On 6 February, Future Renewables Eco plc belatedly published its accounts for the year ending June 2018, just over a month overdue.
Since its incorporation in 2015, FRE has been funded by investors in unregulated bonds paying up to 13% per year.
FRE’s turnover increased from £440k in 2017 to £593k in 2018. However, with overheads increasing from £569k to £808k, and most significantly, interest payable on its bonds and similar expenses increasing from £1.2 million to £2.5 million, pre-revaluation net losses widened from £375k to £1.99 million.
Over the same period, FRE revalued some of its existing wind turbine sites by £2.05 million, which turned this loss into a small net profit for the year.
Net assets at the end of the year were reported as £505k, comprising £16.6m in assets minus £16.1m in liabilities. It is worth noting that the assets figure also includes the £2.05 million uplift in valuation.
This £2 million in revaluation uplift that allowed FRE to report a net profit and positive net assets was based on an independent valuation from Berrys Chartered Surveyors at open market value.
Directors report
A section of the directors’ report under “Industry overview” is in reality copy and pasted from a report by Deloitte without attribution.
As for the part of the directors’ report that the directors actually wrote, one point that stands out is that the company is due to make capital and interest repayments of £2.7 million by January 2020, of which £2m falls between December 2019 and January 2020.
The company intends to find this from “a combination of trading activity, additional availability of short-term borrowing, opportunity for reinvestment by Bond holders and, if necessary, the sale of turbines in stock and Turbine site sales”.
Given the company is yet to make an operating profit, even before investors’ interest is accounted for, it will need a quick and significant turnaround in its trading performance to be able to repay bondholders from trading activity at the end of this year.
The options of short-term borrowing and bondholders not asking for their money back (aka reinvestment) are perfectly valid in the short-term but kicking the can down the road in the long term.
The directors say that they have prepared projections for 12 months which estimate that even if they do not sell any of their turbines, the company will “remain cash generative” and be able to meet its liabilities as they fall due.
How exactly the company can “remain cash generative” when the cash flow statement shows that the company had a net cash outflow of £988k – even after including £4.1m of new money from investors – is not clear.
What is clear is that, as the directors say, if the company cannot reverse its £2 million net loss (pre-revaluation), then to continue repaying the capital that falls due at the end of this year, it will either need new investment or to start selling off turbines.
FRE continues to seek investment in its “phase 5” bonds which currently pay between 7 and 11% per year for a 3-5 year term.
I have a bond which matured at the end of October 2020. I want to cash it out however FRE PLC cannot pay neither the accumulated interest nor the investment capital now. They are in the process to sell off a turbine.
What was published in this article back on March 2019 now has materialised.
I am also in the same position. I wonder how many other investors are waiting for capital repayments. It would be good to understand what the options are for trying to claw back the initial capital invested.
I invested in 2019 and have been receiving bi-annual interest but fear more and more for final repayment.
I think we need to go urgently to BBC Radio 4 consumer program to get the company investigated before others get into this…
I have emailed You and Yours and the Money Program but not received any reply!
Their accounts are seriously (and illegally) overdue, even after extending their accounting period to give them more time. Not a good sign. However I don’t think most consumer programmes will be very interested in a small, high risk, unregulated company going bust as it happens all the time – unless there is some angle they can focus on that makes them different to the rest.
The nasty angle is that it’s pretending to be all green and pro Care for the Planet, if you see what I mean.
So there I was thinking I was doing my bit to save the planet, instead it looks like I’m lining these (potential) gangsters’ pockets. Grrrrrrr
unfortunately its not looking good me and all the other investors we have received another letter this week telling us that the sales of the turbine sites still haven’t happened so again they cannot pay back the initial investments. being an unregulated company does this mean if they fold will we able to get any money back.
Hi Malcolm,
Sorry to hear your investments have gone pear shaped. I also invested and would be due Returns next year.
How can we “rattle the cage” of these bandits? I’ve waited 15 months for resolution via Financial Ombudsman for another investment (bank trying their best to wash their hands).
Have you thought of contacting a media money consumer program / editor?
Best wishes
FRE claims that will be in position to return capital in the remaining 7 weeks of Q2 2021 by selling off sites.
They have not disclosed its financial position nor whether these sales will cover capital repayments.
Thanks for update Bob!
We’re watching this space…
This company is now in serious trouble. Those involved have been sent details as to interest payments now stopped. A vote is intended for next week giving two options to consider in order to recover funds invested.
Massive bummer! Blame game will not make things better. What’s important now is to vote the right way. Which of the two will bring a better return, and what are the likely timings of payout in either case? Anyone likely to know?
I like all other are not the happiest of people thanks to FRE. Sold as government backed, not sure now what that meant. Due to mature November 2020. Did receive monthly interest payments until this month April. Vote, which way?
I don’t remember it was ‘government backed’. If so is there any hope we could get some legal advice on how to ensure FRE be accountable for their alleged fraud?
How many of us are there that invested in this company?
Who has some influence to get the story out in the public domain? There was veiled threat in the email about legal action if the contents of their email be divulged. Is that even legal?
Had 6 Month fot mine to mature, but has any received their mone y back
My last quarterly interest payment came in April this year
My capital has not been returned. Now no more interest payments but I will keep a tally on what they owe me respective of any company sell off / insolvency payout etc. I have found out the hard way there is a risk when investing in a company not FCA regulated that they can do what they want, whenever they want, unless and until a criminal investigation is initiated at which point those involved should be answerable for there actions. Investors have to rely on the integrity and trustworthiness of those dealing with their accounts. Unfortunately at this moment in time I have been let down and are seriously disappointed. Asset backed they declared. Really ? I am hoping that some day no investment will be allowed in the UK without FCA regulation. How some people can sleep at night knowing the harm they cause to families is beyond me.
Maybe someone can start a Facebook group for FRE investors maybe we find out how many there are of us. There is something similar for Magna who have gone bust too and they managed to find 167 investors. You could also ask your provider / introducer to send an email to all the ones they had introduced and invested to join the Facebook group. Maybe there are lawyers/accountants etc. who can help out with tips on the way forward and if the Security was in place as promised etc. The more backing and people the stronger the case instead of going individually.
That wont do anything maria apart from rile people up give them false hope! Best thing to do is try move on as quickly as possible and try and forget. Regardless if its just a failed investment or if you sold yourself on whatever scheme the gossiping and rumours on these pages just drags out the further the pain and belief you can recover costs. These facebook pages are only any good if someone is prepared to foot the bill in pursing some sort of action which normally no one is ever prepared to do as the bill would normally outweigh their investment.