ACTIVE ENERGY GROUP PLC Interim results

Active Energy, the AIM – quoted voltage optimisation specialist and eco engineering consultants announces its interim results for the six months ended 30 June 2011.
 
Highlights:

• Acquisition of Red Line Engineering Services in April 2011
• New senior management team to drive the business forward
• Raised £1.8m before expenses in a placing to strengthen the Group’s balance sheet
• Loss for the period of £451,845 (2010: loss of £648,046)
• Loss per share 0.33 pence (2010 loss of 0.72 pence)
• Well placed to capitalise on new business opportunities in the voltage optimisation and eco engineering consultancy markets

CHAIRMAN GAVIN LITTLE GAVE THE FOLLOWING REPORT
On behalf of the board, I am pleased to present the results of Active Energy plc for the six month period ended 30 June 2011. Since the acquisition of Red Line Engineering Services in April 2011 and in line with the Board’s strategy, we have made significant progress in restructuring the Company into two main core businesses; voltage optimisation and the provision of a comprehensive service covering the environmental requirements of companies, from consultancy and design through installation to maintenance.
 
The disposal of the Group’s mature, legacy businesses, Gasignition and Derlite was completed in October 2010. These two businesses operated in challenging markets and had continued to make losses. Their disposal is expected to generate significant annualised cost savings as well as enabling the Group to focus on the opportunities within the environmental sector.
 
In May 2011, the company successfully raised £1.8m before expenses through a placing in order to strengthen the Group’s balance sheet and set the foundation in place to accelerate Active Energy’s growth.
 
Financial Review
Group revenues derived from our continuing activities for the period were £839,742 (2010: £2,799,117) and related solely to our voltage optimisation business. The decline is predominantly related to the disposals of Gasignition and Derlite.
 
The Group reported a loss of £451,875 (2010: £648,046) for the period. The loss was after accounting for the costs of restructuring the business and the challenging economic environment that exists in our marketplace and in the wider economy. Loss per share was 0.33p (2010: loss per share 0.72p).
 
Net assets as at 30 June 2011 were £3,250,422 (2010: £1,559,289) including cash balances of £1,998,842 (2010: £97,988).
 
The Directors are not recommending payment of a dividend (2010: £nil)
 
Operating Review
Since the acquisition of Red Line the Group has made significant progress. The Company has also recently secured the ISO 9001 accreditation which we believe will be beneficial in discussions with potential clients and customers.
 
The demand for energy efficient products is still growing, driven increasingly by regulation as well as the need to cut costs. In the UK, the government’s CRC Energy Efficiency Scheme requires larger companies to purchase CO2 credits according to how much CO2 they produce and is designed to encourage a proactive approach to reducing CO2 emissions.
 
We continue to see high levels of interest in our voltage optimisation products and our pipeline of new business opportunities is encouraging. We are currently in negotiations with a number of potential customers for multiple units across multiple sites and are hopeful that these sales can be secured in the second half of the year.
 
Outlook
We have continued to make encouraging progress during the first half of the current financial year in building our presence in the voltage optimisation marketplace. We continue to see sales opportunities in a number of sectors but the nature of our potential customer base is such that we are often subject to longer than normal sales cycles.
 
In addition, the acquisition of Red Line which allows the Company to provide a comprehensive service covering the environmental requirements of companies, from consultancy and design through installation to maintenance has enhanced the Group’s engineering capabilities and help established a presence in the rail industry, where Red Line holds Transport for London approved supplier status. At the same time, the appointment of several new directors at an operational level will underpin our growth ambitions, bringing additional skills and sector experience.