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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Entu (UK) | LSE:ENTU | London | Ordinary Share | GB00BQXKYQ29 | ORD GBP0.0005 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMENTU
RNS Number : 9817L
entu (UK) plc
25 July 2017
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
ENTU (UK) PLC
("Entu" or the "Group")
Results for the Six Months Ended 30 April 2017
Entu (UK) plc, the home improvements group providing energy efficiency products and services to homeowners and businesses across the UK, announces its results for the six months ended 30 April 2017 which are in line with the Group's trading announcement on 14 June 2017.
Highlights
-- Operational and supply chain issues result in lower first half revenues of GBP36.5m (2016: GBP42.2m).
-- LBITDA in line with expectations at GBP2.3m (2016: earnings of GBP1.3m). -- Operational improvements made in the early part of H2 already yielding results. -- Further restructuring exercise implemented with expected savings of GBP0.8m a year.
-- Executive Team strengthened further to drive efficiency savings across the Group's activities and improve working capital.
Hot Features
Premium
Half Year Ended 30 April 2017 2016
Unaudited Restated
GBPm GBPm
------------------------------------ ------ ----------
Continuing Operations
Revenue 36.5 42.2
Gross profit 10.0 13.8
(LBITDA)/EBITDA before exceptional
items (2.3) 1.3
Operating (loss)/profit before
exceptional items (2.4) 1.2
Operating (loss)/profit after
exceptional items (3.0) 1.1
Overall Results
(Loss)/profit for the period (2.6) 0.5
Basic (loss)/profit per share
(pence) (4.0) 0.8
Cash used in operations (7.3) (2.3)
Net decrease in cash and cash
equivalents (7.3) (2.3)
Net debt (6.6) (0.9)
Strategic Review and Going Concern
-- Strategic review announced 6 July 2017 - assisted by KPMG. -- Aim to secure new long-term financing to address cash and borrowing requirements. -- Interest being expressed by a number of parties in a number of possible solutions. -- Group's lenders remain supportive whilst this process continues. -- Initial offers are expected shortly for consideration by the Board and the Group's lenders.
Chief Executive, Ian Blackhurst, commented:
"Whilst implementing our five-point improvement plan, the complexity of issues in our operations and supply chain meant that we were unable to move ahead as quickly as we would have wished. However, our strengthened Executive Team is already delivering tangible results and we hope that the strategic review exercise that we announced on 6 July 2017 will stabilise the Group's financial position to allow the wider management team to deliver the improvement plan and return the business to profitable growth in the next financial year."
For further information, please contact:
Entu Ian Blackhurst, Chief Executive Officer 020 7457 2020 Neill Skinner, Chief Financial Officer Zeus Capital Limited (Broker and Nominated Adviser) John Goold 020 3829 5000 Dominic King Andrew Jones Instinctif Partners (Public Relations) Helen Tarbet 020 7457 2020 James Gray
Notes to Editors
Entu (UK) plc (AIM: ENTU) is a leading home improvement group providing energy efficiency products and services to homeowners and businesses in the UK.
Headquartered in Cheshire, Entu has national presence through a network of strong regional brands such as Weatherseal, Penicuik and Zenith. The Group operates three business segments: home improvement products, energy generation and energy saving products and repairs and renewals services.
Entu operates in a growing marketplace with myriad opportunities. Entu's primary strategy is to focus on driving organic growth from its diversified, fully integrated product portfolio, and also, over time, through the development of new product and service offerings, in particular, energy efficiency products and services.
The Group was admitted to AIM in October 2014.
CHIEF EXECUTIVE'S STATEMENT
Business Review
Sales in the core Home Improvements business held up well throughout the first quarter. However, as operations were scaled up to meet peak seasonal demand in late March and April, it became clear that the operational and supply chain difficulties outlined in the full-year results statement on 29 March 2017 were more complex and further reaching than expected.
Driving up fit capacity to meet peak demand in the last weeks of the first half of the year whilst implementing actions to address these complex operational and supply chain issues would have created an unsustainable position and been counter-productive. The Group, therefore, made the difficult decision to hold fit capacity at a lower level during this peak period and bring sales into line, in order to protect levels of customer service until the operational and supply chain issues had been resolved.
Following the sale of Astley Façades in October 2015, the Energy Saving and Generation Division was a considerably smaller operation in the first half. However, the Division did see some growth in its emerging LED installation business with several major warehouse conversion projects undertaken for a number of leading manufacturing and distribution businesses, and the ECO-funded insulation business secured a 15-month extension to its contract with a major utility company.
The loss of fit capacity during these critical weeks had a significant impact on first half revenues. Group revenues from continuing operations for the six months ended 30 April 2017 were down 13.5% at GBP36.5m (2016: GBP42.2m) and, with the loss of revenue being concentrated in the peak period, gross margins fell to 27.4% (2016: 32.7%) resulting in a gross profit of GBP10.0m (2016: GBP13.8m).
Loss before interest, tax, depreciation and amortisation ("LBITDA") on continuing operations before exceptional items for the six months ended 30 April 2017 was in line with our latest expectations at GBP2.3m (2016: positive earnings of GBP1.3m), and the operating loss before exceptional items was GBP2.4m (2016: profit of GBP1.2m).
The overall loss for the half year, after exceptional items of GBP0.6m (2016: GBP0.1m) relating to restructuring costs, was GBP2.6m (2016: profit of GBP0.5m). Net debt at 30 April 2017 was GBP6.6m (2016: GBP0.9m).
Divisional Results (Continuing Operations)
Six months Home Improvements Energy Repairs Group
ended Generation and Renewals
30 April and Saving Service
2017 Agreements
Unaudited
2017 2016 2017 2016 2017 2016 2017 2016
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- --------- --------- ------ ------ ------- ------- ------ ------
Revenue 32.9 39.1 2.3 1.8 1.3 1.3 36.5 42.2
(LBITDA)/EBITDA(1) (3.4) 0.3 0.2 0.1 0.9 0.9 (2.3) 1.3
Operating
(loss)/profit(1) (3.5) - 0.2 0.1 0.9 1.0 (2.4) 1.2
Operating
(loss)/profit(2) (4.1) - 0.2 0.1 0.9 1.0 (3.0) 1.1
(1) Before exceptional items.
(2) After exceptional items.
Home Improvements
The significant loss of fit capacity during late March and April caused revenues in the core Home Improvements Division to fall 15.8% to GBP32.9m (2016: GBP39.1m). As noted above, the concentration around a few weeks at the end of the first half had a disproportionate impact on gross margin and, as a result, the Division reported an operating loss before exceptional items of GBP3.5m (2016: nil).
Intense competition in the non-core boilers and energy-switching businesses resulted in a loss of GBP0.2m in the first half and, following a review in May, the Group decided to close these businesses and focus on its core glazing products.
Energy Generation and Saving
Revenues grew 27.8% to GBP2.3m (2016: GBP1.8m) due to growth in the Group's emerging LED installations business, whilst the ECO-funded insulation business continued to trade in line with expectations. The Division generated an operating profit of GBP0.2m (2016: GBP0.1m).
Repairs and Renewals Service Agreements ("RRSA")
The RRSA Division continued to deliver a stable revenue and profit stream. Revenues were in line with the previous half year at GBP1.3m (2016: GBP1.3m) and represented 4.0% of Home Improvement revenues (2016: 3.3%). Operating profit was GBP0.9m (2016: GBP1.0m).
Strategic Review and Going Concern
The losses incurred in the period and the pressure on working capital and debt collection resulting from the operational and supply chain issues referred to above have pushed cash and borrowing requirements into uncomfortable territory. As a result, on 6 July 2017, the Group announced that it had, with the assistance of KPMG, commenced a strategic review with the aim of securing new long-term financing and strengthening the balance sheet. The process has attracted interest across the various options being considered, namely new debt funding, debt and equity structures and expressions of interest in certain parts of the Group. Initial offers of interest have been requested to be submitted shortly and an update will be provided once the various offers have been evaluated by the Board in conjunction with the Group's lenders.
Appropriate bank support continues to remain in place whilst this process is completed. Based on the current level of interest, the Board hopes that the Group will be able to secure new long-term finance facilities. However, should the Group's banks withdraw their support or should the process fail to provide options that will stabilise the Group's financial position, then the Group's ability to continue as a going concern may be at risk. This is discussed in more detail in Note 1 to the Consolidated Financial Statements.
Dividend
In light of the results for the six months ended 30 April 2017 and the current financial position of the Group, the Board is not recommending an interim dividend.
Trading Outlook
The outcome of the strategic review will have a bearing upon the trading outlook for the Group. In the meantime, the Group continues to implement its detailed action plan to reduce costs, improve operational efficiency, leverage its supply chain, improve cash collection and strengthen controls.
A significant number of operational improvements have been made since the appointment of a new Group Operations Director in April, and performance in the second half of the year is improving as these measures take effect. A further restructuring exercise was implemented in July which is expected to yield savings of GBP0.8m a year, and the Executive Team has been strengthened with a number of experienced interim managers to drive further efficiency savings across the Group's activities and improve working capital.
As noted in the Trading Update announced on 14 June 2017, the intention is to hold fit capacity at current levels throughout the second half of the year and to bring sales into line. Furthermore, the LED business and other commercial revenue streams will be scaled back in the short-term in order to focus resources on the core Home Improvements business. Whilst the actions noted above will yield some benefit in the current financial year, the Group still expects the full-year loss before interest, tax, depreciation and amortisation on continuing operations before exceptional items to be in the range of GBP1.2m-GBP2.2m subject to the outcome of the strategic review.
Ian Blackhurst
Chief Executive
25 July 2017
CONSOLIDATED INCOME STATEMENT
Half Year Half Year Year to
to to 31 October
30 April 30 April 2016 Audited
2017 Unaudited 2016 Unaudited
Restated
Notes GBP000's GBP000's GBP000's
--------------------------------- ----- --------------- ---------------- ---------------
Continuing operations
Revenue 4 36,501 42,162 87,745
Cost of sales (26,503) (28,326) (60,284)
Gross profit 9,998 13,836 27,461
Administrative expenses (12,397) (12,647) (24,994)
Operating (loss)/profit
before exceptional items (2,399) 1,189 2,467
Exceptional items 5 (601) (90) (4,581)
Operating loss after exceptional
items (3,000) 1,099 (2,114)
Finance costs (194) (92) (219)
Loss before taxation (3,194) 1,007 (2,333)
Taxation credit/(charge) 7 567 (88) 512
Loss for the period from
continuing operations (2,627) 919 (1,821)
Discontinued operations
Loss for the period from
discontinued operations 6 - (414) (3,801)
Loss for the period (2,627) 505 (5,622)
--------------------------------- ----- --------------- ---------------- ---------------
Continuing basic (loss)/profit
per share (pence) 9 (4.0) 1.4 (2.8)
Discontinued basic (loss)/profit
per share (pence): 9 - (0.6) (5.8)
Total basic (loss)/profit
per share (pence) 9 (4.0) 0.8 (8.6)
--------------------------------- ----- --------------- ---------------- ---------------
Diluted continuing operations
(loss)/profit per share
(pence) 9 (4.0) 1.4 (2.8)
--------------------------------- ----- --------------- ---------------- ---------------
Adjusted earnings per share is shown in note 9 to the accounts.
The notes 1 to 15 are an integral part of these Consolidated Financial Statements.
There are no other items of comprehensive income for the period other than the loss for the period attributable to the equity holders.
CONSOLIDATED BALANCE SHEET
As at 30 As at 30 As at
April 2017 April 2016 31 October
Unaudited Unaudited 2016
Restated Audited
Notes GBP000's GBP000's GBP000's
------------------------------ ----- ------------- ------------- -------------
Assets
Non-current assets
Intangible assets 1,141 1,496 1,141
Property, plant and equipment 360 879 481
Deferred tax asset 418 - 418
------------------------------ ----- ------------- ------------- -------------
1,919 2,375 2,040
------------------------------ ----- ------------- ------------- -------------
Current assets
Inventories 1,704 2,002 1,267
Trade and other receivables 10 10,785 15,864 8,103
Current taxation receivable 1,347 - -
Cash and cash equivalents 11 - - 768
------------------------------ ----- ------------- ------------- -------------
13,836 17,866 10,138
------------------------------ ----- ------------- ------------- -------------
Total assets 15,755 20,241 12,178
------------------------------ ----- ------------- ------------- -------------
Equity
Share capital 50 50 50
Accumulated losses (10,983) (1,900) (8,356)
------------------------------ ----- ------------- ------------- -------------
Total shareholders' deficit (10,933) (1,850) (8,306)
------------------------------ ----- ------------- ------------- -------------
Liabilities
Non-current liabilities
Deferred taxation liabilities - 60 -
Provisions 403 1,318 403
------------------------------ ----- ------------- ------------- -------------
403 1,378 403
------------------------------ ----- ------------- ------------- -------------
Current liabilities
Trade and other payables 12 18,348 18,302 18,465
Borrowings 13 6,553 891 -
Current taxation liabilities - 620 54
Provisions 1,384 900 1,562
------------------------------ ----- ------------- ------------- -------------
26,285 20,713 20,081
------------------------------ ----- ------------- ------------- -------------
Total liabilities 26,688 22,091 20,484
------------------------------ ----- ------------- ------------- -------------
Total shareholders' deficit
and liabilities 15,755 20,241 12,178
------------------------------ ----- ------------- ------------- -------------
The notes 1 to 15 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Accumulated Total
Capital Losses Shareholders'
Unaudited Unaudited Deficit
Unaudited
Notes GBP000's GBP000's GBP000's
------------------------------- ----- ---------- ----------- --------------
At 1 November 2015 (restated) 50 (655) (605)
Loss for the period - 505 505
Transactions with owners:
Dividends 8 - (1,750) (1,750)
Total transactions with owners
recognised directly in equity - (1,750) (1,750)
------------------------------- ----- ---------- ----------- --------------
At 30 April 2016 (restated) 50 (1,900) (1,850)
Loss for the period - (6,127) (6,127)
Transactions with owners:
Dividends 8 - (329) (329)
Total transactions with owners
recognised directly in equity - (329) (329)
------------------------------- ----- ---------- ----------- --------------
At 31 October 2016 50 (8,356) (8,306)
Loss for the period - (2,627) (2,627)
At 30 April 2017 50 (10,983) (10,933)
------------------------------- ----- ---------- ----------- --------------
Share capital
The share capital account includes the nominal value for all shares issued and outstanding.
Accumulated losses
The 'Accumulated Losses' column in the Statement of Changes in Equity includes the accumulated profits and losses arising from the Consolidated Income Statement and certain items from the Consolidated Statement of Changes in Equity attributable to equity shareholders, net of distributions to shareholders.
The notes 1 to 15 are an integral part of these Financial Statements.
CONSOLIDATED CASH FLOW STATEMENT
Half Year Half Year Year to
to 30 April to 30 31 October
2017 April 2016 Audited
Unaudited 2016
Unaudited
Restated
Notes GBP000's GBP000's GBP000's
------------------------------ ----- -------------- ---------- ----------------
Cash flows from operating
activities
Cash generated from/(used
in) operations 14 (7,101) (2,168) 1,382
Taxation paid - - (12)
Interest paid (194) (92) (232)
------------------------------- ----- -------------- ---------- ----------------
Net cash generated from/(used
in) operating activities (7,295) (2,260) 1,138
------------------------------- ----- -------------- ---------- ----------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (26) (66) (189)
Proceeds from disposal
of property plant and
equipment - - 463
Net cash generated from/(used
in) investing activities (26) (66) 274
------------------------------- ----- -------------- ---------- ----------------
Cash flows from financing
activities
Dividends paid to equity
shareholders - - (2,079)
------------------------------- ----- -------------- ---------- ----------------
Net cash used in financing
activities - - (2,079)
------------------------------- ----- -------------- ---------- ----------------
Net decrease in cash and
cash equivalents (7,321) (2,326) (667)
Cash and cash equivalents
at the beginning of the
year 768 1,435 1,435
Cash and cash equivalents
at the end of the year (6,553) (891) 768
------------------------------- ----- -------------- ---------- ----------------
The notes 1 to 15 are an integral part of these Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Interim announcement
While the financial information included in this interim announcement has been computed in accordance with IFRS, the announcement does not itself contain sufficient information to comply with IFRS. The accounting policies used are consistent with those in the Group's Statutory Financial Statements for the year ended 31 October 2016. The key accounting policies applied by the Group have been set out below.
General information
Entu (UK) plc ('the Company') and its subsidiaries (together "the Group") principal activity during the period was the sale of replacement windows, double glazing, entrance doors, patio doors and exterior improvement products within the United Kingdom. Other activities, included within discontinued operations were solar home improvement products and within the Astley Facades UK group of companies, the provision of façade facilities for both new build construction and refurbishment products.
The Company is incorporated and domiciled in the UK. The Company's registered number is 08957339. The address of its registered office is 7 Road One, Winsford Industrial Estate, Winsford, Cheshire CW7 3PZ.
The Company is a public limited company and has its primary listing on the AIM division of the London Stock Exchange.
1. Accounting policies
The principal accounting policies applied in the preparation of these Interim Financial Statements are consistent with those of the annual financial statements for the year ended 31 October 2016.
Basis of preparation
The Consolidated Interim Financial Statements for the six months ended 30 April 2017, which have not been reviewed or audited, have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority and in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union (EU). They should be read in conjunction with the audited annual financial statements for the year ended 31 October 2016 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRS Interpretations Committee (IFRS IC) Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
The interim financial statements for the period ended 30 April 2017 do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.
Then financial information set out in this statement relating to the year ended 31 October 2016 does not constitute statutory accounts for that year. Full audited accounts in respect of that year were approved by the Board of Directors on 28 March 2017 and have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under section 498 of the Companies Act 2006.
The preparation of Interim Financial Statements 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. In preparing these Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty continue to be reviewed and applied on a consistent basis. There have been no material changes since 31 October 2016 as set out in the Group's Annual Report and Accounts.
Going concern
On 6 July 2017, the Group announced that it was undertaking a strategic review and that the Directors were exploring options for new long-term finance facilities. KPMG have since been engaged to assist with this ongoing process and appropriate bank support continues to remain in place whilst the process is completed. The ability of the Group to continue to trade is dependent on the ultimate success of the process as, in the event that appropriate new long-term financing arrangements are not secured, the ability of the Group to continue to trade as a going concern is uncertain as it may be unable to realise its assets and discharge its liabilities in the normal course of business. The Directors presently remain confident that, given the level of interest expressed by interested parties, there is a reasonable expectation that the Group will be able to successfully secure appropriate new long-term financing facilities. Therefore, the Directors have concluded that it is appropriate to continue to prepare the Group's financial statements on a going concern basis.
2. Prior year adjustments
During the year ended 31 October 2016, the Directors undertook a review of the Group's revenue recognition policies and the application of those policies. As a result of this review, the Directors took the decision to change their accounting policies for certain revenue streams to better reflect industry practices and to align policies more consistently across the Group. The impact of the changes in accounting policies is disclosed in the Annual Report and Accounts for the year ended 31 October 2016.
In accordance with IAS 8, the change in accounting policies has been applied retrospectively and the comparative financial information has been restated. The table below sets out the impact of the changes in accounting policies on both the profit for the period ended 30 April 2016 and the equity of the Group as at that date.
Impact of prior year adjustments on the Consolidated Income Statement of the Group
Period ended 30 April 2016
GBP000's
------------------------------------------------------ --------
Profit after tax as previously reported 431
Change in RRSA revenue recognition (i) 29
Change in other home improvements revenue recognition
(ii) 192
Change in finance commission revenue recognition
(iii) (48)
Change in application of deferred commission
accounting policy (iv) (118)
Adjustment to tax in respect of changes to income
recognition (v) 19
-------------------------------------------------------- --------
Restated profit after tax 505
-------------------------------------------------------- --------
(i) Historically the Group recognised revenue in relation to the RRSA programme on a cash received basis. However, as the RRSA programme results in a 12-month commitment to customers the Directors have determined that it would be appropriate to spread the revenue over the 12-month contract period.
(ii) On review of recognition of revenue across the Group's businesses it was concluded that for certain types of installations in certain subsidiaries, there was a different interpretation of the point of completion of installation. In some cases, revenue was being recognised prior to the substantial completion of the installations. The Directors have determined that the revenue should be recognised when the Group has substantially completed the installation and the substantial risks and rewards of ownership are deemed to have transferred.
(iii) Historically the Group recognised finance commissions on receipt from finance providers. There has been limited history of non-collection of commissions and, therefore, the Directors think it more appropriate to recognise finance commissions in line with the revenue recognition policy to which the product associated with the finance commission relates.
(iv) The Group defers sales commissions costs incurred in a financial year which are considered to be directly related to revenue transactions which are not recognised until subsequent financial years. As part of the review of the Group's revenue recognition policy the Group aligned policies on deferred commissions across the Group. This has resulted in certain costs being required to be recognised earlier than previously recognised. The current and prior years cost of sales numbers have been restated in this respect.
(v) Taxation charges have been adjusted in respected of changes to income recognition and deferred commissions.
Impact of prior year adjustments on the Consolidated Balance Sheet of the Group
At 30 April As reported Change Change Change Change Change Restated
2016 previously in RRSA in other in finance in deferred In taxation
revenue commission commission
recognition
(i) (ii) (iii) (iv) (v)
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Assets
Non-current
assets
Intangible assets 1,496 - - - - - 1,496
Property, plant
and equipment 879 - - - - - 879
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
2,375 - - - - - 2,375
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Current assets
Inventories 2,002 - - - - - 2,002
Trade and other
receivables 16,787 - (554) 76 (445) - 15,864
Cash and cash - - - - - - -
equivalents
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
18,789 - (554) 76 (445) - 17,866
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total assets 21,164 - (554) 76 (445) - 20,241
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Equity
Share capital 50 - - - - - 50
Retained earnings/
(accumulated
losses) (411) (1,187) (353) 76 (445) 420 (1,900)
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total shareholders'
equity/(deficit) (361) (1,187) (353) 76 (445) 420 (1,850)
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Liabilities
Non-current
liabilities
Deferred taxation
liabilities 60 - - - - - 60
Provisions 1,318 - - - - - 1,318
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
1,378 - - - - - 1,378
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
-
Current liabilities
Trade and other
payables 17,316 1,187 (201) - - - 18,302
Borrowings 891 - - - - - 891
Current taxation
liabilities 1,040 - - - - (420) 620
Provisions 900 - - - - - 900
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
20,147 1,187 (201) - - (420) 20,713
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total liabilities 21,525 1,187 (201) - - (420) 22,091
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total shareholders'
equity/(deficit)
and liabilities 21,164 - (554) 76 (445) - 20,241
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
(i) Changes in accounting policies for RRSA resulted in increased deferred income, which is included in trade and other payables category of liabilities.
(ii) Changes in accounting policies for other revenue recognition had the impact of reducing trade receivables, prepayments, accrued income and other receivables within the trade and other receivables category of asset.
(iii) Changes in accounting policies for finance commission had the impact of increasing the trade and other receivables category of asset.
(iv) Changes in the accounting for deferred commission had the impact of decreasing the trade and other receivables category of asset.
(v) The current taxation liability has been adjusted in respect of the reduction to tax charges as a consequence of the above adjustments.
3. Accounting policies
The accounting policies are consistent with those of the Annual Report and Accounts for the year ended 31 October 2016 which are prepared in accordance with IFRS as adopted by the European Union, except as disclosed below:
-- Taxes on income in the interim periods are accrued using the tax rate that would be applicable to total expected annual earnings.
There are no new IFRSs or IFRICs that are effective for the first time in this interim period that would be expected to have a material impact on the group.
4. Segmental analysis
The Chief Operating Decision Maker (CODM) has been identified as the Executive Board which comprises the two Executive Directors.
The CODM reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports which include an allocation of central costs as appropriate.
The CODM considers the business from an operating perspective, with Home Improvements, Energy Generation and Saving, Repair and Renewal Service Agreements being the three reporting segments. The CODM assesses the performance based on operating profit before exceptional items. Other information provided to the CODM, except as noted below, is measured in a manner consistent with that of the Financial Statements.
All revenue, profit and assets of the Group and all segments arise in the Group's country of domicile, being the United Kingdom.
Half year ended 30 Home Energy Repair Total
April 2017 Improvements Generation and Renewal
Unaudited and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
------------------------ ------------- ------------ ------------ --------
Revenue 32,913 2,275 1,313 36,501
------------------------ ------------- ------------ ------------ --------
Operating (loss)/profit
before exceptional
items (3,502) 167 936 (2,399)
Exceptional items (586) (15) - (601)
------------------------ ------------- ------------ ------------ --------
Operating (loss)/profit (4,088) 152 936 (3,000)
Finance costs (194) - - (194)
------------------------ ------------- ------------ ------------ --------
(Loss)/profit before
taxation-continuing
operations (4,282) 152 936 (3,194)
------------------------ ------------- ------------ ------------ --------
There was no material inter-segment revenue in the half year ended 30 April 2017.
Half year ended 30 April 2016 Home Energy Repair Total
Restated Improvements Generation and Renewal
Unaudited and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
------------------------------------ ------------- ------------ ------------ --------
Revenue 39,084 1,776 1,302 42,162
------------------------------------ ------------- ------------ ------------ --------
Operating profit before exceptional
items 130 82 977 1,189
Exceptional items (90) - - (90)
------------------------------------ ------------- ------------ ------------ --------
Operating (loss)/ profit 40 82 977 1,099
Finance costs (92) - - (92)
------------------------------------ ------------- ------------ ------------ --------
(Loss)/profit before taxation -
continuing operations (52) 82 977 1,007
------------------------------------ ------------- ------------ ------------ --------
Loss for the year from discontinued
operations - (414) - (414)
------------------------------------ ------------- ------------ ------------ --------
There was no material inter-segment revenue in the half year ended 30 April 2016.
Year ended 31 October Home Energy Repair Total
2016 Improvements Generation and Renewal
and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
-------------------------- ------------- ------------ ------------ -----------------------
Revenue 77,113 8,017 2,615 87,745
-------------------------- ------------- ------------ ------------ -----------------------
Operating profit before
exceptional items 193 38 2,236 2,467
Exceptional items (4,146) (435) - (4,581)
-------------------------- ------------- ------------ ------------ -----------------------
Operating (loss)/ profit (3,953) (397) 2,236 (2,114)
Finance costs (219) - - (219)
-------------------------- ------------- ------------ ------------ -----------------------
(Loss)/profit before
taxation-continuing
operations (4,172) (397) 2,236 (2,333)
-------------------------- ------------- ------------ ------------ -----------------------
Loss for the year from
discontinued operations* (2,258) (1,543) - (3,801)
-------------------------- ------------- ------------ ------------ -----------------------
*Loss before tax from discontinued operations was GBP4,196,000. A tax credit of GBP395,000 was utilised in arriving at the loss after tax of GBP3,801,000.
There was no material inter-segment revenue in the year ended 31 October 2016.
5. Exceptional items
Half year ended 30 April 2017 2016
Unaudited
GBP000's GBP000's
------------------------- -------- --------
Restructuring 601 90
601 90
------------------------- -------- --------
Restructuring
Restructuring costs relate to the on-going restructuring of the group. Costs relate primarily to redundancy/other employee related costs arising from headcount reduction.
6. Discontinued Operations
During 2016, the Group took the strategic decision to sell the Astley Facades (UK) Limited business (Astley) as well as close its loss making Europlas operations in the South East of England. The Directors consider both businesses to be separate major lines of business and as such the results of both businesses have been presented in discontinued operations in the prior period to 30 April 2016 and year to 31 October 2016.
7. Taxation
Half year Half year Year ended
ended 30 ended 31
April 2017 30 April October
Unaudited 2016 Unaudited 2016
Restated Audited
GBP000's GBP000's GBP000's
----------------------------------- ----------- ----------------- ----------
UK corporation tax credit/(charge) 567 (88) 512
------------------------------------- ----------- ----------------- ----------
Taxation is recognised based on management's best estimate of the weighted average annual tax rate expected for the full financial year. The estimated annual tax rate used for the period ended 30 April 2017 is 19% (30 April 2016: 20%, 31 October 2016: 20%).
8. Dividends
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Audited
GBP000's GBP000's GBP000's
--------------- ---------- ------------- ----------
Dividends paid - 329 2,079
----------------- ---------- ------------- ----------
In the light of the changes in the financial position of the Group, the Directors have concluded that no interim dividend will be declared.
9. Earnings per share
Basic earnings per share and diluted earnings per share are calculated by dividing the loss or profit for the period attributable to equity holders by the weighted average number of shares in issue.
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Audited
Number Number Number
------------------------- ---------- ------------ ----------
Basic weighted average 65,600,000 65,600,000 65,600,000
--------------------------- ---------- ------------ ----------
Diluted weighted average 65,600,000 65,600,000 65,600,000
--------------------------- ---------- ------------ ----------
The weighted average number of shares used to calculate earnings per share is consistent with the number of ordinary shares in issue as at the year end and this has been applied consistently for all years reported within these Financial Statements. As a result of the formation of the Group and the Company's capital structure the application of the closing number of ordinary shares has been deemed to give the most relevant and comparable calculation of earnings per share in the financial years reported.
Deferred shares have been excluded from the basic and diluted number of shares as deferred shares carry no voting right and no rights to any distributions to be made by the Group.
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
--------------------------------- ---------- ---------------- ----------
Basic (loss)/profit per
share (4.0) 0.8 (8.6)
Exceptional items 0.9 0.1 7.0
Discontinued operations - 0.6 5.8
----------------------------------- ---------- ---------------- ----------
Adjusted basic (loss)/earnings
per share (3.1) 1.5 4.2
----------------------------------- ---------- ---------------- ----------
Adjusted diluted (loss)/earnings
per share (3.1) 1.5 4.2
----------------------------------- ---------- ---------------- ----------
Adjustments to earnings per share
Adjusted basic and diluted earnings per share figures are calculated by dividing adjusted loss after tax for the year by the weighted average number of shares in issue (as above). The adjusted loss after tax for the year is as follows:
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
--------------------------- ---------- ------------ ----------
(Loss)/profit attributable
to owners of the Parent
Company (2,627) 505 (5,622)
Exceptional items 601 90 4,581
Discontinued operations - 414 3,801
----------------------------- ---------- ------------ ----------
Adjusted (loss)/profit
after tax (2,026) 1,009 2,760
----------------------------- ---------- ------------ ----------
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
-------------------------- ---------- --------------------------- ----------
Basic earnings per share:
Continuing operations
(loss)/profit per share (4.0) 1.4 (2.8)
Discontinued operations
(loss)/profit per share - (0.6) (5.8)
---------------------------- ---------- --------------------------- ----------
Total basic (loss)/profit
per share (4.0) 0.8 (8.6)
---------------------------- ---------- --------------------------- ----------
There is no material difference between diluted earnings per share and basic earnings per share for continuing and discontinued operations.
10. Trade and other receivables
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
------------------------- ----------- --------- -------------
Trade receivables 5,929 6,873 5,498
Provision for impairment
of trade receivables (1,655) (585) (1,424)
--------------------------- ----------- --------- -------------
Net trade receivables 4,274 6,288 4,074
Other receivables 605 646 675
Prepayments and accrued
income 5,906 8,930 3,354
--------------------------- ----------- --------- -------------
10,785 15,864 8,103
------------------------- ----------- --------- -------------
The fair value of trade and other receivables has been considered to be consistent with the book value given their short term nature.
11. Cash and cash equivalents
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
-------------------------- ----------- --------- -------------
Cash at bank and in hand - - 768
---------------------------- ----------- --------- -------------
Cash and cash equivalents - - 768
---------------------------- ----------- --------- -------------
The Group's banking facility is operated and managed as an integrated facility both internally and externally. Although individual bank accounts may have positive or negative cash balances, the interest calculated is on the net position of the banking balances within the Group facility. The cash at bank and in hand position shown in the above table represents the net position of the Group as bank overdrafts have been offset against cash at bank and in hand as the Group has an enforceable right to offset positive and negative individual bank account positions, and receives or pays interest on its net cash position.
12. Trade and other payables
At 30 At 30 At 31 October
April April 2016
2017 2016
Restated
GBP000's GBP000's GBP000's
---------------------------- -------- --------- -------------
Trade payables 8,033 10,920 7,539
Payments on account 870 2,228 870
Other taxation and social
security 357 429 1,875
Accruals 3,267 3,739 1,937
Deferred income and advance
payments 5,821 986 6,244
------------------------------ -------- --------- -------------
18,348 18,302 18,465
---------------------------- -------- --------- -------------
13. Borrowings
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
----------- ----------- --------- -------------
Borrowings 6,553 891 -
------------- ----------- --------- -------------
During March 2017, the Group extended its facilities with Barclays Bank plc, with the renewal of its GBP4m revolving credit facility for 12 months alongside the Group's existing variable overdraft facility.
14. Reconciliation of (loss)/profit before tax to cash generated from operations
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Audited
GBP000's GBP000's GBP000's
------------------------------ ---------- ---------------- ----------
(Loss)/profit before tax
including discontinued
operations (3,194) 593 (6,529)
Finance costs 194 92 232
Depreciation of property,
plant and equipment 135 134 250
Profit on disposal of
property - - (213)
Goodwill impairment charge - - 355
Other non-cash movements
including write downs
of fixed assets - - 28
Loss on disposal of Astley
group of companies - - 1,740
Operating cash flows before
movements in working capital (2,865) 819 (4,137)
Movements in working capital:
Decrease/(increase) in
inventories (437) (163) 469 Decrease/(increase) in trade and other receivables (2,682) (786) 1,767 Increase/(decrease) in trade and other payables (939) (1,913) 2,891 Increase/(decrease) in provisions (178) (125) 392 -------------------------------- ---------- ---------------- ---------- Cash generated from/(used in) operations (7,101) (2,168) 1,382 -------------------------------- ---------- ---------------- ----------
The impact of the disposal of Astley Facades group of companies is adjusted in the movements in working capital in the above note.
The profit on sale of freehold property of GBP213,000 relates to sales proceeds of GBP463,000 less net book value of GBP250,000 eliminated on disposal.
15. Related party transactions
Sale of freehold property
As reported in the annual report, at the end of October 2016 a freehold property was sold to the Chief Executive Officer. The sale price of GBP463,000, and the future rental charge, were determined by independent valuers on an arm's length basis and were approved by the Non-Executive Directors in advance of the transaction. The Group generated a profit of GBP213,000 as a result of this transaction.
Key management personnel
Darren Cornwall resigned as a director on 15 April 2016 and has subsequently undertaken consultancy work for the Group. For the period ended 30 April 2017, he received GBP51,517 in respect of these services on an arm's length basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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