TIDMAMPH
RNS Number : 4014X
Aggregated Micro Power Holdings PLC
19 December 2019
Aggregated Micro Power Holdings plc
("AMP", the "Group" or the "Company")
Interim Results for the sixth months ended 30 September 2019
Aggregated Micro Power Holdings plc (AIM: AMPH), trading as AMP
Clean Energy, the specialist provider of distributed heat, power
and renewable fuels, is pleased to announce results for the sixth
months ended 30 September 2019.
Financial Highlights
-- Group revenues were GBP18.10m (2018: GBP18.31m restated)
-- Profit after tax increased to GBP0.77m (2018: loss of GBP5.4m restated)
-- Net assets as at 30 September 2018 were GBP24.89m (30 March 2019: GBP24.11m)
-- Net assets do not include any recognition for future deferred
development fees that may be due from AMPIL(a)
Operational Highlights
-- Strong progress in Urban Reserve with 50MWs consented and 32MWs submitted for planning
-- Wood fuels delivered over 90,000 tonnes of RHI compliant wood
fibre to nearly 4,000 customers and provides service and
maintenance to around 950 boilers
Post Period End
-- In November, the board of directors of Fossa Holdco Limited,
a company wholly-owned by Asterion Industrial Infra Fund I, FCR
("Asterion") and AMP announced an agreement on the terms of a
recommended acquisition of the entire issued and to be issued
ordinary share capital of the Company
-- Also in November, AMP announced it had sold a 4% shareholding in IncubEx Inc(b) .
-- AMP's Project Division Urban Reserve has developed a strong
pipeline of projects and is on track to have 100MWs of projects to
have planning consent or be in planning by March 2020
-- In December, AMP helped to secure further funding for
AMPIL(a) raising a further GBP12.9 million bringing the total AMPIL
Notes in issue to GBP80 million
Richard Burrell, Chief Executive of Aggregated Micro Power
Holdings plc, said:
"AMP continues to make progress and our interim results have
benefited from the uplift in the value of our shareholding in
Incubex. The recently announced 90p per share offer from Asterion
represents an attractive offer price for AMP and it ensures that
AMP has the right partner to help fund its next phase of
growth."
(a) Aggregated Micro Power Infrastructure 2 Limited ("AMPIL") is
a special purpose vehicle which is wholly owned by Law Debenture
Intermediary Corporation plc as trustee for general charitable
purposes. AMPIL can issue listed loan notes to fund renewable
energy projects acquired from AMP and/or other developers. AMPIL
has to date raised GBP80m from institutional and other
investors.
(b) IncubEx LLC is an incubator for exchange traded products,
services, and technology solutions. At its core, IncubEx is a
product and business development firm. The company works in
conjunction with its global exchange partner, European Energy
Exchange (EEX) and other leading service providers and stakeholders
to design and develop new financial products in global
environmental, reinsurance, and related commodity markets. The
company has a specific focus on innovation and continuous
improvement of products and services, including technology, trading
solutions, and operational efficiencies. The IncubEx team is
comprised of former key Climate Exchange executives and is uniquely
positioned to capture these opportunities with its partners. The
company was founded in 2016 and currently has offices in Chicago
and London. www.theincubex.com
Contacts
Aggregated Micro Power Holdings plc 020 7382 7800
Neil Eckert, Executive Chairman
Richard Burrell, CEO
Izzy Deterding, Investor Relations
finnCap Ltd 020 7220 0500
Ed Frisby/Simon Hicks - Corporate Finance
Andrew Burdis/Richard Chambers - ECM
Whitman Howard Ltd 020 7659 1234
Mark Murphy - Institutional Sales
Nick Lovering - Corporate Finance
About Aggregated Micro Power Holdings plc
The Group was established to develop, own and operate renewable
energy generating facilities. It specialises in the sale of wood
fuels and in the installation of distributed energy projects.
Trading as AMP Clean Energy, the Group sells high quality wood chip
and wood pellet to end customers throughout the UK, while its
projects division installs biomass boiler and biomass CHP systems
for a wide range of applications and customers. AMP is also active
in developing projects for stand-by power generation which aim to
balance the transmission grid at times of peak demand.
www.ampcleanenergy.com
Executive Chairman's Statement
This Interim Report is in respect of the six month period to 30
September 2019.
Interim Results
Group revenues for the six months to 30 September 2019 were
GBP18.11m (2018: GBP18.31m restated). Profit after tax increased to
GBP0.77m (2018: loss of GBP5.4m restated).
Profit from operations was higher than the comparable (restated)
period last year due to the increased value of the Incubex
investment which has been revalued in line with the value achieved
from the 4% sale in November 2019. The business is trading in line
with budget and management expectations. Net assets as at 30
September 2019 were GBP24.89m (31 March 2019: GBP24.11m
restated).
The balance sheet does not include any recognition for future
deferred development fees that may be due from Aggregated Micro
Power Infrastructure 2 plc ("AMPIL").
Interim Review
AMP operates through three business divisions: Wood Fuels;
Project Development; and Investments.
Wood Fuels Segment
Revenues from the Wood Fuels segment increased to GBP17.33m
(2018: GBP16.71m restated), gross profit increased to GBP1.5m
(2018: GBP1m restated) and the loss for the period decreased to
GBP3.78m (2018: loss of GBP4.18m restated).
The loss for the period reflects the seasonal nature of the Wood
Fuels segment where revenues and gross profit were not sufficient
to cover the fixed costs of our fleet and depots during the summer
months. In comparison to the restated period for last year, the
benefits of the restructuring that has taken place have started to
flow through as evidenced by the improved gross profit and reduced
loss from operations which has been achieved in spite of higher
overhead costs incurred during the first half of the year from the
expansion of the service and maintenance business.
AMP sells high quality, RHI compliant, wood chip and wood pellet
to end customers throughout the UK in the form of fuel only
contracts, heat contracts and/or fuels plus operation and
maintenance. AMP sells fuel to around 4,000 customers and provides
service and maintenance to over 950 biomass systems.
Project Development Segment
Revenues from the Project Development segment were GBP0.78m
(2018: GBP1.60m restated), gross loss was GBP0.29m (2018: profit of
GBP1.36m restated) and the loss for the period was GBP1.42m (2018:
profit of GBP0.41m restated).
The lower revenues and increased losses incurred in this segment
were as a result of the timing of development fees which are
anticipated to be weighted to the second half of the financial
year.
AMP's project development division aims to deliver cost and
carbon savings to high intensity heat and power users. AMP also
develops gas-fired peaking plants which provide flexible generation
at times of peak demand and this business is branded Urban Reserve
where development is increasingly concentrated on smaller sites in
areas of high electricity demand in industrial and urban areas.
These sites can be connected to the distribution network at lower
voltage levels in areas where grid constraints offer significant
system benefits in terms of avoided grid reinforcement costs and
will potentially support the anticipated growth in electric
vehicles and the electrification of heat.
Investments Segment
AMP Investments aim to grow assets under management and to build
up off-balance sheet deferred development fees and carried interest
together with making long term equity investments in companies
aligned to our corporate strategy. It also includes the overhead
costs of the Board and related PLC expenses.
Post period end
On 29 November 2019, AMP announced that it had sold a 4.0 per
cent. shareholding in IncubEx Inc., an incubator for exchange
traded products in the global environmental markets space, to IPGL
Limited, Michael Spencer's investment vehicle, for a cash
consideration of GBP2.35 million. This sale was made to finance AMP
Clean Energy's general working capital requirements, including
funding the project pipeline and acquisition of wood fuel stock for
this season.
Also on 29 November 2019, AMP announced that it had reached
agreement on the terms of a recommended acquisition of the entire
issued and to be issued ordinary share capital of AMP Clean Energy
by Fossa HoldCo Limited a company wholly-owned by Asterion
Industrial Infra Fund I, FCR. Under the terms of the acquisition,
shareholders will receive 90 pence in cash for each AMP Share. The
acquisition values the entire issued and to be issued share capital
of AMP Clean Energy at approximately GBP63.1 million.
It is proposed that the acquisition be implemented by means of a
court sanctioned scheme of arrangement under Part 26 of the
Companies Act, which requires the approval of AMP shareholders at
the Court Meeting and the General Meeting and the sanction of the
Court.
Neil Eckert, Executive Chairman
18 December 2019
INDEPENT REVIEW REPORT TO Aggregated micro power holdings
plc
Introduction
We have been engaged by the Company to review the set of
financial statements in the half-yearly financial report for the
six months ended 30 September 2019 which comprises the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated cash flow statement, the
consolidated statement of changes in equity and the related
notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2019 is not prepared, in all material respects, in
accordance with the rules of the London Stock Exchange for
companies trading securities on AIM.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
BDO LLP
Chartered Accountants
United Kingdom
18 December 2019
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Consolidated statement of comprehensive income
For the six months ended 30 September 2019
Restated
Six months Six months
ended ended Year ended Year ended Year ended
30 Sep 30 Sep 31 Mar 31 Mar 31 Mar
2019 2018 19 19 19
Unaudited Unaudited Audited Audited Audited
Total Total Underlying Non- Total
Underlying
Note GBP GBP GBP
Revenue 3 18,106,275 18,314,798 49,539,100 - 49,539,100
Cost of sales 3 (16,880,135) (15,957,433) (38,734,025) - (38,734,025)
------------- ------------- ------------- ------------ -------------
Gross profit/(loss) 1,226,140 2,357,365 10,805,075 - 10,805,075
Other operating income 3 227,245 69,911 32,763 - 32,763
Administrative expenses (7,210,445) (7,179,122) (14,906,419) - (14,906,419)
Impairment of intangible - - - (463,306) (463,306)
Impairment of receivables 244,319 - (615,067) - (615,067)
Restructuring provision - - - 56,532 56,532
----------------------------------- ----- ------------- ------------- ------------- ------------ -------------
Total Administrative
costs (6,966,126) (7,179,122) (15,521,486) (406,774) (15,928,260)
Fair value adjustment
on deferred consideration - - - 710,344 710,344
Gain on financial asset 6,567,380 -
at fair value through
profit or loss - - -
----------------------------------- ----- ------------- ------------- ------------- ------------ -------------
Profit/(Loss) from
operations 1,054,639 (4,751,846) (4,683,648) 303,570 (4,380,078)
Finance income - - 25,286 - 25,286
Finance expense 5 (315,184) (670,112) (1,362,802) - (1,362,802)
------------- ------------- ------------- ------------ -------------
Profit/(Loss) before
tax 739,455 (5,421,958) (6,021,164) 303,570 (5,717,594)
Tax credit 34,170 34,174 (203) - (203)
------------- ------------- ------------- ------------ -------------
Profit/(Loss) for the
year and other total
comprehensive losses
for the period 773,625 (5,387,784) (6,021,367) 303,570 (5,717,797)
Profit/(Loss) for the
year attributable to:
Owners of the parent 998,686 (5,367,752) (5,514,629)
Non-controlling interest (225,061) (20,032) (203,168)
773,625 (5,387,784) (5,717,797)
============= ============= ============= ============ =============
Basic and diluted earnings/(loss) 11 1.58 (12.39) (11.39)
per share attributable
to the ordinary equity 1.40 (12.39) (11.39)
holders of the parent
Consolidated statement of financial position
As at 30 September 2019
Restated
30 Sep 2019 30 Sep 2018 31 Mar 2019
Unaudited Unaudited Audited
Note GBP GBP GBP
Non-current assets
Property, plant and equipment 4 6,748,140 5,991,223 5,039,392
Investment in associate 9 17,977,500 11,410,120 11,410,120
Intangibles 6 9,103,926 9,975,995 9,295,159
Total non-current assets 33,829,566 27,377,338 25,744,671
------------- ------------- -------------
Current assets
Inventories 2,524,665 2,120,303 2,398,713
Trade and other receivables 6,168,341 7,817,079 11,295,093
Cash and cash equivalents 800,501 531,094 2,383,616
Total current assets 9,493,507 10,468,476 16,077,422
------------- ------------- -------------
Total assets 43,323,073 37,845,813 41,822,094
------------- ------------- -------------
Current liabilities
Trade and other payables 7 10,455,442 16,507,336 13,297,632
Provisions - 397,960 6,000
Loans and borrowings 8 4,062,917 597,313 2,442,707
Total current liabilities 14,518,359 17,502,609 15,746,339
------------- ------------- -------------
Non-current liabilities
Loans and borrowings 8 3,205,137 10,656,053 1,215,633
Deferred Consideration 72,594 812,039 72,594
Deferred tax liability 639,805 652,412 673,975
Total non-current liabilities 3,917,536 12,120,504 1,962,202
------------- ------------- -------------
Total liabilities 18,435,895 29,623,113 17,708,541
------------- ------------- -------------
Net assets 24,887,178 8,222,700 24,113,553
------------- ------------- -------------
Equity attributable to equity
shareholders of the
parent company
Paid up share capital 10 316,970 215,956 316,970
Share premium 10 17,106,745 - 17,106,745
Merger reserve 6,648,126 6,648,126 6,648,126
Other reserve 10 10,711,532 10,682,431 10,711,532
Convertible debt option reserve - 994,276 -
Retained deficit (9,863,955) (10,677,766) (10,862,641)
24,919,418 7,863,023 23,920,732
Non-controlling interest (32,240) 359,677 192,821
------------- ------------- -------------
Total equity 24,887,178 8,222,700 24,113,553
------------- ------------- -------------
The financial statements were approved by the Directors on 13
December 2019 and signed on their behalf by:
Richard Burrell, Chief Executive Officer
Consolidated statement of changes in equity
As at 30 September 2019
Total
Convertible Attributable
debt to Equity
Share Share Retained Merger Other option Holders Non-Controlling Total
capital premium deficit reserve Reserve reserve of Parent Interests Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Equity as at
1 April 2018 215,956 16,192,845 (21,612,095) 6,648,126 10,682,431 1,149,255 13,276,518 395,988 13,672,506
Retained
income
opening
balance
adjustment - (150,051) - - - (150,051) - (150,051)
-------- ------------- ------------- ---------- ----------- ------------ ------------- ---------------- ------------
Equity as at
1 April 2018 215,956 16,192,845 (21,762,146) 6,648,126 10,682,431 1,149,255 13,126,467 395,988 13,522,455
Profits for
the period - - (5,514,629) - - - (5,514,629) (203,167) (5,717,796)
------------- ------------
Total
comprehensive
income - - (5,514,629) - - - (5,514,629) (203,167) (5,717,796)
Issue of share
capital 42,500 8,457,500 - - - - 8,500,000 - 8,500,000
Equity element
of
convertible
debt - - 209,550 - - (209,550) - - -
Conversion of
convertible 58,514 9,074,761 11,739 - - (939,705) 8,205,309 - 8,205,309
Capital
reduction - (16,192,845) 16,192,845 - - - - - -
Share issue
cost - (425,516) - - - - (425,516) - (425,516)
Fair value
adjustment
of EMI
Options - - - - 29,101 - 29,101 - 29,101
Year ended 31
March 2019 316,970 17,106,745 (10,862,641) 6,648,126 10,711,532 - 23,920,732 192,821 24,113,553
======== ============= ============= ========== =========== ============ ============= ================ ============
Total
Convertible Attributable
debt to Equity
Share Share Retained Merger Other option Holders Non-Controlling Total
capital premium deficit reserve Reserve reserve of Parent Interests Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Equity as at
1 April 2019 316,970 17,106,745 (10,862,641) 6,648,126 10,711,532 - 23,920,732 192,821 24,113,553
Profit for the
period - 998,686 - - - 998,686 (225,061) 773,625
------------- ---------------- -----------
Total
comprehensive
income - - 998,686 - - - 998,686 (225,061) 773,625
Period ended
30 September
2019 316,970 17,106,745 (9,863,955) 6,648,126 10,711,532 - 24,919,418 (32,240) 24,887,178
======== =========== ============= ========== =========== ============ ============= ================ ===========
Share capital: Nominal value of shares issued.
Share premium: Amount subscribed for share capital in excess of
the nominal value.
Capital contribution: Relates to funding from the shareholders
for which no share capital was issued and that funding meets the
definition of an equity instrument.
Retained deficit: All other net losses and transactions with
owners (e.g. dividends) not recognised elsewhere.
Merger reserve: Created on the issue of shares on acquisition of
its subsidiary accounted for in line with the Company's Act 2006
provisions.
Other reserve: Amount raised through the use of a cashbox
structure and applying merger relief on business combination where
the consideration for shares in another company includes issued
shares and on completion of the transaction, the company issuing
the shares will have secured at least a 90% equity holding in the
other company.
Convertible debt option reserve: Amount recorded as equity on
the initial fair value measurement of issued convertible loan
notes.
Consolidated statement of cash flows
For the six months ended 30 September 2019
Restated
Six months Six months
ended ended Year ended
30-Sep-19 30-Sep-18 31-Mar-19
Unaudited Unaudited Audited
Note GBP GBP GBP
Operating activities
Loss for the period after tax 773,625 (5,387,784) (5,717,797)
Adjustments for:
Provision for restructure (6,000) - -
Tax credit (34,170) (34,174) 203
Interest Income - - (25,285)
Fair value adjustment on financial
liabilities at fair value through
profit and loss - - (710,344)
Gain on financial asset at fair (6,567,380) - -
value through profit and loss
(Profit)/Loss on disposal of Property,
Plant & Equipment (62,107) 483 149,103
(Profit)/Loss on disposal of Investments - - -
Bad debt expense - - 309,389
Impairment loss - - 463,306
Finance Cost 5 315,184 670,112 1,362,802
Movement in foreign exchange 185,169 136,142 228,919
Amortisation of intangibles 6 191,234 224,012 421,378
Depreciation of property, plant
and equipment 4 828,473 681,351 1,515,443
------------ ------------ ------------
Cash flows from operating activities
before changes to working capital (4,375,972) (3,709,858) (2,002,883)
(Increase)/decrease in inventories (125,952) (347,737) (626,147)
(Increase)/decrease in trade and
other receivables 5,215,894 4,108,606 171,152
Increase/(decrease) in trade and
other payables (485,072) (907,129) (7,060,241)
------------ ------------ ------------
Cash generated/(used) from operations 228,898 (856,118) (9,518,119)
------------ ------------ ------------
Investing activities
Purchase of property, plant and
equipment 4 (179,449) - (48,256)
Proceeds from sale of assets 222,232 114,638 307,880
Interest received - - 25,285
Net cash used in investing activities 42,783 114,638 284,909
------------ ------------ ------------
Financing activities
Share issue cost - - (425,516)
Proceeds from invoice discounting (2,542,286) (1,892,070) 465,764
Proceeds from issue of convertible
notes - - (878,825)
Proceeds from issue of ordinary
shares - - 8,500,000
Proceeds from loan 1,638,622 - 1,750,000
Proceeds from finance lease drawdown - - -
Payments of interest on borrowings (226,041) (605,794) (889,855)
Payments on finance lease (725,091) (390,937) (1,066,117)
Net cash used in financing activities (1,854,796) (2,888,801) 7,455,451
------------ ------------ ------------
Net decrease in cash and cash equivalents (1,583,115) (3,630,281) (1,777,759)
Cash and cash equivalents at beginning
of period 2,383,616 4,161,375 4,161,375
Cash and cash equivalents at end
of period 800,501 531,094 2,383,616
============ ============ ============
Notes to the consolidated financial statements
For the six months ended 30 September 2019
1. Basis of preparation
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs).
The Group's results are considered to be affected by seasonal
variations and do not yet fully reflect the positive impact of our
wood fuels business acquisitions as most of this turnover and
future income is anticipated to be generated in the second half of
the financial year (October through to March) where the heating
season is at its busiest.
The Group's annual report and accounts for the year ended 31
March 2019 have been delivered to the Registrar of Companies. The
Group's independent auditor's report on those statutory accounts
was unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006. The comparative financial information for
the year ended 31 March 2019 in this interim report does not
constitute statutory accounts for that year.
Comparative figures in the financial statements are in respect
of the audited twelve month period to 31 March 2018. The Statement
of income, Statement of Financial position, Statement of changes in
Equity and Cash Flow Statement have been restated to show the
impact of a prior year adjustment. Further details can be found in
Note 13.
The financial information for the half-years ended 30 September
2018 and 30 September 2019 is unaudited.
As at 30 September 2019 the group had GBP801k in cash and net
current liabilities of GBP5.02m. The directors and management have
prepared a cash ow forecast to December 2020, 12 months from the
date this report has been approved, which shows the group will
remain cash positive.
The directors and management note that given the seasonality of
the fuels division revenues and the unpredictability of earning
revenues on development fees, the forecast continues to contain
sensitivity. The directors and management manage this sensitivity
by:
- Risk weighting the development fee revenues based on prudent chance of success of completion;
- Managing working capital through enhanced debtor collection,
constant communication with key suppliers and managing costs in
line with movements in revenues;
- In July 2019 the company drew down a further short term
working capital facility which has provided a further GBP1.8m in
funding. The total facility of GBP3.4m is secured on the equity
shares of AMP Biomass Fuels Ltd;
- Monitoring other short-term credit lines available to the group; and
- In November 2019 the company sold 4% of its holding in Incubex LLC for GBP2.35m.
Based on the information provided above the directors and
management are con dent that the group will trade in line with the
forecasts prepared and have therefore prepared the accounts on a
going concern basis.
2. Significant accounting policies
The group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2018 annual financial statements, except for those that
relate to new standards and interpretations effective for the first
time for periods beginning on (or after) 1 January 2018, and will
be adopted in the 2019 annual financial statements. A number of
amendments to Standards have become effective for financial periods
beginning on (or after) 1 January 2019, and are therefore
applicable for the 30 September 2019 interim financial
statements.
Only the application of IFRS 16 resulted in the accounting
applied by the Group changing. The impacts of these standards on
the recognition and measurement of items in the financial
statements are shown in this note 2.
Details of the impact of this standard are given below.
Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and
IFRIC 4 Determining whether an
Arrangement Contains a Lease.
IFRS 16 provides a single lessee accounting model, requiring the
recognition of assets and liabilities for all leases, together with
options to exclude leases where the lease term is 12 months or
less, or where the underlying asset is of low value. IFRS 16
substantially carries forward the lessor accounting in IAS 17, with
the distinction between operating leases and finance leases being
retained. The Group does not have significant leasing activities
acting as a lessor.
(a) Transition Method and Practical Expedients Utilised
The Group adopted IFRS 16 using the modified retrospective
approach, with recognition of transitional adjustments on the date
of initial application (1 April 2019), without restatement of
comparative figures. The Group elected to apply the practical
expedient to not reassess whether a contract is, or contains a
lease at the date of initial application. Contracts entered into
before the transition date that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed. The definition of a lease
under IFRS 16 was applied only to contracts entered into or changed
on or after 1 April 2019.
IFRS 16 provides for certain optional practical expedients,
including those related to the initial adoption of the standard.
The Group applied the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
-- Apply a single discount rate to a portfolio of leases with
reasonably similar characteristics;
-- Exclude initial direct costs from the measurement of
right-of-use assets at the date of initial application for leases
where the right-of-use asset was determined as if IFRS 16 had been
applied since the commencement date;
-- Reliance on previous assessments on whether leases are
onerous as opposed to preparing an impairment review under IAS 36
as at the date of initial application; and
-- Applied the exemption not to recognise right-of-use assets
and liabilities for leases with less than 12 months of lease term
remaining as of the date of initial application.
As a lessee, the Group previously classified leases as operating
or finance leases based on its assessment of whether the lease
transferred substantially all of the risks and rewards of
ownership. Under IFRS 16, the Group recognizes right-of-use assets
and lease liabilities for most leases. However, the Group has
elected not to recognise right-of-use assets and lease liabilities
for some leases of low value assets based on the value of the
underlying asset when new or for short-term leases with a lease
term of 12 months or less.
On adoption of IFRS 16, the Group recognised right-of-use assets
and lease liabilities in relation to leases of office space, heavy
equipment and automobiles, which had previously been classified as
operating leases.
The lease liabilities were measured at the present value of the
remaining lease payments, discounted using the Group's incremental
borrowing rate as at 1 April 2019. The Group's incremental
borrowing rate is the rate at which a similar borrowing could be
obtained from an independent creditor under comparable terms and
conditions. The weighted-average rate applied was 3.37%
The right-of-use assets were measured as follows:
(a) Office space: Right-of-use assets are measured at an amount
equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments.
(b) All other leases: Right-of-use assets are measured at an
amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments.
The following table presents the impact of adopting IFRS 16 on
the statement of financial position as at 1 April 2019:
31 March 2019
As Originally IFRS 16 1 April 2019
Presented
GBP GBP GBP
Non-current assets
Property, plant and
equipment 5,039,392 1,464,735 6,504,127
Non-current liabilities
Loans and borrowings 1,215,633 1,464,735 2,680,368
Included in profit or loss for the period are GBP192,049 of
amortisation of right-of-use assets and GBP26,906 of finance
expense on lease liabilities. Short-term and low-value leases
included in profit or loss for the period were GBP269,759.
The following table reconciles the minimum lease commitments
disclosed in the Group's 31 March 2019 annual financial statements
to the amount of lease liabilities recognised on 1 April 2019:
1 April 2019
GBP
Minimum operating lease commitment at 31 March
2019 2,010,808
Less: short-term leases not recognised under
IFRS 16 (359,631)
Less: low value leases not recognised under
IFRS 16 -
Plus: effect of extension options reasonably
certain to be exercised -
Undiscounted lease payments -
Add: effect of discounting using the incremental
borrowing rate
as at the date of initial application (192,766)
Plus: leases previously classified as finance
type under IAS 17 1,881,371
Lease liability as at 1 April 2019 3,339,781
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- Leases of low value assets; and
-- Leases with a term of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate.
In such cases, the initial measurement of the lease liability
assumes the variable element will remain unchanged throughout the
lease term. Other variable lease payments are expensed in the
period to which they relate.
On initial recognition, the carrying value of the lease
liability also includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour
of the group if it is reasonable certain to assess that option;
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated on the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased
asset.
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term. Lease
liabilities are remeasured when there is a change in future lease
payments arising from a change in an index or rate or when there is
a change in the assessment of the term of any lease.
3 Segmental information
For management purposes, the Group is organised into business
units based on its products and services. The results have been
prepared using consistent accounting policies for each segment as
detailed in Note 1 to the consolidated financial statements for the
year ended 31 March 2019.
The Group was exclusively focused on UK operations. The
performance of each segment is reported below.
Operating segments - Six Months Project
Ending 30 September 2019 Wood fuels development Investments Total
GBP GBP GBP GBP
Revenue 17,329,480 776,795 - 18,106,275
Cost of sales (15,809,568) (1,070,567) - (16,880,135)
------------- ------------- ------------ -------------
Gross profit 1,519,912 (293,772) - 1,226,140
Other operating income 227,245 - - 227,243
Administrative expenses (3,851,780) (1,124,082) (656,750) (5,632,612)
------------- ------------- ------------ -------------
*Adjusted EBITDA (2,104,625) (1,417,854) (656,750) (4,179,229)
Depreciation (668,970) - (159,503) (828,473)
Finance Expense (687,579) - 380,251 (307,328)
Amortisation Intangibles - - (191,234) (191,234)
FX Gain/(Loss) (193,788) - - (193,788)
Non-Recurring Income/(Expenses) (127,873) - - (127,873)
Gain on financial asset at
fair value through profit and
loss 6,567,380 6,567,380
Tax credit - - 34,170 34,170
------------- ------------- ------------ -------------
Profit / (Loss) from operations (3,782,835) (1,417,854) 5,974,314 773,625
============= ============= ============ =============
Segment assets 13,354,249 1,451,996 28,516,828 43,323,073
Segment liabilities (15,103,766) (1,209,935) (2,122,194) (18,435,895)
(1,749,517) 242,061 26,394,634 24,887,178
============= ============= ============ =============
Operating segments - Six Months Project
Ending 30 September 2018 - Restated Wood fuels development Investments Total
GBP GBP GBP GBP
Revenue 16,714,499 1,600,299 - 18,314,798
Cost of sales (15,719,488) (237,945) - (15,957,433)
------------- ------------- ------------- -------------
Gross profit 995,011 1,362,354 - 2,357,365
Other operating income 69,871 - 40 69,911
Administrative expenses (4,306,648) (955,442) (875,526) (6,137,616)
------------- ------------- ------------- -------------
*Adjusted EBITDA (3,241,766) 406,912 (875,486) (3,710,340)
Depreciation (613,802) - (67,549) (681,351)
Finance Expense (184,765) - (485,347) (670,112)
Amortisation Intangibles - - (224,012) (224,012)
FX Gain/(Loss) (136,143) - - (136,143)
Tax credit - - 34,174 34,174
------------- ------------- ------------- -------------
Profit / (Loss) from operations (4,176,476) 406,912 (1,618,220) (5,387,784)
============= ============= ============= =============
Segment assets 10,254,942 1,397,717 26,193,154 37,845,813
Segment liabilities (17,576,679) (1,826,471) (10,219,963) (29,623,113)
------------- ------------- ------------- -------------
(7,321,737) (428,754) 15,973,191 8,222,700
============= ============= ============= =============
* We have presented an Adjusted EBITDA, which is earnings before
interest, tax, depreciation and amortisation, as well as
nonrecurring income and costs.
4. Property, plant and equipment
Assets
Under Farm Land and Plant & Office Motor
Construction & Upgrade Buildings Machinery Equipment Vehicles Total
GBP GBP GBP GBP GBP GBP
Cost
As at 1 April
2018 64,390 6,906,294 310,956 5,233,878 877,129 3,170,086 16,562,733
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Prior period
Restatement - - (10,097) (602,647) 326,235 416,791 130,282
Reclassification - - - (760,141) - 760,141 -
Additions for
the period - - 14,128 106,475 461,874 115,138 697,616
Disposals for
the period - - - (380,904) (52,253) (296,610) (729,768)
As at 31 March
2019 64,390 6,906,294 314,987 3,596,661 1,612,985 4,165,546 16,660,863
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Additions for
the period - - 14,670 76 33,441 1,184,425 1,232,612
Additions - IFRS
16 - - - 224,462 846,476 393,798 1,464,736
Disposals for
the period - - - (257,104) - - (257,104)
As at 30 September
2019 64,390 6,906,294 329,657 3,564,095 2,492,902 5,743,769 19,101,107
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Depreciation
As at 1 April
2018 50,740 6,906,294 17,488 2,014,691 339,441 919,876 10,248,530
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Prior period
Restatement - - (10,097) (602,647) 326,235 416,791 130,282
Reclassification - - - (279,109) - 279,109 -
Charge for the
period - - 7,735 569,620 304,234 633,854 1,515,443
Disposals for
the period - - - (89,953) (34,746) (148,086) (272,785)
As at 31 March
2019 50,740 6,906,294 15,126 1,612,602 935,164 2,101,544 11,621,470
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Charge for the
period - - 2,183 227,750 254,627 343,913 828,473
Disposals for
the period - - - (96,976) - - (96,976)
As at 30 September
2019 50,740 6,906,294 17,309 1,743,376 1,189,791 2,445,457 12,352,697
------------------ ----------- ----------- ----------- ----------- ---------- -----------
Net book value
================== =========== =========== =========== =========== ========== ===========
As at 1 April
2018 13,650 - 293,468 3,219,187 537,688 2,250,210 6,314,203
================== =========== =========== =========== =========== ========== ===========
As at 31 March
2019 13,650 - - 1,984,058 677,820 2,064,005 5,039,392
================== =========== =========== =========== =========== ========== ===========
As at 30 September
2019 13,650 - 312,348 1,820,719 1,303,111 3,298,312 6,748,140
------------------ ----------- ----------- ----------- ----------- ---------- -----------
5 Finance expense
Period ended Period ended Year ended
30 Sep 30 Sep
2019 2018 31 Mar 2019
GBP GBP GBP
Interest expense 226,041 204,868 582,233
Convertible Loan Note interest - 555,906 567,889
Finance lease 89,142 (90,662) 212,680
------------- ------------- ------------
315,183 670,112 1,362,802
============= ============= ============
6 Intangible assets
Long term contracts
and customer relationships Brand Goodwill Total
GBP GBP GBP GBP
Cost
As at 31 March 2019 3,993,815 972,833 5,927,138 10,893,786
As at 30 September
2019 3,993,815 972,833 5,927,138 10,893,786
Amortisation
As at 31 March 2019 1,364,906 136,421 97,300 1,598,627
Amortisation charge
for the period 166,193 25,041 - 191,234
As at 30 September
2019 1,531,099 161,462 97,300 1,789,861
---------------------------- -------- ---------- -----------
Net book value
As at 31 March 2019 2,628,909 836,412 5,829,838 9,295,159
As at 30 September
2019 2,462,716 811,371 5,829,838 9,103,926
============================ ======== ========== ===========
7 Trade payables Restated
Period ended Period ended Year ended
30 Sep 30 Sep
2019 2018 31 Mar 2019
GBP GBP GBP
Trade payables 5,817,860 5,614,777 7,266,518
Accruals 62,101 2,568,633 168,934
Other payables 1,944,571 5,797,823 809,363
Invoice discounting 2,060,475 2,244,927 4,602,762
VAT payables 488,260 143,893 388,235
Employment tax and Social security 82,175 137,283 61,820
------------- ------------- ------------
10,455,442 16,507,336 13,297,632
============= ============= ============
Year ended
Period ended Period ended 31 31 Mar
8 Loans and borrowings 30 Sep 2019 30 Sep 2018 2019
GBP GBP GBP
Current Liabilities
Other loan - finance lease 647,326 597,313 665,738
Short term loan 3,415,591 - 1,776,969
4,062,917 597,313 2,442,707
================ ============= ===========
Financial Liabilities
Convertible Loan Notes - 9,017,824 -
Other loan- finance lease 3,205,137 1,638,229 1,215,633
3,205,137 10,656,053 1,215,633
================ ============= ===========
The fair value of non-current liabilities are not materially
different to their carrying value.
9 Investment in associate
The Company sold 4% of it's 29.1% holding in Incubex LLC for an
amount of GBP2,350,000. The transaction resulted in a new valuation
of Incubex LLC at GBP58.75m. The Company owns 30.6% of Incubex LLC
on an undiluted basis and thus a resulting fair value through
profit and loss uplift of GBP6,567,380 has been accounted for as at
30 September 2019, bringing the new valuation to GBP17,977,500.
10 Share Capital
31 March 2018 No of shares Issued capital Share premium Other reserves
Nos. GBP GBP GBP
Ordinary shares of GBP0.005
each
As at 31st March 2018 43,191,143 215,956 16,192,845 10,682,431
Issued for cash during the
period 8,500,000 42,500 8,457,500 -
Issued as consideration as
part of business combination 11,702,811 58,514 9,074,761 -
Share issue expense - - (425,516) -
Capital Reduction - - (16,192,845) 29,101
As at 31 March 2019 and 30
September 2019 63,393,954 316,970 17,106,745 10,711,532
====================== =============== ============== =========================
As at 1 April 2019 63,393,954 316,970 17,106,745 10,711,532
---------------------- --------------- -------------- -------------------------
As at 30 September 2019 63,393,954 316,970 17,106,745 10,711,532
====================== =============== ============== =========================
11 Profit/(Loss) per share
Six months Six months Year ended
ended ended
30-Sep-19 30-Sep-18 31-Mar-19
Unaudited Unaudited Audited
GBP GBP GBP
Earnings/(Loss) attributable to equity
holders of the company 998,686 (5,367,752) (5,514,629)
Weighted average number of shares 63,393,954 43,191,143 50,187,880
Basic Earnings per share (Pence) 1.58 (12.43) (10.99)
Diluted Earnings per share (Pence) 1.40 (12.43) (10.99)
Basic earnings per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year. The convertible
options are considered anti-dilutive because the exercise of these
would have the effect of reducing the loss per share.
12 Events after the reporting period
On 29 November 2019, AMP announced that it had sold a 4.0 per
cent. shareholding in IncubEx Inc., an incubator for exchange
traded products in the global environmental markets space, to IPGL
Limited, Michael Spencer's investment vehicle, for a cash
consideration of GBP2.35 million. This sale was made to finance
certain of AMP Clean Energy's general working capital requirements,
including funding the project pipeline and acquisition of wood fuel
stock for this season.
Also on 29 November 2019, AMP announced that it had reached
agreement on the terms of a recommended acquisition of the entire
issued and to be issued ordinary share capital of AMP Clean Energy
by Fossa HoldCo Limited a company wholly-owned by Asterion
Industrial Infra Fund I, FCR. Under the terms of the acquisition,
shareholders will receive 90 pence in cash for each AMP Share. The
acquisition values the entire issued and to be issued share capital
of AMP Clean Energy at approximately GBP63.1 million.
It is proposed that the acquisition be implemented by means of a
court sanctioned scheme of arrangement under Part 26 of the
Companies Act, which requires the approval of AMP shareholders at
the Court Meeting and the General Meeting and the sanction of the
Court.
For details of the transaction, please refer to the following
website:
https://www.ampcleanenergy.com/investors/recommended-cash-acquisition-for-amp-clean-energy
13 Prior period restatement
As reported in at 31 March 2019, during the last two years, the
Wood Fuels business underwent a transformative restructuring to
bring all operations into a single management and brand platform.
This also involved replacing the senior management in the fuels
business and the appointment of the new finance director in the
fuels business. At the start of 2019, an in-depth company-led
review was conducted into prior period stock balances which
included the level of accruals and the accounting for goods
received not invoiced.
This review concluded that, stock as at 31 March 2018 had been
overstated due to the systems incorrectly accounting for stock
movements around the 2018 year end with certain costs incorrectly
being capitalised and, in addition, the closure of several depots
as part of the restructure not being accurately reflected on the
balance sheet. The overstatement was also applicable to the
balances included in 30 September 2018 interim financial
statements.
The aggregate adjustment to Retained Earnings as at 30 September
2018 was a negative impact of GBP4.4m.
The restatement relates to issues pertaining to the previous
financial year. This means that the restated audited accounts for
the 6 months to 30 September 2018 have been adjusted and that there
is no adverse effect on the profit and loss for the half year to 30
September 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKFDKKBDBPBD
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