RNS Number:2661T
Impax Group PLC
16 December 2003
16 December 2003
IMPAX GROUP PLC
PRELIMINARY STATEMENT OF RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2003
Impax Group plc, the AIM quoted company, today announced its preliminary results
for the year ended 30 September 2003.
Highlights:
* Improved revenues from asset management as a result of higher equity
prices and a valuable mandate to manage The Recycling Fund.
* Notable and sustained revenue growth from corporate finance activities
starting in the second half.
* Appointment of Keith Falconer as Chairman. Since 1986, Keith has been a
main board director of Martin Currie Limited, the
Edinburgh-based investment management company.
Commenting Stuart Bickerstaff, Non-Executive Chairman, said:
"The Group's progress in expanding financial service operations in the
environmental infrastructure and technology sector has been encouraging. The
commercial opportunities in asset management and corporate finance are
considerable, and we are delighted to have attracted someone of Keith Falconer's
experience to lead the development of the business."
For further information please contact:
Nigel Taunt or Ian Simm
Impax Group plc 020 7434 1122
Robert Luetchford or John Webb
Marshall Securities Limited 020 7490 3788
16 December 2003
IMPAX GROUP PLC
PRELIMINARY STATEMENT OF RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2003
CHAIRMAN'S STATEMENT AND OPERATIONAL REVIEW
Since my last statement on 30 June 2003, the Group has made significant progress
in expanding the financial services operations in the environmental
infrastructure and technology sector (the "Sector"). The last quarter of the
financial year to 30 September 2003 saw a continuation of improved revenues and
activity, which we have been able to sustain in the first two months of the
current year.
Asset Management
Impax Asset Management Ltd ("IAM") currently manages or advises five funds with
assets totalling over #65 million. The division has benefited in particular from
higher equity prices as well as the award of a valuable mandate to manage The
Recycling Fund, which was launched on 1 July 2003.
Impax Environmental Markets plc ("IEM"), the largest of the funds under
management, recovered strongly during the year. IEM's net asset value increased
from #27.2 million to #31.5 million over the year, a rise of 15.8 per cent.,
which represents an out-performance against its benchmark, the Morgan Stanley
Capital International ("MSCI") World Index, which rose 11.3 per cent. during the
same period. IAM continues to provide advisory services to two clients in
continental Europe whose net assets also rose over the year: Alm. Brand Invest 6
Environmental Technology Fund in Denmark; and the ASN Milieufonds Fund in the
Netherlands.
IAM now manages two private equity funds: the US$25 million PVMTI facility
targeting the solar electricity sector on behalf of the International Finance
Corporation; and the #5.5 million Recycling Fund, which is sponsored by the
Waste and Resources Action Programme ("WRAP"). To win the mandate to manage the
Recycling Fund, IAM competed successfully against six other fund managers and
then supported WRAP during the process to raise additional contributions from
Wastelink Ltd, Barclays Bank and Partnerships UK. The Recycling Fund is
attracting significant interest from a wide range of companies and investors,
and we believe it is likely to lead to additional commercial opportunities for
the Group.
Corporate Finance
As anticipated in the Interim Statement, Impax Capital Corporation Ltd ("ICC")
achieved significant revenue growth in the second half of the year. The division
has made good progress in developing its client base, focusing on work for
governmental agencies and larger corporates. The corporate finance team has been
further strengthened by the recruitment of an additional senior executive.
Our work for private sector clients has expanded considerably over the year. For
example, in the waste sector, the extension of the Private Finance Initiative
has brought increased demand for project structuring and advisory services, and
we were mandated to advise on two waste management developments. In the
renewable energy sector, we secured new mandates focusing on financial
restructuring and on the valuation of Renewables Obligation Certificates.
We have been notably active in advising governmental agencies. In particular, we
advised the Department of Enterprise, Trade and Investment, Northern Ireland, in
conjunction with Simmons & Simmons, on the roll-out of the Renewables Obligation
into the Province. We also advised government on the application of carbon
credit allocation methodologies under the European Emissions Trading Scheme, the
benefit of which is already reflected in the new financial year. Meanwhile, ICC
continues to make a full contribution as a member of the Finance and Investment
Working Group of the DTI's Renewables Advisory Board.
Oil Interests
Progress has been made towards the disposal of the Group's oil assets. On 30
June 2003, we announced the sale of the Starks Oil Field to Temsik Investments
Ltd. Subsequently, we have continued to search for opportunities to realise
value from the Nukern Oil Field in California, and on 2 December 2003 we
announced that the Group had entered into a co-operation agreement with All
American Oil and Gas Inc., a company in which Temsik Investments Ltd is an
equity investor. The agreement covers maintenance of the field, a small
development programme to demonstrate the field's value by re-establishing
limited production, and further activity to seek a sale of this asset. In
addition, All American Oil and Gas Inc. has been granted an option on terms
consistent with our revised carrying value to purchase the field on or before 31
August 2004.
Funding
On 20 August 2003 the Group announced a fund raising of approximately #2.31
million, net of expenses, through a placing of convertible unsecured loan stock.
Proceeds are being used to fund the restructuring of the Group's finances, the
development of IAM and ICC and for working capital. I would like to thank the
Group's advisers and all those who supported us through a period of dark days
for the whole financial services sector.
Financial results
The main feature of our results is improved trading in the second half of the
year during which turnover was #754,000 (up from #429,000 in the first half) and
operating loss from continuing operations before amortisation of goodwill was
reduced from #405,000 to #271,000.
Turnover for the full year from continuing operations was #1,183,000 (2002:
#828,000) and the operating loss before amortisation of goodwill and exceptional
items was #676,000 (2002: #800,000). As noted in the Interim Statement, the
Group made an exceptional provision against the carrying value of the Nukern
Field of #1,626,000. After net interest charges of #40,000 (2002: #4,000) the
loss before tax for the year was #2,627,000 (2002: #3,925,000).
Board Changes
I am delighted to announce that Keith Falconer has agreed to join the Board on 1
January 2004. He will be taking over from me as chairman after the annual
general meeting when I will retire from the Board.
Keith has spent most of his career with Martin Currie Investment Management
Limited, a substantial investment management company based in Edinburgh. During
his 24 years there, he has worked as a fund manager, and has successfully
managed both investment trusts and bespoke mandates for institutions. Over the
past ten years, Keith has concentrated on marketing and selling for the firm
with considerable success. He served on the firm's executive committee for many
years until his retirement in October 2003. He will remain a non-executive
director of Martin Currie.
We are delighted to have attracted someone with Keith's experience to lead the
development of the business. Following my retirement I will continue to support
the Group wherever possible.
Outlook
Sentiment and commercial activity in the Sector have picked up considerably over
the past six months. For example, in July 2003, the Department of Trade and
Industry announced plans to grant licences to private companies to build up to
six Gigawatt (6 GW) of offshore wind power capacity, which is expected to be one
of the largest construction programmes ever undertaken in this country. In the
waste sector, consultation on how the private sector should implement the
European Directives requiring recovery and recycling of end-of-life vehicles and
of electrical and electronic equipment has gathered pace, while in the water
sector, utilities have indicated that they foresee a major new investment
programme in order to meet performance targets in the fourth asset management
period. The Group is well positioned to secure new mandates from both private
and public sector clients arising from these and similar developments.
After a difficult period for service companies in the financial sector, the
business model and strategy we set out for Impax is beginning to demonstrate
signs of success. The opportunities for the Group are considerable and I am
confident that Keith Falconer and his colleagues will be reporting further
strong progress for many years.
Stuart Bickerstaff
Chairman
16 December 2003
IMPAX GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 30 September 2003
2003 2002
Note # #
TURNOVER
Continuing operations 1,182,924 827,582
Discontinued operations - 588,498
--------- --------
2 1,182,924 1,416,080
--------- --------
OPERATING EXPENSES
Continuing operations (2,142,833) (1,931,035)
Discontinued operations - (567,976)
Impairment in value of assets (2,631,434) (2,631,434)
--------- --------
(3,769,302) (5,130,445)
--------- --------
OPERATING LOSS
Continuing operations (959,959) (1,103,453)
Discontinued operations - 20,522
Impairment in value of assets 3 (1,626,419) (2,631,434)
--------- --------
2 (2,586,378) (3,714,365)
Impairment in value of investments - (215,330)
Interest receivable and similar income 20,382 11,427
Interest payable (60,975) (7,140)
--------- --------
LOSS ON ORDINARY ACTIVITIES (2,626,971) (3,925,408)
BEFORE TAXATION
Tax on loss on ordinary activities 4 (32,741) -
--------- --------
LOSS FOR THE YEAR (2,659,712) (3,925,408)
========= ========
LOSS PER SHARE 7
Basic (7.50)p (11.06)p
========= ========
Fully diluted (6.84)p (10.29)p
========= ========
Adjusted (2.13)p (2.24)p
========= ========
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 30 September 2003
2003 2002
# #
Loss for financial year (2,659,712) (3,925,408)
Currency translation differences (318,612) (420,830)
--------- --------
Total recognised gains and losses for the year (2,978,324) (4,346,238)
========= ========
IMPAX GROUP PLC
CONSOLIDATED BALANCE SHEET
As at 30 September 2003
2003 2002
# #
FIXED ASSETS
Intangible fixed assets 2,194,305 2,476,909
Tangible fixed assets 2,409,141 5,085,736
Investments - -
-------- ---------
4,603,446 7,562,645
-------- ---------
CURRENT ASSETS
Debtors 1,236,576 329,626
Cash at bank and in hand 1,219,747 380,311
-------- ---------
2,456,323 709,937
CREDITORS - amounts falling due (617,778) (1,152,267)
within one year
-------- ---------
NET CURRENT ASSETS/(LIABILITIES) 1,838,545 (442,330)
-------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,441,991 7,120,315
CREDITORS - amounts falling due after more than
one year (2,300,000) -
-------- ---------
4,141,991 7,120,315
======== =========
CAPITAL AND RESERVES
Called up share capital 8,871,441 8,871,441
Share premium 687,472 687,472
Merger reserve - 2,197,944
Exchange equalisation reserve (501,265) (182,653)
Profit and loss account (4,915,657) (4,453,889)
-------- ---------
EQUITY SHAREHOLDERS' FUNDS 4,141,991 7,120,315
======== =========
IMPAX GROUP PLC
CONSOLIDATED CASHFLOW STATEMENT
Year ended 30 September 2003
Note 2003 2002
# #
NET CASH (OUTFLOW)/INFLOW FROM 8 (875,594) (820,027)
OPERATING ACTIVITIES
Returns on investments and servicing of finance 9 (34,482) 4,287
Tax paid - -
Capital expenditure and financial investment 9 (4,525) (298,735)
Acquisitions and Disposals 9 83,730 -
Management of liquid resources 9 75,016 (144,128)
Acquisition 9 - -
--------- --------
NET CASH OUTFLOW BEFORE FINANCING (755,855) (1,258,603)
Financing 9 1,726,743 573,257
--------- --------
INCREASE/(DECREASE) IN CASH 10 970,888 (685,346)
========= ========
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET
DEBT
Increase/(Decrease) in cash in year 970,888 (685,346)
(Decrease)/increase in cash on deposit in year (75,016) -
Cash (inflow) from increase in net debt (1,726,743) (429,129)
--------- --------
Changes in net debt resulting from cashflows (830,871) (1,114,475)
Non cash transactions - 640,570
Translation differences (56,436) (79,175)
--------- --------
Movement in net debt in the year (887,307) (553,080)
--------- --------
Net debt at 1 October (192,946) 360,134
--------- --------
Net debt at 30 September (1,080,253) (192,946)
========
=========
IMPAX GROUP PLC
NOTES TO THE PRELIMINARY STATEMENT
1 Nature of the financial information
The financial information set out above does not constitute full accounts for
the purposes of section 240 of the Companies Act 1985. The financial information
has been extracted from the Company's accounts for the year ended 30 September
2003 on which the auditors, MRI Moores Rowland LLP, have given an unqualified
opinion. The auditors in their report refer to the matters described in the
paragraph below.
2 Turnover, operating loss and net assets
Turnover relates solely to the principal activities of the Group.
Turnover
2003 2002
Analysis by class of business # #
and geographical market
European Markets
Corporate finance advisory
and asset management
services 1,177,224 827,582
US Markets
Oil & gas activities -
continuing 5,700 -
Oil & gas activities -
discontinued - 588,498
--------- ---------
1,182,924 1,416,080
========= =========
Operating loss Net assets
2003 2002 2003 2002
# # # #
Analysis by class of business
and geographical market
European Markets
Asset management &
corporate finance advisory (261,271) (527,531) 356,352 256,110
Holding company costs (245,556) (241,250) 830,572 1,617,429
Goodwill amortisation (282,604) (282,604) - -
US Markets
Oil & gas activities -
continuing - (52,068) 2,492,123 4,412,728
Oil & gas activities -
discontinued (170,528) 20,522 - 836,835
Impairment provisions (1,626,419) (2,631,434) 462,944 (2,787)
-------- --------- -------- ---------
(2,586,378) (3,714,365) 4,141,991 7,120,315
======== ========= ======== =========
3 Exceptional Items
2003 2002
# #
Impairment in value of Nukern Oil Field 1,629,419 -
========== ==========
Impairment in value of Starks Oil Field - 2,631,434
========== ==========
Impairment in value of unlisted investments - 215,330
========== ==========
As described in the Chairman's Statement, the Group has entered into an
agreement to facilitate the disposal of the Nukern Oil Field. During the year,
the Directors reviewed the value of this asset and adjusted its carrying value
to US$4,000,000 (#2,400,528). This adjustment was based on the Directors' belief
that any disposal arrangements are likely to include deferred terms based on
long-term production.
4 Tax on loss on ordinary activities
2003 2002
# #
UK corporation tax - -
US corporation tax 32,741 -
---------- ----------
32,741 -
========== ==========
No liability to current year UK corporation tax arises on the results for the
year. The Group has tax losses of #2,901,688 (2000: #2,382,612) available for
offset against future taxable profits in the UK.
The US tax liability relates to CSV Holdings Inc. a US subsidiary disposed of
during the year.
5 Foreign currencies
The results of subsidiary undertakings reporting in foreign currencies are
translated at the average rate ruling in the accounting period (US$1.60: #1;
2002: US$1.46: #1) and the assets and liabilities at the rate ruling at the
balance sheet date (US$1.67: #1; 2002: US$1. 56: #1).
6 Dividends
No dividend is proposed.
7 Loss per share
The calculation of loss per share is based on the loss for the year of
#2,659,712 and on the weighted average number of ordinary shares in issue of
35,485,764 (2002: Loss of #3,925,408, shares in issue 35,485,764).
The calculation of diluted loss per share is based on the weighted average
number of shares outstanding adjusted by the dilutive share options. These
adjustments give rise to an increase in the weighted average number of shares
outstanding to 38,869,864 (2002: 38,145,858).
In order to show results from operating activities on a comparable basis, an
adjusted loss per share has been calculated which excludes goodwill amortisation
of #282,604 (2002: #282,604) and exceptional items of #1,626,419 (2002: #
2,856,764) from the result for the year.
8 Reconciliation of operating loss to net cash outflow from operating activities
2003 2002
# #
Operating loss (2,586,378) (3,714,365)
Impairment provisions 1,570,545 2,631,434
Depreciation and depletion charges 6,161 154,153
Amortisation charge 282,604 290,104
(Increase) in debtors (267,072) (135,600)
Increase/(decrease) in creditors 118,546 (45,753)
---------- ----------
Net cash outflow from operating activities (875,594) (820,027)
========== ==========
9 Analysis of changes in cashflows during the year
2003 2002
# #
Returns on investments and servicing of finance
Interest received 20,382 11,427
Interest paid (54,864) (7,140)
---------- ----------
34,482 4,287
========== ==========
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (4,525) (298,735)
---------- ----------
(4,525) (298,735)
========== ==========
Management of liquid resources
Cash held on deposit to support oil activities (75,016) 144,128
========== ==========
Acquisitions and disposals
Net proceeds from disposal of subsidiaries 22,159 -
Repayments received 61,571 -
---------- ----------
83,730 -
========== ==========
Financing
Repayment of working capital loan (1,228,520) -
Increase in working capital loan 655,263 -
Proceeds from Convertible Loan Stock 2,300,000 573,257
---------- ----------
1,726,743 573,257
========== ==========
10 Analysis of changes in net funds
1 October 2002 Cash Flow Translation 30 September
Difference 2003
# # # #
Cash at bank
and in hand 236,183 970,888 (48,060) 1,159,011
Cash on
deposit 144,128 (75,016) (8,376) 60,736
Debt due
within one
year (573,257) 573,257 - -
Debt due after
one year - (2,300,000) - (2,300,000)
-------- --------- --------- --------
(192,946) (830,871) (56,436) (192,946)
======== ========= ========= ========
Copies of the report and accounts of the Company for the year ended 30 September
2003 will be available on the Company's web site www.impax.co.uk and may be
collected from the Registered Office. Copies will be sent to shareholders.
Registered Office:
Broughton House
6-8 Sackville Street
London W1S 3DG
This information is provided by RNS
The company news service from the London Stock Exchange
END
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