Energy Assets Gp plc EAS Interim Results

  Energy Assets Gp plc (EAS) - Interim Results

RNS Number : 5037R
Energy Assets Group plc
20 November 2012




Note: A briefing  for analysts  will be  held at  9.30am this  morning at  the 
offices of Buchanan,  107 Cheapside,  London, EC2V 6DN.  For further  details 
please contact Buchanan on 020 7466 5000.

For immediate release 20 November 2012



                           Energy Assets Group plc

               ("Energy Assets", the "Company" or the "Group")

          Interim Results for the six months ended 30 September 2012

               Strong growth and a transformational acquisition

Energy Assets  Group plc  (LSE: EAS.L),  the largest  independent provider  of 
industrial and commercial ("I&C") gas metering  services in the UK (by  number 
of meters owned and managed), today announces its Interim Results for the  six 
months ended 30 September 2012 (H1 2012/13).



The first half of the year has delivered strong financial results which are in
line with management expectations. The second half of the financial year  has 
started well with the business continuing to perform strongly and, as recently
announced, Energy Assets completed  a transformational acquisition of  Gazprom 
Global Energy Solutions Limited (GGES)  immediately following the half  year. 
This brings with it exclusive agreements  with Gazprom for all three  business 
streams including:



· A doubling of the number of  meter points from which data is  collected 
on behalf of our customers;



· The potential to  double the size of  the Group's I&C meter  portfolio; 
and



· A partnership with a growing gas supplier, offering the opportunity  to 
increase  our  Automated  Meter   Reading  ("AMR")  portfolio  and   Siteworks 
activities.



Integration of this business into the Group is progressing well.



Financial highlights



· Revenue increased by 27% to £7.6m (H1 2011/12: £6.0m);



· Recurring revenue increased by 32%  to £5.0m from £3.8m and  represents 
66% of total revenue;



· EBITDA increased by 30% to £4.8m (H1 2011/12: £3.7m);



· Profit before tax and exceptional  items increased by 38% to £1.8m  (H1 
2011/12: £1.3m). Profit before tax was £1.5m (H1 2011/12: £1.3m);



· Cash generated from operations of £3.8m (H1 2011/2012: £3.3m), a growth
of 15%;



· Diluted EPS of 4.25p (H1  2011/12: adjusted EPS based on share  capital 
at the date of listing being in issue for the full year 3.67p).



Operational highlights



· The metering  portfolio owned  and installed  has increased  by 16%  to 
circa 73,000 assets since the year end and by 30% since 30 September 2011;



· Increased capital investment  of 7% in meter  assets which deliver  our 
long term recurring revenue to £7.6m  (H1 2011/12: £7.1m), bringing the  total 
investment to £45.7m;



· Energy Assets provides  Meter Asset Management  ("MAM") services to  24 
gas suppliers within the I&C gas market;



· The data  logger portfolio  has increased by  16% to  circa 22,000  (H1 
2011/12: circa 19,000) representing one of the largest independent  portfolios 
within the I&C sector;



· We continue to  achieve a strong performance  in AMR contract  renewals 
with a 96% success rate based on the number of meter points as a percentage of
AMR units, ensuring a continuation of the long term revenue attached to  these 
contracts.



Current trading and outlook



· The  outlook  for the  Group  has  been enhanced  considerably  by  the 
acquisition of GGES, a  subsidiary of Gazprom  Marketing and Trading  Limited, 
which has  significantly  added  to  the install  and  meter  exchange  growth 
prospects already in existence  through our contracts  with Corona Energy  and 
British Gas;



· The Group continues  its discussions with a  number of other major  gas 
suppliers requiring a  fully integrated Metering,  AMR, and Siteworks  service 
provision and is confident that these will result in further expansion of  all 
three business streams in the future;



· The second half of the financial year has started well and the business
continues to perform in line with expectations.



Acquisition of GGES



The acquisition  of  GGES  brings  a complementary  business  into  the  Group 
strengthening our  ability  to  provide  AMR and  Siteworks  services  to  gas 
suppliers and blue-chip clients across the I&C sector.



This is a transformational  acquisition and brings  the following benefits  to 
the Group: 



· An  exclusive agreement  with Gazprom  to deliver  new and  replacement 
meter installs,  including  the  exchange of  Gazprom's  existing  UK  assets, 
bringing the potential  to more  than double  the existing  Energy Assets  I&C 
metering portfolio,  which  is  currently circa  58,000  meters.  Each  asset 
installed will have  the long term  security provisions of  the Group's  Meter 
Asset Management agreement;



· An exclusivity  period to  provide all  AMR and  Siteworks services  to 
Gazprom Energy across their growing customer portfolio. Energy Assets is  now 
delivering AMR and Siteworks services to the fastest growing gas suppliers  in 
the I&C sector with circa  25% of the market (by  volume of gas supplied)  now 
contracted^1;



· Access to a proven, significantly deployed, proprietary AMR  technology 
for both gas and water applications including low power radio data  collection 
technology and  a range  of other  Intellectual Property,  all of  which  will 
provide significant operational benefits; and



· A substantially  increased data logger  portfolio through the  acquired 
ownership of circa 27,000  data points across the  gas, water and  electricity 
sectors  immediately  increasing   recurring  revenue   for  Energy   Assets. 
Consequently, Energy Assets has doubled the number of meter points from  which 
data is collected on behalf of our  customers to circa 49,000 units making  it 
one of the largest AMR providers.



^1Source: Datamonitor, Macquarie Research, October 2012







Commenting on the half year results, Chief Executive Officer Phil  Bellamy-Lee 
said:



"I am  delighted to  be able  to  report a  strong operational  and  financial 
performance in the  first half  of the  year, reflecting  good organic  growth 
across our three business divisions.



Our primary strategy continues to  be the expansion of  our market share as  a 
Meter Asset Manager  ("MAM") and  to remain  the leading  independent MAM,  by 
volume of  meters  owned and  managed,  within the  UK  I&C gas  sector.  This 
position remains secure and  has been further cemented  through our growth  in 
the year to date. 



The recent  acquisition of  GGES  is a  transformational  deal for  the  Group 
providing us with a significant opportunity  to more than double our  existing 
I&C metering portfolio during  the term of the  contract, in partnership  with 
one of the world's largest energy companies.



Following the acquisition, we are now a leading provider and developer of  AMR 
technology with a proven and significantly deployed technology platform and  a 
range of products with the potential to serve the wider utilities markets.



We have  considerably  strengthened  our market  position  and,  coupled  with 
Government regulatory requirements to ensure meters in the UK are advanced  or 
smart, we remain confident of our continued growth prospects into the future.



We have added  to our  business development  team through  the appointment  of 
individuals with strong industry expertise  who will complement the  expertise 
of the team at GGES. This strengthened resource will ensure that we can  take 
advantage of the new opportunities available to us to grow our business.



We have also strengthened our  Siteworks design team, placed further  emphasis 
on sales  and marketing  activities within  AMR, and  gained accreditation  to 
enable direct metering installation works.



All of these actions  enable us to maximise  the opportunity available to  our 
integrated solution."







Enquiries



For further information visit www.energyassets.co.uk or contact:



Energy Assets Group plc                              
Phil Bellamy-Lee / John McMorrow                      Tel: +44 (0)1506 405 405
                                                     
Buchanan                                              
Richard Darby  / Diane  Stewart  / Carrie  Clement  / Tel: +44 (0)20 7466 5000
Helen Greenwood
                                                     
Canaccord Genuity Limited                             
Piers Coombs / Adam Miller                            Tel: +44 (0)20 7523 8350
                                                     
Macquarie Capital (Europe) Limited                    
Steve Baldwin / Dan Iacopetti                         Tel: +44 (0)20 3037 2000



Notes to Editors:



Energy Assets provides gas metering and related services in the I&C segment of
the UK gas market and is the largest independent provider of I&C gas  metering 
services in the UK (by number  of meters under management). The Group  offers 
gas suppliers  and end-user  consumers of  gas a  broad spectrum  of  metering 
services from  the provision  and  management of  new and  replacement  meters 
through its MAM Services division to the procurement and project management of
related gas  infrastructure works  and  the collection  and provision  of  gas 
consumption data through the Group's Siteworks and AMR divisions.





Interim Management Report



Throughout the period we  have continued to build  on the fundamentals  within 
our business, increasing  our asset  portfolio and  strengthening our  growing 
Siteworks  division.  This  has  been  reflected  in  the  strong   financial 
performance detailed below.



The performance will be further strengthened by the successful acquisition  of 
GGES in the second half of the financial year and beyond.



Key Performance Indicators



The Group monitors a number of key performance indicators as follows:



                          6 months ended  6 months ended % change Year ended
                          30 September 2012  30 September            31 March
                                                 2011                  2012
Revenue                               £7.6m          £6.0m      27%     £12.7m
Recurring revenue                     £5.0m          £3.8m      32%      £8.3m
EBITDA                                £4.8m          £3.7m      30%     £7.9m
Operating profit (before              £3.3m          £2.7m      22%      £5.6m
exceptional items)
Profit before tax                     £1.5m          £1.3m      15%      £0.2m
Profit before tax and                 £1.8m          £1.3m      38%      £2.9m
exceptional items
                                                                         
I&C meters                           57,663         40,948      41%     47,878
Domestic meters                      15,195         15,195       0%     15,195
Total meters                         72,858         56,143      30%     63,073
                                                                         
Total data loggers                   22,471         19,201      17%     20,814
                                                                         
Net Debt/EBITDA                         2.8            n/a                2.4



Results for the period



The Group  has  continued to  grow  its  revenue and  profits  through  strong 
performances across each of its business segments.



For the six months ended 30 September 2012, group revenue was £7.6m showing an
increase of £1.6m (27%)  compared with the same  period in the last  financial 
year. This increase  is predominately  due to  the expanding  meter and  data 
logger portfolio  owned  and managed  by  the  Group. At  30  September  2012 
recurring revenue accounted for 66% of total revenue being £5.0m, compared  to 
£3.8m in the corresponding period in  the previous year, an increase of  32%. 
Additionally, the  Group has  increased its  focus on  the I&C  market,  which 
typically generates higher rental incomes per meter than the domestic  market, 
further underpinning the revenue growth.



EBITDA increased by 30% from £3.7m to £4.8m and gross profit increased by  31% 
from £3.5m (H1 2011/12)  to £4.6m (H1 2012/13).  All segments contributed  to 
the improvement as  well as helping  to improve overall  gross profit  margins 
from 58% in H1 2011/12 to 61% in this period.



On 22  March 2012  Energy Assets  Group plc  was admitted  to trading  on  the 
Official List  of  the  London  Stock  Exchange  and,  as  a  result,  certain 
incremental costs of becoming  a plc have  been incurred in  the period to  30 
September 2012 which were  not incurred in the  period to 30 September  2011. 
Additionally, a share based payment expense of £0.2m has been incurred in  the 
current period due to the implementation of the employee share schemes as part
of the IPO.



Despite the impact of these costs, operating profit has still increased by 14%
from H1 2011/12 demonstrating the underlying strength of the business.
Operating profit before exceptional share based payment expense increased from
£2.7m to £3.3m in H1 2012/13, a rise of 22%.



Finance costs  increased  from £1.3m  to  £1.5m due  to  increased  borrowings 
supporting our growing investment in meter assets.



Profit before tax and exceptional items increased by 38% to £1.8m (H1 2011/12:
£1.3m). Profit before tax was £1.5m  (H1 2011/12: £1.3m) after incurring  the 
exceptional share based payment expense.



The results can be further analysed into the business divisions as follows:



Meter Asset Management ("MAM")



The Group's key area of activity is its Meter Asset Management division  which 
owns, provides, manages and  maintains I&C gas meters  as an OFGEM  accredited 
Meter Asset Manager. Revenue is  generated through long term rental  payments 
from gas suppliers who supply gas through the Group's meters.



This division has made significant progress during the period installing circa
10,000 meters since the end of the last financial year and circa 17,000 meters
since September 2011, increasing  its total portfolio  to circa 73,000  meters 
(up 16% since the year end and 30% from September 2011).



Given that the design life of gas meters in the UK is in excess of 20 years it
is expected  that  these assets  will  provide a  solid  source of  long  term 
recurring revenue. Meter Asset Management represents the core of our business
and we  have  continued to  deliver  on our  strategy  of developing  an  ever 
increasing base of long  term recurring revenue which,  for this division,  is 
now at £3.6m  for H1 2012/13  and represents  47% of total  Group revenue  (H1 
2011/12: 43% and £2.6m).



Gross profits for the Meter Asset  Management division increased to £2.5m  (H1 
2011/12: £1.7m) with gross profit margin maintained at 68%.



Going forward we expect the I&C asset  base within this division to more  than 
double over the next few years, from circa 58,000 meters at 30 September 2012,
as a result of the recently  announced acquisition of the Gazprom  subsidiary, 
GGES. This acquisition includes a MAM  agreement that will see Energy  Assets 
appointed  as  the  primary  Meter  Asset  Manager  for  Gazprom  Energy's  UK 
portfolio. This  provides Energy  Assets with  an exclusivity  period  during 
which it will install new metering assets and undertake meter exchanges across
Gazprom Energy's existing and new UK portfolio.



The growing asset portfolio continues to increase the recurring revenue of the
business providing increasing profits and added opportunities going forward.



Siteworks



Through its Siteworks division the Group provides a comprehensive consultancy,
system design and project management service for gas infrastructure works  and 
meter point infrastructure.



In the  2012  financial year  the  Siteworks division  achieved  Gas  Industry 
Registration Scheme ("GIRS") accreditation which has allowed it to bring  more 
of the  project  management and  design  capability of  its  service  offering 
in-house thus  improving margins  and extending  the range  and complexity  of 
services we can provide.



The result has been successful, improving overall gross profit by 29% to £1.6m
for the six months to September 2012 and provides us with a strong platform to
increase our market share in this segment and to further enhance profitability
in the future.



The acquisition of GGES brings with it an agreement with Gazprom Energy giving
the Group exclusive access to Siteworks activity generated by their  customers 
and thereby  allowing us  to deliver  a  Siteworks service  to a  growing  gas 
supplier base, thus strengthening this part of our business even further.



Pulse 24 - Automated Meter Reading ("AMR")



The Group's AMR division (branded as  Pulse 24) provides AMR Service  Provider 
Code of Practice  ("ASPCoP") approved  AMR services,  installing data  loggers 
that collect and transmit  consumption data from gas  meters to a data  centre 
for validation and formatting before  provision to gas suppliers and  end-user 
consumers.



Our Pulse 24  business has  had a  good six month  trading period  with a  13% 
increase in revenue to £1.4m (H1  2011/12: £1.2m). Our data logger  portfolio 
increased  by  16%  to  circa   22,000  assets  (H1  2011/12:  circa   19,000) 
representing one of the largest independent portfolios within the I&C sector.



We continue to achieve  a strong performance in  AMR contract renewals with  a 
96% success rate based on  the number of meter points  as a percentage of  AMR 
units.



The recent GGES acquisition brings with it a further 27,000 data points, which
will more than double the AMR portfolio,  ensuring we continue to hold one  of 
the largest data logger portfolios in the I&C sector.



Financial Position



As at 30 September 2012,  the Group had £39.5m  of debt outstanding against  a 
meter portfolio of circa  73,000 meters with  a net book  value of £45.7m  (H1 
2011/12: £32.0m of debt against circa 56,000  meters with a net book value  of 
£34.1m).



Dividend



Given the Company only listed at the end of the last financial year, and as we
continue to see significant opportunities  to invest in the profitable  growth 
of the business,  the Board is  not recommending an  interim dividend for  the 
half year to 30 September 2012.



Principal Risks and Uncertainties



Details of  the principal  risks  and uncertainties  faced  by the  Group  are 
included on page 16  of the published annual  report and financial  statements 
for the year ended 31 March  2012. No additional risks or uncertainties  have 
been identified  since the  year end  which will  impact the  business in  the 
coming six months.



Strategy and outlook



Energy Assets is a well funded, publicly listed company with a track record of
growth, a  blue chip  customer base,  state of  the art  systems and  a  truly 
dedicated team committed to the growth of the Group.



The main focus of the Group continues to be the expansion of our market  share 
as a Meter Asset Manager within the UK I&C gas sector by further  capitalising 
on identified market opportunities. Our successful positioning as the leading
independent MAM  (by  volume  of  meters  owned  and  managed),  coupled  with 
Government regulatory requirements to ensure meters in the UK are advanced  or 
smart, puts us in a strong position.



In addition,  we expect  to  take full  advantage  of our  newly  strengthened 
relationship  with  Gazprom  striving  to  ensure  the  acquisition  of   GGES 
significantly improves our revenue and profitability.



The second  half of  the financial  year  has started  well and  the  business 
continues to perform in line with  expectations. The Group is continuing  its 
dialogue with  other major  gas suppliers,  seeking similar  alliances to  the 
strong relationships  we  have  with  Corona Energy  and  more  recently  with 
Gazprom, and thereby continuing to build and further broaden our market  reach 
thus cementing Energy  Assets' position as  the MAM of  choice within the  gas 
industry.



We  look  forward  to  the  coming  period  with  confidence  that  management 
expectations for the full financial year will be achieved.



Responsibility Statement

We confirm that to the best of our knowledge:



a) The  condensed consolidated  interim financial  information contained  in 
this document has  been prepared in  accordance with International  Accounting 
Standard 34 "Interim Financial Reporting" as adopted by the European Union;

b) The interim management report includes  a fair review of the  information 
required by  the Financial  Services Authority's  Disclosure and  Transparency 
Rules ("DTR")  4.2.7R (indication  of important  events during  the first  six 
months and description of principal risks and uncertainties for the  remaining 
six months of the year); and

c) This document includes a fair  review of the information required by  DTR 
4.2.8R (disclosure of related party transactions and changes therein).



By order of and on behalf of the Board









Philip Bellamy-Lee John McMorrow

Chief Executive Officer  Chief Financial
Officer



20 November 2012





Consolidated Statement of Comprehensive Income

For six months ended 30 September 2012



                       Note 6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011    March 2012
                                                     (unaudited)     (audited)
                                   (unaudited)
                                       £'000             £'000         £'000
Revenue                  7               7,597             5,965        12,714
Cost of sales            7             (2,993)           (2,473)       (5,125)
Gross profit                            4,604             3,492         7,589
Administrative expenses  7             (1,540)             (809)       (4,625)
Operating profit                        3,064             2,683         2,964
                                                                         
Attributable to:                                                          
Operating profit before  8               3,305             2,683         5,609
exceptional items
Exceptional IPO costs    8                   -                 -       (2,630)
Exceptional share based  8               (241)                 -     (15)
payment expense
Operating profit                        3,064             2,683         2,964
                                                                         
Finance income                              2                 3            46
Finance costs                         (1,539)           (1,342)       (2,777)
Profit on ordinary                      1,527             1,344           233
activities before
taxation
                                                                         
Tax on profit on         9               (344)             1,221         1,360
ordinary activities
Profit for the year                     1,183             2,565         1,593
                                                                         
Other comprehensive                                                       
income
Cash flow hedge                         (239)             (294)        (521)
movement, net of tax
Total comprehensive                       944             2,271        1,072
income for the year
                                                                         
Basic earnings per       10               4.35            209.90         46.01
share (pence)
                                                                         
Diluted earnings per     10               4.25            209.90         45.74
share (pence)
                                                                         
Adjusted basic earnings  10               5.05              3.67          7.85
per share (pence)







Consolidated Balance Sheet

As at 30 September 2012

                    Note As at 30 September As at 30 September As at 31 March
                            2012 (unaudited)   2011 (unaudited) 2012 (audited)
                                     £'000              £'000          £'000
ASSETS                                                       
                                                            
Non-current assets                                           
Intangible assets                     1,982              1,944          1,981
Property, plant and   11              47,482             35,687         40,932
equipment
Deferred tax asset                      702                573        1,035
                                    50,166             38,204         43,948
Current assets                                                            
Inventories                             320                580            686
Trade and other                       2,224              1,816          1,703
receivables
Cash and cash                        14,669              3,259         16,382
equivalents
                                    17,213              5,655         18,771
                                                                         
TOTAL ASSETS                         67,379             43,859         62,719
                                                                         
EQUITY AND                                                                
LIABILITIES
                                                                         
Current liabilities                                                       
Trade and other                       4,654              5,311          5,530
payables
Current tax                             282                  -            282
liabilities
Borrowings                            2,928              1,605        2,052
                                     7,864              6,916        7,864
                                                                         
Non-current                                                               
liabilities
Borrowings                           36,580             30,348         33,405
Derivative financial                    987                386            685
instruments
Deferred tax                             48                 32     50
liabilities
                                    37,615             30,766         34,140
                                                                         
Total liabilities                    45,479             37,682         42,004
                                                                         
NET ASSETS                           21,900              6,177         20,715
                                                                         
Equity attributable                                                       
to owners of the
parent
Share capital                           271              1,222            271
Share premium                        14,274                  -         14,274
Share based payment                     254                  -             13
reserve
Other reserves                     (32,945)               (44)       (32,706)
Retained earnings                    40,046              4,999       38,863
                                    21,900              6,177       20,715
                                                                         
TOTAL EQUITY AND                     67,379             43,859       62,719
LIABILITIES



The notes on pages 14 to 25 are an integral part of this interim  consolidated 
financial information.





Consolidated Statement of Changes in Equity

For six months ended 30 September 2012



                  Share       Share    Share based     Other       Retained    TOTAL
                  capital     premium     payment     reserves      earnings
                                          reserve
                  £'000       £'000       £'000        £'000        £'000      £'000
Attributable to                                                           
the owners of
the parent
company:
                                                                                
At 1 April 2011       1,222           -           -           250        2,434    3,906
                                                                                
Profit for the            -           -           -             -        2,565    2,565
period
Fair value loss
on cash flow
hedge
derivatives, net     
of tax                    -           -           -       (294)   -   (294)
Total
comprehensive
(expense)/income
for the period            -           -           -         (294)        2,565    2,271
                                                                                
At 30 September       1,222           -           -          (44)        4,999    6,177
2011
                                                                                
Profit for the            -           -           -             -        (972)    (972)
period
Fair value loss
on cash flow
hedge
derivatives, net     
of tax                    -           -           -       (227)   -   (227)
Total
comprehensive
expense for the
period                    -           -           -         (227)        (972)  (1,199)
                                                                                
Value of
employee
services                  -           -          13             -            -       13
Removal of share
capital of
Energy Assets
Holdings Ltd        (1,222)           -           -             -           36  (1,186)
Issue of share
capital upon
incorporation of
Energy Assets
Group plc            35,000           -           -             -            -   35,000
Transfer of
share capital to
retained
earnings upon
reduction of
nominal value      (34,800)           -           -             -       34,800        -
Creation of
merger reserve
upon
incorporation of
Energy Assets
Group plc                 -           -           -      (32,435)            - (32,435)
IPO costs
recognised
through equity            -       (655)           -             -            -    (655)
Proceeds of
issue of share                  
capital from IPO         71      14,929           -             -            -   15,000
Transactions
with owners of
the parent
company               (951)      14,274          13      (32,435)       34,836   15,737
                                                                                
At 31 March 2012    
                        271      14,274  13      (32,706)       38,863   20,715







Consolidated Statement of Changes in Equity

For six months ended 30 September 2012 (continued)



                     Share       Share Share based         Other     Retained  TOTAL
                    capital     premium     payment      reserves     earnings
                                           reserve


                     £'000       £'000       £'000         £'000        £'000  £'000
Attributable to                                                                
the owners of
the parent
company:
                                                                              
At 1 April 2012         271      14,274          13      (32,706)       38,863 20,715
                                                                              
Profit for the            -           -           -             -        1,183  1,183
period
Fair value loss
on cash flow
hedge
derivatives, net                                      
of tax                    -           -           -       (239)   -  (239)
Total
comprehensive
(expense)/income
for the period            -           -           -         (239)        1,183    944
                                                                              
Value of
employee
services                  -           -         241             -            -    241
Issue of new
shares in
relation to SIP
scheme                    1           -           -             -            -      1
Treasury shares
upon
consolidation of                
SIP trust               (1)           -           -             -            -    (1)
Transactions
with owners of
the parent
company                   -           -         241             -            -    241
                                                                              
At 30 September                           
2012                    271      14,274   254      (32,945)       40,046 21,900







Consolidated Statement of Cash Flows

For six months ended 30 September 2012



                           6 months ended 30 6 months ended 30  Year ended 31
                               September 2012    September 2011     March 2012
                                  (unaudited)       (unaudited)      (audited)
                                       £'000             £'000          £'000
Cash flows from operating                                                  
activities
Profit before taxation                  1,527             1,344            233
Finance income                            (2)               (3)           (46)
Finance costs                           1,539             1,342          2,777
Depreciation                            1,428               977          2,225
Intangibles amortisation                   58                29             69
Net foreign exchange losses                 -                 -              7
Share based payment expense               241                 -             13
Decrease/(increase) in                    366             (523)          (629)
inventories
(Increase)/decrease in                  (521)               419            532
trade and other receivables
(Decrease)/increase in                  (827)             (296)        1,319
trade and other payables
Cash generated from                     3,809             3,289          6,500
operations
Income tax                                  -                 -   -
Net cash from operating                 3,809             3,289          6,500
activities
                                                                          
Cash flows from investing                                                  
activities
Payments to acquire                   (7,978)           (8,220)       (14,713)
property, plant and
equipment
Payments to acquire                      (58)              (73)          (150)
intangible assets
Finance income                              2                 3  46
Net cash used in investing            (8,034)           (8,290)       (14,817)
activities
                                                                          
Cash flows from financing                                                  
activities
Proceeds from new                       5,014             6,524         10,695
borrowings
Repayment of borrowings                 (963)           (1,911)        (2,577)
Finance costs                         (1,539)           (1,342)        (2,777)
Transactions with related                   -                 -             24
parties
Proceeds from share issue                   -                 -         15,000
IPO costs recognised                        -                 -       (655)
through equity
Net cash from financing                 2,512             3,271         19,710
activities
                                                                          
Net increase in cash and              (1,713)           (1,730)         11,393
cash equivalents
                                                                          
Cash and cash equivalents              16,382             4,989        4,989
at the beginning of the
year
Cash and cash equivalents              14,669             3,259        16,382
at the end of the year









Notes



1) Financial information



This announcement does not constitute full accounts within the meaning of  the 
Companies Act 2006  and the condensed  interim financial information  included 
within has not been audited.



This information has  been approved  for issue by  the Board  of Directors  of 
Energy Assets Group plc,  a company domiciled and  incorporated in the  United 
Kingdom.



Statutory accounts  for the  year ended  31 March  2012 were  approved by  the 
Directors on 21 June  2012 and delivered to  the registrar of companies.  The 
audit report received on  those accounts was unqualified  and did not  contain 
any emphasis of matter  paragraph nor any statement  under section 498 of  the 
Companies Act 2006.



2) Basis of preparation



The condensed consolidated interim financial information included within  this 
announcement  has  been  prepared  in  accordance  with  the  Disclosure   and 
Transparency Rules  of  the  Financial  Services Authority  and  with  IAS  34 
"Interim Financial Reporting" as adopted by the European Union (EU) and should
be read in conjunction with the annual financial statements for the year ended
31 March  2012, which  have  been prepared  in accordance  with  International 
Financial Reporting Standards as adopted by the European Union.



The consolidated financial information has been prepared under the  historical 
cost convention, as  modified by financial  assets and liabilities  (including 
derivative instruments) at fair value through profit or loss.



A financial review of the business is outlined on pages 5 to 8.



3) Initial public offering



On 22  March 2012  Energy Assets  Group plc  was admitted  to trading  on  the 
Official List of the London Stock Exchange as a Premium Listed company.



During the prior year, in  connection with the listing  of the Company on  the 
London Stock Exchange, the Company was incorporated and introduced as the  new 
holding company of the Group on 21 February 2012 as follows:

· On  21  February  34,999,998  million £1  shares  were  issued  to  the 
shareholders of Energy Assets Holdings  Limited (the previous holding  company 
of the Group) in connection with its acquisition by the Company;

· On  22  February  the  sole shareholder  resolved  to  consolidate  the 
Company's capital to 20,000,000 shares of £1.75;

· On 23  February the  sole shareholder  resolved to  reduce the  nominal 
value of each share from £1.75 to 1p;

· On  22  March  2012 a  further  7,142,857  new shares  were  issued  in 
connection with the offering of 14,395,705  new and existing 1p shares at  210 
pence per share bringing the total share capital to 27,142,857.

4) Going concern



The Group's business activities,  together with the  factors likely to  affect 
its future development, performance and position are set out in the  financial 
review on pages 5 to 8.







4) Going concern (continued)



The Directors have  considered these  factors, the likely  performance of  the 
business and possible alternative outcomes, the financing facilities available
to the Group and the possible actions  able to be taken should new  facilities 
not be available in the future.



Having taken all of  these factors into  consideration, the Directors  confirm 
that forecasts and projections indicate that the Group and its Parent  Company 
have adequate resources for the foreseeable future and at least for the period
of 12 months from the date of the half year report. Accordingly the financial
information has been prepared on the going concern basis.



5) Accounting policies



The accounting policies  adopted are  consistent with those  of the  financial 
year ended 31 March 2012.



Exceptional items  are  disclosed  and described  separately  in  the  interim 
financial information  where it  is  necessary to  do  so to  provide  further 
understanding of the financial performance of the Group.



Taxes on income in  the interim periods  are accrued using  the tax rate  that 
would be applicable to expected total earnings.



6) Estimates



The preparation of interim financial  information requires management to  make 
certain judgements, estimates and assumptions  that affect the application  of 
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual amounts may differ from these estimates.



In preparing  this condensed  consolidated interim  financial information  the 
significant judgements made by management  in applying the Group's  accounting 
policies and the key sources of estimation uncertainty were the same as  those 
applied to the consolidated financial statements  for the year ended 31  March 
2012.



7) Segment information



Operating segments are reported in a  manner consistent with the reports  made 
to the chief  operating decision  maker. It is  considered that  the role  of 
chief operating decision maker is performed by the Board of Directors.



The Group only operates in the UK and for management purposes is organised
into three core divisions:



· Meter Asset Management

· AMR data provision

· Siteworks



This forms the basis of the Group's reportable operating segments.



The  Meter  Asset  Management  segment  combines  the  results  of  both   the 
installation and  management of  gas meters  as both  have similar  long  term 
economic characteristics and similar nature of their products and services due
to the customer base and regulatory environment under which they operate.







Note 7 - Segment information (continued)



The  measure  of  profit  principally  used  to  allocate  resources  is   net 
contribution. However, as interest costs arise on borrowings which are  wholly 
attributable to the  Meter Asset  Management segment, finance  costs are  also 
allocated to  this segment.  Allocated  operating costs  represent  management 
charges including payroll  and related  overheads. EBITDA is  monitored on  a 
group level but not at segment level and therefore this has not been presented
within this note.



Certain central costs, assets and liabilities are not allocated to segments as
they are  managed on  a Group  basis. These  comprise primarily  central  head 
office and management overhead costs,  cash, accounts receivable and  accounts 
payable.



Six months ended 30 September     Meter asset  AMR data  Siteworks    Total
2012 (unaudited)                  management   provision           operations
                                    £'000       £'000     £'000      £'000
Segment revenue from external
customers                                3,636     1,388     2,573       7,597
Cost of sales - depreciation           (1,159)     (197)         -     (1,356)
Cost of sales - other             -     (683)     (954)     (1,637)
Group gross profit                       2,477       508     1,619       4,604
                                                                         
Items not reported by segment:                                            
Other operating costs                                               (1,169)
Depreciation                                                           (72)
Amortisation                                                           (58)
Exceptional share based payment                                     (241)
expense
                                                                
Group operating profit                                                3,064
Net finance costs                      (1,537)                       (1,537)
Profit before tax                     940                         1,527
Tax                                                                  (344)
Profit for the year                                                  1,183





At 30 September 2012 (unaudited)    Meter asset AMR data  Siteworks   Total
                                    management  provision           operations
                                       £'000      £'000     £'000     £'000
Property, plant and equipment            45,740     1,410         -     47,150
Assets not reported by segment                                        20,229
Total assets                                                            67,379
Bank borrowings                        (39,508)         -         -   (39,508)
Liabilities not reported by segment                                   (5,971)
Total liabilities                                                     (45,479)









Note 7 - Segment information (continued)



Six months ended 30 September      Meter asset  AMR data  Siteworks   Total
2011 (unaudited)                   management   provision           operations
                                     £'000       £'000     £'000     £'000
Segment revenue from external
customers                                 2,551     1,225     2,189      5,965
Cost of sales - depreciation              (825)     (110)         -      (935)
Cost of sales - other              -     (607)     (931)    (1,538)
Group gross profit                        1,726       508     1,258      3,492
                                                                         
Items not reported by segment:                                            
Other operating costs                                                 (738)
Depreciation                                                           (42)
Amortisation                                                           (29)
Group operating profit                                                2,683
Net finance costs                       (1,339)                      (1,339)
Profit before tax                      387                        1,344
Tax                                                                 1,221
Profit for the year                                                  2,565





At 30 September 2011 (unaudited)    Meter asset AMR data  Siteworks   Total
                                    management  provision           operations
                                       £'000      £'000     £'000     £'000
Property, plant and equipment            34,181     1,167         -     35,348
Assets not reported by segment                                         8,511
Total assets                                                            43,859
Bank borrowings                        (31,953)         -         -   (31,953)
Liabilities not reported by segment                                   (5,729)
Total liabilities                                                     (37,682)







Note 7 - Segment information (continued)



Year ended 31 March 2012           Meter asset  AMR data  Siteworks   Total
(audited)                          management   provision           operations
                                     £'000       £'000     £'000     £'000
Segment revenue from external
customers                                 5,662     2,607     4,445     12,714
Cost of sales - depreciation            (1,815)     (299)         -    (2,114)
Cost of sales - other              -   (1,258)   (1,753)    (3,011)
Group gross profit                        3,847     1,050     2,692      7,589
Allocated operating costs          -     (120)     (180)      (300)
Net contribution before finance
costs                                     3,847       930     2,512      7,289
                                                                         
Items not reported by segment:                                            
Other operating costs                                               (1,493)
Depreciation                                                          (111)
Amortisation                                                           (69)
Net foreign exchange losses                                             (7)
Exceptional IPO costs                                               (2,645)
Group operating profit                                                2,964
Net finance costs                       (2,731)                      (2,731)
Profit before tax                        1,116                          233
Tax                                                                   1,360
Profit for the year                                                   1,593



At 31 March 2012 (audited)          Meter asset AMR data  Siteworks   Total
                                    management  provision           operations
                                       £'000      £'000     £'000     £'000
Property, plant and equipment            39,267     1,333         -     40,600
Assets not reported by segment                                          22,119
Total assets                                                            62,719
Bank borrowings                        (35,457)         -         -   (35,457)
Liabilities not reported by segment                                   (6,547)
Total liabilities                                                     (42,004)



During the year to 31 March 2012,  sales to related parties amounted to  £6.7m 
being sales  made  on  an arm's  length  basis  to Corona  Energy  Limited,  a 
Macquarie Group company. Sales  to Corona in the  six months to 30  September 
2012 were £3.9m.







8) Exceptional items



Items that are both  material because of their  size or nature,  non-recurring 
and whose  significance  is  sufficient to  warrant  separate  disclosure  and 
identification within the consolidated  financial information are referred  to 
as exceptional items.  The separate  reporting of exceptional  items helps  to 
provide an understanding of the Group's underlying performance.



                  6 months ended 30 September 6 months ended 30 Year ended 31
                              2012 (unaudited)    September 2011    March 2012
                                                     (unaudited)     (audited)
                                        £'000             £'000         £'000
Operating   profit                       3,305             2,683         5,609
before exceptional
items
Exceptional    IPO                           -                 -       (2,630)
costs
Exceptional  share                       (241)                 -    (15)
based      payment 
expense
Operating profit                         3,064             2,683         2,964



On 22 March 2012  Energy Assets plc  was admitted to  trading on the  Official 
List of the London Stock Exchange as a Premium Listed company. The IPO  raised 
net proceeds  of £11.7m  through  the issue  of  14,395,705 new  and  existing 
ordinary shares. However,  significant non-recurring costs  were incurred  in 
relation to the IPO  and it is deemed  necessary to separately identify  these 
costs within the results for the year to 31 March 2012.



Additionally, exceptional IPO costs of £0.7m were offset against equity in the
prior year amounting to total IPO costs of £3.3m.



The Group also implemented a number of share based payment schemes as part  of 
the IPO. The  expense for  the current period  in relation  to these  schemes 
amounts to £0.2m.













9) Taxation



                            6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011   March 2012
                                   (unaudited)       (unaudited)     (audited)
                                        £'000             £'000         £'000
Analysis of charge in period                                   
                                                              
Current tax:                                                   
Current income tax expense                   -                 -         (278)
Adjustment  in  respect   of                48               768         906
prior years
Total current tax                           48               768           628
                                                                          
Deferred tax:                                                              
Origination and reversal  of             (377)               409           773
temporary differences
Adjustments  in  respect  of                 -                54             -
prior periods
Effect  of  changes  in  tax              (15)              (10)        (41)
rate on opening liability
Total deferred tax                       (392)               453           732
                                                                          
Income tax credit/(expense)              (344)             1,221         1,360
                                                                          
Effective tax rate                         23%                              
Effective      tax      rate               26%                              
(excluding PY adjustment)



The tax on the Group's profit  before tax differs from the theoretical  amount 
that would arise using the weighted average tax rate applicable to profits  of 
the consolidated entities as follows:



                            6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011   March 2012
                                   (unaudited)       (unaudited)     (audited)
                                        £'000             £'000         £'000
Profit before tax                        1,527             1,344           233
                                                                          
Tax calculated at domestic               (366)             (349)          (61)
tax rate applicable to
profits (2012/13: 24%,
2011/12: 26%)
                                                                          
Effects of:                                                                
Expenses not deductible for               (11)              (26)         (698)
tax purposes
Adjustments in respect of                   48               822
previous periods                                                           956
Group relief claimed                         -               784         1,204
Effect of changes in tax                  (15)              (10)
rate                                                                   (41)
Tax credit/(charge)                      (344)             1,221        1,360



Energy Assets  Group plc  agreed with  its significant  shareholder, and  100% 
parent until the Listing, that the  wider Macquarie Group would surrender  tax 
losses under Part 5 of Corporation Tax  Act 2010 to cover Energy Assets  Group 
plc taxable profits in the years ended 31 March 2011 and 31 March 2012 for the
period of ownership hence the tax credit for the year ended 31 March 2012.





9) Taxation (continued)



As anticipated the Group has been subject to ordinary rates of corporation tax
in the UK for the six months to 30 September 2012.



A number of further changes to the UK corporation tax system were announced in
the March 2012 UK  Budget Statement. A resolution  passed by Parliament on  26 
March 2012 reduced the main rate of corporation tax to 24% from 1 April  2012. 
Legislation to reduce the main rate of corporation tax from 24% to 23% from  1 
April 2013 is expected to be included in Finance Act 2012. A further reduction
to the main rate is also proposed to reduce the rate to 22% from 1 April 2014.
None of these rate  reductions had been substantively  enacted at the  balance 
sheet date and, therefore, are not included in these financial statements. Had
these changes been substantively enacted at the balance sheet date there would
have been no significant impact on the accounts.



10) Earnings per share



Basic earnings per share is calculated by dividing the profit attributable  to 
ordinary equity  holders of  the Company  by the  weighted average  number  of 
ordinary shares in issue during the year.



                            6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011    March 2012
                                   (unaudited)       (unaudited)     (audited)
                                                                          
Net profit  attributable  to             1,183             2,565         1,593
equity holders of the  Group 
(£'000)
                                                                          
Weighted average  number  of            27,196             1,222         3,462
shares in issue (thousands)
                                                                          
Basic  earnings  per   share              4.35            209.90         46.01
from  continuing  operations 
(pence)



Diluted earnings per  share is  calculated by adjusting  the weighted  average 
number of ordinary  shares outstanding  to assume conversion  of all  dilutive 
potential ordinary shares.



This is done by calculating the number of shares that could have been acquired
at fair value (determined as the  average market share price of the  Company's 
shares since Listing) based on the  monetary value of the subscription  rights 
attached to outstanding share options. The number of shares calculated  above 
is compared with the number of shares that would have been issued assuming the
exercise of the share options.



Therefore, the  Company will  be required  to adjust  the earnings  per  share 
calculation in relation to the share options that are in issue under the  LTIP 
and IPO Award Plan share based incentive schemes as follows:









10) Earnings per share (continued)



                            6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011    March 2012
                                   (unaudited)       (unaudited)     (audited)
Net profit  attributable  to             1,183             2,565         1,593
equity holders of the  Group 
(£'000)
                                                                          
Weighted average  number  of            27,824             1,222         3,483
shares in issue (thousands)
                                                                          
Diluted earnings  per  share              4.25            209.90         45.74
from  continuing  operations 
(pence)



Adjusted earnings per share



Given the large issue of shares  as a result of the  IPO on 22 March 2012  the 
Group had 27,142,857 shares in issue at  31 March 2012 compared to a  weighted 
average of 3,462,433 in the year to 31 March 2012. Going forward EPS will  be 
calculated using these shares as a basis and therefore it is useful to  review 
what the  EPS in  the year  to 31  March 2012  and for  the six  months to  30 
September 2011 would  have been  if these  shares had  been in  issue for  the 
entire reporting period  to give a  meaningful comparison to  the EPS for  the 
current six month period.



Additionally, there was a  significant tax credit received  in the year to  31 
March 2012 due to group relief received from Macquarie, however, this will not
be available going forward and therefore  the profit figure has been  adjusted 
to show profit after a notional tax charge at 26% in the prior year and before
exceptional items.

The tax charge in  the current period  is the tax charge  shown in the  income 
statement minus the prior year adjustment which is non-recurring. 

                            6 months ended 30 6 months ended 30 Year ended 31
                                September 2012    September 2011    March 2012
                                   (unaudited)       (unaudited)     (audited)
Profit   before   tax    and             1,768             1,344         2,878
exceptional items (£'000)
Tax charge (£'000)                       (392)             (349)        (748)
Profit   after    tax    but             1,376               995         2,130
pre-exceptional        items 
(£'000)
                                                                          
Number of  shares  in  issue            27,246            27,143        27,143
(thousands)
                                                                          
Adjusted earnings per  share              5.05              3.67          7.85
from  continuing  operations 
(pence)









11) Property, plant and equipment






                    Furniture, fittings &               Data    Motor
                     office equipment      Gas meters loggers vehicles TOTAL
                           £'000             £'000     £'000   £'000   £'000
At 30 September                                                          
2012
                                                                        
Cost                                                                     
At 1 April 2011                         229     29,592     752        9 30,582
Additions                               231      7,142     847        -  8,220
At  30  September                       460     36,734   1,599        9 38,802
2011
                                                                        
At 1 October 2011                       460     36,734   1,599        9 38,802
Additions                                65      6,082     346        -  6,493
At 31 March 2012                        525     42,816   1,945        9 45,295
                                                                        
At 1 April 2012                         525     42,816   1,945        9 45,295
Additions                                76      7,627     275        -  7,978
At  30  September                       601     50,443   2,220        9 53,273
2012
                                                                        
Depreciation                                                             
At 1 April 2011                          84      1,733     314        7  2,138
Charge  for   the                        37        820     118        2    977
period
At  30  September                       121      2,553     432        9  3,115
2011
                                                                        
At 1 October 2011                       121      2,553     432        9  3,115
Charge  for   the                        72        996     180        -  1,248
period
At 31 March 2012                        193      3,549     612        9  4,363
                                                                        
At 1 April 2012                         193      3,549     612        9  4,363
Charge  for   the                        76      1,154     198        -  1,428
period
At  30  September                       269      4,703     810        9  5,791
2012
                                                                        
NBV     at     30                       332     45,740   1,410        - 47,482
September 2012
NBV at  31  March                       332     39,267   1,333        - 40,932
2012
NBV     at     30                       339     34,181   1,167        - 35,687
September 2011
NBV at  31  March                       145     27,859     438        2 28,444
2011



Gas Meter additions in the period to 30 September 2012 include directly
attributable costs of £1.2m (H1 2011/12: £1.1m).

Borrowings are secured by a cross company guarantee and fixed and floating
charge over the Group's assets.





12)  Net debt/EBITDA

The Group monitors capital on the basis of net debt divided by EBITDA. Net
debt is calculated as total borrowings less cash and EBITDA is calculated as
operating profit before any significant non-recurring items, interest, tax,
depreciation and amortisation as follows:



                        12 months ended 30 September  Year ended 31 March 2012
                              2012 (unaudited)               (audited)
                                   £'000                       £'000
Profit before tax                                 416                      233
Add: finance costs                              2,974                    2,777
Less: finance income                             (45)                     (46)
Add: depreciation                               2,676                    2,225
Add: amortisation                                  98                       69
Add: exceptional items                          2,886                    2,645
EBITDA                                          9,005                    7,903



                               30 September 2012 31 March 2012
                                     £'000           £'000
Total borrowings                           39,508        35,457
Less: cash and cash equivalents          (14,669)      (16,382)
Net debt                                   24,839        19,075
                                                            
Net debt/EBITDA                               2.8           2.4



13) Leased assets

The Group, as  part of its  core business,  is a lessor  of metering  assets. 
These are  leased to  customers  under operating  leases. The  minimum  lease 
rentals receivable at current prices assuming  the lease remains in place  for 
its expected term are as follows:

                         6 months ended 30 September Year ended 31 March 2012
                                     2012 (unaudited)                (audited)
                                               £'000                    £'000
Within one year                                 7,934                    6,749
Between  one  to  two                           7,934                    6,749
years
Between three to five                          23,802                   20,246
years
More than five years                          102,645                  90,089
                                             142,315                  123,833



These lease payments are subject to annual reviews and are cancellable by  the 
customer.







14) Post balance sheet events



On 11 October 2012, the  Group acquired 100% of  the share capital of  Gazprom 
Global Energy  Solutions Limited  (GGES) for  a total  consideration of  £9.0m 
which includes an  initial cash consideration  of £6.0m and  a potential  cash 
earn-out payment up to a maximum of £3.0m (payable dependent upon the level of
data logger installations  carried out over  a 3 year  period by the  acquired 
company). 



At  the  time  of  issuing  this  condensed  consolidated  interim   financial 
information it  is  not possible  to  disclose  the assets  acquired  and  the 
liabilities assumed as the acquisition balance sheet is still to be  finalised 
with the  vendor,  Gazprom Energy,  and  none  of the  assets  or  liabilities 
acquired are included  within the  Group's balance  sheet as  at 30  September 
2012. 



Subsequent to  agreement  of the  acquisition  balance sheet  the  Group  will 
undertake a purchase price  allocation exercise in  accordance with IFRS  3(r) 
Business combinations, full disclosure  of which will  be included within  the 
annual report for the year ending 31 March 2013. 



In addition to the  assets and liabilities currently  recorded on the  balance 
sheet of GGES at the date of acquisition it is anticipated that there will  be 
further assets identifiable in relation to the various exclusivity  agreements 
GGES has in place with Gazprom Energy and which were acquired by the Group  as 
part of the transaction.  The fair values of  such assets will be  determined 
when performing the  purchase price  allocation exercise and  amounts will  be 
allocated to  these  assets  from  the  total  consideration.  Any  remaining 
consideration paid over and  above the net of  recognised assets acquired  and 
liabilities assumed will be allocated to goodwill. Any goodwill recognised is
expected to be attributable to future customers and the assembled workforce. 

All acquisition costs that relate to the transaction will be expensed  through 
the statement of comprehensive income and will be separately disclosed in  the 
annual report for the  year ending 31  March 2013. It  is estimated that  the 
costs of the acquisition will amount to circa £0.35m in total.


Further details of the  business combination and the  benefits that this  will 
bring to the Group are included on page 2. 



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR DKLFFLFFXFBV -0- Nov/20/2012 07:00 GMT
 
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