RNS Number:9704P
Global Natural Energy PLC
19 September 2003
For Immediate Release 19 September 2003
Global Natural Energy plc
Interim Results
Global Natural Energy plc, the London based energy group, today announced
interim results for the first six months ended 30 June 2003.
Key Financial Highlights:
6 months ended 6 months ended
30 June 2003 30 June 2002
(Unaudited) (Unaudited)
Turnover (#m) - Continuing operations 66.4 0.3
- Discontinued operations Nil 40.7
(Loss)/profit on ordinary activities
before tax (#000) (849) 151
Retained (loss)/profit (#000) (927) 125
Basic (loss)/earnings per share (p) (8.7) 1.2*
Equity shareholders' funds (#m) 13.9 15.7
*: rebased for 100 for 1 consolidation on 12 August 2002.
Farhad Moshiri, Chief Executive said:
"The Company is delighted to have been able to secure this significant stake in
the UK gas distribution market alongside leading financial investors of the
calibre of Baring's European Private Equity Fund and Troika Dialog, the largest
private investment company in the Russian Federation. This investment is a
further step in the Group's stated strategy to build a European-based energy
operation."
Enquiries:
Farhad Moshiri 020 7483 2426
Chief Executive, Global Natural Energy plc
Dennis Bailey 020 7588 5171
Hichens, Harrison & Co. plc
GLOBAL NATURAL ENERGY PLC
INTERIM REPORT 2003
Chief executive's review
This is the first accounting period for the Group with its sole focus being the
building of a European-based energy operation and the results reflect this
process. In accordance with the Company's practice in previous years, the
Directors are not proposing the payment of an interim dividend. During the
period the Group disposed of its remaining gold mining interests for a $1.
The Group's refocusing commenced in the second half of 2002 with the acquisition
of a controlling equity investment in Petrol Express Limited, which owns and
operates a chain of 54 petrol stations and Fuel Up Limited, which operates a
fuel card business.
The refocusing has continued in 2003 when at the Annual General meeting held on
28 May 2003 the Chairman, Lord Owen, announced that the Company was in late
stages of detailed discussions to play a key role in UK gas distribution and was
also intending to sell its 36% shareholding in Afon Tinplate Company Limited on
which negotiations are proceeding. On 30 June 2003, the Company announced that
discussions had been completed and that it had acquired an effective 19.9%
interest in a new UK gas distribution group, consisting of Quantum Energy Group
Limited, Fortum Energy Plus Limited and Sararcen Gas Limited. This group will
hold approximately 5% of the industrial/commercial gas distribution market
serving small and medium sized enterprises and multi-site operators. The
Directors consider this investment will provide the bedrock of its move into gas
distribution.
In late June 2003 the Company obtained funding of #1.4 million in the form of a
loan provided by Rodava Management Limited ("Rodava"), a company owned by
Alisher Usmanov, Vice Chairman of the Company.
On 30 June 2003 the Company utilised #1 million, of this new cash funding, to
subscribe for this interest. The other investors are Troika Dialog ("Troika"), a
Russian based securities trading, investment banking and wealth management group
with 40.1% and Baring European Private Equity Fund with 40%..
The Company has been granted, for a nominal consideration, a call option by
Troika allowing the Company to acquire up to a further 40.1% (making an in
aggregate 60%) of the enlarged group for #4 million, with a further 8% per annum
payable on this amount in the event that the option is exercised. The Company is
providing temporary financial support to the gas distribution group by way of #3
million standby letter of credit until 30 September 2004. The Company has issued
warrants to the gas supplier to the enlarged gas business in respect of 2.5% of
its issued share capital at 30 June 2003, exercisable at 350p per share during
the next two years or on expiry of the gas supply agreement if earlier.
On 2 July 2003 Rodava subscribed at a price of 260p per share for 538,874 new
ordinary shares of 25p each in the Company, representing 4.75% of the enlarged
issued share capital. The subscription monies for these new ordinary shares had
been received by the Company as part of the #1.4 million loan Rodava provided to
the Company in late June 2003. On 15 July 2003 the Company opened the #3 million
standby letter of credit in favour of the gas supplier. This facility is secured
by a #3 million cash deposit opened at the issuing bank.
Conclusion
The Company is delighted to have been able to secure this significant stake in
the UK gas distribution market alongside leading financial investors of the
calibre of Baring's European Private Equity Fund and Troika Dialog, the largest
private investment company in the Russian Federation. This investment is a
further step in the Group's stated strategy to build a European-based energy
operation.
Farhad Moshiri
Chief Executive
19 September 2003
Page 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six months ended 30 June 2003
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Unaudited Unaudited Audited
Note #000 #000 #000
Turnover - Continuing operations 2 66,439 347 53,610
- Discontinued operations 2 - 40,706 40,661
66,439 41,053 94,271
Cost of sales (64,616) (39,692) (90,910)
Gross profit 1,823 1,361 3,361
Administrative expenses (2,368) (1,240) (3,140)
Operating (loss)/profit
- Continuing operations (545) (531) (482)
- Discontinued operations - 652 703
(545) 121 221
Share of associated undertakings'
profits 58 141 78
Gain on sale of properties 114 - 26
Gain on sale of steel assets - - 517
(Loss)/profit on ordinary activities
before interest (373) 262 842
Interest receivable and similar
income 79 31 107
Interest payable and similar charges (555) (142) (654)
(Loss)/profit on ordinary activities
before taxation 2 (849) 151 295
Tax charge on (loss)/profit on
ordinary activities 3 (39) (26) (63)
(Loss)/profit on ordinary
activities after taxation (888) 125 232
Equity minority interest (39) - (61)
Retained (loss)/profit for the
financial period/year (927) 125 171
Basic (loss)/earnings per
ordinary share 4 (8.7)p 1.2p* 1.6p
Diluted (loss)/earnings per
ordinary share 4 (10.3)p 1.2p* 1.5p
*: rebased for the 100 for 1 share consolidation on 12 August 2002.
Page 3
CONSOLIDATED BALANCE SHEET
As at 30 June 2003
30.6.03 30.6.02 31.12.02
Unaudited Unaudited Audited
Note #000 #000 #000
Fixed assets
Intangible assets 3,916 592 4,021
Tangible assets 27,191 15 25,295
Trade investments 4 13,339 4
Net investment in associated undertakings 3,365 2,349 2,205
Mining leases - 10 10
34,476 16,305 31,535
Current assets
Stocks 1,978 - 2,149
Debtors 3,003 2,050 5,750
Cash at bank and in hand 7,639 4,458 5,479
12,620 6,508 13,378
Creditors: amounts falling due within one year (12,616) (7,114) (10,336)
Net current assets/(liabilities) 4 (606) 3,042
Total assets less current liabilities 34,480 15,699 34,577
Creditors: amounts falling due after more than one year (12,900) - (11,874)
Provisions for liabilities and charges (299) - (305)
Total net assets 21,281 15,699 22,398
Capital and reserves
Called up share capital 2,701 2,701 2,701
Share premium account 9,704 9,704 9,704
Profit and loss account 1,507 3,294 2,663
Total equity shareholders' funds 6 13,912 15,699 15,068
Equity minority interests 7,369 - 7,330
21,281 15,699 22,398
Page 4
CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2003
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Unaudited Unaudited Audited
Note #000 #000 #000
Cash inflow/(outflow) from operating activities 5(a) 1,528 6,736 6,017
Dividends received from associated undertaking 7 207 300
Returns on investments and servicing of finance 5(b) (272) 32 (351)
Taxation (10) (100) (131)
Net cash inflow/(outflow) from capital expenditure
and financial investment 5(b) 3,058 (4,426) (3,147)
Acquisitions and disposals (1,000) - 835
Cash inflow before financing 3,311 2,449 3,523
Financing - Increase/(decrease) in debt 5(b) 600 (913) (2,726)
Increase in cash 5(c) 3,911 1,536 797
Reconciliation of net cash flow to movement in net debt
Note #000
Increase in cash in the six months ended 30.6.03 5(c) 3,911
Cash inflow from increase in debt 5(c) (600)
Change in net debt resulting from cash flows 3,311
Debt acquired with subsidiary 5(c) (2,000)
Translation difference 5(c) (21)
Movement in net debt in the period 1,290
Net debt at 1.1.03 (9,726)
Net debt at 30.6.03 5(c) (8,436)
Page 5
Notes to the interim financial information
Six months ended 30 June 2003
1. Preparation
(i) The unaudited results for the six months ended 30 June 2003
have been prepared using accounting policies which are consistent with those
adopted in the audited accounts for the year ended 31 December 2002.
(ii) The Interim Report is unaudited and does not constitute statutory
accounts. The results for the year ended 31 December 2002 do not comprise
statutory accounts for the purpose of S240 Companies Act 1985 and have been
extracted from the Group's published accounts for that year which have been
filed with the Registrar of Companies and contain an unqualified Audit Report.
The Interim Report for the six months ended 30 June 2003 was
approved by the Directors on 19 September 2003.
(iii) Copies of the Interim Report will be available from the
Company's Registered Office at Fifth Floor, 100 Avenue Road, London NW3 3HF.
2. Segmental analysis of results
(i) Turnover - by destination
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Continuing operations: #000 #000 #000
United Kingdom 66,439 - 53,263
Russia - 347 347
66,439 347 53,610
Discontinued operations:
Italy - 8,686 8,686
Taiwan - 7,513 7,513
Egypt - 6,049 6,049
China - 3,573 3,573
USA - 3,202 3,202
Thailand - 3,132 3,132
Spain - 3,073 3,073
Hong Kong - 2,266 2,266
Indonesia - 2,247 2,247
France - 274 274
Belgium - 243 243
United Kingdom - 163 118
Norway - 149 149
Malaysia - 136 136
- 40,706 40,661
66,439 41,053 94,271
(ii) Turnover - by location
All turnover for the periods ended 30 June 2003 and 2002 and year ended 31
December 2002, being continuing operations and discontinued operations, were
undertaken by companies incorporated and registered in England and Wales.
Page 6
2. Segmental analysis of results - continued
(iii) Turnover
By class of business
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Continuing operations: #000 #000 #000
Petrol service stations 56,993 - 44,648
Fuel cards 9,272 - 8,484
Financial services - 347 347
Metals and metal related
activities 46 - 89
Other 128 - 42
66,439 347 53,610
Discontinued operations:
Metal and metal related
activities - 40,706 40,661
66,439 41,053 94,271
(iv) (Loss)/profit on ordinary activities before taxation
By class of business
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Continuing operations: #000 #000 #000
Petrol service stations (70) - (15)
Fuel cards 196 - 255
Financial services - 347 347
Gas distribution
- associated undertaking (63) - -
Metals and metal related
activities - group companies 19 168 (71)
- associated
undertakings 76 (72) (30)
Other - associated undertakings - 37 (88)
Net interest payable and
parent company expenses (1,007) (981) (1,333)
(849) (501) (935)
Discontinued operations:
Metals and metal related
activities - group companies - 652 713
Exceptional - Gain on sale
of steel assets - - 517
- 652 1,230
(849) 151 295
(v) (Loss)/profit on ordinary activities before taxation
By location
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
Continuing operations #000 #000 #000
UK - group companies (860) (504) (498)
- associated undertakings 13 (2) (118)
USA 2 14 8
Bermuda (2) (5) (9)
Jersey (2) (4) (7)
(849) (501) (624)
Discontinued operations:
UK - group companies - 659 927
Jersey - (7) (8)
- 652 919
(849) 151 295
Page 7
3. Tax charge on (loss)/profit on ordinary activities
The taxation charge for the six months ended 30 June 2003 has been
based on the estimated effective rate for the full year of (5) % (30 June 2002:
17 %).
In 1999 the Inland Revenue raised queries regarding the historical
tax affairs of the Group. These enquiries were completed and a settlement agreed
during the period. This settlement was reflected as an adjusting post-balance
sheet event in the accounts for the year ended 31 December 2002.
4. Basic (loss)/earnings per ordinary share and diluted (loss)/earnings
per ordinary share
The calculation of basic (loss)/earnings per share is based on the
(loss)/profit after taxation and minority interests for the period of #(927,000)
(2002 - first six months: #125,000 ; full year: #171,000) and on 10,805,392
ordinary shares (2002 - first six months: 10,805,392*; full year - 10,805,392),
being the weighted average number of ordinary shares in issue during the period.
The calculation of diluted (loss)/earnings per share is based on
adjusted (loss)/profit after taxation and minority interests for the period of #
(927,000) (2002 - first six months: #125,000; full year: #171,000) and on
8,999,148 ordinary shares (2002 - first six months: 10,805,392*; full year:
11,046,893), being the weighted average number of ordinary shares in issue,
dilutive share options and warrants outstanding during the period.
*: rebased for the 100 for 1 share consolidation on 12 August 2002.
5. Consolidated cashflow statement
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
#000 #000 #000
(a) Reconciliation of operating
(loss)/profit to net cash
inflow from operating activities
Operating (loss)/profit (545) 121 221
Depreciation and amortisation
charges 277 77 327
Decrease in stocks 171 9,603 9,128
(Increase)/decrease in debtors (242) 2,309 93
Increase/(decrease) in creditors 2,038 (4,970) (3,820)
Currency translation differences (171) (404) 68
Cash inflow from operating
activities 1,528 6,736 6,017
(b) Analysis of cash flows from
headings netted in the cash
flow statement
Returns on investments and
servicing of finance
Interest received 79 31 107
Interest paid (351) 1 (458)
Net cash (outflow)/inflow for
returns on investments and
servicing of finance (272) 32 (351)
Net cash inflow/(outflow) from
capital expenditure and
financial investment
Purchase of tangible fixed assets (590) (1) (2,671)
Sale of tangible fixed assets 745 - 574
Loans repaid to/advanced to
associated undertakings (91) (18) (29)
Loan (repaid to)/advanced by
Oskol Electrometallurgical Kombinat - (4,407) (4,135)
New equity share capital
subscribed by minority shareholder
in subsidiary - - 250
Sale of trade investments 2,994 - 2,864
Net cash inflow/(outflow) from
capital expenditure and financial
investment 3,058 (4,426) (3,147)
Net cash (outflow)/inflow from
acquisitions and disposals
Investment in associated
undertakings (1,000) - (80)
Sale of subsidiary undertakings - - 1,966
Net cash disposed of with
subsidiary undertakings - - (335)
Purchase of subsidiary undertakings - - (1,332)
Net cash acquired with subsidiary
undertakings - - 933
Transaction costs written off - - (317)
Net cash (outflow)/inflow from
acquisitions and disposals (1,000) - 835
Page 8
5. Consolidated cashflow statement - continued
(b) Analysis of cash flows from headings netted in the cash flow
statement - continued
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
#000 #000 #000
Financing
(Decrease)/increase in debt due (774) - 2,855
after one year
Increase/(decrease) in debt due 1,374 (913) (5,581)
within one year
Net cash inflow/(outflow) from 600 (913) (2,726)
financing
(c) Analysis of net debt At 1.1.03 Cash Acquisition of Exchange At 30.6.03
Flow subsidiary movements
#000 #000 #000 #000 #000
Cash at bank and in hand 5,479 2,181 (21) 7,639
Bank overdrafts (1,730) 1,730 - -
3,749 3,911 - (21) 7,639
Debt due after one year (11,874) 774 (1,800) - (12,900)
Debt due within one year (1,601) (1,374) (200) - (3,175)
(9,726) 3,311 (2,000) (21) (8,436)
As at 30 June 2003 #840,000 of the total cash at bank and in hand balance of
#7,639,000 was on a fixed deposit as security for a guarantee of US$950,000
(approximately #576,000), which Wolff Steel Limited has provided in respect of
bank borrowings of one of its associated undertakings.
6. Reconciliation of movement in shareholders' funds
Six months Six months Year ended
ended 30.6.03 ended 30.6.02 31.12.02
#000 #000 #000
(Loss)/profit for the financial period/year (927) 125 171
Currency translation differences on foreign currency
net investments (229) (209) (886)
Net reduction in shareholders' funds (1,156) (84) (715)
Opening shareholders' funds 15,068 15,783 15,783
Closing shareholders' funds 13,912 15,699 15,068
7. Events occurring after the end of the period
On 2 July 2003 the Company announced that Rodava Management Limited ("Rodava"),
a company controlled by Alisher Usmanov, Vice Chairman of the Company, had
subscribed at a price of 260p per share for 538,874 new ordinary shares of 25p
each in the Company, representing 4.75% of the enlarged issued share capital.
The subscription monies for these new ordinary shares had been received by the
Company in accordance with a #1.4 million Loan Facility Letter between Rodava
and the Company dated 23 June 2003 (the "Loan"), whereby Rodava advanced the
funds to the Company in June 2003, which were then predominantly used to fund
the initial investment in the UK gas distribution group announced and completed
on 30 June 2003. The terms of the Loan, which were not binding on the parties,
were that Rodava intended to apply for an allotment and issue of such number of
the Company's shares so as to have an aggregate value equal to the Loan.
On 15 July 2003 the Company opened a #3 million standby letter of credit ("the
Facility") with Barclays Bank PLC ("Barclays") in favour of the gas supplier to
Quantum Energy Group Limited for the period to 30 September 2004. The Facility
is secured by a #3 million cash deposit the Company has opened at Barclays.
Page 9
Independent review report to Global Natural Energy plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 June 2003, which comprises Consolidated Profit and Loss
Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement, and
related notes 1 to 7. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 "Review of interim financial information" issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.
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 Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
"Review of interim financial information" issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of Group management and applying analytical procedures to the
financial information and underlying financial data and based thereon, assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
Ernst & Young LLP
London
19 September 2003
Page 10
Directors and Advisers
Directors
The Rt Hon the Lord Owen of the City of Plymouth, CH - Executive Chairman
A B Usmanov - Vice Chairman
A F Moshiri, FCCA - Chief Executive
I Falconer, CA (SA) - Finance Director
D L Woods - Executive Director
J G West, FCA - Non-Executive Director
Lord Chandos - Non-Executive Director
D C Port - Non-Executive Director
Secretary and registered office
J P Gorman, FCA
Fifth Floor
100 Avenue Road
London NW3 3HF
Auditors
Ernst & Young LLP
Chartered Accountants
Becket House
1 Lambeth Palace Road
London SE1 7EU
Financial Advisers
Nabarro Wells & Co. Limited
Saddlers House
Gutter Lane
London EC2V 6HS
Stockbrokers
Hichens, Harrison & Co. plc
Bell Court House
11 Blomfield Street
London EC2M 1LB
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Page 11
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