Half Yearly Report

RNS Number : 2713N

TEG Group (The) PLC

27 September 2012

 

For release

07:00

27 September 2012

The TEG GROUP PLC (AIM: TEG)

("TEG" or "the Company")

INTERIM RESULTS

The TEG Group PLC, the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, announces its interim results for the

half-year ended 30 June 2012.

 

Highlights

Financial

·      Period of transition for the Group, with a refocusing of the business on its operating sites, further cost reductions and, since the period end, a successful financial close on the Dagenham project.

·      Underlying trading at the group's own plant operations has been strong.

·      Half-year revenue for period was £5,617,000 (2011 interim: £9,333,000) and the Group loss was £1,795,000 (2011: £798,000), reflecting the loss of the North East Wales contract and delays to the fourth facility in Manchester and at Dagenham.

·      Group recorded a gross profit of £1,268,000 (2011 interim: £2,345,000 profit).

·      The Group cash balance as at 30 June 2012 was £1,101,000.

·      No dividend is recommended.

Operations

Group Plant Operations

·      Revenues and profit margins from the Group's own plant operations have continued to grow impressively in 2012, reflecting the continuous growth in the waste market together with a reduction in competitor capacity following stricter regulatory enforcement.

·      Operational revenues grew by 15% in the first half of 2012, with the gross margin increasing from 18% to 24%.  The volume of food and co-mingled waste grew by approximately 20%.

Projects

Dagenham Facility

·      Financial close achieved on the delayed Dagenham project delivering approx. £16m in revenues from an engineering, procurement and construction contract and a further £1.3m per annum of operating revenues (escalated annually) over the term of a 15-year operating and maintenance contract.

·      In addition, the Group retains a 24.5% shareholding in the newly created project company, TEG Biogas (London) Limited.

·      Project to be the first AD plant to be built in London and a flagship plant for the Company generating approx. 1.4MW of electricity, sufficient to power approx. 2,000 homes.

·      Project funding secured by the Foresight Group, with co-funding from other equity funders including UK and regional Governments, alongside bank debt funding - the Board believes a similar funding model could be used for further projects in development by the Group.

Greater Manchester Waste PFI Contract

·      Construction of the fourth and final facility (Bolton) is proceeding well with commissioning and handover scheduled for completion in Quarter 4 of 2013.

·      TEG has successfully achieved Take Over on all three facilities constructed to date, and all remain in full operation. 

Perth AD Facility

·      Commissioning of the new AD facility at Perth, the Group's first, was successfully completed in the period and the plant is in full operation.

·      The plant processes 15,000 tonnes per annum of food waste and will generate approximately 0.7MW of electricity and 0.2 MW of heat, which will be utilised on site in the Binn Eco Park development. 

·      The project was funded by Albion Ventures LLP ("Albion") and Zero Waste Scotland. The Group retains a 50% shareholding in the project.

Market Update

·      The fundamental drivers remain in place for continued market growth as obligations increase on waste producers to divert organic waste from landfill and statutory obligations are expected to increase annually until 2020. 

·      Landfill Tax ("LFT") rose by £8.00 per tonne in April 2012, increasing the tax to a total of £64.00 per tonne with confirmation that LFT will rise by a further £8.00 per tonne pa until at least 2014.

·      TEG's policy to promote combined IVC and AD facilities and to offer additionally contained comprehensive organic waste services wherever possible is increasingly of interest following cost and subsidy cuts at local authority and the national level alongside more stringent regulatory rules on containment.

Commenting, Rory Maw, Non-Executive Chairman, The TEG Group Plc, said:

"The financial close of the Dagenham project was a significant milestone for the Group.  Market demand for more organic capacity remains strong and with a secure funding position at the project level, the Group will be well placed to continue to take advantage of the expanding market.  TEG maintains a strong pipeline of tender opportunities and assuming the funding structure for the Dagenham project can be replicated this will place the Group in a strong position." 

"The good performance of the Group's own plant operations and the continued growth in this segment demonstrates that if TEG can secure the appropriate level of project funding and control its costs appropriately, it will further develop its secure and profitably successful operating platform.   The Board is confident that the Group has an exciting future with a promising outlook for trading in the second half of 2012 and beyond."

ENDS

Contact:
The TEG Group Plc	Tel: [phone]
Michael Fishwick, Chief Executive	www.theteggroup.plc.uk
N+1 Brewin (Nomad & Broker)	Tel : [phone]
Andrew Craig/Ben Wright
Peckwater PR	Tel: [phone]
Tarquin Edwards	[e-mail]

Editor's Notes:

TEG

TEG provides state of the art technology for handling organic wastes.  Its in-vessel composting (IVC) system is one of the few approved technologies capable of treating animal by-product (ABP) waste and it is now providing an anaerobic digestion (AD) technology to produce power from food waste.  Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).  The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs").  TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets.  The TEG processes are an economic and sustainable alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies capable of treating this waste, is a natural process producing compost as an end product.  The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease.  TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners.  The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste.  Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year. 

Chairman's statement

I am delighted to present the Group's interim report for the half year ended 30 June 2012, the first report since my appointment in June of this year. It has been a period of transition for the Group, with a refocusing of the business on its operating sites, further cost reductions and, since the end of the half-year, a successful financial close on the Dagenham project.  Underlying trading at the group's own plant operations has been strong.

Half year revenue for the period was £5,617,000 (2011: £9,333,000) and the Group loss was £1,795,000 (2011: £798,000).  This performance reflects the loss and associated costs of the North East Wales contract and delays to the fourth facility in Manchester and at Dagenham, as previously announced.  Overall, the Group recorded a gross profit of £1,268,000 (2011 interim: £2,345,000 profit).

The Group cash balance as at 30 June 2012 was £1,101,000,

Group Plant Operations

Revenues and profit margins from the Group's own plant operations have continued to grow impressively in 2012, reflecting the continuous growth in the waste market together with a reduction in competitor capacity following stricter regulatory enforcement.

Operational revenues grew by 15% in the first half of 2012 compared to the same period in 2011, with the gross margin increasing from 18% to 24%.  The volume of food and co-mingled waste grew by approximately 20% though there was a short term reduction in pure green waste volumes brought about by the unusually wet weather.  It is expected that the volume of pure green waste will return to expected levels in the second half of the year. 

Greater Manchester Waste PFI Contract

Construction of the fourth and final facility (Bolton) is proceeding well.  Construction will continue until Quarter 2 of 2013 with commissioning and handover scheduled for completion in Quarter 4 of 2013.

TEG has successfully achieved Take Over on all three facilities constructed to date, and all remain in full operation.  Acceptance of these facilities by the client has still to be achieved and a number of retentions remain in place, however it is still expected that these retentions will be released progressively from the final quarter of 2012.

Perth AD Facility

Commissioning of the new AD facility at Perth, the Group's first, was successfully completed in the period and the plant is in full operation.  The plant processes 15,000 tonnes per annum of food waste and will generate approximately 0.7MW of electricity and 0.2 MW of heat, which will be utilised on site in the Binn Eco Park development.  The project was funded by Albion Ventures LLP ("Albion") and Zero Waste Scotland. The Group retains a 50% shareholding in the project.

Dagenham Project

The Group was delighted to reach financial close on its Dagenham project on 31 August 2012.  Construction of the facility will commence in the fourth quarter of 2012. This project will bring approximately £16m in revenues to the Group from an engineering, procurement and construction contract and a further £1.3m per annum of operating revenues (escalating annually) over the term of a 15-year operating and maintenance contract.  In addition, the Group retains a 24.5% shareholding in the newly created project company, TEG Biogas (London) Limited.

The project will be the first AD plant to be built in London and we expect it to be a flagship plant for the Group.  It will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes.  It will also produce over 36,000 tonnes per annum in AD digestate and 14,000 tonnes per annum in compost for agricultural use.

The project funding secured by the Foresight Group, also attracted co-funding from other equity funders including UK and regional Governments, alongside bank debt funding.  The Board is very encouraged by the scope and range of funding sourced for the project and it believes a similar model could be used for further projects being developed by the Group.

No revenues were booked for this project in the half year results.

Strategic Activities

On 22 June 2012, the Group completed an Open Offer to raise approximately £2m before expenses to provide additional working capital for the business.  The Board thanks shareholders for their continued support and is pleased that excellent progress has since been made with regards to the Dagenham project, securing significant future revenues for the Group.

Following the success with the funding of the Dagenham project, the Group continues to investigate further similar investment at the project level and is in discussion with a number of other potential investors. These funding options will be considered on a case-by-case basis.

Market Update

The fundamental drivers remain in place for continued market growth as obligations increase on waste producers to divert organic waste from landfill.  These statutory obligations are expected to increase annually until 2020.  Landfill Tax ("LFT") rose by £8.00 per tonne in April 2012, increasing the tax to a total of £64.00 per tonne, and Government has confirmed that LFT will rise by a further £8.00 per tonne per annum until at least 2014.  This is expected to continue to stimulate market growth for the foreseeable future.  In addition, the Scottish Assembly has passed legislation to introduce a complete ban on the landfill of organic waste in both the public and private sectors beginning in 2014. 

The Board is pleased to note a continued significant interest in IVC, often alongside AD.  Local Authority costs are often reduced by the collection of green and food wastes together, and this waste stream is better suited to IVC.  Whilst there is continued market interest in energy generation from food waste and the strengthening of interest in technologies such as AD, this technology still relies upon Government subsidy in the form of either renewable obligation certificates (ROCs) or feed in tariffs (FITs).  The level of subsidy available is under review by Government and may be reduced for future schemes.  The impact of this on future AD schemes is uncertain and the Board believes this underlines the merit of the Group policy to promote combined IVC and AD facilities wherever possible, allowing the Group to offer a comprehensive organic waste service irrespective of policy on the levels of subsidy available.

The wider regulatory environment is now benefiting the Group, as its technology lends itself to the additional level of containment required by the regulators, which is now being enforced more generally.  In addition, the regulators have introduced policies to reduce the level of low-grade green waste disposal.  In time, this is expected to increase the volume of green waste diverted into the composting sector.

Future Prospects

The financial close of the Dagenham project was a significant milestone for the Group.  Market demand for more capacity remains strong and with a secure funding position at the project level, the Group will be well placed to continue to take advantage of the expanding market.  TEG maintains a strong pipeline of tender opportunities and assuming the funding structure for the Dagenham project can be replicated this will place the Group in a strong position.  The good performance of the Group's own plant operations and the continued growth in this segment demonstrates that if TEG can secure the appropriate level of project funding and control its costs appropriately, it will be well placed to deliver a profitable and successful operating platform.   The Board is confident that the Group has an exciting future with a promising outlook for trading in the second half of 2012 and beyond.

Rory Maw

Chairman

27 September 2012

Consolidated statement of comprehensive income

For the six months ended 30 June 2012

		Unaudited	Unaudited	Unaudited	Unaudited	Audited
		Before
		exceptional costs	Exceptional costs	Total	Total	Total
		6 months ended 30 June 2012	6 months ended 30 June 2012	6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	Note	£'000	£'000	£'000	£'000	£'000
Revenue	3	5,617	-	5,617	9,333	17,871
Cost of sales		(4,349)	-	(4,349)	(6,988)	(13,391)
Gross profit		1,268	-	1,268	2,345	4,480
Administrative expenses		(2,814)	(91)	(2,905)	(2,958)	(5,762)
Exceptional impairment charges		-	-	-	-	(6,264)
Amortisation of intangible assets		(152)	-	(152)	(152)	(304)
Total administrative expenses		(2,966)	(91)	(3,057)	(3,110)	(12,330)
Operating loss		(1,698)	(91)	(1,789)	(765)	(7,850)
Finance income		34	-	34	8	16
Finance costs		(83)	-	(83)	(90)	(170)
Loss before tax	3	(1,747)	(91)	(1,838)	(847)	(8,004)
Income tax		43	-	43	49	388
Loss for the period		(1,704)	(91)	(1,795)	(798)	(7,616)
Other comprehensive income		-	-	-	-	-
Total comprehensive loss for the period		(1,704)	(91)	(1,795)	(798)	(7,616)
Attributable to:
Equity holders of the parent
Retained loss		(1,704)	(91)	(1,795)	(798)	(7,616)
Loss per share
Basic and diluted loss per share (pence)	5	(1.43)	(0.07)	(1.50)	(1.05)	(7.90)

Consolidated statement of financial position

As at 30 June 2012

		Unaudited	Unaudited	Audited
		30 June 2012	30 June 2011	31 December 2011
	Note	£'000	£'000	£'000
ASSETS
Non-current assets
Goodwill		3,883	6,152	3,883
Intangible assets		1,103	1,407	1,255
Property, plant and equipment		15,779	19,564	16,196
Trade and other receivables		993	700	1,000
		21,758	27,823	22,334
Current assets
Inventories		382	517	555
Trade and other receivables		9,006	9,357	7,329
Taxation receivable		166	-	166
Cash and cash equivalents		1,101	1,520	1,557
		10,655	11,394	9,607
Total assets		32,413	39,217	31,941
LIABILITIES
Current liabilities
Trade and other payables		7,406	10,471	6,477
Taxation payable		-	71	-
Contingent consideration		-	300	-
Current portion of long-term borrowings		386	781	421
Current portion of deferred consideration		200	206	253
Provisions		40	-	265
		8,032	11,829	7,416
Non-current liabilities
Long-term borrowings		1,734	1,607	1,833
Long-term deferred consideration		610	851	684
Deferred tax		404	620	447
Provisions		30	-	50
		2,778	3,078	3,014
Total liabilities		10,810	14,907	10,430
Net assets		21,603	24,310	21,511
EQUITY
Equity attributable to equity holders of the parent
Share capital	4	6,582	3,811	5,872
Share premium		39,201	36,995	38,045
Merger relief reserve		886	-	886
Other reserves		1,082	1,039	1,061
Retained losses		(26,148)	(17,535)	(24,353)
Total equity		21,603	24,310	21,511

Consolidated statement of changes in equity

For the six months ended 30 June 2012

	Share capital	Merger relief reserve	Share premium	Other reserves	Retained  losses	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2011	3,781	-	36,876	1,005	(16,737)	24,925
Issue of share capital	30	-	-	-	-	30
Premium on issue of share capital	-	-	119	-	-	119
Recognition of share-based payments	-	-	-	34	-	34
Transactions with owners	30	-	119	34	-	183
Loss for the period and total comprehensive income	-	-	-	-	(798)	(798)
Balance at 30 June 2011	3,811	-	36,995	1,039	(17,535)	24,310
Issue of share capital	2,061	-	-	-	-	2,061
Premium on issue of share capital	-	285	1,793	-	-	2,078
Issue costs	-	-	(142)	-	-	(142)
Transfer from share premium	-	601	(601)	-	-	-
Recognition of share-based payments	-	-	-	22	-	22
Transactions with owners	2,061	886	1,050	22	-	4,019
Loss for the period and total comprehensive income	-	-	-	-	(6,818)	(6,818)
Balance at 31 December 2011	5,872	886	38,045	1,061	(24,353)	21,511
Issue of share capital	710	-	-	-	-	710
Premium on issue of share capital	-	-	1,419	-	-	1,419
Issue costs	-	-	(263)	-	-	(263)
Recognition of share-based payments	-	-	-	21	-	21
Transactions with owners	710	-	1,156	21	-	1,887
Loss for the period and total comprehensive income	-	-	-	-	(1,795)	(1,795)
Balance at 30 June 2012	6,582	886	39,201	1,082	(26,148)	21,603

Consolidated statement of cash flows

For the six months ended 30 June 2012

		Unaudited	Unaudited	Audited
		6 months	6 months	Year
		ended	ended	ended
		30 June 2012	30 June 2011	31 December 2011
		£'000	£'000	£'000
Cash flows from operating activities
Loss after taxation		(1,795)	(798)	(7,616)
Adjustments for:
Depreciation		711	880	1,661
Amortisation of intangibles		152	152	304
Goodwill impairment charge		-	-	2,269
Property, plant and equipment impairment charge		-	-	3,904
Share based administrative expense		21	34	56
Taxation credit recognised in the statement of comprehensive income		(43)	(49)	(388)
Finance costs		83	90	170
Finance income		(34)	(8)	(16)
Profit on sale of property, plant and equipment		(33)	(14)	(65)
Increase in trade and other receivables		(1,670)	(2,805)	(1,077)
Decrease in inventories		173	99	61
Increase / (decrease) in trade payables		929	2,604	(1,184)
(Decrease) / increase in provisions for other liabilities		(245)	-	90
Cash (used in)/from operations		(1,751)	185	(1,831)
Interest paid		(60)	(61)	(111)
Taxation		-	(121)	(171)
Net cash (used in)/from operating activities		(1,811)	3	(2,113)
Cash flows from investing activities
Acquisition of business - deferred consideration		(150)	(150)	(300)
Purchase of property, plant and equipment		(299)	(1,406)	(2,464)
Proceeds from sale of property, plant and equipment		38	56	73
Interest received		34	8	16
Net cash (used in)/from investing activities		(377)	(1,492)	(2,675)
Cash flows from financing activities
Proceeds from issue of share capital		1,866	-	3,696
Repayment of loan		(3)	(86)	(173)
Payment of finance lease liabilities		(131)	(294)	(567)
Net cash from / (used in) financing activities		1,732	(380)	2,956
Net decrease in cash and cash equivalents		(456)	(1,869)	(1,832)
Cash and cash equivalents at beginning of period		1,557	3,389	3,389
Cash and cash equivalents at end of period		1,101	1,520	1,557

Notes to the interim report

1.   Nature of operations and general information

The principal activities of The TEG Group Plc and its subsidiaries ('the Group') are the design and production of Silo-cage composting plants and Anaerobic Digestion (AD) plants for sale to third party clients, and the design, build and operation of TEG owned waste recycling facilities.

The TEG Group Plc is the Group's ultimate parent company.  It is incorporated and domiciled in Great Britain.  The address of TEG Group Plc's registered office, which is also its principal place of business, is Westmarch House, 42 Eaton Avenue, Buckshaw Village, Chorley, PR7 7NA.  The TEG Group Plc's shares are listed on the Alternative Investment Market of the London Stock Exchange.

The TEG Group Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company. 

These consolidated condensed interim financial statements have been approved for issue by the Board of Directors on 27 September 2012.

The figures for 31 December 2011 are an abridged version of the Group's full financial statements and, together with other financial information contained in this interim report, which is unaudited, do not constitute statutory financial statements of the Group as defined in Section 434 of the Companies Act 2006.  Statutory financial statements for the year ended 31 December 2011 have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors was unqualified and did not contain a statement under section 498 (2) or Section 498 (3) of the Companies Act 2006.

2.   Basis of preparation

The Group's interim condensed consolidated financial statements are for the six months ended 30 June 2012 and have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS).  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2011.

These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year 31 December 2011.

Following the open offer on 25 June 2012, the Group has considerable financial resources available.  As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.  The Directors have also prepared cash flow forecasts for the period until December 2013.  As part of the preparation of these forecasts, the Directors have estimated the likely conversion of potential future contracts. Before entering into a contract, the Directors ensure that the Group has sufficient working capital facilities available to allow the completion of the contract. Based on these forecasts, the Directors have confirmed that there are sufficient cash reserves to fund the operations business for the period under review.  After reviewing these forecasts, consideration of the Group's cash resources and other appropriate enquiries, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the interim statements.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements. 

3.   Business segments

For management purposes, the Group is organised into the following operating segments: Operations segment and Projects segment. Prior to June 2011, the Group had been organised into build own and operate, IVC sales to third parties, AD sales to third parties, product management revenue and other corporate expenses. During the prior year, the organisational structure of the Group was restructured and the figures for the six months to June 2011 have been restated accordingly with build, own and operate and product management being reported with the Operations segment, whilst IVC and AD sales to third parties are now being reported within the Projects segment.

All revenues from external customers and non-current assets are attributable to, and located in, Great Britain.

In identifying its operating segments, management follows the Group's service lines which represent the main products and services provided by the Group.  These operating segments are monitored and strategic decisions are made on the basis of segment operating results.

The Projects segment includes IVC and AD sales to third parties including the design, production and installation of plants for sale to third party clients.  The Operations segment relates to facilities which are owned and operated by the Group.  These sites process waste received from customers and manage the compost produced by the facilities.  The Operations segment is also responsible for the maintenance and operating contracts carried out for third parties.  The revenues and net result generated by each of the Group's operating segments are summarised as follows:

6 months to 30 June 2012

	Operations	Projects	Other corporate expenses	Consolidated
	£'000	£'000	£'000	£'000
External revenue	4,622	995	-	5,617
Gross profit	1,115	153	-	1,268
Segment corporate expenses	(539)	(1,151)	(483)	(2,173)
Depreciation	(694)	-	(17)	(711)
Amortisation	(152)	-	-	(152)
Segment loss before taxation	(270)	(998)	(500)	(1,768)
Share-based payment expense				(21)
Operating loss				(1,789)
Finance income				34
Finance costs				(83)
Loss before taxation				(1,838)

6 months to 30 June 2011

	Operations	Projects	Other corporate expenses	Consolidated
	£'000	£'000	£'000	£'000
External revenue	4,017	5,316	-	9,333
Gross profit	723	1,622	-	2,345
Segment corporate expenses	(487)	(1,225)	(332)	(2,044)
Depreciation	(829)	-	(51)	(880)
Amortisation	(152)	-	-	(152)
Segment (loss) / profit before taxation	(745)	397	(383)	(731)
Share-based payment expense				(34)
Operating loss				(765)
Finance income				8
Finance costs				(90)
Loss before taxation				(847)

Year to 31 December 2011

	Operations	Projects		Other corporate expenses		Consolidated
	£'000	£'000		£'000		£'000
External revenue	8,944	8,927		-		17,871
Gross profit	1,834	2,646		-		4,480
Segment corporate expenses	(1,110)	(2,320)		(615)		(4,045)
Impairment charges	(6,264)	-		-		(6,264)
Depreciation	(1,613)	-		(48)		(1,661)
Amortisation	(304)	-		-		(304)
Segment (loss) / profit before taxation	(7,457)	326		(663)		(7,794)
Share-based payment expense						(56)
Operating loss					(7,850)
Finance income					16
Finance costs					(170)
Loss before taxation					(8,004)

4.   Share Capital

On 25 June 2012, the Group converted 117,439,360 Ordinary Shares with a nominal value of £0.05 each into 117,439,360 Ordinary Shares with a nominal value of £0.01 each and 117,439,360 Deferred Shares with a nominal value of £0.04 each.

Immediately following this capital reorganisation, the Group issued 70,989,288 Ordinary Shares of £0.01 at a price of £0.03 per share, raising £2,129,000 before issue costs of £263,000.

6 months to 30 June 2012
Ordinary Shares of £0.05 each	Number	£'000
At 1 January 2012	117,439,360	5,872
Capital reorganisation	(117,439,360)	(5,872)
At 30 June 2012	-	-
Ordinary Shares of £0.01 each
	Number	£'000
At 1 January 2012	-	-
Capital reorganisation	117,439,360	1,174
Issue of shares	70,989,288	710
At 30 June 2012	188,428,648	1,884
Deferred Shares of £0.04 each
	Number	£'000
At 1 January 2012	-	-
Capital reorganisation	117,439,360	4,698
At 30 June 2012	117,439,360	4,698
6 months to 30 June 2011 Ordinary Shares of £0.05 each
	Number	£'000
At 1 January 2011	75,617,825	3,781
Issue of shares	608,520	30
At 30 June 2011	76,226,345	3,811

Year to 31 December 2011
Ordinary Shares of £0.05 each	Number	£'000
At 1 January 2011	75,617,825	3,781
Issue of shares	41,821,535	2,091
As at 31 December 2011	117,439,360	5,872

The deferred shares have no voting rights. The shares are not entitled to any dividend or other distribution or to participate in any way in the income or profits of the Group.  

5.   Loss per share

	6 months	6 months	Year
	ended	ended	ended
	30 June 2012	30 June 2011	31 December 2011
	£'000	£'000	£'000
Loss for the financial year after tax	(1,795)	(798)	(7,616)
Adjustments to basic earnings
Exceptional costs	91	-	6,264
Underlying losses before exceptional costs	(1,704)	(798)	(1,352)
	Number	Number	Number
Weighted average number of shares for the purposes of basic, diluted and underlying losses per share	119,439,058	76,017,902	96,334,294
	Pence	Pence	Pence
Basic loss per share	(1.50)	(1.05)	(7.90)
Diluted loss per share	(1.50)	(1.05)	(7.90)
Basic underlying loss per share before exceptional costs	(1.43)	(1.05)	(1.40)

Underlying losses per share has been disclosed to give a clear understanding of the Group's underlying trading performance.  It has been calculated using the underlying earnings figures above and the weighted average number of ordinary shares above.

Diluted losses per share is equal to the basic loss per share as the share options in issue at 30 June 2012 are anti-dilutive in respect of the diluted loss per share calculation and have therefore not been included.

 

END

 

 

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