TIDMAPR
RNS Number : 8986K
APR Energy PLC
21 April 2015
21 April 2015
APR Energy plc (the "Company")
Annual Report and Notice of Annual General Meeting
Following the release earlier today of the Company's full year
results announcement for the year ended 31 December 2014, the
Company announces that it has published its Annual Report and
Accounts for 2014 (the "Annual Report and Accounts").
The Company's 2015 AGM will be held at The Lincoln Centre, 18
Lincoln's Inn Fields, London WC2A 3ED on Wednesday 13 May 2015 at
10.00 am.
Copies of the Annual Report and Accounts and the Notice of the
Annual General Meeting 2015 are available to view on the Company's
website: www.aprenergy.com/investors.
In accordance with Disclosure and Transparency Rule 6.3.5(2)(b),
additional information is set out in the appendices to this
announcement. This information is extracted in full unedited text
from the Annual Report and Accounts.
In accordance with Listing Rule 9.6.1, a copy of each of the
Annual Report and Accounts, the 2015 Notice of Annual General
Meeting and the form of proxy in relation to the 2015 Annual
General Meeting has been submitted to the Financial Conduct
Authority via the National Storage Mechanism and will be available
for viewing shortly at: http://www.morningstar.co.uk/uk/NSM.
Enquiries:
APR Energy plc
Lee Munro + 1 904 404 4576
CNC Communications
Richard Campbell +44 (0) 20 3219 8800 / +44 (0) 7775 784 933
Michael Kinirons +44 (0) 20 3219 8816 / +44 (0) 7827 925 090
About APR Energy
APR Energy is the world's leading fast-track mobile turbine
power business. We provide large-scale, fast-track power, providing
customers with 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.
Appendices
Appendix A: Directors' responsibility statement
The following directors' responsibility statement is extracted
from the Annual Report and Accounts (pg. 51).
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with
International Financial Reporting Standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole;
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, togetherwith a description of the principal risks and
uncertainties that they face; and
-- the Annual Report and financial statements, taken as a whole,
are fair, balancedand understandable and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
On behalf of the Board
Laurence Anderson
Chief Executive Officer
Lee Munro
Chief Financial Officer
Appendix B: A description of the principal risks and
uncertainties that the Company faces
The following factors and other information contained in this
Annual Report should be considered carefully. The following is a
description of the risks that may affect some or all of the Group's
activities and which may affect the value of an investment in the
Company's securities. If any of the events described below occurs,
the business, financial condition or results of operations of the
Group could be affected adversely in a material way.
Additional risks and uncertainties that the Group is unaware of,
or that it currently deems immaterial, may also in the future have
a material adverse effect on the Group's business, results of
operations and financial condition.
The Group has learned from its experience managing risks in
Libya. There were no clear forecasts that Libya would become a
failed state. The Group is using these lessons to put measures into
place that better mitigate concentration risk, security risks and
credit risk to ensure the Group is safeguarded as it continues to
operate in emerging and frontier markets.
Key Risk Description Impact How we Manage it
-------------------- -------------------------- ----------------------------- -----------------------------------
Strategy
-------------------- -------------------------- ----------------------------- -----------------------------------
Failure The Group's strategy The inability to -- A detailed annual operating
to deliver is primarily based deploy capital plan has been established,
the growth on organic growth successfully into approved by the Board,
plan via the deployment new projects, scale and performance is monitored
of capital into its infrastructure
new temporary and maintain its -- The regional business
power projects growing fleet could development organisation
that are value have a material is fully deployed and
accretive. This adverse effect operational. The pace
organic growth on the financial of capital expenditures
is dependent on results of the is aligned with the commercial
the Group's ability Group. pipeline
to effectively
secure new projects
and to scale the
infrastructure
of the business
to support execution.
-------------------- -------------------------- ----------------------------- -----------------------------------
Contracts The Group operates Assets may be idle -- The Group's commercial
are temporary in an industry for a period of team takes a dual approach,
in nature where the majority time before they which involves pursuing
and may of contracts are are redeployed contract extensions with
be nonstandard short-term (typically in a revenue generating existing customers whilst
12-18 months) capacity or nonstandard also pre-marketing assets
and may include contract terms that may soon become available
nonstandard terms. may have been agreed
There are no assurances without appropriate -- A commercial pipeline
that any particular levels of approvals. process tracks new contract
customer will opportunities from opportunity
renew or extend identification through
a contract. to final contract signature
-- Asset utilisation models
are used to manage fleet
assets
-- Each proposed contract
or extension is reviewed
by appropriate levels
of management, including
any nonstandard terms
prior to official signoff
-------------------- -------------------------- ----------------------------- -----------------------------------
Asset concentration Given the scale Any such loss of -- The Group is pursuing
of the Group's a major customer a strategy of geographic
customer base, contract could and market diversification,
a high concentration materially impact as demonstrated by its
of assets and/or revenues and associated regionalisation strategy,
the loss of any profitability. and continues to focus
single major customer on expansion of its customer
could have an base to lessen the impact
adverse impact of any single customer
on the results loss. Distribution of
of its operations. assets across multiple
sites helps to mitigate
the risk pertaining to
an issue at any given
location. Also, the Group
pursues longer- term contracts
as a way to reduce project
roll-off risk, which is
inherently higher with
short-term contracts
-- Commercial opportunities
are balanced across regions,
customer segments and
technology to align with
strategic growth objectives
-- The Group maintains
a regular dialogue with
major customers at a senior
level to help understand
and anticipate their future
plans
-------------------- -------------------------- ----------------------------- -----------------------------------
Key Risk Description Impact How we Manage it
-------------------- -------------------------- ----------------------------- -----------------------------------
Market
-------------------- -------------------------- ----------------------------- -----------------------------------
Global political The Group's strategy Declines in economic -- A detailed annual operating
and economic is primarily based activity, slowing plan has been established,
conditions on organic growth of growth rates approved by the Board,
via the deployment and customer access and is monitored monthly
of capital into to funding could
new power projects impact the growth -- The regional business
that are value strategies of the development organisation
accretive. This business. is fully deployed and
organic growth Additionally, changes operational. The pace
is dependent on in political regimes of capital expenditures
the Group's ability or political unrest is aligned with the commercial
to effectively pose potential pipeline
secure new projects risk to existing
and to scale the contracts and/or -- The Group is pursuing
infrastructure the timing of potential a strategy of geographic
of the business new contract opportunities. and market diversification
to support execution. with a focus on continuing
to expand its customer
base to lessen the impact
of economic cycles and/or
political changes
-- A commercial pipeline
process has been established
to track new contract
opportunities and includes
risk management elements
-- APR recognises that
some of the countries
in which it operates have
experienced political,
social, economic and security
instability. The Group
is proactive about mitigating
all or a portion of its
international currency
and asset exposures through
various risk mitigation
tools. Those include the
use or purchasing of insurance,
bonds, guarantees and
cash advances to protect
its assets, both financial
and operational, as well
as the employment of extensive
security operations and
monitoring of political
and security developments
in certain high risk areas
-------------------- -------------------------- ----------------------------- -----------------------------------
Volatility Customer demand Fluctuating demand -- By developing a global
in customer inherently fluctuates can create volatility expanded customer base,
demand, and, in many cases, in trading results. the impact of any single
including is driven by external Higher margin event- event can be mitigated
event driven events that are driven (emergency)
demand difficult to predict. contracts may not -- A regional hub strategy
be sustainable has been implemented to
on a consistent help ensure that equipment
basis. is available nearby to
customers and can be utilised
in the event that an immediate
market opportunity arises
-------------------- -------------------------- ----------------------------- -----------------------------------
Increase While barriers New entrants may -- The Group's business
in competitive to entry in our create pricing development team regularly
environment market space remain pressure in the monitors competitive activity
high, there is market and lead and publicly available
the potential to reduced margins. pricing dynamics to understand
for new or expanding changes in the market
entrants to compete
with the Group. -- The Group focuses on
maintaining a world-class
competitive offering using
best-in-class technology
to provide responsive
customer service and pricing
that is aligned with our
overall value proposition
-------------------- -------------------------- ----------------------------- -----------------------------------
Key Risk Description Impact How we Manage it
-------------------- -------------------------- ----------------------------- -----------------------------------
Operations
-------------------- -------------------------- ----------------------------- -----------------------------------
Employee, The Group's operations The potential exists -- The Group maintains
contractor are highly capital for nationalisation, a comprehensive global
and asset intensive and expropriation and/or property insurance programme
security require a number theft of high-value
of employees and assets. -- In addition, there
contractors to is a global political
run. In many cases, risk insurance programme
projects require that can be implemented
the placement on a country-by-country
of high-value basis to protect against
equipment, employees government actions relative
and contractors to assets, such as expropriation
into volatile or nationalization
environments.
-- In many cases, standby
letters of credit from
customers are required
for asset security
-- The Group has an extensive
security operation comprising
trained and experienced
employees and contractors
to secure the Group's
human capital and assets
-------------------- -------------------------- ----------------------------- -----------------------------------
Focus on The Group's operations This may expose -- The Group has instituted
developing are highly decentralised the Group to unethical a comprehensive compliance
markets, and, in many cases, behaviour and potential programme that includes
with operations the Group operates legal/regulatory a broad anti-corruption
in difficult in regions of violations that policy, extensive training
regions the world where could have a significant and monitoring on a regular
of the world corruption and financial and reputational basis, with all new employees
bribery are commonplace. impact. required to undertake
training upon joining
and existing employees
required to retrain on
an annual basis
-- Third-party agents/contractors
are thoroughly vetted
prior to any engagement
and are required to provide
compliance certifications
-- Additionally, the Group
has Compliance Hotline,
on which employees can
report anonymously any
suspected violation. The
Group has a 'no retaliation'
policy for those that
do report potential compliance
violations. Moreover,
the Company's Board has
adopted a 'zero tolerance'
policy on corruption -
evidencing the Senior
Management Team's strong
regard for compliance
-- All of these best practices
are designed to deter
corruption in the Group's
global business
-------------------- -------------------------- ----------------------------- -----------------------------------
Recruitment The Group depends The loss of key -- Competitive remuneration
and retention on the recruitment senior individuals policies, including a
of key staff and retention in the organisation performance share plan,
of key senior or the inability have been put in place
management in to recruit sufficient to attract and retain
order to effectively talent could jeopardise key personnel
manage the business. APR Energy's ability -- A talent review and
to execute its development process is
growth plans. in place across the organisation
with a focus on providing
growth opportunities across
the organisation
-------------------- -------------------------- ----------------------------- -----------------------------------
Environment, The Group's operations Plant personnel -- The Group has implemented
health and involve the movement, could be subject comprehensive health and
safety installation and to safety hazards safety policies and procedures
operation of large that lead to injury at all sites. An extensive
electrical equipment, or loss of life. training programme has
which often operates Operations could been rolled out to all
at high voltage. be subject to an personnel
In addition, the accidental spill
handling of fuel, of fuel or other -- The Group has strengthened
oil and other hazardous materials, its security arrangements,
hazardous materials which also could including the introduction
is a common part impact surrounding of a Group Security Director,
of the day-to-day communities. country security managers
activity. in higher-risk countries
and the introduction of
a Group security standard
setting out mandatory
principles and procedures
for all our locations
-- The development of
environment, health and
safety performance indicators
is ongoing and will be
reviewed regularly with
the Board
-------------------- -------------------------- ----------------------------- -----------------------------------
Key Risk Description Impact How we Manage it
-------------------- -------------------------- ----------------------------- -----------------------------------
Financial
-------------------- -------------------------- ----------------------------- -----------------------------------
Movements The business model Changes in the -- The Group has two key
in cost is dependent on cost of key inputs supplier framework agreements
inputs the procurement could have a material with GE and Caterpillar
of capital equipment, adverse effect that have fixed pricing
services, labour on the operating and are indexed to an
and other cost margins of the annual inflation indicator
inputs associated business. thereafter
with timely installation
and operation -- Significant cost efficiency
of turnkey power projects are underway
plants around
the world. -- Contract terms are
in place and weekly monitoring
protocols exist to avoid/reduce
penalties
-------------------- -------------------------- ----------------------------- -----------------------------------
Payment The Group has Delay in payments -- Prior to contracting
default a number of contracts or default could with a customer, a thorough
with customers adversely affect risk assessment is completed
in developing the financial performance including a credit risk
countries where of the business. review
payment practices
can be lengthy -- In many cases, the
and unpredictable. Group requires the customer
to post standby letters
of credit (LCs), and in
some cases, documentary
LCs as payment security,
decreasing the impact
of any individual contract
default
-- The Group's strategy
is focused on increasing
the scale and diversification
of the business
-------------------- -------------------------- ----------------------------- -----------------------------------
Funding The business model Adverse changes -- The Group increased
Risk is dependent on affecting access its credit facility to
external funding to funding or the $770 million during 2014
for the procurement higher costs associated with its group of lending
of capital equipment, with replacing banks. The credit facility
services, labour maturing debt could includes provisions allowing
and other costs have a material for amendments to be requested,
to operate the adverse effect if necessary. See note
business. on the business. 26 in the financial statements
regarding the new amended
facility
-- The Group enjoys good
ongoing relationships
with its lenders
-- Alternative financing
opportunities are available
to APR Energy and are
continuously evaluated
by the Group
-------------------- -------------------------- ----------------------------- -----------------------------------
Appendix C: Related party transactions
The related party transactions are extracted from the Annual
Report and Accounts (page 96).
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
Executive Chairman and the CEO of APR Energy plc. Consulting
services from JCLA Holdings LLC (and its subsidiaries) were
incurred by the Group during the year. These consulting services
were made at an arm's length market price. The total expense for
the year was $0.2 million (2013: $0.4 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 Executive
Chairman 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 year was $0.3 million
(2013: $0.3 million). The services rendered were all paid in cash.
No guarantees have been given or received.
JCLA Development II LLC is a company related by common control
by the Executive Chairman and the CEO of APR Energy plc. JCLA
Development 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 year was $0.1 million (2013: $nil). The services
rendered were all paid in cash. No guarantees have been given or
received.
Remuneration of key management personnel
The remuneration of key management personnel of the Group is set
out below in aggregate for each of the categories specified in IAS
24 Related Party Disclosures. Further information about the
remuneration of certain key management personnel is provided in the
audited part of the Directors' Remuneration Report on pages
53-64.
$ million 2014 2013
------------------------------------- ----- -----
Remuneration 5.0 7.0
Other long-term benefits 0.1 0.1
Termination benefits 0.4 -
Equity-settled share-based payment
expense 3.1 2.8
------------------------------------- ----- -----
8.6 9.9
------------------------------------- ----- -----
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
END
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