	Lapsed in the year	Number of warrants at 30 April 2017	Exercisable at 30 April 2017	Exercise price	Vesting date	Expiry date
20,000,000	-	-	-	20,000,000	20,000,000	0.9p	22.08.2014	27.08.2017
30,075,207	-	-	-	30,075,207	-	1.15p	27.05.2018	27.05.2021
50,075,207	-	-	-	50,075,207	20,000,000

 

24.  Financial instruments

Categories of financial instruments

	Carrying value
	2017 £	2016 £
Group Financial assets
Investments designated as available for sale on initial recognition	152	152
Trade receivables	28,339	-
Cash and cash equivalents	71,609	22,608
	100,100	22,760
Financial liabilities at amortised cost:
Convertible unsecured loan notes	200,000	193,363
Trade and other payables	154,885	102,938
	354,885	296,301

 

25.  Risk management objectives and policies

The Group's finance function monitors and manages the financial risks relating to the operations of the Group. These risks include credit risk, liquidity risk and cash flow interest rate risk.

The Group seeks to minimise the effects of these risks, in accordance with the Group's policies approved by the Board of Directors, which provide written principles on interest rate risk, credit risk and the investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for any purpose.

Capital risk management

The Group's objectives when managing capital are:

•   to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

•   to support the Group's growth; and

•   to provide capital for the purpose of strengthening the Group's risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The capital structure consists of capital and reserves and convertible loan notes, for capital management purposes.

Interest rate risk

The Group's exposure to interest rate risk is limited to the interest payable on the convertible unsecured loan notes, which are at fixed rates of interest.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

The Group's principal financial assets are bank balances and cash and other receivables.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

 

26.  Notes to the cash flow statement

	Group		Company
	2017 £	2016 £	2017 £	2016 £
(Loss)/profit before tax	(201,501)	(407,776)	35,987	(389,426)
Share-based compensation charge	31,276	35,070	31,276	35,070
Loan note interest charge	22,637	27,688	22,637	27,688
Operating cash flow before movements in working capital	(147,588)	(345,018)	89,900	(326,668)
Decrease/(increase) in receivables	149,242	(139,973)	(24,471)	103,637
Increase/(decrease) in payables	63,347	21,886	(27,391)	19,545
Net cash generated by/(used in) operating activities	65,001	(463,105)	38,038	(203,486)

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.

 

27.  Operating lease arrangements

The Group and Company as lessee

	2017 £	2016 £
Minimum lease payments under operating leases recognised as an expense in the year	58,000	41,400

 

Minimum future lease payments under non-cancellable operating lease agreements:

	2017 £	2016 £
Due within 1 year	47,700	55,200

 

28.  Related party transactions

During the year ended 30 April 2017 £145,500 fees were paid to Tatbels Limited and in 2016 fees of £116,750 were paid to Yum Management Limited in respect of Charles Tatnall's services as Executive Chairman.

During the year ended 30 April 2017, fees of £145,500 (2016: £116,750) were paid to Dearden Chapman Accountants Limited in respect of James Longley's services as Chief Financial Officer.

During the year ended 30 April 2017, fees of £231,125 (2016: £158,167) were paid to PPT Capital Limited in respect of services rendered by Phil Stephens and Paul Lazarevic. Phil Stephens and Paul Lazarevic were both directors and shareholders of PPT Capital Ltd during the year. Also, fees of £72,375 (2016: £45,000) were paid to Helvic Limited, £26,500 (2016: £nil) to Ennerco Limited, and £12,000 to Catmadboo Limited, in respect of services rendered by Paul Lazarevic and Phil Stephens, and of which either Paul Lazarevic, Phil Stephens or a connected party to the two were the Directors and major shareholders or those three companies.

During the year ended 30 April 2017 fees of £13,133 were paid to Kinloch Corporate Finance Limited in respect of Tim Cottier's services as an independent non-executive director and of which Tim Cottier was a director and major shareholder.

Remuneration of key management personnel

The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the Directors' Remuneration Report on page 15 of the full Report & Accounts.

	2017 £	2016 £
Short-term employee benefits	738,354	766,010
	738,354	766,010

In addition to the information disclosed in Note 23, movement on warrants held by the Directors is as follows:

			James Longley	Charles Tatnall
	Exercise price	Vesting date	Number of warrants	Number of warrants
At 30 April 2015	0.9	27.08.2017	20,000,000	20,000,000
Exercised during the year	0.9	27.08.2017	(10,000,000)	(10,000,000)
At 30 April 2016 and 30 April 2017	0.9	27.08.2017	10,000,000	10,000,000

On 1 February 2016, 10,000,000 shares were issued at 0.9p per share to each of Charles Tatnall and James Longley on the exercise of warrants. The aggregate of the amount of gains made by each director on the exercise of warrants is £20,000.

 

29.  Events after the year end

Exercise of warrants

On 19 May 2017 10,000,000 Ordinary Shares have been issued to Charles Tatnall, Executive Director, and a further 10,000,000 Ordinary Shares have been issued to James Longley, Chief Financial Officer, following the exercise of an aggregate of 20 million warrants at an exercise price of 0.9p per ordinary share, representing a cash subscription to the Company of £180,000. 

New Share Option Incentive scheme

On 18 May 2017, the Company adopted a new share option scheme (the "2017 Share Option Scheme"). On the same day, the Company granted an aggregate of 60,000,000 share options with an exercise price of 1.485p (representing a 7.6% premium to the mid-market closing price on 18 May of the Ordinary Shares of the Company) pursuant to the 2017 Share Option Scheme, all vesting in three equal annual instalments (the "Options"). 15,000,000 Options were granted to each of Paul Lazarevic, James Longley, Phil Stephens and Charles Tatnall. 

 

Charles Tatnall and James Longley hold 4,770,000 existing share options each which were awarded prior to the Reverse Acquisition. All of the Directors have indicated that they will not sell any shares that they hold for at least the next eighteen months. 

 

Following the issue of options and exercise of warrants, there are a total of 69,540,000 options in the Company outstanding, representing approximately 9.8% of the Company's issued share capital.

Director Dealings

Following the warrant exercise, the interests of the Directors in the issued share capital of the Company before and after the issue of the New Ordinary Shares is as follows: 

 

Name	Existing interest in ordinary shares of 0.1p each	Number of New Ordinary Shares	Total interest in ordinary shares of 0.1p each	Percentage interest in the issued ordinary share capital of the Company
Philip Stephens	88,012,823	-	88,012,823	12.37%
Paul Lazerevic	82,203,379	-	82,203,379	11.55%
Charles Tatnall	65,500,000	10,000,000	75,500,000	10.61%
James Longley	57,500,000	10,000,000	67,500,000	9.49%

 

 

**ENDS**

 

For further information, please visit www.plutuspowergen.com, or contact:

 

Charles Tatnall	Plutus PowerGen Plc	Tel: +44 (0) 20 3705 8350
Phil Stephens	Plutus PowerGen Plc	Tel: +44 (0) 20 3705 8352
Andrew Craig	Cantor Fitzgerald Europe	Tel: +44 (0) 20 7894 7000
Richard Salmond	Cantor Fitzgerald Europe	Tel: +44 (0) 20 7894 7000
Isabel de Salis	St Brides Partners Limited	Tel: +44 (0) 20 7236 1177
Olivia Vita	St Brides Partners Limited	Tel: +44 (0) 20 7236 1177

 

Notes to Editors

Plutus PowerGen Plc is an AIM listed company focused on the development, construction and operation of flexible stand-by power generation sites in the UK.  At present, the market dynamics for flexible power generation are positive due to the continued downward pressure on capacity available to National Grid to balance supply and demand, leading to their announcements about possible power shortages over the next few years.  Flexible power generators such as PPG offer a viable and timely solution to the power capacity shortfall in the UK.