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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Aquila Services Group Plc | LSE:AQSG | London | Ordinary Share | GB00BPYP3Q26 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 6.50 | 4.00 | 9.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 12.25M | 518k | 0.0130 | 5.00 | 2.6M |
From Apr 2019 to Apr 2024
TIDMAQSG
RNS Number : 5004J
Aquila Services Group PLC
29 June 2017
For Immediate Release
29 June 2017
Aquila Services Group plc
("Aquila" or the "Company")
Annual report and financial statements for the year ended 31 March 2017
and Notice of Annual General Meeting
Aquila is pleased announce its audited annual report and financial statements for the year ended 31 March 2017, extracts of which are set out below.
The Company's Annual General Meeting ("AGM") will be held at Tempus Wharf 29A, Bermondsey Wall West, London, SE16 4SA on 27 July 2017 at 4.30 pm.
The Company's annual report and financial statements for the year ended 31 March 2017 along with a Notice of AGM and a Form of Proxy are being posted to shareholders today and will shortly be made available from the Company's website at: http://www.aquilaservicesgroup.co.uk/.
In addition, these documents will be uploaded to the National Storage Mechanism and will be available for viewing shortly at http://www.morningstar.co.uk/uk/NSM.
The financial information set out below does not constitute the Company's statutory accounts for the period ending 31 March 2017. The financial information for 2017 is derived from the statutory accounts for that year. The auditors, Saffery Champness, have reported on the 2017 accounts. Their report was unqualified and did not include a reference to any matters to which the auditors draw attention by way of emphasis without qualifying their report.
For further information please visit www.aquilaservicesgroup.co.uk or contact:
Aquila Services Group plc
Susan Kane, Group Finance Director
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Roland Cornish
Tel: 020 7628 3396
Chairman's Statement
Dear Shareholder,
I am pleased to present the annual report and the Financial Statements for the year to 31 March 2017.
Aquila Services Group plc ("the Company"), previously General Industries plc, is the holding company for Altair Consultancy & Advisory Services Ltd ("Altair") and Murja Ltd ("Murja") which form the Group ("the Group").
The Group provides financing and management consultancy advice on all aspects of affordable housing across the United Kingdom and Republic of Ireland to housing associations, local authorities, government agencies and other non-profit organisations as well as high level business advice to the property sector.
The Group's strategy is to expand the range of professional services either through organic growth or acquisition to offer clients a 'one stop shop' for all their higher-level support requirements.
Group Members
Altair Consultancy and Advisory Services Limited
Altair is a specialist management consultancy providing professional services to local authorities, housing associations, charities, property companies, regulators and government departments. The consultancy covers the whole of the United Kingdom and in the year under review has focused on expanding into the Republic of Ireland and increasing its client base in the Midlands and North of England. This year Altair has undertaken its first consulting assignment in Africa. Altair advises on all aspects of the development and management of affordable housing for rent and sale, and on the effective management of organisations operating in this sector.
Murja Limited
Murja is a specialist treasury management consultancy authorised and regulated by the Financial Conduct Authority. Murja advises local authorities, housing associations, colleges and other bodies on their capital funding requirements and supports them in securing debt finance. The business operates through both retained contracts with a significant number of clients and one-off specific projects which result in additional fees being generated when projects are complete.
Business Review
During the year under review, the Group continued to grow both its capacity and its client-base; expanding and strengthening its consultancy capacity through the recruitment of high-calibre individuals to support the national coverage and increased product offering. The Group has developed a series of new products and services and this has provided opportunities to successfully bid for larger, and more complex, contracts.
Brexit, change in political leadership, the wider global economic uncertainty, and the recent General Election all cause uncertainty for our clients. This coupled with changes in government policy, regulation, devolution, the ever-changing funding environment, and exposure to the wider residential property market affect the clients of both subsidiaries. Changes and challenges on this scale lead to an increase in the demand for high quality consultancy advice as clients look to find ways of using resources - money, people and technology - more effectively and efficiently.
Alongside this, the public, regulators and government expect ever improving performance and quality from the Group's clients. The track record of the company's subsidiaries show that they are well placed to provide the support services and therefore the trading conditions required by our clients.
During the period of review, we have successfully partnered with 3C, a specialist IT consultancy company to increase our offering to the sector.
Financial results
For the year to 31 March 2017, Group turnover rose to GBP5.928m, an increase of 25% over the year. Altair's consultancy and interim management business contributed GBP5.456m (2016: GBP4.628m) and Murja's GBP0.472m (2016: GBP0.118m).
Gross profit rose to GBP1,475k (2016: GBP1,288k) with operating profit, before share option charges, of GBP658k (2016: GBP545k). Operating profit took into account investment in new staff for Altair and Murja to meet growing demand, particularly, in the North of England, Midlands and Scotland. Profit after tax, attributable to shareholders, was GBP404k (2016: GBP167k(1) ) and earnings per share was 1.24p (2016: 0.61p(2) ).
The comparison between this reporting period, the mid-year results and the previous year's results for the Group are as follows:
Hot Features
Premium
Year ended 6 months to Year ended
31 March 30 September 31 March
2017 (audited) 2016 (unaudited) 2016 (audited)
GBP000s GBP000s GBP000s
Turnover 5,928 2,796 4,746
Gross profit 1,475 673 1,288
Operating profit (before share
option charge) 658 307 545
Share option charge 148 68 255
Operating profit (after share
option charge) 510 239 290
The Group has a strong balance sheet with over GBP2.3m in cash deposits as at 31 March 2017.
_________
(1) Adjusted Profit after Tax to exclude deemed cost of listing (2) Adjusted Earnings per share to exclude deemed cost of listing
Dividend
The directors propose a final dividend of 0.50p per share (2016: 0.44p), making a total dividend for the year of 0.74p per share (2016: 0.66p), an increase of 12% compared to 2016. This will be payable on 4 August 2017 to shareholders on the register at 21 July 2017.
Outlook
The outlook for the Group remains positive. The affordable housing sector is a key market for the Group and the continued political pressure to deliver more homes coupled with the recent move from the government to include affordable rent within its previous sales only 'Affordable Housing Funding Programme' will enable the Group's clients to increase their delivery of new homes.
The Housing and Planning Act 2016 has meant changes for our clients within the housing sector, although some expected policy changes have not yet come into force due to delays caused by the Referendum and the subsequent changes within the government. There will now be further delays as a result of the early General Election.
However, changes to the regulation for the housing sector in England are moving forward with the separation of the Homes and Communities Agency into two bodies: Regulation and Homes England (the investment arm) plus amendments to regulation to ensure that housing organisations are no longer classified as public bodies. These changes will translate into opportunities for the Group to increase its revenues and profitability by offering an increased range of funding advice and consultancy services.
The task for our clients will be to help the government make the case for continued support and investment in housing solutions. With the government's focus on Brexit, it is even more important that the housing sector has a coherent and well-articulated offer.
The Group will continue to work with housing providers of all types, including housing associations, local authorities, house builders and private sector providers. We will support their growth, helping them change to improve and supporting their resilience to the current and future operating environment. This coupled with our constant engagement with the policy landscape ensures that we are able to provide credible, innovative and practical solutions to our client needs.
The increasing profile of public and political debate around the funding of care and support services will also provide opportunities as well as threats for a number of our clients; we will be developing our services to provide support in this area.
We continue to investigate acquisitions and other opportunities to increase the scope and depth of the business.
May I take the opportunity to record my thanks to my fellow directors, executive team and staff of the Group. As a people-business, the Group is dependent on their enormous commitment and expertise. I look forward to reporting further progress as part of the half year results.
Jeffrey Zitron - Chairman
28 June 2017
Strategic Report
Our business
Aquila Services Group plc ("the Company") comprises two subsidiaries, Altair Consultancy and Advisory Services Limited ("Altair") and Murja Limited ("Murja").
Altair
Altair provides support services to enable other organisations to carry out their activities in a more efficient manner. It helps manage complex and diverse organisations through periods of significant change, driving service improvement and delivering creative solutions. Altair's traditional client base includes housing associations, charities and local authorities, although the client base also includes government departments, statutory bodies, financial institutions and other private commercial institutions.
Within the housing sector, Altair provides a broad range of advisory and consultancy services to its clients covering areas such as general management, high level executive recruitment, corporate governance, financial planning, management strategy, organisational improvement and training. We also have strong relationships with the English Regulator (the Homes and Communities Agency), Greater London Authority, Welsh Government, the Scottish Regulator, the Irish Housing Regulator and the Irish Council for Social Housing. Altair's services also cover the application of government strategies to increase the supply of affordable housing both for rent and home ownership as well as local government initiatives encouraging the transfer of public sector housing to independent vehicles. We have recently completed our first advisory assignment in Africa.
Murja
Murja specialises in providing advice to organisations principally involved in the affordable housing and education sectors in respect of debt and interest rate risk. With changes to Government policy, there is a strong and growing market for the provision of specialist treasury services to local authorities, housing associations and charities operating in the provision of affordable housing, market rent and low-cost home ownership initiatives. Housing associations and local authorities are seeking more complex legal and financial structures for both, particularly with the involvement of house builders and developers in joint ventures. The complementary services and products offered by Altair to the sector provides a significant opportunity for growth.
Strategy and Objectives - Leadership, Quality, Insight
The strategy and objectives of the Group are:
-- Provide consultancy advice and support to organisations operating within or aligned to the public sector.
-- Continue to seek out acquisitions which will expand our range of services and scope of business to increase our ability to be a one-stop shop of professional support services for the clients of our subsidiary companies.
-- Attract and retain employees by providing a great place and environment to work and enable employee participation and reward through equity participation.
-- To increase our client base nationwide, with particular emphasis on the North of England, Midlands and Scotland.
-- Encourage innovation through the development of new products.
-- To continue exploring the opportunities that are occurring as a result of the Group's expertise in overseas markets
Review of the Business
The year under review has achieved the following financial results.
The Group saw a 25% increase in turnover on 2016, reflecting continued growth in Altair's housing consultancy and interim management business and the successful embedding of Murja within the Group. Gross profit from the consultancy, interim management and treasury business rose by over GBP187k, with margins at 25%. Altair has made a substantial investment in staff over the last two years in anticipation of future growth; (after allowing for both the additional staff investment mentioned and the charge in respect of staff options) the Board anticipates that this investment will aid future profit growth. The Group is in a very strong net asset position, with over GBP2.3m in cash held at 31 March 2017.
The underlying business remains strong and there has been continued growth of the client base in the consultancy business outside of London and the South East. We have seen an increase in cross-company opportunities between Altair and Murja, being able to offer consulting and treasury advice to our clients both in the United Kingdom and Ireland. We have undertaken our first consultancy assignment in Africa and are hoping that this will lead to further opportunities. Our focus on the policy environment has provided Altair with the opportunity to research and publish our findings on a variety of topics; Future gazing, Innovation - the brave new world (in collaboration with the National Housing Federation), and working with the Chartered Institute of Housing and a recently merged housing association (VIVID), we are developing a practical guide to how councils and housing associations can work better together which will be published in the Autumn of 2017. We are also working with three housing organisations to deliver a leadership programme to support aspiring leaders from BME backgrounds. We will continue to seek out research opportunities to help inform the decision makers throughout the sector and government.
In the first six months of the year, Altair invested in and expanded its consultancy capacity through recruitment of new consultants focusing on increasing its national coverage and developing new products and services to reflect the changing operational and political environment of our clients. This investment has provided opportunities to bid for larger contracts and, as a consequence, has extended the consultancy pipeline. This has been aided by our partnership with 3C, a specialist IT consultancy company, and our investment in 'lean expertise' to strengthen our innovative Organisational Excellence product. Altair has also provided Human Resource and Personnel services to clients through retained contracts during the year. The core consultancy and interim business remains strong and the client base continues to grow in number and range.
Murja has similarly expanded its specialist treasury management services. A significant number of clients are on retained contracts and additional fees are secured once specific projects have been completed. During the year under review, a number of these specific projects have commenced with fees expected to accrue during the next twelve months.
The comparison between this reporting year, the mid-year results and the last reporting year are set out below:
Year ended 31 6 months to 30 Year ended
March 2017 (audited) September 2016 31 March 2016
(unaudited) (audited)
GBP000s GBP000s GBP000s
Turnover 5,928 2,796 4,746
Gross profit 1,475 673 1,288
Operating Profit 510 307 290
Operating profit includes share option
charge as follows:
Share option charge 148 68 255
The Group hasn't identified any post balance sheet events, as set out in note 27 to the Financial Statements.
The changes in the political and economic environment, the Referendum resulting in the uncertainty of the Brexit negotiations, the change in leadership of the Conservative Party, the newly elected President of the USA, and the General Election have and will continue to be a catalyst for change with our clients and all provide opportunities for the future. The Group anticipates that it will continue to expand organically through recruitment to assist the delivery of projects nationwide.
The Group will also continue to look at opportunities to expand its consultancy base through acquisition to offer an increased scope of services and products to our clients.
Key Performance Indicators
The Group monitors its key performance indicators (KPI's) regularly and these are set out below:
Earnings
Revenue Gross profit per share
2017 5,928,201 1,474,735 1.24p
2016 4,746,144 1,287,612 0.61p(3)
(3) Adjusted Earnings per share to exclude deemed cost of listing
Number of clients New clients Client retention
(%) rate (%)
2017 212 72 64
2016 194 40 68
Principal Risks and Uncertainties
The principal risks currently faced by the Group are:
Financial Instruments
The main financial risks arising from the Group activities are credit risk, foreign currency risk and interest rate risk details of which can be found in Note 26 to the Financial Statements.
Unfavourable economic conditions and / or changes to government policy
The Group's operating results and its financial condition may be negatively affected by a downturn in the general economic climate within the UK which consequently may have adverse effect upon government policy and spending, and private sector investments.
A reduced level of economic activity will restrict the amount of outsourcing by companies, local authorities or other bodies and result in the restriction of funding available for the purchase of such services leading to a decline in the number of firms in the sector and their profitability.
The continuing Brexit negotiations could lead to a period of uncertainty and may delay the implementation of government policy pertaining to housing. This may cause clients to review their spending with consultancy providers and lead to a reduction in projects.
Reduction in government investment and funding
The Group's future revenues and profitability will be dependent on the current UK Government's policy with regard to expenditure on service and social housing improvements and to public expenditure levels in general. The introduction of policies to restrict the income for housing providers is a risk that the Group is monitoring closely.
The UK Government and local authorities may decide in future to change their programmes and priorities including reducing present or future spending and investment where the Group would expect to compete for work.
Competition
The contracts and procurement arrangements under which companies operating in these sectors compete for new business can lead to a higher cost of procuring new contracts and the possibility of not meeting fully the terms of contracts leading to reduced margins.
Staff skills, retention, recruitment and succession
The success of the Group is dependent on retaining, developing, motivating and communicating with senior management and personnel and as the business grows on recruiting appropriately skilled, competent people at all levels. The shortages in the availability of appropriately skilled personnel may have a negative effect on the Group. The Directors of the subsidiaries are expected to contribute to its ability to obtain, generate and manage opportunities.
If the Group cannot successfully attract, retain and motivate such personnel, it may not be able to maintain standards of service or continue to grow its businesses as anticipated. The loss of such personnel, or the inability to attract, retain, motivate and communicate with additional skilled employees required for their activities within an affordable cost base, could have an adverse effect on the Group's business and prospects.
The Group seeks to mitigate all these risks through ensuring that it monitors changes in statutory, regulatory and financial changes and maintains good relationships with its principal contacts within government, regulators and other key influencers within the sector.
The Group is well placed to provide the full range of services needed by housing providers as the external environment changes and the outlook for the business continues to be positive. A continued understanding of its position in the market and delivering value for money to clients will ensure that services and products remain competitive. In addition, the Group will ensure that its people policies are refreshed and follow good practice so that it can continue to attract and retain excellent staff.
Employees
A split of our employees and directors by gender as at the end of the year is shown below:
Male Female
Directors of the Company 4 2
----- -------
Directors of subsidiary companies not included
in above 3 0
Employees in other senior management positions 1 6
----- -------
Total senior managers other than directors
of the Company 4 6
Other employees of the Group 7 11
----- -------
Total employees of the Group 15 19
===== =======
The Group consults with its employees on a regular basis through direct updates and conducts an annual review of staff; results are reviewed and discussed by the Directors and an action plan agreed and discussed with all staff. The Group invests in training and developing its employees through both internal and external courses.
The Group follows the legislative requirements set out in the Equality Act 2010 which covers all aspects of equality and diversity, replacing previous legislation covering equal pay, sex, race and disability discrimination. The Group gives due consideration to all applications and provides training and the opportunity for career development wherever possible. The Board is also mindful of the Human Rights Act 1998.
Environment
We understand and effectively manage the actual and potential impact of our activities. The Group's operations are conducted such that compliance is maintained with legal requirements relating to the environment.
Corporate and Social Responsibility
The Group recognises that we have a responsibility to ensure the impact of our business is positive, and that we are good corporate citizens.
-- We are committed to treating with respect and dignity those we work with.
-- We are committed to honesty and transparency in our communication with staff, external stakeholders, and customers.
-- We treat all those we work with equally, and do not discriminate on the basis of age, gender, sexuality, disability, ethnicity, or any other protected characteristic.
-- We aim to work actively with our suppliers to ensure they meet our values and have sustainability issues at the heart of every decision.
-- We are conscious of our responsibilities to minimise the environmental impact of our activities and to behave in a sustainable manner.
-- We know that as corporate citizens we have a responsibility to the broader community. We work with our stakeholders to understand community priorities and reflect these in our activities.
-- We recognise that our staff are our most valuable asset as an organisation. Our employment policies across the Company seek to exceed mere compliance with relevant legislation, to create a working environment that embraces diversity and offers fairness and equality of opportunity throughout our workplace.
During the year, we continued our commitment to supporting a vibrant and inclusive leadership within the housing sector. In response to a Chartered Institute of Housing challenge to the sector to support the talent that is not coming through. Altair, L&Q, AmicusHorizon and the BME London Group of Housing Associations, in partnership with Roffey Park Business school, have joined forces to develop a leadership programme - Leadership 2025. This programme will help guide senior BME leaders in housing to navigate the glass maze of executive leadership and become the sector influencers of the future. We have matched the GBP54,000 initial investment from our partners with GBP10,000 of our own resources, including Partner time and project management input. The programme is set to launch in October 2017.
Going Concern Basis
The Board updates its three-year business plan annually which includes a review of the company's cash flows and other key financial ratios over the period. These metrics are subject to sensitivity analysis which involves flexing a number of the main assumptions underlying the forecast both individually and in unison. Where appropriate, this analysis is carried out to evaluate the potential impact of the company's principal risks actually occurring. The three-year review also makes certain assumptions about the normal level of capital investment likely to occur and considers whether additional financing facilities will be required.
Based on the results of this analysis, the directors have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment, and thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Susan Kane - Finance Director
28 June 2017
Consolidated statement of comprehensive income
For the year ended 31 March 2017
Notes 2017 2016
GBP GBP
Revenue 4 5,928,201 4,746,144
Cost of sales 5 (4,453,466) (3,458,532)
------------ ------------
Gross profit 1,474,735 1,287,612
Administrative expenses 5 (964,692) (997,786)
Operating profit 510,043 289,826
Deemed cost of listing 13 - (3,104,527)
Finance income 4 5,512 1,713
Profit / (loss) before taxation 6 515,555 (2,812,988)
Income tax expense 8 (111,345) (124,319)
------------ ------------
Profit / (loss) for the year 404,210 (2,937,307)
Other comprehensive income - -
------------ ------------
Total comprehensive income profit
/ (loss) for the year 404,210 (2,937,307)
============ ============
Earnings profit / (loss) per
share attributable to owners
of the parent
Basic 9 1.24p (10.66p)
Diluted 9 1.08p (10.66p)
Adjusted earnings per share
before deemed cost of listing
Basic 9 1.24p 0.61p
Diluted 9 1.08p 0.54p
Consolidated and Company statements of financial position
As at 31 March 2017
Group Group Company Company
2017 2016 2017 2016
Note GBP GBP GBP GBP
Non-current assets
Intangible assets 10 317,688 317,688 - -
Property, plant and
equipment 11 50,559 14,654 - -
Investments 12 - - 9,749,931 9,602,280
------------
368,247 332,342 9,749,931 9,602,280
Current assets
Trade and other receivables 14 1,350,187 1,158,836 47 1,770
Deferred tax assets 15 - 11,671 - -
Cash and bank balances 2,312,600 2,552,642 348,062 341,849
------------
3,662,787 3,723,149 348,109 343,619
------------ ------------ ---------- ----------
Current liabilities
Trade and other payables 16 951,923 1,276,501 217,380 218,530
Corporation tax 134,753 166,769 - -
------------
1,086,676 1,443,270 217,380 218,530
------------ ------------ ---------- ----------
Net current assets 2,576,111 2,279,879 130,729 125,089
Net assets 2,944,358 2,612,221 9,880,660 9,727,369
============ ============ ========== ==========
Equity
Share capital 17 1,632,550 1,630,434 1,632,550 1,630,434
Share premium account 18 533,235 533,235 533,235 533,235
Reverse acquisition
reserve 18 (4,771,473) (4,771,473) - -
Merger reserve 18 7,184,334 7,184,334 7,184,334 7,184,334
Share-based payment
reserve 20 422,391 281,586 422,391 281,586
Retained (losses) /
earnings (2,056,679) (2,245,895) 108,150 97,780
------------ ------------ ---------- ----------
Equity attributable
to the owners of the
parent 2,944,358 2,612,221 9,880,660 9,727,369
============ ============ ========== ==========
As permitted by S408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's profit for the year was GBP225,364 (2016: GBP200,724).
Susan Kane - Finance Director
Company Registration No. 08988813
Consolidated statement of changes in equity
For the year ended 31 March 2017
Share Reverse Share based Retained
Share acquisition Merger Payment earnings Total
premium /
capital account reserve reserve Reserve (losses) equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 April 2015 515,000 464,960 (857,429) - 17,016 758,752 898,299
Issue of shares 1,115,434 68,275 - 7,184,334 - - 8,368,043
Reverse acquisition - - (3,914,044) - 11,923 - (3,902,121)
Total comprehensive income - - - - - (2,937,307) (2,937,307)
Transfer on exercise of
options - - - - (1,960) 1,960 -
Share based payment charge - - - - 254,607 - 254,607
Dividend - - - - - (69,300) (69,300)
---------- -------- ------------ ---------- -------- ------------ ------------
Balance at 31 March 2016 1,630,434 533,235 (4,771,473) 7,184,334 281,586 (2,245,895) 2,612,221
========== ======== ============ ========== ======== ============ ============
Balance at 1 April 2016 1,630,434 533,235 (4,771,473) 7,184,334 281,586 (2,245,895) 2,612,221
Issue of shares 2,116 - - - - - 2,116
Total comprehensive income - - - - - 404,210 404,210
Transfer on exercise of
options - - - - (6,846) 6,846 -
Share based payment charge - - - - 147,651 - 147,651
Dividend - - - - - (221,840) (221,840)
---------- -------- ------------ ---------- -------- ------------ ------------
Balance at 31 March 2017 1,632,550 533,235 (4,771,473) 7,184,334 422,391 (2,056,679) 2,944,358
========== ======== ============ ========== ======== ============ ============
Company statement of changes in equity
For the year ended 31 March 2017
Share Share based Retained
Share Merger payment earnings Total
premium /
capital account reserve reserve (losses) equity
GBP GBP GBP GBP GBP GBP
Balance at 1 April 2015 515,000 464,960 - 17,016 (35,604) 961,372
Issue of shares 1,115,434 68,275 7,184,334 - - 8,367,043
Total comprehensive income - - - - 200,724 200,724
Transfer on exercise of options - - - (1,960) 1,960 -
Share based payment charge - - - 266,530 - 266,530
Dividend - - - - (69,300) (69,300)
---------- -------- ---------- -------- ---------- ----------
Balance at 31 March 2016 1,630,434 533,235 7,184,334 281,586 97,780 9,727,369
========== ======== ========== ======== ========== ==========
Balance at 1 April 2016 1,630,434 533,235 7,184,334 281,586 97,780 9,727,369
Issue of shares 2,116 - - - - 2,116
Total comprehensive income - - - - 225,364 225,364
Transfer on exercise of options - - - (6,846) 6,846 -
Share based payment charge - - - 147,651 - 147,651
Dividend - - - - (221,840) (221,840)
---------- -------- ---------- -------- ---------- ----------
Balance at 31 March 2017 1,632,550 533,235 7,184,334 422,391 108,150 9,880,660
========== ======== ========== ======== ========== ==========
Consolidated statement of cash flow
For the year ended 31 March 2017
2017 2016
GBP GBP
Cash flows from operating activities
Profit / (loss) for the year 404,210 (2,937,307)
Interest received (5,512) (1,713)
Income tax expense 111,345 124,319
Share based payment charge 147,651 254,606
Deemed cost of listing - 3,104,527
Depreciation 11,694 5,457
---------- ------------
Operating cash flows before movement in working
capital 669,388 549,889
Increase in trade and other receivables (191,351) (76,254)
(Decrease) / increase in trade and other payables (324,578) 99,878
---------- ------------
Cash generated by operations 153,459 573,513
Income taxes paid (131,690) (179,445)
Net cash inflow from operating activities 21,769 394,068
---------- ------------
Cash flows from investing activities
Interest received 5,512 1,713
Cash acquired on reverse acquisition - 795,690
Cash acquired on purchase of subsidiary - 785,262
Purchase of subsidiary - (899,696)
Purchase of property, plant and equipment (47,599) (16,344)
Proceeds from disposal of investments - 207,834
---------- ------------
Net cash (outflow) / inflow from investing
activities (42,087) 874,459
---------- ------------
Cash flows from financing activities
Proceeds of share issue 2,116 239,456
Dividends paid (221,840) (69,300)
Net cash (outflow) / inflow from financing
activities (219,724) 170,156
Net (decrease)/increase in cash and cash equivalents (240,042) 1,438,683
Cash and cash equivalents at beginning of
the year 2,552,642 1,113,959
Cash and cash equivalents at end of the year 2,312,600 2,552,642
========== ============
Company statement of cash flow
For the year ended 31 March 2017
2017 2016
GBP GBP
Cash flows from operating activities
Profit for the year 225,364 200,723
Dividends received (325,650) (300,600)
Interest received (1,024) (1,017)
Operating cash flows before movement in working
capital (101,310) (100,894)
Decrease in trade and other receivables 1,723 16,230
(Decrease) / increase in trade and other payables (1,150) 215,696
---------- ------------
Net cash (outflow) / inflow from operating
activities (100,737) 131,032
---------- ------------
Cash flows from investing activities
Interest received 1,024 1,017
Dividends received 325,650 300,600
Purchase of subsidiary - (1,053,782)
Net cash inflow / (outflow) from investing
activities 326,674 (752,165)
---------- ------------
Cash flows from financing activities
Proceeds of share issue 2,116 86,075
Dividends paid (221,840) (69,300)
Net cash (outflow) / inflow from financing
activities (219,724) 16,775
Net increase/(decrease) in cash and cash equivalents 6,213 (604,358)
Cash and cash equivalents at beginning of
the year 341,849 946,207
Cash and cash equivalents at end of the year 348,062 341,849
========== ============
Notes to the financial statements
For the year ended 31 March 2017
1 General information
Aquila Services Group plc ("the Company") and its subsidiaries (together, "the Group") provide specialist housing and treasury management consultancy services. The principal activity of the Company is that of a holding company for the Group as well as providing all the strategic and governance functions of the Group.
The Company is a public limited company which is listed on the London Stock Exchange, domiciled in the United Kingdom and incorporated and registered in England and Wales. The Company's registered office is Tempus Wharf, 29a Bermondsey Wall West, London, SE16 4SA.
2 Accounting policies
The principal accounting policies applied in preparation of these consolidated financial statements are set out below. These policies have been consistently applied unless otherwise stated.
Basis of preparation
The financial statements of have been prepared in accordance with International Reporting Standards as adopted by the European Union (IFRSs), issued by the International Accounting Standards Board (IASB), including interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), and the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis.
The financial statements are presented in Pounds Sterling which is the Group's functional and presentational currency.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas of critical accounting estimates and judgements are set out in note 3.
Basis of consolidation
On 20 August 2015, the Company became the legal parent of Altair Consultancy and Advisory Services Limited ("Altair") through a reverse acquisition. In the judgement of the Directors, the Company was not a business as defined by IFRS 3 prior to the transaction. As such, the transaction is not considered to be a business combination and therefore is deemed to be outside the scope of IFRS 3, instead falling within the scope of IFRS 2.
The principles of IFRS 3 have been applied in identifying Altair as the accounting acquirer. The consolidated financial statements of the Company are presented as a continuation of Altair's financial statements, reflecting the commercial substance of the transaction. However, the equity structure presented in the consolidated financial statements reflects the equity structure of the Company, including the equity instruments issued as part of the transaction.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of subsidiary entities. A subsidiary is defined as an entity over which the Company has control. Control is achieved when the Company has power over an entity, is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to use its power to affects its returns.
Consolidation of a subsidiary begins when the Company obtains control and ceases when control is lost. The Company reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the three control elements listed above.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated on consolidation.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with the Group's accounting policies.
Business combinations
Other than the reverse acquisition noted above, acquisitions of subsidiaries are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control of the acquiree.
Any excess of the consideration over the fair value of the identifiable assets and liabilities acquired is recognised as goodwill. Goodwill is not amortised but is reviewed for impairment at least annually. If the consideration is less than the fair value of the identifiable assets and liabilities acquired, the difference is recognised in the Statement of comprehensive income.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the rendering of services in the ordinary course of the Group's activity. Revenue is shown net of value added tax, returns, rebates and discounts. The Group recognises revenue when the amount of the revenue can be reliably measured and when it is probable that economic benefits will flow to the entity.
Un-invoiced fees at the balance sheet date are valued at the fair value of the consideration receivable when it is probable that economic benefits will flow to the Group. Where income is invoiced in advanced of work being completed, revenue is treated in the first instance as deferred income and recognised when the services are performed by the Group.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for use. Depreciation is recognised so as to write-off the cost of assets less their residual values over their estimated useful lives, using the straight-line method, on the following bases:
Computer equipment 33% per annum Fixtures and fittings 33% per annum
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of comprehensive income.
Investment in subsidiaries
In the company's separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment.
The cost of an investment in a subsidiary is the aggregate of the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the company, plus any costs directly attributable to the purchase of the subsidiary.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Financial assets can be divided into the following categories: loans and receivables, financial assets at fair value through profit or loss, available-for-sale financial assets and held-to-maturity investments. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the instruments were acquired. The designation of financial assets is re-evaluated at every reporting date at which a choice of classification or accounting treatment is available.
De-recognition of financial instruments occurs when the rights to receive cash flows from investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.
Trade receivables
Trade receivables are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at an effective interest rate computed at initial recognition.
Loans receivable
Loans receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group or Company provides money directly to a debtor with no intention of trading the receivables. Loans receivable are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. A financial liability is a contractual obligation to either deliver cash or another financial asset to another entity or to exchange a financial asset or financial liability with another entity, including obligations which may be settled by the Group using its equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.
Financial liabilities
At initial recognition, financial liabilities are measured at their fair value plus, if appropriate, any transaction costs that are directly attributable to the issue of the financial liability. After initial recognition, all financial liabilities are measured at amortised cost using the effective interest method.
Pensions
The Group contributes to defined contribution schemes for the benefit of its directors and employees. Contributions payable are charged to the statement of comprehensive income in the year they are payable.
Current and deferred income tax
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit or loss, because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled. Deferred tax is charged or credited in the profit or loss, except when it relates to items credited or charged in other comprehensive income directly to equity, in which case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets
Management regularly assesses the likelihood that deferred tax assets will be recovered from future taxable income. No deferred tax asset is recognised when management believe that it is more likely than not that a deferred asset will not be realised.
Impairment of assets
The Group assesses at each statement of financial position date if there is any indication that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset.
If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.
An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.
The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at an appropriate pre-tax discount rate.
Operating leases
Rentals payable under operating leases, net of lease incentives, are charged to the statement of comprehensive income on a straight-line basis over the term of the lease.
Share capital / equity instruments
Ordinary shares are classified as equity. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. The Company has one class Ordinary share which carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company.
Share based payments
The Group has issued share options to certain directors and employees. The share options granted become exercisable at varying future dates. If certain conditions are met, following the vesting period, the employee will be eligible to exercise their option at an exercise price determined on the date the share options are granted.
The share based payment charge is recognised in the statement of comprehensive income and is calculated based on the Company's estimate of the number of share options that will eventually vest.
The fair value of share options granted is determined by applying the Black Scholes model. This model utilises inputs for the risk-free rate, expected volatility in share price, dividend yield and the current share price at fair value, which are factors determined on the date the share options are granted.
Adoption of new and revised standards
The following pronouncements have been adopted in the year and either had no impact on the financial statements or resulted in changes to presentation and disclosure only:
-- Annual Improvements 2012-2014 *
-- IFRS 11 (amendments) Accounting for acquisitions of interests in joint operations *
-- IFRS 14 Regulatory Deferral accounts *
-- IAS 16 Property, Plant & Equipment and IAS 38 - Intangible assets (amendments) *
-- IAS 27 (amendments) Equity Method in Separate Financial Statements *
-- IAS 16 Property, Plant & Equipment and IAS 41 - Bearer Plants (amendments) *
-- IAS 1 Disclosure initiative *
*Effective for annual periods beginning on or after 1 January 2016
Standards issued but not yet effective
At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the Group, which have not been applied in these financial statements, were in issue but were not yet effective. In some cases these standards and guidance have not been endorsed by the European Union.
-- IAS 7 (amendments) Statement of cashflows disclosure *
-- IAS 12 (amendments) Income taxes on Recognition of deferred tax losses for unrealised losses *
-- IFRS 2 (amendments) Share based payments **
-- IFRS 9 Financial Instruments **
-- IFRS 15 (amendments) Revenue from contracts with customers **
-- IFRS 16 Leases ***
-- IFRS 4 (amendments) 'Insurance contracts' regarding the implementation of IFRS 9 'Financial Instruments' **
-- IFRIC 22 Foreign currency transactions and advance consideration **
-- Annual Improvements 2014-2016 Cycles *
*Effective for annual periods beginning on or after 1 January 2017
**Effective for annual periods beginning on or after 1 January 2018
***Effective for annual periods beginning on or after 1 January 2019
The directors are evaluating the impact that these standards will have on the financial statements of the Group.
3 Critical accounting estimates and judgements
In application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving estimations, that the directors have made in the process of applying the Group's accounting policies and that have a significant effect on the amounts recognised in the financial statements.
Revenue recognition
Work in progress is calculated on a project by project basis using the fair value of chargeable time that is un-invoiced at the period end. Historic analysis shows that recovery rates of work in progress are very high; the Group does not expect any work in progress to be irrecoverable. Work in progress is reviewed on a monthly basis to ensure it is recognised appropriately, it is probable that economic benefits will flow to the Group and that the fair value can be reliably measured.
Share based payments
The Company has granted share options to certain employees and directors of the Group. The share options granted become exercisable at varying future dates. If certain conditions are met, following the vesting period, the employee will be eligible to exercise their option at an exercise price determined on the date the share options are granted.
The share based payment charge is recognised in the statement of comprehensive income and is calculated based on the Company's estimate of the number of share options that will eventually vest.
Assumptions regarding the fair value of the Company's shares and assumptions regarding employee fluctuation are taken into account when measuring the value of share-based payments for employees, which are required to be accounted for as equity-settled share-based payment transactions pursuant to IFRS 2. The resulting staff costs are recognised pro rata in the statement of comprehensive income to reflect the services rendered as consideration during the vesting period.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that may have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Impairment of goodwill
The carrying amounts of the Group's assets value are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated and an impairment loss is recognised where the recoverable amount is less than the carrying value of the asset. Any impairment losses are recognised in the income statement.
4 Revenue
An analysis of the Group's revenue is
as follows:
2017 2016
GBP GBP
Continuing operations - rendering of services
Specialist housing consultancy income 5,456,328 4,628,195
Treasury management consultancy income 471,873 117,949
5,928,201 4,746,144
Interest revenue on bank deposits 5,512 1,713
5,933,713 4,747,857
========== ==========
5 Operating segments
The Group has three reportable segments, being consultancy, interim management and treasury management services, the results of which are included within the financial information. IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Chief Operating Decision Maker ("CODM"). In accordance with IFRS 8 'Operating Segments', information on segment assets is not shown, as this is not provided to the CODM. The Group's revenues are mainly derived from operations in the UK and ROI. As a result, the CODM does not review segments by country or continent.
The principal activities of the Group are as follows:
Consultancy - a range of services to support the business needs of a diverse range of organisations (including housing associations and local authority) across the housing sector. The majority of consultancy projects run over one to two months requiring on-going business development to ensure a full pipeline of consultancy work for the employed team.
Interim Management - individuals are embedded within housing organisations (normally registered providers, local authorities and ALMOs) in a substantive role, normally for a specified period of time. Interim management provides the Group with a more extended forward sales pipeline as the average contract is for six months. This section of the business provides low risk as the interim consultants are placed on rolling contractual basis and provides minimal financial commitment as associates to the business, rather than employees, are used for these roles.
Treasury Management - a range of services providing treasury advice and fund-raising services to non-profit making organisations working in the affordable housing and education sectors. Within this segment of the business a number of client organisations enter into fixed period retainers to ensure immediate call-off of the required services.
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2. Segment profit represents the profit earned by each segment, without allocation of central administration costs, including Directors' salaries, finance costs and income tax expense. This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.
2017 2016
GBP GBP
Revenue from Consultancy 3,712,790 2,974,901
Revenue from Interim management 1,743,538 1,653,294
Revenue from Treasury management 471,873 117,949
5,928,201 4,746,144
Cost of sales from Consultancy 2,627,985 2,045,190
Cost of sales from Interim management 1,483,353 1,413,342
Cost of sales from Treasury management 342,128 -
---------- ----------
4,453,466 3,458,532
Gross profit from Consultancy 1,084,805 929,711
Gross profit from Interim management 260,185 239,952
Gross profit from Treasury management 129,745 117,949
---------- ----------
1,474,735 1,287,612
Administrative expenses (964,692) (997,786)
Operating profit 510,043 289,826
========== ==========
6 Profit / (loss) before tax
2017 2016
GBP GBP
Profit / (loss) before taxation is arrived
at after charging:
Deemed cost of listing - 3,104,527
Auditors' remuneration 37,200 36,000
Other fees payable to auditors:
- 12,000
* Taxation - 25,000
* Corporate finance services
Depreciation of property, plant and equipment 11,694 5,457
Staff costs (see note 7) 2,702,039 2,407,049
Operating lease costs - land and buildings 49,605 39,400
The share option charge for the year of GBP147,651 (2016: GBP254,607)
is included within administrative expenses.
7 Staff costs
2017 2016
The average monthly number of employees
(including directors) employed by the
Group was: 37 30
2017 2016
GBP GBP
Aggregate remuneration (including directors)
Wages and salaries 2,322,383 1,878,993
Share-based payments 147,651 254,607
Pension contributions 88,565 80,770
Social security costs 257,513 192,679
---------- ----------
2,816,112 2,407,049
========== ==========
Directors' remuneration
Salary (including taxable benefits) 347,362 270,443
Share-based payments 65,500 110,526
Pension contributions 12,000 11,366
---------- ---------
424,862 392,335
========== =========
The amounts set out above include remuneration to the highest
paid director as follows:
Salary (including taxable benefits) 106,513 109,050
Share-based payments 22,866 55,263
Pension contributions 6,000 7,700
---------- ---------
135,379 172,013
========== =========
8 Taxation
2017 2016
GBP GBP
Corporation tax:
Current year 117,738 116,918
Adjustment in respect of prior years (18,064) -
99,674 116,918
Deferred tax charge 11,671 7,401
111,345 124,319
========= ========
The tax charge for the year can be reconciled to the profit/(loss)
in the income statement as follows:
2017 2016
GBP GBP
Profit/(loss) before taxation 515,555 (2,812,988)
---------- -------------
Tax at the UK corporation tax rate of
20% (2016: 20%) 103,111 (562,598)
Expenses not deductible 26,298 66,012
Adjustment in respect of prior years (18,064) -
Deemed cost of listing - 620,905
8,234 686,917
Tax expense for the year 111,345 124,319
========== =============
9 Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the year. Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all potential dilutive shares, namely share options.
2017 2016
GBP GBP
Profit / (loss) after tax attributable
to owners of the parent 404,210 (2,937,307)
Weighted average number of shares
* Basic 32,633,381 27,566,749
* Diluted 37,301,635 27,566,749
Basic earnings/(loss) per share 1.24p (10.66p)
Diluted earnings/(loss) per share 1.08p (10.66p)
Adjusted earnings per share before deemed
cost of listing
Profit / (loss) after tax attributable
to owners of the parent 404,210 (2,937,307)
Deemed cost of listing - 3,104,527
----------- ------------
Adjusted earnings 404,210 167,220
Weighted average number of shares
* Basic 32,633,381 27,566,749
* Diluted 37,301,635 30,918,874
Adjusted basic earnings per share 1.24p 0.61p
Adjusted diluted earnings per share 1.08p 0.54p
Potential Ordinary shares are antidilutive when their conversion to Ordinary shares would increase earnings per share or decrease loss per share from continuing operations.
10 Intangible assets
Group Goodwill
GBP
Cost
At 1 April 2015 -
Additions 317,688
---------
At 31 March 2016 317,688
Additions -
At 31 March 2017 317,688
---------
Accumulated impairment losses
At 1 April 2015 and 31 March 2016 -
Impairment losses for the year -
---------
At 31 March 2017 -
---------
Net book value
At 31 March 2015 -
=========
At 31 March 2016 317,688
=========
At 31 March 2017 317,688
=========
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units that are expected to benefit from that business combination.
The Group tests goodwill annually for impairment, or more frequently if there are any indications that goodwill might be impaired.
The recoverable amount of goodwill is determined from value in use calculations. The key assumptions for the value in use calculations are those regarding growth rate of client base and project fees. Management's approach to determining the values to each key assumption is based on past experience and project work already secured for future periods. Management have projected cash flows over a period of 5 years, based on a minimum average growth rate of 10% per annum. Projected cash flows have been discounted at a rate of 5%.
11 Property, plant and equipment
Fixtures Computer Total
Group and fittings equipment
GBP GBP GBP
Cost
At 1 April 2015 - - -
Additions - 20,111 20,111
-------------- ----------- -------
At 31 March 2016 - 20,111 20,111
Additions 34,339 13,260 47,599
-------------- ----------- -------
At 31 March 2017 34,339 33,371 67,710
-------------- ----------- -------
Accumulated depreciation
At 1 April 2015 - - -
Charge for the year - 5,457 5,457
------- ------- -------
At 31 March 2016 - 5,457 5,457
Charge for the year 953 10,741 11,694
------- ------- -------
At 31 March 2017 953 16,198 17,151
------- ------- -------
Net book value
At 31 March 2015 - - -
======= ======= =======
At 31 March 2016 - 14,654 14,654
======= ======= =======
At 31 March 2017 33,386 17,173 50,559
======= ======= =======
12 Investment
Company Investments
in subsidiaries
GBP
Cost
At 1 April 2015 -
Additions 9,602,280
--------------
At 31 March 2016 9,602,280
Additions 147,651
--------------
At 31 March 2017 9,749,931
--------------
Accumulated impairment losses
At 1 April 2015 and 31 March 2016 -
Impairment losses for the year -
--------------
At 31 March 2017 -
--------------
Net book value
At 31 March 2015 -
==============
At 31 March 2016 9,602,280
==============
At 31 March 2017 9,749,931
==============
The addition of GBP147,651 represents capital contributions made
to the Company's subsidiaries in respect of the share option
expense recognised in those subsidiaries on share options issued
by the Company.
Details of the Company's subsidiaries at 31 March 2017 are as
follows:
Proportion of
ownership and
Place of incorporation voting rights
and operation Principal activity held
Altair Consultancy
and Advisory Services England and Specialist housing
Limited Wales consultancy 100%
England and Treasury management
Murja Limited Wales consultancy 100%
The accounting reference date of each of the subsidiaries is co-terminus with that of the Company. The registered office of each subsidiary is Tempus Wharf, 29a Bermondsey Wall West, London, SE16 4SA.
13 Business combinations
On 20 August 2015, General Industries plc (now Aquila Services Group plc) became the legal parent of Altair Consultancy and Advisory Services Limited by way of reverse acquisition. The cost of the acquisition is deemed to have been incurred by Altair Consultancy and Advisory Services Limited, the legal subsidiary, in the form of equity instruments issued to the owners of the legal parent. The deemed cost of listing arising on the reverse acquisition was GBP3,104,527.
On 12 December 2015, the Group acquired 100% of the issued share capital of Murja Limited, thereby obtaining control. The principal activity of Murja Limited is that of treasury management services. Murja Limited was acquired so as to broaden the range of services the Group can offer.
14 Trade and other receivables
Group Group Company Company
2017 2016 2017 2016
GBP GBP GBP GBP
Trade receivables 1,153,940 995,660 - -
Other receivables 11,055 17,081 47 1,770
Prepayments and accrued
income 185,192 146,095 - -
------------ ----------- --------- ---------
1,350,187 1,158,836 47 1,770
============ =========== ========= =========
The directors consider that the carrying amount of trade receivables
approximates to their fair value. Trade and other receivables
are not considered impaired.
The aged profile of trade receivables not impaired is as follows:
Total <30 days 30-60 days 66-90 days >90 days
GBP GBP GBP GBP GBP
31 March 2017 1,153,940 774,753 299,432 30,933 48,822
31 March 2016 995,660 687,310 236,379 50,149 21,822
15 Deferred tax assets
The following are the Group's major deferred tax assets recognised
and the movements thereon during the current and prior reporting
period.
Decelerated capital Other timing
allowances differences Total
GBP GBP GBP
At 31 March 2015 3,045 16,027 19,072
Charge to profit or loss (1,741) (5,660) (7,401)
-------------------- ---------------- -----------
At 31 March 2016 1,304 10,367 11,671
Charge to profit or loss (1,304) (10,367) (11,671)
-------------------- ---------------- -----------
At 31 March 2017 - - -
==================== ================ ===========
Deferred tax assets are recognised to the extent that it is probable
that the future tax profits will allow the deferred tax assets
to be recovered.
16 Trade and other payables
Group Group Company Company
2017 2016 2017 2016
GBP GBP GBP GBP
Trade payables 274,420 220,307 140 19,621
Other payables 27,668 61,067 - -
Amounts owed to Group
undertakings - - 183,865 183,409
Taxes and social security
costs 341,020 354,117 - -
Accruals and deferred
income 308,815 641,010 33,375 15,500
--------- ------------ -------- --------
951,923 1,276,501 217,380 218,530
========= ============ ======== ========
The directors consider that the carrying amount of trade payables
approximates to their fair value.
17 Share capital
2017 2016
GBP GBP
Allotted, called up and fully paid
32,651,003 (2016: 32,608,688) Ordinary shares
of 5p each 1,632,550 1,630,434
========== ==========
The Company has one class Ordinary share which carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company.
A reconciliation of share capital, share premium account and merger reserve is set out below:
Number of Amount called
Ordinary up and fully Merger
shares paid Share premium reserve
GBP GBP GBP
At 1 April 2015 10,300,000 515,000 464,960 -
Issued at 37.5p per share
on
19 August 2015 to acquire
Altair 21,200,000 1,060,000 - 6,890,000
Issued at 46.5p per share
on
15 December 2015 to acquire
Murja 120,000 6,000 - 49,800
Issued at 43.65p per share
on
11 March 2016 to acquire
Murja 632,688 31,634 - 244,534
Issued at 43.65p per share
on
11 March 2016 150,000 7,500 57,975 -
Issued at 10p per share
on
11 March 2016 upon exercise
of
options 206,000 10,300 10,300 -
At 31 March 2016 32,608,688 1,630,434 533,235 7,184,334
Issued at 5p per share
on
31 August 2016 upon exercise
of options 42,315 2,116 - -
----------- -------------- -------------- ----------
At 31 March 2017 32,651,003 1,632,550 533,235 7,184,334
=========== ============== ============== ==========
18 Reserves
The share premium account represents the amount received on the issue of Ordinary shares by the Company in excess of their nominal value and is non-distributable.
The merger relief reserve arose on the Company's acquisition of Altair and Murja. There is no legal share premium on the shares issued as consideration as section 612 of the Companies Act 2006, which deals with merger relief, applies in respect of the acquisition.
The reverse acquisition reserve arises due to the elimination of the Company's investment in Altair. Since the shareholders of Altair became the majority shareholders of the enlarged group, the acquisition is accounted for as though the legal acquiree is the accounting acquirer.
19 Dividends
2017 2016
GBP GBP
Amounts recognised as distributions to equity
holders
Final dividend paid of 0.44p per share 143,478 -
Interim dividend paid of 0.24p per share
(2016: 0.22p) 78,362 69,300
221,840 69,300
======== ========
Proposed final dividend of 0.50p per share
(2016: 0.44p) 163,255 143,478
======== ========
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed dividend is payable on 4 August 2017 to shareholders on the Register of Members at 21 July 2017. The total recommended dividend to be paid is 0.50p per share. The payment of this dividend will not have any tax consequences for the Group.
20 Share-based payment transactions
The Company operates an Unapproved Scheme and an Enterprise Management Incentives Scheme. The total expense recognised in the year to 31 March 2017 arising from share-based payment transactions is GBP147,651 (2016: GBP254,067).
Weighted average
Unapproved scheme Number exercise price
Number of options outstanding at 1 April
2016 2,587,093 GBP0.23
Granted during period - -
Forfeited during period - -
Exercised during period - -
----------
Number of options outstanding as at 31
March 2017 2,587,093 GBP0.23
==========
Number of options exercisable as at 31
March 2017 2,587,093 GBP0.23
==========
The exercise price of the options outstanding at 31 March 2017 ranges between GBP0.10 and GBP0.42. The weighted average remaining contractual life of the options outstanding at 31 March 2017 is 3 years (2016: 4 years).
Weighted average
EMI scheme Number exercise price
Number of options outstanding at 1 April 1,713,772
2016 GBP0.05
Granted during period 510,000 GBP0.05
Forfeited during period (62,316) GBP0.05
Exercised during period (42,315) GBP0.05
----------
Number of options outstanding as at 31 2,119,141
March 2017 GBP0.05
==========
Number of options exercisable as at 31
March 2017 296,208 GBP0.05
========
The weighted average remaining contractual life of the options outstanding at 31 March 2017 is 8 years (2016: 9 years).
For the EMI share options granted during the year, the weighted average fair value of the options is GBP0.42. The fair value of the options was measured using the Black Scholes options valuation model. The inputs into that model in respect of the EMI share options were as follows:
Share price GBP0.46 Exercise price GBP0.05 Expected volatility 19.29% Expected option life 10 years Risk-free rate 0.86%
The risk-free rate is based on the yield of a 10 year government bond.
The expected share price volatility is based on the Company's share price since 20 August 2015.
For the EMI share options exercised in the year, the share price at the date of exercise was GBP0.45.
21 Operating lease arrangements
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable operating
leases, which fall due as follows:
2017 2016
GBP GBP
Within one year 49,605 39,400
In the second to fifth years inclusive 71,106 91,000
---------- ---------
120,711 130,400
========== =========
Operating lease payments represent rentals payable by the Group
for certain of its office properties.
22 Remuneration of key management personnel
The remuneration of the key management personnel of the Group, including all directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2017 2016
GBP GBP
Short-term employee benefits 694,790 586,283
Share-based payments 112,956 212,116
Post-retirement benefits 12,000 22,934
-------- --------
819,746 821,333
======== ========
23 Related party disclosures
Balances and transactions between the Group and other related parties are disclosed below:
Dividends totalling GBP153,646 (2016: GBP49,709) were paid in the year in respect of Ordinary shares held by the Company's directors.
During the year the Group charged GBP24,060 (2016: GBP24,060) to DMJ Consultancy Services Limited for administrative services, a company in which Derek Joseph serves as a director. At 31 March 2017, the balance owed to the Group by DMJ Consulting Limited was GBP7,219 (2016: GBP14,436).
During the year the Group was charged GBP257 (2016: GBP12,410) by Jeffrey Zitron for consultancy services.
24 Retirement benefit schemes
Defined contribution schemes
2017 2016
GBP GBP
Contributions payable by the Group for
the year 88,565 80,770
======= =======
25 Control
In the opinion of the Directors there is no single ultimate controlling party.
26 Financial instruments
Financial risk management
The Group's activities are exposed to a variety of market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.
Credit risk
Credit risk is the risk of financial loss to the Group resulting from counterparties failing to discharge their obligations to the Group. The Group's principal financial assets are trade and other receivables and cash and cash equivalents.
The Group considers its credit risk to be low. Of the total trade receivables at the 2017 year end, GBP107,604 (2016: GBP68,808) is due from one customer. There are no other customers that represent more than 9% of the total balance of trade receivables. The maximum exposure to credit risk is equal to the carrying value of these instruments.
Liquidity risk
Liquidity risk is the risk of the Group being unable to meet its liabilities as they fall due. The Group manages liquidity risk by maintaining sufficient cash reserves and holding banking facilities, and by continuously monitoring forecast and actual cash flows. In addition, the Group is a cash generative business with income being received regularly over the course of the year. The Group held cash reserves of GBP2,312,600 (2016: GBP2,552,642) at the year-end.
Foreign currency risk
Foreign exchange risk is the risk of loss due to adverse movements in the exchange rates affecting the Group's profits and cash flows. Only a very small number of clients are invoiced in Euros and USD and the foreign exchange exposure is not considered a significant risk. The Group's principal financial assets are cash and cash equivalents and trade and other receivables, which are almost exclusively denominated in Pounds Sterling.
Interest rate risk
The Group does not undertake any hedging activity in this area. The main element in interest rate risk involves sterling deposits which are placed on deposit.
Capital risk management
Internal working capital requirements are low and are regularly monitored. Externally imposed capital requirements to which the Group is subject have been complied with in the year.
27 Post Balance Sheet event
There are no post balance sheet events.
28 Capital commitments
There were no capital commitments at 31 March 2017.
29 Contingent liabilities
There were no contingent liabilities at 31 March 2017.
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
June 29, 2017 02:00 ET (06:00 GMT)
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