TIDMENRT
RNS Number : 6980A
Environmental Recycling Tech. PLC
30 September 2015
For Immediate Release:
Environmental Recycling Technologies plc
Interim Results for the six months ended 30 June 2015
Environmental Recycling Technologies plc ("ERT", "the Company")
(AIM: ENRT), the patent rights holder to the Powder Impression
Moulding ("PIM") process, which converts mixed waste plastics into
commercially viable products, announces its unaudited interim
results for the six months ended 30 June 2015.
Highlights
-- Non-exclusive PIM licence signed for the sale and production
of flat sheet in Colorado Denver; commissioning of the facility is
due in Q4 2015
-- Heads of Terms signed with Mettalis Recycling Limited for an
exclusive PIM licence for the sale and production of flat sheet in
the UK
-- Commercial agreement signed with CDS Group for the
manufacture and distribution of equipment for production of PIM
products
-- First order of AXPLAS(R) for our North American licensee
-- Short term funding facility of GBP500,000 organised to cover the Company's overheads
Lee Clayton - Managing Director comments:
"Environmental Recycling Technologies PLC is now benefiting from
its strategic partnerships, which have resulted in the securing of
key licence agreements. With our commercial partners in place we
can focus on expanding the market for our Powder Impression
moulding (PIM) process for converting mixed waste plastics into
commercially viable products."
For further information:
Environmental Recycling Technologies plc
Ken Brooks (Chairman)
Lee Clayton (Managing Director) 01993 779 468
W H Ireland
John Wakefield 0117 945 3470
Kreab
Robert Speed 020 7074 1800
Half-Yearly Review
Results
Revenue for the six months ended 30 June 2015 was GBP36,000 (H1,
2014 GBP31,000). The loss on operations was GBP0.62 million (H1,
2014 loss GBP0.59 million). Losses attributable to equity
shareholders were GBP1.11 million (H1, 2014 loss GBP1.60
million).
Turnover included revenue from royalties.
Administrative expenses, excluding depreciation and
amortisation, incurred in the day to day running of the business,
were GBP0.52 million (H1, 2014 GBP0.49 million).
Review of business
The Company continues proactively to market its PIM technology
globally, with new and exciting opportunities presenting themselves
as a result of recent changes in legislation and increased
recycling targets required by the EU under the waste
directives.
Your board is confident that ERT, through the wider
commercialisation of its PIM process has the opportunity to
capitalise on these initiatives. Through our recent collaborations,
ERT now has the resources to offer turn-key solutions to licensees
in the manufacturing and recycling sector.
Whilst the board of ERT has decided not to proceed with the
previously announced intended acquisition, it confirms negotiations
have commenced with the vendors of another business with a view to
achieving a similar strategic objective of acquiring a company in a
complementary sector.
Dividends and loss per share
As at 30 June 2015, as reported in the statement of financial
position, the Company does not have distributable reserves and is
unable to declare a dividend.
The loss per share was 0.13 pence (H1, 2014 0.18 pence).
Short term funding
The Company meets its day to day cost base by managing its cash
resources and securing appropriate levels of finance to settle its
liabilities as they fall due. Additional cash loans during the
period were GBP711,000.
The directors have received written assurance from Oxford
Capital, the lenders, that there is no intention to request
immediate repayment of the liabilities and that subject to
agreement on conversion terms, the lender would accept repayment by
way of a debt for equity swap.
Short term funding facilities of GBP500,000 have been arranged
since the half year-end to cover the Company's normal overheads for
the rest of the year. The board continues to look for a longer term
solution from which to develop the Company's proprietary recycling
technology.
Ken Brooks
Chairman
Interim Accounts for the Six Months ended 30 June 2015
(unaudited)
The financial information contained within these accounts has
been prepared by the Directors who accept responsibility for the
interim results presented below and confirm that it has been
properly presented in accordance with applicable law. The interim
results were approved by the Board of Directors on 29 September
2015 and have been prepared on the basis of the accounting policies
set out in note 1. The interim results covers the six months ended
30 June 2015.
Statement of Comprehensive Income (unaudited)
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Continuing operations Note Unaudited Unaudited Audited
Revenue 36 31 37
Administrative expenses (653) (616) (1.139)
Loss on operations (617) (585) (1,102)
Finance costs 2 (494) (1,019) (2,160)
Loss before income tax (1,111) (1,604) (3,262)
Tax on loss on ordinary
activities - 7 44
Loss and total comprehensive
loss for the period from
continuing
operations attributable
to the equity shareholders
of the company (1,111) (1,597) (3,218)
Loss per share (pence)
Basic and diluted loss
per share 3 (0.13p) (0.18p) (0.37p)
Statement of Financial Position (unaudited)
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Assets Note Unaudited Unaudited Audited
Non-Current Assets
Intangible assets 1,388 1,632 1,510
Plant & equipment 41 58 49
Available-for-sale financial
assets 40 40 40
Total non-current assets 1,469 1,730 1,599
Current assets
Trade and other receivables 45 92 81
Cash and cash equivalents 18 38 71
Total current assets 63 130 152
Total assets 1,532 1,860 1,751
Liabilities
Current liabilities
Trade and other payables 353 421 398
Borrowings 4 5,171 2,699 4,434
Total current liabilities 5,525 3,120 4,632
Non-Current liabilities
Borrowings 4 1,841 1,841 1,841
Total Non-Current liabilities 1,841 1,841 1,841
Total liabilities 7,365 4,961 6,473
Net liabilities (5,833) (3,101) (4,722)
Equity attributable to the shareholders
of the parent
Share capital 5 19,861 19,861 19,861
Share premium reserve 37,436 37,436 37,436
Warrant reserve 74 87 87
Available-for-sale reserve (71) (71) (71)
Retained earnings (63,133) (60,414) (62,035)
Total equity (5,833) (3,101) (4,722)
Statement of Changes in Shareholders' Equity (unaudited)
Six months ended Share Share Warrant Available Retained Total
30 June 2015 Capital Premium Reserves -for-sale Earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss and total comprehensive
loss for the period - - - (1,111) (1,111)
Options lapsed - - (13) - 13 -
Balance at 1 January
2015 19,861 37,436 87 (71) (62,035) (4,722)
Balance at 30 June
2015 19,861 37,436 74 (71) (63,133) (5,833)
Six months ended Share Share Warrant Available Retained Total
30 June 2014 Capital Premium Reserves -for-sale Earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total comprehensive
loss for the period - - - (1,597) (1,597)
Balance at 1 January
2014 19,861 37,436 87 (71) (58,817) (1,504)
Balance at 30 June
2014 19,861 37,436 87 (71) (60,414) (3,101)
Year ended 31 December Share Share Warrant Available Retained Total
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September 30, 2015 04:00 ET (08:00 GMT)
2014 Capital Premium Reserves -for-sale Earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total comprehensive
loss for the period - - - - (3,218) (3,218)
Balance at 1 January
2014 19,861 37,436 87 (71) (58,817) (1,504)
Balance at 31 December
2014 19,861 37,436 87 (71) (62,035) (4,722)
Statement of Cash Flows (unaudited)
Six months ended 30 June 2015
30 June
30 June 2014 31 December
2015 2014
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Continuing Activities
Loss before tax (1,111) (1,604) (3,262)
Adjusted for:
Amortisation of intangible
assets 122 123 245
Depreciation of plant and
machinery 8 2 10
Accrued interest cost 194 95 421
Finance charges for short-notice
loans 266 840 1,739
Provision for trade receivable
loan - - 29
Adjusted loss from operations (521) (544) (818)
Decrease in trade and other
receivables 36 38 44
(Decrease) in trade and
other payables (87) (108) (79)
Cash used by operations (572) (614) (853)
Tax receipt 7 19
Net cash outflow from operations (572) (607) (834)
Cash flows from investing
activities
Purchase of plant and machinery - (1) (11)
Net cash used in investing
activities - (1) (11)
Cash flows from financing
activities
Inception of loans (net
of issue costs) 711 560 1,159
Interest paid on loans (192) (92) (421)
Net increase in cash from
financing activities 519 468 738
Net increase/(decrease)
in cash (53) (140) (107)
Cash and cash equivalents
at beginning of period 71 178 178
Cash and cash equivalents
at end of period 18 38 71
Notes to the comprehensive financial statements
1. Accounting policies
Basis of accounting
The financial information presented in this Interim Report has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards issued
by the International Accounting Standards Board, as adopted by the
European Union. The principal accounting policies adopted in the
preparation of the financial information in this Interim Report are
unchanged from those used in the company's financial statements for
the year ended 31 December 2014 and are consistent with those that
the company expects to apply in its financial statements for the
year ended 31 December 2015.
The financial information for the year ended 31 December 2014
presented in this Interim Report does not constitute the company's
statutory accounts for that period but has been derived from them.
The Annual Report and Accounts for the year ended 31 December 2014
were audited and can be obtained from the Registered Office Regent
House, 316 Beulah Hill, London, SE19 3HF. The Independent Auditors'
Report on the Annual Report and Accounts for the year ended 31
December 2014 was unqualified and drew attention to a matter of
emphasis in relation to going concern and did not contain
statements under s498(2) or (3) of the Companies Act 2006. The
financial information for the periods ended 30 June 2015 and 30
June 2014 are unaudited and have not been reviewed by the company's
auditors.
As at 30 June 2015, the company held 40% of the voting rights of
Delta Waste Management Limited, which meets the definition of an
associated undertaking. Delta Waste Management Limited has not been
accounted for as an associated undertaking on the basis that its
results are not material to the company.
This report has not been audited and has not been reviewed by
independent auditors pursuant to the Auditing Practices Board
guidance on Review of Interim Financial Information.
Going concern
The company has reported another operating loss for the half
year and has net liabilities of GBP5.8 million as at the balance
sheet date.
The directors have prepared detailed cash flow forecasts for the
period ended 30 September 2016. Based on their current expectations
of current and new licence fees the directors have a reasonable
expectation that revenue will be generated in line with the
forecasts and will be available to provide some level of
underpinning to the cash flows of the Company for the period to
September 2016. The forecasts also assume that Oxford Capital (the
lender) and Mr K W brooks (a director) will not seek cash repayment
of any of the GBP6.85 million of loan funding and GBP0.162m of
loans made available to the company during at least the 12 months
from the date of approval of these interim results. The forecasts
indicate that the company should be able to meet its liabilities as
they fall due for payment over the forthcoming 12 months.
Appropriate assurances have been received from the lender and Mr
K W Brooks that there is no intention to request repayment of the
amounts due for at least the period within 12 months from the date
of signing these interim results. In addition, the directors are in
discussions with the lender that will enable the company to settle
the outstanding loans of GBP6.85 million by the issue of shares in
the company rather than settling in cash.
The directors have also agreed further funding of GBP500,000
from Oxford Capital subsequent to the year end.
The directors have also obtained written confirmation from Magna
Group confirming their willingness to make available to the
company, if required, a Convertible Promissory Note amounting to
the value of $0.6 million on acceptable terms to help cover the
company's normal overheads in the foreseeable future.
The directors consider that the recent and expected trading
performance and the requirement for the continuation of loan
funding from the lenders indicate the existence of material
uncertainties which may cast significant doubt over the company's
ability to continue as a going concern. However, the directors are
confident that the level of funds available to the company will
enable the company to meet its liabilities as they fall due.
Accordingly the directors continue to adopt the going concern basis
in preparing these interim results.
These interim results do not include the adjustments to the
carrying value of assets that would result if the company was
unable to continue as a going concern.
2. Finance
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Finance costs
Loan interest 194 95 243
Finance charges for short-notice
loans 266 840 1,739
Amortisation of finance
costs 34 84 178
Total finance costs 494 1,019 2,160
3. Earnings per share
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Loss used for calculation
of basic and diluted EPS (1,111) (1,597) (3,218)
30 June 30 June 31 December
2015 2014 2014
Number number Number
Unaudited Unaudited Audited
Weighted average number
of shares used in basic
and diluted EPS 869,563,733 869,563,733 869,563,733
At 30 June 2015, there were 4,550,000 (31 December 2014:
5,550,000) (H1, 2014: 5,750,000) of potentially issuable shares
which are anti-dilutive.
4. Borrowings
30 June 2015 30 June 2014 31 December
2014
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Current - due within one
year
Short term borrowings 5,171 2,699 4,234
Long term - due more than
one year
Long term borrowings 1,841 1,841 1,841
Total borrowings 7,012 4,540 6,075
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