Full Year Results

RNS Number : 4426R

eEnergy Group PLC

30 June 2020

 

30 June 2020

eEnergy Group plc

("eEnergy" or "the Group" or "the Company")

Full Year Results

eEnergy Group plc (AIM: EAAS) (the "Company" or "Group") announces its full year results for the year ended 31 December 2019.  The Annual Report and Accounts will be available on www.eenergyplc.com and will be sent to shareholders shortly. 

As at 31 December 2019, the Group was known as Alexander Mining plc, and it changed its name to eEnergy Group plc on 8 January 2020.

On 20 December 2019 the Board had announced the proposed reverse acquisition of eLight Group Holdings Limited ("eLight") and the simultaneous disposal of the Group's Metaleach mining technology subsidiary as well as the change of the name of the Company to eEnergy Group plc.  These proposals were approved by shareholders at a general meeting of the Company held on 8 January 2020.  A placing of new ordinary shares was completed at the same time and raised net proceeds of £1.34 million.

The acquisition of eLight represented the first step in creating a broader-based Energy Efficiency Services provider that can supply multiple complementary energy-related services to both existing and new customers and use the currency of its AIM-listed securities to participate in the consolidation and integration of other service providers in what is a highly fragmented market.

Financial review

During the year the Group made a comprehensive loss for the year of £615,000 (2018: £513,000).  The Group had net liabilities at 31 December 2019 of £82,000 (2018: net assets of £73,000).

Outlook

The Company has today published a separate pre-close Trading Update in respect of the eLight business.

Contacts:

eEnergy Group plc	Tel: [phone]
Harvey Sinclair, Chief Executive Officer	[e-mail] ; www.eenergyplc.com
Cairn Financial Advisers (Nominated Adviser)	Tel: [phone]
Sandy Jamieson / James Caithie
Turner Pope Investments (Broker)	Tel: [phone]
Andy Thacker / Zoe Alexander	[e-mail]
Newgate Communications	Tel: [phone]
Giles Croot / Robin Tozer	[e-mail]

 

Strategic report

On 20 December 2019 the Company announced that it had agreed to dispose of its existing trading subsidiary, Metaleach Limited ("Metaleach") and to complete the Reverse Takeover of eLight, subject to Shareholder approval.  Therefore, this strategic report does not address the operations of MetaLeach which as at 31 December 2019 was considered to be an asset held for sale nor does it address all of the details relating to eLight which were included in the Admission Document published by the Company on 20 December 2019.

Report on the business

The Group was originally engaged in developing mineral processing technologies, which was carried out by MetaLeach, its wholly owned subsidiary. On 25 September 2019 the Board announced the findings of a strategic review that concluded it was no longer in Shareholders' interests for the Company to continue to provide financial support indefinitely to MetaLeach as although it had proprietary minerals and metals processing technologies, it had yet to commercialise these, generate turnover and realise their full potential, in spite of a number of years of seeking to do so.  Accordingly, the Group's strategy changed to become an AIM Rule 15 cash shell and to complete a suitable reverse takeover in accordance with the AIM Rules.

After careful review the Board identified eLight as a suitable candidate for a reverse takeover and following a robust diligence process announced the intention to dispose of MetaLeach and acquire all of the share capital of eLight on 20 December 2019.  These transactions were subject to shareholder approval.

Whilst there was a possibility at the year end that the disposal of MetalLeach and the acquisition of eLight may not have completed these transactions, together with a placing of new ordinary shares, were completed on 9 January 2020.

Disposal of MetaLeach

Following the announcement of the intention to dispose of MetaLeach, the Group ran a formal process and solicited interest from a number of parties in the mining sector.  The £150,000 consideration received post-year end represented the fair value of that business. 

Financial review

During the year the Company made a comprehensive loss for the year of £615,000 (2018: £513,000).  There is a weighted loss per share from continuing operations of 0.03p (2018: 0.02p).

The Group had net liabilities at 31 December 2019 of £82,000 (2018: net assets of £73,000).

  Cash and cash equivalents at 31 December 2019 were £101,000 (2018: £441,000).

Events after the year end are set out in Note 2 to the financial statements below.

The Group's strategy

eEnergy is now the leading "Energy Efficiency-as-a-Service" (EEaaS) business in the UK and Ireland.  It is currently focused on "Light as a Service" (LaaS) to schools and businesses through its eLight subsidiary.  eLight is a proven operating platform with over 900 client projects completed by its management team and eLight has recently started operating in Northern Ireland.

eEnergy's strategy is to develop as a broader Energy Services business through the acquisition of adjacent businesses in the energy management sector which offer strategic and synergistic growth opportunities.  There is considerable market opportunity as demands for greater energy efficiency grow as organisations need to reduce costs and governments need to meet strict carbon targets.

There are three legs to the growth strategy:

Sales Growth Rapid growth of existing LaaS business through enhanced lead generation and sector focus on education and key account strategy. 

New Revenue Channel (services)  Developing an app-based tool to open up subcontractor channel to address the SME market.

Consolidation Buy and build in a fragmented sector.  Significant opportunities for consolidation within the Energy Management sector which offer strategic synergies.

Further details of the Group's current strategy are included in the Admission Document published on 20 December 2019 and on the Company's website.

David Nicholl

Chairman

 

CONSOLIDATED PROFIT AND LOSS As at 31 December 2019

	2019 £'000	2018 £'000
Continuing operations
Revenue	-	-
Gross profit	-	-
Administrative expenses	(474)	(358)
Costs associated with reverse takeover	(332)	-
Research and development expenses	-	-
Operating loss	(806)	(358)
Finance income	-	1
Finance costs	-	-
Loss before taxation	(806)	(357)
Income tax	-	-
Loss for the year from continuing operations	(806)	(357)
Discontinued operation
Profit / (loss) from discontinued operation	191	(156)
Total loss for the year attributable to equity holders of the parent	(615)	(513)
Other comprehensive income	-	-
Total comprehensive loss for the year attributable to equity holders of the parent	(615)	(513)
Basic and diluted loss per share from continuing operations (p)	(0.03)p	(0.02)p
Basic and diluted gain / (loss) per share from discontinued operations (p)	0.01p	(0.01)p

                        CONSOLIDATED BALANCE SHEET As at 31 December 2019

	2019 £'000	2018 £'000
Assets
Trade and other receivables	106	33
Cash and cash equivalents	101	441
Total current assets	207	474
Total assets	207	474
Equity attributable to owners of the parent
Issued share capital	15,376	15,352
Share premium	14,468	14,044
Accumulated losses	(29,926)	(29,323)
Total equity	(82)	73
Liabilities
Trade and other payables	289	401
Total current liabilities	289	401
Total liabilities	289	401
Total equity and liabilities	207	474

COMPANY BALANCE SHEET As at 31 December 2019
	2019 £'000	2018 £'000
Assets
Trade and other receivables	106	32
Cash and cash equivalents	101	441
Total current assets	207	473
Total assets	207	473
Equity attributable to owners of the parent
Issued share capital	15,376	15,352
Share premium	14,468	14,044
Accumulated losses	(29,926)	(29,023)
Total equity	(82)	373
Liabilities
Trade and other payables	289	100
Total current liabilities	289	100
Total liabilities	289	100
Total equity and liabilities	207	473

STATEMENTS OF CASHFLOWS For the year ended 31 December 2019
		Group			Company
		2019 £'000	2018 £'000		2019 £'000	2018 £'000
Cash flow from operating activities
Operating loss - continuing operations		(615)	(513)		(915)	(553)
(Increase)/decrease in trade and other receivables		(73)	4		(74)	5
(Decrease)/increase in trade and other payables		(113)	(102)		187	(63)
Increase in provisions		-	-		-	194
Share option charge		2	56		2	56
Inter-company recharge		-	-		121	(10)
Net cash outflow from operating activities		(800)	(555)		(679)	(371)
Cash flow from investing activities
Amounts remitted to subsidiaries		-	-		(121)	(184)
Interest received		-	1		-	1
Net cash inflow / (outflow) from investing activities		-	1		(121)	(183)
Cash flows from financing activities
Proceeds from the issue of share capital, net of issue costs		460	-		460	-
Net cash inflow from financing activities		460	-		460	-
Net decrease in cash and cash equivalents		(340)	(554)		(340)	(554)
Cash and cash equivalents at the beginning of the period		441	995		441	995
Cash and cash equivalents at the end of the period		101	441		101	441

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2019
		Share Capital	Share Premium	Accumulated Losses		Total  Equity
		£'000	£'000	£'000		£'000
At 1 January 2018		15,352	14,044	(28,866)		530
Loss for the year		-	-	(513)		(513)
Total comprehensive loss for the year attributable to equity holders of the parent		-	-	(513)		(513)
Share option and warrant costs		-	-	56		56
Total transaction with owners		-	-	56		56
At 31 December 2018		15,352	14,044	(29,323)		73
At 1 January 2019		15,352	14,044	(29,323)		73
Loss for the year		-	-	(615)		(615)
Total comprehensive loss for the year attributable to equity holders of the parent		-	-	(615)		(615)
Share option and warrant costs		-	-	12		12
Shares issued during the year		24	475	-		499
Cost of share issue		-	(51)	-		(51)
Total transaction with owners		24	424	12		460
Balance at 31 December 2019		15,376	14,468	(29,926)		(82)

COMPANY STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2019
		Share Capital	Share Premium	Accumulated Losses		Total  Equity
		£'000	£'000	£'000		£'000
At 1 January 2018		15,352	14,044	(28,527)		373
Loss for the year		-	-	(552)		(552)
Total comprehensive loss for the year attributable to equity holders of the parent		-	-	(552)		(552)
Share option and warrant costs		-	-	56		56
Total transaction with owners		-	-	56		56
At 31 December 2018		15,352	14,044	(29,023)		373
At 1 January 2019		15,352	14,044	(29,023)		373
Loss for the year		-	-	(915)		(915)
Total comprehensive loss for the year attributable to equity holders of the parent		-	-	(915)		(915)
Share option and warrant costs		-	-	12		12
Shares issued during the year		24	475	-		499
Cost of share issue		-	(51)	-		(51)
Total transaction with owners		24	24	12		460
Balance at 31 December 2019		15,376	14,468	(29,926)		(82)

NOTES TO THE FINANCIAL INFORMATION

1  Accounting Policies

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRS IC") as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements.

Going concern

The financial information has been prepared on a going concern basis, which assumes that the Group and Company will continue in operational existence for the foreseeable future.  In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant information about the current and future position of the Group and Company, including the current level of resources and the ability to trade within the terms and covenants of its loan facility over the going concern period of at least 12 months from the date of approval of the financial statements.

Subsequent to year end, the Company completed the acquisition of eLight and in conjunction with the acquisition, raised net proceeds of £1.34m.  The eEnergy group meets its working capital requirements from its cash and cash equivalents and its loan facility, which is secured by a debenture over the trading subsidiaries and assets of eLight.

The directors note that COVID-19 has had a significant negative impact on the global economy and has resulted in the Group's clients and prospects delaying orders.  Since the lockdown restrictions started to be lifted the Group has seen a strong rebound of orders and the directors expect the Group to trade strongly over the foreseeable future.  Having prepared budgets and cash flow forecasts covering the going concern period which have been stress tested for the negative impact of possible scenarios from COVID-19, the Directors believe the Group has sufficient resources to meet its obligations for a period of at least 12 months from the date of approval of these financial statements. Discretionary expenditure will be curtailed, if necessary, in order to preserve cash for working capital purposes and ensure compliance with covenants.

Taking these matters into consideration, the Directors consider that the continued adoption of the going concern basis is appropriate having prepared cash flow forecasts for the coming 18 months. The financial statements do not reflect any adjustments that would be required if they were to be prepared on a non going concern basis.

The financial information set out in this announcement does not comprise the Company's statutory accounts for the year ended 31 December 2019.  The financial information has been extracted from the statutory accounts of the Company for the year then ended.

2  EVENTS SUBSEQUENT TO PERIOD END

On 9 January 2020 the Company completed the acquisition of eLight Group Holdings Ltd; a Share Capital Consolidation and Share Sub-division; the disposal of MetaLeach; a change of name to eEnergy Group plc; a Placing of 26,666,667 new Ordinary Shares each at a price of 7.5p per share and Admission of the Enlarged Ordinary Share Capital to trading on AIM.

The Company announced on 29 November 2019 that it was in advanced negotiations to acquire the entire issued share capital of eLight. As the acquisition would be treated as a reverse takeover under the AIM Rules, trading in the Company's Existing Ordinary Shares was suspended pending publication of an admission document.  The Company entered into the Acquisition Agreement to acquire the entire issued share capital of eLight for an aggregate purchase price of £6.6m satisfied by the issue of the Consideration Shares.  The acquisition was approved by shareholders in a General Meeting on 8 January 2020. 

The shareholders also approved a share consolidation of every 75,000 Existing Ordinary Share into one Consolidated Ordinary Share and then sub divided each Consolidated Ordinary Share into 250 New Ordinary Shares.

Simultaneously the Company completed a Placing of 26,666,667 Placing Shares which raised net proceeds of £1,340,000.

MetaLeach was disposed of to Qora Capital Limited for cash consideration of £150,000 following shareholder approval on 8 January 2020.

The Company also adopted New Articles of Association and changed its name from Alexander Mining plc to eEnergy Group plc on 8 January 2020.

The enlarged Ordinary Share Capital was admitted to trading on AIM on 9 January 2020 and at that time all of the existing officers of the Company with the exception of Dr Nigel Burton resigned and the new Board was appointed.

Following the year end the COVID-19 pandemic has had a global impact. The situation is continually developing and as at the date of this report it will need continuous attention and will continue to evolve over time. In our view, consistent with others, COVID-19 is considered to be a non-adjusting post balance sheet event and no adjustment is made in the financial statements as a result.

 

END

 

 

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