TIDMAPR
RNS Number : 0507L
APR Energy PLC
30 August 2012
For Immediate Release 30 August 2012
APR Energy plc
Interim Results 2012
Pro Forma Profits Above Expectations.
344MW New Contracts and 356MW Extensions in 2012 to 30 June.
Increased Investment in Fleet. Positive Outlook.
APR Energy plc (LSE: APR) (the "Company" and together with its
subsidiaries, "APR Energy" or the "Group"), a global leader in
temporary power solutions, today announces its interim results for
the six month period ended 30 June 2012.
The reported financial statements cover a six month period from
1 January 2012 to 30 June 2012. The Group is also providing pro
forma financial data for the six month period from 1 January 2011
to 30 June 2011 to aid in historical comparative analysis. Pro
forma financial data is used by the Group in managing the business
and measuring the Group's underlying performance and cash
flows.
Reported (1) Pro forma (2)
($ million) H1 2012 H1 2011 H1 2012 H1 2011 Change
Revenue 155.0 10.9 155.0 59.1 162%
Operating (loss)/profit (0.8) (43.4) 52.8 15.7 236%
(Loss)/profit before tax (1.9) (32.3) 51.8 13.9 273%
Net (loss)/income (6.9) (33.3) 46.8 5.7 721%
Earnings per share (cents) (8.82) (75.34) 59.81 12.79 368%
Pro forma EBITDA - - 96.1 28.5 237%
Pro forma EBITDA margin
(%) - - 62.0 48.3 1,370bps
HIGHLIGHTS
-- Pro forma revenues of $155.0 million up 162%
-- Pro forma profits above expectations:
o Pro forma EBITDA up 237% to $96.1 million
o Pro forma net income up 721% to $46.8 million
-- Pro forma EBITDA margin up to 62% from 48%
-- 344MW of new contracts and 356MW of extensions delivered in the period
-- Successful opening of Panama and Dubai Hubs; Malaysian Hub on schedule for September
-- New fleet investment of $290-310 million planned based on
improved outlook for natural gas opportunities
-- 25MW of new contracts and 83MW of extensions since 30 June 2012
(1) Reported figures for 2011 cover the 6 month period from 1
January to 30 June 2011 and include the trading results of APR
Energy Cayman Limited and Falconbridge Services LLC and their
subsidiaries (together, the "APR Group") for 17 days post the date
of acquisition.
(2) Pro forma figures for 2012 cover the 6 month period ended 30
June 2012 for APR Energy and exclude non-cash expense for
amortisation of intangible assets ($48.7 million) and founder
shares and securities revaluation ($5.0 million). Pro forma figures
for 2011 cover the 6 month period ended 30 June 2011 for the APR
Group, and include items of income and expense of APR Energy plc
and APR Energy Holdings Limited for 17 days post the date of
acquisition. Figures exclude one-time transaction costs ($30.7
million), non-cash expense for amortisation of intangible assets
($0.4 million) and founder shares and securities revaluation ($27.7
million). Pro forma net income also excludes a pre-acquisition
foreign exchange gain ($8.5 million).
John Campion, Chief Executive Officer, said:
APR Energy has continued to make good progress during the first
half of 2012. New contracts of 344MW have been awarded in the
period ended 30 June 2012 - this compares to 513MW for the whole of
2011. In addition, we have delivered 356MW of contract extensions -
a profitable and important cornerstone of the business. This
provides us with an order book of 9,082MW-Months as of 30 June 2012
- an increase of 41% since the end of 2011. Since 30 June 2012, we
have also gained 25 MW of new contracts and 83 MW of extensions. In
addition, we have significantly improved EBITDA margins, reflecting
the discipline with which we have taken on new business and
improvements in our operational structure and mobilisation
technologies. Underlying revenue in the second half of the year
will be lower than the first half due to early closure on one
Japanese site and contractual project delays, nevertheless, we
currently anticipate beating consensus net income.
We see 2012 as an important year of investment for the future
growth of APR Energy. The longer term key growth drivers of the
temporary power business remain strong. With the Hub strategy now
largely completed, today we are announcing an expansion in our
planned fleet investment to $290-310 million for 2012. The
additional expenditure will be focused on our dual-fuel
technologies reflecting confidence in the natural gas market for
which we feel APR Energy is uniquely positioned.
Enquiries:
APR Energy plc
Brian Gallagher +44 (0) 20 3427 3747
+44 (0) 7775 906 075
Citigate Dewe Rogerson Consultancy + 44 (0) 20 7638 9571
Anthony Carlisle + 44 (0) 7973 611 888
Lydia-Claire Halliday + 44 (0) 7866 617 671
Analyst Conference
There will be an analyst conference this morning at 10.15 am GMT
at the offices of Citigate Dewe Rogerson at 3 London Wall
Buildings, London EC1R 0HL.
A webcast will available be on the APR Energy website -
www.aprenergy.com
About APR Energy
APR Energy specialises in the sale of reliable and efficient
electricity through the rapid global deployment of customised,
turnkey power solutions. APR's fast-track approach, flexible
offerings, and comprehensive operation and maintenance services
have established it as a leader in the utility and industrial
segments. APR Energy provides its power generation solutions to
customers and communities around the world, with an emphasis in
Africa, South America, Central America, the Middle East and Asia.
APR Energy also implements philanthropic initiatives at each plant
location through its Community Development Programme, which aims to
build and maintain close relationships in the areas in which it
works through projects and donations in health and education.
Certain statements included in this announcement constitute, or
may constitute, forward-looking statements. Any statement in this
announcement that is not a statement of historical fact (including,
without limitation, statements regarding the Company's future
expectations, operations, financial performance, financial
condition and business) is or may be a forward-looking statement.
Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those projected or implied in any forward-looking statement.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
Although any such forward-looking statements reflect knowledge and
information available at the date of this announcement, reliance
should not be placed on them. Without limitation to the foregoing,
nothing in this announcement should be construed as a profit
forecast.
-End-
APR Energy plc
Chairman's Statement
Introduction
I am pleased to report that the Group's performance has been
strong over the six months to 30 June 2012, with pro forma net
income rising 721% to $46.8 million over the comparable period.
Performance
Pro forma revenue in the first half was $155.0 million (H1 2011:
$59.1 million), a rise of 162% as the Group invested the capital
received in H1 2011 from the Horizon transaction. Pro forma net
income rose by 721% due to important contract wins, which were
supplemented by strong contract extension activity across our
portfolio. The reported net loss decreased by 79% to $(6.9)
million.
Planned fleet investment is being increased to $290-310 million
for 2012 (previous guidance $230-260 million), as we believe the
prospects for natural gas and dual fuel turbine temporary power
continue to improve. We continue to invest in a disciplined manner
in both natural gas reciprocating and dual-fuel turbine
technologies. During the first half, capital expenditure in the
fleet was $147.1 million in a mix of diesel engines and dual-fuel
turbines.
The Group balance sheet has gross debt of $104.5 million
(excluding capitalised financing costs) and cash of $33.6 million,
resulting in net debt of $70.9 million at 30 June 2012.
Unfortunately we were delayed in announcing our preliminary 2011
results against our deadline in March. Since that time a number of
changes and additions have been made to the finance function, which
have yielded immediate improvements in the reporting structure and
the Board is satisfied that these changes are appropriate for the
business going forward. Our auditors have undertaken a review of
our half year results and the Board remains fully committed to
obtaining a Premium Listing on the London Stock Exchange in
2013.
In a parallel Stock Exchange release today, we are announcing
that Rick Greene, our CFO, is leaving the Group effective 30
September 2012, and that Andrew Martinez, our Vice President of
Finance, is appointed CFO of the Company with effect from 30 August
2012.
Dividend
The Board declared an interim 2012 dividend of 3.3 pence per
ordinary share in the half year to 30 June 2012. This interim
dividend will be paid on 27 November 2012 to shareholders on the
register of members of the Company as at 2 November 2012, with an
ex-dividend date of 31 October 2012.
Our Board of Directors
As announced on 23 July 2012, Shonaid Jemmett-Page joined the
Board as an independent Non-Executive Director and Chair of the
Audit Committee. Shonaid brings an extensive amount of financial
experience from her time as the Chief Operating Officer of CDC
Group plc, as an Executive Board member of Unilever's HPC Business,
and as a partner at KPMG. Shonaid is also currently a Board member
and sits on the Audit Committees of GKN plc, Close Brothers Group
plc and Amlin plc.
Outlook
The Group expects to deliver on our commercial pipeline in the
second half of 2012 and to build on recent contract wins and
existing contract extensions. Our three hubs in Panama, Dubai and
Malaysia will provide an important strategic platform for the
Group's growth, with Panama and Dubai already driving contract wins
and faster installation times. We also expect to see operational
efficiencies delivering improved EBITDA and net income performance
going forward. APR Energy remains confident in the strong medium-
and long-term expansion trends within the temporary power
market.
Chairman
Michael Fairey
29 August 2012
APR Energy plc
Interim management report
BUSINESS REVIEW
Overview
The first half of the year was a busy period for APR Energy.
Group revenues totalled $155.0 million for the six-months ending 30
June 2012, up 162% over the prior period on a pro forma basis. As
previously announced, during the last six months the Group achieved
new contract wins of 344MW and contract extensions of 356MW.
As of 30 June 2012, total fleet capacity was 1,052MW (31
December 2011: 900MW) with an order book of 9,082MW-Months, an
increase of 41% from the end of 2011.
APR Energy continues to make progress in expanding our
profitability. During the first half of 2012, pro forma EBITDA
margins were strong. The Group has consistently and prudently
invested in its operational structure to service its growing
portfolio of contracts and fleet of assets.
Review of Strategy
We continue to make good progress on our key strategic
initiatives during the first half, from which we are already seeing
benefits.
Improved operational execution. Through our newly enhanced
mobilisation methodologies, APR Energy has been able to increase
its deployment and installation speed, reduce costs and increase
flexibility. The accelerated installation and operation of the
120MW power facility in Cyprus in June is a notable success
resulting from these efforts. Through our advancements in plant
design, deployment and logistics, we were able to have the plant
operational within 20 days of equipment arrival, which was ahead of
the contracted schedule.
Regional expansion and responsiveness. The successful execution
of the Hub strategy during 2012 also has strengthened further our
ability to respond quickly to customer needs and emerging
opportunities. The opening of the Dubai Hub in Q1 has been
instrumental in facilitating significant contract wins in the
Middle East, an important region for the Group. In addition, the
opening of the Malaysian Hub in Q3 will play a key role in
expanding business in the strategically important Southeast Asia
region.
Focus on dual-fuel turbines. Our strategy of offering customers
the alternative of dual-fuel turbines continues to pay dividends,
as seen in the recent 100MW contract win in Uruguay.
In addition to these strategic advancements, we also have
continued to invest in elevating the skills, experience and
expertise of our people, while better structuring our workforce to
align with our strategic focus areas. We have made great strides in
improving our internal processes across all functional areas,
especially accounting and finance, and continue to invest towards
increasing our brand presence in key markets.
Trading
The structural growth drivers within our business are intact and
the prospects for temporary power in all our chosen geographies
remain very strong.
The early termination at one of the two TEPCO sites in Japan
will impact second half net income. However, we signed a new
extension with TEPCO at the second site through until at least
March 2013. The demobilisation and redeployment of the Japan assets
took longer than anticipated, with the diesel engines having been
placed in Yemen.
On a geographical basis, Europe and the Middle East saw strong
progress with major contract wins in Cyprus (120MW), Oman (24MW)
and Yemen (60MW). The value and payback of the Dubai Hub has
already been established. We believe that Africa will remain a
strong market for APR Energy in the medium term as demonstrated by
our expansion into new markets such as Angola (40MW). Latin America
continues to be a productive region for the Group, as evidenced by
the 100MW contract in Uruguay. We anticipate that the opening of
the Malaysian Hub in September will provide a similar enhancement
to the business in the second half as the opening of the Panama and
Dubai Hubs provided in the early part of 2012.
In addition to new contract wins, the Group also benefited from
key extensions during the period, including Japan (70MW), Botswana
(70MW) and Argentina (93MW).
The implementation of our enhanced mobilisation system has begun
to have a positive impact on profitability. While the investment in
this improved system requires an increased upfront spend in higher
quality equipment, the overall cost per project is reduced due to
substantial operating efficiencies and savings. Management looks
forward to further margin progression from this level and into the
medium term.
Outlook
The longer-term structural trends within temporary power market
remain intact. The demand for power solutions - especially in our
core geographical markets - is substantial, hence our decision to
increase the planned capital investment in our fleet, with a
specific focus on natural gas generation, to $290-310 million
during the year. We are pleased to report 25MW of new contracts and
83MW of extensions since 30 June 2012.
We remain actively engaged in a wide range of opportunities in
different technologies across our core geographical markets. The
Group expects to deliver on contract opportunities in the second
half of 2012 and into 2013, while benefiting from improved
operating efficiencies. Looking ahead, we are confident of another
successful year of delivery at APR Energy.
Key performance indicators
As set out in our most recent annual report, we monitor our
performance implementing our strategy using five key performance
indicators (KPIs). These KPIs are applied on a Group wide basis.
Performance in the six months ended 30 June 2012 is set out in the
table below, together with the prior period performance data. The
source of data and calculation methods used are consistent with
those disclosed in the 2011 annual report.
H1 2012 H1 2011 Change
Capacity 1,052MW 724MW 45%
Order book 9,082MW-Months 5,340MW-Months 70%
Pro forma EBITDA $96.1m $28.5m 237%
Pro forma EBITDA margin 62.0% 48.3% 1,370bps
Pro forma ROCE 18.2% 13.2% 500bps
Pro forma earnings per
share 59.81c 12.79c 368%
Loss per share (8.82)c (75.34)c (88)%
Capacity, order book, pro forma EBITDA, pro forma EBITDA margin,
pro forma ROCE and pro forma earnings per share are non-IFRS
measures. The Directors have included these measures in this
document because they are used by the Group in managing the
business and measuring the Group's core performance and cash flows,
and that they will be beneficial to potential investors in
understanding the Group. However, the figures disclosed herein may
not be comparable to similarly titled measures disclosed by other
companies as non-IFRS measures are not uniformly defined.
Finance review
Revised
Reported Reported Reported Pro forma Pro forma Pro forma
6 mths 6 mths 14 mths 6 mths 6 mths 12 mths
ended ended ended ended ended ended
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
12 11 11 12 11 11
$'000 $'000 $'000 $'000 $'000 $'000
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Unaudited)
Revenue 155,048 10,935 164,617 155,048 59,095 212,777
Cost of sales (79,336) (7,045) (91,376) (79,336) (39,331) (123,663)
Amortisation of
intangible assets (48,729) (367) (46,713) - - -
------------ ------------ ---------- ------------ ------------ ------------
Gross profit 26,983 3,523 26,528 75,712 19,764 89,114
Selling, general
and administrative
expenses (22,863) (19,263) (44,022) (22,863) (4,024) (28,554)
Founder shares and
securities revaluation (4,952) (27,678) (27,678) - - -
------------ ------------ ---------- ------------ ------------ ------------
Operating (loss)/profit (832) (43,418) (45,172) 52,849 15,740 60,560
Foreign exchange
(loss)/gain (535) 8,400 9,961 (535) (82) 41
Finance income 176 3,119 4,810 176 18 644
Finance costs (675) (380) (2,567) (675) (1,804) (3,991)
------------ ------------ ---------- ------------ ------------ ------------
(Loss)/profit before
taxation (1,866) (32,279) (32,968) 51,815 13,872 57,254
Taxation (5,032) (1,054) (9,686) (5,032) (8,215) (16,847)
------------ ------------ ---------- ------------ ------------ ------------
(Loss)/profit for
the period (6,898) (33,333) (42,654) 46,783 5,657 40,407
Total comprehensive
(loss)/profit for
the period (6,898) (33,333) (42,654) 46,783 5,657 40,407
------------ ------------ ---------- ------------ ------------ ------------
Revenue for the six month period ended 30 June 2012 was $155.0
million, an increase of 1,322% on a reported basis and 162% on a
pro forma basis over the same period last year. The increase in
revenue year on year was primarily driven by new contract wins that
went into operation in late 2011 and early 2012.
Gross profit on a pro forma basis increased 282% to $75.7
million. Improvement in the gross profit margin was largely due to
the Japan TEPCO contract.
Operating loss decreased by 98% to $(0.8) million and pro forma
operating profit increased by 236% to $52.8 million due to the
Japan contract, but was offset by increases in administrative
expenses over the prior period which were driven by the growth in
external consulting resources to support the business, share-based
compensation expense, and an increase in headcount costs in the
business.
Pro forma EBITDA totalled $96.1 million, an increase of 237%
over the prior period (H1 2011: $28.5 million).
Return on Capital Employed (ROCE) is a key performance metric
for the business. Despite the significant increase in net operating
assets associated with the growth of the business, coupled with the
timing of new projects beginning operation, pro forma ROCE
increased to 18.2% (31 December 2011: 16.5%, 30 June 2011: 13.2%).
This calculation is based on a twelve month rolling average ROCE
calculated using industry standard.
During the period APR finalised the provisional fair value of
identifiable assets and liabilities of the APR Group in accordance
with IFRS 3 Business Combinations. These revisions are made
retrospectively to the acquisition balance sheet as of 13 June 2011
of the APR Group and APR has therefore revised the prior year
comparatives accordingly.
Provision for bad debt
A provision for bad debt is recognised against trade receivables
which are greater than 90 days past due based on estimated
recoverable amounts. The net provision movement for bad debt was a
$1.5 million credit to the income statement in the period (H1 2011:
$nil).
Share-based payments
In accordance with IFRS 2, a non-cash expense of $0.6 million
related to equity settled share-based payment transactions was
recognised (H1 2011: $0.4 million). This expense relates to equity
grants made under the Company's Performance Share Plan and the
Non-Executive Director's Share Matching Scheme.
Interest and finance cost
Net interest declined to a $0.5 million expense in the period,
compared to a $2.7 million income in the prior period, due mainly
to lower cash balances held during the period.
Tax
The Group's tax charge for the interim result on a pro forma
basis was $5.0 million, reflecting a pro forma effective tax rate
of 10% (H1 2011: 59%). This expense included foreign withholding
taxes of $2.2 million. The significant reduction in the effective
tax rate from the prior period is a result of a reduction in
withholding taxes and an increased share of profit from lower tax
jurisdictions.
Liquidity and capital resources
Net debt (excluding capitalised finance fees) as at 30 June 2012
was $70.9 million. This compared to net cash at 30 June 2011 of
$206.3 million. A summary analysis of cash flow is set out in the
table below:
($'000) H1 2012 H1 2011
Cash flow from/(used in) operations 70,869 (26,955)
Cash used in investing activities (191,500) (333,007)
Cash from/(used in) financing
activities 91,195 (742)
Beginning cash and cash equivalents
balance 63,061 647,211
Ending cash and cash equivalents
balance 33,625 286,507
During the current period, net cash flow from operations
totalled $70.9 million whereas in the prior period cash outflow
from operations was negative primarily as a result of transaction
costs. The cash outflow in this period from investing activities
primarily comprised purchases and deposits for property and
equipment. Net cash inflow from financing activities was a result
of drawing on the credit facility used to purchase property and
equipment.
Dividends
The Company's shareholders approved a final dividend for the 14
month period ended 31 December 2011 of 10 pence per ordinary share
at the Annual General Meeting on 24 May 2012. This amount was paid
on 29 May 2012 to shareholders on the register of members of the
Company as of 2 May 2012.
The Board declared an interim 2012 dividend of 3.3 pence per
ordinary share in the half year to 30 June 2012. This interim
dividend will be paid on 27 November 2012 to shareholders on the
register of members of the Company as of 2 November 2012, with an
ex-dividend date of 31 October 2012.
Principal risks and uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remaining six months of the financial year and which could cause
actual results to differ materially from expected and historical
results. A detailed explanation of the risks summarised below can
be found on pages 42 to 45 of the 2011 annual report which is
available at www.aprenergy.com.
-- Failure to deliver the growth plan envisaged as part of the recent capital injections;
-- Contracts are temporary in nature;
-- Customer concentration;
-- Global political and economic conditions;
-- Volatility in customer demand, including event-driven demand;
-- Increase in competitive environment;
-- Asset security;
-- Focus on developing markets - operations in difficult regions of the world;
-- Recruitment and retention of key staff;
-- Environmental, health and safety;
-- Movement in cost inputs; and
-- Payment default.
The Directors do not consider that the principal risks and
uncertainties have changed since the publication of the annual
report for the year ended 31 December 2011 and believe that these
will continue to be the same in the second half of the year.
Related party transactions
Related party transactions are disclosed in note 11 to the
condensed set of financial statements.
There have been no material changes in the related party
transactions described in the last annual report.
Going concern
The Directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report. The
Group's principal debt facilities (totalling $400.0 million) are
provided by a syndicate of banks under a revolving credit facility
and expire on 28 November 2016. The Group's forecasts and
projections show that the facilities in place currently are
anticipated to be sufficient for meeting the Group's operational
requirements. Accordingly, they continue to adopt the going concern
basis in preparing the condensed set of financial statements.
APR Energy plc
Responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with International Accounting Standard 34 Interim
Financial Reporting;
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Chief Executive Officer
John Campion
29 August 2012
APR Energy plc
Independent review report to APR Energy plc
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2012, which comprises the condensed
consolidated statement of comprehensive income, the condensed
consolidated statement of financial position, the condensed
consolidated statement of changes in equity, the condensed
consolidated cash flow statement and related notes 1 to 11. 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.
This report is made solely to the Company 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 Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 Interim
Financial Reporting, as adopted by the European Union.
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 Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, 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 Ireland) 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
June 2012 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
29 August 2012
London, United Kingdom
Notes:
(a) The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on
the Company's website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial information differs from legislation
in other jurisdictions.
APR Energy plc
Condensed consolidated statement of comprehensive income
For the six month period ended 30 June 2012
Revised*
6 months 6 months 14 months
ended ended ended
30 June 30 June 31 December
2012 2011 2011
$'000 $'000 $'000
Note (Unaudited) (Unaudited) (Audited)
Revenue 5 155,048 10,935 164,617
Cost of sales (79,336) (7,045) (91,376)
Amortisation of intangible
assets (48,729) (367) (46,713)
------------ ------------ ------------
Gross profit 26,983 3,523 26,528
Selling, general and administrative
expenses (22,863) (19,263) (44,022)
Founder shares and securities
revaluation (4,952) (27,678) (27,678)
------------ ------------ ------------
Operating loss (832) (43,418) (45,172)
Foreign exchange (loss)/gain (535) 8,400 9,961
Finance income 176 3,119 4,810
Finance costs (675) (380) (2,567)
------------ ------------ ------------
Loss before taxation (1,866) (32,279) (32,968)
Taxation 4 (5,032) (1,054) (9,686)
------------ ------------ ------------
Loss for the period (6,898) (33,333) (42,654)
Total comprehensive loss for
the period (6,898) (33,333) (42,654)
------------ ------------ ------------
Loss per share
Basic loss per share - cents 7 (8.82) (75.34) (73.05)
Diluted loss per share - cents 7 (8.82) (75.34) (73.05)
* See note 10 relating to the finalisation of the APR Group
acquisition fair values under IFRS 3 Business Combinations.
APR Energy plc
Condensed consolidated statement of financial position
As at 30 June 2012
Revised*
30 June 30 June 31 December
2012 2011 2011
$'000 $'000 $'000
Note (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Goodwill 10 547,069 547,069 547,069
Intangible assets 49,058 144,133 97,787
Property, plant and equipment 8 527,348 247,545 402,535
Capitalised financing costs - - 3,699
Deferred tax asset - 714 1,221
Other non-current assets 3,040 103 2,865
------------ ------------ ------------
Total non-current assets 1,126,515 939,564 1,055,176
Current assets
Derivative asset 1,215 - 2,258
Inventories 11,984 58 2,156
Trade and other receivables 52,371 28,455 40,673
Cash and cash equivalents 33,625 286,507 63,061
Deposits 56,890 13,605 27,666
------------ ------------ ------------
Total current assets 156,085 328,625 135,814
------------ ------------ ------------
Total assets 1,282,600 1,268,189 1,190,990
------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables 45,757 22,816 31,844
Income tax payable 3,897 2,222 3,001
Deferred revenue 5,186 16,083 10,479
Derivative liability - 197 -
Borrowings 9 4,473 72,340 -
Decommissioning provisions 12,492 9,865 17,902
------------ ------------ ------------
Total current liabilities 71,805 123,523 63,226
Non-current liabilities
Derivative liability 9,913 4,961 4,961
Deferred tax liability 2,793 2,163 2,939
Borrowings 9 94,299 7,258 -
Decommissioning provisions 2,832 1,404 161
------------ ------------ ------------
Total non-current liabilities 109,837 15,786 8,061
------------ ------------ ------------
Total liabilities 181,642 139,309 71,287
Equity
Share capital 12,620 12,696 12,696
Share premium 645,250 645,250 645,250
Other reserves 485,854 485,775 485,775
Equity reserves 1,739 781 1,795
Accumulated losses (44,505) (15,622) (25,813)
------------ ------------ ------------
Total equity 1,100,958 1,128,880 1,119,703
------------ ------------ ------------
Total liabilities and equity 1,282,600 1,268,189 1,190,990
------------ ------------ ------------
* See note 10 relating to the finalisation of the APR Group
acquisition fair values under IFRS 3 Business Combinations.
APR Energy plc
Condensed consolidated statement of changes in equity
For the six month period ended 30 June 2012
Share Share Other Equity Accumulated Total
capital premium reserves(1) reserves losses
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1
January
2011 6,579 629,914 - 433 (5,167) 631,759
-------- -------- ------------ --------- ------------ ----------
Loss for the
period - - - - (33,333) (33,333)
-------- -------- ------------ --------- ------------ ----------
Total
comprehensive
loss for the
period - - - - (33,333) (33,333)
Issued share
capital 6,117 15,336 - - - 21,453
Other reserves - - 485,775 - - 485,775
Credit to
accumulated
losses relating
to
Founder D
shares - - - - 22,878 22,878
Credit to equity
for
equity-settled
share-based
payment expense - - - 348 - 348
Balance at 30
June
2011
(Unaudited) 12,696 645,250 485,775 781 (15,622) 1,128,880
-------- -------- ------------ --------- ------------ ----------
Balance at 1
January
2012 12,696 645,250 485,775 1,795 (25,813) 1,119,703
-------- -------- ------------ --------- ------------ ----------
Loss for the
period - - - - (6,898) (6,898)
-------- -------- ------------ --------- ------------ ----------
Total
comprehensive
loss for the
period - - - - (6,898) (6,898)
Issued share
capital 3 - - (687) 687 3
Credit to equity
for
equity-settled
share-based
payment expense - - - 631 - 631
Redemption of
deferred
shares (79) - 79 - - -
Dividends - - - - (12,481) (12,481)
Balance at 30
June
2012
(Unaudited) 12,620 645,250 485,854 1,739 (44,505) 1,100,958
-------- -------- ------------ --------- ------------ ----------
(1) Other reserves arise mainly as a consequence of the
application of merger relief to the acquisition of APR Group in
2011.
APR Energy plc
Condensed consolidated cash flow statement
For the six month period ended 30 June 2012
Revised*
6 months 6 months 14 months
ended ended ended
30 June 30 June 31 December
2012 2011 2011
$'000 $'000 $'000
(Unaudited) (Unaudited) (Audited)
Cash flows from operating
activities
Loss for the period before
taxation (1,866) (32,279) (32,968)
Adjustments for:
Depreciation and amortisation 91,398 3,030 85,603
Loss on sale or disposal
of fixed assets 333 - 1,012
Provision for bad debt (1,468) - 1,943
Equity-settled share-based
payment expense 631 348 1,362
Founder shares and securities
revaluation 4,952 27,678 27,678
Loss/(gain) on derivative
instruments 1,044 197 (2,258)
Interest income (176) (3,119) (4,810)
Interest expense 675 380 2,567
Movements in working capital:
Increase in trade and other
receivables (10,539) (5,608) (18,809)
Increase in inventories (9,828) (58) (2,156)
Increase in other current
and non-current assets (375) (1,596) (2,248)
Increase/(decrease) in trade
and other payables 11,859 (16,719) (8,404)
Settlement of decommissioning
provisions (5,896) - (593)
(Decrease)/increase in other
liabilities (5,293) - 2,804
------------ ------------ ------------
75,451 (27,746) 50,723
Interest paid (1,182) (306) (2,224)
Interest received 176 3,119 4,810
Income taxes paid (3,576) (2,022) (9,605)
------------ ------------ ------------
Net cash from/(used in) operating
activities 70,869 (26,955) 43,704
Cash flows from investing
activities
Purchases of property, plant
and equipment (163,299) (3,278) (195,802)
Increase in deposits (28,201) (645) (16,044)
Acquisition of subsidiary
(net of cash acquired) - (329,084) (329,084)
------------ ------------ ------------
Net cash used in investing
activities (191,500) (333,007) (540,930)
Cash flows from financing
activities
Cash from borrowings 104,473 - 15,246
Repayment of borrowings - (821) (96,816)
Dividends paid (12,478) - -
Debt issuance costs (803) - (3,762)
Proceeds from the issue of
ordinary shares 3 - -
Proceeds from the issue of
deferred shares - 79 79
------------ ------------ ------------
Net cash from/(used in) financing
activities 91,195 (742) (85,253)
Net decrease in cash and
cash equivalents (29,436) (360,704) (582,479)
Cash and cash equivalents
at beginning of the period 63,061 647,211 645,540
------------ ------------
Cash and cash equivalents
at end of the period 33,625 286,507 63,061
------------ ------------ ------------
* See note 10 relating to the finalisation of the APR Group
acquisition fair values under IFRS 3 Business Combinations.
APR Energy plc
Notes to the condensed set of financial statements
1. General information
APR Energy plc ("the Company" and together with its
subsidiaries, "APR Energy" or "the Group") is incorporated in the
United Kingdom under the Companies Act. The address of the
registered office is 54 Baker Street, London, W1U 7BU, United
Kingdom.
This condensed set of financial statements was approved by the
Board of Directors on 29 August 2012.
The information for the 14 month period ended 31 December 2011
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. A copy of the statutory accounts for that
period has been delivered to the Registrar of Companies. The
auditors reported on those accounts: their report was unqualified,
did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
2. Accounting policies
Basis of preparation
The annual financial statements of APR Energy plc are prepared
in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International
Accounting Standard 34 Interim Financial Reporting, as adopted by
the European Union.
Going concern
The Directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report. The
Group's principal debt facilities (totalling $400.0 million) are
provided by a syndicate of banks under a revolving credit facility
and expire on 28 November 2016. The Group's forecasts and
projections show that the facilities in place currently are
anticipated to be sufficient for meeting the Group's operational
requirements. Accordingly, they continue to adopt the going concern
basis in preparing the condensed set of financial statements.
Changes in accounting policy
The same accounting policies, presentation and methods of
computation are followed in the condensed set of financial
statements as applied in the Group's latest annual audited
financial statements.
3. Segment reporting
Consistent with the Group's latest annual audited financial
statements, the Group continues to identify one operating segment
based on the financial information regularly provided to the chief
operating decision maker and the methods by which the chief
operating decision maker assesses the Group's performance and makes
decisions about resource allocation. As such, no segment reporting
is shown in this condensed set of financial statements.
4. Taxation
Tax for the 6 month period is charged at (270)% (6 months ended
30 June 2011: (3)%; 14 months ended 31 December 2011: (29)%),
representing the consolidated best estimate of the average annual
effective tax rate for each tax paying jurisdiction expected for
the full year, applied to the pre-tax income of the 6 month
period.
The Group is not taxable in certain jurisdictions where either
the jurisdictions do not impose an income tax or the entity is
treated as a flow-through entity for local country tax purposes.
The difference between the statutory income tax rate and the
effective tax rate is a result of withholding taxes and income
taxes in foreign jurisdictions.
5. Revenue
The following is an analysis of the Group's revenue from
continuing operations from its major products and services:
6 months 6 months 14 months
ended ended ended
30 June 30 June 31 December
2012 2011 2011
$'000 $'000 $'000
Lease revenues* 143,514 9,279 137,492
Power revenues 5,355 758 6,355
Fuel revenues 2,945 517 3,671
Other revenues 3,234 381 17,099
--------- --------- ------------
Total revenues 155,048 10,935 164,617
* Includes the lease revenue associated with the cessation of
133MW of the TEPCO contract.
6. Dividends
The Company's shareholders approved a final dividend for the 14
month period ended 31 December 2011 of 10 pence per ordinary share
at the Annual General Meeting on 24 May 2012. This amount was paid
on 29 May 2012 to shareholders on the register of members of the
Company on 2 May 2012.
The Board declared an interim 2012 dividend of 3.3 pence per
ordinary share in the half year to 30 June 2012. This interim
dividend will be paid on 27 November 2012 to shareholders on the
register of members of the Company as at 2 November 2012, with an
ex-dividend date of 31 October 2012.
7. Loss per share from continuing operations
The calculation of the basic and diluted loss per ordinary share
is based on the following data:
6 months 6 months 14 months
ended ended ended
30 June 30 June 31 December
2012 2011 2011
Loss for the purposes of basic and
diluted loss per share being net
loss attributable to the owners
of the Company ($'000) (6,898) (33,333) (42,654)
Weighted average number of ordinary
shares for the purpose of basic
and diluted loss per share(1) (number
of shares) 78,223,296 44,243,317 58,391,446
Loss per ordinary share
Basic and diluted loss per share
(cents) (8.82) (75.34) (73.05)
(1) Share options and Founder shares are considered
anti-dilutive for the periods ended 30 June 2012, 30 June 2011 and
31 December 2011 as the inclusion of these securities would reduce
the loss per share. Potentially dilutive ordinary shares for the
period ended 30 June 2012 were nil (6 months ended 30 June 2011:
nil; 14 months ended 31 December 2011: nil). The Founder shares are
also not considered to be potentially dilutive as the associated
performance conditions had not been met at 30 June 2012.
8. Property, plant and equipment
Machinery Mobilisation Demobilisation Other Total
and equipment equipment
$'000 $'000 $'000 $'000 $'000
Cost:
At 31 October
2010 - - - - -
Additions on
acquisition
of
subsidiaries,
net
book value 223,809 18,485 1,235 1,006 244,535
Additions 161,789 19,243 16,441 429 197,902
Disposals (2,130) - (782) - (2,912)
--------------- ------------- --------------- ----------- --------
At 31 December
2011 383,468 37,728 16,894 1,435 439,525
Additions 147,066 16,794 2,956 999 167,815
Disposals (656) - - 3 (653)
--------------- ------------- --------------- ----------- --------
At 30 June 2012 529,878 54,522 19,850 2,437 606,687
--------------- ------------- --------------- ----------- --------
Accumulated
depreciation:
At 31 October
2010 - - - - -
Charge for the
period 16,535 10,144 12,031 180 38,890
Disposals (1,118) - (782) - (1,900)
--------------- ------------- --------------- ----------- --------
At 31 December
2011 15,417 10,144 11,249 180 36,990
Charge for the
period 19,255 18,524 4,654 236 42,669
Disposals (323) - - 3 (320)
--------------- ------------- --------------- ----------- --------
At 30 June 2012 34,349 28,668 15,903 419 79,339
--------------- ------------- --------------- ----------- --------
Net book value:
30 June 2012 495,529 25,854 3,947 2,018 527,348
31 December
2011 368,051 27,584 5,645 1,255 402,535
As of 30 June 2012, the Group's commitments related to the
purchase of property, plant and equipment was $127.7 million (31
December 2011: $29.0 million).
9. Borrowings
Additional loans of $100.0 million were drawn down under the
Group's existing loan facility partly to fund the additions to
property, plant and equipment. An additional $4.5 million loan was
secured outside the loan facility, which has subsequently been
repaid in July 2012.
As previously disclosed, the Group's principal debt facilities
(totalling $400.0 million) are provided by a syndicate of banks
under a revolving credit facility and expire on 28 November
2016.
10. Acquisition accounting
On 13 June 2011, the Group acquired 100% of the issued share
capital and obtained control of the following companies (comprising
the "APR Group"):
-- APR Energy Cayman Limited, and its subsidiaries and branches;
o APR International LLC,
o APR Energy LLC,
o APR LLC,
o APR Energy SRL Argentina Company,
o SRL Costa Rica Company,
o APR Ecuador,
o APR Energy LLC Sucursal del Peru,
o APR Energy II LLC,
o APR Energy III LLC; and
-- Falconbridge Services LLC and its subsidiary First Coast Travel International LLC.
The provisional and revised amounts recognised in respect of the
identifiable assets acquired and liabilities assumed are as set out
in the table below:
Provisional
fair value
as previously Fair value Fair value
reported adjustments as revised
$'000 $'000 $'000
Cash and cash equivalents 30,182 - 30,182
Deposits 13,014 - 13,014
Accounts receivable 17,883 (229) 17,654
Other assets 5,117 (1,124) 3,993
Property, plant and equipment
(including mobilisation and
installation) 249,042 (4,507) 244,535
Identifiable intangible assets 144,200 300 144,500
Trade and other payables (37,556) (463) (38,019)
Decommissioning provisions (8,874) - (8,874)
Other liabilities (22,854) - (22,854)
Borrowings (80,993) - (80,993)
--------------- ------------- ------------
Total identifiable assets 309,161 (6,023) 303,138
Goodwill 541,046 6,023 547,069
--------------- ------------- ------------
Total consideration 850,207 - 850,207
Satisfied by:
Cash 359,266
Equity instruments (31,841,071 ordinary
shares of the Company) 490,941
------------
Total consideration 850,207
The revised goodwill of $547.1 million arising from the
acquisition is reflective of the recent track record of APR Group
and expected strong growth prospects. None of the goodwill is
expected to be deductible for income tax purposes.
The fair value of the 31,841,071 ordinary shares issued as part
of the consideration paid for the APR Group of $490.9 million was
determined on the basis of the share price as at 13 June 2011,
being the date the subsidiary was acquired.
10. Acquisition accounting (continued)
Acquisition-related costs (included in administrative expenses)
amounted to $16.5 million. These costs were primarily related to
legal and professional fees and early termination fee of the
operator's fees.
The APR Group contributed $164.6 million revenue and $6.6
million to the Group's loss for the period between the date of
acquisition and the balance sheet date.
If the acquisition of the APR Group had been completed on the
first day of the financial period (1 November 2010), Group revenues
for the period would have been $236.5 million and loss would have
been $55.2 million.
Fair value adjustments
The provisional fair value of identifiable assets and
liabilities were finalised during 2012 to reflect additional
information which became available concerning conditions that
existed at the date of acquisition, in accordance with IFRS 3
Business Combinations.
The changes in fair values have arisen mainly as a result of the
finalisation of the fair value of certain items of machinery and
equipment and the expected recoverability of the deferred tax
asset. A reduction in depreciation ($0.1 million) has been offset
by an increase in the amortisation of the intangible assets ($0.2
million) and the taxation expense ($1.2 million) in the 14 month
period to 31 December 2011, which have arisen following the above
fair value changes and have been reflected in the revised
comparative financial statements.
11. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
JCLA Holdings LLC, a company related by common control by the
CEO and COO, received $85.5 million in 2011 on completion of the
acquisition.
Consulting services from JCLA Holdings LLC (and its
subsidiaries) were incurred by the Group during the period
presented. These consulting services were made at an arm's length
market price. The total expense for the period was $0.1 million (6
months ended 30 June 2011: $0.2 million; 14 months ended 31
December 2011: $0.3 million). The services rendered were all paid
in cash. No guarantees have been given or received.
EJJ LLC is a related party due to its owner being the CEO of APR
Energy plc.
EJJ LLC provides travel arrangement services to the Group. These
services were made at an arm's length market price. The total
expense for the period was $nil (6 months ended 30 June 2011: $nil;
14 months ended 31 December 2011: $0.2 million). The services
rendered were all paid in cash. No guarantees have been given or
received.
JCLA Developments II LLC is a company related by common control
by the CEO and COO.
JCLA Developments II LLC rents office space to the Group. These
rental services were made at an arm's length market price. The
total expense for the period was $0.1 million (6 months ended 30
June 2011: $nil; 14 months ended 31 December 2011: $nil). The
services rendered were all paid in cash. No guarantees have been
given or received.
At 30 June 2012, JCLA Holdings LLC owed $nil to the Group due to
expenses being paid by the Group (31 December 2011: $0.4 million,
30 June 2011: $nil).
Key financial definitions:
Pro forma EBITDA
Operating profit adjusted to add back depreciation of property,
plant and equipment, equity-settled share-based payment expense,
amortisation of intangible assets, founder shares and securities
revaluation and exceptional items. Exceptional items are those
items believed to be exceptional in nature by virtue of size and/or
incidence.
Pro forma EBITDA margin
Pro forma EBITDA divided by pro forma revenue.
Pro forma earnings per share
Pro forma net income divided by the weighted average number of
ordinary shares. Pro forma net income is net income adjusted to add
back exceptional items. Exceptional items are those items believed
to be exceptional in nature by virtue of size and/or incidence.
Pro forma ROCE (return on capital employed)
Operating profit for the previous twelve months adjusted to add
back amortisation of intangible assets, founder shares and
securities revaluation and exceptional items divided by the average
of the net operating assets at the previous three balance sheet
dates (for 30 June 2012 this comprises the 30 June 2012, 31
December 2011 and 30 June 2011 and for 31 December 2011 this
comprises the 31 December 2011, 30 June 2011 and 31 December 2010).
"Net operating assets" is defined as total equity adjusted to
exclude goodwill, intangible assets, borrowings, deferred tax
assets and liabilities and current tax assets and liabilities.
Reconciliations of reported results to pro forma results
6 month period to 30 June 2012
Operating
Revenue Profit Net Income
$m $m $m
-------- ---------- -----------
Results as reported 155.0 (0.8) (6.9)
Amortisation of acquired intangible
assets - 48.7 48.7
Founder shares and securities
revaluation - 5.0 5.0
-------- ---------- -----------
Pro forma results 155.0 52.8 46.8
-------------------------------------- -------- ---------- -----------
6 month period to 30 June 2011
Operating
Revenue Profit Net Income
$m $m $m
-------- ---------- -----------
Results as reported 10.9 (43.4) (33.3)
APR Group pre-acquisition date
activity 48.2 (0.2) (8.8)
Horizon pre-acquisition date
activity - 0.5 (2.5)
Amortisation of acquired intangible
assets - 0.4 0.4
Transaction costs - 30.7 30.7
Founder shares and securities
revaluation - 27.7 27.7
Foreign exchange gain on GBP
sterling cash balances held - - (8.5)
-------- ---------- -----------
Pro forma results 59.1 15.7 5.7
-------------------------------------- -------- ---------- -----------
14 month period to 31 December
2011 - revised
Operating
Revenue Profit Net Income
$m $m $m
-------- ---------- -----------
Results as reported 164.6 (45.2) (42.7)
APR Group pre-acquisition date
activity 48.2 (0.2) (8.8)
Horizon pre-acquisition date
activity - 0.9 (3.3)
Amortisation of acquired intangible
assets - 46.7 46.7
Transaction costs - 30.7 30.7
Founder shares and securities
revaluation - 27.7 27.7
Foreign exchange gain on GBP
sterling cash balances held - - (9.9)
-------- ---------- -----------
Pro forma results 212.8 60.6 40.4
-------------------------------------- -------- ---------- -----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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