TIDMLCA
RNS Number : 4625F
Low Carbon Accelerator Limited
26 April 2011
Low Carbon Accelerator: 28 February 2011 NAV
Highlights
-- Q1 2011 NAV of 59.1 pence per Ordinary share up 15.0%
year-on-year
-- Portfolio's good progress is ongoing with the majority of the
portfolio companies now generating revenue
-- Investment Manager continues to work towards cash
realisations as it seeks liquidity in the portfolio
-- UK coalition Government FITs review targeted at large solar
projects with limited impact on the LCA portfolio. This review
process has created some short term uncertainty in the market
causing some impact on the portfolio
Net Asset Value ("NAV")
The unaudited NAV in accordance with International Private
Equity and Venture Capital valuation guidelines of Low Carbon
Accelerator Limited ("the Company" or "LCA") as at 28 February 2011
was GBP50.84m, equivalent to 59.1 pence per Ordinary Share.
Investment Manager's commentary
We are pleased to report that the 28 February 2011 NAV of 59.1
pence per Ordinary share represents an increase in of 15% on the 28
February 2010 unaudited NAV of 51.4 pence per Ordinary Share. The
NAV decreased by 2.0% on the NAV of 60.3 pence per Ordinary share
at the end of the prior quarter, predominantly due to exchange rate
differences.
This reflects the good progress made in the portfolio during
this period and continuation of the commercial traction that has
been seen in many companies within the portfolio over the past
year.
On 18 March 2011, the UK coalition Government published its
proposals regarding changes to the Feed-In Tariff (FITs) scheme in
the UK. As expected this was predominantly focused on larger-scale
solar installations. The cuts to the levels of FITs attainable,
which will not be applied retrospectively, will impact solar
projects over 50kW and will range from c.50-75% depending on the
size of the solar project.
Although this announcement was largely anticipated, as a result
of the UK coalition Government's earlier announcement on 7 February
2011 to review the FIT scheme in general, it has clearly created
some unease and uncertainty in the whole small-scale renewable
market driven by FITs and, in some cases, led to a delay in the
purchasing decision by customers. At the same time, however, no
mention is made of any intention in the announcement to make
prospective changes to FITs for wind installations in the near to
medium-term.
This uncertainty has impacted the short term outlook for both
Proven Energy Limited ("Proven Energy") and Vigor Renewables
Limited ("Vigor") to the extent that sales growth and project
implementation are currently behind expectations. In addition, the
growth in the small scale wind market combined with a lack of
guidance for local planners has resulted in an extension to the
timescale involved in planning and this has also led to a slower
than expected market growth rate. It is anticipated that this will
be resolved over the coming months.
Despite this uncertainty, it is still particularly pleasing to
note that Proven Energy is expected to complete its financial
year-ended 31 May 2011 delivering significant top line growth.
LCA announces that it has made a further investment of
GBP500,000 by way of a convertible loan in Proven Energy. This loan
takes LCA's total investment in Proven Energy to GBP9,900,000 of
which GBP9,250,000 takes the form of equity and GBP650,000 makes up
the total outstanding convertible loan, after a repayment of
GBP100,000 of the existing convertible loan was made in February
2011. LCA's current equity holding in Proven Energy is 75.08% on a
fully diluted basis.
This further investment will in part be used to provide
additional working capital for sales growth. In addition, Proven
Energy will continue its product development to ensure that it
consolidates its market leading position in meeting the demands of
diverse geographies and challenging environments that have an
increasing need for off-grid power solutions. LCA expects that it
will make an additional investment in Proven over the coming
quarter to position the company to continue to deliver both sales
growth and profitability in the next year.
Beyond the UK, Proven Energy will also look to consolidate its
growing presence in markets around the globe. In particular, the US
and Asian markets will be key to the roll-out of the Proven Energy
suite of distributed wind turbines. We are continuing our
discussions with potential co-investors and we continue to expect
the company to play a significant role in the inevitable
consolidation of this sub-sector.
Sterling Planet Inc. ("Sterling Planet") reported its second
consecutive annual net profit for the year-ended 31 December 2010
and continues to grow its order book for the delivery of Renewable
Energy Certificates ("RECs") to its customer base that includes
blue-chip companies such as PepsiCo, Detroit Edison and Intel
Corporation. As a result of the Sterling Planet's strong
performance there is now a growing interest in the company amongst
prospective investors.
The positive momentum in the portfolio is further evidenced by
ResponsiveLoad Limited ("RLtec") which signed a 10-year agreement
with Sainsbury's to fit its dynamic demand technology to the
supermarket's heating and ventilation systems, which went live on 1
March 2011. Sainsbury's use of RLtec's technology will help to
better manage the electricity supply and demand across the entire
national grid and hence provide National Grid with significant cost
savings whilst also saving up to 10,000 tonnes of carbon emissions
per year from the date it went live. Furthermore, the technology
will boost energy efficiency at Sainsbury's.
On 26 January 2011, LCA announced that it has invested a further
GBP200,000 in Vigor in the form of an unsecured loan. The
additional capital was provided to enable Vigor to expand and
accelerate the current pipeline of projects over the next 12
months. Vigor has over 70 wind project sites at various stages of
the development process and expects to have completed its first
installation during the current quarter, slightly behind schedule
due to delays within the planning process.
At the AGM on 29 March 2011, shareholders unanimously passed the
resolution for the Company to continue as an investment
company.
We continue to work towards our goal of delivering material cash
realisations from the portfolio and hence maximise shareholder
value. Indeed the Investment Manager is in ongoing discussions with
a number of third parties regarding companies within the portfolio,
albeit it is not expected that all such discussions will result
into a liquidity event. Nevertheless, the interest in the LCA
portfolio is a reflection of the mature nature of some of the
companies within the portfolio and the value that has been
created.
Other portfolio companies:
LUMEnergi Inc. ("LUMEnergi")
LUMEnergi has entered the expansion phase of its lifecycle and
has continued to both grow its pipeline during the quarter and
convert the existing pipeline into sales. Whilst the public sector
remains a key driver for growth it is encouraging that the company
is gaining traction in the private sector as energy savings plans
are implemented. It was pleasing to note during the quarter that
the company received another significant commercial order from a
large well-known lighting company.
QuantaSol Limited ("QuantaSol")
Although QuantaSol has developed a best-in-class product, the
uptake of the concentrating photovoltaic (CPV) market in the US and
Europe has been much slower than expected to date. This market
weakness is expected to impact on the value Quantasol can extract
as it now enters into advanced discussions with strategic partners
to deliver its technology to the market.
Vykson Limited ("Vykson")
During the quarter Vykson has continued demonstrating the
operation of its first commercial scale engine at a UK landfill
site of a major UK waste company under a revenue sharing agreement.
Once the demonstration and reliability testing are completed,
Vykson will move to the next phase of its growth plan to deliver
its first production units to the market.
Vykson is currently looking to raise further investment to
enable it to complete the required run hours on site and to deliver
its first production engines to the market.
Vykson turbines take gas that is ordinarily vented or flared and
turn it into electricity.
Eco-Solids International Limited ("Eco-Solids")
The company continues to execute its contract signed with
Yorkshire Water. The Validation Period has now commenced and is
expected to last approximately 45 days. Successful demonstration of
Eco-Solids' Cellruptor installation will play a key role in
unlocking other sales prospects in the pipeline.
The company has also received confirmation that the first
Eco-Solids Process unit is now being installed in China.
The company's biggest challenge remains to be able to secure its
working capital requirements through to a position where it will
have an installed base that enables the company to be cashflow
positive.
About Low Carbon Accelerator: www.lowcarbon.gg
Low Carbon Accelerator Limited is a closed ended investment
company created to invest in a portfolio of fast-growing low carbon
businesses. The Company listed on the AIM Market of the London
Stock Exchange on 11 October 2006, raising GBP44.5 million. On 26
June 2009, the Company announced that it had raised a further GBP10
million, net of expenses, following the successful placing of a
further 41.6 million shares.
The Company invests principally in companies which provide low
carbon products and services across the following sectors:
-- Energy efficiency (reductions in energy inputs at source,
improved conversion and reductions at point of use)
-- Energy generation (sustainable and clean energy, micro and
distributed generation)
The Company's investment strategy is to target trading
businesses with patentable technologies and products with a clear
commercial application and the opportunity to gain a large market
share of a new or expanding market. The Company focuses on
businesses with experienced management teams who have developed
commercially viable products providing easily adoptable solutions
which deliver immediate reductions in carbon dioxide emissions.
Enquiries:
Low Carbon Investors Limited Steve Mahon, CIO Tel: +44 (0)20 7631
Andrew Affleck, 2630
CEO
Grant Thornton Corporate Philip Secrett, Tel: +44 (0) 20 7383
Finance Colin Aaronson 5100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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