RNS Number:0501J
Greenhouse Fund Limited (The)
18 September 2006
For Immediate Release 18 September 2006
The Greenhouse Fund Limited
("Greenhouse" or "the Fund")
Interim Results for the period ended 30 June 2006
The Greenhouse Fund (AIM:GHF), the Jersey domiciled closed-ended investment
company, today reports its interim statement to shareholders for the period to
30 June 2006.
Highlights for the period:
*Successful placing and IPO, raising #9.8 million (gross)
*Maiden investment in Molectra, a tyre recycling technology
*Acquisition of technologies from Virotec International Ltd
*Net Asset Value as of 30 June 2006, 9.02p, an increase of 18% since fund
launch
*Cash and equivalents at 30 June 2006, #8,853,365
Commenting on the results, Chairman Nigel Wray said:
"The first six months of Greenhouse have seen the investment in Molectra as well
as the acquisition of technology from Virotec. The green sector is enjoying
remarkable growth, due to regulatory, commercial and consumer pressures and it
offers tremendous commercial opportunities.
Greenhouse will continue to seek out new sustainable technologies, whilst
developing the pipeline of technologies it has acquired and I look to the future
with confidence."
For further information please contact:
Greenhouse Advisor
Paul Gazzard 01725 510 383
Rodger Sargent 020 7399 4260
Evolution Securities 020 7071 4300
Fergus Marcroft
Buchanan Communications 020 7466 5000
Charles Ryland
Ben Willey
CHAIRMAN'S STATEMENT
These are the first set of interim accounts for The Greenhouse Fund Limited
covering the period to 30 June 2006. Greenhouse is a Jersey domiciled
closed-ended investment company, created to invest in sustainable environmental
technologies, and was listed on AIM on 12 January 2006.
Greenhouse has set rigorous investment criteria. Any acquisition must have a
market ready or near market ready patentable green technology with scalable
global market potential. The target company must employ management with a high
level of technical expertise within its particular area, and have a requirement
for capital, commercial and financial management support. Greenhouse may take
minority, majority or 100% stakes in public or private entities, provided it
does not invest more than 35% of its net asset value in any one investment. The
Fund aims to maximise value by the subsequent flotation, restructuring, joint
venture or sale of technologies it develops.
Financial performance
As at 30 June 2006, Greenhouse had net assets of #13,998,150, including cash of
#8,853,365 and investments of #5,158,861. The loss for the period was #51,837
and the period end NAV was 9.02p, an increase of 18% on launch NAV.
Portfolio
Molectra Australia Pty Ltd ("Molectra")
On 27 March 2006, Greenhouse announced its first investment, in Molectra.
Molectra has developed a sustainable process that re-cycles and recovers
materials from used vehicle tyres. The technology has been developed over the
last 10 years and has won many international awards and prizes during this time,
including the Global 100 Eco-tech award at the 2005 World Expo.
The disposal of tyres is a major environmental issue as shredding and
land-filling, the main disposal method currently utilised, is being increasingly
banned or becoming prohibitively expensive around the globe. Greenhouse believes
these legislative and commercial pressures present a major opportunity for
Molectra and will further benefit from government incentive schemes designed to
encourage environmental behaviour.
Greenhouse has agreed to invest up to #750,000 by way of a convertible note
secured over Molectra's assets that, upon conversion, will equate to 32% of
Molectra's equity. This investment will enable the existing Molectra plant and
process to be scaled up and provide the support and business infrastructure
required to deliver the solution on a larger scale. A small-scale commercial
plant will be constructed and operated for a minimum of 3 months at Molectra's
site, during which potential joint venture or commercial partners will examine
the process. Upon the completion of the trial, Greenhouse will consider further
funding options for the next phase of Molectra's development. It is anticipated
the results of the trial will be available by the first quarter of 2007.
Bauxsol licences and other assets
On 29 June 2006 Greenhouse announced the acquisition of five Bauxsol technology
sub-licences and the purchase of the business and assets of Sterling
Environmental Solutions Ltd from Virotec International Ltd ("Virotec"). Bauxsol
extracts heavy metals, arsenic, phosphates and cyanide from water, soil and air
through its bespoke re-agents, without creating any hazardous waste streams.
Once treated, wastes are rendered inert or non-hazardous, and significantly
easier and cheaper to either be disposed of or reused.
The consideration of #5 million was satisfied by the issue of 30,000,000 new
Greenhouse shares at 15p and #500,000 in cash, giving Virotec a 19% holding in
Greenhouse. Virotec will receive an ongoing royalty on any revenue earned from
the technologies. In addition, if any of the technologies are subsequently sold
by Greenhouse, any sale will include the obligation to continue to pay royalties
to Virotec and for Virotec to retain a 19% interest in the technologies for zero
consideration.
The five Bauxsol platform technologies being sub-licensed to Greenhouse are:
(a) ViroConcrete Technology, speciality cement products with
applications in shotcreteing, grouting, high density concrete, acid exposed
concrete or concretes that are exposed to water or wet environments,
particularly salt water environments. Greenhouse intends to develop this
technology with a view to full commercial realisation. Following further
proposed research and collaboration with Queens University, Belfast, Greenhouse
will increase commercial and sales support as the concrete market gains
awareness of the products and their potential;
(b) ViroAirFilter Technology, development of which has
progressed in collaboration with the US Environmental Protection Agency, is
designed to remove mercury, CO2 and other polluting metals from industrial flue
gasses by 'gas scrubbing' such environmentally hazardous compounds from waste
gases prior to their release into the atmosphere;
(c) ViroFertiliser Technology, aims to control the level of
phosphate pollution and to increase crop yields via the slow release of
phosphate from superphosphate fertilisers. A ViroFertiliser re-agent is added to
the fertiliser, binding with the phosphate, keeping it in situ, thus decreasing
the fertiliser run off, water pollution and provides the user with the
opportunity to achieve greater value from the fertiliser. Tests have shown a
significant improvement in crop yields when the ViroFertiliser was used on,
amongst others, cotton crops in Australia;
(d) Gastric animal applications, aims to relieve chronic and
potentially life threatening gastric problems within commercially farmed
animals. Demonstration and proving work indicating the potential for a product
has already been carried out on horses. The next step is to negotiate with a
commercial partner to commence field trials with commercial livestock to move
towards demonstrating the real commercial application of this product;
(e) Any further new commercial applications developed from the
Bauxsol technology. This gives Greenhouse access to the time and efforts of the
three main scientists, their facilities and staff involved in the development of
Bauxsol and its applications in the Southern Cross University in New South
Wales, Australia.
Greenhouse's strategy is to further develop the Bauxsol technologies, using both
academic and commercial partners from within industry. Once an application has
been fully commercialised, Greenhouse will consider the strategic options
available so as to maximise shareholder value. Such alternatives include
introducing a new structure for each license, depending on the particular market
and opportunity that it faces.
Greenhouse has also purchased the business and assets of Sterling Environmental
Solutions Ltd ("Sterling"), a UK non-trading company with a view to establishing
a regional treatment centre ("RTC") for the treatment of high strength organic
waste streams. The assets acquired include all intellectual property rights
owned or used by Sterling, including all rights relating to the concept for the
treatment of industrial waste at an RTC. Greenhouse believes collaboration with
a waste management operator would further enhance the credibility of the project
and it is Greenhouse's intention to seek a joint venture partner to assist in
the establishment of the RTC.
In addition, Greenhouse has entered into a 12 month option, for nominal
consideration on grant and exercise, to acquire the business and assets of
ImperativePlus Pty Ltd, a wholly owned subsidiary of Virotec.
Post balance sheet events
On 7 August 2006, it was announced that Brian Sheeran, Virotec Executive
Chairman, was appointed to the board of Greenhouse as non-executive Deputy
Chairman to oversee commercialisation of these technologies.
The future
The Board is delighted with the progress made by Greenhouse in its first
reporting period and believes that Molectra has the potential to develop a
significant presence within the waste tyre recycling industry, a sector the
Board expects to grow significantly in the future due to regulatory pressure and
public sentiment.
The Bauxsol platform technology has already achieved commercial and regulatory
recognition and has had significant development capital invested in it by
Virotec. Greenhouse will benefit from this proving work and has the opportunity
to further develop the technology into new and as yet commercially untapped
areas. The Board considers that sufficient investment has been made in the
Bauxsol technologies to demonstrate the potential for each one to become, in
time, the platform for a significant business. Similarly, the RTC concept has
the potential to offer an alternative to landfill in the disposal of high
strength organic wastes and be rolled out across the UK and Europe.
Greenhouse will continue to seek out new sustainable technologies, whilst
developing the pipeline of technologies it has acquired. I look forward to
reporting further developments to you in the future.
Nigel Wray
Chairman
Greenhouse Fund Limited
18 September 2006
THE GREENHOUSE FUND LIMITED
Consolidated Condensed Interim Income Statement (unaudited)
For the period 13 December 2005 to 30 June 2006
Notes #
Income
Bank interest 8,211
Deposit interest 174,962
-------
Total Income 183,173
-------
Operating expenses
Management fees 3 (91,288)
Other operating expenses (143,722)
-------
Total operating expenses (235,010)
-------
-------
Net loss for the period (51,837)
-------
Basic earnings per share (pence) 2 (0.04)
THE GREENHOUSE FUND LIMITED
Consolidated Condensed Interim Balance Sheet
(unaudited)
AS AT 30 JUNE 2006
Notes # #
Non-Current Assets
Intangible assets 4 5,000,000
Investments held at fair value through
profit or loss 4 158,861
--------
5,158,861
Current assets
Other receivables 24,387
Cash and cash equivalents 8,853,365
--------
8,877,752
--------
Total assets 14,036,613
Current liabilities
Other payables (38,463)
--------
--------
Net assets 13,998,150
--------
Equity
Share capital 5 14,572,250
Retained earnings (574,100)
--------
Total Equity 13,998,150
--------
Net asset value per Ordinary share (pence) 9.02
--------
THE GREENHOUSE FUND LIMITED
Consolidated Statement of Changes in Equity (unaudited)
FOR THE PERIOD 13 DECEMBER 2005 TO 30 JUNE 2006
Share Retained
capital earnings Total
# # #
Issue of Ordinary Shares Capital 14,572,250 - 14,572,250
Expenses of share issue - (522,263) (522,263)
Net operating loss for the period - (51,837) (51,837)
------------- --------- -------- --------- --------
At 30 June 2006 14,572,250 (574,100) 13,998,150
------------- --------- -------- --------- --------
THE GREENHOUSE FUND LIMITED
Condensed Interim Statement of Cash Flows (unaudited)
For the Period 13 December 2005 to 30 June 2006
#
Cash flow from operating activities
Net loss for period (51,837)
Increase in other receivables (24,387)
Increase in other payables 38,463
--------
Net cash outflow from operating activities (37,761)
Cash flow from investing activities
Purchase of investments (658,861)
--------
Net cash outflow from investing activities (658,861)
Cash flow from financing activities
Issue of Ordinary shares 10,072,250
Sales commission and formation costs paid (522,263)
--------
Net cash inflow from financing activities 9,549,987
--------
Net increase in cash and cash equivalents 8,853,365
Cash and cash equivalents at start of the period -
--------
Cash and cash equivalents at 30 June 2006 8,853,365
--------
THE GREENHOUSE FUND LIMITED
Notes to the Condensed Interim Financial Statements (unaudited)
1 Summary of Significant Accounting Policies
These condensed interim financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
adopted by the International Accounting Standards Board (IASB), and
interpretations issued by the International Financial Reporting
Interpretations Committee of the IASB (IFRIC).
(a) Basis of preparation
The financial statements have been prepared on a historical cost basis,
except for the measurement at fair value of investments and derivative
instruments.
(b) Basis of consolidation
The interim financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made
up to 30 June. Control exists when the Company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so
as to obtain benefits from its activities. The financial statements of
subsidiaries are included in the consolidated financial statements from
the date that control commences up to the date that control ceases.
(c) Revenue recognition
Interest receivable on fixed interest securities is recognised on an
effective yield basis. Interest on short term deposits, expenses and
interest payable are treated on an accruals basis.
(d) Investments
Intangible assets
Intangible assets are stated at cost less any provisions for amortisation
and impairments. They are
amortised over their useful life, estimated to be 20 years.
Investments held at fair value through profit or loss
For financial assets acquired, the cost is the fair value of the
consideration. Subsequent to initial recognition,
held at fair value assets are measured at fair value.
Unlisted investments are valued by the directors using appropriate
valuation methodologies.
Assets are derecognised at the trade date of the disposal, Proceeds will
be measured at fair value which
will be regarded as the proceeds less any transaction costs.
(e) Movements in Fair Value
Changes in the fair value of all held at fair value assets are taken to
the income statement. On disposal, realised gains and losses are also
recognised in the income statement.
(f) Cash and cash equivalents
Cash and cash equivalents comprise current deposits with banks.
(g) Expenses
All expenses are recognised in the income statement on an accruals basis.
Transactions costs incurred on the disposal of investments are deducted
from the proceeds on sale.
(h) Taxation
The Fund is an Exempt Company for Jersey taxation purposes. The Fund pays
an exempt company fee, for each company in the group, which is currently
#600 per annum.
(i) Foreign currency
The results and financial position of the Fund are expressed in pounds
sterling, which is the functional currency of the Company.
Transactions in currencies other than sterling are recorded at the rates
of exchange prevailing on the dates of the transactions. At each balance
sheet date, monetary items and non monetary assets and liabilities that
are fair valued and that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Gains and
losses arising on retranslation are included in net profit or loss for the
period where investments are classified as fair value.
(j) Share Capital
Ordinary share capital
Ordinary shares are classified as equity. External costs directly
attributable to the issue of new shares
are shown as a deduction to reserves.
Founder shares
Founder shares are classified as equity.
THE GREENHOUSE FUND LIMITED
Notes to the Condensed Interim Financial Statements (unaudited)
2 Returns per share
The earnings per ordinary share is based on the net loss for the period of #51,837
and on 120,806,784 ordinary shares, being the weighted average number of ordinary
in issue during the period.
3 Management fee #
Management fee 91,288
--------
The management fee paid to Development Capital Management (Jersey) Limited is 2%
per annum of the amount subscribed plus any gains retained by the Fund for
reinvestment.
The management agreement between the Fund and the Manager is terminable by either
party on twelve month's notice, subject to an initial term of 36 months from
admission.
4 Investing activities
Intangible Unlisted Total
assets investments
# # #
Opening book cost - - -
Purchases at cost 5,000,000 158,861 5,158,861
-------- ------- --------
Closing book cost 5,000,000 158,861 5,158,861
-------- ------- --------
5 Called up share capital
Authorised:
Founder shares of no par value 10
Ordinary shares of no par value Unlimited
Issued and fully paid:
#
2 Founder shares of no par value -
27,225,000 Ordinary shares issued on 14 December 2005 at 1p 272,250
98,000,000 Ordinary shares on 22nd December 2005 at 10p 9,800,000
30,000,000 Ordinary shares on 29th June 2006 at 15p 4,500,000
--------
14,572,250
The 30,000,000 ordinary shares were issued as part of the consideration for
investment in intangible assets.
6 Net Asset Value per share
The net asset value per ordinary share is based on the net assets attributable to
equity shareholders of #13,998,150 and on 155,225,000 ordinary shares, being the
number of ordinary shares in issue at the period end.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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