TIDMAPR
RNS Number : 0608Q
APR Energy PLC
27 August 2014
27 August 2014
APR Energy plc
Results for the half-year ended 30 June 2014
Continued progress across each of our key priorities, further
positioning the Group
for sustainable future growth
-- Revenue up 192% to $254 million (H1 2013: $87 million)
reflecting strong financial and operational performance and
inclusion of the acquired GE Power Rental Business
-- Adjusted EBITDA margin up 6 points to 56% (H1 2013: 50%)
notwithstanding the rising cost of effective risk management in
some emerging markets due to geopolitical conditions
-- Significant advancements in fleet maintenance programme
driving $9 million lower depreciation charge in the period
-- Record contract renewals of 1,206MW year to date, with a
renewal success rate in excess of 90%
-- Average utilisation up 11 points to 77% for the period (H1
2013: 66%); fleet capacity increasing 37% to 2,194MW (H1 2013:
1,607MW)
-- Completion of new five-year $770 million credit facility,
providing increased liquidity and greater flexibility at a lower
cost
-- Post period end, renewal of the Libyan 450MW contract through
first quarter 2015 on similar terms to the original contract and,
as announced today, the signing of a contract in Australia for a
power plant comprising four mobile gas turbines, to run through
first quarter 2017
-- Effective immediately, Mike Fairey, Chairman, steps down from
the Board, John Campion appointed Executive Chairman, Laurence
Anderson appointed Chief Executive Officer and Lee Munro appointed
Chief Financial Officer
APR Energy plc (LSE: APR) (the "Company" and together with its
subsidiaries, "APR Energy" or the "Group"), a global leader in
fast-track power solutions, announces its results for the half-year
ended 30 June 2014.
Reported Reported Adjusted(1) Adjusted(1)
$ million unless otherwise H1 2014 H1 2013 H1 2014 H1 2013
stated
Revenue 254.2 87.2 254.2 87.2
Operating profit 54.7 0.4 71.9 5.2
Profit/(loss) before
taxation 54.3 (16.1) 59.1 (3.1)
Profit/(loss) for the
period 47.2 (11.8) 52.0 1.1
Basic earnings per share
($) $0.50 ($0.15) $0.55 $0.01
Adjusted EBITDA - - 141.7 43.7
Adjusted EBITDA margin
(%) - - 56% 50%
Adjusted ROCE (%) - - 12% 3%
Laurence Anderson, Chief Executive Officer, said:
"Overall it has been a solid period for the Group with strong
year on year growth. Our focus on contract renewals has paid off,
as illustrated by our 90% contract renewal rate and the extension
of our contracts in both Libya and Uruguay. We are also very
pleased with our recent announcement of a four-turbine power plant
with a large utility in Western Australia, which further
diversifies our project portfolio. We continue to see many
opportunities in both emerging and developed markets across the
world to deploy semi-permanent power solutions although, as ever,
the timing of large scale power projects will remain difficult to
predict."
(1) The Group uses adjusted financial information in managing
the business and evaluating the Group's underlying performance. The
Group adjusts for certain items including amortisation of
intangibles, founder securities revaluation movements and
integration and acquisition related costs. A reconciliation to
their statutory equivalents is available in the Financial Review on
page 7.
Enquiries:
APR Energy plc
Karen Menzel +44 (0) 777 590 6076
Capital MSL
Richard Campbell +44 (0) 20 3219 8800 / +44 (0) 7775 784 933
Richard Gotla +44 (0) 20 3219 8819 / +44 (0) 7904 122 207
Webcast and Conference call details
An analyst presentation will be held this morning at 9.30 am at
The Lincoln Centre, 18 Lincoln's Inn Fields,
London, WC2A 3ED.
A webcast will be available on the APR Energy website:
www.aprenergy.com
A conference call can be accessed via:
Conference call: 'APR Energy'
UK Toll Free: +44 (0)808 109 0700
US Toll Free: +1 866 966 5335
International: +44 20 3003 2666 or +1 212 999 6659
Lines will open 15 minutes prior to the event.
About APR Energy
APR Energy is the world's leading fast-track mobile turbine
power business. We provide large-scale, fast-track power, providing
customerswith rapid access to reliable electricity when and where
they need it. APR combines state-of-the-art, fuel-efficient
technology with industry-leading expertise to provide turnkey power
plants that are rapidly deployed, customisable and scalable.
Serving both utility and industrial segments, APR Energy provides
power generation solutions to customers and communities around the
world, with an emphasis on Africa, the Americas, Asia-Pacific and
the Middle East. For more information, visit the Company's website
at www.aprenergy.com.
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.
Interim Management Review
The first half of 2014 has been a period of significant
development as we further position the Group for sustainable future
growth. We continue to execute upon our strategy, focusing on the
development of high-value, larger and longer-term power projects,
expanding our footprint in our priority regions and diversifying
our risk with new opportunities in developed markets. We remain
focused on using mobile gas turbines as a key competitive
differentiator and as a means of expanding our available market
opportunity, particularly with large utilities, power-intensive
industries and natural gas opportunities. We have continued to
invest in our people, processes and systems, further developing our
core competencies, increasing our global responsiveness and driving
continuous operational improvements. The Group's strong
performance, successful track record of renewals and leadership in
fast-track power generation are testament to the successful
execution of our strategic initiatives.
Key priorities for the year
Our priorities for 2014 have been securing key contract
renewals, transferring the GE contracts that are due for renewal
onto more favourable terms or redeploying these assets, developing
opportunities through our partnership with GE and continuing to
deliver an improved financial and operational performance. The
success that we have achieved in each of these areas reflects
positively on our half year results.
Key accomplishments
With a sustained renewal rate exceeding 90% year to date, our
efforts are paying off and reflect the inherent longevity of our
service and our successful focus on renewals. Year to date, APR
Energy has signed 262MW of new contracts, together with contract
extensions of 1,206MW. This includes the renewal of the first 100MW
tranche of the 300MW Uruguay mobile gas turbine contract. Extended
until late 2014, the tranche is now aligned with the renewal dates
of the remaining 200MW of the contract. Other renewals during the
period include key contracts in Argentina, Indonesia, Mali and
Senegal. Post period, we have extended our 450MW Libyan contract,
comprising both the 250MW mobile gas turbine project and the 200MW
diesel power module project, through the first quarter of 2015.
These renewals reflect the strong long-term relationships we have
built with these customers and their preference for mobile gas
turbines to deliver large-scale, semi-permanent power.
During the first half, we have successfully commissioned new
mobile gas turbine power plants in Angola and the South Pacific, as
well as a gas power module plant in Myanmar. At the end of the
period, the Group commenced demobilisation of its mobile gas
turbine contract in Bangladesh, freeing the units for placement
into higher-value contracts.
Following the acquisition of the GE Power Rental Business, and
in anticipation of the timing of scheduled maintenance of our young
diesel power module fleet, we have significantly enhanced our
planned fleet maintenance programme. During the period, we have
aligned our approach with the standard industry practice as
utilised by our OEM partners, resulting in improved financial
returns through significant operational efficiencies on maintenance
activities and an enhanced fleet. These improvements are expected
to realise an ongoing sustainable benefit to the Group, with
reduced depreciation charges and a better maintenance regime going
forward, as discussed further in the financial section that
follows.
Following period end, we have contracted directly with Horizon
Power, a large state-owned utility, serving Western Australia, a
region with growing power demand and the hub of Australia's
extractive industry. The four-turbine plant will run for a term of
at least 30 months and will serve as a bridging solution until a
permanent power plant is developed. This project aligns with our
goal of diversifying our operational footprint with projects in
developed markets and exemplifies the strong solution that mobile
turbines provide for these customers.
H1 2014 financial performance
Through a combination of strong renewals and contract wins over
the past six months and successful project execution, we have
delivered strong operational and financial performance for the
first half of 2014.
Average utilisation across the first half remained strong, up 11
points to 77% (H1 2013: 66%). Period end utilisation of 70%
reflects the timing of the demobilisation of the Bangladesh
contract, fleet expansion during the period and the termination of
the original Australian contract with Forge. That contract has
since been renegotiated and signed, post period end, directly with
the end-user utility, Horizon Power.
At the period end, total fleet capacity increased 37% to 2,194MW
since 30 June 2013 (1,607MW). Fleet capital expenditure of $139
million (H1 2013: $245 million) reflects continued fleet
investment, including the ongoing maintenance of the enlarged fleet
and essential equipment to support the three commissioned power
plants in Myanmar, Angola and the South Pacific. The capital
expenditure also reflects an increase of 120MW of mobile gas
turbine capacity and associated balance of plant, and positions the
Group to take advantage of new large-scale opportunities.
Revenue increased nearly three-fold to $254 million (H1 2013:
$87 million), driven by significantly higher activity from new
contracts, contract extensions and high utilisation levels on an
enlarged fleet following the commissioning of a number of
significant contracts during the second half of 2013. Revenue
included $43m (H1 2013: $nil) from the GE business post
acquisition, including $13.5 million arising from the Australian
contract.
Adjusted EBITDA increased to $142 million (H1 2013: $44
million), resulting in an increased adjusted EBITDA margin of 56%
(H1 2013: 50%). This was driven by the contribution from
large-scale projects, including Libya and Uruguay and the acquired
GE business, partly offset by higher costs associated with
operating in markets facing increased geopolitical conditions and
newly emerging markets.
During the period, the Group has reassessed the fleet
maintenance programmes to align with standard practice as utilised
by mature industrial companies and also to reflect the maturing of
the business' capabilities following the acquisition of the GE
Power Rental Business in October 2013. This has resulted in
enhanced economics and operational efficiencies on maintenance
activities and as required by IAS 16, the residual values of the
diesel power modules and mobile gas turbines have been reviewed and
amended to better match these economics. This change in estimate
has led to a reduction in fleet depreciation of $9.1 million during
the period, which is accounted for prospectively from 1 January
2014, and is a sustainable benefit to the Group, which will
continue to be recognised throughout future periods.
Adjusted operating profit increased to $72 million (H1 2013: $5
million), reflecting the higher revenue and higher selling, general
and administrative expenses resulting from the Group's strong
growth, expanded market presence and lower depreciation charge.
Adjusted basic earnings per share was 55 cents (H1 2013: 1
cent), based on a weighted average number of shares of 94.3 million
(H1 2013: 78.2 million shares). The increase in shares reflects the
15.5 million shares issued to GE at the end of October 2013.
Adjusted return on capital employed increased to 12% (H1 2013:
3%) driven by the significant increase in adjusted operating
profit, the timing of capacity growth and improved utilisation.
The Group's cash flow reflected continued investments in the
fleet and mobilisation costs arising from projects commencing
operations during the first half. Net cash flow from operating
activities totalled $144 million (H1 2013: $40 million) reflecting
significantly higher activity during the period, with enhanced
working capital management and the collection of Libyan
receivables. As a result, the Group maintained a good financial
position, with period end net debt of $518 million (31 December
2013: $556 million) excluding capitalised financing fees.
Post period end, the Group completed a new five-year, $770
million facility, with an accordion feature to enable additional
financing up to $1 billion. The facility strengthens the Group's
financial position, while providing significantly greater
flexibility, additional capacity for growth and improved liquidity
to manage through our business cycle, at a lower cost.
Continued progress across our global portfolio
With nearly 20% of the world's population still without access
to electricity, the need for large-scale, fast-track power remains
strong. The underlying factors contributing to this need have not
changed, and we expect the supply/demand gap to only grow. We
aggressively pursue this opportunity by taking a proactive approach
to anticipating opportunities before they emerge, extending our
reach within our target markets and developing strong relationships
with potential customers.During the period we have experienced
significant activity in each of our key regions.
Europe, the Middle East and Africa
In less than two years, we have more than doubled our footprint
across Africa, including major plant additions in Libya and Angola,
and a cross-border agreement with Mali. Our new 40MW power plant in
Angola commenced operations. It is one of the first-ever
semi-permanent mobile turbine projects in Sub-Saharan Africa and
APR Energy's first turbine deal following the GE strategic
alliance. Angola represents another example of APR Energy's ability
to both extend and expand contracts in strategic markets. In this
case extending our original diesel power module contract and
doubling our capacity to 80MW through the execution of the mobile
turbine plant. Through this approach, we have established a strong
platform from which we can expand further our market for mobile
turbine generation solutions across the region.
A key renewal during the first half was the first extension of
the 200MW diesel power module project in Libya through the summer.
Post period end, we announced a further extension of the Libyan
contract, comprising both the 250MW mobile gas turbine project and
the 200MW diesel power module project, through the first quarter of
2015. This 450MW solution continues to provide power to more than
one million homes and helps meet demand during the critical summer
high heat season, as well as provide interim power while the
country continues to rebuild and improve its ageing infrastructure.
Notwithstanding our sizeable power contribution, across six sites,
Libya continues to face a chronic and growing structural power
deficit, requiring significant long-term investment to address.
Other key renewals in the region included contracts in Angola, Mali
and Senegal.
Asia Pacific
APR Energy has enjoyed rapid growth in the Asia Pacific region,
growing its presence into Myanmar, the South Pacific, Australia and
across multiple sites in Indonesia. These new projects, together
with renewals in Indonesia, demonstrate the rapid growth we have
experienced in the region and bring the Group's generation capacity
in Asia Pacific to 410MW.
During the first half, the Group successfully commissioned two
new power plants in the region, including the landmark 82MW
contract in Myanmar, with generation capacity to deliver up to
100MW. The plant, featuring our gas power modules, commenced
operations in May and runs on the country's indigenous
clean-burning natural gas. It is one of the largest thermal plants
in the country, providing power to more than six million
people.
The Group commenced operations on its largest industrial
contract to date, a 60MW mobile gas turbine plant in the South
Pacific, supplying electricity for our customer's critical mining
operations. The mobile turbine technology was the customer's
preferred solution, meeting strict EU emissions requirements and
able to fit within the challenging space constraints at the mine
site. This project adds to APR Energy's track record in the
extractive industry sector, which includes power projects in
Mozambique, Guatemala and Botswana. It also demonstrates that
mobile gas turbine technology is attractive to not only utilities,
but to industrial customers as well. We continue to see great
potential with extractive industries and will leverage our current
success to capture new future opportunities in the sector.
In Australia, our customer acquired through the GE acquisition
filed for protection from its creditors. The Group generated
revenue of $13.5 million from the termination of this contract,
which was enforced by drawing the related letter of credit, thus
ensuring no adverse impact to the Group's 2014 net income from this
contract, as detailed in notes 4, 7 and 13. The Administrators and
Receivers are claiming title in respect of the dual-fuel turbines
being used in this contract, a claim which the Group disagrees with
and will vigorously contest. We have an agreement with the
Administrators and Receivers for free and clear use of these
assets. Today, we have announced the signing of a new four-turbine,
gas-fired power plant directly with the end-user, Horizon Power,
leveraging the plant, equipment and infrastructure already in place
from the original GE contract. The power plant will run for a term
of at least 30 months, serving as a bridging solution until a
permanent power plant is developed and operational in early 2017.
The plant has been designed for extreme conditions in Western
Australia,
where temperatures can reach 48 degrees Celsius in the summer,
and can be rapidly expanded as capacity requirements grow.
The Americas
APR Energy operates multiple sites in Uruguay and Argentina, in
addition to plants in the US Virgin Islands and Guatemala. In
Uruguay, we renewed the first 100MW tranche of the 300MW Uruguay
mobile gas turbine contract at the Punta Del Tigre site. Extended
until late 2014, this tranche is now aligned with the renewal dates
of the remaining 200MW of the contract. Contracts in Argentina and
Guatemala were also renewed during the period.
Building a solid foundation for the future
APR Energy is a pure-play power generation company with a clear
focus on delivering complex power solutions for our customers, on a
rapid basis, often in challenging parts of the world. As the Group
continues growing into a truly global and mature business with
significant growth opportunities, it is imperative that we have the
underlying systems, processes and partnerships necessary to support
our regional and corporate growth objectives and achieve our
vision.
As a maturing business, we will continue to make a significant
investment in our people, systems, tools and processes to ensure we
have the foundation needed to support sustained growth and our
ever-expanding global footprint. This investment will enable us to
provide improved and streamlined ways to serve our customers, drive
efficiency, track KPIs and support the Group globally.
Our people remain our strongest asset. We continue to invest in
our people, recruiting and developing talent across all key areas
of our business. In doing so, we ensure that we have the skills and
leadership in place to support our growth initiatives and
effectively execute our strategy at a global level.
Opportunities often take us to challenging parts of the world,
including countries that experience political, social, economic and
security instability. The safety of our people remains our top
concern and in light of events in Libya, we undertook a full review
of our operating protocols to ensure that our people are safe and
that our operations continue to run as normal, and in the event we
do need to move people and equipment, we have detailed and tested
contingency plans in place.
As contracts become larger, longer and more complex, we
recognise the need for ever more rigorous risk assessment and
mitigation. We are committed to creating a safe and secure working
environment for our people, while ensuring the security of our
physical assets and surety of payment. We are proactive through our
contract due diligence to address these issues through a variety of
mitigating actions, including the purchasing of insurance, bonds,
guarantees, and cash advances to protect both our financial and
operational assets. To mitigate significant receivable risks, we
also enter into enhanced credit structures, which through the use
of letters of credit, guarantee customer payment. The cost of
effective risk management in frontier and sometimes challenging
markets is often higher than developed markets and, with the
Group's increasing geographical diversification, we believe these
essential, albeit higher, operating costs are a key element of the
Group's risk management strategy.
Our extension of the full 450MW Libyan contract, together with
the first 100MW tranche in Uruguay, positions us well. The strong
presence and track record we have achieved in regions such as South
East Asia and Sub-Saharan Africa provide us with a solid platform
for further expansion with new and existing customers.
Our new facility provides us with the funding, flexibility and
liquidity to manage through our business cycles and invest in our
business infrastructure. Our expanded fleet provides us with a
solid foundation to grow and will enable us to capture new
large-scale power project opportunities in the pipeline.
We see attractive opportunities in each of our key markets and
are working hard to convert our considerable pipeline of
opportunities. With larger-scale projects, the lead time from
initial discussions to contract award can be lengthy and the
precise timing of such opportunities reaching a successful
conclusion is often difficult to predict. The Group's partnership
with GE continues to mature, and will further enhance our ability
to execute our turbine strategy in our chosen markets.
APR Energy's proven track record of delivering a strong,
reliable and repeatable platform positions us well to secure future
larger, longer and more complex contracts. We have made significant
progress in recent years, building advanced and scalable
capabilities to meet our customers' needs. This success is
demonstrated across each aspect of our performance this year and is
exemplified further by our ability to commission successfully three
power plants, simultaneously, across diverse geographies within a
few weeks of each other.
Outlook
The Group's financial performance during the first half
represents significant progress, with achievements across each of
our key Group priorities
While we have continued to see significant revenue growth in the
period, the Group faces some headwinds going into the second half
of the year as a result of the cost of effective risk management in
some emerging market contracts due to geopolitical conditions.
We continue to actively focus on securing a number of
longer-term, larger-scale power projects which are in the pipeline,
although as these projects typically have a longer development
cycle, the precise timing of customer decision making and award
remains difficult to predict.
Despite these challenges, the Board remains confident of strong
year-on-year growth for 2014.
Financial Review
Reported Reported Adjusted(1) Adjusted(1)
H1 2014 H1 2013 H1 2014 H1 2013
$ million (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------------------- ------------ ------------ ------------ ------------
Revenue 254.2 87.2 254.2 87.2
Cost of sales (160.9) (64.5) (160.9) (64.5)
Amortisation of intangible
assets (17.2) (4.8) - -
------------------------------------- ------------ ------------ ------------ ------------
Gross profit 76.1 17.9 93.3 22.7
Selling, general and administrative
expenses (21.4) (17.5) (21.4) (17.5)
------------------------------------- ------------ ------------ ------------ ------------
Operating profit 54.7 0.4 71.9 5.2
Integration and acquisition
related costs (2.2) - - -
Founder securities revaluation 17.5 (8.2) - -
Foreign exchange loss (0.2) - (0.2) -
Finance income 0.7 0.2 0.7 0.2
Finance costs (16.2) (8.5) (13.3) (8.5)
------------------------------------- ------------ ------------ ------------ ------------
Profit/(loss) before taxation 54.3 (16.1) 59.1 (3.1)
Taxation (7.1) 4.3 (7.1) 4.3
------------------------------------- ------------ ------------ ------------ ------------
Profit/(loss) for the period 47.2 (11.8) 52.0 1.1
------------------------------------- ------------
Total comprehensive profit/(loss)
for the period 47.2 (11.8) 52.0 1.1
------------------------------------- ------------ ------------ ------------ ------------
Earnings per share
------------------------------ ------ -------- ------ ------
Basic earnings per share ($) $0.50 ($0.15) $0.55 $0.01
Diluted earnings per share
($) $0.49 ($0.15) $0.54 $0.01
------------------------------ ------ -------- ------ ------
Average utilisation across the first half remained strong at 77%
(H1 2013: 66%) representing management's focus on delivering an
improved operating performance and the Group's success in securing
new contract wins and renewals, notwithstanding significant fleet
expansion. Period end utilisation of 70% reflects the timing of the
demobilisation of the Bangladesh contract, fleet expansion during
the period and the termination of the original Australian contract
with Forge. That contract has post period end been contracted
directly with the Australian utility.
At the period end, total fleet capacity increased 37% to 2,194MW
since 30 June 2013 (1,607MW).
Adjusted financial results and performance review
To provide investors with greater clarity on the performance of
the Group and to adjust for non-operational fair value movements
and non-recurring integration and acquisition related costs,
adjusted unaudited financial information has been prepared to show
the results for the Group, excluding certain items: amortisation of
intangibles, founder securities revaluation movements, and GE
related integration and acquisition costs and acquisition related
finance costs.
(1) The Group uses adjusted financial information in managing
the business and evaluating the Group's underlying performance. The
Group adjusts for certain items including amortisation of
intangibles, founder securities revaluation movements, integration
and acquisition related costs. A reconciliation to their statutory
equivalents is available within this Financial Review.
The adjusted unaudited financial information has been prepared
as follows:
Revenue Operating Profit
profit for the
$ million period
-------------------------------------- -------- ---------- ---------
6 month statutory results to 30 June
2014 254.2 54.7 47.2
Amortisation of intangible assets - 17.2 17.2
Founder securities revaluation - - (17.5)
Integration and acquisition related
costs - - 2.2
Acquisition related finance costs - - 2.9
6 month adjusted results to 30 June
2014 254.2 71.9 52.0
-------------------------------------- -------- ---------- ---------
Revenue Operating Profit
profit for the
$ million period
------------------------------------------ -------- ---------- ---------
6 month statutory results to 30 June
2013 87.2 0.4 (11.8)
Amortisation of intangible assets - 4.8 4.8
Founder securities revaluation - - 8.2
6 month adjusted results to 30 June 2013 87.2 5.2 1.1
------------------------------------------ -------- ---------- ---------
Reconciliation of adjusted operating profit to adjusted
EBITDA:
Adjusted Adjusted
$ million H1 2014 H1 2013
-------------------------------------------- --------- ---------
Adjusted operating profit 71.9 5.2
Depreciation 66.4 35.8
Equity-settled share-based payment expense 3.4 2.7
-------------------------------------------- --------- ---------
Adjusted EBITDA 141.7 43.7
-------------------------------------------- --------- ---------
Revenues for the first half increased nearly three-fold to
$254.2 million (H1 2013: $87.2 million) driven by significantly
higher activity reflected in new contracts, contract extensions and
high utilisation levels on an enlarged fleet, following the
commissioning of a number of significant contracts during the
second half of 2013. Revenue included $43 million (H1 2013: $nil)
from the GE business post acquisition including $13.5 million
(2013: $nil) in respect of the Australian contract, including the
letter of credit drawn during the second quarter.
During the period, the Group has reassessed the fleet
maintenance programmes to align with standard practice as utilised
by mature industrial companies and also to reflect the maturing of
the business' capabilities following the acquisition of the GE
Power Rental Business in October 2013. This has resulted in
enhanced economics and operational efficiencies on maintenance
activities and as required by IAS 16, the residual values of the
diesel power modules and mobile gas turbines have been reviewed and
amended to match better these cash flows and the new information
available. This change in estimate has led to a reduction in fleet
depreciation of $9.1 million during the period, which has been
accounted for prospectively from 1 January 2014, and is a
sustainable benefit to the Group, which will continue to be
recognised throughout future periods.
Effect of the change in estimates on depreciation and adjusted
operating profit:
Pre change Post change
Adjusted Adjusted
$ million H1 2014 H1 2014
------------------------------------ ----------- ------------
Adjusted operating profit 62.8 71.9
Depreciation 75.5 66.4
Equity-settled share-based payment
expense 3.4 3.4
------------------------------------ ----------- ------------
Adjusted EBITDA 141.7 141.7
------------------------------------ ----------- ------------
Adjusted operating profit increased to $71.9 million (H1 2013:
$5.2 million) reflecting the higher revenue and lower depreciation
charge, notwithstanding higher selling, general and administrative
expenses which reflects the Group's growth.
Adjusted net interest expense for the first half was $12.6
million (H1 2013: $8.3 million) reflecting drawings made on the
enlarged credit facility as part of the purchase of fleet capital
expenditure, the timing of receivables and the $150 million
term-loan drawn down in May 2013. This excludes the cash
consideration for the GE acquisition and fees associated with the
additional $100 million term-loan.
The tax charge on an adjusted basis was $7.1 million (H1 2013:
credit of $4.3 million), reflecting an effective tax rate on
adjusted profit before tax of 13% (H1 2013: 26%). The decrease in
the effective tax rate primarily reflects the current geographical
portfolio mix of operations.
Adjusted profit for the first half was $52.0 million (H1 2013:
$1.1 million) reflecting the increased adjusted operating profit,
partly offset by the higher adjusted net interest expense.
Adjusted basic earnings per share were $0.55 (H1 2013: $0.01)
based on a weighted average number of shares of 94.3 million (H1
2013: 78.2 million shares) due to the issuance of 15.5 million
shares in connection with the acquisition of the GE Power Rental
Business. Adjusted diluted earnings per share were $0.54 (H1 2013:
$0.01) based on a weighted average number of shares of 95.5 million
(H1 2013: 78.2 million shares).
Adjusted EBITDA increased more than three-fold to $141.7 million
(H1 2013: $43.7 million), resulting in an adjusted EBITDA margin of
56% (H1 2013: 50%) reflecting the higher activity levels, the
acquired GE business, high utilisation and an increased proportion
of mobile gas turbines within the total fleet partly offset by
higher costs associated with operating in markets facing increased
geopolitical conditions and newly emerging markets.
Fleet capital expenditure of $138.8 million (H1 2013: $245.2
million) reflected continued fleet investment to support the
commissioned three power plants in Myanmar, Angola and the South
Pacific, ongoing maintenance of the enlarged fleet and an increase
of 120MW of mobile gas turbines capacity and associated balance of
plant, to position the Group for new large-scale opportunities.
Financing and bank facilities
As at 30 June 2014, the Group reduced its gross debt by $20
million (excluding capitalised finance costs) to $570 million (31
December 2013: $590 million; 30 June 2013: $440 million). Cash on
the balance sheet as of 30 June 2014 was $52 million (31 December
2013: $34 million; 30 June 2013: $35 million) resulting in net debt
of $518 million (31 December 2013: $556 million; 30 June 2013: $405
million) comfortably within financial covenants.
The Group's bad debt provision is unchanged and remains in line
with historical low levels representing less than 1% of total
receivables.
Post period end, in August, the Group closed on a new syndicated
credit facility for the Group. This new facility, comprising a $450
million revolving credit facility and $320 million term loan
replaces the Group's existing $400 million revolving credit
facility and $250 million term loan. The new facility also contains
an accordion feature that would allow the total facility to expand
to $1 billion, subject to the Group obtaining additional funding
commitments and complying with certain financial covenants. The new
five year facility provides the Group with increased capacity and
greater covenant flexibility.
Adjusted Return on Capital Employed
Adjusted Return on Capital Employed (ROCE) is a key performance
metric for the business. Adjusted ROCE increased to 12% (H1 2013:
3%) reflecting the significant increase in adjusted operating
profit, the timing of capacity growth and improved utilisation.
Currencies
Nearly all operating costs are matched with corresponding
revenues of the same currency and as such there is minimal
transactional currency risk in the Group.
Statutory financial results and performance review
The statutory results for APR Energy cover the six-month period
ended 30 June 2014.
Revenue
Revenue for the period was $254.2 million (H1 2013: $87.2
million), as described above.
Amortisation of intangible assets
Amortisation of intangible assets resulted in the recognition of
a charge during the period of $17.2 million (H1 2013: $4.8 million)
primarily reflecting acquired customer contracts, including $5.8
million in respect of the original Australian contract with Forge
and brand and trademark assets associated with the previous
acquisitions.
Operating profit
Reported operating profit was $54.7 million (H1 2013: $0.4m)
reflecting increased revenues and lower depreciation charge, partly
offset by the higher charge arising from the impact of the
amortisation of intangible assets.
Integration and acquisition related costs
Expenses of $2.2 million (H1 2013: $nil) were recognised in
respect of the integration and acquisition related costs and
expenses of $2.9 million in respect of acquisition related finance
costs associated with the GE acquisition, which completed in
October 2013.
Founder securities revaluation
Founder securities credit of $17.5 million (H1 2013: charge of
$8.2 million) reflects the reduction in the share price and reduced
timeframe for potential exercise.
Bad debt expense
In determining the recoverability of a trade receivable, the
Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the end
of the reporting period. The risk associated with individual
customers is mitigated by the letters of credit we obtain from
customers on commencement of a contract. Management reviews
concentration credit risk on a regular basis and ensures that,
where the net exposure exceeds certain thresholds, appropriate
actions are taken. This is done on a customer by customer basis and
takes account of the billing terms, letters of credit and local
customs and practices. Bad debt expense was $nil in the period (H1
2013: $nil) reflecting the Group's use of letters of credit,
contract insurance policies and up front deposits to support
receipt of contract revenues.
Share-based payments
In accordance with IFRS 2, a non-cash charge of $3.4 million (H1
2013: $2.7 million) was recognised related to equity-settled
share-based payment transactions. This expense relates to equity
grants made under the Company's Performance Share Plans.
Interest and finance cost
Net interest expense for the first half was $15.5 million (H1
2013 $8.3 million), reflecting drawings made on the enlarged credit
facility as part of the purchase of fleet capital expenditure
including balance of plant and the timing of receipt of
receivables.
Taxation
The Group's reported tax charge for the first half was $7.1
million (H1 2013: credit of $4.3 million). The charge primarily
comprises withholding taxes of $2.2 million (H1 2013: $0.7 million)
and corporate income taxes of $4.9 million (H1 2013: credit of $5.0
million).
Earnings per share
Basic earnings per share was $0.50 (H1 2013: loss per share of
$0.15) based on a weighted average number of shares of 94.3 million
(H1 2013: 78.2 million shares) due to the issuance of 15.5 million
shares in connection with the acquisition of the GE Power Rental
Business. Diluted earnings per share was $0.49 (H1 2013: loss per
share of $0.15) based on a weighted average number of shares of
95.5 million (H1 2013: 78.2 million shares).
Liquidity and capital resources
Net debt (excluding capitalised finance fees of $6.4 million) as
at 30 June 2014 was $518 million (H1 2013: $405 million). This
reflects the Group's continued investment in its fleet and is
consistent with the Group strategy.
A summary analysis of cash flows is set out in the table
below.
$ million H1 2014 H1 2013
---------------------------------------- -------- --------
Net cash from operating activities 143.6 40.3
Net cash used in investing activities (94.8) (247.0)
Net cash from/(used in) financing
activities (30.7) 220.7
---------------------------------------- -------- --------
Net increase in cash and cash
equivalents 18.1 14.0
Cash and cash equivalents at beginning
of the year 33.9 21.0
---------------------------------------- -------- --------
Cash and cash equivalents at end
of the period 52.0 35.0
---------------------------------------- -------- --------
During the period, net cash flow from operating activities
totalled $143.6 million (H1 2013: $40.3 million) reflecting
significantly higher activity during the period, together with
enhanced working capital management and the collection of Libyan
receivables.
Cash flow used in investing activities primarily comprised
continued investments in the fleet and mobilisation costs arising
from projects commencing operations during the period. The
reduction, year on year, reflects the timing of the purchase of
property, plant and equipment and the mobilisation of the Libyan
contract, prior to commencement of operations in the second half of
2013.
Cash from financing activities reflects the repayment of $45.0
million of debt (H1 2013: $90.0 million), including two quarterly
repayments of $12.5 million in connection with the term loan. The
cash balance at period end was maintained at a level commensurate
with the month ahead forecasted cash flows, plus leaving a
sufficient amount of cash on hand to cover any eventualities and to
minimise borrowing costs.
Statement of financial position
As at 30 June 2014, the Group had goodwill of $622.6 million (31
December 2013: $622.6 million).
Property, plant and equipment
As at 30 June 2014, 31 December 2013, the Group held property,
plant and equipment of $1,289.6 million (31 December 2013: $1,194.3
million), reflecting additions of $138.8 million from fleet capital
expenditure.
Equity
As at 30 June 2014, the Group's total equity increased to
$1,436.6 million (31 December 2013: $1,396.6 million) as a result
of the profit for the period, net of dividends.
Treasury policies and risk management
The Group's activities give rise to a number of financial risks,
particularly market risk comprising foreign exchange and interest
rate risk, credit risk, liquidity risk, and capital risk
management.
Market risk
Market risk includes foreign exchange risk and interest rate
risk. The Group seeks to manage these risks to acceptable levels by
maintaining appropriate policies and procedures. In its
determination to enter into a contract, the Group will carry out a
risk assessment and determine the appropriate risk mitigation
strategies. Market risk also includes the risk that cash derived
from income for services fulfilled under contract terms will become
restricted and not available for use in the on-going activities of
the business.
Foreign exchange risk
The Group has an exposure to transactional foreign exchange from
purchases or sales in currencies other than US dollars. In order to
minimise exposure to foreign exchange risk, the Group primarily
contracts in US dollars or in contracts with a price based on US
dollars at the date of transaction or payment if possible. In some
cases, the Group transacts in local currencies when purchasing
materials and supplies for project operations.
In limited circumstances, the Group may use derivative
instruments to hedge economically against foreign exchange risk.
Any hedges are limited in duration and correspond to the applicable
contract payments or receipts to which the derivatives are
associated.
Interest rate risk
The Group is primarily exposed to interest rate risk on its
borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. When applicable,
the Group may elect to hedge interest rate risk associated with
debt or borrowings under the credit facility by purchasing
derivative instruments. As at 30 June 2014, 31 December 2013 and 30
June 2013 there were no interest rate hedges in place.
Credit risk
Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions, as well as exposures to
outstanding receivables from customers. Due to the nature of the
Group's business in emerging markets, management believes the most
significant of these to be exposures to outstanding receivables
from customers.
To minimise the risk of a significant impact on the business due
to a customer defaulting on its commitments, the Group closely
monitors trade receivables. In addition, the Group utilises letters
of credit, contract insurance policies and up front deposits to
mitigate this risk.
Liquidity risk
Liquidity risk results from insufficient funding being available
to meet the Group's funding requirements as they arise. The Group
manages liquidity risk by maintaining adequate reserves of cash and
available committed facilities to meet the Group's short and
long-term funding requirements. The Group monitors the short-term
forecast and actual cash flows on a daily basis and medium- and
long-term requirements in line with the Group's long-term planning
processes.
Financing and bank facilities
Post period end, the Group closed on a new syndicated credit
facility for the Group. This new facility, comprised of a $450
millionrevolving credit facility and $320 millionterm loan replaces
the Group's existing $400 millionrevolving credit facility and $250
millionterm loan. The new facility also contains an accordion
feature that would allow the total facility to expand to $1
billion, subject to the Group obtaining additional funding
commitments and complying with certain financial covenants.
The facilities provide for funding of capital expenditures,
working capital requirements and letters of credit. Key financial
covenants include a Total Leverage Ratio (Net Debt/Adjusted EBITDA)
at a maximum of 3.25:1 and an Interest Coverage Ratio (Adjusted
EBITDA/Net Interest) at a minimum of 3.00:1.
The new five year facility provides the Group with greater
covenant flexibility and is secured with the equity and assets of
the majority of the Group's subsidiary undertaking. Underwritten by
a syndicate led by Bank of America Merrill Lynch and HSBC, the
facility broadens and diversifies the Group's bank relationships
with both existing and new lenders.
Going concern
As at 30 June 2014, the Group had committed, secured credit
facilities of $650 million comprising a $400 million revolving
credit facility and a $250 million term-loan. Post period end, the
Group completed a new five-year $770 million syndicated credit
facility and repaid all existing credit facilities. Further details
of this new facility can be found on note 14.
In order to ensure it remains within the terms of this new
facility (including covenant requirements), the Group regularly
produces cash flow statements, and forecasts and sensitivities are
run for different scenarios including, but not limited to, changes
to contract start dates, pricing and expected contract duration. In
the event of unexpected adverse changes to the Group's cash flows
and having considered the risks and uncertainties disclosed on page
13, the Directors are confident that the Group could manage its
financial affairs, portfolio management and if necessary, deferring
of non-essential capital expenditure, so as to ensure that
sufficient funding remains available for the next twelve
months.
Accordingly, the Directors believe that the Group's forecasts
and projections, taking account of reasonably possible changes in
assumptions, show that the Group will be able to operate within the
terms of its financing and bank facilities for the foreseeable
future, being twelve months from the date of this report.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed consolidated financial statements.
Dividends
The Company's shareholders approved a final dividend for the
year ended 31 December 2013 of 6.7 pence per ordinary share (2012:
6.7 pence per ordinary share). This final dividend was paid on 3
June 2014 to shareholders on the register as at 4 April 2014.
The Board has declared an interim dividend of 3.3 pence per
ordinary share (H1 2013: 3.3 pence per ordinary share). This
interim dividend will be paid on 10 October 2014 to shareholders on
the register of members of the Company as at 12 September 2014,
with an ex-dividend date of 10 September 2014.
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 48 to 51 of the 2013 Annual Report which is
available at www.aprenergy.com.
Strategic:
-- Failure to deliver the growth plan envisaged as part of the recent capital injections;
-- Contracts are temporary in nature;
-- Asset concentration;
Market:
-- Global political and economic conditions;
-- Volatility in customer demand, including event-driven demand;
-- Increase in competitive environment;
Operational:
-- Asset security;
-- Focus on developing markets - operations in difficult regions of the world;
-- Recruitment and retention of key staff;
-- Environmental, health and safety;
Financial:
-- Movement in cost inputs;
-- Payment default; and
-- Funding risk.
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 2013 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 12 to the
condensed set of financial statements.
There have been no material changes in the related party
transactions described in the last annual report.
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
John Campion
Chief Executive Officer
26 August 2014
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 2014, 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 14. 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 Conduct 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 and IFRSs as issued by the IASB. 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 2014 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 Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
26 August 2014
London, United Kingdom
Condensed Consolidated Statement of Comprehensive Income
For the six month period ended 30 June 2014
6 months 6 months Year
ended ended
30 June 30 June ended
2014 2013
(Unaudited) (Unaudited) 31 December
2013
$ million Note (Audited)
Revenue 4 254.2 87.2 308.3
Cost of sales (160.9) (64.5) (197.3)
Amortisation of intangible
assets (17.2) (4.8) (8.8)
Gross profit 76.1 17.9 102.2
Selling, general and administrative
expenses (21.4) (17.5) (33.2)
------------------------------------- ----- -------------- -------------- --------------
Operating profit 54.7 0.4 69.0
Integration and acquisition
related costs (2.2) - (14.4)
Founder securities revaluation 11 17.5 (8.2) (3.3)
Foreign exchange loss (0.2) - (0.4)
Finance income 0.7 0.2 0.2
Finance costs (16.2) (8.5) (23.6)
Profit/(loss) before taxation 54.3 (16.1) 27.5
Taxation 5 (7.1) 4.3 (7.7)
------------------------------------- ----- -------------- -------------- --------------
Profit/(loss) for the period 47.2 (11.8) 19.8
------------------------------------- ----- -------------- -------------- --------------
Total comprehensive profit/(loss)
for the period 47.2 (11.8) 19.8
Earnings per share
Basic earnings per share (cents) 6 50.1 (15.1) 24.4
Diluted earnings per share
(cents) 6 49.4 (15.1) 24.2
Condensed Consolidated Statement of Financial Position
As at 30 June 2014
30 June 30 June 31 December
2014 2013 2013
$ million Note (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Goodwill 622.6 547.1 622.6
Intangible assets 7 53.1 35.0 70.3
Property, plant and equipment 8 1,289.6 927.9 1,194.3
Deferred tax asset 7.7 8.9 7.8
Other non-current assets 5.1 6.1 5.5
------------------------------- ----- -------------- -------------- ------------
Total non-current assets 1,978.1 1,525.0 1,900.5
------------------------------- ----- -------------- -------------- ------------
Current assets
Derivative asset - 0.2 -
Inventories 67.9 14.4 43.0
Trade and other receivables 144.3 71.1 183.1
Cash and cash equivalents 52.0 35.0 33.9
Income tax receivable 3.4 5.7 3.9
Deposits 7.6 11.4 7.3
------------------------------- ----- -------------- -------------- ------------
Total current assets 275.2 137.8 271.2
------------------------------- ----- -------------- -------------- ------------
Total assets 2,253.3 1,662.8 2,171.7
------------------------------- ----- -------------- -------------- ------------
Liabilities
Current liabilities
Trade and other payables 159.4 77.5 83.4
Income tax payable 14.7 5.9 10.8
Deferred revenue 18.2 26.0 27.5
Derivative liability - 0.1 -
Borrowings 9 225.0 - 50.0
Decommissioning provisions 16.6 8.0 18.0
------------------------------- ----- -------------- -------------- ------------
Total current liabilities 433.9 117.5 189.7
------------------------------- ----- -------------- -------------- ------------
Non-current liabilities
Founder securities 11 1.0 23.3 18.5
Deferred tax liability 3.2 4.1 6.5
Borrowings 9 338.6 431.2 529.3
Decommissioning provisions 40.0 11.9 31.1
------------------------------- ----- -------------- -------------- ------------
Total non-current liabilities 382.8 470.5 585.4
------------------------------- ----- -------------- -------------- ------------
Total liabilities 816.7 588.0 775.1
------------------------------- ----- -------------- -------------- ------------
Equity
Share capital 15.2 12.6 15.2
Share premium 674.9 668.1 674.9
Other reserves 770.0 485.9 770.0
Equity reserves 10.3 7.2 6.9
Accumulated losses (33.8) (99.0) (70.4)
Total equity 1,436.6 1,074.8 1,396.6
------------------------------- ----- -------------- -------------- ------------
Total liabilities and equity 2,253.3 1,662.8 2,171.7
------------------------------- ----- -------------- -------------- ------------
Condensed Consolidated Statement of Changes in Equity
For the six month period ended 30 June 2014
Share Share Other Equity Accumulated Total
$ million capital premium reserves reserves losses
Balance at 1 January 2013 12.6 668.1 485.9 4.5 (79.3) 1,091.8
------------------------------------ -------- -------- --------- --------- ----------- -------
Loss for the period - - - - (11.8) (11.8)
------------------------------------ -------- -------- --------- --------- ----------- -------
Total comprehensive loss
for the year - - - - (11.8) (11.8)
------------------------------------ -------- -------- --------- --------- ----------- -------
Credit to equity for equity-settled
share-based payment expense - - - 2.7 - 2.7
Dividends - - - - (7.9) (7.9)
------------------------------------ -------- -------- --------- --------- ----------- -------
Balance at 30 June 2013
(unaudited) 12.6 668.1 485.9 7.2 (99.0) 1,074.8
------------------------------------ -------- -------- --------- --------- ----------- -------
Balance at 1 January 2014 15.2 674.9 770.0 6.9 (70.4) 1,396.6
Profit for the period - - - - 47.2 47.2
Total comprehensive profit
for the period - - - - 47.2 47.2
Credit to equity for equity-settled
share-based payment expense - - - 3.4 - 3.4
Dividends - - - - (10.6) (10.6)
------------------------------------ -------- -------- --------- --------- ----------- -------
Balance at 30 June 2014
(unaudited) 15.2 674.9 770.0 10.3 (33.8) 1,436.6
------------------------------------ -------- -------- --------- --------- ----------- -------
Condensed Consolidated Cash Flow Statement
For the six month period ended 30 June 2014
6 months
ended Year
6 months 30 June
ended 2013 ended
30 June (Unaudited) 31 December
2014 2013
$ million Note (Unaudited) (Audited)
Cash flows from operating activities
Profit/(loss) for the period before
taxation 54.3 (16.1) 27.5
Adjustments for:
Depreciation and amortisation 83.6 40.5 107.8
Profit on sale or disposal of fixed
assets (0.2) - (2.4)
Equity-settled share-based payment
expense 3.4 2.7 4.4
Founder securities revaluation 11 (17.5) 8.2 3.3
Gain on derivative financial instruments - (0.4) (0.3)
Finance income (0.7) (0.2) (0.2)
Finance costs 16.2 8.5 23.6
Movements in working capital:
Decrease/(increase) in trade and
other receivables 41.9 (18.0) (100.3)
Increase in inventories (24.9) (5.0) (26.5)
Decrease/(increase) in other current
and non-current assets 0.2 (1.0) (0.4)
Increase in trade and other payables 17.1 24.3 48.9
Settlement of decommissioning provisions (2.3) (7.4) (10.7)
(Decrease)/increase in other liabilities (9.4) 17.1 9.6
------------------------------------------- ----- -------------- -------------- --------------
161.7 53.2 84.3
Interest paid (12.3) (5.0) (15.5)
Interest received 0.1 0.2 0.2
Income taxes paid (5.9) (8.1) (11.2)
------------------------------------------- ----- -------------- -------------- --------------
Net cash from operating activities 143.6 40.3 57.8
Cash flows from investing activities
Purchases of property, plant and
equipment (95.0) (260.8) (358.4)
Proceeds on sale or disposal of property,
plant and equipment 0.5 - 2.8
(Increase)/decrease in deposits (0.3) 13.8 17.9
Acquisition of subsidiaries - - (73.1)
------------------------------------------- ----- -------------- -------------- --------------
Net cash used in investing activities (94.8) (247.0) (410.8)
------------------------------------------- ----- -------------- -------------- --------------
Cash flows from financing activities
Cash from borrowings 9 25.0 325.0 567.8
Repayment of borrowings 9 (45.0) (90.0) (182.8)
Dividends paid 10 (10.6) (7.9) (12.9)
Debt issuance costs (0.1) (6.4) (11.3)
Proceeds from the issue of ordinary
shares (net of
transaction costs - - 5.1
Net cash (used in)/from financing
activities (30.7) 220.7 365.9
------------------------------------------- ----- -------------- -------------- --------------
Net increase in cash and cash equivalents 18.1 14.0 12.9
Cash and cash equivalents at beginning
of the period 33.9 21.0 21.0
------------------------------------------- ----- -------------- -------------- --------------
Cash and cash equivalents at end
of the period 52.0 35.0 33.9
------------------------------------------- ----- -------------- -------------- --------------
Included within cash and cash equivalents at 30 June 2014 is an
amount of $10.7 million which backs letters of credit and as such
is classified as restricted cash (31 December 2013: $8.9
million).
Notes to the Condensed Consolidated 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 5th Floor, 6 St. Andrew Street, London, EC4A
3AE, United Kingdom.
This condensed consolidated set of financial statements was
approved by the Board of Directors on 26 August 2014.
The information for the year ended 31 December 2013 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
auditor 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 International Financial Reporting Standards
(IFRS). The financial statements have also been prepared in
accordance with IFRS as adopted by the European Union and therefore
the Group financial statements comply with Article 4 of the EU IAS
regulation. The Group financial statements also comply with IFRS
issued by the IASB.
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 and have been prepared on the
basis of the accounting policies set out in the Group's financial
statements for the year ended 31 December 2013.
Changes in accounting policy
Since the 2013 Annual report and accounts was published no
significant new standards and interpretations have been issued
other than IFRS 15 - Revenue from Contracts with Customers, as
noted below. The following new and revised standards were adopted
for the period beginning 1 January 2014:
-- IFRS 10 Consolidated Financial Statements
-- IFRS 11 Joint Arrangements
-- IFRS 12 Disclosure of Interests in Other Entities
-- IAS 28 (revised) Investment in Associates and Joint
Ventures
The adoption of these standards has not had a material impact on
the financial statements of the Group.
At the balance sheet date, there are no newly issued or revised
IFRS standards endorsed by the EU that will come into effect for 1
January 2015.
IFRS 15 Revenue from Contracts with Customers has been issued by
the International Accounting Standards Board (IASB) for application
beginning on or after 1 January 2017. Management is currently
assessing the impact that this new standard will have on the
Group's financial reports and related disclosures.
Management will continue to monitor any developing standards
which it believes will have a material impact on the Group's
financial statements.
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. On
15 August 2014, the Group refinanced its debt facilities (see note
14). 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
consolidated 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 consolidated financial statements.
4. Revenue
The following is an analysis of the Group's revenue from
continuing operations from its major products and services:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
$ million 2014 2013 2013
Power revenues* 247.8 85.4 282.0
Finance lease revenues - - 14.0
Other revenues 6.4 1.8 12.3
------------------------ --------- --------- -------------
Total revenues 254.2 87.2 308.3
------------------------ --------- --------- -------------
* Six months ended 30 June 2014 includes revenues of $13.5
million related to the terminated Australian contract, which
includes the drawdown of the letter of credit.
5. Taxation
Tax for the six month period comprises a current tax charge of
$10.3 million (H1 2013: $4.4 million) and a deferred tax credit of
$3.2 million (H1 2013: $8.7 million credit). It has been charged at
13% (H1 2013: 26%), representing the consolidated best estimate of
the average annual effective tax rate for each tax paying
jurisdiction expected for the full year, applied to the pre-tax
income of the six month period and adjusted for the discrete
recognition of deferred tax assets.
The Group is not taxable in certain jurisdictions where either
the jurisdictions do not impose an income tax or the entity is
treated as a flow- through entity for local country tax purposes.
The difference between the statutory rate and the effective tax
rate is a result of withholding taxes and taxes in foreign
jurisdictions as shown above.
The structure of the Group generally results in each entity or
branch operating within only one tax jurisdiction. In general,
income tax is imposed on taxable income earned in the applicable
tax jurisdiction. Withholding taxes are imposed based upon local
country tax laws. In the jurisdictions where the Group operates,
these taxes may be imposed on cross border payments to related
parties. In general, withholding taxes are imposed on payments such
as rents, dividends, and certain service payments or gross receipts
from customers.
6. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is
based on the following data:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
----------------------------------------------- ------------- ------------- -------------
Profit/(loss) for the purposes of basic
and diluted earnings per share being net
profit/(loss) attributable to the owners
of the Company ($m) 47.2 (11.8) 19.8
----------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary shares
for the purpose of basic earnings per share
(number of shares) 94,251,622 78,235,164 81,044,059
----------------------------------------------- ------------- ------------- -------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share(1) (number of shares) 94,478,797 78,235,164 81,884,709
----------------------------------------------- ------------- ------------- -------------
Earnings per ordinary share
----------------------------------------------- ------------- ------------- -------------
Basic earnings per share (cents) 50.1 (15.1) 24.4
----------------------------------------------- ------------- ------------- -------------
Diluted earnings per share (cents) 49.4 (15.1) 24.2
----------------------------------------------- ------------- ------------- -------------
(1) Founder securities are not considered dilutive for the
periods ended 30 June 2014, 30 June 2013 and 31 December 2013 as
the exercise price was above the period end share price. The
Founder securities are also not considered dilutive as the
associated performance conditions had not been met at 30 June 2014,
30 June 2013 and 31 December 2013.
7. Intangible assets
$ million Customer Trademark Brand Total
contracts
---------------------------- ---------- --------- ------- --------
Cost:
At 1 January 2013 106.4 - 38.1 144.5
Acquisition of subsidiary 23.2 16.1 - 39.3
---------------------------- ---------- --------- ------- --------
At 31 December 2013 129.6 16.1 38.1 183.8
Additions - - - -
At 30 June 2014 129.6 16.1 38.1 183.8
---------------------------- ---------- --------- ------- --------
Accumulated amortisation
At 1 January 2013 102.4 - 2.3 104.7
Charge for the year 7.0 0.3 1.5 8.8
---------------------------- ---------- --------- ------- --------
At 31 December 2013 109.4 0.3 3.8 113.5
Charge for the period 15.6 0.8 0.8 17.2
At 30 June 2014 125.0 1.1 4.6 130.7
---------------------------- ---------- --------- ------- --------
Net book value:
30 June 2014 4.6 15.0 33.5 53.1
31 December 2013 20.2 15.8 34.3 70.3
---------------------------- ---------- --------- ------- --------
*Amortisation of customer contracts includes $7.6 million of
impairments (H1 2013: $nil) of which $5.8 million related to the
termination of the Australian contract.
Customer contractsare amortised over the contract term. The
brand and trademark are amortised over their estimated useful
economic lives of 25 years and 10 years respectively.
8. Property, plant and equipment
Machinery Mobilisation Demobilisation Other Total
$ million and equipment equipment
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
Cost:
At 1 January
2013 697.4 43.4 12.2 2.8 755.8
Acquisitions of
subsidiaries 242.3 - - - 242.3
Additions 293.9 67.9 31.3 1.7 394.8
Disposals (25.3) (24.1) (8.0) (0.1) (57.5)
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
At 31 December
2013 1,208.3 87.2 35.5 4.4 1,335.4
Additions 138.8 13.5 9.1 3.1 164.5
Disposals (0.5) - - - (0.5)
At 30 June 2014 1,346.6 100.7 44.6 7.5 1,499.4
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
Accumulated
depreciation:
At 1 January
2013 55.4 21.4 6.6 0.9 84.3
Charge for the
period 67.3 21.3 10.6 0.7 99.9
Disposals (11.0) (24.1) (8.0) - (43.1)
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
At 31 December
2013 111.7 18.6 9.2 1.6 141.1
Charge for the
period 43.0 16.1 6.8 0.5 66.4
Impairments 2.5 - - - 2.5
Disposals (0.2) - - - (0.2)
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
At 30 June 2014 157.0 34.7 16.0 2.1 209.8
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
Net book value:
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
30 June 2014 1,189.6 66.0 28.6 5.4 1,289.6
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
31 December
2013 1,096.6 68.6 26.3 2.8 1,194.3
--------------- ----------------------- -------------------- ---------------------- --------------- -------------
Depreciation is presented within cost of sales in the condensed
consolidated statement of comprehensive income.
During the period, the Group has reassessed the fleet
maintenance programmes to align with standard practice as utilised
by mature industrial companies and also to reflect the maturing of
the businesses capabilities following the acquisition of the GE
Power Rental Business in October 2013. This change in estimate of
residual value has led to a reduction in fleet depreciation
recognised in the period of $9.1 million. The expected future
annual depreciation reduction related to the diesel power modules
is $9.9 million. It is impracticable to estimate the future effect
of the change in the mobile gas turbines as the depreciation is
calculated using machine run hours, which vary dependent on
customer requirements.
As of 30 June 2014, the Group's commitments related to the
purchase of property, plant and equipment were $27.6 million (31
December 2013: $16.6 million).
9. Borrowings
Revolving Term- Total
$ million credit facility loan
-------------------------------- ---------------- ------ ------
At 1 January 2014 340.0 250.0 590.0
Cash from borrowings 25.0 - 25.0
-------------------------------- ---------------- ------ ------
Repayment of borrowings (20.0) (25.0) (45.0)
-------------------------------- ---------------- ------ ------
At 30 June 2014 345.0 225.0 570.0
-------------------------------- ---------------- ------ ------
Capitalised debt issuance costs (6.4)
-------------------------------- ---------------- ------ ------
563.6
-------------------------------- ---------------- ------ ------
In 2011, the Group entered into a committed,secured revolving
credit facility of $400 million with a group of international
banks, with a maturity date of 28 November 2016.
In May 2013, the Group entered into a committed,secured term
loan of $150 million with several of the existing group of
international banks involved with the revolvingcredit facility.
This term loan was then subsequently extended in October 2013 by an
additional $100 million to $250 million, with a maturity date of 1
January 2015, with quarterly repayments of $12.5 million commencing
on 31 March 2014.
As of 30 June 2014, $13.0 million (31 December 2013: $9.8
million) of letters of credit have been drawn against the revolving
credit facility. As of 30 June 2014, the available amount of the
undrawn facilities was $42.0 million (31 December 2013: $50.2
million).
The facilities provide for funding of capital expenditures,
working capital requirements and letters of credit. Key
financialcovenants include a Total LeverageRatio (Total
Indebtedness/Adjusted EBITDA) at a maximum of 2.50:1 and an
Interest Coverage Ratio (Adjusted EBITDA/Net Interest) at a minimum
of 4.00:1.The LIBOR spread is LIBOR plus 2.25% - 3.75% dependenton
the Total Leverage Ratio.
The revolving credit facility and term loan are secured with the
equity and assets of the majority of the Group's subsidiary
undertakings. The Directors believe that the carryingvalue of
borrowings approximate their fair value.
If the interest rates had been 50 basis points higher/lower and
all other variables were held constant, the Group's total
comprehensive profit would have increased/decreased by $0.7 million
(H1 2013: $0.6 million). This is mainly due to the Group's
exposureto interest rates on its variable rate borrowings.
Bid/performance bonds
The Group has a need to post bid or performance bonds associated
with customer contracts. These bonds are typically issued from the
Group's revolving credit facility or backed by a cash deposit. As
of 30 June 2014 the Group had $10.0 million (31 December 2013: $8.9
million) backed by cash deposits.
10. Dividends
$ million 2014 2013
------------------------------------------------ ---- ----
Declared and paid during the year
Final dividend for 2013: 6.7 pence (2012: 6.7
pence) per ordinary share 10.6 7.9
Proposed for approval by the Board of Directors
Interim dividend for 2014: 3.3 pence (2013:
3.3 pence) per ordinary share 5.3 5.0
------------------------------------------------ ---- ----
The interim dividend will be paid on 10 October 2014 to
shareholders on the register of members of the Company as at 12
September 2014, with an ex-dividend date of 10 September 2014.
11. Founder securities
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable:
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
$ million Level 1 Level 2 Level 3 Total
-------------------- ------- ------- ------- ------
At 30 June 2014
Founder securities - - (1.0) (1.0)
-------------------- ------- ------- ------- ------
- - (1.0) (1.0)
-------------------- ------- ------- ------- ------
At 31 December 2013
Founder securities - - (18.5) (18.5)
-------------------- ------- ------- ------- ------
- - (18.5) (18.5)
-------------------- ------- ------- ------- ------
There were no transfers between Level 1 and 2 during the current
or prior period.
Founder
securities
$ million (level 3)
--------------------- -----------
At 1 January 2013 15.2
Change in fair vale 3.3
--------------------- -----------
At 31 December 2013 18.5
Change in fair value (17.5)
--------------------- -----------
At 30 June 2014 1.0
--------------------- -----------
The Founder securities revaluation in the current period
resulted in a gain of $17.5 million (H1 2013: $8.2 million loss)
recognised in the condensed consolidated statement of comprehensive
income.
Subject to the satisfaction of the performance condition, the
holders of the Founder securities have the right to require the
Company to acquire the Founder securities in exchange for the issue
to the holders of the Founder securities of such number of ordinary
shares, as described in the 2013 Annual report and accounts.
For 30 June 2014, the Group continues to use a Monte Carlo
simulation model to value the Founder securities, which
incorporates a binomial tree to value the Founder securities as of
the date of the performance condition being achieved within the
Monte Carlo simulation. This model simulates the future Company
ordinary share price, on a daily basis, using a Geometric Brownian
Motion in a risk-neutral framework. The valuation output of this
model is then discounted to reflect the lack of marketability of
the Founder securities using a protective put option method.
The inputs used for the Monte Carlo simulation model were:
2014 2013
------------------------------- -------- --------
Balance sheet date share price $11.12 $15.74
Expected volatility 30% 31%
Remaining life 712 days 894 days
Lack of marketability period 730 days 730 days
Risk-free rate 1.3% 1.3%
Expected dividend yield 1.7% 1.2%
------------------------------- -------- --------
A change in the expected volatility by 1% would have a $0.3
million (H1 2013: $1.2 million) impact on the reported fair
value.
The expected volatility was determined by calculating the
historical and implied volatilities of the Company and several
comparable listed entity share prices over the previous 3
years.
12. 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 is a related party due to its owners being
the CEO and President of APR Energy plc.
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 (H1
2013: $0.1 million). The services rendered were all paid in cash.
No guarantees have been given or received.
CJJ LLC is a related party due to its owner being the CEO of APR
Energy plc. CJJ 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 $0.2 million (H1 2013: $nil). The
services rendered were all paid in cash. No guarantees have been
given or received.
At 30 June 2014, JCLA Holdings, LLC and CJJ LLC owed $nil to the
Group due to expenses having been paid by the Group (31 December
2013: $nil).
13. Contingent liabilities
As part of the acquisition of General Electric's Power Rental
Business in October 2013, APR Energy, through one of its
affiliates, acquired the beneficial interest of a contract between
General Electric International Inc. ("GE") and the Forge Group
Power Party Limited ("Forge"), including the ownership of four
mobile gas turbines ("Turbines"). In February 2014, Forge, Forge
Group Limited, and a number of its other affiliated companies
commenced voluntary insolvency proceedings and, on the next day,
Administrators and Receivers were appointed. APR is in a proceeding
regarding the Turbines with the Administrators and Receivers. At
issue in that proceeding is the claim of the Administrators and
Receivers that Australia's insolvency law affords them superior
title over APR to the Turbines. APR Energy disagrees with this
claim and is contesting it vigorously. In advance of the
proceedings, APR entered into an Interim Arrangement Deed with the
Administrators and Receivers, whereby, after 30 June 2014, APR
posted a $44 million bond for its unfettered use of the Turbines
and, as such, APR can legally deploy the Turbines unencumbered in
Australia or anywhere else in the world, indefinitely for the life
of the Turbines.
The anticipated date of final resolution of this matter is
unknown, as proceedings only commenced on 1 August 2014. As stated,
APR Energy has been contesting, and will continue to contest,
vigorously the title claim alleged by the Administrators and
Receivers. At this early stage of the dispute, it is difficult to
predict the outcome or accurately estimate the precise exposure for
APR Energy (if any), whilst noting that the maximum exposure is
ultimately capped at the value of the bond. Upon advice of counsel,
it is believed that it is probable that APR Energy will be
successful in this proceeding and therefore no reserve has been
established in the condensed consolidated statement of financial
position.
14. Events after the balance sheet date
On 29 July, the Group announced that post period, the Ministry
of Electricity and GECOL have awarded APR Energy an addendum to the
450MW Libyan contract, comprising both the 250MW mobile gas turbine
project and the 200MW diesel power module project, extending
through first quarter 2015, on similar terms to the original
contract.
On 18 August, the Group announced that it has closed and funded
a new syndicated credit facility for the Group. The expanded $770m
facility, comprising a $450m revolving credit facility and $320m
term loan, replaces the Group's existing $400m revolving credit
facility and $250m term loan.
The new five-year facility provides the Group with financing
through August 2019, expands available funding by $120m and
provides significantly improved covenant flexibility. Key financial
covenants include a Total Leverage Ratio (Net Debt/Adjusted EBITDA)
at a maximum of 3.25:1 and an Interest Coverage Ratio (Adjusted
EBITDA/Net Interest) at a minimum of 3.00:1. The new facility also
contains an accordion feature that would allow the total facility
to expand further, up to $1 billion, subject to the Group obtaining
additional funding commitments and complying with leverage
covenants. The LIBOR spread is LIBOR plus 2.25% - 3.25% dependent
on the total leverage ratio.
Underwritten by a syndicate led by Bank of America Merrill Lynch
and HSBC, the facility broadens and diversifies the Group's bank
relationships with both existing and new lenders.
On 27 August, the Group announced the signing of a contract for
a -peaking power plant in Port Hedland, Pilbara, Western Australia.
The power plant features four state-of-the-art GE TM2500+ dual-fuel
turbines running on clean-burning natural gas. Contracted with the
end-user customer, Horizon Power, the plant will run for a term of
at least 30 months and will serve as a bridging solution until a
permanent power plant is developed and operational in early 2017.
The plant has been designed for extreme conditions in Western
Australia, where temperatures can reach 48 degrees Celsius in the
summer, and can be rapidly expanded by an additional two
aero-derivative turbines as capacity requirements grow.
The contract replaces APR Energy's earlier agreement with Forge,
which was assumed as part of APR's acquisition of GE's power rental
business. Following Forge's declaration of bankruptcy, its contract
with APR Energy and its rental contract with Horizon were
terminated. APR's new contract, signed directly with the end-user
customer Horizon, leverages the plant infrastructure already in
place in Port Hedland.
On 27 August, the Group announced that Michael Fairey,
Non-Executive Chairman of APR Energy plc is stepping down as
Chairman, with immediate effect, to pursue other opportunities.
Following consultation with a number of the company's major
shareholders, the Board of APR Energy has unanimously selected John
Campion, who will transition from Chief Executive Officer, with
immediate effect, to take the position of Executive Chairman.
Laurence Anderson, who most recently served as President of APR
Energy, will assume the role of Chief Executive Officer.
Additionally, the Board announces today that Lee Munro has been
named Chief Financial Officer.
APPENDIX: Key financial definitions:
Adjusted EBITDA
Operating profit adjusted to add back depreciation of property,
plant and equipment, equity-settled share-based payment expense,
amortisation of intangible assets and exceptional items.
Exceptional items are those items believed to be exceptional in
nature by virtue of size and/or incidence.
Adjusted EBITDA margin
Adjusted EBITDA divided by adjusted revenue.
Adjusted earnings per share
Adjusted net income divided by the weighted average number of
ordinary shares. The weighted average number of ordinary shares
used to calculate the 30 June 2014 adjusted basic earnings per
share was 94,251,622. Adjusted net income is net income adjusted to
add back amortisation of intangible assets, Founder securities
revaluation and exceptional items. Exceptional items are those
items believed to be exceptional in nature by virtue of size and/or
incidence.
Adjusted ROCE (return on capital employed)
Operating profit for the previous twelve months adjusted to add
back amortisation of intangible assets and exceptional items
divided by the average of the net operating assets at the previous
three balance sheet dates (for 30 June 2014 this comprises the 30
June 2014, 31 December 2013 and 30 June 2013 and for 30 June 2013
this comprises the 30 June 2013, 31 December 2012 and 30 June
2012). "Net operating assets" is defined as total equity adjusted
to exclude goodwill, intangible assets, borrowings, Founder
securities, deferred tax assets and liabilities and current tax
assets and liabilities.
Renewal rate
Renewal rate is calculated based on the number of contracts that
renew in a given period as a percentage of the total number of
contracts that come up for renewal in that same period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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