RNS Number : 9237J
ReEnergy Group PLC
11 December 2008
ReEnergy Group plc
("ReEnergy" or the "Company")
Interim Results for the six months to 30 June 2008
ReEnergy, an investing company with an investment strategy seeking to acquire, a UK-based trading company involved primarily in
renewable energy, waste management or financial services capable of significant organic growth (the "Investing Strategy"), is pleased to
announce its interim results for the six months ended 30 June 2008. Trading in the Company's shares was suspended on 27 June 2008, pending
publication of the Company's annual report and accounts for the 12 months ended 31 December 2007 (the "2007 Annual Report and Accounts").
The 2007 Annual Report and Accounts were posted to shareholders on 6 November 2008. As trading in the Company's shares remained suspended
pending publication of these interim results, such suspension has now been lifted with immediate effect.
HIGHLIGHTS:
* On 17 June 2008, the Company announced the sale of its operating subsidiary, Estech Europe Limited ("Estech Europe") to VT
Environmental Engineering Limited, a wholly owned subsidiary of VT Group plc ("VT Group"). The consideration payable, following settlement
and accrual adjustments, was �1,642,601. The net cash consideration received on 17 June 2008, after warranty retention, settlement agreement
and advances repaid, was �1,356,000.
* A retention against warranty claims of �150,000, from the consideration received, was held in a joint account which less, any warranty
claims, was to be released by VT Group on 15 August 2008. VT Group has asserted claims in the value of �96,486 against the warranty
retention. ReEnergy is engaged in discussions with VT Group in order to finalise settlement of such warranty claims. A further
announcement will be made as appropriate.
* On 30 July 2008, ReEnergy's shareholders voted, at a general meeting, to approve the Investing Strategy.
Roger Hewitt, Non-Executive Chairman of ReEnergy, commented:
"The disposal of Estech Europe represented a disposal of the Company's last trading subsidiary and in accordance with AIM Rule 15 the
Company is now treated as an investing company. I am confident that we will be able to secure a candidate company in line with the investing
strategy to achieve future growth for the Company and contribute to shareholder value."
For further information please contact:
ReEnergy Group plc
Michael Roger Hewitt, Non-Executive Chairman Tel: +44 (0)20 7432 0340
Strand Partners Limited
Stuart Faulkner Tel: +44 (0)20 7409 3494
David Altberg
Chairman's Statement
Subsequent to the trading update of 17 June 2008 regarding the disposal of Estech Europe, the Company has initiated discussions with a
number of potential candidates and is continuing to pursue other investment opportunities in line with its investing strategy. In assessing
investment opportunities, the Board will seek relevant commercial advice from market consultants as deemed appropriate. In addition,
relevant legal and financial due diligence will be undertaken by suitably qualified advisers in order to determine the feasibility and risks
associated with any potential acquisition or investment.
The total cash burn for the six months to 30 June 2008 was �1,808,000, an average of �301,333 per month. The cash balance remaining at
30 June 2008 was �1,484,000.
Costs, which include the closure of the London office from 21 November 2008, and the monthly burn rate have since been significantly
reduced and are not expected to change significantly until an appropriate merger is completed.
The Group remains confident of the future potential for ReEnergy as an investment vehicle and its ability to create shareholder value.
Michael Roger Hewitt
Non-Executive Chairman
11 December 2008
Consolidated Interim Income Statement
For the six months ended 30 June 2008
Unaudited Unaudited Audited
six months to six months to 12 months to
30 June 2008 30 June 2007 31 December 2007
�000 �000 �000
Administration expense (1,306) (2,204) (12,861)
Loss from operations (1,306) (2,204) (12,861)
Investment income 28 134 530
Finance costs (58) (219) (9)
Loss before tax (1,336) (2,289) (12,340)
Taxation - - -
Loss after tax (1,336) (2,289) (12,340)
Loss per ordinary share (1.3)p (2.8)p (13.6)p
- basic and diluted
Consolidated Interim Balance Sheet
At 30 June 2008
Unaudited at Unaudited at Audited at
30 June 2008 30 June 2007 31 December 2007
�000 �000 �000
Non-current assets
Goodwill - 22,323 -
Other intangible assets - 1,490 -
Property, plant and equipment 1 59 48
1 23,872 48
Available for sale investments - - 1,863
Current assets
Trade and other receivables 287 323 283
Cash and cash equivalents 1,484 3,757 1,666
1,771 4,080 1,949
Current liabilities
Trade and other payables (524) (5,597) (1,126)
Net current assets / 1,247 (1,517) 823
(liabilities)
Total assets less current 1,248 22,355 2,734
liabilities
Non-current liabilities
Trade and other payables (81) (14,043) (250)
Total assets 1,167 8,312 2,484
EQUITY AND LIABILITIES
Share capital 5,090 4,078 5,090
Share premium 24,101 20,521 24,101
Share option reserve - 235 -
Merger reserve 209 209 209
Translation reserve (141) (26) (160)
Minority interest - - -
Accumulated losses (28,092) (16,705) (26,756)
Total equity 1,167 8,312 2,484
Consolidated Unaudited Interim Statement of Changes in Shareholders' Equity
For the six months ended 30 June 2008
----------------Attributable to equity holders of the company----------------
Share premium Share Accum- Trans-
Share account Option Merger ulated lation Minority
Capital Reserve reserve losses reserve Interest
Total
Total
�000 �000 �000 �000 �000 �000 �000 �000
�000
At 1 January 2006 (restated) 1,867 10,051 304 209 (4,487) (26) 7,918 -
7,918
Changes in equity for 2006
Loss for the year - - - - (9,929) - (9,929) -
(9,929)
Minority interest - - - - - - - 1,249
1,249
Disposal of minority interest - - - - - - - (1,249)
(1,249)
Issue of share capital 2,211 11,274 - - - - 13,485 -
13,485
Costs of issue of shares - (804) - - - - (804) -
(804)
Share based payments - - (69) - - - (69) -
(69)
Movement on re-translation of
overseas subsidiaries - - - - - (32) (32) -
(32)
At 31 December 2006 (restated) 4,078 20,521 235 209 (14,416) (58) 10,569 -
10,569
Loss for the year - - - - (12,340) - (12,340) -
(12,340)
Issue of share capital 1,012 3,580 - - - - 4,592 -
4,592
Share based payments - - (235) - - - (235) -
(235)
Movement on re-translation of
overseas subsidiaries - - - - - (102) (102) -
(102)
At 31 December 2007 5,090 24,101 - 209 (26,756) (160) 2,484 -
2,484
Changes in equity for the
Period ended 30 June 2008
Loss for the six months - - - - (1,336) - (1,336) -
(1,336)
Movement on re-translation of
overseas subsidiaries - - - - - 19 19 -
19
At 30 June 2008 5,090 24,101 - 209 (28,092) (141) 1,167 -
1,167
Consolidated Interim Cash Flow Statement
For the six months ended 30 June 2008
Unaudited Unaudited Audited
six months to six months to 12 months to
30 June 2008 30 June 2007 31 December 2007
(restated)
�000 �000 �000
Operating cash flow before (1,280) (1,905) 741
changes in working capital and
provisions
Income taxes (paid) / refunded - - -
Interest paid (2) - -
Interest element of finance (2) (4) (8)
lease rental payments
(1,284) (1,909) 733
Movement in working capital
Decrease in debtors 146 82 315,75 121
Decrease in creditors (313) (1,066) (923)
Net cash (used for) / from
operating
activities (1,451) (2,893) (69)
Cash flows from investing
activities
Interest received 28 134 529
Acquisition of equipment (16) - (16)
Acquisition of intangibles - - -
Disposal of subsidiary 1,356 - -
Net cash used in investing 1,368 134 513
activities
Cash flows from financing
activities
Repayment of finance leases (41) (35) (70)
Loans repaid (58) - (5,259)
Net cash (used for) / from
financing
activities (99) (35) (5,329)
Net (decrease)/increase in
cash and
cash equivalents (182) (2,794) (4,885)
Cash and cash equivalents at
beginning of the period 1,666 6,551 6,551
Cash and cash equivalents at
end of the period 1,484 3,757 1,666
Notes to the Interim Financial Statements
For the six months ended 30 June 2008
1. Accounting policies
Basis of preparation
This Report was approved by the Directors on 11 December 2008.
From 1 January 2007, the Group has adopted International Financial Reporting Standards ('IFRS') and the IFRIC interpretations in the
preparation of its consolidated financial statements. The financial statements have been prepared under the historical cost basis.
Information on the impact on accounting policies and financial results resulting from the conversion from UK Generally Accepted Accounting
Practice ('UK GAAP') to IFRS is provided later in this report.
Prior to 1 January 2007, the Group prepared its audited financial statements and unaudited interim financial statements under UK GAAP.
From 1 January 2007, the Group is required to prepare annual consolidated financial statements in accordance with IFRS as adopted by the
European Union. As the 2007 annual financial statements included comparatives for 2006, the Group's date of transition to IFRS is 1 January
2006 with the 2006 comparatives restated to IFRS. Accordingly the financial information for the six months to 30 June 2007 has been restated
to present the comparative information in accordance with IFRS based on the transition date of 1 January 2006.
This half yearly report does not constitute statutory accounts of the group within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2007, which were prepared under IFRS, have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any statement under section 237 (2) or (3) of the Companies Act 1985.
At the date of authorisation of this report the following Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective:
IFRS 3 Business combinations - revised
IFRS 8 Operating Segments
IAS 23 Borrowing costs - revised
IFRIC 8 Scope of IFRS 2 Share-based Payment
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer loyalty programme
IFRIC 14 The limit of a defined benefit asset, minimum funding requirements and their interaction
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the
financial statements of the Group when the relevant standards come into effect for periods commencing on or after 1 July 2008.
Going Concern
As of 30 June 2008, the Company had a cash balance of �1,484,000 and has reduced its operations in an effort to secure a merger
candidate for the Company. The Directors have reviewed the company's cash flow forecast up to December 2009 and, based on the cash available
and cash flow forecast in anticipation of a merger, the Company will have adequate funds taking into account all known risks and
uncertainties. Accordingly, the Going Concern basis has been adopted for the preparation of these interim financial statements.
Basis of consolidation
Under the share purchase agreements dated 13 December 2004 and 17 March 2005 the Company acquired the entire issued share capital of
ReEnergy USA Inc. (formerly Renergy Pacific Corp.) by means of a share for share exchange. The Company gained control of ReEnergy USA Inc.
on 13 December 2004. IFRS 3 has not been applied as this business consolidation falls outside the scope of IFRS 3. The transfer of ownership
has therefore been accounted for in accordance with the principles of merger accounting hence the assets and liabilities of ReEnergy USA
Inc. and its subsidiary and associated undertakings have been brought in at their book values.
Accounting policies
All principal accounting policies of the Group are consistent with those set out in the Annual Report and Accounts for 2007.
2. Events after the balance sheet date
In accordance with the Board's proposed investing strategy of acquiring a U.K. based trading company involved primarily in renewable
energy, waste management or financial services, ReEnergy Group is engaged in the process of meeting with a number of potential candidates.
In assessing investment opportunities, the Board will seek relevant commercial advice from market consultants as deemed appropriate. In
addition, relevant legal and financial due diligence will be undertaken by suitably qualified advisers in order to determine the feasibility
and risks associated with any potential acquisition or investment.
Following the disposal of Estech Europe and the winding up of the remaining Group operations, the Directors have projected that the
settlement of professional fees, severance and redundancy costs, and the cessation of trading activities will approximate �500,000 in
additional costs. It is anticipated that the trading activity of the Group will cease as of 15 December 2008 until such time as we finalize
a merger with a suitable candidate operating company.
3. Loss per share
Loss per share is based on a loss after taxation of �1,336,000 (2007: �2,289,000) and on 101,806,460 (2007: 81,553,460) ordinary shares,
being the calculated weighted average number in issue during the six months ended 30 June 2008.
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 June 2008 30 June 2007 31 December 2007
No. No. No.
Basic weighted average number 101,806,460 81,553,460 90,606,493
of shares
The loss for the period and the weighted average number of ordinary shares for calculating the diluted earnings per share is identical
for all periods to those used for the basic earnings per share. This is because the outstanding share options would have the effect of
reducing the loss per ordinary share and would therefore not be dilutive.
4. Other
A copy of ReEnergy's interim financial statements is available for download from the Company's website at www.reenergygroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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