TIDMDOO
RNS Number : 1802Z
D1 Oils Plc
13 March 2012
D1 Oils plc
Interim results
The unaudited interim results for the six months ended 30
December 2011 are hereby released to the market.
Chairman's Report
I am pleased to be able to provide an update to shareholders in
respect of the 6 month period to 31 December 2011, and other
developments following the period end.
As announced in October 2011, the Board has focused D1 Oils plc
(the "Company") and its subsidiaries (the "Group") on its
operations in India, where there is considerable demand for Crude
Jatropha Oil (CJO) and for oil produced from other non-edible oil
seeds that are used in a number of industrial applications.
Accordingly, the Group has committed an increasing proportion of
its working capital to operations in India, which has enabled
larger scale consolidation of grain storage and processing to be
achieved than previously. In addition, the Group is in the process
of seeking to obtain commodity trade financing of its seed stock
for the 2012/2013 harvest season. Obtaining such finance is
facilitated by the operation of centralised storage and processing
facilities and is expected to enhance the return on capital
committed by the Group.
The Board remains confident that the Group is on track to
achieving the targeted volume for this calendar year. Since the
commencement of the season in September 2011, the Group has
purchased, processed and sold oil and seed cake derived from over
1,268 tonnes of Jatropha seed and has purchased a further 300
tonnes for processing and sale. Revenues are supported by
continuing upward price pressure in the market for CJO and Jatropha
Seed Cake (JSC) beyond that anticipated last year, with prices
achieved (ex works) currently exceeding $1,160 per tonne, and $130
per tonne respectively.
The Board has implemented the cost reduction plans announced in
December 2011, with a direct impact on the Group's expenditure in
the UK, Zambia, Malawi and Indonesia, reducing the Group monthly
overhead cost base by over 65% since June 2011, to below GBP90,000
per month. The Board has suspended, until further notice, the
Group's animal feed development programme, together with the
related cattle trials, as JSC has achieved higher selling prices as
an organic fertiliser than previously expected, thereby also
achieving an attractive gross margin on the product without the
cost of further enhancement.
As part of its review of the business, the Group has trialled
the procuring and processing other non-edible oil seeds in India
that can be developed into organic bio-chemicals and feed stocks
that have multiple applications including bio-diesel production.
Most of these oil seeds are similar to Jatropha and do not compete
with food crops or feed crops. These other non-edible oil seeds
include: Pomgamia, Neem and Castor. The Group has procured,
processed and sold oil and seed cake from over 100 tonnes of
Pomgamia seed, achieving prices for Crude Pomgamia Oil and Pomgamia
Seed Cake in excess of $1,060 per tonne and $200 per tonne,
respectively. The Group has additionally collected initial tonnages
of Neem and anticipates achieving sales prices for Crude Neem Oil
and Neem Seed Cake in excess of $1,500 per tonne and $200 per
tonne, respectively.
In light of these trials the Board believes that the Group can
become a producer and supplier of crude oil and seed cake from
multiple non-edible oil seeds in addition to Jatropha. The Board
believes this will diversify and enhance the future growth in sales
volumes of the business, and widen the market opportunities for the
crude oil that is produced. Currently the Group has sold CJO as a
feedstock for pharmaceutical and personal care applications as well
as a biofuel feedstock. Additionally Pomgamia, Neem and Castor can
be refined into biofuel or be used as a pharmaceutical feedstock in
India. The Board has therefore determined that a key element to its
strategy will be to diversify from its reliance on Jatropha to a
wider variety of non-edible oil seeds, with a view to achieving
high volume usage of available storage and processing facilities,
and creating a wider supplier base and end product output
capability.
It was announced in December 2011 that Martin Jarvis had
resigned as the Chief Operating Officer and Director of the
Company. I would like to thank Martin for his contribution to the
Company during the transition period following the appointment of
the new members of the management team and Board last year.
Nicholas Myerson, a current executive director, was duly appointed
as the Chief Operating Officer.
Finance
Group revenue from continuing operations was GBP141.5k (6 months
to December 2010: GBP90.0k). The net loss from continuing
operations was GBP1.5m (6 months to December 2010: GBP0.5m). The
loss, compared to 6 months ended December 2010, reflects
restructuring of the Group resulting from the business review by
the Board.
Administrative costs of GBP1.1m (6 months to December 2010
GBP1.0m) included costs incurred in Zambia and Indonesia of
GBP0.21m prior to the decision of the Board to withdraw from these
regions. India incurred costs of GBP0.22m. The UK incurred costs of
GBP0.40m including GBP0.24m of salaries. During the period, there
was a change over to the new Board and, late in the period, two
members of UK staff were made redundant. Restructuring costs
amounted to GBP0.06m and professional and legal fees amounted to
GBP0.05m. Post year end the number of UK staff was further reduced
by four. Overheads for the Group have been reduced from GBP0.26m
per month in H2 2011, to an underlying rate of GBP0.09m per month.
This has allowed more working capital to be directed to India to
enable more seed collection.
There were additional one off costs incurred within finance
expenses, of GBP0.3m, consisting of GBP0.3m foreign exchange
previously held in equity associated with countries that are no
longer active being released to the income statement, and GBP0.1m
of foreign exchange cost as a result of impairing intra-group loans
for operations in countries that are no longer active also being
released to the income statement. Additional finance expense
included an ongoing foreign exchange gain of GBP0.1m. In
comparison, during the 6 months to 2010, there was a net gain on
foreign exchange of GBP0.2m and additional income of GBP0.2m for
tax credits received for research and development carried out in
2008 and 2009. As part of the business review, the Group no longer
carries out work which would qualify for such tax credits.
The overall loss for the period was GBP1.6m (6 months to
December 2010: GBP3.0m) and the basic loss per share was 1.15p (6
months to December 2010: 2.37p).
The Group's cash and cash equivalents and term deposits at 31
December 2011 amounted to GBP2.2m (December 2010: GBP3.5m). During
the period GBP1.2m net of costs was raised from a share
placing.
Since the period end, ongoing seed processing and sale in the
Indian harvest season has enabled the Group to trade on a cash
positive basis.
In October 2011 the Board announced that the Company may seek to
raise further funds from shareholders during the latter half of
2012 to enable the Group to finance its development until it
becomes cash flow self sufficient. In light of the positive impact
of the restructuring and cost reduction plan which has been
achieved to date, and the ongoing review of future development
plans, the Board will over the coming months be considering this
matter further and whether it would be appropriate to proceed with
a shareholder funding process this year.
Outlook
The Board is enthusiastic and cautiously optimistic for the
development of the Group going forward. This is based on the
confidence in the strategy of procuring, processing and selling
multiple non-edible oil seeds in India and South East Asia,
The Group is still in the early stages of its commercial
development, and there are many ongoing commercial challenges to be
addressed. However, I believe the Company is now well positioned
for the future; firstly by investing and building infrastructure in
India, a high growth region; and secondly by developing the scale
and growth of multiple non-edible oil seed production with multiple
sales applications for the crude oil that is produced. The Board
firmly believes that the Group has very good opportunities within
the agricultural, pharmaceutical, personal care, and energy sectors
which will allow it to strengthen and expand through profitable
trading, with reduced reliance on the demand for biofuels and the
impact of biofuel legislation.
Steven Rudofsky
Executive Chairman
12 March 2012
Consolidated interim income statement
Unaudited results for the six months ended 31 December 2011
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Audited
Note GBP000 GBP000 GBP000
------------------------------------------ ---- ----------- ----------- -----------
Revenue 2 141.5 89.8 105.2
Cost of sales (131.8) (77.8) (85.4)
------------------------------------------ ---- ----------- ----------- -----------
Gross profit 9.7 12.0 19.8
Administrative expenses (1,143.5) (996.1) (3,353.2)
------------------------------------------ ---- ----------- ----------- -----------
Operating loss (1,133.8) (984.1) (3,333.4)
Share of losses of joint ventures
accounted for using the equity method - (96.5) (306.1)
Impairment due to restructuring (56.7) - -
Loss from continuing operations (1,190.5) (1,080.6) (3,639.5)
Finance income 14.8 240.7 373.5
Finance costs (311.2) 69.1 (57.8)
------------------------------------------ ---- ----------- ----------- -----------
Loss for the period from continuing
operations before taxation (1,486.9) (770.8) (3,323.8)
Tax (expense) / credit (7.0) 240.7 235.9
------------------------------------------ ---- ----------- ----------- -----------
Loss for the period from continuing
operations (1,493.9) (530.1) (3,087.9)
------------------------------------------ ---- ----------- ----------- -----------
Discontinued operations
Loss for the period from discontinued
operations (145.5) (2,461.5) (3,000.5)
------------------------------------------ ---- ----------- ----------- -----------
Total loss for the period (1,639.4) (2,991.6) (6,088.4)
------------------------------------------ ---- ----------- ----------- -----------
Loss for the period attributable to
equity holders of the parent (1,639.4) (2,991.6) (6,088.4)
Loss per ordinary share
Basic and diluted loss per ordinary
share (pence) 4 (1.15) (2.37) (4.81)
Basic and diluted loss per ordinary
share from continuing operations (pence) 4 (1.04) (0.58) (2.44)
------------------------------------------ ---- ----------- ----------- -----------
Consolidated interim statement of comprehensive income
Unaudited results for the six months ended 31 December 2011
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
---------------------------------------- ----------- ----------- -----------
Loss for the period (1,639.4) (2,991.6) (6,088.4)
Exchange difference on retranslation
of foreign operations flowing through
foreign exchange reserves. (44.1) (373.8) (302.2)
Transfer of foreign exchange reserves
to income statement * 296.1 (12.5) (12.5)
---------------------------------------- ----------- ----------- -----------
Total recognised income and expense for
the period (1,387.4) (3,377.9) (6,403.1)
---------------------------------------- ----------- ----------- -----------
Attributable to:
Equity holders of the parent (1,387.4) (3,377.9) (6,403.1)
---------------------------------------- ----------- ----------- -----------
* This represents the recycling of the cumulative currency
translation reserves in respect of the region's the Group withdrew
from during the period in accordance with IAS 21 'The Effects of
Changes in Foreign Exchange Rates'.
Consolidated interim statement of changes in equity
Unaudited results for the six months ended 31 December 2011
Own Share Currency
Share Share shares Merger Revenue option translation
capital premium held reserve reserve reserve reserve Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------- --------- --------- --------- --------- ----------- --------- ----------- ---------
At 1 January 2010 1,266.8 99,290.3 (484.0) 437.7 (91,919.6) 1,025.0 (33.1) 9,583.1
Share-based payments - - - - 41.0 - - 41.0
------------------------- --------- --------- --------- --------- ----------- --------- ----------- ---------
Transactions with owners - - - - 41.0 - - 41.0
Total recognised income
and expense - - - - (6,088.4) - (314.7) (6,403.1)
At 1 January 2011 1,266.8 99,290.3 (484.0) 437.7 (97,967.0) 1,025.0 (347.8) 3,221.0
Share-based payments - - - - 28.0 - - 28.0
------------------------- --------- --------- --------- --------- ----------- --------- ----------- ---------
Transactions with owners - - - - 28.0 - - 28.0
Total recognised income
and expense - - - - (1,777.2) - 57.1 (1,720.1)
At 1 July 2011 1,266.8 99,290.3 (484.0) 437.7 (99,716.2) 1,025.0 (290.7) 1,528.9
Equity issue 516.4 666.2 - - - - - 1,182.6
Share-based payments - - - - 28.0 - - 28.0
------------------------- --------- --------- --------- --------- ----------- --------- ----------- ---------
Transactions with owners 516.4 666.2 - - 28.0 - - 1,210.6
Total recognised income
and expense - - - - (1,639.4) - 252.0 (1,387.4)
At 31 December 2011 1,783.2 99,956.5 (484.0) 437.7 (101,327.6) 1,025.0 (38.7) 1,352.1
------------------------- --------- --------- --------- --------- ----------- --------- ----------- ---------
Consolidated interim balance sheet
Unaudited results at 31 December 2011
At At At
31 December 30 June 31 December
2011 2011 2010
Unaudited Unaudited Audited
Note GBP000 GBP000 GBP000
------------------------------ ---- ----------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 41.6 84.8 169.2
Current assets
Inventories 71.1 148.5 211.4
Trade and other receivables 107.6 195.9 899.7
Other financial assets 5 - - 90.0
Cash and short-term deposits 2,214.5 2,412.0 3,440.5
2,393.2 2,756.4 4,641.6
Total assets 2,434.8 2,841.2 4,810.8
------------------------------ ---- ----------- --------- -----------
Equity and liabilities
Current liabilities
Trade and other payables (84.4) (63.0) (336.7)
Accruals and deferred income (214.4) (467.8) (498.5)
Deferred consideration (47.2) (47.2) (4.1)
Provisions (250.0) (274.0) (274.0)
------------------------------ ---- ----------- --------- -----------
(596.0) (852.0) (1,113.3)
Non-current liabilities
Deferred consideration (486.7) (460.3) (476.5)
(486.7) (460.3) (476.5)
------------------------------ ---- ----------- --------- -----------
Total liabilities (1,082.7) (1,312.3) (1,589.8)
------------------------------ ---- ----------- --------- -----------
Net assets 1,352.1 1,528.9 3,221.0
------------------------------ ---- ----------- --------- -----------
Capital and reserves
Equity share capital 1,783.2 1,266.8 1,266.8
Share premium 99,956.5 99,290.3 99,290.3
Own shares held (484.0) (484.0) (484.0)
Other reserves 437.7 437.7 437.7
Revenue reserves (101,327.6) (99,716.2) (97,967.0)
Share option reserve 1,025.0 1,025.0 1,025.0
Currency translation reserve (38.7) (290.7) (347.8)
Equity shareholders' funds 1,352.1 1,528.9 3,221.0
----------------------------- ----------- ---------- ----------
Consolidated interim statement of cash flows
Unaudited results for the six months ended 31 December 2011
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Restated
Audited
GBP000 GBP000 GBP000
----------------------------------------------- ----------- ----------- -----------
Operating activities
Loss for the period (1,639.4) (2,991.6) (6,088.4)
Adjustments to reconcile loss for the
period to net cash flow from operating
activities:
Depreciation of property, plant and equipment,
and amortisation of intangible assets 21.3 43.4 135.6
Impairment of property, plant and equipment 24.2 (8.2) 48.1
Impairment of net current assets 32.5 - -
Share-based payments 28.0 (37.0) 41.0
Net loss on disposal of agronomy and breeding
activities - 865.8 865.8
Loss on disposal of property, plant and
equipment 5.2 48.0 55.1
Share of post-tax losses of joint ventures
accounted for using the equity method - 96.5 306.1
Finance income (14.8) (257.5) (386.1)
Finance expense 311.5 (68.6) 59.4
Income tax credit - (229.1) (235.9)
Tax (paid) / received (7.0) (2.6) 4.2
Decrease / (increase) in inventories 15.9 (50.5) (110.5)
Decrease / (increase) in trade and other
receivables 59.3 569.0 843.9
Increase / (decrease) in trade and other
payables (166.9) (151.2) (319.6)
Increase / (decrease) in provisions (24.0) (560.9) (1,461.9)
Effects of exchange rates on cash at the
start of the period (19.6) 6.3 19.3
Exchange effects on operating costs 122.5 193.0 351.3
Exchange released to Income Statement
upon impairment of Group loans (109.1) - -
Retranslation of revenue reserves (24.5) (249.3) (334.0)
Net cash flow from operating activities (1,384.9) (2,784.5) (6,206.6)
----------------------------------------------- ----------- ----------- -----------
Investing activities
Interest received 14.8 (7.1) 34.8
Payments to acquire property, plant and
equipment, and intangible assets (7.5) (27.0) (66.9)
Funds transferred to deposits - 4,026.7 4,457.6
Purchase of joint venture investments - (88.6) (100.0)
Net cash out flow on disposal of agronomy
and breeding activities - (800.0) (800.0)
Proceeds from disposal of assets held
for sale - 1,696.1 1,696.1
----------------------------------------------- ----------- ----------- -----------
Net cash flow from investing activities 7.3 4,800.1 5,221.6
----------------------------------------------- ----------- ----------- -----------
Financing activities
Interest paid (2.5) - -
Exercise of share options 1,182.6 - -
Net cash flow from financing activities 1,180.1 - -
----------------------------------------------- ----------- ----------- -----------
Net (decrease) / increase in cash and
cash equivalents (197.5) 2,015.6 (985.0)
Cash and cash equivalents at the start
of the period 2,412.0 1,424.9 4,425.5
Cash and cash equivalents at the end of
the period 2,214.5 3,440.5 3,440.5
----------------------------------------------- ----------- ----------- -----------
Notes to the interim financial statements
1. Basis of preparation
This interim report, which does not constitute statutory
accounts within the meaning of Section 435 of the Companies Act
2006, was approved by the Board on 12 March 2012. The condensed set
of financial statements of this interim report has been prepared in
accordance with accounting policies which were adopted in
presenting the full year annual report and accounts for the year
ending 31 December 2010.
As announced in December 2011, the Company changed its
accounting reference date from 31 December to 30 June. Accordingly,
the 18 month period report and accounts to 30 June 2012 will be
prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The Group has
not applied International Accounting Standard (IAS) 34 Interim
Financial Reporting in the preparation of these condensed interim
financial statements, as it is not mandatory for AIM-listed
companies.
The financial information for the full preceding year does not
constitute statutory accounts as defined in Section 435 of the
Companies Act 2006 and has been extracted from the statutory
accounts for the financial year ended 31 December 2010 which have
been delivered to the Registrar of Companies. Those accounts, which
included an auditors' report which contained a 'disclaimer on
opinion' qualification, did not contain a statement under Section
498(2) nor Section 498(3).
Fundamental accounting concept
The financial statements have been prepared on a going concern
basis which assumes that the Company and the Group will continue in
operating existence for the foreseeable future and meet its
liabilities as they fall due. There are uncertainties that the
Directors have had to consider in deciding to prepare the financial
statements on the going concern basis which are set out below.
Business planning uncertainty
The Report of the Chairman on pages 1 and 2 sets out the
strategy of the business and what it is seeking to achieve. Whilst
the Directors believe the strategy is realistic, there are
inevitably uncertainties as to whether they will be achieved in
full and in time. While the Board is confident it can deliver a
non-edible oil based strategy that is viable over the long term,
until the execution of the business plan becomes more certain the
Board cannot assess with certainty the implications for the
Company.
Funding uncertainty
The Company's Board informed the market during the last fund
raising in October 2011 that the Company would require a further
injection of funds during 2012. The Board believes that the case
can be made for further funding for capital and working capital
investment ahead of the business becoming cash stable. The Board is
encouraged by the feedback it has received to from existing
shareholders to participate in a fund raising. However, if the
Directors are unable to secure the appropriate level of shareholder
support for the strategy and associated future fund raising before
late 2012, the Company and the Group will be unable to continue as
a going concern.
Directors' view
After making enquiries and considering these uncertainties, the
Directors conclude that the implications of the business plan
uncertainty and whether funding can be secured before cash
resources are depleted are material uncertainties which may cast
doubt about the Group and Company's ability to continue as a going
concern in its current form. The Directors believe that the impact
of these uncertainties should be manageable and the Directors have
a reasonable expectation that the Group and the Company have
adequate resources to continue in operational existence for the
foreseeable future. Consequently the Directors believe that it is
appropriate to prepare the financial statements on a going concern
basis.
Should the proposed fund raising not be successful, then the
going concern basis would be invalid and adjustments may have to be
made to reduce the value of the assets to their recoverable amount,
to provide for any further liabilities which might arise and to
reclassify fixed assets and long term liabilities to current assets
and current liabilities.
Significant accounting policies
The accounting policies adopted in the preparation of the
Group's interim financial statements are consistent with those
followed in the preparation of the annual financial statements for
the year ended 31 December 2010, except for the adoption of new
Standards and Interpretations as of 1 January 2011 listed
below:
-- IFRS 2 - Amendment to IFRS 2 - Group Cash-settled Share-based
Payments. The amendments clarified the classification of
share-based payment awards in parent and subsidiary companies and
addressed plans not considered in the original Standard. The
adoption of this amendment has not had a material impact on the
financial position or performance of the Group.
The IASB and IFRIC have issued the following standards and
interpretations with an effective date after the date of these
financial statements:
-- IFRIC 14 - Amendment - IAS 19 limit on a defined benefit asset - effective 1 January 2011.
The Directors do not anticipate that the adoption of these
standards will have a material impact on the Group's financial
statements in the period of initial application.
The IASB and IFRIC have issued the following standards and
interpretations with an effective date after the date of these
financial statements that have not yet been endorsed by the
European Union:
-- IFRS 1 - Amendment - First time adoption of IFRS - effective 1 July 2010.
-- IFRS 7 - Amendment - Financial instruments: disclosures - effective 1 July 2011
-- IFRS 9 - Financial instruments - effective 1 January 2013.
-- IFRS 10 - Consolidated financial statements - effective 1 January 2013.
-- IFRS 11 - Joint arrangements - effective 1 January 2013.
-- IFRS 12 - Disclosure of involvement with other entities - effective 1 January 2013.
-- IFRS 13 - Fair value measurement - effective 1 January 2013.
-- IAS 12 - Amendment - Income taxes - effective 1 January 2012.
-- IAS 27 - Amendment - Separate financial statements - effective 1 January 2013.
-- IAS 28 - Amendment - Investment in associates and joint
ventures - effective 1 January 2013.
The Group has not yet assessed the impact of IFRS 9, IFRS 10,
IFRS 11, IFRS 12, IFRS 13, IAS 27 nor IAS 28. The Directors do not
anticipate that the adoption of amendments to IFRS 1, IFRS 7 and
IAS 12 will have a material impact on the Group's financial
statements in the period of initial application.
2. Segmental information
For management purposes, the Group is organised into business
units according to the nature of the products and services and has
the following operating segments:
-- The Operations segment is responsible for managing the
out-grower network, collecting grain and selling CJO and other
non-edible oil seeds.
-- The Science & Technology segment provided Jatropha plant
science and associated technical consulting services to
third-parties, breeding seeds and seedlings for commercial planting
and undertakes research and development activities on Jatropha and
its co-products. In December 2010, the disposal of a substantial
portion of this segment was effected, with the exception of the
animal feed activity. The effective financial date of disposal was
1 November 2010. For the purposes of segmental reporting, the
agronomy and breeding activities that were disposed of in 2010 are
classified as discontinued. As a result of a business review
conducted during the period, the Board took the view to place the
Animal feed programme on hold. The animal feed activity has been
reclassified as discontinuing and the comparatives have been
restated on this basis.
No operating segments have been aggregated to form the above
reportable operating segments.
Management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on profit or loss which in certain respects, as
explained in the table below, is measured differently from profit
or loss in the consolidated financial statements. Group financing
(including finance costs and finance revenue), taxation and central
administration are managed on a group basis and are not allocated
to operating segments.
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Restated Audited
GBP000 GBP000 GBP000
------------------------------------------------- ----------- ----------- ----------------
Revenue
Operations (continued operations) 141.5 89.8 105.2
Science and Technology (discontinued operations) - 142.2 228.9
Group total 141.5 232.0 334.1
------------------------------------------------- ----------- ----------- ----------------
Loss
Operations (599.4) (935.9) (1,702.6)
Science and Technology (discontinued operations) (187.0) (2,756.3) (3,923.5)
UK Refining and Trading (discontinued
operation) 41.5 294.8 923.0
(744.9) (3,397.4) (4,703.1)
Corporate (894.5) 405.8 (1,385.3)
Group total (1,639.4) (2,991.6) (6,088.4)
------------------------------------------------- ----------- ----------- ----------------
3. Discontinued operations
At 31 December 2011, the Group had two discontinued operations:
i) Refining & Trading; and ii) Science & Technology.
Refining & Trading
On 9 April 2008, the Group announced the decision of its Board
to cease biodiesel refining and trading operations. The two
refining sites at Middlesbrough and Bromborough in the UK were
closed. The Middlesbrough site and associated assets were sold in
June 2009. On 2 July 2010, the Group sold the Bromborough site and
associated prepaid insurance for GBP2.2m. The Group is also due to
receive up to GBP0.4m based on future production volumes from the
site. The royalty has been classified as a contingent asset due to
uncertainty about its timing and amount. At 31 December 2011, the
refining and trading operations remained classified as discontinued
operations.
The results of the refining and trading activities of the Group
for the period are presented below:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
GBP000 GBP000 GBP000
---------------------------------------------- ----------- ----------- -----------
Revenue - - -
Expenses (a) 41.5 294.9 971.1
---------------------------------------------- ----------- ----------- -----------
Gross profit 41.5 294.9 971.1
Asset impairment - (0.1) (48.1)
---------------------------------------------- ----------- ----------- -----------
Operating profit 41.5 294.8 923.0
Finance income - - -
Finance costs - - -
---------------------------------------------- ----------- ----------- -----------
Profit before tax from discontinued operation 41.5 294.8 923.0
---------------------------------------------- ----------- ----------- -----------
Tax income - - -
---------------------------------------------- ----------- ----------- -----------
Profit from discontinued operation 41.5 294.8 923.0
---------------------------------------------- ----------- ----------- -----------
(a) Administrative expenses in 2011 includes the settlement of
an outstanding liability plus the release of a contracts provision
in relation to the Bromborough site.
The net cash flows incurred by the refining and trading
operations are as follows:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
GBP000 GBP000 GBP000
-------------------------- ----------- ----------- -----------
Operating (58.1) (236.5) (244.0)
Investing - - 1,695.4
Financing - - -
-------------------------- ----------- ----------- -----------
Net cash (outflow)/inflow (58.1) (236.5) 1,451.4
-------------------------- ----------- ----------- -----------
Science & Technology
In December 2010, the Group completed the disposal of the
agronomy and breeding activities within the Science &
Technology division with an effective financial date of 1 November
2010. The disposed entities are known as 'Quinvita'. The disposal
was made on, inter alia, the following terms:
1. Retention by the Company of all agronomy and breeding
intellectual property developed to 1 November 2010;
2. The Company provided Quinvita with GBP0.8m working capital;
3. Issue of GBP0.8m in Cumulative Redeemable Preference Shares
by Quinvita to the Company with a 5% coupon plus future royalties
on Jatropha related sales on a sliding scale over 10 years (15% to
year 5; 10% years 6 - 8; 5% years 9 - 10); and
4. The Group became a member of Quinvita's agronomy and breeding
platforms for a minimum of three years (subject to certain
conditions) giving the Group access to ongoing Jatropha
developments.
No value has been ascribed to the Cumulative Redeemable
Preference Shares or the royalty entitlements at the year end on
the basis that their fair value is assessed as GBPnil at this point
in time.
As part of the overall Group business review conducted during
the period, the Board decided to place the retained Animal Feed
sector on hold indefinitely. As such, this sector has now been
classified as discontinued.
The results of the Science & Technology division for the
period are presented below:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
GBP000 GBP000 GBP000
---------------------------------------------------- ----------- ----------- -----------
Revenue - 142.1 228.8
Expenses (187.0) (2,053.8) (3,307.7)
---------------------------------------------------- ----------- ----------- -----------
Operating loss (187.0) (1,911.7) (3,078.9)
Finance income - 12.6 12.6
Finance costs - (1.6) (1.6)
---------------------------------------------------- ----------- ----------- -----------
Trading loss before tax from discontinued operation (187.0) (1,900.7) (3,067.9)
---------------------------------------------------- ----------- ----------- -----------
Tax income - 10.2 10.2
---------------------------------------------------- ----------- ----------- -----------
Trading loss from discontinued operation (187.0) (1,890.5) (3,057.7)
---------------------------------------------------- ----------- ----------- -----------
Loss on disposal of agronomy and breeding business - (865.8) (865.8)
Loss from discontinued operation (187.0) (2,756.3) (3,923.5)
---------------------------------------------------- ----------- ----------- -----------
The net cash flows incurred by the Science & Technology
division are as follows:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
GBP000 GBP000 GBP000
----------------- ----------- ----------- -----------
Operating (189.6) (1,167.0) (1,756.5)
Investing - - (800.0)
Financing - - -
----------------- ----------- ----------- -----------
Net cash outflow (189.6) (1,167.0) (2,556.5)
----------------- ----------- ----------- -----------
Losses and loss per share for the discontinued operations
The losses from discontinued operations are as follows:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
GBP000 GBP000 GBP000
--------------------------------------------------- ----------- ----------- -----------
(Loss)/profit from discontinued Refining & Trading
operations (187.0) 294.8 923.0
Profit/(loss) from discontinued portion of Science
& Technology operations 41.5 (2,756.3) (3,923.5)
Total loss from discontinued operations (145.5) (2,461.5) (3,000.5)
--------------------------------------------------- ----------- ----------- -----------
The losses per share for the discontinued operations are as
follows:
Six months Six months Restated
ended ended Year ended
31 December 31 December 31 December
2011 2010 2010
pence pence pence
----------------------------------------------- ----------- ----------- -----------
Basic and diluted from discontinued operations (0.11) (1.95) (2.37)
----------------------------------------------- ----------- ----------- -----------
4. Loss per ordinary share
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited unaudited Audited
Number Number Number
---------------------------------------------- ----------- ----------- -----------
Weighted average number of shares in issue 143,040,052 126,481,574 126,481,574
---------------------------------------------- ----------- ----------- -----------
Pence Pence Pence
---------------------------------------------- ----------- ----------- -----------
Basic loss per ordinary share for the period (1.15) (2.37) (4.81)
Basic loss per ordinary share from continuing
operations (1.04) (0.42) (2.44)
---------------------------------------------- ----------- ----------- -----------
The number of shares in issue at 31 December 2011 was
178,315,219 and at 31 December 2010 was 126,675,219. For the
purposes of calculating the loss per ordinary share the weighted
average number of shares excludes 193,645 shares held by the D1
Oils plc Employee Benefit Trust. The diluted loss per share does
not differ from the basic loss per share as the share options are
anti-dilutive.
For the purposes of calculating earnings per share, the
following loss figures were used:
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Restated
Audited
GBP000 GBP000 GBP000
---------------------------------------------------- ----------- ----------- -----------
Loss for the period attributable to equity
holders of the parent from continuing operations (1,493.9) (530.1) (3,087.9)
Loss for the period attributable to equity
holders of the parent from discontinued operations (145.5) (2,461.5) (3,000.5)
---------------------------------------------------- ----------- ----------- -----------
Total loss for the period attributable to
equity holders of the parent (1,639.4) (2,991.6) (6,088.4)
---------------------------------------------------- ----------- ----------- -----------
5. Other financial assets
Other financial assets comprise the following:
Six months Six months Year
ended ended ended
31 December 31 December 31 December
2011 2010 2010
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
---------------------- ----------- ----------- -----------
Other cash deposits - - -
Accrued bank interest - - -
Euro forward deposit - - 90.0
---------------------- ----------- ----------- -----------
- - 90.0
---------------------- ----------- ----------- -----------
6. Contingent assets
At 31 December 2011, the Group had three contingent assets:
1. D1 Oils Trading Limited has commenced proceedings to recover
amounts due under a note, beneficial entitlement of which was
assigned to the company as a result of a previous settlement. The
note issuer has delayed payment of the note. D1 Oils Trading
Limited has not recognised an asset in relation to this note as the
amount and timing of cash flows from the note were uncertain. Post
31 December 2011, a cash amount was received by D1 Oils Trading Ltd
in part settlement of the amounts owed.
2. In addition to the sale of the Bromborough refining site, the
buyer of the site agreed to pay D1 Oils Trading Limited a net
royalty of GBP0.4m plus VAT based on Bromborough's future
production volumes of biodiesel. The Group has not recognised an
asset in relation to this entitlement as the amount and timing of
cash flows are uncertain.
3. As part of the disposal of the agronomy and breeding
activities in the Science & Technology division in December
2010, the Company received Cumulative Redeemable Preference Shares
(CRPS) with a nominal value of GBP0.8m and a 5% coupon due for
repayment in 2015. In addition, the Company is entitled to future
royalties on Jatropha related sales on a sliding scale over 10
years (15% to year 5; 10% years 6 - 8; 5% years 9 - 10). The Group
has not recognised an asset in relation to the CRPS or the
royalties as the amount and timing of cash flows are uncertain.
Post 31 December 2011, the Group entered into discussions with
Quinvita for the early settlement of the CRPS and royalties. The
outcome of the discussions are currently ongoing.
7. Contingent liabilities
At 31 December 2011, the Group had one contingent liability:
1. As part of the sale of the Bromborough site, the lease
obligations for two parcels of land adjacent to the Bromborough
site were passed to the buyers. The two leases are first
cancellable in 2021. If the buyer defaults on these lease
obligations, the obligation may fall to D1. The maximum exposure is
GBP2.0m but various mitigations, such as sub-lets, are available.
This obligation remains contingent on the buyer defaulting and the
Board does not consider the risk sufficiently likely to recognise a
liability.
8. Approval by the Board of Directors
The Interim Report was approved by the Board of Directors on 12
March 2012.
Directors and advisors
Steven Rudofsky Company Secretary
Executive Chairman Marie Edwards
Nicholas Myerson Registered office
Chief Operating Officer 16 Great Queen Street
London WC2B 5DG
Graham Woolfman Registered number
Non-Executive Director 5212852
Broker and nominated advisor
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
Bankers
Barclays Bank plc
PO Box 378
71 Grey Street
Newcastle upon Tyne NE99 1JP
Auditors
Grant Thornton UK LLP
1020 Eskdale Road
IQ Winnersh
Wokingham
Berkshire RG41 5TS
Solicitors
Fladgate
16 Great Queen Street
London WC2B 5DG
Registrars
Capita IRG plc
The Registry
34 Beckenham Road
Kent BR3 4TU
The Directors of D1 confirm that the interim results of the
Group for the six months ended 31 December 2011 have been posted to
shareholders today and are available at www.d1plc.com.
For further information please contact:-
D1 Oils plc +44 (0) 20 7936 9104
Steven Rudofsky
Executive Chairman
WH Ireland + 44 (0) 20 7220 0470
Chris Fielding
This information is provided by RNS
The company news service from the London Stock Exchange
END
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