TIDMNGR
RNS Number : 3505W
Nature Group PLC
30 January 2012
Nature Group PLC
("Nature Group" or the "Group")
Trading Update
The Board of Nature Group, the AIM quoted provider of port
reception facilities and waste treatment solutions for the oil and
maritime and service industries provides the following update for
the year ended 31 December 2011.
Summary
-- Results for the year ended 31 December 2011 impacted by insurance claim
-- Andremains strong
-- Oil and Gas Division preparing additional CTUs (compact treatment units) to meet increased demand
-- Acquired seagoing tanker barge to service hub and spoke operations in SW Europe
-- Rotterdam PRF (port reception facility) to be extended to other Dutch ports
-- Feasibility to set up an additional PRF in key Global location under review
-- New appointments to strengthen management team
-- Reviewing opportunity to establish a second oil and gas shore based joint venture in NW Europe
Underlying trading in the second half, excluding the Group's
Gibraltar operations, was in line with performance for the first
half, however the reported profit before tax will be adversely
affected by the on-going dispute regarding the insurance claim
relating to the accident at our Gibraltar plant.
We have been advised by our insurers that cover has been denied
in relation to our claim for property damage and business
interruption. The Company believes the denial of cover is not
merited and our legal team will appeal against this decision. The
Company has claimed for aggregate insurance cover of approximately
GBP2.5m which included claim for damage to property of
approximately GBP750,000 and a claim for loss of business and
inventory for the period ended 31 December 2011 of approximately
GBP1.7m.
Whilst the timing and ultimate level of any insurance receipts
remain uncertain and unlikely to be resolved before our final
results for 2011 are announced, should the denial of coverage be
upheld in full the Group's results will be adversely affected by
this amount and would result in an expected profit before tax of
approximately GBP1.5m for the year ended 31 December 2011. This is
calculated after including a provision for repairs to the Gibraltar
plant of GBP750,000 and also includes one off costs for the
acquisition of ISD and our new barge Crystalwater.
The Group's current cash reserves are sufficient to deal with
the repairs, our programmed investments and the continuation of the
group dividend policy.
Whilst this news is disappointing we would like to stress that
this is an exceptional situation.
Below we provide details of our operating divisions, all of
which remain encouraging for the future growth of the business.
Market Background
As we highlighted in our interim report the current Global
economic uncertainty, particularly in Europe, has led to a fall in
International trade and therefore reduced shipping movements which
has inevitably led to a reduction in the collection and treatment
of waste in our PRF's across all regions.
However, we are pleased to report that the Nature Oil and Gas
Division remains unaffected by Global shipping activity and is
performing better than management anticipated, and will offset some
of the shortfall in the PRF business.
Nature Port Reception Facilities (NPRF)
Trading in this Division has suffered from the suspension of our
reception and treatment facilities in Gibraltar, although we are
pleased to report that our International expansion plans are moving
ahead strongly.
Negotiations have been maintained with the Gibraltar Government
with a view to restarting limited operations. Prudently the
Government are reviewing our operating procedures pending the
return to full scale operations of storage and treatment. There is
a legislative requirement for all EU ports to provide port
reception facilities and we have already carried out extensive
repairs using our local plant operatives to minimise any future
delays in bringing the plant back on stream. Subject to the
Government review we hope to be able to reinstate limited
operations in the second quarter of this year. Since the accident
we have continued to service our customers by maintaining our
collection services and sub-contracting treatment to third
parties.
To maintain our commitment to growth in SW Europe and enhancing
our customer services, we have acquired, using our existing cash
resources, an additional vessel named "Crystalwater", a Lloyds
classified second hand chemical tanker (IMO 2) with a cargo
capacity of 2,500 tonnes. We are pleased to report that since the
addition of Crystalwater in December 2011 waste volumes have
returned to the same level as before the incident.
Expansion plans also continue elsewhere in Europe and we
anticipate that our Rotterdam operation will be expanded to other
ports in the Netherlands during 2012 to provide incremental
volumes. This is in addition to reviewing opportunities to
establish operation in a number of key global hubs in 2012 where
some are already in an advanced stage.
Whilst the final outcome for Nature PRF for the year ended 31
December 2011 is dependent on the final outcome of the Gibraltar
insurance claim, the outlook remains positive for 2012 and the
longer term, where new locations would contribute to substantial
revenue growth.
Nature Oil and Gas
We are especially pleased to report that this Division is
exceeding internal forecasts with several contracts in the
Norwegian offshore oil and gas sector being serviced in the second
half of 2011 with an expectation that these will continue in 2012.
Nature's 40% investment in SART, the treatment plant on Norway that
services the off-shore oil industry, slowed in the second half
after achieving strong first half results but the full year results
are expected to meet management expectations . Currently SART are
increasing process capacity to meet an anticipated volume growth in
demand for water treatment in 2012 and beyond.
In others parts of the world we are in discussion with several
interested clients for the use of our compact treatment unit (CTU)
technology, primarily for offshore oil and gas contracts in a
number of countries including Brazil, West Africa and Asia. This
has encouraged us to build two more CTUs which we expect to be
operational in the second quarter of 2012. As demand grows we will
add further CTUs to our portfolio of offshore assets.
As evidence of this our CTU for the Brazilian contract has been
delivered and will commence active operations at the beginning of
2012. The client for this contract has already ordered an
additional oil recycling unit which we expect to deliver in
February 2012. This is further evidence that our treatment units
are achieving technical leadership in the offshore market.
We are looking at opportunities to establish a shore based joint
venture to serve our oil clients on the UK sector of the
continental shelf in Europe.
Central Management and Organisations
In order to cope with the increasing management requirement of
our growth we are strengthening our management team. I am pleased
to announce the appointment of Arjan Donatz as Chief Business
Support Officer. Arjan was formerly employed by Det Norske Veritas
where he was a Business Leader for the process industry and lead
standards and accreditation auditor for the oil and gas industry
and brings in a wealth of experience in environmental management
and procedures. In addition the Group are looking to strengthen
their technical capability with the appointment of a senior
technical manager.
In summary, whilst 2011 has presented us with unexpected
challenges, in particular the current cessation of our operations
in Gibraltar and subsequent insurance claim, there is a significant
amount of work being done to lay the foundations for future growth.
Management believe that the operational team and expertise, coupled
with existing contracts and a strong pipeline of new business,
ensures that we have laid down the foundations to look to the
future with confidence.
- ends -
Contact Details:
Nature Group
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Bernard Muller, Chairman Tel: 0031 6533 057 75
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Andreas Drenthen, CEO Tel: 0031 6532 614 84
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Kieron Becerra, FD Tel; 0035 0200 444 68
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WH Ireland
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James Joyce / Nick Field, Nominated Tel: 0044 2072 201 666
Adviser
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Seb Wykeham / Ruari McGirr, Broking Tel: 0044 2072 201 666
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Hermes Financial PR
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Chris Steele Tel: 0044 7979 604 687
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Trevor Phillips Tel: 0044 7889 153 628
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This information is provided by RNS
The company news service from the London Stock Exchange
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