REG - ADM Energy PLC - Full Year Results
23/06/2022 07:00
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RNS Number : 8781P ADM Energy PLC 23 June 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
23 June 2022
ADM Energy PLC
("ADM", the "Group" or the "Company")
Full Year Results
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural
resources investing company, announces its audited full year results for the
12 months ended 31 December 2021.
Investment Highlights
Aje Field, OML 113
· First full year of increased interest in the Aje Field, Nigeria
(ADM increased its equity investment from 5% to 9.2% in December 2020)
· Total oil production in 2021 of 407,705 bbls and barrels of oil
per day of 1,117 bopd 103 bopd net to ADM)
· Completed the 15(th) and 16(th) liftings at the Aje Field in
April and October 2021 for a total of 457,379 barrels with a net share of
49,099
Barracuda Field, OML 141
· Acquired an indirect interest in a Risk Sharing Agreement ("RSA")
for the development of the Barracuda Field. Subsequently, commissioned a
Competent Person's Report ("CPR") by Xodus on the Barracuda Field
· Post-period announced the result of the CPR on the Barracuda
prospect with a 2U (P50) case, the NPV10 is +$99mm with an IRR of 45%
Disposal of interest
· Disposed of 188,778 shares in Superdielectrics Ltd
("Superdielectrics") for a total consideration of £849,501, which provided a
profit of £656,000 on ADM's original investment
Financial and Corporate Highlights
· Revenue increased by 125% to £1.8m (2020: £0.8m), reflecting a
recovery in the oil price and ADM's increased profit interest in the Aje Field
· Loss after tax decreased 64% to £2.5m (2020: £6.9m loss)
· Completed an oversubscribed fundraising of £1,220,000 in March
2021, and raised an additional £475,000 in November 2021
· Appointed Oliver Andrews, former Chief Investment Officer at the
Africa Finance Corporation, as Non-executive Chairman and Dr Babatunde Pearse,
as Chief Engineer on the Aje Development to oversee the next phase of Aje
development
· Post period, in January 2022, the Company completed an equity
fundraising of approximately £561,000 with Optima Resources Limited
Osamede Okhomina, CEO of ADM Energy, said: "2021 was a good year of progress
for ADM Energy. It was our first full year since almost doubling our interest
in the Aje Field which helped achieve a significant increase in revenues over
the previous year. We also completed an acquisition giving us indirect
interest in the Barracuda field, strengthening our foothold in West Africa.
"2022 is set to be an important year for the development of Aje with PetroNor
expected to take a significant stake in the asset demonstrating a commitment
and confidence of the potential of Aje. With PetroNor on board, the partners
can push ahead with development plans to increase production at Aje.
"In parallel to Aje and Barracuda, we continue to target the acquisition of
undervalued 2P reserves that can be added to our investment portfolio and have
had encouraging discussions with potential partners regarding various
opportunities. It remains a buyers' market as majors look to divest non-core
projects presenting opportunities for companies such as ADM who have the
network, expertise, and access to capital to progress projects that can
potentially bring significant value creation for shareholders."
Enquiries:
ADM Energy plc +44 20 7459 4718
Osamede Okhomina, CEO
www.admenergyplc.com (http://www.admenergyplc.com)
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Hybridan LLP +44 20 3764 2341
(Broker)
Claire Louise Noyce
ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor)
Michael B. Thiriot
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore, Tan Siddique
About ADM Energy PLC
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investing
company with an existing asset base in Nigeria. ADM Energy holds a 9.2% profit
interest in the oil producing Aje Field, part of OML 113, which covers an area
of 835km² offshore Nigeria. Aje has multiple oil, gas, and gas condensate
reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells
drilled to date.
ADM Energy is seeking to build on its existing asset base in Nigeria and
target other investment opportunities across the West African region in the
oil and gas sector with attractive risk reward profiles such as proven nature
of reserves, level of historic investment, established infrastructure and
route to early cash flow.
Operating Review
2021 was an important year of progress for ADM Energy. It marks the first full
year since the Company consolidated its position in the Aje Field OML 113,
expanding ADM's profit interest from 5% to 9.2%. The Company announced the
15th and 16th liftings at the Aje Field for a total of 457,379 barrels with a
net share of 49,099.
For the full year, revenue increased by 125% to £1.8 million (2020: £0.8
million) reflecting the first two liftings at the Aje Field since the Company
increased its interest in Aje alongside a recovery in oil prices in 2021.
Alongside Aje, the Company entered 2021 with a strategy to continue to pursue
high-quality assets, with attractive risk-reward profiles, and successfully
completed the acquisition of an indirect interest for the large-scale
Barracuda Field in OML 141.
ADM also welcomed Oliver Andrews as Non-executive Chairman and strengthened
the team's technical expertise with the appointment of industry veteran Dr
Babatunde Pearse as Chief Engineer on the Aje Development.
OML 113 - Aje Field
The Aje Field on OML 113 offshore Nigeria is an oil producing asset which is
rich in gas and condensate reserves. It is strategically located 24km offshore
Lagos where it benefits from increasing local energy demand, particularly for
gas, which is viewed as a replacement fuel for diesel and commands a premium.
The field is also within close proximity to the West African Gas Pipeline
which presents a potential opportunity for gas monetisation in neighbouring
countries such as Benin and Togo.
Oil Production:
2021 2020
Gross 407,705 bbls 698,649 bbls
1,117 bopd 1,909 bopd
Net 37,595 bbls 36,295 bbls
103 bopd 99.2 bopd
This is the first full year since the Company announced the completion of the
transaction with EER (Colobos) Nigeria Limited ("EER") in December 2020
benefitting from an increased 9.2% profit interest in the field, nearly
doubling ADM's share of revenue, reserves and net production.
During the period, oil production continued from the Aje Field (Aje-4 and
Aje-5) at an average of 1,117 bopd (FY 2020: 1909). Total gross production
volume amounted to approximately 407,705 barrels of oil. As stated previously,
the drop in volume reflects the decision by the Joint Venture Partners ("JV
Partners") to continue a more thorough and extended period of maintenance on
the Floating Production Storage and Offloading ("FPSO") while oil prices were
depressed at the beginning of the year and due to limited gas handling
capacity of the FPSO.
The Company announced the 15th and 16th liftings at the Aje Field in April and
October 2021 for a total of 457,379 barrels with a net share of 49,099. These
were the first liftings since the Company consolidated its interest in the
asset. The proceeds of the liftings were applied against the project debt,
contributing to a reduction in the outstanding balance and the JV Partners
anticipate further liftings in 2022.
The JV Partners have assessed that the current FPSO is not suitable for the
long-term development plans for OML-113 and are progressing plans to replace
the current FPSO to increase capacity. As a result, the JV Partners declined
to commit to a long-term extension of the current FPSO contract and the
current FPSO operator will stop production in preparation for demobilisation
from the field. This temporary suspension is a necessary step to ensure future
production is not limited by FPSO capacity and production issues. The JV
Partners are working towards securing an optimum FPSO that will match plans to
significantly increase production from the redevelopment of the Aje field and
the Company will update the market in due course.
A crucial step forward in the future development of Aje came post period in
January 2022 when Panoro Energy ASA ("Panoro") and PetroNor E&P Limited
("PetroNor") announced that the transaction for Panoro to sell 10% of its
ownership to PetroNor (the "Transaction") had received all government
approvals. PetroNor and Panoro are progressing the final stages and have
agreed a long-stop date to complete the transaction at 30 June 2022.
PetroNor's decision to take a significant stake in the Aje field is a strong
endorsement of the potential of the asset.
The expected completion of the Transaction will accelerate the JV Partners
Final Investment Decision on the long-term field development plans for the Aje
Field and PetroNor's experience in development and production will play a key
role in the next phase of Aje's development. The Field Development Plan, which
includes the potential drilling of three new wells, could significantly
increase production of oil and gas liquids at a time nations around the world
are seeking new sources of oil and gas. Chief Engineer on the Aje Development,
Dr Babatunde Pearse, who has an IOC background and extensive industry
experience will lead the planning, development and oversee Front End
Engineering Design ("FEED") studies to support the Final Investment Decision.
Barracuda
In April 2021, ADM completed the acquisition of an indirect interest in a Risk
Sharing Agreement ("RSA") for the development of the Barracuda Field. Located
in OML 141, the Barracuda Field is an existing discovery asset which covers
103km(2) in the swamp/shallow waters of the Niger Delta.
In May 2021, the Company commissioned Xodus Group Limited ("Xodus"), an
independent, international energy consultancy, to prepare a CPR on the field
which was completed in March 2022. Xodus calculated gross, unrisked
Prospective Resources for the RSA using standard geological and engineering
approaches applied to the data made available by ADM.
The CPR demonstrated the prospect of Barracuda as prospective and robust for
development, assuming at least 70mmbbl Stock tank oil initially in place
("STOIIP") is discovered, with a 2U (P50) case, the NPV10 is +$99 million with
an IRR of 45%.
The findings from the CPR provide a solid foundation to continue towards the
next stage of technical review which will include subsurface analysis and
gaining more analogue data from neighbouring fields to better understand the
trap mechanisms.
The Company will use the findings from the CPR and any additional work
required to further appraise the asset and make an investment decision.
Interim Injunction
As announced in November 2021, K.O.N.H. (UK) Ltd ("KONH") was notified by
Noble Hill-Network Limited ("NHNL") of a dispute regarding its ownership in
NHNL and therefore its interest in the Barracuda Field in OML 141. ADM and its
legal advisers consider that the dispute brought by NHNL is without merit and
ADM confirms there has been no change in its position as the majority
shareholder in KONH and the subsequent 70 per cent. indirect interest in NHNL.
The Company and KONH obtained an interim injunction at the Federal High Court
of Nigeria, Lagos ("Court") restraining NHNL from selling, disposing,
divesting or tampering with the 70% shareholding interest of KONH in NHNL to
third-party investors or in any other manner whatsoever.
NHNL applied to the court to set aside the interim injunction order. The Court
pronounced NHNL's application as lacking in merit and the application was
dismissed.
The Court has since adjourned this matter until 30 June 2022 and the interim
injunction remains in place.
Corporate
The Company has sought to appoint high calibre individuals who will propel the
business forward including Oliver Andrews as the new Non-executive Chairman.
He replaces Peter Francis who departed due to personal circumstances, and
whose contribution to the business was noted and for which the board noted its
appreciation. Mr Andrews is the former Chief Investment Officer at the Africa
Finance Corporation, one of the largest investment funds in Africa. Over the
last 35 years, he has overseen investments of approximately US$10 billion and
originated investments deals in natural resources and infrastructure across
the continent, worth US$100 billion.
ADM continues to bolster its technical team to advance the Company's existing
assets and evaluate new prospects. Dr Babatunde Pearse was appointed as Chief
Engineer for the Aje Field Development Plan to oversee both the next phase of
development at Aje and the FEED ("Front End Engineering Studies"). Dr Pearse
is an industry veteran with an extensive background with International Oil
Companies ("IOC"s).
Financial Review
The financial results of the Group improved markedly on last year as they
benefitted from an increased profit interest in the Aje Field, and the oil
price recovered in the context of a somewhat abating Covid crisis. Also, the
Group successfully completed the acquisition of a controlling indirect
interest in the Risk Sharing Agreement for the development of the large-scale
Barracuda Field in OML 141.
Revenue and profit
For the year ended 31 December 2021, the Group's revenue increased by 125% to
£1.8 million (2020: £0.8 million). The higher revenue reflects the better
oil price environment for the two liftings which were completed in April and
October 2021 for a total gross production of 457,379 bbls with a net share of
49,099 bbls for ADM.
Operating costs increased by 36% to £1.9 million (2020: £1.4 million) as
certain temporary cost-cutting initiatives taken by the Aje partnership in
2020 to mitigate the impact of low oil prices, were reversed as a response to
a much better commodity pricing environment.
Decommissioning provision amounted to £1.3 million (2020: £1 million).
Depreciation & amortisation expense decreased by 45% to £0.05 million
(2020: £0.09 million) reflecting the lower value of ADM's interest in Aje
after an impairment was recognised in 2020 to reflect the recent
Petronor/Panoro transaction.
Administrative expenses decreased by 12% to £2.3 million (2020: £2.6
million) remaining at a relatively high level and reflecting high M&A
evaluation activity, as well as the costs related to the completion of the
Group's acquisition of a controlling indirect interest in the Barracuda Field
RSA.
Finance costs decreased by 16% to £0.06 million (2020: £0.07 million).
As a result, the loss after taxation decreased 64% to £2.5 million (2020:
£6.9 million loss). The Directors do not propose a dividend (2020: £nil).
Cash flows and liquidity
After adjusting for the conversion of warrants issued in settlement of fees
and working capital movements, cash flow loss from operating activities
increased by 40% to £2.1 million (2020: £1.5 million loss).
The £2.7 million owed to the Aje JV has this year been accounted for in
non-current liabilities rather than in current liabilities. The liability
will be repaid in due time out of Aje production cash flows.
During the period, the Group raised additional equity of £1.7 million in two
fundraisings. In March 2021, the Group raised £1,220,000 of equity for
general working capital purposes. In November 2021, the Group raised £475,000
of equity also for general working capital purposes.
As of 31 December 2021, the Group had cash and cash equivalents of £110,000
(31 December 2020: £30,000).
Post period, in January 2022, the Company announced an equity fundraising of
approximately £561,000 with Optima Resources Limited.
Funding and disposals
The Company raised a total of approximately £1.7 million in two fundraisings
in 2021. In March 2021, ADM completed an oversubscribed fundraising raising
£1,220,000 before expenses and a further £475,000 raised in November 2021,
including a subscription from Directors. In addition, post period, the Company
announced an equity fundraise of approximately £561,000 with Optima Resources
Limited.
In May 2021, the Company completed the sale of 188,778 shares in
Superdielectrics for a total consideration of £849,501, a profit of £656,000
and an increase in value of approximately 340% on ADM's original investment of
£199,875 in 2017 and 2018. The proceeds of the sale, together with the above
fundraises, have been used to support ADM's growth strategy.
Outlook
The Company considers the progress it has made in 2021 provides an excellent
platform for growth. In Aje, ADM has an interest in a high-quality asset with
scope for significant increase in production. PetroNor coming on board is a
great endorsement of Aje's potential and if, as is expected, PetroNor
completes the formalities of the acquisition, it adds a heavyweight partner
that will be keen to extract further value from the asset. It will enable the
partners to progress the Field Development Plan and significantly increase
production at a time when new supplies of oil and gas are increasingly needed
around the world.
Alongside Aje, Barracuda took a major step forward with the completed CPR
which showed Barracuda has the potential to be prospective for development. In
2022 the Company will continue further work and analysis to help further
understand the assets potential before making an investment decision.
With Aje and Barracuda progressing, there remain opportunities for ADM, with
its expertise, deep network and access to capital with strong relationships
with majors such as Trafigura, to add additional high-quality assets to its
investment portfolio. The Company considers it is well placed to take
advantage of a market whereby International Oil Companies are in the process
of extensive divestment programmes and, in line with the Group's strategy, ADM
will continue to seek out assets in West Africa at attractive valuations with
substantial upside for shareholders. In addition, and as part of its
investment strategy, ADM remains open to potential renewable energy
investments, primarily in Europe, if there is an opportunity to bring
additional value to shareholders.
Group Income Statement and Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
Note £'000 £'000
Continuing operations
Revenue 3 1,751 799
Operating costs (1,895) (1,423)
Administrative expenses (2,340) (2,616)
Impairment of investment - (4,628)
Consultancy fee income - 353
Operating loss 4 (2,484) (7,515)
Movement in fair value of investments - 678
Finance costs 5 (56) (67)
Loss on ordinary activities before taxation (2,540) (6,904)
Taxation 7 - -
Loss for the year (2,540) (6,904)
Other Comprehensive income:
Exchange translation movement 141 (233)
Total comprehensive income for the year (2,399) (7,137)
Basic and diluted loss per share: 8
From continuing and total operations (1.6)p (8.7)p
Group and Company Statements of Financial Position
as at 31 December 2021
GROUP COMPANY
2021 2020 2021 2020
Notes £'000 £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 9 16,149 16,007 - -
Investment in subsidiaries 10 - - 12,335 12,316
Fixed asset investments 11 576 - 576 -
16,725 16,007 12,911 12,316
CURRENT ASSETS
Investments held for trading 12 28 878 28 878
Inventory 13 33 32 - -
Trade and other receivables 14 130 109 130 109
Cash and cash equivalents 15 110 30 109 30
301 1,049 267 1,017
CURRENT LIABILITIES
Trade and other payables 16 1,534 4,206 1,515 1,429
Convertible loans 17 212 235 212 235
1,746 4,441 1,727 1,664
NET CURRENT LIABILITIES (1,445) (3,392) (1,460) (647)
NON-CURRENT LIABILITIES
Convertible loans 17 - 284 - 284
Other borrowings 17 247 297 247 297
Other payables 2,783 - - -
Decommissioning provision 18 1,264 1,032 - -
4,294 1,613 247 581
NET ASSETS 10,986 11,002 11,204 11,088
EQUITY
Share capital 19 10,267 9,450 10,267 9,450
Share premium 19 38,014 36,591 38,014 36,591
Other reserves 20 960 817 960 817
Currency translation reserve (709) (850) - -
Retained deficit (37,546) (35,006) (38,037) (35,770)
Equity attributable to owners of the Company and total equity 10,986 11,002 11,204 11,088
Group Statement of Changes in Equity
For the year ended 31 December 2021
Share Share Exchange translation reserve Other reserves Retained deficit Total
capital premium equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2020 8,817 34,012 (617) 870 (28,152) 14,930
Loss for the year - - - - (6,904) (6,904)
Exchange translation movement - - (233) - - (233)
Total comprehensive expense for the year - - (233) - (6,904) (7,137)
Issue of new shares 633 2,544 - (134) - 3,043
Share issue costs - (21) - - - (21)
Warrants issued in settlement of fees - - - 170 - 170
Warrants exercised - 56 - (106) 50 -
Issue of convertible loans - - - 17 - 17
At 31 December 2020 9,450 36,591 (850) 817 (35,006) 11,002
Loss for the year - - - - (2,540) (2,540)
Exchange translation movement - - 141 - - 141
Total comprehensive expense for the year - - 141 - (2,540) (2,399)
Issue of new shares 817 1,517 - - - 2,334
Share issue costs - (94) - 27 - (67)
Issue of convertible loans - - - 2 - 2
Warrants issued in settlement of fees - - - 114 - 114
At 31 December 2021 10,267 38,014 (709) 960 (37,546) 10,986
Company Statement of Changes in Equity
For the year ended 31 December 2021
Share Share Other reserves Retained deficit Total
capital premium equity
£'000 £'000 £'000 £'000 £'000
At 1 January 2020 8,817 34,012 870 (29,270) 14,429
Loss for the period and total comprehensive expense - - - (6,550) (6,550)
Issue of new shares 633 2,544 (134) - 3,043
Share issue costs - (21) - - (21)
Issue of convertible loans - - 17 - 17
Warrants issued in settlement of fees - - 170 - 170
Warrants exercised - 56 (106) 50 -
At 31 December 2020 9,450 36,591 817 (35,770) 11,088
Loss for the period and total comprehensive expense - - - (2,267) (2,267)
Issue of new shares 817 1,517 - - 2,334
Share issue costs - (94) 27 - (67)
Issue of convertible loans - - 2 - 2
Warrants issued in settlement of fees - - 114 - 114
At 31 December 2021 10,267 38,014 960 (38,037) 11,204
Group and Company Statements of cash flows
For the year ended 31 December 2021
GROUP COMPANY
Note 2021 2020 2021 2020
£'000 £'000 £'000 £'000
OPERATING ACTIVITIES
Loss for the period (2,540) (6,904) (2,267) (6,550)
Adjustments for:
Fair value adjustment to investments - (678) - (678)
Warrants issued in settlement of fees 114 170 114 170
Finance costs 56 67 56 67
Impairment of intangible assets - 4,628 - 4,996
Depreciation and amortisation 47 85 - -
Decommissioning provision 215 - - -
Operating cashflow before working capital changes (2,108) (2,632) (2,097) (1,995)
Increase in inventories - (32) - -
Decrease/(increase) in receivables (21) 303 (21) 303
Increase/(decrease) in trade and other payables 570 1,410 545 783
Net cash outflow from operating activities (1,559) (951) (1,573) (909)
INVESTMENT ACTIVITIES
Development costs - (181) - -
Acquisition of subsidiary (180) - (180) -
Proceeds on disposal of investments 850 - 850 -
Loans to subsidiary operation - - (19) (181)
Net cash outflow from investment activities 670 (181) 651 (181)
FINANCING ACTIVITIES
Continuing operations:
Issue of ordinary share capital 1,406 848 1,406 848
Share issue costs (67) (21) (67) (21)
Repayment of borrowings (338) - (338) -
Proceeds from short term loans - 278 - 278
Net cash inflow from financing activities 1,001 1,105 1,001 1,105
Net (decrease)/increase in cash and cash equivalents from continuing and total 112 (27) 79 15
operations
Exchange translation difference (32) 42 - -
Cash and cash equivalents at beginning of period 30 15 30 15
Cash and cash equivalents at end of period 15 110 30 109 30
Notes to the Financial Statements
For the year ended 31 December 2021
1. General Information
The Company is a public limited company incorporated in the United Kingdom and
its shares are listed on the AIM market of the London Stock Exchange. The
Company also has secondary listings on the Quotation Board Segment of the Open
Market of the Berlin Stock Exchange ("BER") and Xetra, the electronic trading
platform of the Frankfurt Stock Exchange ("FSE").
The Company is an investment company, mainly investing in natural resources
and oil and gas projects. The registered office and principal place of
business of the Company is as detailed in the Company Information section on
page 2.
The information included in this announcement has been extracted from the
Company's report and accounts, and, therefore, as references and page numbers
may be incorrect. Shareholders should read the Company's report and accounts
in full which can be found on its website.
2. Principal Accounting Policies
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied throughout all periods presented in the financial statements.
As in prior periods, the Group financial statements have been prepared in
accordance with International Financial Reporting Standards, International
Accounting Standards and interpretations issued by the International
Accounting Standards Board (IASB) UK-adopted International Financial Reporting
Standards (adopted IFRSs). The financial statements have been prepared using
the measurement bases specified by IFRS for each type of asset, liability,
income and expense. The measurement bases are more fully described in the
accounting policies below.
The current period covered by these financial statements is the year to 31
December 2021. The comparative figures relate to the year ended 31 December
2020. The financial statements are presented in pounds sterling (£) which
is the functional currency of the Group.
An overview of standards, amendments and interpretations to IFRSs issued but
not yet effective, and which have not been adopted early by the Group are
presented below under 'Statement of Compliance'.
STATEMENT OF COMPLIANCE
New standards, amendments and interpretations adopted by the Company
The company has applied the following standards and amendments for the first
time for its annual reporting period commencing 1 January 2021:
· Amendment to "IFRS 4 "Insurance Contracts - deferral of IFRS 9"
supports the companies implementing the new IFRS 17 standard and it makes it
simpler to report their financial performances.
· The amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
"Interest Rate Benchmark Reform - Phase 2" integrate the amendments made in
2019. The amendments referred in phase 2, address issues that might affect
financial reporting when an existing interest rate benchmark is replaced with
an alternative benchmark interest rate (i.e., replacement issue) and assist
companies in the application of IFRS when changes are made to contractual cash
flows or hedging relationships due to the interest rate reform, and in
providing useful information to users of the financial statements.
· The Amendment to IFRS 16, "Covid-19-Related Rent Concessions beyond
30 June 2021" extends the period of application of the 2020 amendment to IFRS
16, relative to the lessees' accounting of concessions granted as a result of
Covid-19, by one year.
The adoption of the standards and interpretations described above, already in
effect at the date of this report, did not have a material impact on the
measurement of the Group's assets, liabilities, costs and revenues.
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning after 1 January 2021 and have not been
applied in preparing these financial statements. None of these are expected to
have a significant effect on the financial statements of the Company. There
are no other IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company.
3. Going Concern
At 31 December 2021, the Group recorded a loss for the year of £2,540,000 and
had net current liabilities of £1,445,000, after allowing for cash balances
of £110,000.
During the period, the Group raised additional equity of £1.7 million in two
fundraisings. In March 2021, the Group raised £1,220,000 and in November
2021, the Group raised £475,000. Post period, in January 2022, the Company
announced an equity fundraising of approximately £561,000 with Optima
Resources Limited. In May 2021 realised £850,000 from the sale of investments
to provide for working capital requirements, and the Directors have prepared
cashflow forecasts for the period to 30 September 2022 to assess whether the
use of the going concern basis for the preparation of the financial statements
is appropriate. In the short term, the Group will require further additional
funding in order to meet its liabilities as they fall due and continue to
operate as a going concern. The Directors have taken into consideration the
level and timing of the Group's working capital requirements (which takes into
account recent reductions in costs and control of discretionary spending to
preserve cash flow) and has also considered the likelihood of successfully
securing funding to meet these needs. In particular, consideration has been
given to ongoing discussions around further third-party investment and the
extent to which these discussions are advanced both in respect of short and
longer term funding. The Directors acknowledge that while they have an
expectation that funding will be secured based on this assessment, at the date
of approval of these financial statements, no such funding has been
unconditionally committed. Therefore, while the Directors have a reasonable
expectation that the Group has the ability to raise the additional finance
required in order to continue in operational existence for the foreseeable
future, the uncertainty surrounding the ability and likely timing of securing
such finance indicates that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern. Were
no such funding to be secured, the Group would have no realistic alternative
but to halt operations and prepare its financial statements on a non-going
concern basis.
4. Earnings and Net Asset Value Per Share
The basic and diluted earnings per share is calculated by dividing the loss
attributable to owners of the Group by the weighted average number of ordinary
shares in issue during the year.
2021 2020
£'000 £'000
Loss attributable to owners of the Group
-Continuing operations (2,540) (6,904)
Continuing and discontinued operations (2,540) (6,904)
2021 2020
Weighted average number of shares for calculating basic and fully diluted 155,014,671 79,594,655
earnings per share
2021 2020
pence pence
Earnings per share:
Loss per share from continuing and total operations (1.6) (8.7)
The weighted average number of shares used for calculating the diluted loss
per share for 2021 and 2020 was the same as that used for calculating the
basic loss per share as the effect of exercise of the outstanding share
options was anti-dilutive.
Net asset value per share ("NAV")
The basic NAV is calculated by dividing the loss total net assets attributable
to the owners of the Group by the number of ordinary shares in issue at the
reporting date. The fully diluted NAV is calculated by adding the cost of
exercising any extant warrants and options to the total net assets and
dividing the resulting total by the sum of the number of shares in issue and
the number of warrants and options extant at the reporting date.
2021 2020
£'000 £'000
Total net assets of the Group 10,986 11,002
Cost of exercise of warrants 1,318 1,715
Total net assets for calculation of fully diluted NAV 12,304 12,717
2021 2020
Number of shares in issue at the reporting date 204,480,863 122,769,073
Number of extant warrants 31,581,012 27,726,241
Total number of shares for calculation of fully diluted NAV 236,061,875 150,495,314
2021 2020
NAV - Basic (pence per share) 5.4p 9.0p
NAV - Fully diluted (pence per share) 5.2p 8.5p
The weighted average number of shares used for calculating the diluted loss
per share for 2021 and 2020 was the same as that used for calculating the
basic loss per share as the effect of exercise of the outstanding share
options was anti-dilutive.
Net asset value per share ("NAV")
The basic NAV is calculated by dividing the loss total net assets attributable
to the owners of the Group by the number of ordinary shares in issue at the
reporting date. The fully diluted NAV is calculated by adding the cost of
exercising any extant warrants and options to the total net assets and
dividing the resulting total by the sum of the number of shares in issue and
the number of warrants and options extant at the reporting date.
2021 2020
£'000 £'000
Total net assets of the Group 10,986 11,002
Cost of exercise of warrants 1,318 1,715
Total net assets for calculation of fully diluted NAV 12,304 12,717
2021 2020
Number of shares in issue at the reporting date 204,480,863 122,769,073
Number of extant warrants 31,581,012 27,726,241
Total number of shares for calculation of fully diluted NAV 236,061,875 150,495,314
2021 2020
NAV - Basic (pence per share) 5.4p 9.0p
NAV - Fully diluted (pence per share) 5.2p 8.5p
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