RNS Number:2255Q
TEG Environmental Plc
18 August 2005
For release 7.00am 18 August 2005
TEG ENVIRONMENTAL PLC
Interim Results for the half year ended 30 June 2005
TEG Environmental Plc ("TEG"), the leading edge green technology company which
converts organic wastes into natural organic fertiliser, announces its Interim
Results for the half year ended 30 June 2005.
For further information please
contact:
TEG Environmental Plc
Mick Fishwick, Chief Executive 01772 422 220
TEG Environmental Plc
Tanja Willis, Finance Director 01772 422 220
Binns & Co PR Ltd
Peter Binns / Tarquin Edwards 020 7786 9600
Editor's Notes:
TEG provides an in-vessel composter, which is one of the few approved
technologies capable of treating animal by-product waste. Plant economics are
driven by the gate fees charged, rather than the value of the end product
(compost). The TEG process is an economic alternative to landfill.
The Silo Cage system, one of the few technologies in Europe capable of treating
this waste, is a natural process producing compost as an end product, used as an
excellent soil conditioner that fertilizes, retains moisture, provides structure
and restricts weed growth. TEG's Silo-Cages will be housed in a self-contained
building, are not unsightly and are environmentally friendly.
Potential customers include local authorities, waste management companies, food
processors, farmers and landowners. The Company's expanding market is driven by
increasingly stringent EU and UK legislation regulating the treatment and
disposal of organic waste.
TEG ENVIRONMENTAL PLC
Interim Report for the six months ended 30 June 2005
Chairman's Statement
I am pleased to present the company's interim results for the first half of
2005. The first half of the year has seen tremendous progress in the
development of the business with major commercial successes, the benefits of
which will be seen in the second half of the year. In addition, we have
achieved positive release status for Animal By Product (ABP) processing at our
plant at Sherdley Farm, Preston and we have strengthened our management team
with the appointment of Michael Fishwick as Chief Executive and Tanja Willis as
Finance Director.
The first half of the financial year saw us secure a #925,000 contract with The
City and County of Swansea Council. Although TEG received the first payment of
#357,000 as deposit, this is bonded until works commence and equipment orders
are placed, scheduled for the fourth quarter of 2005. Consequently, this does
not show against the first half results. We have recorded a post tax loss of
#762,379 (2004 : #518,566), the results reflecting the cost of strengthening the
management team in this period and resultant increase in administrative
expenses. No dividend is proposed.
On 12 July 2005, we were able to announce our second sale, a plant for Banham
(Compost) Limited valued at close to #2 million. Revenues are expected to
commence in the third quarter of 2005.
I am also delighted to be able to announce a third major project for TEG, the
takeover and development of a large composting business in Scotland, our first
major build, own and operate project. The contract is for 11 years and is worth
some #14 million, with substantial scope for growth.
The business has established revenues with an excellent customer base. It is
one of the largest ABP composting businesses in the UK and has waste management
licence and planning permission in place. It represents TEG's largest contract
gain since it listed on AIM in July 2004.
TEG will assume responsibility for the business in September 2005 and will
install its Silo-Cages progressively in early to mid 2006. Revenues will
commence on 29 August 2005.
As noted above, TEG achieved positive release status for ABP approval at its
plant at Sherdley Farm, Preston. Full ABP approval is expected at the end of
August 2005. Once achieved, this will enable development of the plant and we
have generated significant local interest from food manufacturers to supply
waste to the facility. It is anticipated that revenues will be generated from
the fourth quarter of 2005.
In order to finance the new projects, TEG has announced it is intending to raise
funds by a share issue in August 2005.
The contracts we have secured provide the base for an excellent business and I
look forward to its continued success.
Nigel Moore
Chairman
SUMMARISED PROFIT AND LOSS ACCOUNT
For the six months ended 30 June 2005
Unaudited 6 Unaudited 6 Audited 12
months months months ended
ended 30 ended 30 31 December
June 2005 June 2004 2004
Note # # #
TURNOVER 9,286 14,326 21,572
Cost of Sales (8,292) (9,259) (12,017)
_________ _________ _________
GROSS PROFIT 994 5,067 9,555
Administrative expenses (773,981) (533,248) (1,227,550)
_________ _________ _________
OPERATING LOSS (772,987) (528,181) (1,217,995)
Interest receivable 22,446 12,702 34,598
Interest payable (1,375) (3,087) (4,121)
_________ _________ _________
LOSS ON ORDINARY ACTIVITIES BEFORE (751,916) (518,566) (1,187,518)
TAXATION
Taxation 2 (10,463) - 75,774
_________ _________ _________
LOSS FOR THE PERIOD (762,379) (518,566) (1,111,744)
--------- --------- ---------
Loss per ordinary share 3 (4.65p) (4.15p) (7.9p)
- basic & diluted
SUMMARISED BALANCE SHEET
As at 30 June 2005
Unaudited Unaudited Audited at
at 30 June at 30 June 31 December
2005 2004 2004
# # #
FIXED ASSETS
Intangible assets 1,990 5,988 3,990
Tangible assets 179,071 140,384 206,549
_________ _________ _________
181,061 146,372 210,539
CURRENT ASSETS
Stocks 3,362 7,848 8,166
Debtors 84,217 79,380 100,122
Cash at bank and in hand 771,650 314,267 1,164,284
_________ _________ _________
859,229 401,495 1,272,572
CREDITORS: due within one year (631,707) (309,160) (300,479)
_________ _________ _________
NET CURRENT ASSETS 227,522 92,335 972,093
_________ _________ _________
TOTAL ASSETS LESS CURRENT 408,583 238,707 1,182,632
LIABILITIES
CREDITORS: due after more than one (24,517) - (36,187)
year
_________ _________ _________
NET ASSETS 384,066 238,707 1,146,445
--------- --------- ---------
CAPITAL AND RESERVES
Called up share capital 819,269 624,207 819,269
Share premium account 9,352,543 8,046,688 9,352,543
Profit and loss account (9,787,746) (8,432,188) (9,025,367)
_________ _________ _________
EQUITY SHAREHOLDERS' FUNDS 384,066 238,707 1,146,445
--------- --------- ---------
SUMMARISED STATEMENT OF CASHFLOWS
For the six months ended 30 June 2005
Unaudited 6 Unaudited 6 Audited 12
months months months ended
ended 30 ended 30 31 December
June 2005 June 2004 2004
Note # # #
NET CASH OUTFLOW FROM OPERATING 4 (397,557) (550,862) (1,196,815)
ACTIVITIES
_________ _________ _________
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Interest received 22,446 12,702 34,598
Interest element of finance lease (1,375) (3,087) (4,121)
and hire purchase payments
_________ _________ _________
21,071 9,615 30,477
_________ _________ _________
TAXATION
UK Corporation tax received - 71,137 71,137
_________ _________ _________
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
Payments to acquire tangible (6,708) (12,586) (27,972)
fixed assets
Receipts from sales of tangible 2,230 - 2,859
fixed assets
_________ _________ _________
(4,478) (12,586) (25,113)
_________ _________ _________
NET CASH OUTFLOW BEFORE FINANCING (380,964) (482,696) (1,120,314)
FINANCING
Proceeds on issue of shares - - 1,500,916
Repayment of capital lease and (11,670) (16,542) (29,823)
hire purchase contracts
_________ _________ _________
(11,670) (16,542) 1,471,093
_________ _________ _________
(DECREASE) / INCREASE IN CASH (392,634) (499,238) 350,779
--------- --------- ---------
NOTES TO THE UNAUDITED INTERIM RESULTS
1. BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION
The financial information contained in this statement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
figures for the 12 month period ended 31 December 2004 have been extracted from
the Statutory Financial Statements which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain a statement under Section 237(2) of the Companies Act 1985.
The accounts have been prepared in accordance with applicable accounting
standards and under the historical cost convention.
The principal accounting policies of the company have remained unchanged from
those set out in the Company's 2004 Annual Report and Financial Statements.
The directors have concluded that the continued development of the business will
result in a net cash outflow until operating revenues exceed expenditure.
Consequently, the current funds available are believed to be insufficient to
finance the future development of the business. The directors intend to undergo
a further fund raising exercise to raise working capital sufficient to enable
the company to continue its development and to fund investments in committed
projects.
Therefore, the directors consider it appropriate to prepare the financial
statements on a going concern basis. The financial statements do not include any
adjustments that would result in the failure to raise the additional finance.
The interim report has been reviewed by the Company's auditors. A copy of the
auditors' review report is attached to this interim report.
2. TAXATION
The tax charge represents a reduction in the claim for payable R&D tax credit
2004.
3. LOSS PER SHARE
The loss per share is calculated by reference to the loss attributable to
ordinary shareholders divided by the weighted average of 16,385,381 ordinary
shares for the 6 months to 30 June 2005, 12,484,140 ordinary shares for the 6
months to 30 June 2004, and 14,060,383 for the 12 months to 31 December 2004.
Unaudited 6 Unaudited 6 Audited 12
months ended months ended months ended
30 June 2005 30 June 2004 31 December
2004
Attributable loss (#) (762,379) (518,566) (1,111,744)
_________ _________ _________
Average number of ordinary
shares in issue
for basic and diluted loss per 16,385,381 12,484,140 14,060,383
share
_________ _________ _________
Basic and diluted loss per (4.65p) (4.15p) (7.9p)
share
--------- --------- ---------
The loss for each period and the weighted average number of ordinary shares for
calculating the diluted loss per share for each period are identical to those
used for the basic loss per share. This is because the outstanding share options
would not be dilutive under the terms of Financial Reporting Standard No. 14
'Earnings per share' (FRS 14).
4. RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING
ACTIVITIES
Unaudited Unaudited Audited 12
6 months 6 months months
ended 30 ended 30 ended 31
June 2005 June 2004 December
2004
Operating loss (772,987) (528,181) (1,217,995)
Amortisation 2,000 1,998 3,996
Depreciation of tangible fixed assets 31,687 30,323 32,666
Loss/(profit) on sale of tangible fixed 270 - (2,859)
assets
Decrease/(increase) in stocks and work 4,804 (967) (1,285)
in progress
Decrease/(increase) in debtors 5,442 (52,004) 3,028
Increase/(decrease) in creditors 331,227 (2,031) (14,366)
_________ _________ _________
(397,557) (550,862) (1,196,815)
--------- --------- ---------
5. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited Unaudited Audited 12
6 months 6 months months
ended 30 ended 30 ended 31
June 2005 June 2004 December
2004
(Decrease) / increase in cash during (392,634) (499,238) 350,779
the period
Cash outflow from hire purchase 11,670 16,542 29,823
_________ _________ _________
Change in net funds resulting from (380,964) (482,696) 380,602
cashflows
Inception of finance lease - - (53,122)
_________ _________ _________
Movement in net funds during the period (380,964) (482,696) 327,480
Opening net funds 1,104,751 777,271 777,271
_________ _________ _________
Closing net funds 723,787 294,575 1,104,751
--------- --------- ---------
6. ANALYSIS OF MOVEMENT IN NET FUNDS
At 1 January Cash flow 30 June 2005
2005
# # #
Cash at bank and in hand 1,164,284 (392,634) 771,650
_________ _________ _________
Finance leases (59,533) 11,670 (47,863)
_________ _________ _________
1,104,751 (380,964) 723,787
--------- --------- ---------
An advance customer payment of #357,000 is held in a restricted account which
will be released following the completion of contractual conditions.
7. RECONCILIATION OF EQUITY SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited At
At 30 June At 30 June 31 December
2005 2004 2004
# #
Loss for the financial period (762,379) (518,566) (1,111,744)
Issue of share capital - - 1,500,916
_________ _________ _________
(Decrease) / increase in equity (762,379) (518,566) 389,172
shareholders' funds
Opening equity shareholders' funds 1,146,445 757,273 757,273
_________ _________ _________
Closing equity shareholders' funds 384,066 238,707 1,146,445
--------- --------- ---------
8. Copies will be available on request from the Company Secretary, TEG
Environmental plc, Unit 6, Meadowcroft Business Park, Pope Lane, Whitestake,
Preston, Lancs. PR4 4BA.
9. The interim report was approved by the board of directors on 17 August 2005.
INDEPENDENT REVIEW REPORT TO TEG ENVIRONMENTAL PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2005 which comprises the Summarised Profit and Loss
Account, Summarised Balance Sheet, Summarised Cash Flow Statement, and the
related notes 1 to 9. We have read the other information contained in the
interim report, which comprises only the Chairman's Statement, and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information. Our responsibilities do not extend to any other
information.
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 and ensuring that the
accounting policies and presentation applied to the interim figures are
consistent with those applied in preparing the preceding annual accounts except
where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review having regard to the guidance contained in Bulletin 1999
/4 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Going concern
In arriving at our review conclusion, we have considered the adequacy of the
disclosures made in the interim statement concerning the future funding of the
company. The interim statement has been prepared on a going concern basis, the
validity of which depends on future funding being available. The interim
statement does not include any adjustments that would result from the failure to
obtain funding. Details of the circumstances relating to this fundamental
uncertainty are described in note 1.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
Grant Thornton UK LLP
Manchester
17 August 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
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