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RNS Number : 3027S
Cogenpower PLC
29 September 2017
 

29 September 2017

 

Cogenpower plc ("Cogenpower" or the "Company" or the "Group")

 

Interim results for the six months ended 30 June 2017

 

Cogenpower, the low-carbon technology energy business using sustainable generation to supply cost-effective and cleaner energy to urban communities, announces its interim results for the six months ended 30 June 2017.

Anaconda technology

Cogenpower designs, builds, transforms, owns and operates high efficiency Combined Heat and Power plants with annexed District Heating/Cooling (DHC) distribution networks, known as CHPDHC. The Group's CHPDHC schemes can be scaled to serve communities from 3,000 to 50,000 people. At the heart of the business is Cogenpower's fully automated Anaconda power plant which has an urban-scale CHPDHC distribution system and a capacity of 3MWe of electric output and 15MWt of thermal output. Cogenpower's technology platform uses intelligent automation for heat storage and has achieved energy efficiency levels of over 90 per cent. Cogenpower is also a provider of energy consultancy and implementation services.

Update on operations: 6 months to 30 June 2017

Following an extremely warm March 2017 compared to the corresponding period in 2016, the output for the period for our key asset, the CHPDH unit in Borgaro, was lower, producing 9,962 MWh compared to 10,508 MWh for the same period in 2016. The H1 2017 results do not benefit from the Green Certificate scheme which ended in 2016, therefore to compare on a like for like basis, the true comparison of the results is:


2017 H1

2016 H1

Revenue excluding green certificates

1,573

1,726

Gross Profit

380

276

 

This demonstrates the value of both the renegotiated gas supply contract and the reduction in overheads from having a completely automated operation. The Group now has a blueprint for a low-capex, biomass/gas hybrid, refinement to the plant, as described more fully in our Final Results announcement released on 29 September 2017, which the Directors' believe will replace a substantial proportion of the Green Certificate margin that the Group no longer benefits from.

Outlook

As announced in our Final Results, the Group is in the process of an extensive strategic re-assessment of its future trajectory and further announcements will be made shortly.

CEO Dr Francesco Vallone commented: "As we move into a new strategic phase, it has been encouraging to see the benefit of our investment in automated technology. This innovative capability is, and will continue to be, Cogenpower's defining quality."

Suspension of shares and update on Group strategy

 

The Company's ordinary shares were previously suspended from trading on AIM pending publication of the Annual Report and Accounts. Notwithstanding the publication of the Annual Report and Accounts on 29 September 2017, the Group's shares remain temporarily suspended from trading on AIM for the reasons outlined below.

 

The Group has been undertaking an extensive strategic re-assessment of how it moves forward and is in advanced discussions on a potential fundraising from new investors to strengthen the Company's working capital position. As part of this fundraising, which will require shareholder approval, the Group will be seeking to put a Company Voluntary Arrangement (CVA) proposal to the creditors and shareholders of Cogenpower plc. The strategic re-assessment also includes consideration by the Board of the Group of the potential disposal of the Group's operating subsidiaries.

 

The Company's ordinary shares will remain suspended from trading on AIM pending a further announcement in respect of such fundraising proposals.

 

 

Further enquiries:

 

Cogenpower plc

Dr. Francesco Vallone

Ilaria Cannata

Martin Groak

 

+39 011 4501466

 

+44 7949 209 301

info@cogenpower.co.uk

Allenby Capital Limited

(Nominated Adviser and Joint Broker)

 

Nick Athanas

Richard Short

Nick Naylor

 

+44 (0)20 3328 5656

Peterhouse Corporate Finance Limited (Joint Broker)

Heena Karani                                  Charles Goodfellow

+44 (0) 20 7469 0930

 

Notes to Editors

 

Energy efficiency through smart technology: Anaconda technology

Cogenpower (CGP.L) designs, builds or transforms, owns and operates high efficiency district heating and cooling schemes, scalable to serve communities from 3,000 to 50,000 people. At the heart of the business is Cogenpower's Anaconda Artificial Intelligence technology, an automated, Artificial Intelligence energy generation and control system equipped with a heat storage facility that delivers heat or cooling to customers and electricity to the grid with proven energy efficiency of more than 90%.

 

Although district heating systems have been available for some time, advances in technology have brought significant new operational and environmental advantages, making them increasingly attractive and reliable energy solutions for communities. With the scalability of schemes such as Cogenpower's, the energy-saving advantages of fully automated CHPDH, usually associated with large towns and cities, can be applied to modest sized communities and new developments

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDING 30 JUNE 2017










Six months to

30 Jun 17 (unaudited)

Six months to

30 Jun 16 (unaudited)

Year to

 31 Dec 16

 (audited)

 





Restated

Restated

 


Notes


€000's

€000's

€000's

 

Continuing operations

(2)





 

Revenue from goods and services



                  1,573

              2,187

3,688

 

Cost of Sales



  (1,193)

  (1,450)

(1,947)

 

Gross Profit



                   380

                737

1,741

 

Other operating income



-

-

10

 

Administrative expenses



(395)

(434)

(1,755)

 

Depreciation and Amortization



(152)

(308)

(605)

 

Other operating expenses



(72)

(620)

(793)

 

Loss from operations



(240)

(625)

(1,402)

 







 

Finance expense



 (117)

(248)

(578)

 

Finance income



10

11

111

 

Net finance (expense) income



(107)

(237)

(467)

 

Loss for the period before tax



(347)

(862)

(1,869)

 

Taxation



-

-

                  124

 

Loss for the period attributable to equity shareholders of the parent company from continuing operations

 

(347)

 

(862)

 

(1,993)

 

Discontinued operations (net of tax)                                         (2)

(99)

(115)

(380)

 

Loss for the period attributable to equity shareholders of the parent company from operations

 

            (446)

 

         (977)

 

(2,373)

 

Other comprehensive income (net of tax)

   -

    -

-

 

Total comprehensive income attributable to equity holders of the parent company

 

           (446)

 

          (977)

 

(2,373)

 







 







 

Loss per share

 






 

Loss per share from operations:






 

Basic & diluted (Cents)

(3)


            (0.9)

              (1.9)

 






 







 



 

AS AT 30 JUNE 2017


 




 




30 Jun 17

(unaudited)

31 Dec 16

(audited)




€000's

€000's

Non-current assets





Property, plant and equipment



10,321

10,471

Intangible assets



57

85

Investments



12

12

Deferred tax asset



448

448

Total non-current assets



10,838

11,016

Current assets





Inventories



26

26

Trade and other receivables



2,651

2,808

Cash and cash equivalents



114

13

Total current assets



2,791

2,847






Total assets



13,629

13,863






Current liabilities





Trade and other payables



4,577

4,981

Provisions



314

228

Borrowings



1,276

1,574

Corporation taxes



1,047

1,047

Other taxes



3,338

2,256

Total current liabilities



10,552

10,086

 

Non-current liabilities





Borrowings



4,100

4,116

Fiscal liabilities deferred



359

597

Total non-current liabilities



4,459

4,713






Total liabilities



15,011

14,799






Net assets / (liabilities)



(1,382)

(936)






Equity attributable to equity holders of the Parent





Share capital



171

171

Share premium



2,129

2,129

Revaluation reserve



3,035

3,035

Retained earnings



(6,717)

(6,271))

Total equity



(1,382)

(936)










 


STATEMENT OF CHANGES IN EQUITY

 


 



 

Share capital

 

Share premium

 

Merger Reserve

 

Total



€000's

€000's

€000's

€000's

€000's

For the 6 month period ended 30 June 2017






 








At 1 January 2017


171

2,129

(6,271)

3,035

(936)

Comprehensive income







Profit/Loss for the period




 (446)


(446)

At 30 June 2017


171

2,129

(6,717)

3,035

(1,382)







 

For the year ended 31 December 2016






 








At 1 January 2016


138


(3,906)

3,035

(733)

Adjustment on disposal of subsidiary



               

      8


    8

Comprehensive income







Loss for the period


-

-

(2,373)

-

(929)

Issue of share capital


33

2,590

-

-

2,623

Expenses of share issue


-

(461)

-

-

(461)

At 31 December 2016


171

2,129

(6,271)

3,035

(936)


 CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDING 30 JUNE 2017

 


Six months to 30 Jun 17 (unaudited)

Six months to 30 Jun 16 (unaudited)

Year to 31-Dec-16 (audited)

 


 


 


€000's

€000's

€000's

 




 

Operating activities




 

Loss before tax

(446)

(963)

  (2,249)

 

Amortisation of intangible assets

 28

88

  68

 

Depreciation of property, plant and equipment

150

247

562

 

Write off of amounts due from former subsidiary

-

-

104

 

Fair value movement on investment

-

-

 10

 

Finance expense

121

270

      621

 

Finance income

(11)

(63)

    (118)

 

Corporate tax recovery

-

34

-

 

(Increase)/decrease in trade and other receivables

157

(41)

   1,271

 

(Increase)/decrease in inventories

-

1

-

 

Increase (decrease) in provisions

 86

137

(195)

 

Increase/(decrease) in trade and other payables

(404)

(280)

(297)

 

Increase/(decrease) in other taxes

844

902

524

 

Cash generated from operations

525

332

301

 

Income tax recovered / (paid)

-

-

40

 

Net cash flows from operating activities

525

332

341

 





 

Investing activities




 

Finance income

11

63

22

 

Purchase of property, plant and equipment

-

(179)

-

 

Purchase of investments

-

-

-

 

Purchase of intangibles

-

(22)

(15)

 

Net cash (used)/ recovered on disposal of subsidiary

-

30

(74)

 

Net cash from/(used in) investing activities

11

(108)

(67)

 





 

Financing activities




Repayment of loans                                                                     

 (74)

(749)

(284)

 

Drawdown/(repayment) of bank overdraft

(240)

(496)

(785)

 

Finance expense net of non-cash items

(121)

(270)

(523)

 

Proceeds from sale of shares net of issue costs

-

1,053

    1,053

 

Net cash used in financing activities

(435)

(462)

(539)

 





 

Cash flow of the period

101

(238)

(265)

 





 

Cash and cash equivalents at beginning of period

 13

278

278

 

Cash and cash equivalents at end of period

         114

40

  13

 

Net change in cash and cash equivalents

101

(238)

(265)

 

 

 

Notes to the accounts

1.    Basis of Preparation

The financial information contained in this announcement does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006.

 

The financial information for the six months ended 30 June 2017 is unaudited.  In the opinion of the directors, the financial information for the period fairly represents the financial position of the Group.  Results of operations and cash flows for the period are in compliance with International Financial Reporting Standards as adopted by the EU ("EUIFRS").   These financial statements should be read in conjunction with the audited financial statements for 31 December 2016 published on 29 September 2017 and available on the Company's website www.cogenpower.co.uk .  The accounting policies, estimates and judgements applied in these financial statements are consistent with those disclosed in the audited financial statements for 31 December 2016.

 

All financial information is presented in Euro, unless otherwise disclosed.

 

The Directors of the Company approved the financial information included in the results on 29 September 2017

Going concern

The financial information for the six months ended 30 June 2017 has been prepared on the going concern basis. The Company has just released its delayed Annual Report and Accounts and the strategic report contains the following statement:

 

"As at 31 December 2016, the Group had €7.2 million of net current liabilities - an improvement of €2.3 million compared to one year earlier. After a long and well documented dispute with the Italian authorities in relation to Green Certificates, the Board can now report that the Italian judicial system is fully supportive of the Company's position and the Board is confident that the Company will substantially recover the carrying value of the Green Certificate receivables by the end of the 4th quarter 2017. It is similarly confident of bringing in the amounts due in relation to CO2 incentives. However, the unavailability of the €1.6 million cash represented by those two receivables has meant that the Company was unable to keep to its commitments under deferred payment plans negotiated in 2016. The Company was supported during this difficult period by its main financing banker, which deferred two quarters of capital repayments in order to give the Italian group much needed working capital whilst it assessed its options.  We are   currently seeking to restructure the indebtedness of the recently closed Italian retail subsidiary - which has the highest level of indebtedness.

 

This process is being undertaken in the context of discussions with a major infrastructure fund to invest in various Italian projects and also separate discussions with other parties on investment at the parent company level, as detailed in the Chairman's Statement.

 

Having considered the current status of the strategy to remedy the Group's funding issues, the Directors are of the opinion that the Group can obtain adequate financial resources to enable it to continue in operation for the foreseeable future. For this reason, it continues to adopt the going concern basis in preparing the financial statements. There can, however, be no certainty that the transactions noted above will complete and therefore there is a material uncertainty that could cast doubt on the Group's ability to continue as a going concern and discharge its liabilities as they fall due. These financial statements do not contain any adjustments that would be required if the Company could not continue as a going concern."

 

The only change to that status is that we are now reporting €7.7 million of net current liabilities at the end of June 2017 as a consequence of the inability to keep to our repayment plans.

 

The programme to bring in new investment is on track and further announcements will be made shortly.

 

 

2.    Restatement of total comprehensive income for prior periods

Following the closure of the Cogenpower Gas&Power (Gas&Power) business during the period to 30 June 2017, the consolidated statement of total comprehensive income comparative numbers for the year ended 31 December 2016 and the 6 months to 30 June 2016 have been restated to exclude the results of Gas&Power from continuing operations. The net result attributable to Gas&Power for all three periods reported are shown in the line "Discontinued operations (net of tax)"

 

 

3.    Earnings per share

The number of shares used in the calculation of basic and diluted  Earnings per share (EPS) for the six months to 30 June 2017 is 50,166,760.  There were no shares issued during the period.

 

The number of shares used in the calculation of basic and diluted  Earnings per share (EPS) for the year to 31 December 2016 was 49,000,083 and for the six months to 30 June 2016 was 47,834,000 being in both cases the weighted average number of shares in issue over the period.

 


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