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RNS Number : 1729S
Nature Group PLC
28 September 2017
 

Nature Group PLC

("Nature" or the "Company" or the "Group")

Unaudited Interim Results for the 6 months to 30 June 2017

 

Nature Group PLC (AIM:NGR), the provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, announces its interim results for the six months ended 30 June 2017.

Financial Performance

·     Revenues for the period of £ 5.4 million (H1 2016: £ 6.2 million)

·     Underlying pre-tax loss of Continuing Operations for the period of £ 1.8 million (H1 2016: loss £ 0.9 million)

·     Finalized the sale and transfer of the NPRF Gibraltar assets on 16th of January 2017 for a consideration of £4.0 million.

·     Profit from Discontinued Operations for the period of £ 2.0 million (H1 2016: loss £ 0.6 million) due to the combination of a book profit on the sale of NPRF Gibraltar and a book loss due to the dissolvement of Nature Environmental Services Limited ("NESL") in Jersey .

·     Underlying earnings per share for the period of -2.26 pence (H1 2016: -0.81 pence)

·     Net indebtedness at 30 June 2017 was £1.0 million (H1 2016: £0.36 million cash and cash equivalents).

·     Since the period end, the Board has been managing the cash position of the Group on a daily basis and is currently in discussions in regards to a number of strategic options which include the provision of immediate liquidity to the Group.

 

Chairman's Statement

 

The first six months of 2017 has been a very disappointing period for the Directors of Nature Group. 2017 started optimistically with the sale of our Gibraltar business to World Fuel Services for a total consideration of £4 million of which £3.2 million has been received and £0.8 million is held in escrow until January 2019, against any unforeseen liabilities that might arise in that period.

 

Trading in the first six months of 2017, has, however, been challenging. The Oil and Gas division has continued to struggle, and has consequently drained the Group's financial resources as contracts were delayed or failed to materialise. Our initial inability to flex the Group overhead to match the downturn was not helpful.

 

As announced in July, the Board had to act decisively and as a first step, the CEO and CFO left the Group. In their place, Andreas Drenthen, who held a non-executive position on the Board, and who is based in Rotterdam and has significant experience in the Maritime sector, has been reappointed Chief Executive Officer. René Verbruggen has been appointed to the Board as non-executive director and is currently closely supervising our financial resources and leading on the financial reporting. He has held a number of senior financial appointments in a similar capacity, and more importantly in business turnaround situations where his experience is already benefiting the Board. For an interim period, I intend to lead the Board with just Andreas and René to ensure close communication and rapid decision-making.

 

Turnaround Plan

One of the first decisions the restructured Board has taken, is to undertake a strategic review of all of the Group's operations. This remains ongoing. As well as continuing to scrutinise and reduce the Group's overhead we are in negotiations with a number of parties about the immediate financing, structure and strategic direction of the business. In addition, we are ensuring that the Board is monitoring, on a daily basis, the precarious financial position. Cash is being closely supervised. We look forward to updating shareholders as soon as possible on the outcome of our negotiations and expect to be able to do so within a few weeks.

 

Oil and Gas Division

The volatility in oil prices has curtailed offshore exploration which is the Oil and Gas Division's target market. Although we had secured a significant contract with Maersk, the start was delayed and the division was not able to secure any additional material contracts despite the technological superior process we have in comparison to our competitors. Overheads have been cut but we continue to carrying a high fixed cost base which continues to put pressure on the Group's cash flow. In previous periods, Nature Group had the confidence to invest considerable resources in this division and we continue to receive a flow of contract enquiries from clients. Accordingly, the Board still believes that a reorganized business model has a good future in this sector.

 

Maritime Division

Nature Group has a substantial and market-leading position in Rotterdam for the removal and treatments of ships generated and cargo related waste. Working in the largest port in Europe and the third largest in the world provides the scope to increase the services Nature Group offers. Our services are backed up by waste and environmental legislation in Europe. The take up by ship owners is not discretionary and is strictly monitored by environmental regulators.

 

The strategic review has highlighted that the distraction from having to chase oil and gas contracts has, to a limited extent, had an impact on the Maritime operations. This is currently being addressed to exploit the growth potential we have always identified for this division.

 

The Texas based operation, acquired in 2014, has, after an encouraging start, seen in this period a reduction in business from both support service companies and oil and gas operators in the US Gulf. This business is now being refocused to increase the range of shipping services being offered with barge support and tank cleaning adding to existing operations. We also continue to maintain an interest in Middle East port opportunities.

 

We believe that giving even more focus to the Maritime Division allows us to become a dedicated service business with strong growth potential. In line with our longer term aim to expand our reach outside of Europe, we see the potential of working in partnership with international waste management and environmental businesses that are looking to expand their activities into the Maritime sector.

 

Outlook

The Board understands shareholders frustrations that we have not been able to fulfil past optimism and has worked tirelessly to review all aspects of Nature's operations. We are continuing the restructuring that started in previous periods which will be critical to the Group's survival and success and are confident that we are putting in place a creditable and forward looking turnaround plan. Our cash position is extremely difficult and, as outlined above, we are working with partners to attempt to address our immediate liquidity concerns.

 

 

For further information contact:

Nature Group PLC

Andreas Drenthen, CEO Tel: + 31 653261484

Berend van Straten, Chairman Tel: + 31 626805605

Cenkos Securities plc

Neil McDonald Tel: +44 (0)131 220 9771 / +44 (0)207 397 1953

Beth McKiernan Tel: +44 (0)131 220 9778 / +44 (0)207 397 1950

Nature Group is traded on the AIM market, (ticker: NGR). www.ngrp.com



 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited

Unaudited

Audited

For the half year to 30 June 2017

30 June 2017

30 June 2016

year to 2016


£

£

£

Continuing operations




Revenue

5.362.780

6.166.292

11.990.529

Cost of sales

(3.503.578)

(3.668.381)

(7.332.730)

Operating profit/(loss)

1.859.202

2.497.911

4.657.799





Other expenses

                      -  

            -  

(203.961)

 

Share based payments

                      -  

            -  

3.699

 

Administrative costs

(3.026.092)

(2.911.854)

(5.814.627)

 

Depreciation and goodwill amortisation

(493.279)

(445.259)

(1.141.913)

 

Goodwill write off

                      -  

0

       -  

 

Finance costs

(110.664)

(20.780)

(35.650)

 

Profit/(Loss) before taxation

(1.770.833)

(879.982)

(2.534.653)

 

Income tax gain/(expense)

                     (20.211)  

110.319

285.013

 

Profit/(Loss) for the year and total comprehensive income for the year from continuing operations

(1.791.054)

(769.662)

(2.249.640)





Discontinued operations




Profit/(Loss) for the year and total comprehensive income for the year from discontinued operations

2.077.620

(601.127)

(1.055.144)

Profit/(Loss) for the year and total comprehensive income for the year

286.566

(1.370.788)

(3.304.784)





Attributable to:




Owners of the parent




Profit/(Loss) for the year from continuing operations

(1.770.833)

(769.662)

(2.249.640)

Profit/(Loss) for the year from discontinued operations

2.077.620

(601.127)

(1.055.144)

Profit/(Loss) for the year attibutable to owners of the parent

286.566

(1.370.788)

(3.304.784)





Non-controlling interest:




Profit/(Loss) for the year from continuing operations

                      -  

125.173

47.367

Profit/(Loss) for the year from discontinued operations

61.056

        -  

132.187

Profit/(Loss) for the period attributable to owners of the non-controlling interest

61.056

125.173

179.554





Profit/(Loss) for the year and total comprehensive income for the year attributed to owners

347.622

(1.245.615)

(3.125.230)





Earnings per share (pence):




From continuing operations:




Basic

(2,259)

(0,813)

(2,778)

Diluted

(2,192)

(0,813)


From discontinued operations:




Basic

2,698

(0,758)

(1,164)

Diluted

2,617

(0,758)






Profit/(Loss) after tax, before share based payments

347.622

(1.245.615)

(3.128.929)

Excluding Share based payments

(2,259)

(0,813)

(2,778)

 

 




 

CONSOLIDATED BALANCE SHEET




As at 30 June 2017

Unaudited

Unaudited

Audited


30 June 2017

30 June 2016

31 December 2016


£

£

£





Assets




Non-current assets




Plant, vessels and equipment

8.150.475

6.303.694

8.341.330

Goodwill

1.174.448

961.489

1.238.137

Other intangible assets

19.846

129.022

17.680

Investment in associated company

308.446

308.446

308.446

Deferred tax assets

494.029

264.202

478.508

Total non-current assets

10.167.464

7.966.853

10.384.100





Current assets




Insurance Recoveries on 3rd Party Claims

1.665.682

-

                    1.593.352

Corporate taxes

7.427

121.864

86.978

Stocks and work in progress

107.743

1.470.253

79.234

Trade and other receivables

4.741.669

5.397.481

3.369.337

Cash and cash equivalents

426.722

328.855

383.642

Total current assets

6.949.243

7.318.453

5.512.544





Assets classified as held for sale

-

5.903.509

6.387.737





Total Assets

17.096.486

21.188.815

22.284.382





Liabilities




Current liabilities




Trade and other payables

(6.394.535)

(3.683.426)

(7.031.742)

Bank loans and overdrafts

(1.466.993)

(642.888)

(1.186.456)

Corporate taxes

(409.417)

(390.784)

(386.907)

Provision for 3rd Party Claims

(1.665.682)

-

(1.593.352)

Liabilities directly associated with assets classified as held for sale

-

(5.111.259)

(5.608.227)

Total current liabilities

(9.936.627)

(9.828.357)

(15.806.685)





Non current liabilities




Term loans

(822.923)

(2.920.396)

(1.220.277)





Net assets

6.336.936

8.440.062

5.257.420





Equity




Called up share capital

158.561

158.561

158.561

Share premium account

21.953.617

22.019.285

21.953.617

Share option reserve

107.047

110.746

107.047

Capital reserve

2.702.399

2.925.520

2.702.399

Foreign currency translation reserve

311.270

324.200

(265.625)

Profit and loss account

(18.804.998)

(17.248.549)

(19.128.164)


6.427.897

8.289.763

5.527.835

Amounts recognised directly in equity relating to assets classified as held for sale

-

-

-

Equity attributable to owners of the group

6.427.897

8.289.763

5.527.835

Non-controlling interest

(90.961)

150.299

(270.415)

Total equity attributable to equity shareholders

6.336.936

8.440.062

5.257.420

 

CONSOLIDATED CASH FLOW STATEMENT




For the half year to 30 June 2017

Unaudited

Unaudited

Audited


30 June

2017

30 June

2016

31 December 2016


 £

£

£

Reconciliation of operating profit to net cash flow from operating activities:




Profit/(Loss) before taxation

306.787

(1.576.255)

(3.600.996)





Adjustments for:




Depreciation and amortisation

493.460

504.446

1.150.457

Decrease/(Increase) in stock

(28.509)

(284.623)

-

Decrease/(Increase) in debtors

(1.365.111)

1.099.299

1.798.041

(Decrease)/Increase in creditors

(542.367)

(1.089.716)

2.011.300

Foreign exchange differences

(218.763)

587.822

30.533

Increase in reserves due to share based payments

-

-

(3.699)

Impairment of financial/fixed assets

-

-

   646.405

Net cash from operating activities

(1.354.503)

(759.026)

2.032.040





Investing activities:




Result from divestment of asset held for sale

1.383.284

-

-

Acquisition of tangible fixed assets

(256.421)

(392.782)

(1.968.916)

Acquisition of intangible fixed assets

(2.166)

-

(166.478)

Proceeds from disposal of fixed assets

-

34.761

-

Financing activities:




Proceeds from bank borrowings

(116.817)

955.768

(336.884)

Proceeds from investments by non-controlling interest

-

-

-

Increase in cash balances

(346.622)

(161.278)

(440.238)





Analysis of cash and cash equivalents during the period:




Balance at start of period

(693.649)

525.578

(253.411)

Increase/(Decrease) in cash and cash equivalents

(346.622)

(161.278)

(440.238)

Balance at end of period

(1.040.271)

364.300

(693.649)

 

 

 

 

 

1.    The calculation of earnings per share has been based on the loss for the period and the average 79,280,655 Ordinary Shares and 2.440.000 Options in issue throughout the period.

 

2.    These unaudited results have been prepared on the basis of the accounting policies adopted in the accounts to 31 December 2016.

3.    The Cash Flow Statement incorporates both continuing operations as discontinued operations but does not provide a split as in the Consolidated Balance Sheet and Consolidated Statement of Comprehensive Income.

4.    The interim report to 30 June 2017 was approved by the Directors on 29 September 2017. The report will be available to the public on the Nature Group website via www.naturegroup.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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