TIDMHTIG
RNS Number : 0222T
Hightex Group PLC
30 September 2014
Hightex Group plc
("Hightex" or "the Group")
Unaudited Results for the Six Months Ended 30 June 2014
Hightex Group plc (AIM: HTIG), a leading systems engineering
company, which designs, fabricates and installs large area, cable
supported lightweight membrane roofs and façades worldwide,
announces its unaudited results for the six months ended 30 June
2014.
Financial Overview:
-- Turnover of EUR0.1 million (H1 2013: EUR3.2million)
-- Gross profit down to a loss of EUR0.1million (H1 2013: EUR0.4million)
-- Overheads (actual) down 43% to EUR0.9 million (H1 2013: EUR1.4 million)
-- EBITDA - loss of EUR1.0 million (H1 2013: loss of EUR0.9 million)
-- Goodwill write-off of EUR4.0million
-- Pre-tax loss of EUR5.5million (H1 2013: loss of EUR1.4 million)
-- Result per share - loss of 1.90 c (H1 2013: loss of 0.53 c)
-- Net cash balances of EUR0.7million (H1 2013: EUR0.8million)
Operational Highlights:
-- The installation of the roof of the Estadio Beira-Rio in
Porto Alegre, Brazil was completed on time and to plan. The stadia
where Hightex was involved were used for the 2014 FIFA World Cup
competition with the final being played at the Maracana
stadium.
-- Hightex initiated a new area of activity in the design of
structures destined for cargo handling where membranes can be used
for the rapid construction of facades.
-- Hightex continues to pursue other potential significant
contracts, in the United Kingdom, Europe and the Middle East with a
special focus on stadia projects for the World Cup 2018 to be held
in Russia. The projects successfully completed in Brazil further
enhanced the Company's reputation as one of the major players in
this area of large scale civil engineering.
-- A loan facility with TCA Global Credit Master Fund, LP for up
to USD 10,000,000 was agreed and signed in March 2014.
-- Due to the issue for shares for cash in SolarNext AG the
Hightex Group plc shareholding in SolarNext AG has decreased, with
a current holding of 26.06%.
Post Balance Sheet Event and Prospects:
-- In order to pursue the funds owed from the Brazilian JV to
Hightex an insurance claim has been started. Hightex believes that
a partial payment may be received before the end of 2014.
Legal action in Brazil to seek full settlement of the Company's
claim has been approved by the Board.
-- Further membrane projects of significant value, which have
been the subject of detailed offers by Hightex, are still being
pursued but the current military tensions in the Middle East and
the political difficulties between Russia and the Ukraine, with the
related economic sanctions currently in force, have led to delays
in the signing of contracts. The Company is in regular contact with
the relevant general contractors.
-- Hightex has also responded to tender requests for projects,
where polymeric membrane is an essential part of the total
structure, but the end use lies outside the sports/events stadia
category. These include commercial buildings, air cargo storage
facilities, educational establishments and transport
infrastructure. The Directors believe that new membrane contracts
will be won in the next 6 to 12 months.
-- Whilst the Company still has the option to draw down further
funds through the TCA facility, it is the Directors' opinion that
by identifying an industrial or financial partner with the
requisite financial strength arising from its own balance sheet or
with established credit lines the engineering expertise and
reputation of Hightex could be better exploited. Such a development
would enhance the intrinsic value of the Group and be of benefit to
both shareholders and a potential partner.
For further information:
Hightex Group plc
Charles DesForges, Chairman www.hightexworld.com
Frank Molter, Chief Executive Officer Tel: +0049 8051 6888 211
FinnCap
Geoff Nash/Henrik Persson- Corporate Tel: +44 (0) 20 7600 1658
Finance
Mia Gardener - Broking www.finncap.com
Chairman's statement re 2014 interim results
Introduction
The half year to June 30(th) 2014 saw the completion of the
remaining stadium contract in Brazil on time and to plan. The Beira
Rio Stadium therefore was subsequently used for the preliminary
stages of the 2014 FIFA World Cup competition. The Maracana stadium
in Rio, the contract for which was completed earlier in 2013, was
used for the final game and was seen by a global TV audience in
excess of 1billion, The Beira-Rio stadium in Porto Alegre received
singular praise from the international media as well as the
architectural community for its elegant appearance and innovative
design and use of membrane materials. Of particular note in this
contract was the very close collaboration between Hightex and the
general contractor against the background of the financial problems
of the joint venture company.
The financial problems relating to the Brazilian joint venture
have still not been resolved and, following independent advice, the
Board has agreed to undertake legal action so as to recover the
related monies. The Company has been further advised that this is
likely to be a protracted business.
The lack of verifiable information and transparency of the
accounts of the Brazilian joint venture led to the postponement of
the 2013 interims announcement. This matter was resolved eventually
by making a provision for specific debts arising in Brazil and, as
stated earlier, advice has been sought as to the appropriate
action, which might be required, to resolve this situation for the
ultimate benefit of shareholders. Hightex has traded judiciously
through the subsequent six months period and is pleased to announce
that on 26(th) March 2014 it entered into a loan facility agreement
with TCA Global Credit Master Fund, LP for up to USD 10,000,000.
The first USD 1,800,000 has been drawn down so as to provide
essential working capital. In the Board's considered opinion and in
more normal circumstances credit facilities should have been
provided by local financial institutions.
The consequence of the failure of the banking system in several
European countries has had a particularly catastrophic impact on
small to medium size companies and across a range of industrial
sectors.
Hightex has not been insulated from this fall out and the
Directors are pleased to have concluded this agreement with TCA. In
principle Hightex has access to sufficient working capital for
current operations but a more permanent solution may be required if
the bonds, which will be needed for the winning and execution of
large area, high value contracts, are to be adequately
financed.
Financial stability is both essential and particularly relevant
to all companies working in the construction industry, where stage
payments are made as a function of the percentage of completion.
The Directors will be devoting their efforts over the coming months
to ensure this stability is obtained. Further working capital has
been made available following the strategic decision to focus the
Company's commercial efforts on the light weight, structural
engineering sector where its expertise and its well established
reputation for excellence can be more fully exploited.
SolarNext AG, a wholly-owned subsidiary of the Company for the
past five years, has been establishing itself in the clean energy
sector as a provider of solutions to the problem of developing more
efficient, non-carbon, local energy generation and its utilisation
for applications such as air-conditioning.
The basic technologies used in structural engineering and
thermal processing are sufficiently different from each other and
have very different financial requirements for their respective
operations. A strategic review led the Board to conclude that the
two business units should go their separate ways and during the
period the company has disposed of a majority interest of 50.2% in
the shareholding of SolarNext AG to a number of UK investors
including management.
The signing of the loan facility agreement, the publication of
the delayed interim results and the announcement of the sale of the
stake in SolarNext AG led to restoration to trading on AIM with
effect from 26 March 2014..
Commentary on 2014 interim results
In the first six months of 2014 Hightex's revenues decreased
from EUR3.3 million to EUR0.1million. No significant new contracts
of high value were won and this has to be placed into context by
the fact that there very few new large area membrane projects were
started in this period. One pleasing feature has been the renewed
interest in the development of façade structures for use in large
area storage spaces where the light weight of membrane materials
combined with design flexibility and shorter construction times can
be exploited to provide maximum economic advantage in the creation
of new transportation hubs.
The EUR3.2 millionfall in revenues resulted in an EBITDA loss of
EUR1.0 million(2013 first half: loss of EUR0.9 million).
Management have responded to the financial pressures by making
further reductions in general expenses, these being mainly achieved
in the German operating company. These expenses fell to EUR0.9
million in the first half of 2014 (2013 first half: EUR1.4
million).
Due to the significant impact of the "Brazilian issue" and the
consequences therefrom for Hightex Group the Board has reviewed the
goodwill position. After discussion and detailed impairment reviews
the management has decided to write off EUR4.0 million of the
goodwill, which had an extraordinary effect of the same amount on
the EBIT.
Due to this extraordinary write off in the amount of EUR4.0
million the result before tax in the first six months was a loss of
EUR5.5 million compared with the loss of EUR1.5 million in the
first six months of 2013. Expressed in per share terms, the result
of the first six months of 2014 amounted to a loss of 1.90 cents,
compared with a loss per share of 0.53 cents in the first half of
2013.
Shareholders' funds were EUR0.7 million, compared with EUR6.3
million at 31 December 2013 and EUR6.4 million at 30 June 2013.
Cash balances as at 30 June 2014 were EUR0.7 million, compared with
EUR0.9 million as at 31 December 2013 and EUR0.8 million as at 30
June 2013.
SolarNext
As stated earlier the decision to dispose of a majority stake in
SolarNext AG has enabled the Company to devote all its current
resources, both human and financial, to the membrane business.
Further sale of the remaining shares is planned in the second half
of the year and possibly extended into 2015.
Prospects
A number of projects where the membrane component is an
essential part of the total structure have been identified by the
Company. Preliminary design analyses and related cost estimations
have been made for some of these projects and offers made to the
relevant general contractors.
The Directors believe that although contracts will be awarded,
the current political and military tensions in Europe and the
Middle East are likely to delay their signing until early 2015.
These potential contracts, include both stadia and infrastructure
projects in the Middle East, five stadia projects related to the
2018 FIFA World Cup in Russia, as well as other identified projects
in Western Europe including France, Spain and the UK.
If successful, such contract wins would increase revenues
substantially in 2015/2016 and subsequent years, thus realising
prospects for a return of Group profitability.
The Directors continue to believe that finding an industrial or
financial partner with the necessary financial resources, either in
their balance sheet or as credit lines, would enhance the
engineering expertise and excellent marketplace reputation of
Hightex. Such a development can only be of benefit to the Group,
its shareholders and its employees. The Board will continue to
review the possibility of raising further capital from current
shareholders.
The Directors and all employees are making every effort in
challenging circumstances to win new membrane contracts. 2014 is
proving to be a very difficult year but Hightex's excellent
reputation for competence in executing projects demanding
innovative engineering places the Company in a good position when
market confidence returns, a greater degree of political stability
is established in sensitive regions of the world and much needed
infrastructure investment resumes across the global economy.
Charles DesForges
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes 6 Months 6 Months 12 Months
30-Jun 30-Jun 31-Dec
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Continuing operations
Revenue 85 3,238 9,867
Cost of sales (230) (2,807) (9,242)
Gross profit (145) 431 625
Operating expenses:
Selling and distribution
costs (138) (275) (446)
Research and development
costs (75) (53) (88)
Administrative expenses (650) (1,028) (1,851)
Underlying loss before interest,
tax, depreciation and amortisation (1,008) (925) (1,760)
Depreciation and amortisation (4,331) (353) (699)
Operating loss (5,339) (1,278) (2,459)
Share option charge - (7) (1)
Finance income 4 7 20
Finance costs (167) (130) (350)
Share of the profit of associates 32 36 (14)
Loss before tax (5,470) (1,372) (2,804)
Income tax (charge)/credit 4 (2) (6) (7)
Loss for the period from
continuing operations (5,472) (1,378) (2,811)
============ ============== ==========
Profit/(loss) from discontinued
operations, net of tax - (111) 1,066
============ ============== ==========
Loss for the period (5,472) (1,489) (1,745)
============ ============== ==========
Loss attributable to equity
holders (5,472) (1,489) (1,745)
(5,472) (1,489) (1,745)
======== ======== ========
Loss per share (cents)
Basic 5 (1.90) (0.53) (0.61)
Diluted 5 (1.90) (0.53) (0.61)
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME (continued)
Loss per share from continuing
operations (cents)
Basic 5 (1.90) (0.49) (0.99)
Diluted 5 (1.90) (0.49) (0.99)
Loss per share from discontinuing
operations (cents)
Basic 5 - (0.04) 0.36
Diluted 5 - (0.04) 0.36
Other comprehensive income
6 Months 6 Months 12 Months
30-Jun 30-Jun 31-Dec
2013 2013 2013
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Loss for the period (5,472) (1,489) (1,745)
------------ ------------ ----------
Exchange differences in translating
foreign operations (30) 152 337
------------ ------------ ----------
Total comprehensive loss for
the period (5,502) (1,337) (1,408)
============ ============ ==========
Total comprehensive loss attributable
to equity holders (5,502) (1,337) (1,408)
(5,502) (1,337) (1,408)
============ ============ ==========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes 30-Jun 30-Jun 31-Dec
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Non-current assets
Goodwill 2,496 6,722 6,496
Other intangible assets 1,335 1,587 1,461
Property, plant and equipment
(net) 4,548 4,973 4,780
Other financial assets 17 655 17
Investments in associate 816 531 979
Deferred tax assets - - 1
------------ ------------ ----------
Total non-current assets 9,212 14,468 13,734
------------ ------------ ----------
Current assets
Inventories and work in progress 192 285 192
Accounts receivable 2,196 5,780 2,452
Cash and cash equivalents 739 803 909
Total current assets 3,127 6,868 3,553
------------ ------------ ----------
Total assets 12,339 21,336 17,287
============ ============ ==========
Shareholders' equity
Share capital 3,682 3,682 3,682
Share premium 15,059 15,059 15,059
Retained losses (18,030) (12,302) (12,558)
Share option reserve 40 46 40
Translation reserve 42 (113) 72
Total equity attributable to
equity holders 793 6,372 6,295
------------ ------------ ----------
Current liabilities
Trade and other payables 6,574 11,030 7,104
Borrowings 2,879 1,406 1,478
------------ ------------ ----------
Total current liabilities 9,453 12,436 8,582
------------ ------------ ----------
Non-current liabilities
Borrowings 2,036 2,470 2,353
Deferred tax liability 57 58 57
Total non-current liabilities 2,093 2,528 2,410
------------ ------------ ----------
Total liabilities 11,546 14,964 10,992
------------ ------------ ----------
Total liabilities and equity 12,339 21,336 17,287
============ ============ ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months 6 Months 12 Months
30-Jun 30-Jun 31-Dec
2014 2013 2013
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Cash flows from operating activities
Operating loss for the period: (5,339) (1,278) (2,459)
Profit/(loss) from discontinued operations,
net of tax - (111) 1,066
Adjustments for:
Loss for disposal 67 16 15
Foreign exchange differences (32) 155 28
Gain on sale of discontinued operation,
net of tax - - (1,391)
Bad debts written off - 4 317
Depreciation 205 233 442
Amortisation and impairment of intangibles 4,126 130 257
Operating cash flows before movements
in working capital (973) (851) (2,970)
------------ ------------ ----------
Increase in inventories - (39) 151
(Increase) / decrease in accounts
receivable 256 1,741 4,366
Increase / (decrease) in accounts
payable (486) (737) (3,328)
------------ ------------ ----------
Cash generated / (used in) from operating
activities (1,203) 114 1,400
Interest paid (167) (130) (350)
Income tax paid (1) (2) (7)
Operating cash flow form discontinuing
operations - - (53)
Net cash generated / (used in) from
operating activities (1,371) (18) 1,067
------------ ------------ ----------
Cash flows from investing activities
Acquisition of other financial assets - (144) -
Acquisition of intangible assets - - (2)
Acquisition of property, plant and
equipment - (145) (199)
Proceeds from disposal of other financial
assets 125 - 750
Proceeds from disposal of property,
plant and equipment 30 - 27
Proceeds from disposal of discontinued
operation, net of cash disposed - - 519
Interest received 4 7 20
------------ ------------ ----------
Net cash used in investing activities 159 (282) 1,115
------------ ------------ ----------
Cash flows from financing activities
Payment of finance lease liabilities (17) (14) (24)
Proceeds from loan 1,378 256 43
Repayment of loans (256) (161) (203)
------------ ------------ ----------
Net cash (used in) / generated from
financing activities 1,105 81 (184)
------------ ------------ ----------
Net decrease in cash and cash equivalents (107) (219) (55)
Cash and cash equivalents, beginning
of period/year 808 917 917
Effect of foreign exchange on cash
and cash equivalent 2 (3) (54)
------------ ------------ ----------
Cash and cash equivalents, end of
period / year 703 695 808
------------ ------------ ----------
Cash at bank and in hand comprises:
Cash and cash equivalents 49 79 235
Cash lodged under performance and
warranty bonds 690 724 674
Bank overdraft (36) (108) (101)
------------ ------------ ----------
703 695 808
------------ ------------ ----------
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY
(Unaudited)
Share Share Retained Share Foreign Total
capital premium losses option currency
reserve translation
reserves
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balances at 1 January
2013 3,682 15,059 (10,813) 39 (265) 7,702
---------- ----------- ----------- ----------- ------------- -----------
Loss for the period - - (1,489) - - (1,489)
Currency translation differences - - - - 152 152
---------- ----------- ----------- ----------- ------------- -----------
Total comprehensive income
for the period - - (1,489) - 152 (1,337)
Share option charge - - - 7 - 7
Balances at 30 June 2013 3,682 15,059 (12,302) 46 (113) 6,372
---------- ----------- ----------- ----------- ------------- -----------
Loss for the period - - (256) - - (256)
Currency translation differences - - - 185 185
---------- ----------- ----------- ----------- ------------- -----------
Total comprehensive income
for the period - - (256) - 185 (71)
Share option charge - - - (6) - (6)
Balances at 31 December
2013 3,682 15,059 (12,558) 40 72 6,295
---------- ----------- ----------- ----------- ------------- -----------
Loss for the period - - (5,472) - - (5,472)
Currency translation differences - - - - (30) (30)
---------- ----------- ----------- ----------- ------------- -----------
Total comprehensive income
for the period - - (5,472) - (30) (5,502)
Share option charge - - - - - -
Balances at 30 June 2014 3,682 15,059 (18,030) 40 42 793
---------- ----------- ----------- ----------- ------------- -----------
1. General information
Hightex Group Plc was incorporated on 28 June 2006 under the
Companies Act 1985. The Company was registered under the number
5860429. The Company's registered office is located at 55 Gower St,
London WC1E 6HQ. The Company is domiciled in the United
Kingdom.
The consolidated financial information is presented in Euros
(EUR).
2. Basis of preparation
The next annual financial statements of Hightex Group ('the
Group') will be prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted for use in the EU applied in
accordance with the provisions of the Companies Act 2006.
Accordingly, the interim financial information in this report
has been prepared using accounting policies consistent with IFRS.
IFRS is subject to amendment and interpretation by the
International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC)
and there is ongoing process of review and endorsement by the
European Commission. The financial information has been prepared on
the basis of IFRS that the directors expect to be applicable as at
31 December 2014.
The financial information has been prepared under the historical
cost convention. The principal accounting policies set out below
have been applied to all periods presented.
The consolidated interim financial information has been prepared
assuming that the Group will continue as a going concern. Reference
is made to Note 3. "Going Concern" below.
The same accounting policies, presentation and methods of
computation have been followed in these unaudited interim financial
statements as those which were applied in the preparation of the
Group's annual financial statements for the year ended 31 December
2013.
The interim financial information for the six months ended 30
June 2014 was approved by the directors on 26 September 2014.
3. Going concern
The Group has been actively managing the review of the going
concern position, including the following material measures:
-- Capital increase in SolarNext AG in order to repay loans from
SolarNext AG to Hightex Group plc
-- signing a loan facility with TCA Global Credit Master Fund,
LP for up to USD 10,000,000, of which the first USD 1,800,000 has
been drawn down
-- negotiation with some creditors regarding the payment terms of proposed settlements
-- negotiation on an insurance case claim with a view to
receiving a potential part payment with reference to a resolution
of the problem of the Brazilian JV
-- contact being made with potential partners in order to assist
Hightex on the financial terms for potential new projects.
Based on the financial forecasts for 2014 and 2015 and the
Group's economic prospects the directors of Hightex Group have made
the assessment, that the above measures provide sufficient working
capital in order to cover the period until Hightex Group is able to
earn operating positive cash flows from new projects in the last
quarter of 2014 and the year 2015. In assessing whether the going
concern assumption is appropriate, the directors have taken into
account all available information regarding the foreseeable future;
in particular for the period covering the twelve months from the
date of issue of the interim financial information. This
information included the nature of the business in which Hightex
operates, outstanding payments from realised projects, expected
contract wins in 2014/2015, as well as the aforementioned financing
facilities available to the Group.
4. Taxation
30-Jun 30-Jun 31-Dec
2014 2013 2013
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Deferred taxation - (4) -
Current taxation 2 (2) 7
------------- ------------- ----------
Corporate taxation charge 2 (6) 7
============= ============= ==========
5. Earnings per share
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2013 2013
EUR'000 EUR'000 EUR'000
(Unaudited) (Unaudited) (Audited)
Earnings
Earnings for the purpose of basic
and
diluted earnings per share being
net loss
attributable to equity shareholders (5,472) (1,489) (1,745)
Number of shares
Weighted average number of ordinary
shares
for basic earnings per share 287,627,154 282,820,727 282,820,727
Share options - - -
Warrants - - -
Weighted average number of ordinary
shares
for diluted earnings per share 287,627,154 282,820,727 282,820,727
Earnings per share (cents)
Basic (1.90) (0.53) (0.61)
Diluted (1.90) (0.53) (0.61)
Earnings per share from continuing
operations (cents)
Basic (1.90) (0.49) (0.99)
Diluted (1.90) (0.49) (0.99)
Earnings per share from discontinuing
operations (cents)
Basic - (0.04) 0.36
Diluted - (0.04) 0.36
6. Goodwill
During the period the Board reviewed the carrying value of
Goodwill. As a result of this detailed exercise EUR4 million has
been written off this balance.
7. Dividend
The directors do not propose the payment of an interim dividend
(2013: nil).
8. Contingent liabilities
The group had contingent liabilities of EUR690,000 (31 December
2013: EUR674,000) under contracted performance and warranty bonds
and advance payments.
9. Post balance sheet events
The following material post balance sheet events have incurred
to date:
At operational level the contracts in Brazil (Maracana Stadium
and Estadio Beira-Rio) have been executed and were used during the
FIFA 2014 World Cup in June and July 2014.
Providing working capital from all possible sources in the
second half of 2014 included a capital increase (by issuing new
shares for cash) at SolarNext AG in order to repay a loan to
Hightex Group plc. Another capital increase in SolarNext is in
execution and shall be terminated by end of October 2014.
-END-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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