RNS Number : 8781P
ADM Energy PLC
23 June 2022
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

 

23 June 2022

 

ADM Energy PLC  

("ADM", the "Group" or the "Company")  

 

Full Year Results

 

 

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural resources investing company, announces its audited full year results for the 12 months ended 31 December 2021.

 

Investment Highlights

 

Aje Field, OML 113

·      First full year of increased interest in the Aje Field, Nigeria (ADM increased its equity investment from 5% to 9.2% in December 2020)

·      Total oil production in 2021 of 407,705 bbls and barrels of oil per day of 1,117 bopd 103 bopd net to ADM)

·      Completed the 15th and 16th liftings at the Aje Field in April and October 2021 for a total of 457,379 barrels with a net share of 49,099

 

Barracuda Field, OML 141

·      Acquired an indirect interest in a Risk Sharing Agreement ("RSA") for the development of the Barracuda Field. Subsequently, commissioned a Competent Person's Report ("CPR") by Xodus on the Barracuda Field

·      Post-period announced the result of the CPR on the Barracuda prospect with a 2U (P50) case, the NPV10 is +$99mm with an IRR of 45%

 

Disposal of interest

·      Disposed of 188,778 shares in Superdielectrics Ltd ("Superdielectrics") for a total consideration of £849,501, which provided a profit of £656,000 on ADM's original investment

 

 

Financial and Corporate Highlights

·      Revenue increased by 125% to £1.8m (2020: £0.8m), reflecting a recovery in the oil price and ADM's increased profit interest in the Aje Field

·      Loss after tax decreased 64% to £2.5m (2020: £6.9m loss)

·      Completed an oversubscribed fundraising of £1,220,000 in March 2021, and raised an additional £475,000 in November 2021

·      Appointed Oliver Andrews, former Chief Investment Officer at the Africa Finance Corporation, as Non-executive Chairman and Dr Babatunde Pearse, as Chief Engineer on the Aje Development to oversee the next phase of Aje development

·      Post period, in January 2022, the Company completed an equity fundraising of approximately £561,000 with Optima Resources Limited

 

Osamede Okhomina, CEO of ADM Energy, said: "2021 was a good year of progress for ADM Energy. It was our first full year since almost doubling our interest in the Aje Field which helped achieve a significant increase in revenues over the previous year.  We also completed an acquisition giving us indirect interest in the Barracuda field, strengthening our foothold in West Africa. 

 

"2022 is set to be an important year for the development of Aje with PetroNor expected to take a significant stake in the asset demonstrating a commitment and confidence of the potential of Aje. With PetroNor on board, the partners can push ahead with development plans to increase production at Aje.

 

"In parallel to Aje and Barracuda, we continue to target the acquisition of undervalued 2P reserves that can be added to our investment portfolio and have had encouraging discussions with potential partners regarding various opportunities. It remains a buyers' market as majors look to divest non-core projects presenting opportunities for companies such as ADM who have the network, expertise, and access to capital to progress projects that can potentially bring significant value creation for shareholders."

 

 

Enquiries:

 

ADM Energy plc

+44 20 7459 4718

Osamede Okhomina, CEO


www.admenergyplc.com




Cairn Financial Advisers LLP

+44 20 7213 0880

(Nominated Adviser)


Jo Turner, James Caithie




Hybridan LLP

+44 20 3764 2341

(Broker)


Claire Louise Noyce




ODDO BHF Corporates & Markets AG

+49 69 920540

(Designated Sponsor)


Michael B. Thiriot




Luther Pendragon

+44 20 7618 9100

(Financial PR)


Harry Chathli, Alexis Gore, Tan Siddique


 

About ADM Energy PLC

 

ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural resources investing company with an existing asset base in Nigeria. ADM Energy holds a 9.2% profit interest in the oil producing Aje Field, part of OML 113, which covers an area of 835km² offshore Nigeria. Aje has multiple oil, gas, and gas condensate reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells drilled to date.

 

ADM Energy is seeking to build on its existing asset base in Nigeria and target other investment opportunities across the West African region in the oil and gas sector with attractive risk reward profiles such as proven nature of reserves, level of historic investment, established infrastructure and route to early cash flow.

 



 

Operating Review

 

2021 was an important year of progress for ADM Energy. It marks the first full year since the Company consolidated its position in the Aje Field OML 113, expanding ADM's profit interest from 5% to 9.2%. The Company announced the 15th and 16th liftings at the Aje Field for a total of 457,379 barrels with a net share of 49,099.

 

For the full year, revenue increased by 125% to £1.8 million (2020: £0.8 million) reflecting the first two liftings at the Aje Field since the Company increased its interest in Aje alongside a recovery in oil prices in 2021.

 

Alongside Aje, the Company entered 2021 with a strategy to continue to pursue high-quality assets, with attractive risk-reward profiles, and successfully completed the acquisition of an indirect interest for the large-scale Barracuda Field in OML 141.

 

ADM also welcomed Oliver Andrews as Non-executive Chairman and strengthened the team's technical expertise with the appointment of industry veteran Dr Babatunde Pearse as Chief Engineer on the Aje Development. 

 

OML 113 - Aje Field

 

The Aje Field on OML 113 offshore Nigeria is an oil producing asset which is rich in gas and condensate reserves. It is strategically located 24km offshore Lagos where it benefits from increasing local energy demand, particularly for gas, which is viewed as a replacement fuel for diesel and commands a premium. The field is also within close proximity to the West African Gas Pipeline which presents a potential opportunity for gas monetisation in neighbouring countries such as Benin and Togo.

 

Oil Production:

 


2021

2020

Gross

407,705 bbls

698,649 bbls

 

1,117 bopd

1,909 bopd

Net

37,595 bbls

36,295 bbls

 

103 bopd

99.2 bopd

 

 

This is the first full year since the Company announced the completion of the transaction with EER (Colobos) Nigeria Limited ("EER") in December 2020 benefitting from an increased 9.2% profit interest in the field, nearly doubling ADM's share of revenue, reserves and net production.

 

During the period, oil production continued from the Aje Field (Aje-4 and Aje-5) at an average of 1,117 bopd (FY 2020: 1909). Total gross production volume amounted to approximately 407,705 barrels of oil. As stated previously, the drop in volume reflects the decision by the Joint Venture Partners ("JV Partners") to continue a more thorough and extended period of maintenance on the Floating Production Storage and Offloading ("FPSO") while oil prices were depressed at the beginning of the year and due to limited gas handling capacity of the FPSO.

 

The Company announced the 15th and 16th liftings at the Aje Field in April and October 2021 for a total of 457,379 barrels with a net share of 49,099. These were the first liftings since the Company consolidated its interest in the asset. The proceeds of the liftings were applied against the project debt, contributing to a reduction in the outstanding balance and the JV Partners anticipate further liftings in 2022.

 

The JV Partners have assessed that the current FPSO is not suitable for the long-term development plans for OML-113 and are progressing plans to replace the current FPSO to increase capacity.  As a result, the JV Partners declined to commit to a long-term extension of the current FPSO contract and the current FPSO operator will stop production in preparation for demobilisation from the field. This temporary suspension is a necessary step to ensure future production is not limited by FPSO capacity and production issues. The JV Partners are working towards securing an optimum FPSO that will match plans to significantly increase production from the redevelopment of the Aje field and the Company will update the market in due course.

 

A crucial step forward in the future development of Aje came post period in January 2022 when Panoro Energy ASA ("Panoro") and PetroNor E&P Limited ("PetroNor") announced that the transaction for Panoro to sell 10% of its ownership to PetroNor (the "Transaction") had received all government approvals. PetroNor and Panoro are progressing the final stages and have agreed a long-stop date to complete the transaction at 30 June 2022. PetroNor's decision to take a significant stake in the Aje field is a strong endorsement of the potential of the asset. 

 

The expected completion of the Transaction will accelerate the JV Partners Final Investment Decision on the long-term field development plans for the Aje Field and PetroNor's experience in development and production will play a key role in the next phase of Aje's development. The Field Development Plan, which includes the potential drilling of three new wells, could significantly increase production of oil and gas liquids at a time nations around the world are seeking new sources of oil and gas. Chief Engineer on the Aje Development, Dr Babatunde Pearse, who has an IOC background and extensive industry experience will lead the planning, development and oversee Front End Engineering Design ("FEED") studies to support the Final Investment Decision.

 

Barracuda

 

In April 2021, ADM completed the acquisition of an indirect interest in a Risk Sharing Agreement ("RSA") for the development of the Barracuda Field. Located in OML 141, the Barracuda Field is an existing discovery asset which covers 103km2 in the swamp/shallow waters of the Niger Delta.

 

In May 2021, the Company commissioned Xodus Group Limited ("Xodus"), an independent, international energy consultancy, to prepare a CPR on the field which was completed in March 2022. Xodus calculated gross, unrisked Prospective Resources for the RSA using standard geological and engineering approaches applied to the data made available by ADM.

 

The CPR demonstrated the prospect of Barracuda as prospective and robust for development, assuming at least 70mmbbl Stock tank oil initially in place ("STOIIP") is discovered, with a 2U (P50) case, the NPV10 is +$99 million with an IRR of 45%.

 

The findings from the CPR provide a solid foundation to continue towards the next stage of technical review which will include subsurface analysis and gaining more analogue data from neighbouring fields to better understand the trap mechanisms.

 

The Company will use the findings from the CPR and any additional work required to further appraise the asset and make an investment decision.

 

Interim Injunction

 

As announced in November 2021, K.O.N.H. (UK) Ltd ("KONH") was notified by Noble Hill-Network Limited ("NHNL") of a dispute regarding its ownership in NHNL and therefore its interest in the Barracuda Field in OML 141. ADM and its legal advisers consider that the dispute brought by NHNL is without merit and ADM confirms there has been no change in its position as the majority shareholder in KONH and the subsequent 70 per cent. indirect interest in NHNL.

 

The Company and KONH obtained an interim injunction at the Federal High Court of Nigeria, Lagos ("Court") restraining NHNL from selling, disposing, divesting or tampering with the 70% shareholding interest of KONH in NHNL to third-party investors or in any other manner whatsoever.

 

NHNL applied to the court to set aside the interim injunction order. The Court pronounced NHNL's application as lacking in merit and the application was dismissed.

 

The Court has since adjourned this matter until 30 June 2022 and the interim injunction remains in place. 

 

 

Corporate

 

The Company has sought to appoint high calibre individuals who will propel the business forward including Oliver Andrews as the new Non-executive Chairman. He replaces Peter Francis who departed due to personal circumstances, and whose contribution to the business was noted and for which the board noted its appreciation. Mr Andrews is the former Chief Investment Officer at the Africa Finance Corporation, one of the largest investment funds in Africa. Over the last 35 years, he has overseen investments of approximately US$10 billion and originated investments deals in natural resources and infrastructure across the continent, worth US$100 billion.

 

ADM continues to bolster its technical team to advance the Company's existing assets and evaluate new prospects. Dr Babatunde Pearse was appointed as Chief Engineer for the Aje Field Development Plan to oversee both the next phase of development at Aje and the FEED ("Front End Engineering Studies"). Dr Pearse is an industry veteran with an extensive background with International Oil Companies ("IOC"s).

 

Financial Review  

 

The financial results of the Group improved markedly on last year as they benefitted from an increased profit interest in the Aje Field, and the oil price recovered in the context of a somewhat abating Covid crisis. Also, the Group successfully completed the acquisition of a controlling indirect interest in the Risk Sharing Agreement for the development of the large-scale Barracuda Field in OML 141.

 

Revenue and profit

 

For the year ended 31 December 2021, the Group's revenue increased by 125% to £1.8 million (2020: £0.8 million). The higher revenue reflects the better oil price environment for the two liftings which were completed in April and October 2021 for a total gross production of 457,379 bbls with a net share of 49,099 bbls for ADM.

 

Operating costs increased by 36% to £1.9 million (2020: £1.4 million) as certain temporary cost-cutting initiatives taken by the Aje partnership in 2020 to mitigate the impact of low oil prices, were reversed as a response to a much better commodity pricing environment.

 

Decommissioning provision amounted to £1.3 million (2020: £1 million).

 

Depreciation & amortisation expense decreased by 45% to £0.05 million (2020: £0.09 million) reflecting the lower value of ADM's interest in Aje after an impairment was recognised in 2020 to reflect the recent Petronor/Panoro transaction.

 

Administrative expenses decreased by 12% to £2.3 million (2020: £2.6 million) remaining at a relatively high level and reflecting high M&A evaluation activity, as well as the costs related to the completion of the Group's acquisition of a controlling indirect interest in the Barracuda Field RSA.

 

Finance costs decreased by 16% to £0.06 million (2020: £0.07 million).

 

As a result, the loss after taxation decreased 64% to £2.5 million (2020: £6.9 million loss). The Directors do not propose a dividend (2020: £nil).

 

Cash flows and liquidity

 

After adjusting for the conversion of warrants issued in settlement of fees and working capital movements, cash flow loss from operating activities increased by 40% to £2.1 million (2020: £1.5 million loss).

 

The £2.7 million owed to the Aje JV has this year been accounted for in non-current liabilities rather than in current liabilities.  The liability will be repaid in due time out of Aje production cash flows.

 

During the period, the Group raised additional equity of £1.7 million in two fundraisings. In March 2021, the Group raised £1,220,000 of equity for general working capital purposes. In November 2021, the Group raised £475,000 of equity also for general working capital purposes.

 

As of 31 December 2021, the Group had cash and cash equivalents of £110,000 (31 December 2020: £30,000).

 

Post period, in January 2022, the Company announced an equity fundraising of approximately £561,000 with Optima Resources Limited.

 

Funding and disposals

 

The Company raised a total of approximately £1.7 million in two fundraisings in 2021. In March 2021, ADM completed an oversubscribed fundraising raising £1,220,000 before expenses and a further £475,000 raised in November 2021, including a subscription from Directors. In addition, post period, the Company announced an equity fundraise of approximately £561,000 with Optima Resources Limited.

 

In May 2021, the Company completed the sale of 188,778 shares in Superdielectrics for a total consideration of £849,501, a profit of £656,000 and an increase in value of approximately 340% on ADM's original investment of £199,875 in 2017 and 2018. The proceeds of the sale, together with the above fundraises, have been used to support ADM's growth strategy.

 

Outlook

 

The Company considers the progress it has made in 2021 provides an excellent platform for growth. In Aje, ADM has an interest in a high-quality asset with scope for significant increase in production. PetroNor coming on board is a great endorsement of Aje's potential and if, as is expected, PetroNor completes the formalities of the acquisition, it adds a heavyweight partner that will be keen to extract further value from the asset. It will enable the partners to progress the Field Development Plan and significantly increase production at a time when new supplies of oil and gas are increasingly needed around the world.

 

Alongside Aje, Barracuda took a major step forward with the completed CPR which showed Barracuda has the potential to be prospective for development. In 2022 the Company will continue further work and analysis to help further understand the assets potential before making an investment decision.

 

With Aje and Barracuda progressing, there remain opportunities for ADM, with its expertise, deep network and access to capital with strong relationships with majors such as Trafigura, to add additional high-quality assets to its investment portfolio. The Company considers it is well placed to take advantage of a market whereby International Oil Companies are in the process of extensive divestment programmes and, in line with the Group's strategy, ADM will continue to seek out assets in West Africa at attractive valuations with substantial upside for shareholders. In addition, and as part of its investment strategy, ADM remains open to potential renewable energy investments, primarily in Europe, if there is an opportunity to bring additional value to shareholders. 

 

 

 


 

Group Income Statement and Statement of Comprehensive Income

For the year ended 31 December 2021

 


 

2021

2020


Note

£'000

£'000

 

 

 

 


Continuing operations

 

 



 

 


Revenue

3

1,751

799


 

 


Operating costs

 

(1,895)

(1,423)

Administrative expenses

 

(2,340)

(2,616)

Impairment of investment

 

-

(4,628)

Consultancy fee income

 

-

353


 

 


Operating loss

4

(2,484)

(7,515)


 

 


Movement in fair value of investments

 

-

678

Finance costs

5

(56)

(67)


 

 


Loss on ordinary activities before taxation

 

(2,540)

(6,904)


 

 


Taxation

7

-

-


 

 


Loss for the year

 

(2,540)

(6,904)

Other Comprehensive income:

 

 


Exchange translation movement

 

141

(233)

Total comprehensive income for the year

 

(2,399)

(7,137)


 

 


Basic and diluted loss per share:

8

 


From continuing and total operations

 

(1.6)p

(8.7)p


 

 


 



 

 

Group and Company Statements of Financial Position

as at 31 December 2021

 


 

GROUP

COMPANY


 

2021

2020

2021

2020


Notes

£'000

£'000

£'000

£'000


 

 


 


NON-CURRENT ASSETS

 

 


 


Intangible assets

9

16,149

16,007

-

-

Investment in subsidiaries

10

-

-

12,335

12,316

Fixed asset investments

11

576

-

576

-


 

16,725

16,007

12,911

12,316

CURRENT ASSETS

 

 


 


Investments held for trading

12

28

878

28

878

Inventory

13

33

32

-

-

Trade and other receivables

14

130

109

130

109

Cash and cash equivalents

15

110

30

109

30


 

301

1,049

267

1,017

CURRENT LIABILITIES

 

 


 


Trade and other payables

16

1,534

4,206

1,515

1,429

Convertible loans

17

212

235

212

235


 

1,746

4,441

1,727

1,664

NET CURRENT LIABILITIES

 

(1,445)

(3,392)

(1,460)

(647)


 

 


 


NON-CURRENT LIABILITIES

 

 


 


Convertible loans

17

-

284

-

284

Other borrowings

17

247

297

247

297

Other payables

 

2,783

-

-

-

Decommissioning provision

18

1,264

1,032

-

-


 

4,294

1,613

247

581


 

 


 


NET ASSETS

 

10,986

11,002

11,204

11,088


 

 


 


EQUITY

 

 


 


Share capital 

19

10,267

9,450

10,267

9,450

Share premium

19

38,014

36,591

38,014

36,591

Other reserves

20

960

817

960

817

Currency translation reserve

 

(709)

(850)

-

-

Retained deficit

 

(37,546)

(35,006)

(38,037)

(35,770)

Equity attributable to owners of the Company and total equity

 

10,986

11,002

11,204

11,088

 

 

 


 




 

Group Statement of Changes in Equity

For the year ended 31 December 2021

 


Share

 capital

Share

premium

Exchange translation reserve

Other reserves

Retained deficit

Total

equity


£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2020

8,817

34,012

(617)

870

(28,152)

14,930

Loss for the year

-

-

-

-

(6,904)

(6,904)

Exchange translation movement

-

-

(233)

-

-

(233)

Total comprehensive expense for the year

-

-

(233)

-

(6,904)

(7,137)

Issue of new shares

633

2,544

-

(134)

-

3,043

Share issue costs

-

(21)

-

-

-

(21)

Warrants issued in settlement of fees

-

-

-

170

-

170

Warrants exercised

-

56

-

(106)

50

-

Issue of convertible loans

-

-

17

-

17

At 31 December 2020

9,450

36,591

(850)

817

(35,006)

11,002

Loss for the year

-

-

-

-

(2,540)

(2,540)

Exchange translation movement

-

-

141

-

-

141

Total comprehensive expense for the year

-

-

141

-

(2,540)

(2,399)

Issue of new shares

817

1,517

-

-

-

2,334

Share issue costs

-

(94)

-

27

-

(67)

Issue of convertible loans

-

-

2

-

2

Warrants issued in settlement of fees

-

-

-

114

-

114



 

 

 

 

 

At 31 December 2021

10,267

38,014

(709)

960

(37,546)

10,986

 

 

 

 



 

Company Statement of Changes in Equity

For the year ended 31 December 2021

 


Share

 capital

Share

premium

Other reserves

Retained deficit

Total

equity


£'000

£'000

£'000

£'000

£'000






 

At 1 January 2020

8,817

34,012

870

(29,270)

14,429

Loss for the period and total comprehensive expense

-

-

-

(6,550)

(6,550)

Issue of new shares

633

2,544

(134)

-

3,043

Share issue costs

-

(21)

-

-

(21)

Issue of convertible loans

-

-

17

-

17

Warrants issued in settlement of fees

-

-

170

-

170

Warrants exercised

-

56

(106)

50

-






 

At 31 December 2020

9,450

36,591

817

(35,770)

11,088

Loss for the period and total comprehensive expense

-

-

-

(2,267)

(2,267)

Issue of new shares

817

1,517

-

-

2,334

Share issue costs

-

(94)

27

-

(67)

Issue of convertible loans

-

2

-

2

Warrants issued in settlement of fees

-

-

114

-

114



 

 

 

 

At 31 December 2021

10,267

38,014

960

(38,037)

11,204

 

 

 



 

Group and Company Statements of cash flows

For the year ended 31 December 2021

 



      GROUP

      COMPANY


Note

2021

2020

2021

2020



 


 




£'000

£'000

£'000

£'000







OPERATING ACTIVITIES






Loss for the period


(2,540)

(6,904)

(2,267)

(6,550)

Adjustments for:


 


 


Fair value adjustment to investments


-

(678)

-

(678)

Warrants issued in settlement of fees


114

170

114

170

Finance costs


56

67

56

67

Impairment of intangible assets


-

4,628

-

4,996

Depreciation and amortisation


47

85

-

-

Decommissioning provision


215

-

-

-

Operating cashflow before working capital changes


(2,108)

(2,632)

(2,097)

(1,995)

Increase in inventories


-

(32)

-

-

Decrease/(increase) in receivables


(21)

303

(21)

303

Increase/(decrease) in trade and other payables


570

1,410

545

783

Net cash outflow from operating activities


(1,559)

(951)

(1,573)

(909)

INVESTMENT ACTIVITIES


 


 


Development costs


-

(181)

-

-

Acquisition of subsidiary


(180)

-

(180)

-

Proceeds on disposal of investments


850

-

850

-

Loans to subsidiary operation


-

-

(19)

(181)

Net cash outflow from investment activities


670

(181)

651

(181)

FINANCING ACTIVITIES


 


 


Continuing operations:


 


 


Issue of ordinary share capital


1,406

848

1,406

848

Share issue costs


(67)

(21)

(67)

(21)

Repayment of borrowings


(338)

-

(338)

-

Proceeds from short term loans


-

278

-

278

Net cash inflow from financing activities


1,001

1,105

1,001

1,105

 


 


 


Net (decrease)/increase in cash and cash equivalents from continuing and total operations


112

(27)

79

15

Exchange translation difference


(32)

42

-

-

Cash and cash equivalents at beginning of period


30

15

30

15



 


 


Cash and cash equivalents at end of period

15

110

30

109

30

 

 

Notes to the Financial Statements

For the year ended 31 December 2021

 

1.            General Information

 

The Company is a public limited company incorporated in the United Kingdom and its shares are listed on the AIM market of the London Stock Exchange. The Company also has secondary listings on the Quotation Board Segment of the Open Market of the Berlin Stock Exchange ("BER") and Xetra, the electronic trading platform of the Frankfurt Stock Exchange ("FSE").

 

The Company is an investment company, mainly investing in natural resources and oil and gas projects. The registered office and principal place of business of the Company is as detailed in the Company Information section on page 2.

 

The information included in this announcement has been extracted from the Company's report and accounts, and, therefore, as references and page numbers may be incorrect. Shareholders should read the Company's report and accounts in full which can be found on its website.

 

2.            Principal Accounting Policies

 

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout all periods presented in the financial statements.

 

As in prior periods, the Group financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and interpretations issued by the International Accounting Standards Board (IASB) UK-adopted International Financial Reporting Standards (adopted IFRSs).  The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below.

 

The current period covered by these financial statements is the year to 31 December 2021.  The comparative figures relate to the year ended 31 December 2020.  The financial statements are presented in pounds sterling (£) which is the functional currency of the Group.

 

An overview of standards, amendments and interpretations to IFRSs issued but not yet effective, and which have not been adopted early by the Group are presented below under 'Statement of Compliance'.

 

STATEMENT OF COMPLIANCE

 

New standards, amendments and interpretations adopted by the Company

The company has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2021:

·    Amendment to "IFRS 4 "Insurance Contracts - deferral of IFRS 9" supports the companies implementing the new IFRS 17 standard and it makes it simpler to report their financial performances.

·    The amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 "Interest Rate Benchmark Reform - Phase 2" integrate the amendments made in 2019. The amendments referred in phase 2, address issues that might affect financial reporting when an existing interest rate benchmark is replaced with an alternative benchmark interest rate (i.e., replacement issue) and assist companies in the application of IFRS when changes are made to contractual cash flows or hedging relationships due to the interest rate reform, and in providing useful information to users of the financial statements.

·    The Amendment to IFRS 16, "Covid-19-Related Rent Concessions beyond 30 June 2021" extends the period of application of the 2020 amendment to IFRS 16, relative to the lessees' accounting of concessions granted as a result of Covid-19, by one year.

The adoption of the standards and interpretations described above, already in effect at the date of this report, did not have a material impact on the measurement of the Group's assets, liabilities, costs and revenues.

New standards and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2021 and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Company. There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

 

3.            Going Concern

 

At 31 December 2021, the Group recorded a loss for the year of £2,540,000 and had net current liabilities of £1,445,000, after allowing for cash balances of £110,000.

 

During the period, the Group raised additional equity of £1.7 million in two fundraisings. In March 2021, the Group raised £1,220,000 and in November 2021, the Group raised £475,000.  Post period, in January 2022, the Company announced an equity fundraising of approximately £561,000 with Optima Resources Limited. In May 2021 realised £850,000 from the sale of investments to provide for working capital requirements, and the Directors have prepared cashflow forecasts for the period to 30 September 2022 to assess whether the use of the going concern basis for the preparation of the financial statements is appropriate. In the short term, the Group will require further additional funding in order to meet its liabilities as they fall due and continue to operate as a going concern. The Directors have taken into consideration the level and timing of the Group's working capital requirements (which takes into account recent reductions in costs and control of discretionary spending to preserve cash flow) and has also considered the likelihood of successfully securing funding to meet these needs. In particular, consideration has been given to ongoing discussions around further third-party investment and the extent to which these discussions are advanced both in respect of short and longer term funding. The Directors acknowledge that while they have an expectation that funding will be secured based on this assessment, at the date of approval of these financial statements, no such funding has been unconditionally committed. Therefore, while the Directors have a reasonable expectation that the Group has the ability to raise the additional finance required in order to continue in operational existence for the foreseeable future, the uncertainty surrounding the ability and likely timing of securing such finance indicates that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Were no such funding to be secured, the Group would have no realistic alternative but to halt operations and prepare its financial statements on a non-going concern basis.

 



 

4.

Earnings and Net Asset Value Per Share

 


The basic and diluted earnings per share is calculated by dividing the loss attributable to owners of the Group by the weighted average number of ordinary shares in issue during the year.




2021

2020




£'000

£'000


Loss attributable to owners of the Group


 



- Continuing operations


(2,540)

(6,904)


Continuing and discontinued operations


(2,540)

(6,904)




2021

2020


Weighted average number of shares for calculating basic and fully diluted earnings per share


155,014,671

79,594,655




2021

2020




pence

pence


Earnings per share:


 



Loss per share from continuing and total operations


(1.6)

(8.7)

 

The weighted average number of shares used for calculating the diluted loss per share for 2021 and 2020 was the same as that used for calculating the basic loss per share as the effect of exercise of the outstanding share options was anti-dilutive.

 

 

Net asset value per share ("NAV")

The basic NAV is calculated by dividing the loss total net assets attributable to the owners of the Group by the number of ordinary shares in issue at the reporting date.  The fully diluted NAV is calculated by adding the cost of exercising any extant warrants and options to the total net assets and dividing the resulting total by the sum of the number of shares in issue and the number of warrants and options extant at the reporting date.

 




2021

2020




£'000

£'000


Total net assets of the Group


10,986

11,002


Cost of exercise of warrants


1,318

1,715


Total net assets for calculation of fully diluted NAV


12,304

12,717




2021

2020


Number of shares in issue at the reporting date


204,480,863

122,769,073


Number of extant warrants


31,581,012

27,726,241


Total number of shares for calculation of fully diluted NAV


236,061,875

150,495,314




2021

2020


NAV - Basic (pence per share)


5.4p

9.0p


NAV - Fully diluted (pence per share)


5.2p

8.5p

 

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