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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Driver Group Plc | LSE:DRV | London | Ordinary Share | GB00B0L9C092 | ORD 0.4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.50 | 23.00 | 26.00 | 24.50 | 24.50 | 24.50 | 22,368 | 07:30:33 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Heavy Construction, Nec | 42.63M | -336k | -0.0064 | -38.28 | 12.87M |
From Apr 2019 to Apr 2024
TIDMDRV
RNS Number : 0255Z
Driver Group plc
12 December 2017
12 December 2017
DRIVER GROUP PLC
("Driver" or "the Group")
Final Results
Driver Group PLC (AIM: DRV), the global professional services consultancy to construction and engineering industries, is pleased to announce its results for the financial year ended 30 September 2017.
Financial Highlights
Significant improvement on all fronts:
-- Revenue on continuing operations up 15% to GBP60.2m (2016: GBP52.4m) -- A significant transformation of the business from loss in 2016 to profit in 2017 -- Underlying* operating profit of GBP2.7m (2016: loss GBP0.2m)
-- Underlying* profit before taxation of GBP2.5m (2016: loss GBP0.4m) and reported profit for the year of GBP0.3m (2016: loss GBP5.2m)
-- Successful equity raise and refinancing in February 2017 -- Net borrowings** GBP0.2m at September and falling (2016: GBP9.9m)
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
**Net (borrowings) / cash consists of cash and cash equivalents, bank loans and finance leases
Operational Highlights
-- Group Board changes:
o Mark Wheeler, Global COO, appointed to Group Board
o Dave Webster stepped down as NED, replaced by John Horgan
o Peter Collini joined as NED
o Colin Davies resigned as NED after many years' service
o David Kilgour's appointment as CFO effective today, succeeding Hugh Cawley who stands down
-- Strategy refreshed and clearly articulated, focusing on the Group's expertise: Claims and Dispute Resolution and Expert Witness Support Services
-- Following the disposals of Driver Trett South Africa (pty) Ltd and initiate Consulting Ltd ('Initiate'), Group now comprises core businesses only
Hot Features
Premium
-- Continuing progress on developing the global Diales brand
-- Europe & Americas ('EuAm')
o Excellent performance across the whole of the UK market
o Netherlands and Germany another strong year
-- Africa, Middle East and Asia Pacific ('AMEA')
o Singapore significantly outperformed expectations
o Excellent performance across the Middle East region following major restructuring
o Aged debt collection in Oman progressing well
Start to new financial year
-- Positive start to the year and continued strong cash collection in line with management expectations
-- Strong pipeline of opportunities across the Global business
Gordon Wilkinson, Chief Executive Officer of Driver Group plc, commented: "I am pleased to report a significant transformation in the performance of the business in the 12 months to September 2017. The business is now well positioned for future growth."
Enquiries: Driver Group plc Gordon Wilkinson (CEO) 020 7377 0005 David Kilgour (CFO) 01706 223999 N+1 Singer (Nomad & Broker) 0207 496 3000 Sandy Fraser Acuitas Communications 020 3870 1248 Simon Nayyar Fraser Schurer-Lewis fraser.schurer-lewis@acuitascomms.com
Chairman's Statement
INTRODUCTION
I am pleased to report that our performance in the second half of this financial year has continued to build on the progress we made in the first half. The Company has returned to pre-tax profit and since the end of the period has moved to a net cash positive position while demand for our services continues to be strong across the globe. A number of the strategic initiatives that we undertook to deliver at the time of the equity raise have been delivered on time or even ahead of schedule. We have streamlined our operations, including the disposal of our business in South Africa to local management and the sale of Initiate in the UK, and have increased the number of experts we employ around the world. There has been a transformation in the performance of the business in the course of the last twelve months, which is now well positioned to make the most of the opportunities that lie ahead. The result for the year as a whole, with an underlying* profit before tax from continuing operations of GBP2.5m (2016: loss GBP0.4m) from revenue at GBP60.2m (2016: GBP52.4m) is clearly pleasing in the context of exceeding the market expectations. By the close of this year, we had progressed to a position where the net profit after tax was again positive, even after taking account of all the significant costs associated with the financial restructuring.
Both major regions reported good progress. Revenue in Europe and Americas 'EuAm' grew by 13.5% to GBP26.0m, with a 22% improvement in underlying* profitability to GBP2.3m (2016: GBP1.9m). The growth in APAC, the Middle East and Africa 'AMEA' was even greater at 16% to GBP34.2m and this latter region's profitability improved significantly recording a profit of GBP2.2m against a loss of GBP1.1m in the prior period. The conclusion of the business disposals in the year means that the shape of the Group is now largely as our strategy requires and we can move forward with renewed confidence to develop the business, particularly through our expert witness brand, Diales.
FINANCIAL RESULTS
Continuing Group revenue for the year was GBP60.2m (2016: GBP52.4m) and underlying* profit before tax was GBP2.5m (2016: loss GBP0.4m). The underlying* continuing earnings per share were 5.8p (2016: loss of 1.0p). The reported profit for the year was GBP0.3m (2016: loss GBP5.2m), after taking into account the net loss on the discontinued operation of GBP1.0m (2016: GBP1.8m) and highlighted exceptional items relating to
restructuring costs of GBP0.6m (2016: GBP0.2m) and costs associated with the disposal of a subsidiary of GBP0.4m
(2016: GBPnil). In the prior year there were also exceptional costs associated with severance of GBP1.4m and a goodwill impairment charge of GBP0.4m. Profit before tax also reflects a share based payment charge of GBP0.2m (2016: GBP1.1m).
Net borrowings** at the close of the year were better than anticipated, standing at just GBP0.2m (2016: GBP9.9m), reflecting significant progress made since the equity raise and refinancing in February/March of the year. In completing the equity raise, the support of existing shareholders together with the entry onto the register of a number of new institutional investors enabled us to raise GBP8.5m before expenses through the issue of 21,235,662 shares at 40 pence per share. The combination of markedly improved trading since that time and our relentless focus on reducing the cash tied up in debtors, particularly in the Middle East, has combined with the equity raised to virtually eliminate the debt at the period end and has restored the balance sheet to good health.
DIVID
The Board do not recommend the payment of a dividend for 2017 (2016: GBPnil).
STRATEGY
The Group's strategy remains to focus on those areas of expertise where we have a particularly strong position, in claims and dispute resolution and in expert witness work, and to consolidate the Group's position as one of the pre-eminent firms in its areas of expertise. Concentration on this clearly articulated aim has demonstrably so far delivered rapidly improved revenue growth and better profitability leading to the generation of more attractive returns for shareholders. We see no reason currently to amend our objective or our strategy, although of course this remains under continual review.
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
**Net (borrowings) / cash consists of cash and cash equivalents, bank loans and finance leases
BOARD
The composition of the Board has altered markedly during the year as previously announced, to suit the changing circumstances of the Group.
Dave Webster stood down at the time of the refinancing from his role as a non-executive director and we welcomed John Horgan as his replacement. John is proving to be a significant asset to the Board not least in his role as Chairman of the Remuneration Committee. We also welcomed Peter Collini as a non-executive director. Peter has now assumed the role of Chairman of the Audit Committee and we are already benefiting from his expertise. Colin Davies stepped down not only as Chairman of the Audit Committee but also from the Board at the end of October 2017 and we are grateful to him for his years of excellent service to the Group. We were also delighted to welcome Mark Wheeler, the Group COO, to the Board providing his invaluable operational insights to its deliberations. And finally, Hugh Cawley, with the turnaround now firmly entrenched, has stepped down upon signature of these accounts, to be replaced by David Kilgour, who we are happy to welcome to the team.
I should like to place on record our thanks to all the retiring members of the Board for their service and dedication and to wish them well in their future endeavours.
OUTLOOK
The first two months of the current financial year have shown a continuation of the positive trading and improvements that we enjoyed in the latter part of last year. In a professional services business like ours, it is notoriously difficult to predict activity levels but your Board will continue to monitor costs and margins to ensure that the Company deals appropriately with the fluctuations in activity that are a feature of our business. Nonetheless, your Board is confident that we can continue to build on the exceptional progress we have made so far. There is no question that in every significant respect the Company is in a far better state than it was a year ago.
I take this opportunity to thank all of the staff of Driver Group in every part of the business for the loyalty, hard work and support that they have shown during what has been a year of very significant change. Under the leadership of Gordon Wilkinson they have all contributed to turning round the company's fortunes and my Board colleagues join me in thanking them most sincerely. Finally I should like to thank again both our more longstanding and new shareholders for their continuing support throughout the year. Your Board will continue to do all it can to reward the confidence you have shown in us.
Steven Norris
Non-Executive Chairman
11 December 2017
Chief Executive's Review
INTRODUCTION
After a very challenging year in 2016, I am pleased to report that our efforts to stabilise the business and return it to profit have come to fruition ahead of plan and have delivered a very successful outturn for the financial year 2017.
At the end of the 2016 financial year we addressed a number of significant challenges facing the business including: adjusting the cost base; the restructure or closure of a number of under-performing offices; re-focusing the business on its core offering of construction claims, dispute resolution, and the provision of expert witness services; and establishing effective cash collection procedures.
We continued to build on this in the financial year 2017. The Hong Kong and Australia businesses were restructured which saw the Asia Pacific region return to profit by the end of H1. A review of the cost base has continued with headcount reduced by 10% to 461 (2016: 515). The South African subsidiary was disposed of early in H2 and, along with the sale of the Initiate business at the end of H2, this completed the restructure required to return the Group to profit, and leaves the business well placed for profitable growth in future years.
A successful equity raise of GBP8.5m, before associated legal and professional fees, in February 2017 provided the necessary strength to the balance sheet and significantly lowered the Group's borrowings. However, when combined with the very significant improvements we have made in our cash collection procedures and the inroads we have made in collecting some very old debts, our overall debtor and cash position has improved greatly.
We took the decision at the beginning of the 2017 financial year to simplify our operating model and operate the business as one global region. This has given us much greater transparency, improved our overall integration and most importantly, enabled us to respond to clients in an efficient manner by ensuring we get the right resources in the right location to meet our clients' expectations. It has also enabled us to improve our overall utilisation levels as we look to get greater efficiencies across the globe.
We have continued our efforts to strengthen our Diales brand (our expert witness services brand) with the
appointment of Regional Heads in our key markets. The Diales brand is a central part of our strategy to increase margin and utilisation, by securing the best work in the market place, with an increasing portfolio of blue chip and magic circle clients. We continue to set a market leading standard in the global provision of multi-disciplinary teams and skills to meet our clients' needs in the areas of expert witness, arbitration and dispute resolution. The positive review of our expert services from the High Court in the recent Riva v Foster and Partners case is an excellent example of how our expert team adds value to our clients' business.
These results attest to that achievement and the prudent measures that your Board has taken over the last 12 months to get the business's fundamentals right, and they provide solid foundations for future growth.
Financial Performance HIGHLIGHTS
Revenue from continuing operations grew by 15% to GBP60.2m (2016: GBP52.4m). The resultant Gross Margin increased by GBP4.0m to GBP14.8m (2016: GBP10.8m).
AFRICA, MIDDLE EAST AND ASIA PACIFIC
The South African business presented a number of challenges specific to that market and the constraints imposed by government upon ownership and management, which prevented effective bidding for most of the key projects that the business needed to target. The disposal during the year to the local management team, allows the local business to develop, and at the same time a continuing collaboration will allow us to deliver our expert services within the African market, whenever opportunities arise.
Strong performances in the UAE and Qatar have meant that the Middle East region as a whole has performed very well. The revised cash procedures that were implemented in April 2016 have led to a significant improvement in our monthly cash collections and we have also benefited from the collection of a number of older debts, which had previously proved problematic. We would expect to see a lowering of our bad debt provisions in future years as a more selective approach to clients and engagements is linked to improved cash collections.
During the summer, we appointed John Brells as leader of the Asia Pacific region. The region has seen wide fluctuations in recent years, with poor results in Hong Kong and Australia, contrasted with a stable business in Malaysia and growth in Singapore. Despite a slow start in H1, performance in Singapore has been exceptional, and the pipeline of expert appointments in the oil and gas arena looks set to continue into 2018.
The Board consider that the appointment of John will give a greater local focus on the management of the region overall, to build on our success in Singapore.
EUROPE AND AMERICAS
Performance in the UK has been particularly good, achieving record breaking revenue and profit levels for the year. We have seen negligible Brexit trading effect,
our market has remained quite stable since the results of the referendum were announced last year. The future effect on the domestic market is more difficult to predict; however, we see no reasons to be concerned at present.
Our joint venture business in Canada has been impacted this year by a change in management, to reflect the revised strategy of the business. Although a poor year overall, the performance in Ontario which was particularly disappointing, has masked excellent growth in our Vancouver based operation. We anticipate the business in Canada is set for a much improved performance in 2018.
The Netherlands and Germany businesses, which are now effectively run as one operation, and France have also performed well, and will continue steady and planned growth into 2018. The opportunities in northern Germany are focused on heavy engineering and we intend to forge stronger links between this business and our operations in oil and gas in the North East of England and in Asia Pacific to provide a global solution to clients in this significant sector.
initiate
At the end of the 2017 financial year we disposed of initiate Consulting Ltd by way of a sale to the PDSI Group of companies.
DRIVER GROUP BOARD
Earlier this year, I gave a commitment to shareholders to strengthen our Group Board and improve our overall Corporate Governance.
I am delighted to report that those changes have taken place with the appointment of John Horgan and Peter Collini as Non-Executive Directors during 2017. They both bring a wealth of experience and talent to our board.
John, in his capacity as Chair of the Remuneration Committee, has with his committee reviewed the remuneration and bonus provisions of the Executive for the coming year and Peter as Chair of the Audit Committee has overseen the completion of our 2017 accounts.
Finally, as previously announced, David Kilgour today officially joins the Board as Group CFO, succeeding Hugh Cawley. We are delighted to have someone of David's ability and experience to help us take the next step in our development.
outlook
The enquiry rate globally is showing no signs of abating.
The business has been transformed over the last 18 months and we believe we are well positioned to take full advantage of those changes. We are confident we will continue to deliver a sustainable and profitable business for the coming year and beyond, and deliver on-going success for all our stakeholders.
Gordon Wilkinson
Chief Executive Officer
11 December 2017
Financial Directors Review
OVERVIEW OF THE YEAR
Over the past year, the key financial metrics we have concentrated upon have been profit before tax and net borrowings**, which will ultimately depend respectively upon inter alia the utilisation rates of chargeable staff and the effectiveness of our collection of the monies that are owed to us. We also look of course at underlying* profit before tax which we consider helpful to present as it more accurately reflects the underlying, sustainable results of the Group. Revenue for the year for the continuing businesses was 15.0% higher than the prior year at GBP60.227m, (2016: GBP52.385m), but more significantly the Profit before Tax (from continuing operations) climbed from a loss of GBP3.500m to a profit of GBP1.233m.
Both continuing geographic segments saw improvements in their performance. Europe and Americas (EuAm) segmental profit, at GBP2.331m, was 21.7% better than prior year. This included a marked improvement in the UK, which proved once more to be the primary driver of the region's revenue and profit, with just short of 70% of revenue coming through there. A strong performance from Driver Project Services complemented the increased emphasis on claims and dispute services and expert witness work. Contributions from the Netherlands and France, both of which turned in profit contributions similar to the prior year, were important in demonstrating and developing the European business's capability. Results from the Africa, Middle East and Asia Pacific business (AMEA) turned in the year from a segmental loss of some GBP1.089m to a profit of GBP2.161m, not least as a result of dismantling the regional overhead and dispersing the retained management into the constituent territories. Significant progress was made in developing the business further in the UAE and in Qatar. Our business in Singapore, from the experts we are fortunate now to have there, all but doubled in revenue and more than tripled in profitability, such that Singapore is now one of the major drivers of profit in the Group. Progress has also been made in improving the fortunes of our Australian business. The segmental results for the year are disclosed in note 2.
It is worthy of note that utilisation of chargeable staff across the business for the year as a whole stood at 76.2%, as against 71.0% in the prior year, with a degree of variability throughout the year ranging from
a low of 69.1% to a high of 85.7%. This overall increase in utilisation is clearly a significant factor in
the improved results for 2017 and is one of the businesses' key performance indicators. Significant costs classified as exceptional in the year related primarily to the refinancing (GBP0.634m) and to the disposal of the subsidiary in South Africa (GBP0.449m). Severance costs this year have not been categorised as exceptional (2016: GBP1.365m).
By the end of the year, net borrowings** had reduced from GBP9.907m to just GBP0.178m, bank borrowings having reached nearly GBP12 million just before the equity raise. In the period between the equity raise and the end of the year, net borrowing** was reduced by GBP1.965m through trading cash flow and by GBP3.095m through a reduction in debtors outstanding. The most significant cash inflow was of course from the equity raise, the net cash proceeds of which, at GBP8.110m, enabled the group to eradicate creditor stretch (GBP0.953m) and to settle the outstanding balance for the Initiate acquisition (GBP0.760m). Since the end of September 2017, net borrowing has been eliminated altogether.
After a net interest charge of GBP0.261m (2016: GBP0.217m) the underlying* profit before tax from continuing operations was GBP2.486m (2016: loss of GBP0.373m) and the reported profit for the year was GBP0.295m (2016: loss GBP5.233m).
The Board has decided to dispose of the property in Haslingden and this is being actively marketed for sale. The funds received from any sale will be used to repay some of the Group's borrowings that are secured against the property.
TAXATION
The Group showed a tax credit of GBP0.038m (2016: credit GBP0.067m). The tax charge includes the effects of expenses not deductible for tax purposes and profit made in countries where the effective tax rate is nil, consequently, the effective tax rate for the year was negative 3% (2016: negative 2%).
EARNINGS PER SHARE
Underlying* continuing basic earnings per share were 5.8 pence (2016: loss per share 1.0 pence). The basic earnings per share were 0.7 pence (2016: loss per share 16.8 pence).
CASH FLOW
There was a net cash inflow from operating activities of GBP2.183m (2016: outflow of GBP5.463m), reflecting the reported profit for the year of GBP0.295m (2016: loss of GBP5.233m) after depreciation and amortisation of GBP1.222m (2016: GBP0.726m) and the share based payment charge of GBP0.170m (2016: GBP1.141m). Within that, a reduction year on year of GBP0.833m in trade and other receivables (2016: increase of GBP4.184m), against a background of significant growth in revenue, was more than offset by the decrease in creditors of GBP1.378m (2016: increase of GBP0.434m). Net tax paid in the year was GBP0.029m (2016: GBP0.098m).
There was a net cash outflow from investing activities of GBP0.251m (2016: GBP0.714m) principally comprising net capital expenditure of GBP0.264m (2016: GBP0.728m).
Net cash flow from financing activities was of course hugely influenced by the refinancing and equity raise in February/March of 2017, and comprised a net repayment of borrowings of GBP2.123m (2016: net proceeds drawdown of GBP4.071m), net proceeds from the issue of new shares of GBP8.110m (2016: nil) and interest payments of GBP0.262m (2016: GBP0.231m). Although there was no equivalent in 2017, in 2016 there were also outflows in respect of the repurchase of share options, GBP0.462m, and a dividend paid of GBP0.320m.
DIVIDS
The Directors do not propose the payment of a dividend for the year (2016: nil).
Hugh Cawley
Finance Director
11 December 2017
Consolidated Income Statement
For The Year Ended 30 September 2017
Notes 2017 2016
GBP000 GBP000
Restated**
-------------------------------------- ------ --------- ------------
REVENUE 2 60,227 52,385
====================================== ====== ========= ============
Cost of Sales (45,391) (41,547)
-------------------------------------- ------ --------- ------------
GROSS PROFIT 14,836 10,838
====================================== ====== ========= ============
Administrative expenses (13,485) (14,318)
====================================== ====== ========= ============
Other operating income 143 197
-------------------------------------- ------ --------- ------------
Underlying* operating profit/(loss) 2,747 (156)
Exceptional items 3 (1,083) (1,959)
Share-based payment charges
and associated costs (170) (1,141)
Amortisation of intangible
assets - (27)
-------------------------------------- ------ --------- ------------
OPERATING PROFIT/(LOSS) 2 1,494 (3,283)
====================================== ====== ========= ============
Finance income 1 14
====================================== ====== ========= ============
Finance costs (262) (231)
-------------------------------------- ------ --------- ------------
PROFIT/(LOSS) BEFORE TAXATION 2 1,233 (3,500)
====================================== ====== ========= ============
Tax expense 4 38 67
-------------------------------------- ------ --------- ------------
PROFIT/(LOSS) FROM CONTINUING
OPERATIONS 2 1,271 (3,433)
-------------------------------------- ------ --------- ------------
Loss on discontinued operation,
net of tax 6 (976) (1,800)
-------------------------------------- ------ --------- ------------
PROFIT/(LOSS) FOR THE YEAR 295 (5,233)
-------------------------------------- ------ --------- ------------
Profit/(loss) attributable
to non-controlling interests
from continuing operations 4 (3)
-------------------------------------- ------ --------- ------------
Loss attributable to non-controlling
interests from discontinued - -
operations
====================================== ====== ========= ============
Profit/(loss) attributable
to equity shareholders of
the Parent from continuing
operations 1,267 (3,430)
Loss attributable to equity
shareholders of the Parent
from discontinued operations (976) (1,800)
295 (5,233)
---------
Basic earnings/(loss) per
share attributable to equity
shareholders of the Parent
(pence) 5 0.7p (16.8)p
-------------------------------------- ------ --------- ------------
Diluted earnings/(loss) per
share attributable to equity
shareholders of the Parent
(pence) 5 0.6p -
---------
Basic earnings/(loss) per
share attributable to equity
shareholders of the Parent
(pence) from continuing operations 5 2.9p (11.0)p
---------
Diluted earnings/(loss) per
share attributable to equity
shareholders of the Parent
(pence) from continuing operations 5 2.8p -
---------
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
**Restated to reflect discontinued operations
Consolidated Statement of Comprehensive Income
For The Year Ended 30 September 2017
2017 2016
GBP000 GBP000
------------------------------------------------------------------------ -------- ----------
PROFIT/(LOSS) FOR THE YEAR 295 (5,233)
------------------------------------------------------------------------- -------- ----------
Other comprehensive income:
======================================================================== ======== ==========
Items that could subsequently be reclassified to the Income Statement:
======================================================================== ======== ==========
Exchange differences on translating foreign operations (18) (49)
========================================================================= ======== ==========
OTHER COMPREHENSIVE INCOME FOR THE YEAR NET OF TAX (18) (49)
------------------------------------------------------------------------- -------- ----------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 277 (5,282)
------------------------------------------------------------------------- -------- ----------
Total comprehensive income attributable to:
======================================================================== ======== ==========
Owners of the Parent 273 (5,279)
========================================================================= ======== ==========
Non-controlling interest 4 (3)
========================================================================= ======== ==========
277 (5,282)
------------------------------------------------------------------------ -------- ----------
Consolidated Statement of Financial Position
For The Year Ended 30 September 2017
2017 2016
Notes GBP000 GBP000 GBP000 GBP000
------------------------------------- -------- --------- -------- ---------
NON-CURRENT ASSETS
====================================== ======== ========= ======== =========
Goodwill 2,969 3,456
====================================== ======== ========= ======== =========
Property, plant and
equipment 950 2,927
====================================== ======== ========= ======== =========
Intangible assets - 621
====================================== ======== ========= ======== =========
Deferred tax asset 58 21
-------------------------------------- -------- --------- -------- ---------
3,977 7,025
===================================== ======== ========= ======== =========
CURRENT ASSETS
====================================== ======== ========= ======== =========
Trade and other receivables 18,859 20,346
====================================== ======== ========= ======== =========
Derivative financial
asset 531 454
====================================== ======== ========= ======== =========
Cash and cash equivalents 4,932 555
Asset held for sale 1,614 -
25,936 21,355
------------------------------------- -------- --------- -------- ---------
TOTAL ASSETS 29,913 28,380
-------------------------------------- -------- --------- -------- ---------
CURRENT LIABLITIES
====================================== ======== ========= ======== =========
Borrowings (527) (3,352)
====================================== ======== ========= ======== =========
Trade and other payables (8,352) (8,593)
====================================== ======== ========= ======== =========
Derivative financial
liability (12) (1,395)
====================================== ======== ========= ======== =========
Current tax payable (175) (49)
-------------------------------------- -------- --------- -------- ---------
(9,066) (13,389)
------------------------------------- -------- --------- -------- ---------
NON-CURRENT LIABILITIES
Borrowings (4,583) (7,110)
====================================== ======== ========= ======== =========
Deferred tax liabilities (127) (301)
====================================== ======== ========= ======== =========
(4,710) (7,411)
------------------------------------- -------- --------- -------- ---------
TOTAL LIABILITIES (13,776) (20,800)
-------------------------------------- -------- --------- -------- ---------
NET ASSETS 16,137 7,580
-------------------------------------- -------- --------- -------- ---------
SHAREHOLDERS' EQUITY
====================================== ======== ========= ======== =========
Share capital 215 127
====================================== ======== ========= ======== =========
Share premium 11,475 3,453
====================================== ======== ========= ======== =========
Merger reserve 1,055 1,702
====================================== ======== ========= ======== =========
Currency reserve (459) (441)
====================================== ======== ========= ======== =========
Capital redemption
reserve 18 18
====================================== ======== ========= ======== =========
Retained earnings 3,937 2,829
====================================== ======== ========= ======== =========
Own shares (107) (107)
-------------------------------------- -------- --------- -------- ---------
TOTAL SHAREHOLDERS'
EQUITY 16,134 7,581
====================================== ======== ========= ======== =========
NON-CONTROLLING INTEREST 3 (1)
-------------------------------------- -------- --------- -------- ---------
TOTAL EQUITY 16,137 7,580
-------------------------------------- -------- --------- -------- ---------
Consolidated Cashflow Statement
For The Year Ended 30 September 2017
Notes 2017 2016
GBP000 GBP000
---------------------------------------- ------ -------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
======================================== ====== ======== ==========
Profit/(loss) for the year 295 (5,233)
---------------------------------------- ------ -------- ----------
Adjustments for:
======================================== ====== ======== ==========
Depreciation 601 503
======================================== ====== ======== ==========
Amortisation 621 223
======================================== ====== ======== ==========
Impairment of goodwill - 1,400
======================================== ====== ======== ==========
Exchange adjustments 51 249
======================================== ====== ======== ==========
Loss on disposal of subsidiary 796 -
======================================== ====== ======== ==========
Finance income (1) (14)
======================================== ====== ======== ==========
Finance expense 262 231
======================================== ====== ======== ==========
Tax (credit)/expense (38) (115)
======================================== ====== ======== ==========
Equity settled share-based
payment charge 170 1,141
---------------------------------------- ------ -------- ----------
OPERATING CASH FLOW BEFORE
CHANGES IN WORKING CAPITAL
AND PROVISIONS 2,757 (1,615)
---------------------------------------- ------ -------- ----------
Decrease/(increase) in trade
and other receivables 833 (4,184)
======================================== ====== ======== ==========
(Decrease)/increase in trade
and other payables (1,378) 434 ---------------------------------------- ------ -------- ---------- CASH GENERATED/(USED) IN OPERATIONS 2,212 (5,365) ======================================== ====== ======== ========== Tax paid (29) (98) ---------------------------------------- ------ -------- ---------- NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 2,183 (5,463) ---------------------------------------- ------ -------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES ======================================== ====== ======== ========== Interest received 1 14 ======================================== ====== ======== ========== Acquisition of property, plant and equipment (264) (728) ======================================== ====== ======== ========== Disposal of subsidiary net of cash acquired 6 12 - ======================================== ====== ======== ========== NET CASH OUTFLOW FROM INVESTING ACTIVITIES (251) (714) ---------------------------------------- ------ -------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES ======================================== ====== ======== ========== Interest paid (262) (231) ======================================== ====== ======== ========== Repayment of borrowings (7,123) (91) ======================================== ====== ======== ========== Proceeds of borrowings 5,000 4,162 ======================================== ====== ======== ========== Repurchase of share options - (462) ======================================== ====== ======== ========== Proceeds from issue of new 8,560 - shares ======================================== ====== ======== ========== Costs directly attributable (450) - to the issue of new shares ======================================== ====== ======== ========== Dividends paid to equity shareholders of the Parent - (320) ======================================== ====== ======== ========== NET CASH INFLOW FROM FINANCING ACTIVITIES 5,725 3,058 ---------------------------------------- ------ -------- ---------- Net increase/(decrease) in cash and cash equivalents 7,657 (3,119) ======================================== ====== ======== ========== Effect of foreign exchange on cash and cash equivalents (51) (249) ======================================== ====== ======== ========== Cash and cash equivalents at start of period (2,674) 694 ---------------------------------------- ------ -------- ---------- CASH AND CASH EQUIVALENTS AT OF PERIOD 4,932 (2,674) ---------------------------------------- ------ -------- ----------
Consolidated Statement of Changes in Equity
For The Year Ended 30 September 2017
Non-controlling
Share Share Merger Other Retained Own interest Total
capital premium reserve reserves(2) earnings shares Total(1) GBP000 Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
OPENING
BALANCE
AT 1 OCTOBER
2015 125 3,095 3,102 (374) 6,219 (107) 12,060 2 12,062
--------------- --------- --------- ---------- ------------- ---------- -------- ---------- ---------------- ----------
Loss for
the year - - - - (5,230) - (5,230) (3) (5,233)
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Other
comprehensive
income
for the
year - - - (49) - - (49) - (49)
--------------- --------- --------- ---------- ------------- ---------- -------- ---------- ---------------- ----------
Total
comprehensive
income
for the
year - - - (49) (5,230) - (5,279) (3) (5,282)
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Dividends - - - - (320) - (320) - (320)
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Share-based
payment - - - - 1,141 - 1,141 - 1,141
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Transfer
on impairment
of goodwill - - (1,400) - 1,400 - - - -
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Issue
of share
capital 2 358 - - - - 360 - 360
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Repurchase
of share
options - - - - (381) - (381) - (381)
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
CLOSING
BALANCE
AT 30
SEPTEMBER
2016 127 3,453 1,702 (423) 2,829 (107) 7,581 (1) 7,580
--------------- --------- --------- ---------- ------------- ---------- -------- ---------- ---------------- ----------
Profit
for the
year - - - - 291 - 291 4 295
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Other
comprehensive
income
for the
year - - - (18) - - (18) - (18)
--------------- --------- --------- ---------- ------------- ---------- -------- ---------- ---------------- ----------
Total
comprehensive
income
for the
year - - - (18) 291 - 273 4 277
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Transfer
on disposal
of Initiate - - (647) - 647 - - - -
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Share-based
payment - - - - 170 - 170 - 170
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Issue
of share
capital 88 8,472 - - - - 8,560 - 8,560
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
Costs
directly
attributable
to the
issue
of new
shares - (450) - - - - (450) - (450)
=============== ========= ========= ========== ============= ========== ======== ========== ================ ==========
CLOSING
BALANCE
AT 30
SEPTEMBER
2017 215 11,475 1,055 (441) 3,937 (107) 16,134 3 16,137
--------------- --------- --------- ---------- ------------- ---------- -------- ---------- ---------------- ----------
(1) Total equity attributable to the equity holders of the Parent
(2) 'Other reserves' combines the translation reserve and capital redemption reserve. The movement in the current and prior year relates to the translation of foreign currency equity balances and foreign currency non-monetary items.
Notes
1 Basis of preparation and status of financial information
The Financial information set out above has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the EU (Adopted IFRSs).
The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 September 2017 or 2016. Statutory accounts for 2016 have been delivered to the Registrar of Companies, and those for 2017 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
These results were approved by the Board of Directors on 11 December 2017.
2 Segmental analysis
REPORTABLE SEGMENTS
For management purposes, the Group is organised into three operating divisions: EuAm (Europe & Americas), AMEA (APAC, Middle East & Africa) and Initiate. These divisions are the basis on which the Group is structured and managed, based on its geographic structure. In EuAm and AMEA the key service provisions are: quantity surveying, planning / programming, quantum and planning experts, dispute avoidance / resolution, litigation support, contract administration and commercial advice / management. In Initiate the key service provisions are capital investment consultancy providing development, project and contracting management services to the infrastructure market in the UK.
Segment information about these reportable segments is presented below.
Year ended 30 September 2017
APAC,
Middle
Europe East Discontinued
& Americas & Africa Eliminations Unallocated(1) Consolidated Initiate
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Total external
revenue 26,049 34,178 - - 60,227 3,229
================= ============= ========== =============== ================= =============== ===============
Total
inter-segment
revenue 601 - (632) - (31) 31
================= ============= ========== =============== ================= =============== ===============
Total revenue 26,650 34,178 (632) - 60,196 3,260
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Segmental
profit/(loss) 2,331 2,161 - - 4,492 2
================= ============= ========== =============== ================= =============== ===============
Unallocated
corporate
expenses(1) - - - (1,745) (1,745) -
================= ============= ========== =============== ================= =============== ===============
Share-based
payment charge - - - (170) (170) -
================= ============= ========== =============== ================= =============== ===============
Exceptional
items (note
3) - (449) - (634) (1,083) (475)
================= ============= ========== =============== ================= =============== ===============
Amortisation
of intangible
assets - - - - - (621)
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Operating
profit/(loss) 2,331 1,712 - (2,549) 1,494 (1,094)
================= ============= ========== =============== ================= =============== ===============
Finance income - - - 1 1 -
================= ============= ========== =============== ================= =============== ===============
Finance expense - - - (262) (262) -
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Profit/(loss)
before taxation 2,331 1,712 - (2,810) 1,233 (1,094)
================= ============= ========== =============== ================= =============== ===============
Taxation - - - 38 38 118
------------- ---------- --------------- -----------------
Profit/(loss)
for the year 2,331 1,712 - (2,772) 1,271 (976)
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
OTHER
INFORMATION
================= ============= ========== =============== ================= =============== ===============
Non current
assets 3,241 541 - 195 3,977 -
================= ============= ========== =============== ================= =============== ===============
Reportable
segment assets 14,745 13,118 - 2,050 29,913 -
================= ============= ========== =============== ================= =============== ===============
Capital
additions(2) 39 150 - 78 267 -
================= ============= ========== =============== ================= =============== ===============
Depreciation
and
amortisation 110 361 - 130 601 621
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs
and expenses associated with AIM.
(2) Capital additions comprise additions to property,
plant and equipment including additions resulting
from acquisitions through business combinations.
No client had revenue of 10% or more of
the Group's revenue in the year to 30 September
2017.
Year ended 30 September 2016
APAC,
Middle
Europe East Discontinued
& Americas & Africa Eliminations Unallocated(1) Consolidated Initiate
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Total external
revenue 22,945 29,440 - - 52,385 5,876
================= ============= ========== =============== ================= =============== ===============
Total
inter-segment
revenue 532 80 (612) - - -
================= ============= ========== =============== ================= =============== ===============
Total revenue 23,477 29,520 (612) - 52,385 5,876
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Segmental
profit/(loss) 1,916 (1,089) - - 827 (52)
================= ============= ========== =============== ================= =============== ===============
Unallocated
corporate
expenses(1) - - - (983) (983) -
================= ============= ========== =============== ================= =============== ===============
Share-based
payment charge - - - (1,141) (1,141) -
================= ============= ========== =============== ================= =============== ===============
Exceptional
items (note
5) (535) (504) - (920) (1,959) (1,600)
================= ============= ========== =============== ================= =============== ===============
Amortisation
of intangible
assets - (27) - - (27) (196)
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Operating
profit/(loss) 1,381 (1,620) - (3,044) (3,283) (1,848)
================= ============= ========== =============== ================= =============== ===============
Finance income - - - 14 14 -
================= ============= ========== =============== ================= =============== ===============
Finance expense - - - (231) (231) -
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
Profit/(loss)
before taxation 1,381 (1,620) - (3,261) (3,500) (1,848)
================= ============= ========== =============== ================= =============== ===============
Taxation - - - 67 67 48
------------- ---------- ---------------
Profit/(loss)
for the year 1,381 (1,620) - (3,194) (3,433) (1,800)
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
OTHER
INFORMATION
================= ============= ========== =============== ================= =============== ===============
Non current
assets 5,642 742 - 151 6,535 490
================= ============= ========== =============== ================= =============== ===============
Reportable
segment assets 9,955 14,779 - 2,738 27,472 908
================= ============= ========== =============== ================= =============== ===============
Capital
additions(2) 70 547 - 107 724 4
================= ============= ========== =============== ================= =============== ===============
Depreciation
and
amortisation 118 291 - 120 529 197
----------------- ------------- ---------- --------------- ----------------- --------------- ---------------
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs
and expenses associated with AIM.
(2) Capital additions comprise additions to property,
plant and equipment including additions resulting
from acquisitions through business combinations.
No client had revenue of 10% or more of the Group's
revenue in the year to 30 September 2016.
2 Segmental analysis - continued
Geographical information
External revenue
by location
of customers
2017 2016
GBP000 GBP000
----------------- --------- --------
UK 20,517 20,713
================= ========= ========
UAE 11,723 8,724
================= ========= ========
Oman 6,778 6,270
================= ========= ========
Singapore 3,864 1,689
================= ========= ========
Qatar 3,378 1,678
================= ========= ========
Netherlands 2,630 2,699
================= ========= ========
Germany 2,111 1,272
================= ========= ========
France 1,806 1,740
================= ========= ========
Kuwait 1,783 967
================= ========= ========
Malaysia 1,487 1,330
================= ========= ========
Saudi Arabia 1,233 1,481
================= ========= ========
Australia 930 924
================= ========= ========
Belgium 837 624
================= ========= ========
Hong Kong 810 1,123
================= ========= ========
Canada 707 540
================= ========= ========
South Africa 643 3,347
================= ========= ========
China 486 205
================= ========= ========
Italy 401 81
================= ========= ========
Vietnam 209 -
================= ========= ========
Egypt 192 18
================= ========= ========
South Korea 29 1,939
================= ========= ========
United States 19 367
================= ========= ========
Other countries 883 530
================= ========= ========
63,456 58,261
----------------- --------- --------
Reconciliation to total Group revenue
2017 2016
GBP000 GBP000
------------------------------------------ -------- --------
Total external revenue from continuing
operations 60,227 52,385
========================================== ======== ========
Total external revenue from discontinued
operation 3,229 5,876
========================================== ======== ========
63,456 58,261
------------------------------------------ -------- --------
Geographical information of Non current assets
2017 2016
GBP000 GBP000
-------------- -------- --------
UK 3,408 6,248
============== ======== ========
Oman 204 302
============== ======== ========
UAE 164 278
============== ======== ========
Singapore 99 53
============== ======== ========
Qatar 20 17
============== ======== ========
Malaysia 19 27
============== ======== ========
Kuwait 16 -
============== ======== ========
Hong Kong 11 22
============== ======== ========
Netherlands 12 13
============== ======== ========
France 10 13
============== ======== ========
Australia 8 9
============== ======== ========
Canada 6 9
============== ======== ========
South Africa - 34
============== ======== ========
3,977 7,025
-------------- -------- --------
3 Exceptional Items
2017 2016
Restated*
GBP000 GBP000
----------------------------------- -------- -----------
Severance costs (1) - 1,365
=================================== ======== ===========
Acquisition and integration costs - 2
=================================== ======== ===========
Restructuring costs (2) 634 154
=================================== ======== ===========
Impairment of Goodwill - 438
=================================== ======== ===========
Disposal of subsidiary (3) 449 -
=================================== ======== ===========
1,083 1,959
----------------------------------- -------- -----------
(1) Severance costs include redundancy, ex-gratia, other discretionary payments and associated legal costs.
(2) Restructuring costs include bank charges and legal and professional fees in relation to the refinancing in the current year and the requirement of an additional banking facility in the prior year.
(3) Disposal of subsidiary includes the loss on the disposal of Driver Trett South Africa (pty) Ltd and the associated legal and professional fees for the disposal.
*Restated to reflect exceptional items from continuing operations only.
4 Taxation
Analysis of the tax charge
The tax charge on the profit for the year is as follows:
2017 2016
GBP000 GBP000
------------------------------------------- -------- --------
Current tax:
=========================================== ======== ========
UK corporation tax on profit for the - -
year
=========================================== ======== ========
Non-UK corporation tax 126 146
=========================================== ======== ========
Adjustments to the prior period estimates (71) (224)
------------------------------------------- -------- --------
55 (78)
=========================================== ======== ========
Deferred tax:
=========================================== ======== ========
Origination and reversal of temporary
difference (211) (37)
------------------------------------------- -------- --------
Tax (credit)/charge for the year (156) (115)
------------------------------------------- -------- --------
2017 2016
GBP000 GBP000
------------------------------ -------- --------
Current tax:
============================== ======== ========
From continuing operations 55 (67)
============================== ======== ========
From discontinued operations - (11)
------------------------------ -------- --------
55 (78)
============================== ======== ========
Deferred tax:
============================== ======== ========
From continuing operations (93) -
============================== ======== ========
From discontinued operations (118) (37)
------------------------------ -------- --------
(211) (37)
------------------------------ -------- --------
Tax credit for the year (156) (115)
------------------------------ -------- --------
Factors affecting the tax charge
The tax assessed for the year varies from the standard rate of corporation tax in the UK. The difference is explained below:
2017 2016
GBP000 GBP000
------------------------------------------ -------- ----------
Profit/(loss) from continuing operations 1,233 (3,500)
------------------------------------------ -------- ----------
Loss from discontinued operations (1,094) (1,848)
------------------------------------------ -------- ----------
Profit/(loss) before tax 139 (5,348)
------------------------------------------ -------- ----------
Expected tax credit based on the
standard average rate of corporation
tax in the UK of 19% (2016: 20%) 26 (1,070)
========================================== ======== ==========
Effects of:
========================================== ======== ==========
Expenses not deductible 477 644
========================================== ======== ==========
Deferred tax - other differences (211) (36)
========================================== ======== ==========
Foreign tax rate difference (288) 341
========================================== ======== ==========
Adjustment to prior period estimates (71) (224)
========================================== ======== ==========
Utilisation of losses (313) (302)
========================================== ======== ==========
Share options exercised (32) -
========================================== ======== ==========
Unprovided losses 256 532
========================================== ======== ==========
Tax credit for the year (156) (115)
------------------------------------------ -------- ----------
5 Earnings Per Share
2017 2016
Restated
GBP000 GBP000
------------------------------------------------------- ----------- -----------
Profit/(loss) for the financial
year attributable to equity shareholders 291 (5,230)
======================================================= =========== ===========
Share-based payment charges and
associated costs 170 1,141
======================================================= =========== ===========
Exceptional items (note 3) 1,083 1,959
======================================================= =========== ===========
Amortisation of intangible assets - 27
======================================================= =========== ===========
Loss from discontinued operations 976 1,800
======================================================= =========== ===========
Adjusted profit/(loss) for the year
before share-based payments, amortisation
of intangible assets and exceptional
items from continuing operations 2,520 (303)
------------------------------------------------------- ----------- -----------
Weighted average number of shares:
======================================================= =========== ===========
* Ordinary shares in issue 43,775,690 31,251,190
======================================================= =========== ===========
* Shares held by EBT (267,760) (596,677)
======================================================= =========== ===========
* Vested options with nominal consideration - 426,017
------------------------------------------------------- ----------- -----------
Basic weighted average number of
shares 43,507,930 31,080,530
======================================================= =========== ===========
Effect of Employee share options 1,972,870 1,590,610
======================================================= =========== ===========
Diluted weighted average number
of shares 45,480,800 32,671,140
------------------------------------------------------- ----------- -----------
Basic earnings/(loss) per share 0.7p (16.8)p
======================================================= =========== ===========
Diluted earnings per share 0.6p -
======================================================= =========== ===========
Adjusted continuing basic earnings/(loss)
per share before share-based payments,
amortisation of intangible assets
and exceptional items 5.8p (1.0)p
======================================================= =========== ===========
Basic earnings/(loss) per share
attributable to equity shareholders
of the Parent from continuing operations 2.9p (11.0)p
======================================================= =========== ===========
Diluted earnings per share attributable
to equity shareholders of the Parent 2.8p -
from continuing operations
======================================================= =========== ===========
6 Discontinued Operation
In line with the Group's strategy to focus on claims, disputes and expert witness assignments the Directors made the decision to dispose the Group's 100% share of initiate Consulting Limited ('Initiate') on 30 September 2017. As a result of this disposal Initiate has been classed as a discontinued operation and is the only operation presented as discontinued in these financial statements.
At the date of disposal Initiate had net assets of GBP0.1m. The consideration, payable in cash and the amount of which will be finally determined after certification of the completion balance sheet, is expected to be something less than GBP0.2m. The loss on disposal is due to a goodwill write off of GBP0.5m.
Loss on Disposal
GBP000
----------------------------- -----------------
Net assets at disposal date 113
============================= =================
Goodwill write off 487
============================= =================
Anticipated proceeds (188)
============================= =================
Loss on disposal 412
----------------------------- -----------------
Results of discontinued operations
2017 2016
GBP000 GBP000
---------------------------- --------------------- ---------------------
Revenue 3,229 5,876
============================ ===================== =====================
Expenses (3,290) (7,528)
============================ ===================== =====================
Finance costs - -
============================ ===================== =====================
Tax 118 48
============================ ===================== =====================
Amortisation of intangible
asset (621) (196)
============================ ===================== =====================
Loss on disposal (412) -
============================ ===================== =====================
Loss for the year (976) (1,800)
---------------------------- --------------------- ---------------------
Earnings per share from discontinued operations
2017 2016
GBP000 GBP000
---------------------- -------- --------
Basic loss per share (2.2)p (5.8)p
---------------------- -------- --------
Results of discontinued operations
The statement of cash flows includes the following amounts relating to discontinued operations
2017 2016
GBP000 GBP000
---------------------- --------------------- ---------------------
Operating activities (1,244) (1,983)
====================== ===================== =====================
Investing activities - (1)
====================== ===================== =====================
Financing activities - -
====================== ===================== =====================
Loss for the year (1,244) (1,984)
---------------------- --------------------- ---------------------
Disposal of Driver Trett South Africa (pty) Ltd
The Directors also took the decision in the year to dispose of Driver Trett South Africa (pty) Ltd ('DTSA') in South Africa to the local management team on 12 May 2017. This decision was made due to specific market constraints imposed by the government upon ownership which prevented effective bidding for most of the key projects as mentioned in the Chief Executive's Review.
At the date of disposal DTSA had net assets of GBP0.54m. The consideration paid was GBP0.15m in cash. A loss on disposal of GBP0.39m has been recognised in the financial statements. As DTSA forms part of the Africa, Middle East and Asia Pacific operating segment it has not be disclosed separately as a discontinued operation.
During the year the DTSA contribution to revenue was GBP0.70m (2016: GBP3.50m) and a loss before tax of GBP0.30m (2016: GBP0.18m).
7 Critical Accounting Estimates And Judgements
Some asset and liability amounts reported in the Consolidated Financial Statements contain a degree of management estimation and assumptions. There is therefore a risk of significant changes to the carrying amounts for these assets and liabilities within the next financial year. The estimates and assumptions are made on the basis of information and conditions that exist at the time of the valuation.
Impairment reviews
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires an entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. An impairment review test has been performed at the reporting date and no impairment is required.
Receivables impairment provisions
The amounts presented in the Consolidated Statement of Financial Position are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the present value of estimated future cash flows. At the Statement of Financial Position date a GBP2,109,000 (2016: GBP1,576,000) provision was required. Any future increase to the provision would lead to a corresponding increase in reported losses and a reduction in reported total assets.
Revenue recognition on fixed fee projects
Where the Group enters into a formal fixed fee arrangement revenue is recognised by reference to the stage of completion of the project. The stage of completion will be estimated by the Group's management based on the Project Manager's assessment of the contract terms, the time incurred and the performance obligations achieved and remaining.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAAAFFAAXFAF
(END) Dow Jones Newswires
December 12, 2017 02:00 ET (07:00 GMT)
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