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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Exova Grp | LSE:EXO | London | Ordinary Share | GB00BKY7HG11 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 238.50 | 239.00 | 239.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMEXO
RNS Number : 3238C
Exova Group PLC
12 April 2017
12 April 2017
EXOVA GROUP PLC
(the "Company")
Annual Report & Accounts 2016 and Notice of 2017 Annual General Meeting
Following release by the Company on 28 February 2017 of its preliminary results for the financial year ended 31 December 2016, the Company announces that it has today posted to shareholders the documents listed below:
-- the Annual Report & Accounts for the financial year ended 31 December 2016 (the "2016 Annual Report & Accounts");
-- the Notice of the 2017 Annual General Meeting; and -- the Form of Proxy for the 2017 Annual General Meeting.
In accordance with Listing Rule 9.6.1, the Company has submitted copies of these documents to the Financial Conduct Authority via the National Storage Mechanism and they will shortly be available for inspection at www.morningstar.co.uk/uk/nsm. The 2016 Annual Report & Accounts and the Notice of the 2017 Annual General Meeting are now available online at the Company's website, www.exova.com.
Additional information required by Disclosure Guidance and Transparency Rule 6.3.5
The Company's preliminary results announcement on 28 February 2017 contained a management report as well as a condensed set of financial statements which were prepared in accordance with applicable accounting standards. In compliance with DTR 6.3.5R, the following information is extracted from the 2016 Annual Report & Accounts and should be read in conjunction with the Company's preliminary results announcement for the year ended 31 December 2016 issued on 28 February 2017. Both documents are available at www.exova.com and together constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the 2016 Annual Report & Accounts in full.
1. Principal risks and uncertainties
A description of the principal risks and uncertainties that the Company faces is extracted in full and unedited from pages 10 to 13 of the 2016 Annual Report & Accounts.
The principal risks and uncertainties that could affect the Group are outlined below
--
Hot Features
Premium
Operational risks
--------------------------------------------------------------------------------------------------------------
Risk Description Strategic Possible Mitigation
priorities impact
---------------- ------------------- ------------------ ---------------------- ---------------------------
Health The Group's Focusing Failure Health and safety
and work environment on to operate is always the
safety presents the provision safely could first item on
various of technically adversely Board and Executive
potential demanding impact the Committee agendas.
risks services. Group's Overall strategy
within employees and compliance
our laboratories Managing or visitors, is monitored
and when our laboratories lead to by the
operating efficiently. legal action Group HSE director
on customers' from regulators, who reports to
premises. reputational the Group technical
damage director. Clear
or loss guidance is given
of customer on appropriate
confidence. procedures and
maintenance of
equipment, supported
by regular
training, supervision
and compliance
audits. Bulletins
are issued in
response
to any significant
incidents which
might have group-wide
implications.
---------------- ------------------- ------------------ ---------------------- ---------------------------
Reputational The Group Focusing Loss of A comprehensive
damage relies on existing quality
on its the provision or management system
reputation of technically new business. is in place which
and being demanding is regularly
awarded services. Loss of audited both
and retaining ability internally and
a Building to by external accreditation
wide long- service bodies and customer
range term customer approval teams.
of accreditations client requirements
and customer relationships. where accreditations Employee technical
specific or customer competence is
approvals Generating specific maintained through
in order organic approvals mentoring and
to provide revenue are lost. training programmes.
its services. growth.
Reduced
financial
performance.
---------------- ------------------- ------------------ ---------------------- ---------------------------
People The Group Focusing Inability There is a comprehensive
provides on to meet recruitment and
specialised the provision customer ongoing evaluation
technical of technically demand. process supported
services demanding by incentive
and is services. Failure plans based on
dependent to innovate personal and
on attracting Building and develop financial performance.
and retaining long- customer
appropriately term relationships. A Technical Career
qualified client Development Programme
staff. relationships. is in place which
is
designed to develop
and retain
technical staff
and support
succession planning.
---------------- ------------------- ------------------ ---------------------- ---------------------------
Global The strength Generating A prolonged Our business
economic of our organic economic is well diversified
and market end markets revenue downturn both geographically
conditions is an growth. would limit and by end user
important our ability markets and our
driver Extending to grow focus on technically
for growth. our service the business demanding services
range in line gives us
and the with our some resilience.
global strategic
reach plan. We engage regularly
of our with our
business. customers to
understand their
plans and requirements
which are recorded
in our group-wide
customer relationship
management (CRM)
system. This
provides consolidated
visibility of
future revenues
and allows
us to plan capacity
efficiently.
---------------- ------------------- ------------------ ---------------------- ---------------------------
UK withdrawal The UK Building Loss of Many of the standards
from business long-term revenue and
the EU trades client due to changes schemes under
within relationships. in standards which we operate
the EU or legislation are international
and assesses Generating impacting or client specific
whether organic our ability and we anticipate
products revenue to provide little or no
meet European growth. certain impact
standards. services in these areas.
that can
In addition only be We will monitor
the provided the impact on
UK sits by an testing regimes
on various EU member. and certification
committees programmes and
that determine Additional will engage with
future import the relevant
standards and export representative
and methods costs. bodies
of and working groups
testing. Financial as required.
performance
The Group will be Since a large
operates impacted portion of the
in 33 by fluctuations Group's profit
countries in sterling. is derived from
and is activities outside
therefore of the UK and
exposed Europe, the weakening
to currency of sterling has
risk. had a beneficial
impact on results,
the Group does
not, at this
point in time,
envisage
a material adverse
impact in the
future. We will
continue to monitor
developments.
---------------- ------------------- ------------------ ---------------------- ---------------------------
Business The business Managing Lack of Business continuity
infrastructure depends our laboratories operational plans are in
on efficiently. capacity place across
its laboratory could affect the Group and
network our ability our substantial
to service to service laboratory network
customers' existing often allows
needs. customers work
and win to be transferred
new business. to alternative
sites.
---------------- ------------------- ------------------ ---------------------- ---------------------------
IT systems The business Managing Lack of A global Information
depends our laboratories timely information Security policy
on efficiently. could is in place.
the effective affect our
operation Building ability Regular system
of long-term to service maintenance and
global client customer back-ups are
IT systems relationships. requirements taken.
for its and make
key business good business Disaster recovery
processes. decisions. plans in place
across the network
Major Reputational which are tested
IT systems damage from and improved
integrity loss of regularly.
issue systems
or data or data. We continually
security review and improve
breach Potential our cyber defences.
due to legal implications
either associated
internal with potential
or external loss of
factors. sensitive
data.
---------------- ------------------- ------------------ ---------------------- ---------------------------
Acquisitions The process Extending Failure We have a well-developed
of identifying, our service to deliver screening process
acquiring range expected to ensure that
and integrating and the results potential acquisitions
new businesses global due meet the criteria
is fundamental reach to poor in our strategic
to our of our acquisition plans for market
overall business. selection. penetration and
growth geographical
plan. Managing Unforeseen expansion and
our laboratories liabilities our target returns
efficiently. arising on investment.
from failure
to understand Thorough due
business diligence is
risks fully carried
during due out by our in-house
diligence. experts supplemented
by the use of
Reduced specialist advisers.
financial Customary legal
performance protection
arising is included in
from poor the purchase
integration contract.
of acquired
businesses. Detailed integration
plans are
approved prior
to completion
and
are closely
monitored in
line with
an agreed timetable.
---------------- ------------------- ------------------ ---------------------- ---------------------------
Legal and regulatory risks
-----------------------------------------------------------------------------------------------------------
Risk Description Strategic Possible Mitigation
priorities impact
-------------- ------------------- ------------------ --------------------- ---------------------------
Litigation The Group's Building Reputational We have a process
operations long-term damage leading for monitoring
are subject client to customer compliance with
to wide-ranging relationships. loss and laws and regulations
laws Managing brand damage. and internal Group
and regulations our laboratories Diversion procedures and
including efficiently. of management reporting any
business time away significant deviations
conduct, from to the Board.
employment, the operation We also monitor
environmental of changes
and health the business. in regulations
and safety Penalties and communicate
legislation. for breaching these as appropriate.
There contracts, We have a clear
is also laws or delegation of
exposure regulations. authority for
to contractual business decisions
risk. and detailed training
is provided on
key areas of risk
e.g. contract
negotiation.
We carry insurance
cover against
certain losses.
-------------- ------------------- ------------------ --------------------- ---------------------------
Business The activities Building Reputational Our business
integrity of the long-term damage leading activities are
and business client to customer conducted
ethics are governed relationships. loss and in multiple jurisdictions
by various Generating brand damage. and are
ethical organic Diversion exposed to a
requirements revenue of management wide range of
including growth. time away business
anti-corruption Extending from the practices. We
and bribery our service operation have a strong
laws, range of the business. Group
competition and the Penalties culture of integrity
laws, global for and ethical
and trade reach breaching behaviour to
sanctions of our laws ensure a consistent
and export business. or regulations. approach regardless
laws. of local custom.
We have group-wide
policies covering
ethical conduct
and regular training
is provided,
backed up by
external
legal and professional
support where
required.
We encourage
reporting of
any concerns
about wrongdoing
or impropriety
and have a whistleblowing
service managed
by a third party.
-------------- ------------------- ------------------ --------------------- ---------------------------
Financial risks
-----------------------------------------------------------------------------------------------------------
Risk Description Strategic Possible Mitigation
priorities impact
-------------- ------------------- ------------------ --------------------- ---------------------------
Financial The Group Managing Significant The Group has
irregularity could our laboratories financial a well established
suffer efficiently. irregularity system of operational
financial could lead and financial
loss to loss controls including
either of confidence documented procedures
through by key stakeholders and delegation
misappropriation and reputational of
of assets damage to authorities supported
or the the by an
misrepresentation business. internal audit
of financial This might function.
results. impact our
financial
position
and ability
to raise
funds and
could affect
the share
price.
-------------- ------------------- ------------------ --------------------- ---------------------------
Treasury The Group Generating Volatile Borrowings are
is exposed organic financial maintained in
to revenue performance appropriate currencies
currency, growth. arising to partially
liquidity Managing from translation hedge foreign
and credit our laboratories of overseas exchange risk
risks. efficiently. results. on overseas earnings.
Financial We are exposed
penalties to limited transactional
and reputational risk as most
damage arising costs and revenues
from breach are matched in
of banking the same currencies.
covenants. Forecast cash
Financial flows are regularly
loss from reviewed to ensure
inappropriate that sufficient
use of financial committed borrowing
instruments facilities
or failure are in place.
to collect Credit risk is
amounts actively monitored
owed. and
is mitigated
by the wide spread
of
our customer
base.
-------------- ------------------- ------------------ --------------------- ---------------------------
Viability Statement
The Directors confirm that they have a reasonable expectation that the Group will continue to operate and meet its liabilities, as they fall due, for the next three years to December 2019. The Directors' assessment has been made with reference to the resilience of the Group and its strong financial position, the Group's strategy, the Board's risk appetite and the Group's principal risks and how these are managed, as described in this Strategic Report.
The Group has a broad spread of customers across different geographical areas and market sectors and a high level of customer retention and repeat business. The Group is also supported by strong operational cash flows.
The assessment period of three years has been chosen as it is consistent with the Board's annual review of the Group's three year rolling strategic plan. This review covers the prospects for each business, assumptions regarding entry into new markets and geographies, future growth rates and performance of the business. A robust financial model of the Group has been built and the metrics for the Group's KPIs have been reviewed for the assessment period. These metrics are also subject to sensitivity analysis which includes flexing a number of these assumptions, namely, future organic revenue growth, operating margins and operational cash flow. This is supplemented by an overlay of assumptions on the future level of inorganic growth from acquisitions. The results of flexing these assumptions, both individually and in aggregate, are used to determine whether additional bank facilities will be required during this period.
This review and analysis also considers the principal risks and uncertainties facing the Group, as described on pages 10 to 13 and the potential impact these risks would have on the Group's business model, future performance, solvency and liquidity over the assessment period. The Board considers that the diverse nature of the market sectors and geographies in which the Group operates acts significantly to mitigate the impact any of these risks might have on the Group.
2. Related party transactions
The following statements regarding related party transactions are set out on pages 144 to 145 of the 2016 Annual Report & Accounts. The following is extracted in full and unedited form from the 2016 Annual Report & Accounts.
During the year the Group entered into certain transactions with related parties. Details of these transactions are as follows:
Income statement
Company
----------------------------------------------- ---------------
2016 2015
----------------------------------------------- ------ -------
GBPm GBPm
----------------------------------------------- ------ -------
Dividend received from subsidiary undertaking - 120.0
----------------------------------------------- ------ -------
Balances at 31 December
Group Company
----------------------------------------- ---------- ================= ====================
2016 2015 2016 2015
Assets Notes GBPm GBPm GBPm GBPm
----------------------------------------- ---------- ----- ---------- -------- ----------
Amounts due from subsidiary
undertakings 16 - - 122.5 122.0
----------------------------------------- ---------- ----- ---------- -------- ----------
Liabilities
----------------------------------------- ---------- ----- ---------- -------- ----------
Termination of consultancy
agreement fee to private equity
investor - 1.0 - 1.0
----------------------------------------- ---------- ----- ---------- -------- ----------
Amounts due to subsidiary undertakings 17 - - 24.2 14.3
----------------------------------------- ---------- ----- ---------- -------- ----------
Key management compensation
Group Company
----------------------------------- =================== ===================
2016 2015 2016 2015
GBPm GBPm GBPm GBPm
----------------------------------- ----- ------------ ----- ------------
Salaries and short-term benefits 3.8 3.3 0.9 0.9
----------------------------------- ----- ------------ ----- ------------
Post employment benefits 0.2 0.3 0.1 0.1
----------------------------------- ----- ------------ ----- ------------
Termination benefits 0.5 0.1 - -
----------------------------------- ----- ------------ ----- ------------
Share-based payments 0.9 0.2 0.1 0.1
----------------------------------- ----- ------------ ----- ------------
5.4 3.9 1.1 1.1
----------------------------------- ----- ------------ ----- ------------
Key management comprises members of the executive team. The executive team is responsible for the day to day running of the Group, and comprises the CEO, CFO, managing directors and group functional directors.
The Group holds equity interests of less than 51% in the following companies where it exercises control:
% shareholding
--------------------------------------- --------------
Exova (Qatar) LLC 24.5%
--------------------------------------- --------------
Al Futtaim Exova LLC 49.0%
--------------------------------------- --------------
Exova Warringtonfire Middle East LLC 49.0%
--------------------------------------- --------------
Exova (Saudi Arabia) Limited 50.0%
--------------------------------------- --------------
Exova Warringtonfire LLC 49.0%
--------------------------------------- --------------
Exova (Qatar) LLC approved and paid a dividend of GBP0.8m (QAR 4,000,000) (2015: GBP1.1m QAR: 6,000,000) to its shareholders.
The Group is exposed, or has rights, to variable returns from its involvement with the equity interests and has the ability to affect those returns through its power over the equity interests. Based on this, the Directors have determined that the Group has control over these equity interests and therefore consolidates them within the financial statements.
The Group has interests in joint venture arrangements in the following companies:
Principal Group
place ownership
Name of business interest Held by
-------------------------------------- ------------ ---------- ----------------------------
Hong BM TRADA Overseas
BM TRADA (HK) Limited Kong 70% Limited
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA RKCA Certifications Private BM TRADA Overseas
Limited India 50% Limited
-------------------------------------- ------------ ---------- ----------------------------
Hong BM TRADA Overseas
FIRA - CMA Testing Services Limited Kong 50% Limited
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Overseas
BM TRADA Cyprus Limited Cyprus 50% Limited
-------------------------------------- ------------ ---------- ----------------------------
Standardt BM TRADA Belgelendirme BM TRADA Overseas
AS Turkey 50% Limited
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Overseas
BM TRADA Latvija Latvia 50% Limited
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA RKCA Lanka Certifications BM TRADA RKCA Certifications
(Private) Limited Sri Lanka 50% Private Limited
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Suomi OY Finland 50% BM TRADA Latvija
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Eesti Ou Estonia 50% BM TRADA Latvija
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Deutschland GmbH Germany 50% BM TRADA Latvija
-------------------------------------- ------------ ---------- ----------------------------
BM TRADA Lietuva Lithuania 50% BM TRADA Latvija
-------------------------------------- ------------ ---------- ----------------------------
Tianjin C-Kai BM TRADA Certification BM TRADA Certification
Company Limited China 40% Limited
-------------------------------------- ------------ ---------- ----------------------------
3. Directors statement of responsibilities
The following statement is repeated here solely for the purpose of complying with DTR 6.3.5. This statement relates to and is extracted from page 87 of the 2016 Annual Report & Accounts and is signed on behalf of the Board of Directors by Ian El-Mokadem, Chief Executive Officer and Philip Marshall, Chief Financial Officer. Responsibility is for the full 2016 Annual Report & Accounts and not the extracted information presented in this announcement or the full year results announcement.
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the Group and Company financial statements for each financial year in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
Under Company law the Directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing the Group and Company financial statements the Directors are required to:
-- present fairly the financial position, financial performance and cash flows of the Group and Company;
-- select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- make judgements that are reasonable;
-- provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the European Union is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and
-- state whether the Group and Company financial statements have been prepared in accordance with IFRS as adopted by the European Union.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the Group and Company financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for preparing the Directors' Report, the Directors' Remuneration Report, Strategic Report and the Corporate Governance Statement in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure and Transparency Rules.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
Directors' responsibility statement
Each of the Directors, as at the date of this report, confirms to the best of their knowledge that:
-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the Group; and
-- the Strategic Report and the Report of Directors include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
We consider the Annual Report & Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
The Strategic Report contains certain forward-looking statements providing additional information to shareholders to assess the potential for the Group strategies to succeed. Such statements are made by the Directors in good faith, based on the information available to them up to the date of their approval of this report, and should be treated with caution due to the inherent uncertainties underlying forward-looking information.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report & Accounts except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with Section 90A and Schedule 10A of the Financial Services and Markets Act 2000.
4. Substantial shareholding
As at 31 March 2017, being the latest practicable date prior to release of this announcement, the Company had been notified, in accordance with DTR 5, of the following major shareholdings in the ordinary share capital of the Company:
Name Ordinary share % of Capital
holdings
at 31 March
2017
------------------------------ --------------- -------------
Tabasco B.V. 135,045,958 53.91
------------------------------ --------------- -------------
Fidelity Management &
Research Company (US) 13,146,904 5.25
------------------------------ --------------- -------------
Mubadala Development Company
PJSC 12,284,488 4.90
------------------------------ --------------- -------------
T. Rowe Price 9,653,694 3.85
------------------------------ --------------- -------------
First Pacific Advisors 8,805,519 3.52
------------------------------ --------------- -------------
Aberdeen Asset Management
Limited 7,585,901 3.03
------------------------------ --------------- -------------
5. Directors' shareholding and share interests
A statement of Directors' shareholding and share interests as at 31 December 2016 is set out on page 77 of the 2016 Annual Report & Accounts. In compliance with Listing Rule 9.8.6R(1), no changes in the interests of each director (including interests of connected persons) have occurred between 31 December 2016 and the date of posting to shareholders the Notice of the 2017 Annual General Meeting and the 2016 Annual Report & Accounts.
For further information please contact:
Neil MacLennan
General Counsel & Company Secretary
Exova Group plc
Telephone: +44 (0) 131 333 8053
Exova
Exova is one of the world's leading laboratory-based testing groups, trusted by organisations to test and advise on the safety, quality and performance of their products and operations. Headquartered in Edinburgh, UK, Exova operates 136 laboratories and offices in 33 countries and employs around 4,200 people throughout Europe, the Americas, the Middle East, Asia/Asia Pacific and Africa.
Exova's capabilities help to extend asset life, bring predictability to applications, and shorten the time to market for customers' products, processes and materials. With over 90 years' experience, Exova specialises in testing across a number of key sectors ranging from Aerospace to Fire & Building Products; Oil & Gas and Industrials; Infrastructure & Environment; Transportation; and Health Sciences.
Exova Group plc is registered in England and Wales (registration number 08907086). Its legal entity identifier ('LEI') number is 213800BFE317FGSYMZ19.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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