RNS Number : 4888U
Bioganix PLC
15 May 2008
BIOGANIX PLC
15th MAY 2008
PRELIMINARY RESULTS
Bioganix plc ('Bioganix' or 'the Group'), the AIM listed waste management services group, today announces its unaudited preliminary
results for the year ended 31st December 2007.
Highlights
* During the year the Group raised approximately £2.24 million after expenses from a placing of 1,659,311 new ordinary shares.
* The planning and lease arrangements for the new Sharpness plant were agreed and a substantial amount of construction work was
completed. Since the year end, this plant has commenced processing waste material.
* Bioganix was made the preferred bidder for a 15 year contract with Buckinghamshire County Council to process 30,000 tonnes of
organic waste per annum.
* The Directors successfully resolved a dispute with a major customer over contracted volumes of gate fee material for the Group's
Parham Plant.
* Post year end, the Group formed a strategic alliance with Kompogas AG and Kuttner Gmbh to be lead bidder on their Anaerobic
Digestion projects in UK.
* Turnover of £2.06m (2006 - £1.60m)
Commenting on these results, Andrew Walker, Chairman, said: "2007 has been a year of significant progress for Bioganix, both in
developing our in-vessel composting capacity and in developing complementary ways of handling organic wastes. Many of the fundamentals of
our market place have changed, particularly driven by commodity prices, and this presents us with opportunities as well as challenges. 2008
has started very positively, in no small part due to the hard work and achievements of the team in 2007."
Contacts:
Nick Helme 01568 619115
Managing Director * Bioganix Plc
Julian Morgan 01568 619101
Finance and Commercial Director * Bioganix Plc
Mike Coe 0117 933 0020
Blue Oar Securities Plc
Tom Cooper / Paul Vann 0117 920 0092
Winningtons Financial 0797 122 1972
CHAIRMAN'S STATEMENT
I am pleased to report on the Group's results for the year ended 31 December 2007.
FINANCIAL PERFORMANCE
Turnover for the 12 months ended 31 December 2007 was £2,056,039 compared with £1,600,626 for the 12 month period ended 31 December
2006. Not included in turnover are the receipts from the DEFRA New Technologies Demonstrator Programme and the amortisation of the capital
grant received in respect of the Parham Plant which are included in other operating income.
Pre-tax losses for the year were £1,063,884 compared with a pre-tax loss of £65,782 for the year ending 31 December 2006. The loss for
the year is stated after charging £24,035 (2006: £24,291) in respect of IFRS2 (Share Based Payments). As in the previous year, the Group
has taken advantage of the research and development tax credit arrangements and, therefore, the loss after tax was £985,782 compared with a
loss after tax in the previous year of £41,744. Total Equity at 31 December 2007 was £5,746,048 compared with Total Equity of £4,465,791
at the end of the previous year. During the year, the Group raised £2.24 million (net of expenses) from a placing of 1,659,311 new ordinary
shares.
Cash out-flow from operations during the year amounted to £183,030 compared with a cash in-flow of £704,035 in the previous year. As
at 31 December 2007, the Group had bank borrowings amounting to £286,848 and had asset related borrowings of £365,798.
ACTIVITIES
During the year the Group operated two plants at Wharton in Herefordshire and at Parham in Suffolk and also started to build a new plant
at Sharpness in Gloucestershire. In addition to these activities the Group continued to seek long-term contractual opportunities to process
organic waste streams.
The year on year growth in turnover reflects the increase in volumes being processed at the Parham Plant. As previously reported, the
overall volumes processed in the Parham Plant during the year were significantly lower than originally anticipated due to a major Customer
("the Customer") delivering significantly less waste material to the Parham Plant during the year than had been contracted for. As a result
of these shortfalls in delivery, Bioganix sought a remedy from the Customer through formal arbitration. As previously reported, agreement
was reached with the Customer in April 2008 whereby the Customer agreed to a substantial settlement ("the Settlement") in Bioganix's favour
with a value of approximately £1 million. Of this, only £70,000, approximately, has been reflected in the results for the year. The
balance of the Settlement value will be recognised in Bioganix's future financial statements in respect of the periods up to September
2010.
The scale of the losses made in the year were primarily a function of the shortfall in delivery of material from the Customer as
described above. The costs of the upgrade work to the Parham Plant in the early part of the year (as previously reported) also contributed
to the overall loss for the year.
The Wharton Plant continued to be used to conduct research work for DEFRA under the NTDP programme during the year. The project has
yielded some very useful engineering results that will be used to inform the design of future plants as well as acting as a demonstrator for
the Bioganix process. The crop growing experiments undertaken, as part of the project, continue to demonstrate the relative agronomic value
of Bioganix compost fertiliser compared with other organic and inorganic manures. Volumes at the Wharton Plant remained broadly similar to
the prior year and were in-line with expectations.
The planning, design and build of the new Sharpness (Gloucestershire) plant absorbed a substantial proportion of the Group's resources
during the year. The Waste Resources Action Programme (WRAP) awarded Bioganix a capital grant of £381,250 during the year towards the cost
of the Sharpness facility. The designs of the major components within the Sharpness Plant have embodied the results of research work and
practical experience gained from the existing plants at Wharton and Parham. As a result of these, the Directors anticipate a reduction in
operating costs per tonne of waste processed compared with the Parham Plant.
During the year the Group continued to seek out new opportunities to build additional organic waste recycling plants. In particular the
Group submitted a bid to Buckinghamshire County Council to process approximately 30,000 tonnes of green and kitchen waste per year for 15
years in a new plant to be built near Aylesbury. As previously reported, Bioganix were awarded preferred bidder status by Buckinghamshire
County Council in January 2008.
The Board was strengthened during the year by the appointments of Oliver O'Toole as Operations Director (executive) and Professor Jeremy
Tavaras a non-executive director of the Company.
Market Assessment
In a rapidly evolving sector such as that represented by the processing of organic waste, there are challenges as well as opportunities.
The collection, and therefore the availability for processing, of organic waste have been slower to develop than the environmental and
regulatory frameworks might have indicated to be likely. However opportunities such as that presented by the Group's preferred bidder
status with Buckinghamshire County Council continue to present themselves and Bioganix is currently pursuing a number of significant Local
Authority contracts for long term waste streams.
In addition, the Group's recently announced strategic alliance relationship with Kompogas AG and Kuttner GmbH represents an exciting
opportunity to be among the first to build anaerobic digestion ("AD") energy-producing capacity in the UK, using technology which is already
in use in more than fifty plants worldwide, the majority being in Germany and Switzerland. Long term Government contracts for the receipt
of waste, together with a proven processing system with process guarantees from Kompogas, and the potential to produce "green" electricity
present new opportunities for the handling of organic waste.
The significant increases in the price of artificial fertilisers experienced by farmers during the year coupled with the rises in global
cereal prices have led to even greater demand for Bioganix compost fertiliser compared with previous years. As a result, the average prices
charged for product produced at both of the Group's plants have increased during the year. The compost produced by the Wharton Plant was
submitted for approval under the PAS100 Accredited Compost Standard during the year and the Standard was awarded to Bioganix on April 22nd
2008. Some of the costs associated with compost sales continue to present challenges to the business; these include fuel costs and the not
insignificant expense of complying with the regulatory framework imposed by the Environment Agency.
The increase in global cereal and pulse prices, and in particular those destined for animal feeds, has encouraged renewed interest in
the recycling of certain organic wastes to produce animal feed material for the pig, poultry and fish farming sectors. Unfortunately this
has resulted in some of the feather material previously processed by Bioganix no longer being available for composting at economic gate
fees. This situation is expected to continue for the next few years although in the future consumer sentiment may lead to some degree of
rejection of foods produced by feeding feathers to farm animals.
OUTLOOK
The Board are looking forward to a year of significant growth for Bioganix. During 2008 as a whole, Parham is expected to perform
financially much better than in previous years as a result of increased volumes being processed and the terms of the Settlement with the
Customer. Although the performance of the Parham Plant was adversely impacted during the early part of 2008 as a result of the dispute with
the Customer, new sources of gate fee material have now been secured for the Parham Plant. During the course of the year Parham is expected
to return to operating at capacity. The volume of material processed at the Sharpness plant, which has now started operating, will also
increase during the year although full operating capacity is not expected to be achieved by the year end. No positive financial
contribution is expected from Sharpness during 2008. In the later part of the year, the Wharton Plant will be progressively run down and
some of the material currently being processed at Wharton will be transferred to Sharpness. Thus the contribution from the Wharton Plant will diminish during the year to nil by year end.
Planning for the proposed new plant near Aylesbury is now underway and, subject to planning permission being obtained, it is hoped that
construction of the new plant will commence during 2009 on a leased site. The Board is currently reviewing its options for the financing of
the proposed plant. Bioganix aims to include AD technology as part of its planning application in Aylesbury and would expect to be
producing up to 10,000 MWeh of electricity per year. The potential value of this electricity could add approximately £1.25m to the plant
sales, in addition to the gate fees for receipt of waste material. Buckinghamshire County Council plan to start collecting green and
kitchen waste from April 2009, and between then and when the new plant becomes operational Bioganix plan to process this material at the
Sharpness Plant.
In summary, the Directors are pleased that despite some challenges the Group is making excellent progress in developing as a significant
UK operator in the processing of organic waste, including some difficult types of waste which require special processing capability. The
initiatives already identified for the coming year are consistent with further progress for Bioganix in a sector which continues to offer
great commercial opportunity.
Mr A J Walker
Chairman
CONSOLIDATED INCOME STATEMENT OF BIOGANIX PLC FOR THE YEAR ENDED 31 DECEMBER 2007
Year to 31 December Year to 31 December 2006 (audited and restated)
2007 (unaudited)
£ £
GROUP REVENUE 2,056,039 1,600,626
Cost of sales (1,591,179) (1,013,399)
Gross profit 464,860 587,227
Distribution costs (303,799) (196,925)
Administrative expenses (1,456,761) (876,795)
Other operating income 238,516 426,200
Finance income 19,545 21,298
Finance expenses (26,245) (26,787)
(LOSS)/PROFIT BEFORE TAXATION (1,063,884) (65,782)
Corporation tax received 78,102 24,038
(LOSS)/PROFIT FOR THE (985,782) (41,744)
FINANCIAL PERIOD
Basic loss per share (14.88p) (0.97p)
There were no recognised gains or losses other than the profit or loss for the above financial periods. None of the Group's activities
were acquired or discontinued during the year to 31st December 2007.
Consolidated Statement of Changes in Equity for the year ended 31st December 2007
Year to 31 December Year to 31 December 2006
2007 (unaudited) (audited and restated)
£ £
Balance at start of periodas 4,467,992 (736,202)
originally stated under UK
GAAP
Change of accounting policy to - -
comply with IFRS
Restated balances at start of 4,467,992 (736,202)
period
(Loss) / Profit for the period (985,782) (41,744)
(2006: as restated)
Share options reserve 24,035 24,291
Issue of new shares 165,931 645,825
Premium on issue of new shares 2,073,872 4,573,621
Restated balances at end of 5,746,048 4,465,791
period
CONSOLIDATED BALANCE SHEET OF BIOGANIX PLC AS AT 31 DECEMBER 2007
31 December2007 31 December2006 (audited and restated)
(unaudited)
£ £
ASSETS
Non-current assets
Property, plant and equipment 7,881,318 5,427,930
Intangible assets 35,757 71,515
Total non-current assets 7,917,075 5,499,445
CURRENT ASSETS
Inventories 31,344 32,213
Debtors 763,189 373,759
Cash at bank - 141,886
Total current assets 794,533 547,858
Total Assets 8,711,608 6,047,303
EQUITIES AND LIABILITIES
Equity attributable to equity
holders of the company
Share capital 811,767 645,836
Merger reserves 4,308,335 4,308,335
Share Premium 7,039,163 4,965,290
Reverse Acquisition reserve (4,700,004) (4,700,004)
Other reserves 48,326 24,291
Retained losses (1,761,539) (777,957)
Total Equity 5,746,048 4,465,791
Non-current liabilities
Long-term borrowings 224,656 166,559
Long-term property lease 746,667 -
Long-term grant 699,963 799,963
Total non-current liabilities 1,671,286 966,522
Current liabilities
Trade and other payables 712,951 396,784
Short-term borrowings 427,990 118,206
Short-term property lease 53,333 -
Short-term grant 100,000 100,000
Total current liabilities 1,294,274 614,990
TOTAL EQUITY AND LIABILITIES 8,711,608 6,047,303
CONSOLIDATED CASHFLOW STATEMENT OF BIOGANIX PLC FOR THE YEAR ENDED 31 DECEMBER 2007
31 December2007 31 December 2006 (audited
(unaudited) and restated)
£ £
(Loss) before finance income / (1,057,185) (60,293)
expenses and tax
Adjustments for:
Depreciation 844,413 523,119
Changes in working capital
(excluding the effects of
acquisitions):
Inventories 868 57,992
Trade and other receivables (311,328) (138,044)
Trade and other payables 316,167 296,970
Other provisions 24,035 24,291
Cash (lost) / generated from (183,030) 704,035
operations
Corporation tax received - 83,883
Net cash (lost) / generated (183,030) 787,918
from operations
Cash flows from investing
activities
Finance income received 19,545 21,298
Finance expenses (126,245) (126,826)
Purchase of property, plant (2,532,667) (4,181,411)
and equipment
Investment in intangible fixed - (109,989)
assets
Net cash used in investing (2,639,367) (4,396,928)
activities
Cash flows from financing
activities
Repayment of finance leases - (7,175)
Repayment of bank loans (96,142) (111,142)
Issue of equity share capital 2,406,000 6,263,573
Repayment of convertible - (1,760,406)
unsecured loan notes
Expenses incurred in (166,195) (532,056)
connection with new shares
Repayment of amounts owed to - (1,081,620)
group undertakings
Interest on loan notes - (512,072)
New grants received - 1,000,000
New bank loan 250,000 -
Net cash generated / (used) in 2,393,663 3,259,102
financing activities
Net (decrease) in cash and (428,734) (349,908)
cash equivalents
Cash and cash equivalents at 141,886 491,794
beginning of period
(Borrowings) / Cash and cash (286,848) 141,886
equivalents at end of period
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS OF BIOGANIX PLC FOR THE YEAR ENDED 31 DECEMBER 2007
1. Adoption of International Financial Reporting Standards (IFRS)
For all periods up to 31 December 2006 Bioganix plc prepared its financial statements in accordance with UK Generally Accepted
Accounting Principles (UK GAAP). AIM Rules require that the annual consolidated financial statements of Bioganix plc for the year ended 31
December 2007 be prepared in accordance with International Financial Reporting Standards (IFRS).
Accordingly, these preliminary financial statements which are for the year ending 31 December 2007, are the first full year statements
that have been prepared in accordance with IFRS and are covered by IFRS1, First-time Adoption of IFRS.
In preparing these preliminary financial statements the comparative figures previously reported under UK GAAP have been restated for the
transition to IFRS. The disclosures required by IFRS1 regarding the transition for the relevant periods are given in Note 3 below. Other
than changes to accounting policies as a result of the adoption of IFRS, the same accounting policies have been followed in the preliminary
financial statements as compared with the most recent annual financial statements.
2. Loss per ordinary share
The calculation of the basic earnings per ordinary share is based on the result for the Period, for continuing operations as well as
total acquisitions, and the weighted average number of shares in issue during the period.
31 December 2007 (unaudited) 31 December 2006
(audited)
Weighted average number of 7,149,735 4,309,223
ordinary shares in issue
(Loss) after tax (1,063,884) (41,744)
Basic (loss) per share - pence (14.88p) (0.97p)
per
share (p)
Diluted (loss) per share - (14.88p) (0.97p)
pence per share (p)
Basic and diluted loss per share are the same in respect of all the periods as the effect of outstanding options is anti-dilutive and
therefore excluded.
3. Transition from UK GAAP to IFRS
As required under IFRS1, the equity reconciliations at 1 January 2006 (the transition date for IFRS) and at 31 December 2006 (date of
last UK GAAP financial statements) are set out below
The net effect of adopting IFRS rather than the UK GAAP for the year ending 31 December 2006 is to increase total assets from
£5,976,679 to £6,047,303 due to the capitalisation of leases. This change also has the effect of slightly increasing the loss on ordinary
activities for the year ending 31 December 2006 from £39,543 to £41,744.
Reconciliation of UK GAAP equity to IFRS equity:
31 December 1 January
2007 2007
£ £
Capital and reserves according to UK GAAP 5,746,048 4,467,992
Effect of adopting IAS17 - Leases - (2,201)
Equity according to IFRS 5,746,048 4,465,791
Reconciliation of UK GAAP balance sheets to IFRS balance sheets:
As at 31 December 2006
As at 30 June 2006
As previously Effect of transition As restated under As previously Effect of
transition As restated under
reported under UK IFRS reported under UK
IFRS
GAAP GAAP
£ £ £ £
£ £
ASSETS
Non-current assets
Property, plant and equipment 5,357,306 70,624 5,427,930 4,661,091
- 4,661,091
Other tangible assets 71,515 - 71,515 -
- -
Total non-current assets 5,428,821 - 5,499,445 4,661,091
- 4,661,091
Current Assets
Inventories 32,213 - 32,213 159,981
- 159,981
Trade Receivables 373,759 - 373,759 300,528
- 300,528
Cash and cash equivalents 141,886 - 141,886 1,011,134
- 1,011,134
Total current assets 547,858 - 547,858 1,471,643
- 1,471,643
Total Assets 5,976,679 70,624 6,047,303 6,132,734
- 6,132,734
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 645,836 - 645,836 645,834
- 645,834
Merger reserve - 4,308,335 4,308,335 -
4,308,335 4,308,335
Share premium reserve 4,573,621 391,669 4,965,290 4,576,771
391,669 4,968,440
Reverse acquisition reserve (4,700,004) (4,700,004) -
(4,700,004) (4,700,004)
Other reserves 24,291 - 24,291 -
- -
Retained earnings (775,756) (2,201) (777,957) (728,176)
- (728,176)
Total equity 4,467,992 (2,201) 4,465,791 4,494,429
- 4,494,429
Non-current liabilities
Long-term borrowings 115,678 50,881 166,559 161,369
- 161,369
Long-term Government Grants 799,963 - 799,963 849,963
- 849,963
Total Non-current liabilities 915,641 50,881 966,522 1,011,332
- 1,011,332
Current liabilities
Trade and other payables 396,784 - 396,784 411,295
- 411,295
Short-term Government Grants 100,000 - 100,000 100,000
- 100,000
Current portion of long-term 96,262 21,944 118,206 115,678
- 115,678
borrowings
Total current liabilities 593,046 21,944 614,990 626,973
- 626,973
Total liabilities 1,508,687 72,825 1,581,512 1,638,305
- 1,638,305
Total equity and liabilities 5,976,679 70,624 6,047,303 6,132,734
- 6,132,734
Reconciliation of UK GAAP income statements to IFRS income statements:
As at 31 December 2006
As at 30 June 2006
As previously Effect of transition As restated under As previously Effect of
transition As restated under
reported under UK IFRS reported under UK
IFRS
GAAP GAAP
£ £ £ £
£ £
Revenue 1,600,626 - 1,600,626 826,681
- 826,681
Cost of Sales (1,016,293) 2,894 (1,013,399) (354,766)
- (354,766)
Gross Profit 584,333 2,894 587,227 471,915
- 471,915
Other income 426,200 - 426,200
-
Distribution expenses (196,925) - (196,925) (53,823)
- (53,823)
Administrative expenses (876,795) - (876,795) (389,799)
- (389,799)
Finance income 21,298 - 21,298 2,481
- 2,481
Finance expenses (21,692) (5,095) (26,787) (22,736)
- (22,736)
(Loss) / profit before tax (63,581) (2,201) (65,782) 8,038
- 8,038
Taxation 24,038 - 24,038 -
- -
(Loss) / profit for the period (39,543) (2,201) (41,744) 8,038
- 8,038
(Loss) / profit per share (0.92)p (.05p) (0.97p) 0.35p
- 0.35p
4. Business Combination
On 28th April 2006 Bioganix plc completed the purchase of the entire share capital of Bioganix Composting Limited. The Business
Combination has been accounted for as a reverse acquisition in accordance with IFRS 3.
5. Segmental reporting
The group operates in one business segment, that of the provision of waste management services, and in one geographic segment, within
the UK. Accordingly no segmental analysis is required.
6. Taxation
Due to the Company's losses, no taxation charge has arisen for the period. Corporation tax received has arisen from research and
development tax credits.
7. Final Dividend
The directors have not declared a final dividend.
8. Preliminary Financial Statements
The preliminary financial statements for the year ended 31 December 2007 were approved by the Board of Directors on 14 May 2008. These
financial statements do not constitute statutory accounts within the meaning of the Companies Act 1985 and are neither reviewed nor audited.
The figures for the year ended 31 December 2007 are unaudited. Statutory accounts for the year ended 31 December 2006 have been filed with
the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain any statement under Section 237 (2)
or (3) of the Companies Act 1985.
9. Copies of Statement
Copies of this statement are available to shareholders and members of the public, free of charge, from the Company's registered office
at Wharton Court, Leominster, Herefordshire, HR6 0NX.
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
END
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