TIDMPMG
RNS Number : 9867F
Parkmead Group (The) PLC
25 March 2022
25 March 2022
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Interim Results for the six-month period ended 31 December
2021
Parkmead, the independent energy group focused on growth through
gas, oil and renewable energy projects, is pleased to report its
interim results for the six-month period ended 31 December
2021.
HIGHLIGHTS
Revenue tripled, gross profit up 389% and profits recorded at
operating and pre-tax levels
-- Revenue tripled to GBP4.6 million for the period (2020:
GBP1.5 million) as the Company benefited from the continued
increase in gas prices
-- Gross profit increased by 389% to GBP3.8 million (2020:
GBP0.8 million), demonstrating the high-quality nature of
Parkmead's onshore Netherlands assets and strong operating
leverage
-- Gross profit margin increased to 82% (2020: 50%)
-- Operating profit achieved of GBP1.9 million (2020: GBP1.1
million loss) or 1.7p on a per share basis
-- Profit before tax of GBP1.3 million (2020: GBP1.4 million loss)
-- Well capitalised, with cash balances of US$32.2 million
(GBP24.1 million) as at 31 December 2021, equivalent to 22.1 pence
per share
-- Net cash generated from operating activities of GBP1.7
million (2020: GBP0.3 million used in operating activities)
-- Total assets of GBP80.5 million at 31 December 2021 (2020: GBP86.8 million)
-- The strong recovery in gas prices continued during the period
with prices in June 2021 of around EUR25/MWh, increasing to around
EUR95/MWh in December 2021
-- Due to ongoing geopolitical events, the current gas price has
reached EUR160/MWh in March 2022; Parkmead is 100% unhedged
New two-well drilling campaign in the Netherlands; gas royalty
acquisition proving highly beneficial
-- Firm budget agreed for the 'LDS' two-well drilling campaign from the Diever site
-- The LDS project will target a combined Pmean GIIP of 37.2
billion cubic feet ("Bcf"), in the prolific Rotliegendes reservoirs
found on the licence
-- Papekop gas development has successfully progressed through
the concept select gate and is now in the permitting stage; planned
gas development targeting 35.6 Bcf of gross reserves with oil
upside
-- Acquisition of Netherlands gas royalty completed in July 2021
for a consideration of EUR565k, doubling Parkmead's effective
financial interest from 7.5% to 15% in the Grolloo, Geesbrug and
Brakel gas fields
-- Parkmead is benefitting strongly from this gas royalty deal,
completed ahead of the recent increase in energy prices
-- Low-cost onshore gas portfolio in the Netherlands produces
from four separate gas fields with an average field operating cost
of just US$8.6 per barrel of oil equivalent, generating strong cash
flows
-- Average netback over the six-month period to 31 December from
the Netherlands of approximately $72.9 per barrel of oil
equivalent
-- Average gross production for the period across the Group's
Netherlands assets was 22.2 MMscfd , approximately 3,810 barrels of
oil equivalent per day ("boepd")
Oil price upside from Perth project; excellent progress on large
Skerryvore prospect
-- Every $10/bbl increase in the long-term oil price assumption
adds approximately GBP130 million to the modelled P50 post-tax NPV
of the Perth field development alone
-- Parkmead is assessing commercial offers received for the
potential tie-back of the Greater Perth Area ("GPA") and is in
discussions with operators in the GPA vicinity where new
opportunities have arisen
-- GPA has the potential to deliver 75-130 million barrels of
oil equivalent ("MMBoe") on a P50 basis
-- Extension to the Skerryvore licence has been successfully
awarded to Parkmead (as operator) and joint venture partners
-- Completed reprocessing of Skerryvore 3D seismic, allowing
final rock physics and inversion scopes to begin
-- Multiple exploration and development activities centred
around Skerryvore prospect in 2021/22
-- Skerryvore's main prospects are three stacked targets, at Mey
and Chalk level, which together could contain 157 MMBoe
Operational wind farm acquired, delivering immediate electricity
revenue
-- Acquisition of 1.5MW onshore wind farm in Scotland through
purchase of Kempstone Hill Wind Energy Limited ("KHWEL") for
GBP3.29 million in cash (post period end)
-- The Kempstone Hill wind farm provides power for up to 1,000
homes and has an attractive inflation-linked, Feed-in Tariff
through until 2036
-- Electricity is sold through a power purchase agreement which
provides valuable upside through rising wholesale electricity
prices
-- It is expected that annual PPA redetermination will capture increased electricity prices
-- This acquisition significantly increases Parkmead's presence
in the renewable energy and electricity markets
Substantial oil and gas reserves
-- 2P reserves of 45.6 MMBoe as at 1 March 2022 (45.7 MMBoe as at 1 March 2021)
Well positioned for further acquisitions and opportunities
-- Parkmead is actively evaluating further acquisition
opportunities in each of its areas of activity, renewables, gas and
oil
Parkmead's Executive Chairman, Tom Cross, commented:
"I am delighted to report excellent growth in the six-month
period to 31 December 2021. We have delivered a tripling of our
revenue, led by our high-quality Dutch assets and the significant
rise in gas prices.
The innovative royalty deal we completed last summer is proving
to be highly advantageous and is adding considerable value to
Parkmead. Parkmead is 100% unhedged and is directly benefitting
from these additional gas sales at higher prices.
We now plan to increase our activity in the Netherlands with a
firm drilling campaign planned for 2022/23.
Parkmead's acquisition of the Kempstone Hill wind farm provides
another revenue-generating asset to the Group, which has a
long-life and a very steady stream of cash flow. This operational
wind farm is complementary to our earlier stage, high-upside
renewable energy projects.
Our team continues to carefully evaluate further potential gas,
oil and renewable energy acquisitions that would enhance our
existing business.
Parkmead is well positioned for the future. We have excellent UK
and Netherlands regional expertise, strong financial discipline,
and a growing portfolio of high-quality assets. The Group will
continue to build upon the inherent value in its existing interests
with a balanced, acquisition-led, growth strategy to secure
opportunities that maximise future value for our shareholders"
Enquiries:
The Parkmead Group plc +44 (0) 1224 622200
Tom Cross (Executive Chairman)
Ryan Stroulger (Chief Financial Officer)
finnCap Ltd (NOMAD and Broker to Parkmead) +44 (0) 20 7220 0500
Marc Milmo / Seamus Fricker - Corporate
Finance
Andrew Burdis / Barney Hayward - ECM
Financial Performance
During the six-month period to 31 December 2021, the Group
tripled its revenue to GBP4.6 million (2020: GBP1.5 million). This
large increase was driven by the significant uplift in gas prices,
with prices rising from around EUR25/MWh in June 2021 to
approximately EUR95/MWh in December 2021. In addition, the Company
benefitted from a greater proportion of production from certain of
its licences in the Netherlands following the completion of the gas
royalty acquisition in July 2021. Gross profit increased by 389% to
GBP3.8 million (2020: GBP0.8 million), demonstrating the
high-quality nature of Parkmead's onshore Netherlands, assets and
strong operating leverage. An outstanding gross profit margin of
82% was achieved as a result (2020: 50%).
Due to ongoing geopolitical events, the current TTF gas price
has reached EUR160/MWh. Parkmead remains 100% unhedged, thus giving
exposure to these higher Dutch gas prices for the remainder of the
year.
Parkmead delivered an operating profit of GBP1.9 million for the
half year (2020: GBP1.1 million loss), or 1.7p on a per share
basis. The Group moved into profit before tax of GBP1.3 million
(2020: GBP1.4 million loss). Taxation for the period was GBP1.7
million (2020: GBP0.2 million), mainly due to the very low
Netherlands cost base and payment timing. Net cash generated from
operating activities was GBP1.7 million (2020: GBP0.3 million used
in operating activities). Administrative expenses amounted to
GBP1.5 million (2020: GBP1.1 million).
Parkmead's total assets as at 31 December 2021 stood at GBP80.5
million (2020: GBP86.8 million). Parkmead is very carefully managed
and maintains a strong financial discipline. Cash and cash
equivalents at 31 December 2021 were GBP24.1 million (30 June 2021:
GBP23.4 million), equivalent to 22.1 pence per share. Interest
bearing loans receivable were GBP2.9 million (2020: GBP2.9
million). Debt was reduced significantly during the period to
GBP0.5 million (2020: GBP3.1 million).
Review of Activities
Parkmead has delivered substantial growth in its high-quality
asset portfolio across the UK and the Netherlands.
High-quality Netherlands asset base
In July 2021, Parkmead completed the acquisition of a gas
royalty associated with the Group's existing interests in the
Drenthe IV, Drenthe V and Andel Va licenses in the Netherlands from
Vermilion Energy. These licences contain the Grolloo, Geesbrug and
Brakel onshore gas fields, respectively.
The acquisition doubled the Group's effective financial interest
from 7.5% to 15% (in line with Parkmead's working interest in the
licences). This royalty was previously held by NAM (a Shell and
ExxonMobil joint venture) and came with the licences when they were
acquired by Parkmead. The consideration for the royalty was
EUR565k.
The acquisition is already proving to be of significant benefit
to Parkmead as it was completed ahead of the recent increase in
energy prices. It is expected that the royalty deal will also
significantly extend the producing life of these fields, through
greater partner alignment.
Parkmead and its joint venture partners have now agreed a firm
budget which includes a new two-well drilling campaign, expected to
take place in late 2022/early 2023, targeting the LDS-A-SW,
LDS-A-CE and LDS-B prospects (previously named Leemdijk and De
Bree). Drilling will target up to 37.3 Bcf of gross gas resources,
on a Pmean basis, in the prolific Rotliegendes reservoirs found on
the licence (CoS of between 40 and 49%). If successful, the
prospects offer a fast-track tie-in opportunity.
Our Netherlands production was some of the most efficient and
profitable in Europe during 2021, on a per-barrel basis. Production
across the fields remained uninterrupted throughout national and
local COVID-19 lockdowns. Average gross production for the period
across the Group's Netherlands assets was 22.2 MMscfd,
approximately 3,810 barrels of oil equivalent per day
("boepd").
The operating cost of the combined fields is very low at just
$8.6 per barrel of oil equivalent. These high-quality assets,
combined with the operating leverage from a fixed cost base,
underpins the outstanding gross profit margin during the period and
allows us to invest in further opportunities. Parkmead's onshore
gas production continues to form a key part of the Group and an
important role in our transition to a lower-carbon environment. On
our Drenthe VI licence, the Diever gas field remains in the top
three most prolific producing onshore fields in the Netherlands.
Given the production from Parkmead's Netherlands assets, especially
in the context of current gas prices, a key near term focus for the
Company will be to maximise the opportunities within these
licences. The planned two-well drilling campaign is part of this
strategy.
Finally, we are pleased to report that our Papekop development
has successfully progressed through the concept select gate and we
will now carry out further engineering studies and continue the
permitting process. Transportation discussions are also maturing. A
potential gas development is planned at Papekop targeting 35.6 Bcf
of gross reserves, with oil upside.
UK Oil and Gas Projects
Greater Perth Area ("GPA")
The Greater Perth Area (GPA) development continues to form a
part of our balanced portfolio of assets. Transportation studies
for our base case development concept were previously completed.
These have confirmed there are no technical hurdles associated with
the transportation and processing of fluids from the Perth
producing wells all the way through the offshore infrastructure to
the onshore facilities. Parkmead continues to engage with leading,
supply chain companies in order to optimise the commercial
solution.
Parkmead is assessing draft commercial offers received from the
Scott field partnership for the potential tie-back of the GPA
project. Scott lies just 10km southeast of the GPA project and a
tie-back could yield a number of mutually beneficial advantages for
both the Scott partnership and Parkmead. A tie-back to Scott is
just one path to potentially unlock the substantial value of the
GPA project.
The GPA project has the potential to deliver 75-130 MMBoe on a
P50 basis. For the Perth field development alone, every $10/bbl
increase in the long-term oil price assumption adds approximately
GBP130 million of value to the modelled P50 post-tax NPV of the
project. We believe that projects like GPA play an important role
in underpinning the supply of energy that the UK requires in its
transition to net zero. As a fuel that is primarily used for
transportation, manufacturing and petrochemicals, oil will continue
to feature as a vital commodity in the UK over the coming years.
Therefore, it is very important that the UK continues to develop
such projects in order to reduce reliance on less-regulated, more
carbon-intensive imports. Parkmead believes that production of
hydrocarbons from GPA can be done in a sustainable fashion in
alignment with the UK government's most recent targets on carbon
emissions.
Skerryvore
An extension to the Skerryvore licence, P.2400, was successfully
awarded to Parkmead and its joint venture partners during the
period. The joint venture has made excellent progress over the last
12 months, having completed reprocessing of the 3D seismic, rock
physics, inversion, biostratigraphy and geochemistry scopes.
Volumetrics and economics are currently being finalised ahead of a
drilling decision.
The acreage around Skerryvore is currently seeing important
activity on several fronts, with Harbour Energy close to a Final
Investment Decision on the adjacent Talbot discovery, NEO
continuing with the redevelopment of Affleck and Shell recently
spudding the nearby Edinburgh well (March 2022). Development
activity is also taking place in the Norwegian sector and in close
proximity to Skerryvore at Tommeliten A (ConocoPhillips).
Skerryvore's main prospects are three stacked targets, at Mey and
Chalk level, which together could contain 157 million barrels of
oil equivalent ("MMBoe"). Parkmead operates the Skerryvore licence
with a 30% working interest. Our joint venture partners in the
licence are Serica Energy (20%), CalEnergy Resources (20%) and NEO
Energy (30%).
UK Renewables Portfolio
On 31 January 2022, Parkmead completed a major expansion of its
UK renewable energy portfolio through the acquisition of Kempstone
Hill Wind Energy Limited ("KHWEL"). This provides Parkmead with its
first operational renewable energy asset, a 1.5MW wind farm in
Scotland, which provides power for up to 1,000 homes.
The total consideration comprised GBP3.29 million in cash. In
addition, Parkmead assumed a project loan of approximately GBP990k
and GBP300k of cash within KHWEL on acquisition (which becomes a
subsidiary of the Group).
The wind farm has an attractive inflation-linked, Feed-in Tariff
through until 2036. Electricity is sold through a power purchase
agreement which provides exposure to rising wholesale electricity
prices. We anticipate that a new PPA, taking effect in Q3 2022,
means that Parkmead should benefit from the considerable increase
in electricity prices.
The acquisition of this wind farm sits well within the Board's
strategy and increases the Group's presence in this rapidly growing
sector. Furthermore, the Board believes that, as a successful wind
farm already connected to the grid, the Group will benefit from
Kempstone Hill's established relationships and expertise as it
looks to advance the Group's other renewable energy
opportunities.
Within its existing renewable energy portfolio, Parkmead has
identified substantial wind energy potential at one location, some
15 miles west of Aberdeen. The acreage has excellent average wind
speeds and lies adjacent to the Mid Hill Wind Farm which contains
33 Siemens wind turbines with a generating capacity of around 75
megawatts (MW). Technical studies are underway on this site.
Outlook
Parkmead has delivered significant growth across its portfolio
in the six-month period to 31 December 2021 and in the three months
post period end. This had been achieved whilst maintaining the
Group's healthy financial position. The Directors believe that
there are excellent opportunities to increase production from its
Netherlands assets and we are focused on working with our partners
in the Netherlands to drive forward a two-well drilling campaign.
The current gas price environment provides excellent opportunities
to capitalise on the low cost of production from these
interests.
We are pleased with the Group's continuing progress in building
a high-quality business of increasing breadth and scale. Parkmead
has a strong core of profitable gas production and a balanced
portfolio with significant growth potential.
As we move further into 2022, Parkmead maintains its appetite
for acquisitions and is carefully analysing a number of
opportunities. The Board is confident that the Parkmead team is
well positioned to drive the business forward and to build upon the
achievements already made to date.
Tom Cross
Executive Chairman
25 March 2022
Notes:
1. Tim Coxe, Parkmead Group's Managing Director, North Sea, who
holds a First-Class Master's Degree in Engineering and over 30
years of experience in the oil and gas industry, has overseen the
review and approval of the technical information contained in this
announcement. Tim is accountable for the company's HSE, Subsurface,
Drilling, Production Operations and Development Project functions.
Reserves and contingent resource estimates have been produced by
Parkmead's subsurface team and are stated as of 1 March 2022.
Parkmead's evaluation of reserves and resources was prepared in
accordance with the 2007 Petroleum Resources Management System
prepared by the Oil and Gas Reserves Committee of the Society of
Petroleum Engineers and reviewed and jointly sponsored by the World
Petroleum Council, the American Association of Petroleum Geologists
and the Society of Petroleum Evaluation Engineers.
A glossary of key terms can be found at
https://www.nstauthority.co.uk/site-tools/glossary-of-terms/
Condensed Consolidated statement of profit and loss
and other comprehensive income
for the six months ended 31 December 2021
Six months Six months Twelve
to 31 to 31 months
December December to 30
2021 2020 June
2021
Continuous operations Notes GBP'000 GBP'000 GBP'000
Revenue 4,633 1,548 3,608
Cost of sales (837) (772) (1,835)
Gross profit 3,796 776 1,773
Exploration and evaluation expenses 2 (465) (605) (11,116)
Loss on sale of assets - (35) (388)
Administrative (expenses)/credit 3 (1,457) (1,192) (3,040)
------------------------------------- ------ --------------- ------------- ---------
Operating profit / (loss) 1,874 (1,056) (12,771)
Finance income 37 62 148
Finance costs (625) (393) (819)
Profit / (loss) before taxation 1,286 (1,387) (13,442)
Taxation (1,697) (165) (364)
------------------------------------- ------ --------------- ------------- ---------
Loss for the period (411) (1,552) (13,806)
------------------------------------- ------ --------------- ------------- ---------
Loss per share (pence)
Basic 5 (0.38) (1.42) (12.64)
Diluted (0.38) (1.42) (12.64)
Condensed Consolidated statement of financial position
as at 31 December 2021
At 31 December At 31 At 30
2021 December June
2020 2021
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment: development
& production 14,613 11,926 14,646
Property, plant and equipment: other 4,391 8,491 4,654
Goodwill 2,174 2,174 2,174
Exploration and evaluation assets 30,685 36,019 29,497
Interest bearing loans 4 2,900 - 2,900
Deferred tax assets - 3 -
Total non-current assets 54,763 58,613 53,871
--------------------------------------------- ------- -------------------- ---------------- ------------
Current assets
Trade and other receivables 1,597 597 1,352
Interest bearing loans 4 - 2,937 -
Inventory 46 114 66
Cash and cash equivalents 24,128 24,533 23,378
Total current assets 25,771 28,181 24,796
--------------------------------------------- ------- -------------------- ---------------- ------------
Total assets 80,534 86,794 78,667
--------------------------------------------- ------- -------------------- ---------------- ------------
Current liabilities
Trade and other payables (2,975) (4,162) (3,490)
Decommissioning provisions (13,498) - -
Current tax liabilities (1,219) - (241)
Total current liabilities (17,692) (4,162) (3,731)
--------------------------------------------- ------- -------------------- ---------------- ------------
Non-current liabilities
Other liabilities (903) (1,247) (1,011)
Loan (500) (3,110) (500)
Deferred tax liabilities (1,339) (1,404) (1,339)
Decommissioning provisions (2,739) (7,945) (14,365)
--------------------------------------------- ------- -------------------- ---------------- ------------
Total non-current liabilities (5,481) (13,706) (17,215)
--------------------------------------------- ------- -------------------- ---------------- ------------
Total liabilities (23,173) (17,868) (20,946)
--------------------------------------------- ------- -------------------- ---------------- ------------
Net assets 57,361 68,926 57,721
--------------------------------------------- ------- -------------------- ---------------- ------------
Equity attributable to equity holders
Called up share capital 19,688 19,687 19,688
Share premium 88,017 87,983 88,017
Merger reserve 3,376 3,376 3,376
Retained deficit (53,720) (42,120) (53,360)
--------------------------------------------- ------- ---------------- ------------
Total equity 57,361 68,926 57,721
--------------------------------------------- ------- -------------------- ---------------- ------------
Condensed Consolidated statement of changes in equity
for the six months ended 31 December 2021
Share Share Merger Retained Total
capital premium reserve deficit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ------------- --------------- ------------ --------------- ------------
At 1 July 2020 19,678 87,805 3,376 (39,513) 71,346
------------------------------------- ------------- --------------- ------------ --------------- ------------
Loss for the period - - - (1,552) (1,552)
Total comprehensive income / (loss)
for the year - - - (1,552) (1,552)
Share capital issued 9 178 - - 187
Share-based payments - - - (1,055) (1,055)
------------------------------------- ------------- --------------- ------------ --------------- ------------
At 31 December 2020 19,687 87,983 3,376 (42,120) 68,926
------------------------------------- ------------- --------------- ------------ --------------- ------------
Loss for the period - - - (12,254) (12,254)
Total comprehensive income / (loss)
for the year - - - (12,254) (12,254)
Share capital issued 1 34 - - 35
Share-based payments - - - 1,014 1,014
------------------------------------- ------------- --------------- ------------ --------------- ------------
At 30 June 2021 19,688 88,017 3,376 (53,360) 57,721
------------------------------------- ------------- --------------- ------------ --------------- ------------
Loss for the period - - - (411) (411)
Total comprehensive income / (loss)
for the year - - - (411) (411)
Share-based payments - - - 51 51
------------------------------------- ------------- --------------- ------------ ---------------
At 31 December 2021 19,688 88,017 3,376 (53,720) 57,361
------------------------------------- ------------- --------------- ------------ --------------- ------------
Condensed Consolidated statement of cashflows
for the six months ended 31 December 2021
Six months Six months Twelve
to 31 to 31 months
December December to 30 June
2021 2020 2021
Notes GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cashflows from operations 2,474 (1) (1,191)
Taxation paid (770) (293) (124)
--------------------------------------------------------
Net cash generated from / (used in) operating
activities 1,704 (294) (1,315)
-------------------------------------------------------- -------------- ---------------- ------------------
Cash flow from investing activities
Interest received 37 43 148
Acquisition of exploration and evaluation
assets (360) (346) (369)
Proceeds from sale of property, plant and
equipment - 700 4,000
Acquisition of property, plant and equipment:
development and production (46) (16) (165)
Acquisition of property, plant and equipment:
other (1) (75) (114)
Decommissioning expenditure (233) - (31)
Net cash (used in) / generated from investing
activities (603) 306 3,468
-------------------------------------------------------- -------------- ---------------- ------------------
Cash flow from financing activities
Lease payments (162) (222) (421)
Interest paid (24) (56) (110)
Repayment of loans and borrowings - (490) (3,100)
Net cash used in financing activities (186) (768) (3,631)
-------------------------------------------------------- -------------- ---------------- ------------------
Net increase / (decrease) in cash and cash
equivalents 915 (756) (1,477)
-------------------------------------------------------- -------------- ---------------- ------------------
Cash and cash equivalents at beginning of
period 23,378 25,708 25,708
Effect of foreign exchange rate differences (165) (419) (853)
-------------------------------------------------------- -------------- ---------------- ------------------
Cash and cash equivalents at end of period 24,128 24,533 23,378
-------------------------------------------------------- -------------- ---------------- ------------------
Notes to the Interim financial statements
1 Accounting policies
General Information
These condensed consolidated interim financial statements of The
Parkmead Group plc and its subsidiaries (the "Group") were approved
by the Board of Directors on 25 March 2022. The Parkmead Group plc
is the parent company of the Group. Its shares are quoted on AIM,
part of the London Stock Exchange. The registered office is located
at 20 Farringdon Street, 8th Floor, London, England, EC4A 4AB.
The condensed consolidated interim financial statements for the
period 1 July 2021 to 31 December 2021 are unaudited. In the
opinion of the Directors, the condensed consolidated interim
financial statements for the period presents fairly the financial
position, and results from operations and cash flows for the period
in conformity with the generally accepted accounting principles
consistently applied. The condensed consolidated interim financial
statements incorporate unaudited comparative figures for the
interim period 1 July 2020 to 31 December 2020 and the audited
financial year ended 30 June 2021.
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory accounts for the year
ended 30 June 2021 which were prepared under International
Financial Reporting Standards ("IFRS") as adopted for use in the UK
were filed with the Registrar of Companies. The auditors reported
on those accounts and their report was unqualified and did not
contain a statement under either Section 498 (2) or Section 498 (3)
of the Companies Act 2006 and did not include references to any
matters to which the auditor drew attention by way of emphasis.
Basis of preparation
The interim financial information in this report has been
prepared under the historical cost convention using accounting
policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the UK and IFRS Interpretations
Committee (IFRIC) interpretations. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
(IASB) and IFRIC and there is an ongoing process of review and
endorsement by the UK. The financial information has been prepared
on the basis of UK-adopted international accounting standards that
the Directors expect to be adopted and applicable as at 30 June
2021.
The Group has chosen not to adopt IAS 34 - Interim Financial
Statements, in preparing these financial statements.
The accounting policies applied in this report are the same as
those applied in the consolidated financial statements for the year
ended 30 June 2021.
Going concern
The Directors have made an assessment of the Group's ability to
continue as a going concern. As at 31 December 2021 the Group had
GBP57.4 million of net assets of which GBP24.1 million is held in
cash, of which GBP5.9 million is held as restricted cash.
The Group's production in the Netherlands has been uninterrupted
by COVID-19 and the Group and Company employees have utilised
technology to work remotely where required. The Group's current
cash reserves are the principal source of funding and are expected
to more than exceed its estimated liabilities. Based on these
circumstances, the Directors have considered it appropriate to
adopt the going concern basis of accounting in preparing these
interim results.
2 Exploration and evaluation expenses
Exploration and evaluation expenses includes impairment charges
of GBP318,000 recorded in respect of exploration licences
relinquished in the period (Six months to 31 December 2020:
GBP416,000, Twelve months to 30 June 2021: GBP10,855,000).
3 Administrative expenses
Administrative expenses include an expense in respect of a
non-cash revaluation of share appreciation rights (SARs) totalling
GBP238,000 (Six months to 31 December 2020: GBP556,000 charge,
Twelve months to 30 June 2021: GBP52,000 charge). The SARs may be
settled by cash or shares and are therefore revalued with the
movement in share price.
Administrative expenses also includes a non-cash share based
payment charge of GBP51,000 due to options which have been granted,
lapsed or forfeited (Six months to 31 December 2020: GBP1,055,000
credit, Twelve months to 30 June 2021: GBP41,000 credit).
Administrative expenses also include a foreign exchange expense
of GBP165,000 (Six months to 31 December 2020: GBP419,000 expense,
Twelve months to 30 June 2021: GBP853,000 expense).
Notes to the Interim financial statements
4 Interest bearing loans
On 27 July 2017, The Parkmead Group plc entered into a credit
facility with Energy Management Associates Limited, whereby
Parkmead agreed to lend up to GBP2,900,000 to Energy Management
Associates Limited.
The loan has a period of two years, with a fixed interest rate
of 2.5 per cent. Interest charged by Parkmead during the period
amounted to GBP37,000 (Six months to 31 December 2020: GBP37,000,
Twelve months to 30 June 2021: GBP73,000).
On 26 July 2021, The Parkmead Group plc entered into a 24-month
extension of the loan.
5 Loss per share
Loss per share attributable to equity holders of the Company
arise as follows:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2021 2020 2021
(unaudited) (unaudited)
Loss per 1.5p ordinary share (pence)
Basic (0.38) (1.42) (12.64)
Diluted (0.38) (1.42) (12.64)
---------------------------------------- ---------------- ---------------- ------------
The calculations were based on the following information:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Loss attributable to ordinary shareholders (411) (1,552) (13,806)
Weighted average number of shares
in issue
Basic weighted average number of
shares 109,266,931 109,181,797 109,188,561
-------------------------------------------- ---------------- ---------------- ------------
Dilutive potential ordinary shares
Share options 10,778,154 9,314,068 10,778,154
-------------------------------------------- ---------------- ---------------- ------------
Basic loss per share is calculated by dividing the loss for the
period by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated by dividing the loss
for the period by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
Diluted loss per share
Loss per share requires presentation of diluted loss per share
when a company could be called upon to issue shares that would
decrease net profit or net loss per share. When the Group makes a
loss the outstanding share options are anti-dilutive and so are not
included in dilutive potential ordinary shares.
Notes to the Interim financial statements
6 Notes to the statement of cashflows
Reconciliation of operating (loss) / profit to net cash flow
from operations
Six months Six months Twelve
to 31 to 31 months
December December to 30
2021 2020 June 2021
GBP'000 GBP'000 GBP'000
Operating profit / (loss) 1,874 (1,056) (12,771)
Depreciation 341 328 611
Amortisation and exploration write-off 318 416 10,855
Loss on sale of property, plant and equipment - 35 388
Provision for share based payments 51 (1,055) (41)
Currency translation adjustments 165 419 853
Decreases / (increase) in receivables (359) 779 62
Decrease in stock 20 17 65
Increase/(decrease) in payables 64 116 (1,212)
Net cash flow from / (used in) operations 2,474 (1) (1,191)
------------------------------------------------ ---------------- -------------- -----------------
7 Post balance sheet events
On 31 January 2022, the Group acquired the entire issued share
capital of Kempstone Hill Wind Energy Limited ("Kempstone Hill"), a
company owning a 1.5MW onshore wind farm in Scotland (the
"Acquisition") for GBP3.29 million. The initial accounting for the
business is incomplete at the time of the approval of the interim
results; therefore, no business combination disclosure has been
made.
The information contained within this announcement is deemed to
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END
IR PPUWGWUPPPPC
(END) Dow Jones Newswires
March 25, 2022 03:00 ET (07:00 GMT)
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