TIDMNGR
RNS Number : 2264H
Nature Group PLC
25 May 2011
25(th) May 2011
Nature Group PLC
Preliminary Results for the Year ended 31 December 2010
Nature Group Plc ("Nature" or the "Group"), a provider of port
reception facilities and waste water treatment solutions for the
oil, marine and process industries, announces its preliminary
results for the year ended 31 December 2010.
2010 Financial Highlights
-- Revenues of GBP6,830,223 (2009: adjusted to GBP5,062,610)
-- Profit after tax GBP1,528,379 (2009: GBP1,573,712)
-- Earnings per share 3.71p (2009: 4.05p )
-- Adjusted earnings per share excluding share based payments
and group acquisition costs 4.34p
-- Profit before tax, depreciation, share based payments and
group acquisition costs GBP2,318,951 (2009: GBP2,203,458)
-- Cash balances of GBP5,741,644 (2009: GBP1,586,823 )
-- Proposed dividend of 0.7p per share in respect of 2010 (2009:
0.6p )
2010 Operational Highlights
-- Acquisition of ISD and Ecoscrub for GBP16m completed in
December 2010
-- Extension of oil waste collections to Malta and other
locations
-- Formal contract issued to Nature for a new treatment plant at
Duqm Oman, although local site delays have deferred some
anticipated revenues from 2010 to 2011
-- Expansion of tankage planned for 2011/12 at the Group's
Gibraltar facility to 12,000 tonnes from the current 7,000
tonnes.
-- The Placing of shares to raise GBP3 million alongside the
Rotterdam acquisitions and significant expansion of Nature's
institutional shareholder base
2011 highlights to date
-- Synergies to be achieved as a result of the ISD acquisition
were actioned in the first quarter of 2011 and are on track,
including transhipments from Rotterdam
-- Collections of waste oil from Italy commenced in 2011
-- Offshore utilisation of our compact treatment units under
possible deployment from August, potentially generating a new
international market later in the year
-- A new international port location for Nature Group agreed in
principle
-- Group integration and new Group identity progressing well
-- Results for the first quarter 2011 satisfactorily achieved
the budget established for the enlarged Group in December 2010.
Nature entered 2011 as the leading maritime waste reception and
treatment group in Europe, following the acquisition of
International Slop Disposal BV ('ISD'), the largest maritime and
offshore waste collector in the Port of Rotterdam, with effect from
mid December 2010.
The financial results for the year ended 31(st) December 2010 do
not reflect the Group's revenue and profit growth that is evident
since the integration of ISD and Ecoscrub Solutions BV
('Ecoscrub'), an environmental hydrocarbon gas cleaning business
acquired at the same time. As a reflection of the incremental scale
of the Group revenues and activities, we have provided within the
Chairman's statement set out below a summarised pro forma statement
of combined 2010 results for Nature and ISD and Ecoscrub. The Group
Balance Sheet as at 31(st) December 2010 does, however, include
consolidation of ISD and Ecoscrub after acquisition.
Following the appointment of Deloitte as Group auditors the 2010
results reflect certain accounting changes which have an impact on
prior year comparisons with 2009 and earlier. For example, Nature's
40% owned Norwegian joint venture treatment company, to which we
supply both the General Manager and technical support, is now shown
as an 'associate' rather than a 'joint venture'. The accounting
effect, whilst excluding our share of gross revenues and costs, is
to include the Group's proportion of after tax profits. In addition
we have complied with IFRS standards in evaluating executive share
options by the application of such factors as share price
volatility. In view of the significant increase in Nature's share
price during 2010 we have been advised to recognise a share-based
payment expense under IFRS 2 for the first time, resulting in a
deduction of GBP151,303 from 2010 profits. We have also prudently
written off GBP106,937 of costs relating to our Rotterdam
acquisitions.
Richard Eldridge, Chairman of Nature, commented;
"The Nature Group is establishing itself as the leading maritime
and waste reception and treatment group in Europe. It is exciting
that the Group has achieved a size and reputation to enable the
ambition of international expansion held by the Nature team
throughout all the recent years of effort and commitment to be
achieved, particularly through Darren Laguea our Managing Director.
This vision is shared by the ISD shareholders and staff who have
joined us, led by those in key roles such as Andreas Drenthen our
new CEO. I should also like to welcome our new institutional
shareholders who have, alongside the long term support from Jupiter
funds, been most supportive of our current and potential plans.
The results summarised above for the year ended 31 December 2010
are now historic in many ways, but underline the consistency and
growth of Nature's original core businesses. The significant
benefits of both the new Rotterdam businesses and potential upside
from the oil industry opportunities of recent years should
significantly enhance Group's prospects in 2011 and beyond. The
pro-forma results for 2010 if ISD had been consolidated for the
full year are shown in the following Statement as an indication of
the increased scale of Nature Group revenues. As a result of the
consistent performance of the Group in 2010 and our confidence in
the future ability of the Group to generate cash we are
recommending that the dividend to be declared in respect of the
year ended 31 December 2010 be increased to 0.7p per share (2009:
0.6 p)".
For further information please contact
Nature Group Plc
Richard Eldridge Chairman Tel 0044 1841 533611
Andreas Drenthen CEO Tel 0031 181 291144
Peter Snell FD Tel 0044 7000 892481
Northland Capital Partners (Nominated Adviser)
Shane Gallwey Tel 0044 2077 968823
Rod Venables Tel 0044 2077 968827
WH Ireland (Broker)
Sebastian Wykeham Tel 0044 2072 200473
Ruari McGirr Tel 0044 2072 201666
Hermes Financial PR
Chris Steele Tel 0044 7979 604687
Trevor Phillips Tel 0044 7889 153628
CHAIRMAN'S STATEMENT
Introduction
As indicated in my statement with the Circular issued on 13
December 2010, the revenues of the Group for the year ended 31
December 2010 increased in line with expectations, although we have
excluded for 2010 our share of the revenues for the joint venture
treatment plant in Stavanger in line with recommended accounting
standards. Whilst we did not achieve the revenues hoped for in the
offshore sector in 2010, there are indications that significant
revenues from this segment of our business could be secured in the
near future.
Group revenues on a fully integrated basis for 2010 would have
shown combined revenues approximately 140% higher at GBP16.38
million as set out below.
The most significant event of the year was the acquisition of
International Slops Disposals BV (ISD) and Ecoscrub Solutions BV
(Ecoscrub) for GBP16m, completed in December 2010. Both companies
are based in the Port of Rotterdam where ISD is the largest
maritime waste oil collector in Europe. This acquisition was
financed by the issue of shares in Nature half of which were placed
with institutions. At the same time a further GBP3m before expenses
was raised for future expansion.
The substantial effort of our executives and staff devoted to
Group expansion throughout 2010 involved significant executive
time, travel and other costs. This commitment had a positive effect
on operational growth and, in financial terms, resulted in
deductions of considerable corporate acquisition costs from our
profits including certain professional costs in relation to the
Rotterdam acquisitions. Together with the IFRS required
introduction of a "share based payments reserve" and the deferment
of an element of the Middle East project revenues, these factors
reduced our expected profits after tax by approximately
GBP300,000.
Group share capital increased significantly in 2010 as reported
in our Circular of 13 December 2010 and, on a weighted average
basis, earnings per share were 3.71p ( 2009 4.05p ). Excluding the
newly introduced 'share based payments' and corporate acquisition
costs, earnings would have been 4.34p per share.
These results do not portray the substantive Group progress in
2010 which was a year of "scale of business change" for Nature, and
with the enlarged Balance Sheet we now are reflecting cash balances
of GBP5,741,644. The current growth in Group revenues is
demonstrating strong cash generation from operations which gives
your Directors the confidence to continue exploring and developing
new business opportunities.
The Directors are pleased to propose a dividend of 0.7p per
share in respect of the year ended 31 December 2010 (2009 - 0.6p )
for approval at the AGM to be distributed at the end of June 2010.
Your Directors proposals as to current and future dividend policy
stated in our Circular of 13(th) December 2010 - which was the
intended distribution of 25% of future net earnings. Implementation
of this policy as to a maiden interim dividend will be considered
in September this year when announcing our results for the six
months to June 2011.
Review of Group Results for the Year ended 31(st) December
2010
European Port Reception Facilities
Our operations based out of Gibraltar achieved a 25% increase in
revenues in 2010, with the inclusion of initial collections from
Ceuta and Malta, in addition to the Canary Islands as in previous
years. The logistics of inwards shipments, at an economic size for
vessel movements involving some 3000 tonnes per load, has been
managed effectively by our dedicated staff there, requiring
considerable logistical and personal commitment. Your Directors as
announced, are currently in the process of completing approvals for
the expansion in reception tonnage from 7000 to 12000 tonnes. I
would like to thank on behalf of shareholders, our team in
Gibraltar for their strenuous efforts in developing our leading
position in SW Europe.
We have also initiated business opportunities in Southern Europe
ranging from Italy to Portugal, including as announced,
transhipment of waste oils from Malta.
In Rotterdam, ISD is recognised as the leading waste service
provider to the maritime and offshore industry in the ARA
(Amsterdam - Rotterdam - Antwerp) region. The team based in
Rotterdam and operating ISD services, together with the Ecoscrub
technology now uniquely approved for hydrocarbon gas scrubbing by
Rotterdam port, have demonstrated their operational and commercial
skills in developing the services there, now as Nature ISD, to such
a leading position. We welcome them aboard, in particular Andreas
Drenthen as our CEO and Bernard Muller as Deputy Chairman, and look
forward to their valued contribution to our continued growth. The
benefits of their international connections with both shipping
lines and oil companies, and their existing infrastructure
connections in other regions of the world, will undoubtedly
accelerate our growth in these immediate months and years.
Oil Industry Services
2010 was a challenging year for our Norwegian businesses with
several contracts ending in 2010, leading to a change of strategy
to more international marketing, together with the process of
integrating Northern Treatment and Nature Technology Solution into
one business. We believe the benefits of the efforts made in recent
years should at last come to fruition in second half 2011 and 2012
onwards.
The potential joint venture offshore with a leading
international oil services contractor, whilst agreed in principle,
was not concluded due to policy changes resulting from their
integration into a larger group.
Our leading client for the utilisation of our Offshore Treatment
Unit (OTU) was, for operational reasons, restricted to two
campaigns rather than the four we had anticipated. However 2010 saw
the development of our next generation of more compact treatment
container and the first of these new Compact Treatment Units (CTU)
is now completed and available. This design will enable a
standardized design and solution for the future to be marketed
offshore and onshore, and "CTU" will be the new abbreviated
terminology for deployment in identified markets internationally,
particularly as a result of synergies resulting from the ISD team
vision and contacts.
Our SAR Treatment (SART) joint venture in Stavanger continues to
deliver a good service treating wastewaters from the offshore oil
industry. For this business we not only provide the General Manager
but also provide a full technical support service which our JV
partner endorses. In 2010 we experienced process capacity
constraints in meeting demand which was addressed by commissioning
a process upgrade, awarded to Nature for implementation, and
installed early in 2011 with encouraging increases in throughput.
This has led the SART Board to approve a substantial capacity
upgrade to be designed and delivered by Nature for commissioning in
the 4(th) quarter of 2011.
We still remain very confident in the future growth available to
Nature deriving from the oil industry and for which the excellence
of the knowledge and skill base inherent in our Norwegian team,
together with Nature Norway's 12 year history and industry
recognition of complex hydrocarbon treatment research and
development, is an integral and valuable component of Group
capabilities. For the future our business in Norway is to be
renamed Nature Oil and Gas AS.
International Contracts
The contract to supply a turnkey port oil waste treatment
facility to Duqm Oman was formally initiated in 2010. The overall
regional project involves the development of substantial new
infrastructures at Duqm by the main contractor Daewoo on a green
'sands' site 800 kms south of Muscat on the Indian Ocean. Our own
progress has been hindered by a number of external factors beyond
our control; as a consequence only 40% of the revenues attributable
to Nature from the contract were recognised in our accounts for
2010. However, shipment of plant components is now under way, with
installation due to commence in July. We anticipate that over 80%
of the contract will be fulfilled by September, with training of
local Oman Docks Company staff commencing at that time.
The experience gained in the engineering and design work for a
new build plant ten years after initiating our Gibraltar
installation provides a valuable resource for application to the
several potential new international projects where Nature will be
involved as principal and operator.
Pro Forma Revenue and Profit summary for 2010
This assumes consolidation for the full year 2010 of ISD and
Ecoscrub, after deduction of their acquisition costs and the share
based payment provision (together GBP258,240).
Revenues of the Enlarged Group GBP16,384,730
Profits before tax and GBP3,582,338
Profits after tax GBP3,085,745
Current and Future Development of the Group
Opportunities for the Group are widespread. Our resources as
enlarged by the acquisition of ISD in December 2010, including the
introduction of a number of significant institutional investors now
owning in excess of 25% of the Group share capital, provide the
platform for the evolution of the Group as a leader in our
activities worldwide. The development of Group staff resources is
also an essential process to complement the skills and enthusiasm
of our existing staff and is currently a key focus for our senior
team in support of our growth.
I anticipate that by the end of 2011 the Group will be actively
involved in an expansion of our activities further afield in
Europe, in Central and South America, with mainland USA and the Far
East planned also as extensions to our "Nature" world. Achieving
these aims and the enhancement of our service offerings to the
maritime and oil industries is an exciting ambition, targeting
leadership in our industry .
Meanwhile the implementation of a co-ordinated review of
collected wastes in all locations including Rotterdam has commenced
as a key factor in our strategy for extracting synergies from the
enlarged Group activities in Europe. I am pleased to report that
the first substantial transhipment from Rotterdam was achieved in
March, with additional revenues as planned attributable to the
Group after deduction of shipment costs.
We have also signed an initial agreement for a fast track
project feasibility study for providing port oil waste services in
a key international maritime location, where our substantial local
partner is providing the proposed site at which the modular nature
of our treatment units could enable initial operations to commence
by the end of 2011.
Corporate responsibility
With regard to our ethical credentials and corporate
responsibility, your Directors are aware of the impact our
operations can have on our various stakeholders in the contexts
particularly of regulatory compliance, improving the environment
and the welfare of our employees. At the time of the ISD
acquisition we made a commitment to introduce an upgraded CSR
(Corporate Social Responsibility) policy for the Group in 2011 and
our forthcoming Annual Report will include the framework of the
policy that we will be developing in 2011. We intend to ensure that
commitment to CSR is embedded in our organisation and we look to a
programme of constant improvement. Through the services Nature
provides and our technical know-how we feel our operations can make
a strong and valid contribution to a better and cleaner maritime
environment.
Annual General Meeting and dividend payment in respect of
2010
Our Annual General meeting will be held on Tuesday 28(th) June
2011 at our offices at Ordnance House, Pier Road, St. Helier,
Jersey. The dividend payment of 0.7p per to shareholders (excluding
the 16 million shares received by Portinvest in December as part of
the ISD transaction) will be proposed at the meeting, and if
approved paid to shareholders shortly afterwards as advised by our
Registrar.
Conclusion
I am very privileged to have been involved in the initial
formation of the Group, the early engineering of treatment
capabilities and our business development over the past 13 years.
This has seen recognition of both our meaningful contribution to
"cleaner seas" and the commercial potential of our core
capabilities, with both Governments and the industries we serve
seeking high quality responsible solutions to their waste and
environmental issues. I am further privileged to see the leadership
and enthusiasm of the enlarged Group staff in taking forward our
worldwide business in response to the many initiatives available to
us. The current year and beyond will be significant in fulfilling
returns to our shareholders and the leadership position for our
sector that we aim to establish internationally. However, a
Chairman's confident statement of ambition for the future should
undoubtedly not end without words of caution - we must always be
alert to changing market circumstances in today's turbulent global
economies and the effect that they can have on subsequent business
opportunities. Thank you shareholders and staff for your terrific
support in our mutual endeavour.
Richard Eldridge
Chairman
25(th) May 2011.
CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2010
2010 2009
GBP GBP
Unaudited (restated)
Revenue Audited
Continuing operations 6,830,223 5,062,610
Cost of sales
Continuing operations (3,650,881) (1,946,512)
Operating profit 3,179,342 3,116,098
Other income 16,439 15,793
Share based payments (151,303) 0
Administrative costs (938,028) (1,006,986)
Depreciation and goodwill amortisation (556,369) (593,974)
Finance costs (17,284) (15,726)
Costs to acquire group companies (106,937) 0
Share of profits of associates
after tax 78,482 94,279
Profit before tax 1,504,342 1,609,484
Taxation on profit on ordinary
activities 24,037 (35,772)
Profit after tax 1,528,379 1,573,712
============ ============
Earnings per share (pence) 3.711 4.050
Profit after tax, before share based payments and
group acquisition costs 1,786,619 1,573,712
Earnings per Share (pence) Excluding Share
based payments and group acquisition costs 4.338 4.050
-------------------------------------------------- ------------ ------------
CONSOLIDATED BALANCE SHEET
At 31 December 2010
2010 2009
GBP GBP
Unaudited Audited
Assets
Non-current assets
Plant, vessels and equipment 7,060,992 4,039,952
Goodwill 13,224,120 362,355
Other intangible assets 129,289 141,455
Investment in associated company 269,469 275,319
Deferred tax assets 89,827 26,996
Total non-current assets 20,773,697 4,846,077
------------ ----------
Current assets
Stocks and work in progress 98,059 92,871
Trade and other receivables 4,096,871 921,858
Cash and cash equivalents 5,741,644 1,586,823
Total current assets 9,936,574 2,601,552
------------ ----------
Total assets 30,710,271 7,447,629
Liabilities
Current liabilities
Trade and other payables (2,716,534) (607,834)
Bank loans and overdrafts (191,582) 0
Corporate taxes (8,743) (24,947)
Total current liabilities (2,916,859) (632,781)
------------ ----------
Non current liabities
Term loans (1,555,110) (547,456)
------------ ----------
Net assets 26,238,302 6,267,392
============ ==========
Equity
Called up share capital 155,120 77,720
Share premium account 21,683,488 3,233,799
Share option reserve 151,303
Capital reserve 2,925,520 2,925,520
Profit and loss account 1,322,871 30,353
Total equity attributable to equity
shareholders 26,238,302 6,267,392
============ ==========
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2010
2010 2009
Reconciliation of operating profit of net cash
flow from operating activities: GBP GBP
Unaudited Audited
Profit for the year before taxation 1,504,342 1,646,098
Adjustments for:
Depreciation of fixed assets 556,369 593,974
Decrease/(increase) in stock 6,825 (1,187)
Increase in debtors (1,304,479) (44,943)
Increase in creditors 672,641 52,671
Increase in reserves due to share based payments 151,303 0
Net cash from operating activities 1,587,001 2,246,613
Investing activities:
Decrease/(increase) in investments 5,850 (111,521)
Acquisition of tangible fixed assets (607,661) (1,137,141)
Acquisition of intangible fixed assets 0 (25,935)
Acquisition of subsidiaries net of cash acquired (7,026,347) 0
Dividends paid (235,861) 0
Financing activities:
Cash consideration from issuance of shares net of
issuance costs 10,431,839 0
Increase in cash balances 4,154,821 972,016
============ ============
Analysis of cash and cash equivalents during the
year:
Balance at start of period 1,586,823 614,807
Increase in cash and cash equivalents 4,154,821 972,016
Balance at end of period 5,741,644 1,586,823
============ ============
Notes to the accounts
1. The calculation of profit per share has been based on the
profit for the period and the average of 41,190,000 Ordinary Shares
in issue throughout the period.
2. These unaudited results have been prepared on the basis of
the accounting policies adopted in the accounts to 31 December 2010
but stating Joint Venture revenues and costs as net share of
profits of associates.
3. The Report and Accounts for the year ended 31 December 2010
will be posted to shareholders on or before 10 June 2011 and will
also be available on that date on the Company's web site:
www.naturegroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
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