INFINIS ENERGY PLC Infinis Energy plc (Infinis or the Group), the UK's leading independent generator of renewable power, announces its results for the half year ended 30 September 2015.
Eric Machiels, Chief Executive Officer of Infinis, commented:
'This has been a resilient performance by the business against the backdrop of softer commodity prices and regulatory changes. We have delivered another excellent operating performance with high levels of engine reliability and turbine availability. Revenue for the six months to 30 September 2015 was slightly lower than for the comparative period at £102.7 million (2014: £103.9 million) reflecting in part the removal of the exemption from the Climate Change Levy ('CCL') for renewable generation as of 1 August 2015. In addition revenue was adversely affected by a £3.1 million reduction in our estimate of ROC recycle income previously accrued in respect of the prior financial year. EBITDA for the period was £56.5 million, £1.8 million lower than the prior comparative period reflecting the reduction in revenue.
We now have 135 MW of new wind power plants under construction and these are on track in terms of time and budget. When fully operational we anticipate these new plants will deliver around 345 GWh p.a. of new clean and affordable renewable energy.
On 22 October 2015 the board of directors of Monterey Capital II S.à r.l. ('Monterey') and the Infinis independent directors announced that they had reached agreement on the terms of a recommended cash acquisition by which the entire issued and to be issued ordinary share capital of Infinis that Monterey does not already own, representing 31.5% of the share capital, will be acquired by Monterey for £1.85 per share payable in cash. As a consequence of the offer the Group will not be paying an interim dividend for the six months to 30 September 2015. The acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act to be concluded within the coming months.'
Revenue (£m) 102.7 103.9 236.0
EBITDA (£m)1,2 56.5 58.3 140.2
Adjusted net income (£m)1,3 10.0 10.2 36.3
Profit after tax (£m) 1.7 2.0 20.7
Net debt to EBITDA 4.2x 3.8x 3.7x
Net debt (£m)1,4 586.2 547.8 534.7
Dividend per share (pence) - 6.1 18.3
Revenue and EBITDA of £102.7 million and £56.5 million were lower than the prior period of £103.9 million and £58.3 million due to the following:
A lower contribution from LFG principally due to a downward revision to estimated ROC recycle income in respect of the prior year and the removal of the exemption from the Climate Change Levy which was effective from 1 August 2015;
Offset by a higher contribution from the wind business driven by more favourable wind speeds;
Net debt to EBITDA increased to 4.2 times from 3.7 times at 31 March 2015, reflecting increased expenditure and borrowings to fund growth capital expenditure;
Cash on the balance sheet of £56.9 million compared to £75.4 million as at 31 March 2015;
Financial close achieved on three of our remaining four wind construction sites; Galawhistle, Sisters and North Steads.
OutlookTrading is expected to be in line with management expectations after adjusting for the anticipated reduction in EBITDA due to the removal of the exemption from the CCL, a reduction in the current year's EBITDA due to a downward revision in the estimate made in the prior year relating to payments from the ROC recycle fund and assuming average wind speeds over the period from 30 September 2015 to 31 March 2016.
Our onshore wind growth plans are progressing well with A'Chruach wind farm (43 MW) at an advanced stage of commissioning and on track for full operations by March 2016. Galawhistle wind farm (66 MW), Sisters (8 MW) and North Steads (19 MW) are progressing as planned.
Certain statements made in this announcement are forward-looking. These represent expectations for the Group's business, and involve risks and uncertainties. The Group has based these forward-looking statements on current expectations and projections about future events. The Group believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which in some cases are beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.
¹ Non-GAAP measure
2 EBITDA is earnings before interest, tax, depreciation and amortisation
3 Adjusted net income is net income after adjusting for amortisation and impairment of intangible fixed assets, total exceptional items and tax thereon
4 Net debt is current and non-current interest bearing loans and borrowings less cash and cash equivalents. Net debt excludes financial derivatives
5 In FY15 Hydro has been treated as a discontinued operation
Investor Relations
Management will host a call for analysts at 9:00 am (London)
The meeting can also be accessed via a conference call. Details for the call are provided below:
UK Number: +44 (0) 1452 555566
Conference ID: 16151201
Investors and analysts: Will Cooper, Head of Investor Relations
Infinis Energy plc
Telephone: +44 (0) 1604 742338 Email: equityinvestors@infinis.com
Media: David Litterick Brunswick LLP
Telephone: +44 (0) 20 7404 5959 Email: infinis@brunswickgroup.com
Chairman's Introduction
The Group has delivered another solid operational performance with output of 1,137 GWh and revenue and EBITDA of £102.7 million and £56.5 million respectively. This is slightly down on the prior year but has been achieved during a period of continued weakness across energy markets and the removal of Levy Exemption Certificates ('LECs').
We have continued to make progress on our growth agenda and our construction projects, totalling 135MW, are progressing according to plan and we expect all of these new projects to be accredited under the renewable obligation ('RO') regime and deliver around 345 GWh of additional renewable energy per annum.
The regulatory changes that have been announced this year have created uncertainty in the renewable energy sector at a time when companies, like ourselves, should be investing more in future capacity that will help deliver the clean and affordable energy needs of the UK. The changes have served only to reduce investor confidence and business confidence in delivering energy infrastructure projects in the UK renewable sector.
One such change was the removal of the exemption from the Climate Change Levy for electricity sourced from renewable generators, effective from 1 August 2015. This change, announced in the Budget on 8 July 2015, was a complete surprise to the industry as a whole. The removal of this exemption will have a detrimental impact on our results over the coming years.
There are two further items to update on. Firstly, Monterey, our major shareholder, announced on 22 October 2015 its proposed acquisition of all the share capital of Infinis that Monterey does not already own for £1.85 per share in cash. The independent directors of Infinis recommended this proposed acquisition having taken due consideration of alternative offers and the associated risks attached to them. We believe that the Monterey offer provides the best outcome for both the company and all shareholders given the softness in commodity markets and the high degree of regulatory uncertainty.
Secondly, Gordon Boyd, who has been CFO of Infinis since March 2012, will retire from the Board, as previously announced, on 12 November 2015 following the announcement of our interim results. I wish to thank Gordon for his valuable input to the Board since the Company listed. I take this opportunity to welcome Tom Hinton as Infinis' new CFO.
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