The Company's balance sheet ended the year in a position of
strength with all debt having been fully extinguished and a net
cash balance of $63.1 million. With the completion of a newly
expanded credit facility in November 2011 and the organic cash
generation of the business, we believe there is sufficient funding
capacity to finance growth well into the future.
APR and the Global Temporary Power Marketplace APR is a leader
in the field of providing fast-track temporary power solutions. Our
sole focus is on large-scale International Power Projects (IPP),
which are often located in high-growth, high-demand emerging
markets. The power capacity provided through these types of
projects may fill a variety of needs, including supplemental power
to cover high-demand seasonal periods or scheduled plant
maintenance, emergency power for unplanned interruptions or
reductions in supply, or dedicated power to run industrial
operations.
The marketplace in which we operate is global and extensive. It
benefits from strong growth drivers for the short, medium, and long
term. It is a market where demand greatly outstrips supply, and
this supply-demand gap should continue to rise due to underlying
factors which are likely to persist for many years. These factors
include rapid economic development in emerging markets, the
advanced ageing of a number of power plants and infrastructure
around the world, the lack of funds for construction of new
permanent plants, and climatic impacts on rain-dependent
hydroelectric power generation. In many countries, shortage and
unreliability of electricity supply are key impediments to economic
growth.
Our Business The solution to this supply gap is temporary power
capacity. In this field, APR has built an enviable reputation.
Through its flexible turnkey solutions, APR helps customers by
rapidly deploying the power capacity to fill their supply gaps -
when and where they need it - without requiring the customer to
fund the up-front capital investment.
As part of this turnkey approach, APR Energy provides the
installation, operation, and maintenance services for the power
project as a whole, being a one-stop-shop for the customer.
Deploying temporary power plants rapidly to remote - and often
underdeveloped - parts of the world is no easy undertaking.
However, APR has proven to be well equipped for the task,
leveraging deep industry experience, considerable logistics and
engineering capability, and hands-on involvement to ensure customer
demands are met. By using state-of-the-art technology, APR has also
been able to reduce maintenance costs and emissions, while
providing customers with a highly reliable power source and greater
flexibility in fuel type and footprint.
Positioning for Our Future As a result of its compelling
customer value propositions, strong positioning within the
marketplace, and an ability to deliver efficient solutions, APR has
enjoyed robust growth over the past five years. Its continued
strong prospects for growth aligned precisely with the investment
criteria of Horizon Acquisition Company, which had been established
to identify a single company offering considerable growth
potential, but hampered by a shortage of capital. Horizon
Acquisition Company therefore took the opportunity to acquire the
APR Group in June last year, giving our existing shareholders some
60 per cent of the enlarged business, with APR Group management
holding a further 11 per cent, and leaving $279 million of cash on
the balance sheet.
Since June, APR has accelerated its growth rate, increased its
fleet size substantially, and maintained its operating margins. It
has won a significant number of new contracts and extended existing
contracts, strengthened its management team, and continued its
highly disciplined marketing and investment programmes.
APR has also executed upon several key strategic initiatives
over the last few months, which have put it in position for strong
growth in 2012 and beyond:
-- We signed two key global strategic partnerships - one with
Caterpillar Inc., the other with Pratt & Whitney Power Systems
- which provide us with reliable, state-of-the-art technology at
beneficial pricing. The partnership with Pratt & Whitney also
grants APR exclusivity in the rental power market with its mobile
dual-fuel turbines. Both partnerships have already begun yielding
new customer leads and opportunities.
-- We repaid the limited amount of short term debt held on APR's
books and put in place a new $400 million 5-year revolving credit
facility in order to fund continued future investment.
-- We opened our first regional hub in Panama this February and
our second hub in Dubai this March, with a third hub in Malaysia to
follow later this year. These hubs will further expand our global
reach, improve operational efficiency, and allow us to deploy
equipment faster and more efficiently in addressing regional
opportunities and customers in need.
Dividend In our re-listing prospectus in September last year, we
said that given the group's growth strategy and the capital
requirements of the business we anticipated that, in the short to
medium term, the majority of the Company's profits would be
re-invested in the business. We also said, however, that we would
maintain a regular review of our dividend policy and that we
intended to pay an annual dividend.
I am pleased, therefore, that the Board is recommending a
dividend for 2011 of 10 pence per share. Subject to the approval of
shareholders at our Annual General Meeting on 24 May 2012, this
dividend will be payable on 29 May 2012 to shareholders on the
register at the close of business on 4 May 2012. The ex-dividend
date will be 2 May 2012. The Board will continue to maintain a
regular review of its dividend policy and reiterates its intention
to pay an annual dividend.
Our Board of Directors Upon our re-listing last September, we
put in place a strong Board, which has been active in the
supervision of APR Energy's strategy and execution and in
developing a high level of corporate governance. At the end of
January this year, we welcomed Haresh Jaisinghani and James Hughes
as Independent Non-Executive Directors, and Matthew Allen as a
Non-Executive Director. These additions further strengthened our
Board, and provide a mix of skills and experience which match APR's
areas of strategic focus and growth.
Premium Listing In our prospectus last September, we stated that
in due course we may seek a premium listing, rather than our
current standard listing, on the London Stock Exchange. The Company
is now engaged on the work to prepare for a premium listing and we
look forward to advising the market on timing in due course.
Outlook
The momentum of the business exiting 2011 has already carried
into the new year with encouraging results posted in new order
intake, several contract extensions, and execution on our regional
hub strategy.
The structural dynamics of the temporary power market bode well
for continued growth for APR in 2012. Given the strength of our
current order book, a robust commercial pipeline of demand, and
APR's focus on disciplined execution, we expect that 2012 will be
another year of strong growth and continued progress on our
strategic objectives.
In conclusion, 2011 has been an eventful and successful year for
APR Energy and we are well positioned to continue this success. All
that APR has achieved is due to the efforts and dedication of its
management and employees, who have worked tirelessly in building
the company into what it is today and will be in the future. On
behalf of the Board, I thank each and every one of them and I look
forward to reporting on their further achievements during this
year.
Michael Fairey
Chairman
15 April 2012
Business Review
Chief Executive Officer's Report
2011 was a busy and eventful year for the Company, one in which
APR has been significantly transformed. While our Directors and
Management were engaged in capital markets transactions including a
private equity investment in early March (for the APR Group) and
the subsequent reverse acquisition by Horizon Acquisition Company
in June and re-listing as APR Energy plc in September, the
organisation remained focused on executing our growth strategies.
The Company's progress is evident in the rapid growth of our fleet
(358MW to 900MW at year end), the deployment of multiple new
contracts including 203MW in Japan and 150MW in Senegal, the
completion of supplier partnerships with Caterpillar Inc. and Pratt
& Whitney Power Systems, and the expansion of our employee base
around the world. Yet, despite all this change, we remained steady
and focused as we build a sustainable engine of growth.
APR Energy has evolved significantly from only a couple of years
ago, when our ability to grow our fleet was severely constrained by
a lack of capital. Our accomplishments in 2011, together with a
stronger balance sheet and a new five-year credit facility, have
enabled us to enter a new phase in the Company's life-cycle - a
phase in which we are well poised to take advantage of the growing
structural demand for temporary power in 2012 and beyond.
Review of Trading
The statutory trading information provided in this report covers
a fourteen-month period from 1 November 2010 to 31 December 2011,
and reflects the results of the former Horizon Acquisition Company
(now APR Energy plc) for the full period combined with the acquired
entities post the date of acquisition in June 2011.To provide
greater clarity on operational performance, we have also included
pro-forma trading results of the APR Group (the acquired
businesses) covering the twelve-month period from 1 January 2011 to
31 December 2011, and include items of income and expenditure of
APR Energy plc and APR Energy Holdings Limited for the seven months
post acquisition.
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