TIDMEAAS
RNS Number : 5512R
eEnergy Group PLC
09 March 2021
9 March 2021
eEnergy Group plc
("eEnergy" or "the Group")
Results for the six months ended 31 December 2020
eEnergy (AIM: EAAS), the leading "Energy
Efficiency-as-a-Service" business in the UK and Ireland, providing
Light as a Service ("LaaS") under the eLight brand and renewable
energy consulting and procurement under the Beond brand, today
provides its unaudited results for the six months ended 31 December
2020.
Financial Highlights for the six months ended 31 December
2020:
-- Revenue for the enlarged Group up 245% to GBP6.8 million (H1 2020: GBP2.0 million)
-- Organic revenue up 140% to GBP4.5 million (H1 2020: GBP2.0 million)
-- eLight gross margin increased by 460 bps to 37.1% (H1 2020: 32.5%)
-- Positive operating EBITDA in each business unit
-- Profit before exceptional items (1) of GBP0.1 million (H1 2020 loss GBP1.0 million)
-- Cash at bank GBP2.8 million (30 June 2020: GBP1.5 million)
and net cash (excluding IFRS 16 lease liabilities) of GBP0.6
million (30 June 2020: GBP0.1 million).
-- Completed placing to new and existing institutional investors for GBP3.2 million
Operational Highlights:
-- The Group's business model has been able to navigate the
impact of COVID-19 with new contract wins and accelerated
installations in the school holidays
-- Number of LED lighting installations completed at schools and
businesses in the UK & Ireland almost doubled in H1 2021 to 111
(H1 2020: 57)
-- The Group completed two acquisitions in line with its "buy and build" M&A strategy
o In July 2020, the Group expanded its LaaS offering to Academy
and state schools through the acquisition of Renewable Solutions
Lighting Ltd ("RSL").
o In December 2020, eEnergy completed the acquisition of Beond
Group Limited ("Beond"), a top 20 UK-based renewable energy
consulting and smart procurement business.
-- Project funding partner, SUSI Partners AG agreed to provide a
dedicated funding facility of up to EUR15 million for LaaS projects
in the Republic of Ireland.
-- Agreed an exclusive OEM partnership with Venture Lighting
Europe Limited to provide the Group with an eLight branded LED
technology solution on exclusive terms.
-- Strengthened the Management with appointment of Rob Van
Leeuwen as Group Chief Operating Officer in December 2020 and the
Board with the appointments of Derek Myers as Chief Innovation
Officer in December 2020, and Gary Worby as an Independent
Non-executive Director in January 2021.
Harvey Sinclair, CEO of eEnergy, commented :
"The last six months has been transformational for eEnergy which
has seen the Group make real progress against its strategic
objectives, despite the challenges of the pandemic. We are pleased
to have delivered a small inaugural profit, in line with our
breakeven guidance. Our core business eLight has begun to scale,
almost doubling the number of completed LED installations at
schools and businesses compared to the first six months of 2019.
Furthermore, the completion of our first acquisition, RSL, has
further opened the Academy and State Schools sector in the UK to
our Light as a Service offering."
"With growing pressure across all businesses and public sector
organisations such as schools and hospitals, to save money and cut
their carbon footprint, we expect further acceleration in interest
for our Light as a Service offer to grow considerably in the coming
years as evidenced by our growing pipeline of opportunities."
"In addition to sustained organic growth, our goal remains to
build an integrated energy management and energy efficiency
platform through our "buy and build" M&A strategy. The
integration of RSL has been delivered to plan and we took another
significant step with the acquisition of Beond in December, which
increases the breadth of our offering to customers from energy
efficiency through to energy management. We continue to adopt a
disciplined approach to assessing future acquisition opportunities
and are currently evaluating several interesting opportunities in
our pipeline."
" Our market-leading, diversified offering continues to underpin
the Board's confidence that the Group will deliver strong growth
over the next six months compared to the prior period, especially
as the impact of the pandemic begins to ease, with the Board
continuing to expect the Group to achieve a breakeven net income
(before exceptional items) (1) for the full year to 30 June 2021
."
Note: (1) Profit before exceptional items is the profit before
and after tax excluding transaction-related costs and share based
payment expenses.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014. The person responsible for
arranging for the release of this announcement on behalf of eEnergy
is Ric Williams, Chief Financial Officer.
Contacts:
eEnergy Group plc Tel: +44 20 7078 9564
Harvey Sinclair, Chief Executive info@eenergyplc.com
Officer www.eenergyplc.com
Ric Williams, Chief Financial Officer
N+1 Singer (Nominated Adviser and Tel: +44 20 7496 3000
Joint Broker)
Justin McKeegan / Mark Taylor /
Carlo Spingardi (Corporate Finance)
Tom Salvesen (Corporate Broking)
Turner Pope Investments (Joint Tel: +44 20 3657 0050
Broker)
Andy Thacker / Zoe Alexander info@turnerpope.com
SEC Newgate Tel: +44 7540 106 366
Robin Tozer / Isabelle Smurfit eEnergy@secnewgate.co.uk
About eEnergy Group plc
eEnergy Group plc is a leading "Energy Efficiency-as-a-Service"
(EEaaS) business focused on providing its core "Light-as-a-Service"
("LaaS"), to educational and commercial & industrial customers
through its eLight and RSL brands in the UK and Ireland. The Group
helps businesses and schools switch to LED lighting, typically for
a fixed monthly service fee, avoiding any upfront payments.
eEnergy was admitted to AIM in January 2020. The Board's
strategy is to develop eEnergy as a broader energy services company
and acquire other businesses in the energy management sector. The
market in the EU for energy efficiency services was approximately
EUR25 billion in 2017 and is expected to double by 2025.
In December 2020, eEnergy completed the acquisition of Beond
Group Limited. Beond is a UK-based renewable energy consulting and
procurement business, whose services aim to reduce costs for
clients and tackle climate change. Beond's services include
provision of clean energy strategy, smart energy procurement,
hedging strategies, bill validation, bureau services and market
intelligence. However, its key offering is its proprietary platform
used to run reverse energy auctions for clients.
eEnergy has been awarded The Green Economy Mark by the London
Stock Exchange, which recognises a company's work on
sustainability.
https://eenergyplc.com/
Chief Executive's Statement
I am pleased to report that we have been able to deliver strong
organic growth in the period and make significant strides with our
strategy. We have successfully integrated RSL into the Group and
the acquisition of Beond in December 2020 marks an important step
in delivering our strategy of developing an integrated energy
management group enabling our customers to reduce the cost and
environmental impact of their energy use through smart procurement,
energy management and a range of energy efficiency solutions.
Group Trading
eEnergy's core business, eLight, which provides "Light as a
Service" (LaaS) to schools and businesses in the UK and Ireland,
experienced strong organic growth in the period driving a
significant improvement in Group's revenue. For the six-month
period ended 31 December 2020, the Group generated revenue of
GBP6.8 million, a 245% increase on the equivalent six-month period
to December 2019. Organic revenue grew to GBP4.5 million, a 140%
increase on the six months to December 2019. All Group business
units reported positive operating EBITDA.
The Group generated a maiden profit before exceptional items (1)
of GBP0.1 million, in line with our previously announced breakeven
guidance.
This growth has been driven by increased demand for innovative
energy efficiency solutions and a growing awareness of the
importance for organisations to reduce their carbon footprint. The
Group's LaaS proposition, where customers can fund carbon reduction
through the energy savings delivered by installing LED lighting
without investing capital upfront, has been especially popular in
the education sector. During the period, the Group launched a new
Green Energy Initiative to help more UK schools, which are eligible
for part but not full Government funding, to reduce carbon
emissions and save money by switching to cheaper, more efficient
LED lighting. Furthermore, in November, eLight secured a GBP1
million contract, its largest-ever, to install LED Lighting at four
secondary schools for a UK multi-academy trust.
The Group has experienced strong growth within the Academy and
state school sector in the UK. This was helped in July by acquiring
Renewable Solutions Lighting Ltd ("RSL") which specialises in this
area. I'm pleased to report that RSL has been successfully
integrated into the eLight operating platform, which has reduced
unit costs for RSL and allowed it to offer more competitive pricing
to its clients.
Overall, the Group completed 111 LaaS projects, a 95% increase
on the six-month period to December 2019. The increased interest
from larger schools and multi academy trusts has driven the average
contract value of each project up 50% when compared to the
equivalent period in the prior year.
Also, the Group is now benefitting from its exclusive OEM
partnership with Venture Lighting Europe Limited ("Venture
Lighting"), announced in October 2020. Venture Lighting has
provided the Group with a white label, eLight-branded, LED
technology solution on exclusive terms. An integrated supply chain
has also increased operating efficiencies. Venture Lighting holds
dedicated stock lines in the UK for eLight, which has meant the
Group has avoided supply chain disruption caused by Brexit or
COVID-19.
Overall, more competitive technology pricing has helped improve
eLight's gross margin for the period by more than 460 bps when
compared to the equivalent period in the prior year.
Beond Acquisition
In December, eEnergy completed the acquisition of Beond, a top
20 UK-based renewable energy consulting and smart procurement
business, through a mix of consideration shares and a placing to
new and existing institutional and other investors, raising gross
proceeds of GBP3.2 million. The integration of the Beond business
into the Group is progressing well, and the business has performed
as expected to date. As per previous guidance, the acquisition is
expected to be materially earnings-enhancing in the first full year
of ownership as we introduce energy efficiency services to the
Beond client base and build out the capability to offer a wider
range of value-added services to Beond's customers.
New Funding Partner
In August eEnergy announced a major agreement with a new project
funding partner, SUSI Partners AG ("SUSI"). Under the agreement,
SUSI, via its Energy Efficiency Fund II, has provided a dedicated
funding facility (the "Facility") to the Group of up to EUR15
million.
The terms of the Facility provide for SUSI to purchase the
future receivables arising from new LaaS projects in the Republic
of Ireland across the education sector, other public bodies and a
range of commercial sectors. The Facility will cover new projects
installed for the next three years or until the Facility has been
fully utilised, whichever is earlier. Given the opportunities
perceived in the Irish and UK markets, the Group is working with
SUSI to develop this agreement into a longer-term funding
partnership, beyond the current committed Facility size and with
the potential to fund LaaS projects in the UK.
This new funding structure provides the Group with a
significantly enhanced competitive advantage relative to the
previous funding arrangements. The Facility provides the Group's
Irish business with greater flexibility to deploy capital, extend
the contract length offered to customers and improves the Group's
economics. eEnergy will have control over the implementation and
management of contracts and retain an economic interest over the
life of each contract, thereby improving returns.
Board and management changes
The Group has continued to strengthen its senior and operational
management as it grows both organically and through
acquisition.
In December, eEnergy announced the (non-Board) appointment of
Rob Van Leeuwen as Group Chief Operating Officer. Rob has 20 years
of experience in the energy management sector, specialising in
technology platforms and integration. A key focus of Rob will be to
work closely with the Beond management team and oversee initiatives
to accelerate growth, including enhancing the customer value
proposition, growing revenues from existing customers and unlocking
operational synergies and target stretch performance in lead
generation and sales conversions.
Also in December, Derek Myers, the controlling shareholder of
Beond prior to its acquisition by the Group, joined the Board as
Chief Innovation Officer. Derek held a range of senior management
roles at Beond, from 2015 as CEO. Previously, Derek was the
Managing Director of iVentures Capital, an investment vehicle that
raised funds to invest in and manage energy market businesses. Mr.
Myers has previously worked as a strategy consultant at Accenture
and futures trader at Macquarie Bank, trading, inter alia, energy
products.
In January 2021, Gary Worby joined the Board as an Independent
Non-Executive Director of the Board of the Company and member of
the Remuneration Committee. Gary brings considerable strategic
experience to eEnergy, having worked in the energy and carbon
sector for many years. In his role as an Independent Non-Executive
Director, he will support the Board to help build eEnergy into a
market-leading integrated energy management and energy savings
platform, as well as strengthening the Group's corporate
governance. Gary's career has included various executive leadership
roles guiding businesses through organic growth and pan-European
expansion, acquisitions, and trade sales. He was Managing Director
of EnergyQuote JHA, one of the largest pan-European energy
consultants with a world-class client base, which Accenture
acquired in 2014.
COVID-19 Update and Outlook
The Group's business model has been able to navigate the impact
of COVID-19 with new contract wins and accelerated installations
during the school holidays. Whilst our pipeline of opportunities
continues to grow, the most recent lockdown has inevitably added
some additional challenges in delaying customers' decision-making
in contracting for new business, which we anticipate will result in
an extension to some project timeframes. However, the underlying
fundamentals of our market remain very robust and the breadth of
applications for our services and our ability to sell more to our
growing customer base continues to grow.
The Board remains confident that, with the current and expected
contracted forward order book, together with active cross-sell
engagement for customers across the eLight and Beond businesses,
Group revenue and gross profit remain in-line with its expectations
for the full year to 30 June 2021.
The Board expects the Group to achieve a breakeven profit
(before exceptional items)( 1) for the full year to 30 June
2021.
Furthermore, we will continue to focus on our "Buy and Build"
M&A strategy, including (i) the acquisition of established
smart energy procurement platform and smart metering & software
analytics businesses; (ii) scaling the existing EEaaS business
through cross-sell opportunities and moving into
Heating-as-a-Service ("HaaS"); and (iii) scaling the Group to
benefit from operational efficiencies.
We are currently evaluating several strategic opportunities in
our pipeline to build an integrated energy management and energy
efficiency platform."
Harvey Sinclair
Chief Executive Officer
9 March 2021
Note: (1) Profit before exceptional items is the profit before
and after tax excluding transaction-related costs and share based
payment expenses.
Chief Financial Officer's Statement
This is our first interim report since we completed the reverse
takeover that created eEnergy in January 2020. We have had a strong
start to FY21. We have completed two acquisitions that have
enhanced our Energy Efficiency as a Service division and created
the foundation for our Energy Management division. The Board is
confident for the year ahead and we can evaluate commercial
opportunities in the current business environment.
Financial position and liquidity
We successfully completed our second placing of 2020 in December
and raised gross proceeds of GBP3.2 million, primarily to part fund
the acquisition of Beond. At the end of December 2020, we had
GBP2.8 million of cash at the bank. In the month before its
acquisition, Beond had drawn two CBILS loans of GBP0.5 million in
aggregate, which are interest free for the first 12 months and for
which repayments only start from the first anniversary.
With the December Placing and the issue of shares to the vendors
of RSL and Beond we have substantially strengthened our balance
sheet and increased our net assets to GBP8.0 million (30 June 2020
net liabilities of GBP1.8m).
We continue to model a number of potential scenarios that
management believe are reasonably likely for the ongoing impact of
COVID-19 on our financial performance and cash generation and the
Board is confident that the Group has sufficient financial
resources and headroom within its debt covenants for the
foreseeable future should the worst of these scenarios be
realised.
The Board continues to monitor and actively manage our cash
position in the ordinary course.
Financial overview
Energy efficiency as a Service (eLight) - UK
In the face of challenging market conditions, we have delivered
570% revenue growth in the UK to GBP4.9 million in the six months
ended 31 December 2020. This includes RSL, which was acquired on 1
July 2020 and reflects both an increase in the number of projects
completed (59 compared to 21 in the equivalent period of the prior
year) as well as an increase in the average size of each project.
Organic revenue growth was 280% over the equivalent period of the
prior year.
Energy efficiency as a Service (eLight) - Ireland
The impact of COVID-19 has continued to be more severe in
Ireland than in the UK and we have received ongoing support from
the Irish government for our staff. Despite the market conditions,
revenue grew 40% to GBP1.7million in the six months ended 31
December 2020, driven by our entry into the Northern Ireland school
market and by the project funding in place with SUSI, which
increases our share of the total contract value.
Energy Management
These Group results include the trading for Beond from
Completion in 15 December 2020 up to the period end. Beond
performed strongly in its final quarter of 2020 and has contributed
GBP162,000 of revenue and an operating EBITDA of GBP25,000 to the
results for the six-month period ended 31 December 2020.
Working capital
The increase in trade and other receivables to GBP3.5 million
(30 June 2020: GBP1.1 million) primarily reflects the volume of
LaaS projects that were installed and recognised as revenue in
December and the inclusion of the Beond balances at the end of
December. There is a broadly equivalent and offsetting increase in
trade and other payables to GBP6.7 million (30 June 2020: GBP4.0
million).
Borrowings and lease liabilities
During the six-month period ended 31 December 2020 we drew down
a further EUR275,000 under the eLight loan facility, received a
GBP50,000 Bounce back loan for one of our operating companies and
included GBP532,000 of bank loans that Beond had drawn.
The Group's lease liabilities increased to GBP1.3 million (30
June 2020: GBP0.6 million) as a result of recording the lease for
Beond's office under IFRS 16, together with the equal and opposite
Right of Use asset.
Acquisitions
In July we completed the acquisition of RSL. Since acquisition
RSL has traded strongly and slightly ahead of our expectations. We
have integrated operational delivery of RSL's projects into the
eLight operating platform and have seen the benefit in the project
margins. Contingent consideration of up to 16 million eEnergy
shares is payable based upon RSL's EBITDA in the first year
exceeding GBP296,000 and we have recorded the value of that
consideration at acquisition at GBP1.4 million.
In December we completed the acquisition of Beond, which forms
the foundation of our Energy Management business, to complement our
Energy Efficiency platform. As noted above Beond has made a
positive contribution to these results. The Beond acquisition was
completed on 15 December 2020 although the compulsory purchase
mechanism for a small number of minority shareholders was
completed, post the period end, on 14 January 2021.
Ric Williams
Chief Financial Officer
9 March 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six-month period ended 31 December 2020
Period to Period to
31 December 31 December Year to
2020 2019 30 Jun 2020
GBP'000 GBP'000 GBP'000
-------------- -------------- --------------
Continuing operations
Revenue from contracts with customers 6,767 1,959 4,501
Cost of sales (4,182) (1,323) (2,913)
-------------------------------------------- -------------- -------------- --------------
Gross profit 2,585 636 1,588
Operating expenses (3,198) (1,543) (4,433)
Included within operating expenses
are:
* Reverse acquisition expenses - - 1,320
* Other exceptional items 985 39 -
-------------- -------------- --------------
Adjusted operating expenses (2,213) (1,435) (3,113)
-------------- -------------- --------------
Adjusted earnings before interest,
taxation, depreciation and amortisation 372 (868) (1,525)
-------------------------------------------- -------------- -------------- --------------
Earnings before interest, taxation,
depreciation and amortisation (613) (907) (2,845)
Depreciation (63) (36) (72)
Finance costs (212) (113) (277)
Loss before taxation (888) (1,056) (3,194)
Income tax - - -
------------------------------------------- -------------- -------------- --------------
Loss for the year from continuing
operations attributable to the
owners of the company (888) (1,056) (3,194)
============================================ ============== ============== ==============
Other comprehensive income - items
that may be reclassified subsequently
to profit and loss
Translation of foreign operations 49 113 (82)
Change in fair value of other
current assets 43
-------------------------------------------- -------------- -------------- --------------
Total other comprehensive income
(loss) 92 113 (82)
-------------------------------------------- -------------- -------------- --------------
Total comprehensive loss for the
year attributable to the owners
of the company (796) (943) (3,276)
============================================ ============== ============== ==============
Basic and diluted loss per share
from continuing operations (0.58)p (1.20)p (2.96)p
-------------------------------------------- -------------- -------------- --------------
.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
As at 31 As at
December 30 June
2020 2020
GBP'000 GBP'000
----------
NON-CURRENT ASSETS
Property, plant and equipment 108 130
Intangible assets 11,333 211
Right of use assets 1,203 538
Total non-current assets 12,644 879
-------------------------------------------------- ---------- ---------
Other current assets 228 -
Inventories 348 356
Trade and other receivables 3,545 1,073
Financial assets at fair value through profit
or loss 161 414
Cash and cash equivalents 2,823 1,478
-------------------------------------------------- ---------- ---------
Total current assets 7,105 3,321
-------------------------------------------------- ---------- ---------
TOTAL ASSETS 19,749 4,200
-------------------------------------------------- ---------- ---------
NON-CURRENT LIABILITIES
Lease liabilities 1,048 506
Borrowings 1,629 1,120
Total non-current liabilities 2,677 1,626
CURRENT LIABILITIES
Trade and other payables 6,660 3,955
Deferred and contingent consideration 1,566 -
Lease liabilities 237 76
Borrowings 592 304
Total current liabilities 9,055 4,335
-------------------------------------------------- ---------- ---------
TOTAL LIABILITIES 11,732 5,961
-------------------------------------------------- ---------- ---------
NET ASSETS (LIABILITIES) 8,017 (1,761)
================================================== ========== =========
Equity attributable to owners of the parent
Issued share capital 16,053 15,725
Share premium 32,449 22,375
Other reserves 297 82
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve (66) (115)
Accumulated losses (5,470) (4,582)
-------------------------------------------------- ---------- ---------
Total equity 8,017 (1,761)
================================================== ========== =========
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the six-month period ended 31 December 2020
Period Period Year to
to 31 December to 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
---------------- ---------------- ---------
Cash flow from operating activities
Operating loss - continuing operations (888) (1,056) (3,194)
Adjustments for:
Depreciation 63 35 72
Finance cost (net) 131 - 277
Share issue to settle expenses - - 100
Share option charge 172 - 8
Finance charge on lease liabilities 34 26 53
Foreign exchange movement 10 - (14)
Reverse acquisition expense - - 1,052
-------------------------------------------- ---------------- ---------------- ---------
Operating cashflow before working
capital movements (478) (995) (1,646)
Decrease / (increase) in trade and
other receivables (1,652) 23 (998)
(Decrease) / increase in trade and
other payables 1,344 (154) 1,236
(Decrease) / increase in inventories 10 (116) (187)
Decrease / (increase) in deferred
income (140) 116 -
Net cash (outflow) inflow from operating
activities (916) (1,126) (1,595)
-------------------------------------------- ---------------- ---------------- ---------
Cash flow from investing activities
Cash acquired on acquisition of
business 1,218 62 105
Cash from exercise of options in -
acquired business 521 -
Cash paid to acquire subsidiaries (2,395) - -
Proceeds from disposal of subsidiary - - 150
Purchase of property, plant and
equipment (122) (51) (82)
-------------------------------------------- ---------------- ---------------- ---------
Net cash (outflow) inflow from investing
activities (778) 11 173
-------------------------------------------- ---------------- ---------------- ---------
Cash flows from financing activities
Interest (paid) received (131) - (225)
Repayment of lease liabilities (41) (19) (40)
Net proceeds from the issue of
shares 2,985 47 1,664
Proceeds from loans and borrowings 299 1,269 1,342
-------------------------------------------- ---------------- ---------------- ---------
Net cash inflow from financing activities 3,112 1,297 2,741
-------------------------------------------- ---------------- ---------------- ---------
Net increase in cash and cash equivalents 1,418 182 1,319
Effect of exchange rates on cash (73) 36 14
Cash and cash equivalents at the
start of the period 1,478 134 145
Cash and cash equivalents at the
end of the period 2,823 352 1,478
============================================ ================ ================ =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six-month period ended 31 December 2020
Reverse Foreign
Share Share Acqn. Other Currency Total
Capital Premium Reserve Reserves Reserve Accum.Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 15,725 22,375 (35,246) 82 (115) (4,582) (1,761)
Other comprehensive
loss - - - - 49 - 49
Revaluation of
other assets - - - 43 - - 43
Loss for the
period - - - - - (888) (888)
----------------------- --------- --------- --------- ---------- ---------- ------------- --------
Total comprehensive
loss for the
year attributable
to equity holders
of the parent - - - 43 49 (888) (796)
Shares issued
during the year 328 10,301 - - - - 10,629
Share based payments - - 172 - - 172
Cost of share
issue (227) - - - - (227)
----------------------- --------- --------- --------- ---------- ---------- ------------- --------
Total transactions
with owners 328 10,074 - 172 - - 10,574
----------------------- --------- --------- --------- ---------- ---------- ------------- --------
Balance at 31
December 2020 16,053 32,449 (35,246) 297 (66) (5,470) 8,017
======================= ========= ========= ========= ========== ========== ============= ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six-month period ended 31 December 2019
Foreign
Share Currency Total
Capital Reserve Accum.Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2019 18 (34) (1,388) (1,404)
Other comprehensive loss - 113 - 113
Loss for the period - - (1,056) (1,047)
-----------------------------------
Total comprehensive loss for the
period attributable to equity
holders of the parent - 113 (1,056) (934)
----------------------------------- --------- ---------- ------------- --------
Shares issued during the period 47 - - 47
Total transactions with owners 47 - - 47
----------------------------------- --------- ---------- ------------- --------
Balance at 31 December 2019 65 79 (2,444) (2,300)
=================================== ========= ========== ============= ========
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the six-month period ended 31 December 2020
1 Basis of preparation
The condensed consolidated interim financial statements of
eEnergy Group plc (the "Group") for the six-month period ended 31
December 2020 have been prepared in accordance with Accounting
Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 30 June 2020, which was prepared under International
Financial Reporting Standards (IFRS) as adopted by the European
Union (EU), and any public announcements made by eEnergy Group plc
during the interim reporting period and since.
These condensed consolidated interim financial statements do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 June 2020 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been
audited.
Basis of preparation - going concern
The interim financial statements have been prepared under the
going concern assumption, which presumes that the Group will be
able to meet its obligations as they fall due for the foreseeable
future.
At 31 December 2020 the Group had cash reserves of GBP2,823,000
(30 June 2020: GBP1,478,000; 31 December 2019: GBP352,000).
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 interim financial statements. The eEnergy group
meets its working capital requirements from its cash and cash
equivalents and its loan facilities, which are secured by a
debenture over the trading subsidiaries of eLight and the assets of
the relevant borrowing entities.
The Directors note that COVID-19 has had a significant negative
impact on the global economy and has resulted in some of 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 relevant
period. The interim financial statements do not reflect any
adjustments that would be required if they were to be prepared
other than on a going concern basis.
Accounting policies
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period.
Accounting policies that were not relevant in the previous
financial year but are now applicable to the Group are set out
below.
1.1. Share based payments
The cost of equity-settled transactions with employees is
measured by reference to the fair value of the equity instruments
granted at the date at which they are granted and is recognised as
an expense over the vesting period, which ends on the date on which
the relevant employees become fully entitled to the award. In
valuing equity-settled transactions, no account is taken of any
vesting conditions, other than conditions linked to the price of
the shares of a group company (market conditions) and non-vesting
conditions. No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is conditional
upon a market or non-vesting condition, which are treated as
vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other vesting conditions
are satisfied. At each balance sheet date before vesting, the
cumulative expense is calculated, representing the extent to which
the vesting period has expired and management's best estimate of
the achievement or otherwise of non-market conditions and of the
number of equity instruments that will ultimately vest or in the
case of an instrument subject to a market condition, be treated as
vesting as described above. The movement in cumulative expense
since the previous balance sheet date is recognised in the income
statement, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified, or a
new award is designated as replacing a cancelled or settled award,
the cost based on the original award terms continues to be
recognised over the original vesting period. In addition, an
expense is recognised over the remainder of the new vesting period
for the incremental fair value of any modification, based on the
difference between the fair value of the original award and the
fair value of the modified award, both as measured on the date of
the modification. No reduction is recognised if this difference is
negative. Where an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any cost not
yet recognised in the profit and loss account for the award is
expensed immediately. Any compensation paid up to the fair value of
the award at the cancellation or settlement date is deducted from
equity, with any excess over fair value expensed in the profit and
loss account.
1.2. Other current assets
Other current assets are digital assets, including tokens and
cryptocurrency, which do not qualify for recognition as cash and
cash equivalents or financial assets, and have an active market
which provides pricing information on an ongoing basis. Other
current assets are initially measured at fair value. Subsequent
gains and losses on measurement are recognised in other
comprehensive income except for impairment losses which are
recognised directly in profit or loss. This treatment is consistent
with the revaluation model applied to intangible assets in
accordance with IAS 38. Where a digital asset is disposed of, the
cumulative gain or loss previously recognised in other
comprehensive income is reclassified to other operating income or
expense within profit or loss. Digital assets are included in
current assets as management expect them to be used within the
normal operating cycle or otherwise disposed of.
1.3. New and amended standards adopted by the group
A number of new or amended standards became applicable for the
current reporting period. These new/amended standards do not have a
material impact on the Group, and the Group did not have to change
its accounting policies or make retrospective adjustments as a
result of adopting these standards.
3. SEGMENT REPORTING
The following information is given about the Group's reportable
segments:
The Chief Operating Decision Maker is the Board of Directors.
The Board reviews the Group's internal reporting in order to assess
performance of the Group. Management has determined the operating
segment based on the reports reviewed by the Board.
The Board considers that during the six-month period ended 31
December 2020 the Group operated in two business segments, the
Energy Management segment entered with the acquisition of Beond on
15 December 2020 and the Energy Efficiency as a Service segment,
which predominantly comprises of LED lighting solutions. Prior to
the acquisition of Beond the Group operated in the single segment
of Energy Efficiency as a Service.
Energy
Mgmt Energy Efficiency Total
--------------------------- --------- -------------------- --------- -------------
2020 United United
Kingdom Kingdom Ireland Central
GBP'000 GBP'000 GBP'000 GBP'000 2020 GBP'000
--------------------------- --------- --------- --------- --------- -------------
Revenue 162 4,881 1,724 - 6,767
Cost of sales (28) (3,341) (813) - (4,182)
--------- --------- --------- --------- -------------
Gross Profit 134 1,540 911 - 2,585
Operating expenses (109) (1,109) (477) - (1,695)
--------- --------- --------- --------- -------------
Operating EBITDA 25 431 434 - 890
Central management costs - - - (518) (518)
Depreciation (10) (3) (43) (7) (63)
Finance and similar
charges (6) (22) (20) (164) (212)
--------- --------- --------- --------- -------------
Profit before exceptional
items 9 406 371 (689) 97
Exceptional items - - - (985) (985)
--------- --------- --------- --------- -------------
Profit (loss) before
and after tax 9 406 371 (1,674) (888)
========= ========= ========= ========= =============
Net Assets
Assets: 3,245 2,420 3,735 10,349 19,749
Liabilities (2,132) (2,613) (4,355) (2,631) (11,732)
---------
Net assets (liabilities) 1,113 (193) (620) 7,717 8,017
========= ========= ========= ========= =============
2019 United
Kingdom Ireland Central
GBP'000 GBP'000 GBP'000 2019 GBP'000
--------------------------------- --------- --------- --------- -------------
Revenue 727 1,232 - 1,959
Cost of sales (485) (838) - (1,323)
--------- --------- --------- -------------
Gross Profit 242 394 - 636
Operating expenses (394) (755) (1,149)
--------- --------- --------- -------------
Operating EBITDA (152) (361) - (513)
Central management costs - - (355) (355)
Depreciation (1) (34) (1) (36)
Finance and similar charges - - (113) (113)
--------- --------- --------- -------------
Profit before exceptional items (153) (395) (469) (1,017)
Exceptional items - - (39) (39)
--------- --------- --------- -------------
Loss before and after tax (153) (395) (508) (1,056)
========= ========= ========= =============
Net Assets
Assets: 239 1,303 352 1,894
Liabilities (470) (2,364) (1,360) (4,194)
Net assets (liabilities) (231) (1,061) (1,008) (2,300)
========= ========= ========= =============
4. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to
be exceptional by their nature. These items are:
Period to Period to Year to
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
------------------------------ ------------- ------------- ---------
Reverse acquisition expenses - - 1,320
Acquisition expenses 813 39 -
Share based payment expense 172 - -
------------- ------------- ---------
Total exceptional expenses 985 39 1,320
------------- ------------- ---------
The Reverse acquisition expenses were incurred in bringing
eEnergy to the AIM market through the Reverse Takeover in January
2020. Acquisition expenses are professional fees incurred in
completing the acquisitions described in Note 10. The share based
payment charge reflects the non-cash cost of the Management
Incentive Plan awards made on 7 July 2020 that are being amortised
over the three year vesting period.
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
calculated by dividing the profit or loss for the year by the
weighted average number of ordinary shares in issue during the
year
Period to Period to Year to
31 December 31 December 30 June
2020 2019 2020
------------------------------------- ------------- ------------- ------------
Loss for the year from continuing
operations - GBP 888,000 1,056,000 3,194,000
Weighted number of ordinary
shares in issue 152,632,932 [87,651,000] 108,080,337
-------------------------------------- ------------- ------------- ------------
Basic earnings per share
from continuing operations
- pence (0.58) (1.20) (2.96)
-------------------------------------- ------------- ------------- ------------
There is no difference between the diluted loss per share and
the basic loss per share presented. Share options and warrants
could potentially dilute basic earnings per share in the future,
but were not included in the calculation of diluted earnings per
share as they are anti-dilutive for the periods presented.
6. PROPERTY, PLANT AND EQUIPMENT
Property,
plant & Computer
equipment equipment
GBP'000 GBP'000 Total GBP'000
--------------------------------- ----------- ----------- --------------
Cost
At 1 July 2020 107 70 177
Additions on acquisition 154 11 165
Additions in the period - 88 88
Transfer to intangibles - (144) (144)
----------- ----------- --------------
At 31 December 2020 261 25 286
----------- ----------- --------------
Depreciation
At 1 July 2020 39 8 47
Additions on acquisition 104 10 114
Charge for the period 20 10 30
Transfer to intangibles (13) (13)
----------- ----------- --------------
At 30 June 2020 163 15 178
----------- ----------- --------------
Cost
At 1 July 2019 93 2 95
Additions in the period 43 4 47
At 31 December 2019 136 6 142
----------- ----------- --------------
Depreciation
At 1 July 2019 20 - 20
Charge for the period 15 1 16
At 31 December 2019 35 1 36
----------- ----------- --------------
Net book value 31 December 2019 101 5 106
----------- ----------- --------------
Net book value 31 December 2020 98 10 108
=========== =========== ==============
7. INTANGIBLE ASSETS
Goodwill Other intangibles
GBP'000 GBP'000 Total GBP'000
-------------------------- --------- ------------------ --------------
Cost
At 1 July 2020 211 - 211
Additions in the period 10,958 33 10,991
Transfer from PP&E - 131 131
--------- ------------------ --------------
At 31 December 2020 11,169 164 11,333
========= ================== ==============
Cost
At 1 July 2019 211 - 211
Additions in the period - - -
--------- ------------------ --------------
At 31 December 2019 211 - 211
========= ================== ==============
8. RIGHT OF USE ASSETS
Property,
plant &
equipment Motor vehicles
GBP'000 GBP'000 Total GBP'000
------------------------------ ----------- --------------- --------------
Net book value
At 1 July 2020 477 61 538
Additions on acquisition 710 - 710
Less depreciation (22) (14) (36)
Impact of foreign exchange (8) (1) (9)
----------- --------------- --------------
At 31 December 2020 1,157 46 1,203
----------- --------------- --------------
Net book value
At 1 July 2019 (on adoption) 492 30 522
Additions in the period - - -
Less depreciation (12) (6) (18)
Impact of foreign exchange - - -
At 31 December 2019 480 24 504
----------- --------------- --------------
9. BORROWINGS
31 Dec 2020 30 June 31 Dec 2019
GBP'000 2020 GBP'000 GBP'000
------------------------- ------------ -------------- ------------
Current
Borrowings - facility 534 304 91
Borrowings - bank loans 58 - -
------------------------- ------------ -------------- ------------
592 304 91
------------------------- ------------ -------------- ------------
Non-current
Borrowings - facility 1,065 1,120 1,226
Borrowings - bank loans 564 - -
1,629 1,120 1,226
------------------------- ------------ -------------- ------------
During the six months to 31 December 2020, eLight Group Holdings
borrowed a further EUR275,000 in addition to the EUR1,556,000
borrowed during the year to 30 June 2020. The terms of the loan are
as disclosed in the 30 June 2020 financial statements.
During the six months to 31 December 2020 the Group drew down an
unsecured GBP50,000 Bounce Back loan for one of its subsidiaries.
The Bounce Back loan is interest free for the first twelve months
and is then repaid in instalments over the following six years. The
interest rate on the Bounce Back loan is 2.5% per annum. In
addition at acquisition Beond had a term loan of GBP48,000 and
CBILS loans of GBP484,000 both of which are secured over the assets
of Beond. The CBILS loans are interest free for the first twelve
months and are then repaid in instalments over the following five
years. The interest rate on the CBILS loans is 3.4% per annum.
Maturity of the borrowings as at 31 December 2020 are as
follows:
GBP'000
----------------------- --------
Current 592
Due between 1-2 years 732
Due between 2-5 years 805
Due beyond 5 years 92
------------------------ --------
2,221
----------------------- --------
10. BUSINESS COMBINATIONS
Renewable Solutions Lighting Limited
On 1 July 2020 the Company completed the acquisition of all of
the share capital of Renewable Solutions Lighting Limited
("RSL").
RSL specialises in providing the UK education sector with fully
funded LED lighting solutions.
The total consideration for the acquisition, assuming all
earn-out payments are made, will be GBP2.0 million. The
consideration, to be paid entirely in new eEnergy shares, is
structured as follows:
-- Initial consideration, paid on completion, was satisfied by
the issue of 13.3 million new ordinary shares of eEnergy with a
market value at issue of GBP783,000;
-- Contingent consideration, payable after one year, will be
satisfied by the issue of up to 16.0 million new ordinary shares of
eEnergy. The number of shares to be issued is 80,000 new shares for
each GBP1,000 of adjusted EBITDA in excess of GBP296,000 generated
by RSL.
In addition to the consideration payable, RSL will make payments
equal to 3% of revenue generated during the earn-out period to an
RSL director as settlement of historical obligations agreed between
RSL and the director plus RSL will repay an existing loan of
GBP250,000 due to an RSL director. GBP130,000 was paid on
completion and GBP120,000 will be paid on the first anniversary of
completion.
The initial estimate of the fair value of the assets acquired
and liabilities assumed of RSL at the date of acquisition are as
follows:
GBP'000
------------------------------------------------------- --------
Property, plant and equipment 2
Cash at bank 11
Inventory 7
Trade and other receivables 81
Trade and other payables (625)
--------
Total identifiable net assets (liabilities) acquired (524)
Goodwill 2,761
------------------------------------------------------- --------
Consideration
Initial consideration (recorded at the market value
of the shares issued) 783
Stamp duty on purchase of shares paid in cash 10
Contingent consideration 1,444
------------------------------------------------------- --------
Total consideration 2,237
------------------------------------------------------- --------
Goodwill relates to the accumulated "know how" and expertise of
the business and its staff. None of the goodwill is expected to be
deducted for income tax purposes.
The value of the contingent consideration has been estimated
based on the expected number of shares that will be issued
multiplied by the weighted average expected share price on the date
it is satisfied.
The initial accounting for the acquisition of RSL is incomplete
as at the date of these financial statements given the short period
of time since the acquisition was completed.
Beond Group Limited
On 15 December 2020 the Company completed the acquisition of
Beond Group Limited ("Beond").
Beond specialises in renewable energy consulting and procurement
with operations in the UK.
The total consideration for the acquisition (which included
GBP0.7m of surplus cash in the business) is approximately GBP2.4m
in cash and the issue of 64.9 million new eEnergy shares. 63.8
million shares were issued on 15 December 2020 ("Completion") and a
further 1.2 million shares following the completion of the
compulsory purchase of the remaining minority interest on 14
January 2021.
There is no further consideration due.
The initial estimate of the fair value of the assets acquired
and liabilities assumed of Beond at the date of acquisition are as
follows:
GBP'000
------------------------------------------------------- --------
Property, plant and equipment 41
Other assets 185
Cash at bank 1,207
Inventory -
Trade and other receivables 1,005
Prepayments 215
Trade and other payables (1,721)
--------
Total identifiable net assets (liabilities) acquired 933
Goodwill 8,207
------------------------------------------------------- --------
Consideration
Cash paid 2,385
Shares issued (recorded at the market value at
Completion) 6,755
------------------------------------------------------- --------
Total consideration 9,140
------------------------------------------------------- --------
Goodwill relates to the accumulated "know how" and expertise of
the business and its staff. None of the goodwill is expected to be
deducted for income tax purposes.
The initial accounting for the acquisition of Beond is
incomplete as at the date of these financial statements given the
short period of time since the acquisition was completed.
11. RELATED PARTY TRANSACTIONS
Ian McKenna is a director of eLight Projects Limited ("MPL") and
E-Light Solutions DAC ("Solutions"). MPL was the principal customer
of the Group in Ireland up to February 2020 and paid the Group to
provide LaaS solutions to its customers. During the period ended 31
December 2020 the Group credited back to MPL EUR163,000 (net) (H1
20: EUR276,000 earned from MPL) and had net balances owing to MPL,
of EUR402,000. During the same period the Group provided services
to Solutions totalling EUR60,000 (H1 20: EUR60,000) and purchased
services from Solutions totalling EUR35,000 (2019: EUR161,000). At
the period end the Group owed Solutions EUR671,000 (2019:
EUR737,000).
Key management personnel are considered to be the Board of
Directors. The remuneration of the Board of Directors is described
in the 30 June 2020 annual report.
12. POST BALANCE SHEET EVENTS
There were no material post balance sheet events requiring
disclosure.
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