RNS Number:8213Y
Libra Natural Resources PLC
22 June 2007
Press Release 22 June 2007
Libra Natural Resources plc
("LNR" or "the Company")
Preliminary announcement of unaudited results for the twelve months ended 31
December 2006
Libra Natural Resources plc, the international cleaner fuel company, today
announces its preliminary results for the twelve months ended 31 December 2006.
Financial highlights
* Pre tax profit of #2.547m (2005: #156,000 loss)
* Basic EPS 1.16 p (2005: 0.09p loss)
* Net assets of #9.06m (2005: #1.89m)
* Current cash in bank, in excess of #2 million (post wood pellet upgrade
investment)
Operational highlights
* Successful development of one of North America's leading wood pellet
operations, through the acquisition of Westwood Fibre Co and Princeton
Co-generation Company.
* Completion of investment in Prometheus Energy Company Inc, and successful
listing of the company's equity on London's Alternative Investment Market.
* Completion of investment in waste coal processing operations in
Springfield, Illinois. Focus on roll-out of operations onto other sites and
development of royalty-based business model.
* Significant management and Board enhancements. Additional management
appointments included Glenn Smith, who has a broad background in global
energy financing and project markets, as CIO and John Stirling, who brings
substantial technical and management experience in the renewables industry,
as Head of North American Operations.
* Appointment of Mark Campanale to the Board of Directors as senior
non-executive director, bringing significant experience and contacts in the
international renewable and SRI fund management markets.
Since year end
* Following an exceptional first period of integration of newly formed
business unit, termination of discussions to de-merge Company's wood pellet
operations.
* Strengthening of the Company's balance sheet and future investment
capability through #3.5 million equity issue. Take up by several blue chip
UK investors, new to the company, significantly enhancing investor base.
* Initiation of C$3 million upgrade investment programme in existing Canadian
wood pellet facilities. Completed Q3 2007. Immediately earnings enhancing.
* Announcement of next series of planned investments in wood pellet
operations; expansion into United States market for first time.
Strategy
* Following completion of the Strategic Review, announced in March, your
Company intends to focus increasingly on the substantial, near-term growth
opportunities within the international wood pellet sector, one of the most
attractive, earnings-based, niches in the global renewable energy
marketplace.
* Implementation of this strategy to involve significant increase in the
size, scale and range of investments into the wood pellet manufacturing
market, and the potential for entering into strategic financial and
commercial partnerships and joint ventures.
* The evolution of this strategy, to create a stand-alone, world-leading,
wood-to-energy operational business, will entail the active management of
the Company's other investments to create additional near-term shareholder
value.
* Creation of 'pure-play' wood-to-energy business, expected to be completed
by end of 2007.
Commenting on the results, Peter Greensmith, Chief Executive Officer of Libra
Natural Resources plc, said: "We are extremely pleased with the underlying
performance of the business in our first full year as a public company. During
2006, we have invested heavily in building up a range of operational and
investment assets in the international waste to energy marketplace. As our
results today demonstrate, in terms of return on this investment, your Company
is already able to evidence real, substantial, progress.
"As a consequence of this very active investment phase, LNR is a fundamentally
different entity from a year ago. 2007 promises to bring further significant
development of your Company's strategy, as we complete the transformation of LNR
into a focused, operational entity.
"Your Board believes that LNR's wood pellet operations represent an
extraordinary business opportunity, and initial un-audited indications for the
first quarter of 2007, with record pellet production and revenues, strengthens
this belief.
"We look forward with real confidence to the coming year as LNR continues its
strategy of building, demonstrable shareholder value."
- Ends -
For further information:
Libra Natural Resources plc
Peter Greensmith, Chief Executive Tel: +44 (0) 20 7877 5050
pg@lnrplc.com
Teather & Greenwood
Simon Brown, Corporate Finance Tel: +44 (0) 20 7426 9000
simon.brown@teathers.com www.teathers.com
Media enquiries:
Abchurch
Heather Salmond / Franziska Bohnke Tel: +44 (0) 20 7398 7700
heather.salmond@abchurch-group.com www.abchurch-group.com
Chief Executive's Review
2006 has been a tremendous year of achievement for LNR. The Company has been
transformed from a non-operational, emergent entity into a profitable,
fast-growing business. This achievement is attributable to a highly focused and
motivated group of key employees, whose commitment and dedication to the Company
has enabled the creation of the success story LNR increasingly represents.
I will present this review in the following sections:
* Operations
* Strategic Review
* Strategic Review: The Future
Operations
Wood Pellets
2006 was a year of investment and growth for LNR's wood pellet operations in
British Columbia, Canada. Through the February acquisition of Westwood Fibre
Products ('Westbank'), and the December purchase of Princeton Co-Generation
('PCC'), we have now positioned LNR as one of North America's leading
manufacturers of wood pellets.
I am very pleased to inform shareholders that the integration of PCC and
Westwood is progressing extremely well, and the financial and operational
performance of the combined operations during the first period of 2007 has
exceeded management expectations.
During the first quarter of 2007, our Westbank facility returned record
production figures. Demand for our wood pellets is exceptionally strong with
revenue per ton above projections across the entire business. Fibre availability
remains robust, enabling PCC to increase raw product inventory to record levels
in preparation for the plant capacity upgrade. Fibre is managed across the two
plants, and customers are being supplied from both plants and ordering a broader
range of our products, validating the acquisition and integration strategy, and
reinforcing your Board's growing confidence in the long-term potential of these
operations.
In line with its growth strategy for our wood pellet business, and as a first
step in the implementation of the results of the Strategic Review revealed
today, your Board is also pleased to announce several further initiatives within
this business area;
* Further investment of up to #1.5 million in the upgrade of the Westbank and
Princeton operations. This upgrade, involving the installation of
additional drying and bagging facilities, will be completed by September,
and will be immediately earnings enhancing. Funds for the upgrade have been
largely provided from the proceeds of the recent equity issuance.
* Signing of a Letter of Intent for the development of a 60,000 metric ton
wood pellet facility in Western Canada. Estimated operational
date = January 2008
* Signed Term Sheet for the development of a projected 70,000 metric ton wood
pellet facility in the South East of the US. Estimated operational
date = Q1 2008
Prometheus Energy Company ('Prometheus')
LNR completed its investment in Prometheus in April 2006, investing U$4 million
for a 11.55% stake in this Seattle-based methane-gas to LNG business. Prometheus
listed its shares on London's Alternative Investment Market in September (AIM:
PEC), providing your Company with a substantial uplift on its initial
investment.
Since its introduction, Prometheus has made significant progress in fulfilling
its undoubted potential. In January this year, the company completed the
installation of the world's first commercial landfill gas liquefier, at the
Frank R. Bowerman Landfill in Orange County, California. Further developments of
Prometheus operations elsewhere have also been made, with gas rights and
partnerships secured in other parts of the US and in Poland.
Your Board believes that Prometheus is uniquely positioned within its
marketplace and looks forward to seeing further progress in 2007 in the
company's development into a world-class, renewable energy producer
A full copy of the recently published 2006 Preliminary Results for Prometheus is
available for the company's web site (www.prometheus-energy.com/)
Waste Coal
During the last quarter of 2006, LNR completed its U$1.7 million investment into
the Company's waste coal processing facilities in Springfield, Illinois. During
the following commissioning period, waste coal fines have been processed through
the facility and inventory built up at the site, in preparation for full scale
production.
Following completion of LNR's planned investment, and in line with the results
of the Strategic Review announced today, your Company now plans to re-position
its waste coal business within the overall Group.
LNR has entered into negotiations with its contracting and freehold partners at
Springfield, with a view to reaching agreement whereby we will cede direct
operational control and management of our waste coal business. In return, LNR
will remain a significant minority shareholder in the business, whilst receiving
a royalty from the Springfield site.
Additionally, it is envisaged that LNR's operational partners in the Springfield
operation, will 'roll-out' the site's waste coal technology onto at least two
other sites in the Appalachian mountain region. These sites have already been
permitted and preliminary agreement reached for operations to begin within the
next quarter.
Following a successful conclusion of these negotiations, the expected return on
LNR's initial investment will be at least in line with previous management
expectations.
Should such agreement be reached, and this further 'roll-out' expansion
undertaken, it is currently envisaged that no further investment by LNR will be
required.
Strategic Review
As announced in March, your Board has conducted a review of the future strategic
direction of the Company, and in particular, the future of its wood pellet
manufacturing operations.
I am pleased to announce today the outcome of this Review.
As shareholders will know, your Board believes that our wood pellet business, in
particular, provides a tremendous opportunity to develop a world-leading market
position in a fast-growing, profitable niche in the renewable energy sector.
Again, as previously announced, your Board believes that this potential is not
currently fully reflected in LNR's share price.
In reaching its conclusions, your Board has also recognised the increasing
division of LNR's business into two divergent activities; operational and
investment. These distinct business areas clearly require different types of
management skills, experience and expertise, with fundamentally different
valuation methodology applied by the market to each business type.
In announcing the conclusion of this Review, your Board has sought to present a
clear, unequivocal outcome to the market, and one which can be actioned and
delivered in the short term.
Strategic Review: The Future
It is the intention of your Board to move forward aggressively with the
evolution of LNR into a 'pure-play', focused, wood pellet manufacturing group.
Our operations in this area offer tremendous growth prospects, and is that
rarity in the clean tech marketplace; a business that delivers real earnings,
today. It is the Board's opinion that it is in LNR shareholders' best interests
that such an attractive business represents the core of the Company into the
future.
We intend, therefore, to make further investments in both operational and
greenfield operations, initially focusing on further expansion of our North
American facilities, and, where appropriate, in the UK and the rest of Europe.
As announced previously, LNR remains in exclusive discussions to acquire a major
UK pellet manufacturer, and some form of conclusion to this talks is expected
imminently.
In addition to the investment upgrade to our British Columbian facilities,
today's announcement of our further expansion plans in Western Canada and the
South East of the United States, which will more than double the size of our
existing operations, is the first step in implementation of this strategy.
Shareholders can expect further announcements along these lines during the rest
of 2007.
As a consequence of this strategic re-positioning of LNR, your Board intends to
aggregate all its non-pellet investments into a separate, holding company. LNR
will actively manage these investments with a view to maximising near-term
shareholder value and facilitating the creation of a focused wood pellet
business.
With these results, and following the completion of the Strategic Review, we
present an outline of the future of LNR for 2007 and beyond.
I believe that implementation of this Strategy will further build on the
outstanding track record of your Company, and, with the creation of a
world-class wood-to-energy business, offer existing and new shareholders a
unique, high-growth, profitable, renewable energy business.
Peter Greensmith
Chief Executive Officer
21 June 2007
LIBRA NATURAL RESOURCES PLC
CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2006
2006 2005
#'000 #'000
Continuing operations
Revenue 2,362 -
Cost of sales (2,050) -
Gross profit/(loss) 312 -
Other operating income 201 -
Other gains and losses 3,570 567
Administrative expenses (894) (443)
Depreciation and amortisation (220) ( 1)
Operating profit/(loss) 2,969 123
Investment revenues 62 33
Finance costs (484) -
Profit/(loss) before taxation 2,547 156
Taxation (819) (47)
Profit/(loss) for the year 1,728 109
Profit attributable to:
Equity holders of the company 1,833 109
Minority interest (105) -
1,728 109
Earnings/(loss) per share
Basic 1.156p 0.089p
Diluted 1.046p 0.077p
LIBRA NATURAL RESOURCES PLC
CONSOLIDATED BALANCE SHEET as at 31 December 2006
2006 2005
#'000 #'000
Non-current assets
Property, plant and equipment 6,234 -
Intangible assets 4,878 2
Goodwill 458
Total non-current assets 11,570 2
Current assets
Inventories 381 -
Investments held for trading 6,845 1,066
Trade and other receivables 1,724 444
Cash and cash equivalents 410 566
Total current assets 9,360 2,076
Current liabilities
Deferred consideration (573) -
Trade and other payables (2,246) (139)
Current tax liabilities (42) ( 4)
Total current liabilities (2,861) (143)
Net current assets/(liabilities) 6,499 1,933
Non-current liabilities
Financial liabilities - borrowings (7,539) -
Deferred tax liabilities (1,009) (47)
Other liabilities (458) -
Total non-current liabilities (9,006) (47)
Net assets 9,063 1,888
Equity
Share capital 322 256
Share premium account 4,886 1,424
Bond holders' reserve 963 -
Share based payments reserve 135 99
Currency translation reserve (314) -
Retained earnings 1,942 109
Capital and reserves attributable to:
Equity holders of the company 7,934 1,888
Minority interest 1,129 -
Total equity 9,063 1,888
LIBRA NATURAL RESOURCES PLC
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2006
2006 2005
#'000 #'000
Net cash generated from/(used in) operating activities 2,202 (708)
Investing activities
Interest received 62 33
Investment in subsidiaries (6,814) -
Purchase of trading investments (2,210) (499)
Purchase of intangible assets (197) -
Purchases of property, plant and equipment (2,093) (3)
Proceeds on disposal of property, plant and equipment 111 -
Net cash generated from/(used in) investing activities (11,141) (469)
Financing activities
Net proceeds on issue of shares 3,528 1,743
Net proceeds of long term debt 5,957 -
Repayment of long term debt (25) -
Redemption of share capital (183) -
Interest paid (484) -
Net cash generated from/(used in) financing activities 8,793 1,743
Net increase/(decrease) in cash and cash equivalents (146) 566
Exchange rate translation adjustment (10) -
Cash and cash equivalents at beginning of year 566 -
Cash and cash equivalents at end of year 410 566
LIBRA NATURAL RESOURCES PLC
Notes
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2006 within the meaning of
section 240 of the Companies Act 1985. The preliminary results for the year
ended 31 December 2006 are unaudited. The figures in the unaudited preliminary
announcement have been taken from the Group's draft unaudited financial
statements for the year ended 31 December 2006 which are expected to be
finalised on the basis of the financial information presented by the directors
in the unaudited preliminary announcement and will be posted to shareholders in
July 2007. It will be delivered to the Registrar of Companies following the
Company's annual general meeting.
Libra Natural Resources Plc will produce its statutory accounts for the year
ended 31 December 2006 in accordance with International Financial Reporting
Standards ("IFRS") for the first time as adopted by the European Union ("EU").
The comparatives for 2005 have been amended to reflect the change to IFRS
accounting.
Earnings per share 2006 2005
# #
Earnings
Earnings for the purposes of basic and diluted earnings per share
being net profit/(loss) attributable to equity shareholders 1,833,000 109,000
Number of shares
Weighted average number of ordinary shares for the purposes of basic
earnings per share 158,576,110 122,633,785
Number of dilutive warrants 13,336,912 16,932,663
Number of dilutive shares under option 3,304,433 2,575,424
Weighted average number of ordinary shares for the purposes of
dilutive earnings per share 175,217,454 142,141,872
The calculation of diluted earnings per share assumes conversion of all
potentially dilutive ordinary shares, all of which arise from share options. A
calculation is done to determine the number of shares that could have been
acquired at fair value, based upon the monetary value of the subscription rights
attached to outstanding share options.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Libra Natural Resources (LSE:LNR)
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