TIDMLCA
RNS Number : 8248H
Low Carbon Accelerator Limited
17 July 2012
17 July 2012
LOW CARBON ACCELERATOR LIMITED
Interim Report and Unaudited Financial Statements May 2012
Low Carbon Accelerator Limited ("LCA" or "the Company"), the AIM
listed specialist low carbon investment company, announces its
interim results for the six months ended 31(st) May 2012.
The Adjusted NAV as at 31 May 2012 is GBP19.704 million or 22.9
pence per Ordinary share. This compares to the NAV as at 30
November 2011 of GBP24.269 million or 28.2 pence per Ordinary
share.
Update of asset realisation
The Company announced on 27 April 2012 that it had appointed
Cogent Partners as its advisor to assist with the marketing and
sale of the LCA portfolio. The Company, with the support of Cogent
Partners, has approached a targeted short-list of potential buyers
and expects indicative offers to be received by the end of July
2012. A shortlist of buyers will then be given a period for further
due diligence before being required to make binding offers. Our
target is to conclude the sale of LCA's assets in this financial
year, ending 30 November 2012. Consistent with previous
announcements, the Company intends to disburse cash proceeds
realised from any sale to investors.
Enquiries:
Low Carbon Investors Ltd: Steve Mahon Tel: +44 (0) 20
76312630
Grant Thornton Corporate Finance Colin Aaronson Tel: +44 (0) 20
7383 5100
Melanie Frean
FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDED 31 MAY 2012
31 May 2012 31 May 2011
ADJUSTED NET ASSET VALUE (GBP'000) 19,704 48,318*
Adjusted net asset value per ordinary
share (pence) 22.9 56.1*
Ordinary share price (pence) 7.4 30.5
Loss per share (pence) (5.3) (4.2)
--------------------------------------- ------------ ------------
Net Asset Value NAV per share
GBP'000 Pence
31 May 2012
Accounting and Adjusted Net Asset Value 19,704 22.9
31 May 2011
Accounting Net Asset Value 37,668 43.7
Fair value adjustment to non-current
financial assets classified as held
for sale 10,650 12.4
Adjusted Net Asset Value 48,318 56.1
Notes:
* The Company's balance sheet net asset value as at 31 May 2011
was GBP37.7 million. At that date, the Company was required to
present its investment in Proven Energy as a "Non-current financial
asset classified as held for sale", and valued it at its cost of
GBP9.25 million. The fair value of its investment in Proven Energy
was GBP19.9 million. It therefore reported an 'Adjusted' net asset
value of GBP48.3 million in the interim financial statements as at
31 May 2011. As the Company's investment in Proven Energy has been
written off in the period ending 30 November 2011, there is no
difference between the balance sheet net asset value and the
'Adjusted' net asset value as at 31 May 2012.
CHAIRMAN'S STATEMENT
I present the Interim Report and Unaudited Financial Statements
in respect of Low Carbon Accelerator Limited ("LCA" or "the
Company") for the period from 1 December 2011 to 31 May 2012.
Financial performance
The Net Asset Value as at 31 May 2012 is GBP19.704 million or
22.9 pence per Ordinary share. This compares to the NAV as at 29
February 2012 of GBP24.07 million or 24.95 pence per Ordinary
share.
Investment activities
The Company made one follow-on investment, totaling GBP0.77
million (US$1.2 million), into Lumenergi in the six-months ended 31
May 2012. This investment was made in two tranches, and in
aggregate the investment formed part of an additional US$6.5
million funding round by Lumenergi.
Share performance
In the period 1 December 2011 to 31 May 2012, the Company's
closing mid-market share price decreased by 9.5% to 7.25 pence.
This share price represents a 68% discount to the NAV per share as
at 31 May 2012. The share price has remained broadly flat since the
period end and at close of trading on 5 July 2012 stood at 7.25
pence.
Outlook
The Company announced previously that it had appointed Cogent
Partners on the 27 April 2012 as its advisor to assist with the
process of the disposal of its assets. This transaction has been
structured as a two-stage auction. The Company, with the support of
Cogent Partners, has approached a targeted short-list of potential
buyers and provided them access to information relating to the LCA
portfolio. The first stage of the auction process requires
indicative offers to be received in July 2012. A shortlist of
buyers will then be given a period for further due diligence before
being required to make binding offers. Our target is to conclude
the sale of LCA's assets in this financial year, ending 30 November
2012. Consistent with previous announcements, the Company intends
to disburse cash proceeds realised from any sale to investors. It
should be noted that, given the uncertainty surrounding the auction
process, the net proceeds arising from a portfolio sale may vary
from the carrying value of the investments calculated on an
individual basis.
We await the results of Cogent's negotiations with potential
buyers and we expect to update the market in the near future with
progress relating to the sale of the assets.
John Hawkins Chairman 16 July 2012
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
For the six months ended 31 May 2012
2012 2011
Note GBP'000 GBP'000
Income
Interest income 2 28
Other income 276 1
278 29
Investment management fees 4 (302) (640)
Net decrease in fair value of financial
assets at fair value through profit or
loss 9 (4,245) (2,231)
Custodian, secretarial, broker, nomad
and administration fees (114) (96)
Directors' fees (46) (44)
Other operating expenses 5 (136) (621)
Total operating expenses (4,843) (3,632)
Loss for financial period (4,565) (3,603)
Other comprehensive income - -
Total comprehensive (expense)/income (4,565) (3,603)
Basic loss per share (pence) 7 (5.3) (4.2)
Diluted loss per share (pence) 7 (5.3) (4.2)
All activities are derived from discontinuing activities.
The Group has no recognised gains or losses other than the loss
for the period.
The accompanying notes are an integral part of this
statement
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 31 May 2012
As at As at As at
31 May 30 Nov 31 May
2012 2011 2011
Note GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Financial assets at fair value
through profit or loss 9 17,898 21,500 24,155
Long-term loans - 200 -
17,898 21,700 24,155
CURRENT ASSETS
Cash and cash equivalents 945 2,040 2,746
Non-current financial assets
classified as held for sale - - 9,250
Other receivables 8 931 593 1,594
TOTAL CURRENT ASSETS 1,876 2,633 13,590
TOTAL ASSETS 19,774 24,333 37,745
CURRENT LIABILITIES
Other payables (70) (64) (77)
NET ASSETS 19,704 24,269 37,668
EQUITY
Share capital 10 - - -
Share premium 52,720 52,720 52,720
Reserves (33,016) (28,451) (15,052)
TOTAL EQUITY 19,704 24,269 37,668
Number of ordinary shares ('000) 86,100 86,100 86,100
Net asset value (basic and diluted)
per share (pence) 22.9 28.2 43.7
The accompanying notes are an integral part of these financial
statements.
The condensed interim financial statements were approved by the
Board of Directors and authorised for issue on 16 July 2012.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
For the six months ended 31 May 2012
Share capital Retained
GBP'000 Share premium earnings Total
GBP'000 GBP'000 GBP'000
As at 30 November 2010 - 52,720 (11,449) 41,271
Total comprehensive income - - (3,603) (3,603)
As at 31 May 2011 - 52,720 (15,052) 37,668
Total comprehensive expense - - (13,399) (13,399)
As at 30 November 2011 - 52,720 (28,451) 24,269
Total comprehensive expense - - (4,565) (4,565)
As at 31 May 2012 - 52,720 (33,016) 19,704
The accompanying notes are an integral part of this
statement.
CONDENSED CONSOLIDATED CASHFLOW STATEMENT (UNAUDITED) for the
six months ended 31 May 2012
2012 2011
GBP'000 GBP'000
CASHFLOWS FROM OPERATING ACTIVITIES
Operating loss for the period before interest (4,567) (3,631)
Net changes in fair value of financial assets
at fair value through profit or loss 4,245 2,231
Provision made against short-term loans - 549
Increase in other receivables (13) (16)
Increase in other payables 6 16
NET CASH OUTFLOWS FROM OPERATING ACTIVITIES (329) (851)
CASHFLOWS FROM INVESTING ACTIVITIES
Purchase of investments (643) -
Interest received 2 28
NET CASH OUTFLOWS FROM INVESTING ACTIVITIES (641) 28
CASHFLOWS FROM FINANCING ACTIVITIES
Short-term loans (125) (700)
Repayment of short-term loans - 100
NET CASH OUTFLOWS FROM FINANCING ACTIVITIES (125) (600)
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,095) (1,423)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 2,040 4,169
CASH AND CASH EQUIVALENTS AT END OF PERIOD 945 2,746
The accompanying notes are an integral part of this
statement.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) for the six months ended 31 May 2012
1. GENERAL INFORMATION
Low Carbon Accelerator Limited (the "Company") is a company
incorporated and registered in Guernsey on 26 September 2006. The
Company is an authorised closed-end investment company with limited
liability under the Companies (Guernsey) Law, 2008, and its shares
are admitted to trading on the AIM market of the London Stock
Exchange.
The address of the Company's Registered office is set out on
page 1.
2. BASIS OF PREPARATION
The unaudited interim financial statements have been prepared
using accounting policies consistent with International Financial
Reporting Standards (with the exception of IAS 34, Interim
Financial Reporting) which comprise standards and interpretations
approved by the International Accounting Standards and Standings
Committee as adopted by the European Union and that remain in
effect. These interim financial statements are unaudited but have
been reviewed by the auditors.
The financial information summarised does not constitute
statutory financial statements.
a) Significant accounting policies
The same accounting policies, presentation and methods of
computation are followed in these interim financial statements as
those followed in the preparation of the Group's annual financial
statements for the year ended 30 November 2011. The report of the
auditors on these financial statements was unqualified.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of investments and foreign
currency derivatives. The condensed financial statements are
presented in Pounds Sterling and all values are rounded to the
nearest thousand (GBP'000) except when otherwise indicated.
As noted in the Group's annual financial statements for the year
ended 30 November 2011, IFRS 5 does not allow for upward fair value
adjustments to be made to assets classified as "non-current
financial assets classified as held for sale" in excess of any
previous impairments that had been applied to those same assets.
This restriction can mean, therefore, that where the Board
considers there to be an upward revaluation required of an
investment classified as a "non-current financial assets classified
as held for sale" in accordance with International Private Equity
and Venture Capital ("IPEV") valuation guidelines, this fair value
adjustment may not be made under IFRS if the asset had not
previously been impaired since reclassification, or to the extent
that such revaluation was in excess of a previous impairment since
the assets reclassification. As such, the treatment of non-current
financial assets classified as held for sale can, in certain
circumstances, conflict with the Group's general policy for valuing
its investment portfolio. Where this is the case, the Group
provides a reconciliation between the NAV in accordance with IFRS 5
("Accounting NAV") and the NAV in accordance with IPEV valuation
guidelines ("Adjusted NAV").
b) Going Concern
The Company has appointed Cogent Partners to assist with the
process of disposal of its assets. The Directors intend to
distribute the proceeds of such disposal to shareholders. Cogent
are already in discussion with a number of parties, and it is
anticipated that this process will be completed within the next six
months.
In the event that the Company is unable to dispose of its assets
in this time frame, the Company will cease to have the liquidity to
continue as a going concern. In this event, the directors will
distribute the underlying assets of the Company to the
shareholders, and proceed to liquidate the Company.
Consequently, it is likely that the company will not continue as
a going concern.
3. BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Company and entities (including special purpose
entities) controlled by the Company (its subsidiaries). Control is
achieved where the Company has the power to govern the financial
and operating policies of an entity so as to obtain benefits from
its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the
Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
The Company owns two investments via wholly owned intermediate
holding company structures. The acquisition of equity in, and the
provision of the loan to, the underlying investment was funded by a
long term loan account through the intermediate holding companies.
As a result of this structure, the Company falls under the
requirement to produce consolidated accounts.
4. INVESTMENT MANAGEMENT FEES
Investment management fees are payable to Low Carbon Investors
Limited (the "Manager") for investment management services. These
are paid quarterly in advance and, for the period up to 31 May
2012, are equal to 0.625% per quarter of the Net Asset Value
("NAV") of the Company as at the last day of the preceding
quarter.
On 27 April 2012, the Board of LCA announced that it had taken
action to preserve the existing cash reserves of the Company and
minimise any long term liabilities. To this end, and with the
agreement of the Investment Manager, the annual management fees
have been reduced from 2.5% to 2.0% per annum with effect from 1
June 2012. Furthermore, the Company has given notice to terminate
the investment management agreement with the Investment Manager to
start the 12 month notice period and to minimise the long term
liability associated with this contract. These changes have been
made with full co-operation of the Investment Manager who remains
fully committed to supporting the disposal of the assets.
Additionally, the Manager will be paid an annual performance fee
equal to 20% of any amount by which the NAV of the Company at the
relevant year end exceeds the previous high watermark subject to
the performance hurdle test being met. The performance hurdle test
is met if the adjusted NAV at the end of the relevant performance
period exceeds an amount equal to the Hurdle Base (which, as at 31
May 2012, is 92.66 pence). There is no performance fee payable for
the period ending 31 May 2012.
5. OTHER OPERATING EXPENSES
6 months 6 months
ended ended
31 May 31 May
2012 2011
GBP'000 GBP'000
Provision against short-term loan to QuantaSol
Limited - 500
Provision against other receivable from
Low Carbon Accelerator (Barbados) ISRL - 49
Net changes to loan receivables - 549
Other expenses 136 72
Total other operating expenses 136 621
6. DIVIDENDS
In accordance with the strategy set out in the Company's AIM
Admission Document, no dividend has been declared for the period
ending 31 May 2012.
7. BASIC AND DILUTED EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based
on the loss for the period ending 31 May 2012 and on 86,100,000
(2011 - 86,100,000) Ordinary Shares, being the weighted average
number of shares in issue during the period.
8. OTHER RECEIVABLES
31 May 30 Nov 31 May
2012 2011 2011
GBP'000 GBP'000 GBP'000
Short term loans
* Lumenergi Inc. 125 - -
- Proven Energy Limited - - 650
- QuantaSol Limited 350 350 750
- Vigor Renewables Limited 400 200 200
875 550 1,600
Other receivables 56 43 (6)
931 593 1,594
GBP200,000 of the loan to Vigor Renewables Limited is unsecured
and accrues interest at 10% per annum and was repayable on or
before 30 June 2012 but is still outstanding and repayable on
demand. The balance of the loan is repayable on 26 April 2013.
9. INVESTMENTS - DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
6 months 12 months 6 months
ended ended ended
31 May 30 Nov 31 May
2012 2011 2011
GBP'000 GBP'000 GBP'000
Brought forward 21,500 26,386 26,386
Additions during the period
* acquired for cash 643 350 -
* disposed for cash - (1,230) -
* gain on sale of investment - 230 -
Net changes in fair value through
profit or loss (4,245) (4,236) (2,231)
Total financial assets at fair
value through profit or loss 17,898 21,500 24,155
The net changes in fair value through profit or loss represents
amounts relating to the revaluation of investments and foreign
currency gains or losses relating to investments made in currencies
other than GBP.
During the period the Company made the following upward
revaluations to investments:
-- Sterling Planet Inc. ("Sterling Planet")
A net foreign currency gain of GBP177,000 was made on this
investment, which reflects the depreciation of Sterling against the
US dollar in the period.
-- LUMEnergi Inc. ("LUMEnergi")
A net foreign currency gain of GBP39,000 was made on this
investment, which reflects the depreciation of Sterling against the
US dollar in the period.
During the period the Company made the following write-down
against investments:
-- ResponsiveLoad Limited ("RLtec")
On 6 June 2011, LCA announced that it had sold 175,747
Preference B shares in RLtec to Ombu Limited ("Ombu") for a cash
consideration of GBP1.23 million. The price paid for these shares
by Ombu represented a 23% uplift to the carrying value of the
shares at the quarter-ended 28 February 2011. The previous carrying
value of this stake, GBP4,461,000 is based on the valuation set at
the June 2011 investment by Ombu.
Since that investment round, RLtec has failed to make the
progress expected and now requires further funding. As a result of
the uncertainty associated with the further funding round, the
Company has written down the value of its investment in RLtec to
GBPnil.
Cost of 31 May 30 November 31 May
investment 2012 2011 2011
in original Value Value of Value
Currency currency of investment investment of investment
Company of investment '000 GBP'000 GBP'000 GBP'000
Sterling Planet,
Inc. USD 7,000 13,718 13,541 12,957
Lumenergi Inc. USD 7,173 3,530 2,848 3,634
ResponsiveLoad
Limited GBP 2,354 - 4,461 5,691
Eco-Solids International
Limited GBP 825 - - 730
Vykson Limited GBP 650 - - 643
Vigor Renewables
Limited GBP 650 650 650 500
Total 17,898 21,500 24,155
10. SHARE CAPITAL
Authorised No. GBP'000
Ordinary shares of no par value Unlimited -
Issued and fully paid
Ordinary shares of no par value 86,100,000 -
No.
Balance as at 31 May 2011 86,100,000
Issued (ordinary shares of GBP1 each) -
Balance as at 30 November 2011 86,100,000
Issued (ordinary shares of GBP1 each) -
Balance as at 31 May 2012 86,100,000
The Company has one class of ordinary shares which carry no
right to fixed income.
11. POST BALANCE SHEET EVENTS
There have been no material event between the balance sheet date
and 16 July 2012
12. FINANCIAL COMMITMENTS
As at 16 July 2012 the Company has no commitments to companies
in its portfolio.
13. RELATED PARTY TRANSACTIONS
During the period the Company continued to undertake the
following related party transactions:
a. The Company has appointed Low Carbon Investors Limited, a
Company in which David Nussbaum holds shares, provides advisory
services, and sits on the investment committee, to provide
investment management services. During the period the Company paid
a management fee to Low Carbon Investors Limited of GBP302,000
(2011 - GBP640,000).
b. Andrew Neil Munro, a director of the Company, is an employee
of Ogier Fiduciary Services (Guernsey) Limited. Ogier Fund
Administration (Guernsey) Limited provides administration services
to LCA. During the period LCA paid fees of GBP53,938 (2011 -
GBP77,000) to Ogier Fund Administration (Guernsey) Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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