Parkmead swings to profit as revenues triple

25th Mar 2022 10:50

(Sharecast News) - Energy developer Parkmead reported a tripling in revenue in its first half on Friday, to £4.6m from £1.5m, as it benefited from continued increases in gas prices.

The AIM-traded firm said its gross profit rocketed 389% year-on-year for the six months ended 31 December, to £3.8m, which it put down to the "quality" of its onshore Netherlands assets and its "strong" operating leverage.

Its gross profit margin increased to 82%, from 50% in the first half of the 2021 financial year, while it swung to an operating profit of £1.9m from a loss of £1.1m, or 1.7p on a per-share basis.

Profit before tax came in at £1.3m for the period, compared to a loss of £1.4m a year earlier.

Parkmead said it was "well-capitalised", with cash balances totalling $32.2m (£24.1m) at period-end, equivalent to 22.1p per share.

Net cash generated from operating activities totalled £1.7m for the first six months, compared to a net £0.3m being used in operating activities in the first half last year.

Total assets stood at £80.5m on 31 December, however, down from £86.8m.

The board said the "strong recovery" in gas prices continued during the period, with prices in June of around €25 per megawatt-hour increasing to around €95 per megawatt-hour by December.

Due to ongoing geopolitical events, the current gas price reached €160 per megawatt-hour in March, with Parkmead noting it was completely unhedged.

It reported proven and probable reserves of 45.6 million barrels of oil equivalent as at 1 March, compared to 45.7 million barrels on the same date last year.

Parkmead said it was "well-positioned" for further acquisitions and opportunities, as it evaluated further acquisition opportunities in each of its areas of activity - renewables, gas and oil.

"We have delivered a tripling of our revenue, led by our high-quality Dutch assets and the significant rise in gas prices," said executive chairman Tom Cross.

"The innovative royalty deal we completed last summer is proving to be highly advantageous and is adding considerable value to Parkmead.

"Parkmead is 100% unhedged and is directly benefiting from these additional gas sales at higher prices."

Cross said the company now planned to increase activity in the Netherlands, with a firm drilling campaign planned for 2022-2023.

"Parkmead's acquisition of the Kempstone Hill wind farm provides another revenue-generating asset to the group, which has a long-life and a very steady stream of cash flow.

"This operational wind farm is complementary to our earlier stage, high-upside renewable energy projects.

"Our team continues to carefully evaluate further potential gas, oil and renewable energy acquisitions that would enhance our existing business."

Parkmead was well-positioned, Tom Cross said, with "excellent" UK and Netherlands regional expertise, "strong" financial discipline, and a growing portfolio of quality assets.

"The group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led, growth strategy to secure opportunities that maximise future value for our shareholders."

At 1031 GMT, shares in the Parkmead Group were up 6.23% at 52p.