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Aggregated Micro - Half-year Report

RNS Number : 4014X
Aggregated Micro Power Holdings PLC
19 December 2019
 

 

Aggregated Micro Power Holdings plc

("AMP", the "Group" or the "Company")

 

Interim Results for the sixth months ended 30 September 2019

 

 

Aggregated Micro Power Holdings plc (AIM: AMPH), trading as AMP Clean Energy, the specialist provider of distributed heat, power and renewable fuels, is pleased to announce results for the sixth months ended 30 September 2019.

 

Financial Highlights

 

·    Group revenues were £18.10m (2018: £18.31m restated)

·    Profit after tax increased to £0.77m (2018: loss of £5.4m restated)

·    Net assets as at 30 September 2018 were £24.89m (30 March 2019: £24.11m)

·    Net assets do not include any recognition for future deferred development fees that may be due from AMPIL(a)

 

Operational Highlights

 

·    Strong progress in Urban Reserve with 50MWs consented and 32MWs submitted for planning

·    Wood fuels delivered over 90,000 tonnes of RHI compliant wood fibre to nearly 4,000 customers and provides service and maintenance to around 950 boilers

 

Post Period End

 

·    In November, the board of directors of Fossa Holdco Limited, a company wholly-owned by Asterion Industrial Infra Fund I, FCR ("Asterion") and AMP announced an agreement on the terms of a recommended acquisition of the entire issued and to be issued ordinary share capital of the Company

·    Also in November, AMP announced it had sold a 4% shareholding in IncubEx Inc(b).

·    AMP's Project Division Urban Reserve has developed a strong pipeline of projects and is on track to have 100MWs of projects to have planning consent or be in planning by March 2020

·    In December, AMP helped to secure further funding for AMPIL(a) raising a further £12.9 million bringing the total AMPIL Notes in issue to £80 million

 

Richard Burrell, Chief Executive of Aggregated Micro Power Holdings plc, said:

 

"AMP continues to make progress and our interim results have benefited from the uplift in the value of our shareholding in Incubex.  The recently announced 90p per share offer from Asterion represents an attractive offer price for AMP and it ensures that AMP has the right partner to help fund its next phase of growth."

 

 

(a) Aggregated Micro Power Infrastructure 2 Limited ("AMPIL") is a special purpose vehicle which is wholly owned by Law Debenture Intermediary Corporation plc as trustee for general charitable purposes. AMPIL can issue listed loan notes to fund renewable energy projects acquired from AMP and/or other developers. AMPIL has to date raised £80m from institutional and other investors.

 

(b) IncubEx LLC is an incubator for exchange traded products, services, and technology solutions. At its core, IncubEx is a product and business development firm. The company works in conjunction with its global exchange partner, European Energy Exchange (EEX) and other leading service providers and stakeholders to design and develop new financial products in global environmental, reinsurance, and related commodity markets. The company has a specific focus on innovation and continuous improvement of products and services, including technology, trading solutions, and operational efficiencies. The IncubEx team is comprised of former key Climate Exchange executives and is uniquely positioned to capture these opportunities with its partners. The company was founded in 2016 and currently has offices in Chicago and London. www.theincubex.com

                                                                                                                                                                                         

Contacts

 

Aggregated Micro Power Holdings plc                         020 7382 7800

Neil Eckert, Executive Chairman

Richard Burrell, CEO

Izzy Deterding, Investor Relations

               

finnCap Ltd                                                                         020 7220 0500

Ed Frisby/Simon Hicks - Corporate Finance          

Andrew Burdis/Richard Chambers - ECM

 

Whitman Howard Ltd                                                      020 7659 1234

Mark Murphy - Institutional Sales

Nick Lovering - Corporate Finance

 

About Aggregated Micro Power Holdings plc

 

The Group was established to develop, own and operate renewable energy generating facilities. It specialises in the sale of wood fuels and in the installation of distributed energy projects. Trading as AMP Clean Energy, the Group sells high quality wood chip and wood pellet to end customers throughout the UK, while its projects division installs biomass boiler and biomass CHP systems for a wide range of applications and customers. AMP is also active in developing projects for stand-by power generation which aim to balance the transmission grid at times of peak demand.

 

www.ampcleanenergy.com

 

 

 

 

Executive Chairman's Statement

 

This Interim Report is in respect of the six month period to 30 September 2019.

 

Interim Results

 

Group revenues for the six months to 30 September 2019 were £18.11m (2018: £18.31m restated). Profit after tax increased to £0.77m (2018: loss of £5.4m restated).

 

Profit from operations was higher than the comparable (restated) period last year due to the increased value of the Incubex investment which has been revalued in line with the value achieved from the 4% sale in November 2019.  The business is trading in line with budget and management expectations. Net assets as at 30 September 2019 were £24.89m (31 March 2019: £24.11m restated).

The balance sheet does not include any recognition for future deferred development fees that may be due from Aggregated Micro Power Infrastructure 2 plc ("AMPIL").

Interim Review

AMP operates through three business divisions: Wood Fuels; Project Development; and Investments.

Wood Fuels Segment

 

Revenues from the Wood Fuels segment increased to £17.33m (2018: £16.71m restated), gross profit increased to £1.5m (2018: £1m restated) and the loss for the period decreased to £3.78m (2018: loss of £4.18m restated).

 

The loss for the period reflects the seasonal nature of the Wood Fuels segment where revenues and gross profit were not sufficient to cover the fixed costs of our fleet and depots during the summer months.  In comparison to the restated period for last year, the benefits of the restructuring that has taken place have started to flow through as evidenced by the improved gross profit and reduced loss from operations which has been achieved in spite of higher overhead costs incurred during the first half of the year from the expansion of the service and maintenance business.

 

AMP sells high quality, RHI compliant, wood chip and wood pellet to end customers throughout the UK in the form of fuel only contracts, heat contracts and/or fuels plus operation and maintenance. AMP sells fuel to around 4,000 customers and provides service and maintenance to over 950 biomass systems.

 

Project Development Segment

 

Revenues from the Project Development segment were £0.78m (2018: £1.60m restated), gross loss was £0.29m (2018: profit of £1.36m restated) and the loss for the period was £1.42m (2018: profit of £0.41m restated).   

The lower revenues and increased losses incurred in this segment were as a result of the timing of development fees which are anticipated to be weighted to the second half of the financial year.

AMP's project development division aims to deliver cost and carbon savings to high intensity heat and power users.  AMP also develops gas-fired peaking plants which provide flexible generation at times of peak demand and this business is branded Urban Reserve where development is increasingly concentrated on smaller sites in areas of high electricity demand in industrial and urban areas. These sites can be connected to the distribution network at lower voltage levels in areas where grid constraints offer significant system benefits in terms of avoided grid reinforcement costs and will potentially support the anticipated growth in electric vehicles and the electrification of heat.

Investments Segment

AMP Investments aim to grow assets under management and to build up off-balance sheet deferred development fees and carried interest together with making long term equity investments in companies aligned to our corporate strategy. It also includes the overhead costs of the Board and related PLC expenses. 

Post period end

 

On 29 November 2019, AMP announced that it had sold a 4.0 per cent. shareholding in IncubEx Inc., an incubator for exchange traded products in the global environmental markets space, to IPGL Limited, Michael Spencer's investment vehicle, for a cash consideration of £2.35 million. This sale was made to finance AMP Clean Energy's general working capital requirements, including funding the project pipeline and acquisition of wood fuel stock for this season.

Also on 29 November 2019, AMP announced that it had reached agreement on the terms of a recommended acquisition of the entire issued and to be issued ordinary share capital of AMP Clean Energy by Fossa HoldCo Limited a company wholly-owned by Asterion Industrial Infra Fund I, FCR.  Under the terms of the acquisition, shareholders will receive 90 pence in cash for each AMP Share.  The acquisition values the entire issued and to be issued share capital of AMP Clean Energy at approximately £63.1 million.

It is proposed that the acquisition be implemented by means of a court sanctioned scheme of arrangement under Part 26 of the Companies Act, which requires the approval of AMP shareholders at the Court Meeting and the General Meeting and the sanction of the Court. 

 

 

 

Neil Eckert, Executive Chairman

18 December 2019

 

 

 

 

INDEPENDENT REVIEW REPORT TO Aggregated micro power holdings plc

Introduction

We have been engaged by the Company to review the set of financial statements in the half-yearly financial report for the six months ended 30 September 2019 which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated cash flow statement, the consolidated statement of changes in equity and the related notes.

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.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.  The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

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 Financial Reporting Council for use in the United Kingdom.  A review of interim financial information consists of making enquiries, 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 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 September 2019 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

Use of our report

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability

 

 

 

BDO LLP

Chartered Accountants

United Kingdom

18 December 2019

 

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 

 

 

 

 

Consolidated statement of comprehensive income

For the six months ended 30 September 2019  

 

 

 

Restated

 

 

 

 

 

Six months ended

Six months ended

Year ended

Year ended

Year ended

 

 

 30 Sep 2019

 30 Sep 2018

31 Mar 19

31 Mar 19

31 Mar 19

 

 

Unaudited

Unaudited

Audited

Audited

Audited

 

 

Total

Total

Underlying

Non-

Underlying

Total

 

Note

£

£

 

 

£

Revenue

3

18,106,275

18,314,798

49,539,100

-

49,539,100

Cost of sales

3

(16,880,135)

(15,957,433)

(38,734,025)

-

(38,734,025)

 

 

 

 

 

 

 

Gross profit/(loss)

 

1,226,140

2,357,365

10,805,075

-

10,805,075

 

 

 

 

 

 

 

Other operating income

3

227,245

69,911

32,763

-

32,763

 

 

 

 

 

 

 

Administrative expenses

 

(7,210,445)

(7,179,122)

(14,906,419)

(14,906,419)

Impairment of intangible

 

-

-

-

(463,306)

(463,306)

Impairment of receivables

 

244,319

-

(615,067)

-

(615,067)

Restructuring provision

 

 -

 -

-

56,532

56,532

Total Administrative costs

 

(6,966,126)

(7,179,122)

(15,521,486)

(406,774)

(15,928,260)

 

 

 

 

 

 

 

Fair value adjustment on deferred consideration

 

 -

 -

-

710,344

710,344

Gain on financial asset at fair value through profit or loss

 

6,567,380

 

    -

-

-

-

 

 

 

 

 

 

 

Profit/(Loss) from operations

 

1,054,639

(4,751,846)

(4,683,648)

303,570

(4,380,078)

Finance income

 

 -

 -

25,286

-

25,286

Finance expense

5

(315,184)

(670,112)

(1,362,802)

-

(1,362,802)

 

 

 

 

 

 

 

Profit/(Loss) before tax

 

739,455

(5,421,958)

(6,021,164)

303,570

(5,717,594)

 

 

 

 

 

 

 

Tax credit

 

34,170

34,174

(203)

-

(203)

Profit/(Loss) for the year and other total comprehensive losses for the period

 

773,625

(5,387,784)

(6,021,367)

303,570

(5,717,797)

Profit/(Loss) for the year attributable to:

 

 

 

 

 

 

Owners of the parent

 

998,686

(5,367,752)

 

 

(5,514,629)

Non-controlling interest

 

(225,061)

(20,032)

 

 

(203,168)

 

 

773,625

(5,387,784)

 

 

(5,717,797)

Basic and diluted earnings/(loss) per share attributable to the ordinary equity holders of the parent

11

1.58

 

1.40

 

(12.39)

 

(12.39)

 

 

(11.39)

 

(11.39)

 

 

Consolidated statement of financial position

As at 30 September 2019 

 

 

 

Restated

 

 

 

 30 Sep 2019

 30 Sep 2018

31 Mar 2019

 

 

Unaudited

Unaudited

Audited

 

Note

£

£

£

Non-current assets

 

 

 

 

Property, plant and equipment

4

6,748,140

5,991,223

5,039,392

Investment in associate

9

17,977,500

11,410,120

11,410,120

Intangibles

6

9,103,926

9,975,995

9,295,159

Total non-current assets

 

33,829,566

27,377,338

25,744,671

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

2,524,665

2,120,303

2,398,713

Trade and other receivables

 

6,168,341

7,817,079

11,295,093

 

800,501

531,094

2,383,616

Total current assets

 

9,493,507

10,468,476

16,077,422

 

 

 

 

 

Total assets

 

43,323,073

37,845,813

41,822,094

Current liabilities

 

 

 

 

Trade and other payables

7

10,455,442

16,507,336

13,297,632

Provisions

 

 -

397,960

6,000

Loans and borrowings

8

4,062,917

597,313

2,442,707

Total current liabilities

 

14,518,359

17,502,609

15,746,339

 

 

 

 

 

Non-current liabilities

 

 

 

 

Loans and borrowings

8

3,205,137

10,656,053

1,215,633

Deferred Consideration

 

72,594

812,039

72,594

Deferred tax liability

 

639,805

652,412

673,975

Total non-current liabilities

 

3,917,536

12,120,504

1,962,202

 

 

 

 

 

Total liabilities

 

18,435,895

29,623,113

17,708,541

 

 

 

 

 

Net assets

 

24,887,178

8,222,700

24,113,553

Equity attributable to equity shareholders of the
parent company

 

 

 

 

Paid up share capital

10

316,970

215,956

316,970

Share premium

10

17,106,745

 -

17,106,745

Merger reserve

 

6,648,126

6,648,126

6,648,126

Other reserve

10

10,711,532

10,682,431

10,711,532

Convertible debt option reserve

 

 -

994,276

-

Retained deficit

 

(9,863,955)

(10,677,766)

(10,862,641)

 

 

24,919,418

7,863,023

23,920,732

Non-controlling interest

 

(32,240)

359,677

192,821

Total equity

 

24,887,178

8,222,700

24,113,553

The financial statements were approved by the Directors on 13 December 2019 and signed on their behalf by:

 

 

 

Richard Burrell, Chief Executive Officer

 

Consolidated statement of changes in equity

As at 30 September 2019

 

Share
capital

Share premium

Retained  deficit

Merger reserve

Other Reserve

Convertible debt option reserve

Total Attributable to Equity Holders of Parent

Non-Controlling Interests

Total Equity

 

£

£

£

£

£

£

£

£

£

Equity as at 1 April 2018

215,956

16,192,845

(21,612,095)

6,648,126

10,682,431

1,149,255

13,276,518

395,988

13,672,506

Retained income opening balance adjustment

 

 -

(150,051)

 -

 -

 -

(150,051)

-

(150,051)

Equity as at 1 April 2018

215,956

16,192,845

(21,762,146)

6,648,126

10,682,431

1,149,255

13,126,467

395,988

13,522,455

Profits for the period

 -

 -

(5,514,629)

 -

 -

-

(5,514,629)

(203,167)

(5,717,796)

Total comprehensive income

 -

 -

(5,514,629)

 -

 -

 -

(5,514,629)

(203,167)

(5,717,796)

Issue of share capital

42,500

8,457,500

 -

 -

-

 -

8,500,000

 -

8,500,000

Equity element of
convertible debt

 -

 -

209,550

 -

 -

(209,550)

 -

 -

 -

Conversion of convertible

58,514

9,074,761

11,739

-

-

(939,705)

8,205,309

-

8,205,309

Capital reduction

 -

(16,192,845)

16,192,845

 -

-

 -

-

-

-

Share issue cost

 -

(425,516)

 -

 -

 -

 -

(425,516)

 -

(425,516)

Fair value adjustment of EMI Options

 -

 -

 -

 -

29,101

 -

29,101

-

29,101

Year ended 31 March 2019

316,970

17,106,745

(10,862,641)

6,648,126

10,711,532

-

23,920,732

192,821

24,113,553

 

 

Share
capital

Share premium

Retained  deficit

Merger reserve

Other Reserve

Convertible debt option reserve

Total Attributable to Equity Holders of Parent

Non-Controlling Interests

Total Equity

 

£

£

£

£

£

£

£

£

£

Equity as at 1 April 2019

316,970

17,106,745

(10,862,641)

6,648,126

10,711,532

-

23,920,732

192,821

24,113,553

Profit for the period

 

 -

998,686

 -

 -

 -

998,686

(225,061)

773,625

Total comprehensive income

 -

 -

998,686

 -

 -

 -

998,686

(225,061)

773,625

Period  ended 30 September 2019

316,970

17,106,745

(9,863,955)

6,648,126

10,711,532

-

24,919,418

(32,240)

24,887,178

 

Share capital: Nominal value of shares issued.

 

Share premium: Amount subscribed for share capital in excess of the nominal value.

 

Capital contribution: Relates to funding from the shareholders for which no share capital was issued and that funding meets the definition of an equity instrument.

 

Retained deficit: All other net losses and transactions with owners (e.g. dividends) not recognised elsewhere.

 

Merger reserve:  Created on the issue of shares on acquisition of its subsidiary accounted for in line with the Company's Act 2006 provisions.

 

Other reserve: Amount raised through the use of a cashbox structure and applying merger relief on business combination where the consideration for shares in another company includes issued shares and on completion of the transaction, the company issuing the shares will have secured at least a 90% equity holding in the other company.

 

Convertible debt option reserve: Amount recorded as equity on the initial fair value measurement of issued convertible loan notes.

 

Consolidated statement of cash flows

 For the six months ended 30 September 2019

 

 

 

Restated

 

 

 

Six months ended

Six months ended

Year ended

 

 

30-Sep-19

30-Sep-18

31-Mar-19

 

 

Unaudited

Unaudited

Audited

 

Note

£

£

£

Operating activities

 

 

 

 

Loss for the period after tax

 

773,625

(5,387,784)

(5,717,797)

Adjustments for:

 

 

 

 

Provision for restructure

 

(6,000)

-

-

Tax credit

 

(34,170)

(34,174)

203

Interest Income

 

-

-

(25,285)

Fair value adjustment on financial liabilities at fair value through profit and loss

 

-

-

(710,344)

Gain on financial asset at fair value through profit and loss

 

(6,567,380)

-

-

(Profit)/Loss on disposal of Property, Plant & Equipment

 

(62,107)

483

149,103

(Profit)/Loss on disposal of Investments

 

-

-

-

Bad debt expense

 

-

-

309,389

Impairment loss

 

-

-

463,306

Finance Cost

5

315,184

670,112

1,362,802

Movement in foreign exchange

 

185,169

136,142

228,919

Amortisation of intangibles

6

191,234

224,012

421,378

Depreciation of property, plant and equipment

4

828,473

681,351

1,515,443

Cash flows from operating activities before changes to working capital

 

(4,375,972)

(3,709,858)

(2,002,883)

(Increase)/decrease in inventories

 

(125,952)

(347,737)

(626,147)

(Increase)/decrease in trade and other receivables

 

5,215,894

4,108,606

171,152

Increase/(decrease) in trade and other payables        

 

(485,072)

(907,129)

(7,060,241)

Cash generated/(used) from operations

 

228,898

(856,118)

(9,518,119)

 

 

 

 

 

Investing activities

 

 

 

 

Purchase of property, plant and equipment

4

(179,449)

-

(48,256)

Proceeds from sale of assets

 

222,232

114,638

307,880

Interest received

 

-

-

25,285

Net cash used in investing activities

 

42,783

114,638

284,909

 

 

 

 

 

Financing activities

 

 

 

 

Share issue cost

 

-

-

(425,516)

Proceeds from invoice discounting

 

(2,542,286)

(1,892,070)

465,764

Proceeds from issue of convertible notes

 

-

-

(878,825)

Proceeds from issue of ordinary shares

 

-

-

8,500,000

Proceeds from loan

 

1,638,622

-

1,750,000

Proceeds from finance lease drawdown

 

-

-

-

Payments of interest on borrowings                                              

 

(226,041)

(605,794)

(889,855)

Payments on finance lease                                              

 

(725,091)

(390,937)

(1,066,117)

Net cash used in financing activities

 

(1,854,796)

(2,888,801)

7,455,451

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(1,583,115)

(3,630,281)

(1,777,759)

Cash and cash equivalents at beginning of period

 

2,383,616

4,161,375

4,161,375

Cash and cash equivalents at end of period

 

800,501

531,094

2,383,616

 

 

Notes to the consolidated financial statements

For the six months ended 30 September 2019     

 

1. Basis of preparation

 

The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs).

 

The Group's results are considered to be affected by seasonal variations and do not yet fully reflect the positive impact of our wood fuels business acquisitions as most of this turnover and future income is anticipated to be generated in the second half of the financial year (October through to March) where the heating season is at its busiest.

 

The Group's annual report and accounts for the year ended 31 March 2019 have been delivered to the Registrar of Companies. The Group's independent auditor's report on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The comparative financial information for the year ended 31 March 2019 in this interim report does not constitute statutory accounts for that year.

 

Comparative figures in the financial statements are in respect of the audited twelve month period to 31 March 2018.  The Statement of income, Statement of Financial position, Statement of changes in Equity and Cash Flow Statement have been restated to show the impact of a prior year adjustment. Further details can be found in Note 13.

 

The financial information for the half-years ended 30 September 2018 and 30 September 2019 is unaudited.

 

As at 30 September 2019 the group had £801k in cash and net current liabilities of £5.02m. The directors and management have prepared a cash flow forecast to December 2020, 12 months from the date this report has been approved, which shows the group will remain cash positive.

 

The directors and management note that given the seasonality of the fuels division revenues and the unpredictability of earning revenues on development fees, the forecast continues to contain sensitivity. The directors and management manage this sensitivity by:

 

-     Risk weighting the development fee revenues based on prudent chance of success of completion;

-     Managing working capital through enhanced debtor collection, constant communication with key suppliers and managing costs in line with movements in revenues;

-     In July 2019 the company drew down a further short term working capital facility which has provided a further £1.8m in funding. The total facility of £3.4m is secured on the equity shares of AMP Biomass Fuels Ltd; 

-     Monitoring other short-term credit lines available to the group; and

-     In November 2019 the company sold 4% of its holding in Incubex LLC for £2.35m.

 

Based on the information provided above the directors and management are confident that the group will trade in line with the forecasts prepared and have therefore prepared the accounts on a going concern basis.

 

 

2. Significant accounting policies

The group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2018 annual financial statements, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2018, and will be adopted in the 2019 annual financial statements. A number of amendments to Standards have become effective for financial periods beginning on (or after) 1 January 2019, and are therefore applicable for the 30 September 2019 interim financial statements.

 

Only the application of IFRS 16 resulted in the accounting applied by the Group changing.  The impacts of these standards on the recognition and measurement of items in the financial statements are shown in this note 2.   

 

Details of the impact of this standard are given below.

 

Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and IFRIC 4 Determining whether an

Arrangement Contains a Lease. 

 

IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17, with the distinction between operating leases and finance leases being retained. The Group does not have significant leasing activities acting as a lessor. 

 

(a)   Transition Method and Practical Expedients Utilised 

 

The Group adopted IFRS 16 using the modified retrospective approach, with recognition of transitional adjustments on the date of initial application (1 April 2019), without restatement of comparative figures. The Group elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. The definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after 1 April 2019.

 

IFRS 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Group applied the following practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17:

•      Apply a single discount rate to a portfolio of leases with reasonably similar characteristics;

·      Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application for leases where the right-of-use asset was determined as if IFRS 16 had been applied since the commencement date;  

•      Reliance on previous assessments on whether leases are onerous as opposed to preparing an impairment review under IAS 36 as at the date of initial application; and

·      Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application. 

 

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group recognizes right-of-use assets and lease liabilities for most leases. However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

 

 

On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases of office space, heavy equipment and automobiles, which had previously been classified as operating leases. 

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate as at 1 April 2019. The Group's incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 3.37% 

 

The right-of-use assets were measured as follows:

 

(a) Office space: Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

 

 (b) All other leases:   Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

 

 

The following table presents the impact of adopting IFRS 16 on the statement of financial position as at 1 April 2019:

 

 

31 March 2019

As Originally Presented

 

IFRS 16

 

1 April 2019

 

£

£

£

Non-current assets

 

 

 

Property, plant and equipment

5,039,392

1,464,735

6,504,127

 

 

 

 

Non-current liabilities

 

 

 

Loans and borrowings

1,215,633

1,464,735

2,680,368

 

 

 

 

 

Included in profit or loss for the period are £192,049 of amortisation of right-of-use assets and £26,906 of finance expense on lease liabilities. Short-term and low-value leases included in profit or loss for the period were £269,759. 

 

 The following table reconciles the minimum lease commitments disclosed in the Group's 31 March 2019 annual financial statements to the amount of lease liabilities recognised on 1 April 2019:

 

 

1 April 2019

 

£

Minimum operating lease commitment at 31 March 2019

2,010,808

Less: short-term leases not recognised under IFRS 16

(359,631)

Less: low value leases not recognised under IFRS 16

-

Plus: effect of extension options reasonably certain to be exercised

-

Undiscounted lease payments

-

Add: effect of discounting using the incremental borrowing rate

 

as at the date of initial application

(192,766)

Plus: leases previously classified as finance type under IAS 17

1,881,371

Lease liability as at 1 April 2019

3,339,781

 

 

 

 

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

•      Leases of low value assets; and

•      Leases with a term of 12 months or less.

 

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the group's incremental borrowing rate on commencement of the lease is used.  Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. 

 

In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term.  Other variable lease payments are expensed in the period to which they relate.

 

On initial recognition, the carrying value of the lease liability also includes:

•      amounts expected to be payable under any residual value guarantee;

•      the exercise price of any purchase option granted in favour of the group if it is reasonable certain to assess that option;

•      any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

 

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

•      lease payments made at or before commencement of the lease;

•      initial direct costs incurred; and

•      the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset.

 

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made.  Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate or when there is a change in the assessment of the term of any lease.

 

 

 

 

3    Segmental information

For management purposes, the Group is organised into business units based on its products and services. The results have been prepared using consistent accounting policies for each segment as detailed in Note 1 to the consolidated financial statements for the year ended 31 March 2019.

 

The Group was exclusively focused on UK operations. The performance of each segment is reported below.

 

Operating segments - Six Months Ending 30 September 2019

Wood fuels

Project development

Investments

Total

 

£

£

£

£

Revenue

17,329,480

776,795

 -

18,106,275

Cost of sales

(15,809,568)

(1,070,567)

 -

(16,880,135)

Gross profit

1,519,912

(293,772)

 -

1,226,140

Other operating income

227,245

 -

 -

227,243

Administrative expenses

(3,851,780)

(1,124,082)

(656,750)

(5,632,612)

*Adjusted EBITDA

(2,104,625)

(1,417,854)

(656,750)

(4,179,229)

Depreciation

(668,970)

 -

(159,503)

(828,473)

Finance Expense

(687,579)

 -

380,251

(307,328)

Amortisation Intangibles

 -

 -

(191,234)

(191,234)

FX Gain/(Loss)

(193,788)

 -

 -

(193,788)

Non-Recurring Income/(Expenses)

(127,873)

 -

 -

(127,873)

Gain on financial asset at fair value through profit and loss

 

 

6,567,380

6,567,380

Tax credit

 -

 -

34,170

34,170

Profit / (Loss) from operations

(3,782,835)

(1,417,854)

5,974,314

Segment assets

13,354,249

1,451,996

28,516,828

43,323,073

Segment liabilities

(15,103,766)

(1,209,935)

(2,122,194)

(18,435,895)

 

(1,749,517)

242,061

26,394,634

24,887,178

 

Operating segments - Six Months Ending 30 September 2018 - Restated

Wood fuels

Project development

Investments

Total

 

£

£

£

£

Revenue

16,714,499

1,600,299

 -

18,314,798

Cost of sales

(15,719,488)

(237,945)

 -

(15,957,433)

Gross profit

995,011

1,362,354

 -

2,357,365

Other operating income

69,871

 -

40

69,911

Administrative expenses

(4,306,648)

(955,442)

(875,526)

(6,137,616)

*Adjusted EBITDA

(3,241,766)

406,912

(875,486)

(3,710,340)

Depreciation

(613,802)

 -

(67,549)

(681,351)

Finance Expense

(184,765)

 -

(485,347)

(670,112)

Amortisation Intangibles

 -

 -

(224,012)

(224,012)

FX Gain/(Loss)

(136,143)

 -

 -

(136,143)

Tax credit

 -

 -

34,174

34,174

Profit / (Loss) from operations

(4,176,476)

406,912

(1,618,220)

(5,387,784)

Segment assets

10,254,942

1,397,717

26,193,154

37,845,813

Segment liabilities

(17,576,679)

(1,826,471)

(10,219,963)

(29,623,113)

 

(7,321,737)

(428,754)

15,973,191

8,222,700

* We have presented an Adjusted EBITDA, which is earnings before interest, tax, depreciation and amortisation, as well as nonrecurring income and costs.

 

 

 

 

 

4. Property, plant and equipment

 

Assets
Under
Construction

Farm & Upgrade

Land and Buildings

Plant &
Machinery

Office
Equipment

Motor
Vehicles

Total

 

£

£

 

£

£

£

£

Cost

 

 

 

 

 

 

 

As at 1 April 2018

64,390

6,906,294

310,956

5,233,878

877,129

3,170,086

16,562,733

Prior period Restatement

-

-

(10,097)

(602,647)

326,235

416,791

130,282

Reclassification

 -

 -

-

(760,141)

-

760,141

-

Additions for the period

-

-

14,128

106,475

461,874

115,138

697,616

Disposals for the period

 -

 -

 -

(380,904)

(52,253)

(296,610)

(729,768)

As at 31 March 2019

            64,390

6,906,294

314,987

3,596,661

1,612,985

4,165,546

16,660,863

Additions for the period

 -

-

14,670

76

33,441

1,184,425

1,232,612

Additions - IFRS 16

-

-

-

224,462

846,476

393,798

1,464,736

Disposals for the period

 -

 -

 -

(257,104)

-

-

(257,104)

As at 30 September 2019

            64,390

6,906,294

329,657

3,564,095

2,492,902

5,743,769

19,101,107

 

 

 

 

 

 

 

 

Depreciation

 

 

 

 

 

 

 

As at 1 April 2018

50,740

6,906,294

17,488

2,014,691

339,441

919,876

10,248,530

Prior period Restatement

 -

 -

(10,097)

(602,647)

326,235

416,791

130,282

Reclassification

-

-

-

(279,109)

-

279,109

-

Charge for the period

-

-

7,735

569,620

304,234

633,854

1,515,443

Disposals for the period

 -

 -

 -

(89,953)

(34,746)

(148,086)

(272,785)

As at 31 March 2019

50,740

6,906,294

15,126

1,612,602

935,164

2,101,544

11,621,470

Charge for the period

-

-

2,183

227,750

254,627

343,913

828,473

Disposals for the period

 -

 -

 -

(96,976)

-

-

(96,976)

As at 30 September 2019

50,740

6,906,294

17,309

1,743,376

1,189,791

2,445,457

12,352,697

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

As at 1 April 2018

 13,650

 -

 293,468

3,219,187

537,688

2,250,210

6,314,203

As at 31 March 2019

13,650

-

-

1,984,058

677,820

2,064,005

5,039,392

As at 30 September 2019

13,650

-

312,348

1,820,719

1,303,111

3,298,312

6,748,140

 

 

 

 

 

 

5

Finance expense

 

 

 

 

 

Period ended

Period ended

Year ended

 

 

 30 Sep 2019

 30 Sep 2018

31 Mar 2019

 

 

£

£

£

 

Interest expense

226,041

204,868

582,233

 

Convertible Loan Note interest

-

555,906

567,889

 

Finance lease

89,142

(90,662)

212,680

 

 

315,183

670,112

1,362,802

 

6    Intangible assets

 

Long term contracts and customer relationships

Brand

Goodwill

Total

 

£

£

£

£

Cost

 

 

 

 

As at 31 March 2019

3,993,815

972,833

5,927,138

10,893,786

As at 30 September 2019

3,993,815

972,833

5,927,138

10,893,786

 

 

 

 

 

Amortisation

 

 

 

 

As at 31 March 2019

1,364,906

136,421

97,300

1,598,627

Amortisation charge for the period

166,193

25,041

 -

191,234

As at 30 September 2019

1,531,099

161,462

97,300

1,789,861

 

 

 

 

 

Net book value

 

 

 

 

As at 31 March 2019

2,628,909

836,412

5,829,838

9,295,159

As at 30 September 2019

2,462,716

811,371

5,829,838

9,103,926

 

7

Trade payables

 

Restated

 

 

 

Period ended

Period ended

Year ended

 

 

 30 Sep 2019

 30 Sep 2018

31 Mar 2019

 

 

£

£

£

 

Trade payables

5,817,860

5,614,777

7,266,518

 

Accruals

62,101

2,568,633

168,934

 

Other payables

1,944,571

5,797,823

809,363

 

Invoice discounting

2,060,475

2,244,927

4,602,762

 

VAT payables

488,260

143,893

388,235

 

Employment tax and Social security

82,175

137,283

61,820

 

 

10,455,442

16,507,336

13,297,632

 

8

Loans and borrowings

 

 

Period ended 30 Sep 2019

Period ended 30 Sep 2018

Year ended 31 31 Mar 2019

 

 

 

 

£

£

£

 

Current Liabilities

 

 

 

 

 

 

Other loan - finance lease

 

 

         647,326

597,313

665,738

 

Short term loan

 

 

3,415,591

-

1,776,969

 

 

 

 

4,062,917

597,313

2,442,707

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

Convertible Loan Notes

 

 

-

9,017,824

-

 

Other loan- finance lease

 

 

3,205,137

1,638,229

1,215,633

 

 

 

 

3,205,137

10,656,053

1,215,633

The fair value of non-current liabilities are not materially different to their carrying value.

 

 

9   Investment in associate

The Company sold 4% of it's 29.1% holding in Incubex LLC for an amount of £2,350,000. The transaction resulted in a new valuation of Incubex LLC at £58.75m. The Company owns 30.6% of Incubex LLC on an undiluted basis and thus a resulting fair value through profit and loss uplift of £6,567,380 has been accounted for as at 30 September 2019, bringing the new valuation to £17,977,500.

 

10

Share Capital

 

 

 

 

 

31 March 2018

No of shares

Issued capital

Share premium

Other reserves

 

 

Nos.

£

£

£

 

Ordinary shares of £0.005 each

 

 

 

 

 

As at 31st March 2018

43,191,143

215,956

16,192,845

10,682,431

 

Issued for cash during the period

8,500,000

42,500

8,457,500

                        -  

 

Issued as consideration as part of business combination

11,702,811

58,514

9,074,761

-

 

Share issue expense

                    -

-

(425,516)

                        -  

 

Capital Reduction

                      -

-

(16,192,845)

29,101

 

As at 31 March 2019 and 30 September 2019

63,393,954

316,970

17,106,745

10,711,532

 

 

 

 

 

 

 

As at 1 April 2019

63,393,954

316,970

17,106,745

10,711,532

 

As at 30 September 2019

63,393,954

316,970

17,106,745

10,711,532

 

11   Profit/(Loss) per share

 

Six months ended

Six months ended

Year ended

 

30-Sep-19

30-Sep-18

31-Mar-19

 

Unaudited

Unaudited

Audited

 

£

£

£

Earnings/(Loss) attributable to equity holders of the company

           998,686

(5,367,752)

(5,514,629)

Weighted average number of shares

     63,393,954

      43,191,143

50,187,880

Basic Earnings per share (Pence)

                  1.58

(12.43)

(10.99)

Diluted Earnings per share (Pence)

                  1.40

(12.43)

(10.99)

 

Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year. The convertible options are considered anti-dilutive because the exercise of these would have the effect of reducing the loss per share.

 

 

 

 

12    Events after the reporting period

 

 On 29 November 2019, AMP announced that it had sold a 4.0 per cent. shareholding in IncubEx Inc., an incubator for exchange traded products in the global environmental markets space, to IPGL Limited, Michael Spencer's investment vehicle, for a cash consideration of £2.35 million. This sale was made to finance certain of AMP Clean Energy's general working capital requirements, including funding the project pipeline and acquisition of wood fuel stock for this season.

Also on 29 November 2019, AMP announced that it had reached agreement on the terms of a recommended acquisition of the entire issued and to be issued ordinary share capital of AMP Clean Energy by Fossa HoldCo Limited a company wholly-owned by Asterion Industrial Infra Fund I, FCR.  Under the terms of the acquisition, shareholders will receive 90 pence in cash for each AMP Share.  The acquisition values the entire issued and to be issued share capital of AMP Clean Energy at approximately £63.1 million.

It is proposed that the acquisition be implemented by means of a court sanctioned scheme of arrangement under Part 26 of the Companies Act, which requires the approval of AMP shareholders at the Court Meeting and the General Meeting and the sanction of the Court.

For details of the transaction, please refer to the following website: 

https://www.ampcleanenergy.com/investors/recommended-cash-acquisition-for-amp-clean-energy

 

13    Prior period restatement

As reported in at 31 March 2019, during the last two years, the Wood Fuels business underwent a transformative restructuring to bring all operations into a single management and brand platform. This also involved replacing the senior management in the fuels business and the appointment of the new finance director in the fuels business. At the start of 2019, an in-depth company-led review was conducted into prior period stock balances which included the level of accruals and the accounting for goods received not invoiced.

 

This review concluded that, stock as at 31 March 2018 had been overstated due to the systems incorrectly accounting for stock movements around the 2018 year end with certain costs incorrectly being capitalised and, in addition, the closure of several depots as part of the restructure not being accurately reflected on the balance sheet. The overstatement was also applicable to the balances included in 30 September 2018 interim financial statements.

 

The aggregate adjustment to Retained Earnings as at 30 September 2018 was a negative impact of £4.4m.

 

The restatement relates to issues pertaining to the previous financial year.  This means that the restated audited accounts for the 6 months to 30 September 2018 have been adjusted and that there is no adverse effect on the profit and loss for the half year to 30 September 2019.     


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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Aggregated Micro Power books strong year of growth

Richard Burrell, chief executive of Aggregated Micro Power Holdings plc (LON:AMPH), tells Proactive's Andrew Scott 2019 is shaping up to be another exciting year after enjoying strong growth last year. The bulk of the revenues - £40mln (2017: £15.8mln) came from the wood fuels divisions,...

on 4/7/18