REG - Rurelec PLC - Interim results for period ended 31 December 2023
28/03/2024 11:30
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RNS Number : 7281I Rurelec PLC 28 March 2024
28 March 2024
AIM: RUR
Rurelec PLC
("Rurelec" or "the Company"
And with its subsidiaries the "Group")
Interim results for the six months ended 31 December 2023
Rurelec PLC (AIM: RUR), the AIM rule cash shell and owner of Turbines, today
announces its unaudited interim results for the six months ended 31 December
2023.
Financial Highlights:
· Administrative expenses £0.31
million (restated 6 months to 31 December 2022: £0.48 million (audited 2022
restated £0.89 million);
· Operating
loss:
£0.32 million (restated 6 months to 31 December 2022: £2.35 million)
(audited 2022 restated: £2.79 million);
· Post tax
profit:
£0.56 million (6 months to 31 December 2022 loss: £2.93 million) (audited
2022 loss: £2.24 million);
· Profit/(Loss) per
share: 0.09 pence ((6 months
to 31 December 2022: (0.51 pence)) (2022 audited: (0.39 pence));
· Net asset value per share: 1.6
pence (31 December 2022 audited: 2.2 pence);
· Net cash
balance:
£0.74 million (31 December 2022 audited: £0.50 million).
Following the Company's announcement of 29 December 2023, in which the
Directors confirmed they had extended the Company's accounting reference date
from 31 December to 30 June, this second set of unaudited interim results for
the 6 months ended 31 December 2023, are published in accordance with the
Company's regulatory requirements. The Company will publish audited final
results for 18 months ended 30 June 2024 by 31 December 2024.
Operational and Post Six Months Highlights:
· 6 month Post-Tax profit of £0.56 million ((6 months to 31/12/2022
loss: £2.93 million) (2022 audited loss: £2.24 million)).
· Administration expenses were £0.31 million ((31/12/2022 6 months
restated: £0.48 million) (2022 audited restated: £0.89 million)).
· Other income: £0.03 million ((31/12/2022 6 months: £0.03 million)
(2022 audited: £0.03 million)) related to sale of Chilean interests in
December 2023 (6 months to 31/12/22 and audited 2022: Directors fee income).
· Discontinued operations, from 31 December 2022 operations in Chile
and Argentina are treated as discontinued operations no longer included in
Group Financial Statements. From which direct costs, of £0.02 million are
expensed in Rurelec PLC (the "Parent").
· Disposal of Chile interest in December 2023 resulted in one off
reversal of the foreign currency reserve, £0.96 million.
· In July 2023 a dividend of £1.12 million, was declared and paid.
· Cash balance £0.74 million (2022 audited: £0.49 million).
· Discussions remain ongoing with regard to the disposal of two Siemens
Westinghouse 701 128 MW gas turbine generators ("701s").
Strategy update
Having successfully reduced costs, stabilised the Company's financial
condition and disposed of the Argentinian and Chilean interests, the Board's
strategy is now to seek a reverse takeover through which to generate value for
our shareholders, and to give the Company access to further resource thereby
allowing more time to achieve a sale of the two Siemens 701 turbines.
While we continue to hold discussions with credible potential purchasers of
the turbines, these initiatives are at an early stage following the withdrawal
of counterparties to our earlier discussions for reasons unconnected with
Rurelec. The timing of any potential sale of the turbines remains highly
uncertain owing to the limited demand and infrequent occurrence of projects
into which the turbines could be injected.
Following the successful sale of the Argentinian Interests on 9 June 2023,
which was a fundamental change of business pursuant to the AIM Rules, the
Company was deemed to be an AIM Rule 15 Cash Shell. The Company did not make
an acquisition or acquisitions that constituted a reverse takeover under Rule
14 of the AIM Rules for Companies within 6 months of that date and the shares
were suspended from trading on AIM on 11 December 2023. The admission of the
Company's ordinary shares to trading on AIM will be cancelled on 12 June 2024
if a qualifying acquisition is not completed by Rurelec by that date. The
Directors wish to retain the inherent value of the quotation as a mechanism to
maximise shareholder value, and therefore finding a suitable acquisition is
now a priority. The directors will only pursue acquisition opportunities that
are both deliverable and which have a compelling investment case.
We have had held discussions with parties concerning potential fundraisings
and acquisition opportunities. It is likely that any acquisition will need to
be preceded by a fundraising. There can be no guarantee that any acquisition
or fundraise will occur. In addition, the speculative costs associated with an
acquisition, while maintaining the admission of Rurelec's ordinary shares to
trading on AIM, will deplete cash at a significant rate. Therefore, in the
event that funding is not secured in the short term, measures will need to be
implemented to preserve the resource available for the disposal of the
Turbines, and in the absence of a purchase for use in a power project, a
decision to sell them for scrap will need to be made.
Commenting on the results, Andy Coveney, Rurelec's Executive Director, said:
"I am pleased to report that the disposal of the Group's Argentinian
investment, brought cash into the Group and created a position whereby the
Company was able to make a distribution of £1.12 million in July 2023. This
was the first dividend since 2008.
We are in discussions with parties concerning potential fundraisings and
acquisition opportunities to optimise the value of the cash shell for
shareholders. These are currently progressing, and there can be no guarantee
that any transaction will occur, but the Directors are continuing to keep all
options under review. Further updates will be provided as appropriate."
For further information please contact:
Rurelec PLC WH Ireland Limited
Andrew Coveney Katy Mitchell
Executive Director James Bavister
+44 (0)7710 836312 +44 (0)20 7220 1666
Executive Directors' Statement
Review of Operations
701 Turbines
Rurelec continues to pursue the sale of the 701 DU 125MW Turbines into power
projects. A number of separate discussions have taken place with third
parties with a view to selling the Turbines. Disappointingly a number of
earlier discussions were not fruitful, but new interest has emerged. While
this is encouraging discussions therefore remain at an early stage and this
serves to highlight the complex nature of power projects. It is difficult to
predict whether these potential counterparties will be able to enter into head
of terms and secure the necessary finance such that a deposit can be paid.
Asset disposals
The disposal of Cochrane Power Limited and its Chilean subsidiaries (Rurelec
Chile SpA, Rurelec Chile Limitada, Termoelectrica del Norte, S.A. and Central
Illapa, S.A.) (together the "Cochrane Group") which were originally formed
with the intention of developing, own and operate power stations in Chile, was
completed on 8 December 2023 once all the conditions precedent were met and
the total consideration of £25k was received.
As previously announced the Group's interests in Argentina were disposed of on
9 June 2023, on receipt of the initial consideration of US$3.0 million. Two
additional tranches of US$1.0 million become due should defined conditions be
met. The first of these will be triggered in the event of an increase in the
remuneration payable by CAMMESA to Energia del Sur, S.A. within 12 months of
Completion of the disposal. The economic outlook In Argentina, and the
financial operating environment for power companies continues to be uncertain
and it is now unlikely that the conditions will be met within the defined
timeframe for the first of these additional contingent consideration payments
to become due. The second additional contingent payment which relates to
maintenance refunds is not due before 36 months after Completion. Both of
these were fully provided for in in 30/6/23 Interims and 31/12/23 Interims.
AIM Rule 15
As previously announced the disposal of the Argentinean Interests was a
fundamental disposal pursuant to Rule 15 of the AIM Rules for Companies. As
such, Rurelec was deemed to be an AIM Rule 15 cash shell. Accordingly, as the
Company did not make an acquisition or acquisitions that constituted a reverse
takeover under AIM Rule 14 within six months of that date, the Company's
shares were suspended from trading on AIM on 11 December 2023. Furthermore, if
a qualifying acquisition is not completed by 12 June 2024, the admission of
the Company's ordinary shares to trading on AIM will be cancelled.
The Directors are keen, where possible, to retain the listing as a mechanism
to maximise shareholder value, by making the Company attractive to potential
high-quality acquisitions. This is intended to allow access to the resource
necessary to preserve and realise the value of the Turbines which are the
Company's largest asset.
Head office
Costs were substantially reduced at £0.31 million ((31/12/2022 6 months
restated: £0.48 million) (2022 audited restated: £0.89 million)).
Cash flow
Rurelec remained free of any secured debt and was consequently in the position
of not having to pay any interest.
Balance of £0.74 million is after £1.12 million special dividend paid in
July 2023. Balance at 31/12/2022 was £0.49 million.
Given the cash balances held by the Group, there is insufficient headroom in
existing working capital resources beyond the summer, and the Company will
need to seek funding. The Directors believe that such funding will be
available and accordingly continue to adopt the going concern basis of
accounting.
Board of Directors
There were no changes to the Board of Directors during the period covered by
these condensed financial statements.
Andy Coveney
Executive Director
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
for the six months ended 31 December 2023
(expressed in thousands of pounds)
Audited
Notes 6 months to 6 months to 12 months to
31/12/2023 31/12/2022 31/12/2022
£'000 £'000 £'000
Administrative expenses - 6mths 6/22 & 12mths 12/22 restated 4 (309) (447) (889)
Other income 25 25 25
Other expense (35) (1,924) (1,924)
Operating loss (319) (2,346) (2,788)
Foreign exchange (losses) / gains (2) (525) 661
Loss on discontinued operations (17) - -
Loss on Assets Held for Sale - 6mths 12/22 & 12mths 12/22 restated 4 (61) (60) (109)
Exchange differences on translation of foreign operations 956 - -
Finance income 2 - -
Finance expense - - -
Profit / (Loss) before tax 559 (2,931) (2,236)
Tax expense - - -
Profit / (Loss) for the period 559 (2,931) (2,236)
Profit / (Loss) per share pence 3 0.09p (0.51p) (0.39p)
Other comprehensive income
Items that will be subsequently reclassified to Profit & Loss:
Exchange differences on translation of foreign operations (956) (391) (122)
Total other comprehensive expense (956) (391) (122)
Total comprehensive loss for the period (397) (3,322) (2,358)
__________________
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)
for the six months ended 31 December 2023
(expressed in thousands of pounds)
Audited
31/12/2023 31/12/2022
Notes £'000 £'000
Assets
Non-current assets
Property, plant and equipment - -
Investment in Joint Venture - -
Trade and Other Receivables - -
Assets Held for Sale 7,773 10,108
Current assets
Trade and other receivables 97 91
Cash and cash equivalents 738 449
835 540
Total assets 8,608 10,648
Equity and liabilities
Shareholders' equity
Share capital 5,614 5,614
Share premium account - -
Foreign currency reserve - 956
Profit and loss reserve 2,567 3,582
Total equity 8,181 10,152
Current liabilities
Trade and other payables 421 496
Current tax liabilities 6 -
427 496
Total liabilities 427 496
Total equity and liabilities 8,608 10,648
___________
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
for the six months ended 31 December 2023
(expressed in thousands of pounds)
___
Share capital £'000 Foreign currency reserve £'000 Retained earnings £'000 Total equity £'000
Balance at 30.06.22 5,614 1,347 6,513 13,474
Loss for the Period - - (2,931) (2,931)
Exchange differences on translation - (391) - (391)
Total comprehensive loss - (391) (2,931) (3,322)
Balance at 31.12.22 5,614 956 3,582 10,152
Loss for the first 6 months - - (454) (454)
Exchange differences on translation - - - -
Total comprehensive loss - - (454) (454)
Balance at 30.06.23 5,614 956 3,128 9,698
Transactions with owners:
Equity dividend - - (1,120) (1,120)
Total transactions with owners - - (1,120) (1,120)
Loss for the second 6 months - - (397) (397)
Exchange differences on translation - (956) 956 -
Total comprehensive loss - (956) 559 (397)
Balance at 31.12.23 5,614 - 2,567 8,181
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the six months ended 31 December 2023
(expressed in thousands of pounds)
__
Audited
6 months to 6 months to 12 months to
31/12/23 31/12/22 31/12/22
Result for the period before tax from operations 559 (2,931) (2,236)
Net finance expense - - -
Adjustments for:
Unrealised exchange losses / (gains) 2 1,034 (160)
Write down on loans/investments - 1,679 1,679
Discontinued operations 17 - -
Change in trade and other receivables 89 (411) (220)
Change in trade and other payables (106) 257 25
Cash used in operating activities 557 (372) (912)
Taxation paid - - -
Net cash generated from / (used) in operating activities 557 (372) (912)
Cash flows from investing activities
Repayments from joint venture company - (75) 599
Reversal of foreign exchange translation reserve (956) - -
Net proceeds from sale of Joint Venture - - -
Net cash (used) in / generated from investing activities (956) (75) 599
Net cash outflow before financing activities (399) (447) (313)
Cash flows from financing activities
Equity dividend paid (1,120) - -
Loan Interest Repayments - - -
Net cash used in financing activities (1,120) - -
Decrease in cash and cash equivalents (1.519) (447) (313)
Cash and cash equivalents at start of period 2,257 879 745
Cash and cash equivalents at end of period 738 432 432
RURELEC PLC
Notes to the Interim Statement
for the six months ended 31 December 2023
1. Basis of preparation
These condensed consolidated interim financial statements do not constitute
statutory accounts within the meaning of Section 435 of the Companies Act
2006. The comparative figures for the year ended 31 December 2022 were derived
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The financial information contained in this interim
statement has been prepared in compliance with International Financial
Reporting Standards ("IFRSs") and in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and
expected to apply to the Group's results for the year ending 30 June 2024 and
on interpretations of those Standards released to date.
2. Accounting policies
These condensed consolidated interim financial statements have been prepared
in accordance with the accounting policies set out in the Group's financial
statements for the year ended 31 December 2022.
3. Earnings per share
6 months to 6 months to 12 months to
31/12/2023 31/12/2022 31/12/2022
Basic and diluted
Average number of shares 561m 561m 561m
in issue during the period
Profit / (Loss) attributable to equity holders of the parent from continuing £0.56m (£2.93m) (£2.24m)
operations
Basic and diluted profit / (loss) per share on continuing operations
0.09p (0.51p) (0.39p)
There are no financial instruments in issue (2022: none) that could be settled
by the delivery of shares.
4. Restatement of comparative administrative expenses
Audited
6 months to 12 months to
31/12/2022 31/12/2022
£'000 £'000
Administrative expenses - as reported (507) (998)
Transfer to Other Expense:
Loss on Assets Held for Sale 60 109
Administrative expenses - as restated (447) (889)
Operating loss - as reported (381) (2,897)
Transfer from Administrative expenses (60) (109)
5. The Board of Directors approved this interim statement on 28 March 2024.
This interim statement has not been audited.
6. Copies of this statement are available at the Company's website
www.rurelec.com (http://www.rurelec.com)
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