Helius Energy Reports Profit Of GBP30.6 Million Of Fiscal 2008 Results
Key financial highlightsGBP30.7 million profit for the year, attributable to equity holdersRaised additional funding of GBP2.0 million for short-term working capitalSold first 65MWe project to RWE Innogy UK for a cash consideration of GBP28.1 million plus a carried interest of 13% of an adjusted operating profit for the first 24 years of operation, fair valued at GBP14.3 millionRepaid convertible debt facilities;Net cash of GBP24.0 million at September 30, 2008.Key operational highlightsCorporate overheads and development costs for the Group and its first two projects are in line with budget, with a reduction in year on year administration costs;Secured Governmental planning approval (under Section 36) for its first 65MWe project at Stallingborough;Successfully negotiated long term feedstock and construction contracts for the Stallingborough project;Agreed terms and signed lease for an 18 acre site at Bristol Avonmouth for a 100MWe power plant;Signed heads of terms with the Combination of Rothes Distillers (â€œCoRDâ€) for a 7.2MWe project;Since the balance sheet date, Helius secured planning for 7.2MWe CoRD project in January 2009.Alex Worrall, chairman, said: "Helius Energy has met and exceeded the milestones set at its admission to AIM, some two years ago, and these results lay a solid foundation for growth. The successful sale of the Stallingborough project contributed significantly to the GBP30.7 million after tax profit for the year and the resultant cash receipt provides sufficient cash resources to continue to develop, and ultimately own and operate a portfolio of biomass power plants using environmentally sustainable biomass feed-stocks.â€Business ReviewHelius is in a strong position with respect to its current and pipeline projects, with good potential for future growth. The first GreenSwitch project in Rothes is currently progressing through the planning system.Companyâ€™s BusinessHelius was established to develop, install and operate biomass fired renewable electricity generation plants to address the need created by the increasing importance that has been given to climate change internationally. Heliusâ€™ projects are designed to mitigate climate change by helping to cut greenhouse gas emissions quickly.All three main UK political parties have made public commitments to put climate change at the top of their agenda.The Energy White Paper published in May 2007 reinforced the Governmentâ€™s commitment to renewable energy which improved the incentives to biomass generators within the UK. The companyare pleased that this has now passed into law and the company awaits the secondary legislation.Helius has focused its activities during the period on project development and consenting of its flagship 65MWe site at Stallingborough, and, its 7.2MWe site planned for Rothes in Morayshire.Helius possesses a significant combination of knowledge of renewable energy markets, biomass energy technologies, biomass fuel sources, project development, implementation and operation of power generation plants. Since inception, The company has invested in funds and resources specifically to ensure that The company fully understand and can adequately mitigate risks in its chosen business arena.The Group has identified sites for project development within the UK all of which have readily available sustainable fuel sources, with excellent transportation, logistics and related infrastructure. In the UK, the Group is focused on identifying sites for the development of small 5â€“8MWe power plants and larger 60â€“ 100MWe power plants.The Group is focused on delivering short-term revenues, profitability and operating cash in return for shareholdings from its initial three projects. This will also give the Group the liquidity it requires to develop a portfolio of generating assets in the UK with the potential of generating in excess of 300MWe by 2012.Year 2007The year 2007 saw the publication of the Energy White Paper in May which underlined the Governmentâ€™s commitment to renewable energy, which has now passed into law. The company also saw dramatic volatility in fossil fuels which further strengthens the case for renewable energy as a major component in a secure, balanced national portfolio of energy assets. From a business perspective, the Group delivered the key milestones identified in its prospectus when the company floated on AIM in January 2007.Key highlights for 2008 are as follows:Corporate overheads and development costs for the Group and its first two projects are in line with budget with a reduction in year on year administration costs;Delivered profits of GBP30.0 million following the completion of the agreement with RWE;Generated GBP28.7 million of net cash from both the RWE transaction and the secondary placing in August 2008;Signed heads of terms with the Combination of Rothes Distillers for a 7.2MWe project;Submitted planning application for 7.2MWe project; andNet cash of GBP24.0 million at September 30, 2008.Helius Energy plcâ€™s success and future growth is built around its people. The company has secured the appointment of Paul Brighton as our planning director in 2008. The company continued to strengthen our technical capability and engineering team under Adrian Bowles, our technical director, with the recruitment of quality engineering staff.Helius will continue to move forward on the basis of mitigating risks through the utilisation of currently available technology in order to deliver power projects with the potential to stabilise or reduce carbon emissions substantially, while delivering shareholder value. To this end, Helius has made important strides in 2008 with the support and advice of its Board, staff and other advisors. Further strengthening of our team will ensure that the company can deliver in excess of 300MWe of projects by 2012. Development costsDuring the year the Group incurred development costs of GBP3.4 million which are treated as assets in the course of construction in the Group financial statements. All development costs during the year were in line with budget.The Group plans to increase development spend as it progresses its portfolio of projects. The Group has made significant efforts to contain the cost of project development so as to ensure maximum value can be delivered from its cash resources. The management is targeting a >20% reduction in average development costs per MWe over the coming financial year.Cash positionNet cash held by the Group at the 30 September 2008 was GBP24 million.The development fees received from the sale of the Stallingborough project, provide the required liquidity to complete the consenting process for a further 300MWe of biomass power generation within the UK, and, the Board anticipates, that it will provide the necessary working capital to sustain the Group to the point of power generation activities.The Group is focused on ensuring expenditure is focused on project development and that administration costs are strictly controlled.