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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gordon Dadds Group Plc | LSE:GOR | London | Ordinary Share | GB00BZBY3Y09 | 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% | 138.50 | 136.00 | 141.00 | 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
TIDMGOR
RNS Number : 6585X
Gordon Dadds Group PLC
28 November 2017
28 November 2017
Gordon Dadds Group PLC
("Gordon Dadds" or the "Company" or the "Group")
Half year results for the six months ended 30 September 2017
Gordon Dadds Group PLC (AIM: GOR), the acquisitive London-based legal and professional services business, is pleased to announce its unaudited results for the six months ended 30 September 2017.
Financial highlights
-- Revenue ahead by 14.5% to GBP12.89m (H1 2016 GBP11.26m) -- Operating profits increased by 44.0% to GBP3.47m (H1 2016 GBP2.41m) -- Adjusted profit before tax* increased by 103% to GBP0.58m (H1 2016 GBP0.28m) -- Adjusted earnings per share* 2.26p (H1 2016 2.24p)
-- Strong balance sheet with gross assets of GBP40.8million and significant cash resources - net cash** GBP12.53m at 30 September 2017
*Adjusted profit before tax represents the profit before income tax after adding back exceptional items and deducting partners' profit shares of GBP2.653m and Adjusted earnings per share represents earnings per share based on the Adjusted profit before tax
** Net cash represents cash less borrowings
Operational highlights
-- Successful stock market flotation on 4 August raising GBP20 million for working capital and expansion
-- Acquisition of Alen-Buckley, a leading South London solicitors firm, in June 2017 -- First acquisition since IPO of CW Energy, the specialist tax consultants, in October 2017 -- Significant pipeline of potential acquisitions
Adrian Biles, Chief Executive of Gordon Dadds, commented:
"The Group has traded to our expectations through a period when sectors of the market have been hesitant given political and BREXIT uncertainty. The acquisitions made through the last eighteen months have bedded in very well and are contributing positively to the Group. The considerable benefits of being able to offer multiple services to clients from each part of the Group, with the associated multiple touch points and increases in revenue, are beginning to be realised and will continue to improve the Group's performance.
"The market opportunity we identified at the time of our listing, to consolidate the legal services market in England and Wales, continues to be compelling and has been subsequently emphasised by the further development and execution of our mergers and acquisitions pipeline.
"We expect that the pace of change in the legal sector will accelerate as the desire for firms to release their partners' capital increases. Any downturn in the economy or substantive increase in bank lending rates will generate further opportunities for both corporate and lateral profitable expansion. The platform and strategy for growth that the Board has put in place means the Company is exceptionally well placed to take advantage of this ever-growing opportunity."
FOR FURTHER INFORMATION, Via Newgate PLEASE CONTACT: Gordon Dadds Group plc Adrian Biles, Chief Executive Officer Christopher Yates, Chief Financial Officer Arden Partners, Nominated Adviser and broker to the Company John Llewellyn-Lloyd Ciaran Walsh +44 (0) 20 7614 5900 Newgate Communications +44 (0) 20 7680 6550 Adam Lloyd Email: gordondadds@newgatecomms.com Lydia Thompson James Ash
NOTES:
Gordon Dadds Group plc is an acquisitive legal and professional services business headquartered in London with a significant back office and technology platform based in Cardiff. It operates through two distinct business channels, Gordon Dadds LLP and Prolegal Solicitors Limited, to integrate law firms seeking to gain scale in the UK.
Gordon Dadds:
Gordon Dadds LLP targets firms with annual fee income of GBP10m+.
Prolegal:
Prolegal Solicitors Limited acquires and manages firms with GBP2m - GBP10m annual fee income. These firms retain their identity and culture and also benefit from the back-office technology platform used by Gordon Dadds which allows Prolegal to target law firms seeking an alternative solution to the regulatory and investment requirements of the UK legal market.
The Gordon Dadds model offers a number of advantages to target firms:
-- Partners are not required to borrow to fund capital contributions and capital is built up over time out of profit share;
-- Each partner receives as their profit share a percentage of his or her personal billings, allowing partners to achieve a significant uplift to what he or she might achieve in a traditional partnership practice;
-- The Gordon Dadds model, with its clear division between management and back office on the one hand, and client acquisition and servicing on the other, allows partners to devote time to their respective practice areas; and
-- Gordon Dadds Group plc's corporate structure enables partners to acquire and retain an enduring investment in the business through equity ownership.
Gordon Dadds LLP has been operating in this way since 2013, successfully integrating firms into its cost-efficient platform.
Please visit www.gordondaddsgroup.com for more information
Review of the period
This has been a period of exciting change for the Group with its flotation and the strengthening of its balance sheet which puts the Group, with its acquisitive business model, in a strong position to grow rapidly and profitably, taking advantage of the current opportunity in legal services.
During the half year we successfully acquired Alen-Buckley, a high quality South London solicitors' practice. Alen-Buckley is already generating additional business for the Group as a whole through cross referral of clients as well as continuing to generate income from its well established existing business.
We continue to look for attractive opportunities for further acquisitions, have completed one acquisition since the year end as referred to below and have a good pipeline of potential acquisitions with whom we are actively engaging.
While there can be no certainty of concluding a transaction with any of the firms in the pipeline, it is clear that there is considerable genuine interest in our model of providing for the following:
-- Acquisition of partners' goodwill -- De-risking partners from capital provision -- Insulation of partners from all business liabilities -- Retention of existing branding and culture -- Access to cash and IT resources
Our current pipeline consists of firms with incomes of between GBP1 million and GBP6 million principally based in the Midlands and the South of England and Wales.
As indicated in the Admission Document for the flotation, we are developing plans to harness the intellectual capital of the former Work Group business and applying that to the professional services market.
Finance and results
In considering the financial extracts accompanying this statement, you should have regard to notes 1.2 and 5.1 to the Financial Statements attached which explains the basis of accounting.
During the first six months of the year much effort and productive capacity was focussed on achieving the successful flotation of the Group on AIM. Notwithstanding that, overall the business achieved turnover in line with market expectations. Strong results were achieved by the Dispute Resolution, Regulatory Solutions and Taxation segments of the business. Against this, Property has operated in a very competitive sector where activity has been weaker and Corporate has been actively involved in our flotation which reduced their external billings. In the Property segment we are continuing a programme of moving the work done to our Cardiff office and have been making personnel changes to enable this. We are also taking increasing care in selecting the work we undertake. We currently see the remainder of the year as continuing these trends with good pipelines particularly in Dispute Resolution, Tax and Regulatory Solutions, Corporate is seeing an increased level of activity while property will be behind our expectations on fees generated. Overall, fee income is expected to be in line with market expectations for the year as a whole.
During the first half of the year, a part of the Corporate Department's productive capacity was directed to the flotation of the Group. The costs of this have been separately identified but has had the effect of increasing the partners' profit share as a percentage of turnover which should return to normal levels in the second half of the year.
The acquisition of Alen-Buckley has been successful and, as well as continuing to trade positively, is producing new clients for Gordon Dadds as the expertise available at Gordon Dadds is made available to its clients. The acquisitions made in the second half of the financial year ended 31 March 2017 (the Immigration business and the Hanover companies) have settled in well and are both making good progress. Our small personal injury business is making limited progress and we are examining ways to address this.
The Group's balance sheet has been strengthened substantially by the funds raised at the flotation, with cash in the balance sheet and a significant reduction in the short term borrowings which had been used to fund expansion before the flotation. The balance of the short term borrowings will be repaid in accordance with their terms by the end of the financial year. The Group's lock-up as a whole has expanded as a result of the acquisitions of Alen-Buckley and Hanover. Within Gordon Dadds itself, the lock-up has extended by a few days but attention continues to be focussed on managing this and we continue our prudent policy of providing against all debtors and work-in-progress over 180 days old unless we have security or similar assurance of collection. We are expecting to apply to the Court shortly for permission to reduce the share capital and share premium as approved by shareholders in August.
Outlook
Since the period end, we have completed the acquisition of CW Energy. The taxation team was already busy and this acquisition is expected to develop this segment further with the ability to refer work from existing clients into that team and vice versa. We are also expecting the GD Financial Markets consultancy business to contribute more to the Group during the second half following their recent approval as a supplier to one of the major clearing banks in the UK.
It is normal in the Group's business for trading to be weighted towards the second half of the year and this year is no exception. The outlook for the current business of the Group is to continue to trade in line with the market's expectations for the year as a whole against a market which is clearly influenced by BREXIT and political uncertainty.
The Group is in a strong position to develop with the existing pipeline to progress its acquisitive policy aiming for a doubling of revenues in the foreseeable future alongside growth of net margin.
We therefore look forward to reporting further progress in the rest of the year to March 2018 and to the declaration, as expected, of a final dividend in respect of the period.
Unaudited Consolidated Statement of Comprehensive Income
Hot Features
Premium
6 Months 6 Months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Note GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 12,894 11,265 24,936
-------------------------------- ----- ------------------------ ------------- -------------------
Staff costs 2 (4,845) (3,587) (7,681)
Depreciation and amortisation (977) (905) (1,902)
Other operating expenses (3,601) (4,362) (7,961)
-------------------------------- ----- ------------------------ ------------- -------------------
Operating profit 3,471 2,411 7,392
-------------------------------- ----- ------------------------ ------------- -------------------
Finance income 24 48 201
Finance expense (200) (116) (352)
Exceptional items 3 (1,916) - (539)
Share of profit of
associates (63) 187 107
-------------------------------- ----- ------------------------ ------------- -------------------
Profit before income
tax 1,316 2,530 6,809
-------------------------------- ----- ------------------------ ------------- -------------------
Income tax expense (3) - -
-------------------------------- ----- ------------------------ ------------- -------------------
Profit and total comprehensive
income for the year 1,313 2,530 6,809
-------------------------------- ----- ------------------------ ------------- -------------------
Attributable to:-
Equity holders of
the Company (1,513) 285 1,861
Non-controlling interests 2,826 2,245 4,948
-------------------------------- ----- ------------------------ ------------- -------------------
Total comprehensive
income for the year 1,313 2,530 6,809
-------------------------------- ----- ------------------------ ------------- -------------------
Earnings per share
-------------------------------- ----- ------------------------ ------------- -------------------
Basic and diluted
earnings per share
(pence) 4 (8.47) 2.24 14.37
-------------------------------- ----- ------------------------ ------------- -------------------
Pre-exceptional basic
earnings per share
(pence) 4 2.26 2.24 18.53
-------------------------------- ----- ------------------------ ------------- -------------------
The profit for the year relates to continuing operations only.
The attached notes are an integral part of these consolidated financial statements.
Unaudited Consolidated Statement of Financial Position
30 September 2017 30 September 2016 31 March 2017
Note GBP'000 GBP'000 GBP'000
----------------------------------------------------- ----- ------------------ ------------------ --------------
ASSETS
Non-current assets
Property, plant and equipment 28 51 38
Intangible assets 5 13,544 6,996 11,639
Investments 172 237 200
----------------------------------------------------- ----- ------------------ ------------------ --------------
13,744 7,284 11,877
----------------------------------------------------- ----- ------------------ ------------------ --------------
Current assets
Trade and other receivables 6 12,940 9,534 12,922
Cash and cash equivalents 14,113 64 130
----------------------------------------------------- ----- ------------------ ------------------ --------------
27,053 9,598 13,052
----------------------------------------------------- ----- ------------------ ------------------ --------------
Total assets 40,797 16,882 24,929
----------------------------------------------------- ----- ------------------ ------------------ --------------
EQUITY
Capital and reserves attributable to equity holders
Share capital 7 850 572 572
Share premium 8 45,884 8,240 8,240
Reverse acquisition reserve 8 (24,723) (8,812) (7,397)
Retained earnings 8 401 305 1,914
----------------------------------------------------- ----- ------------------ ------------------ --------------
22,412 305 3,329
Non-controlling interest 4,086 3,478 3,941
----------------------------------------------------- ----- ------------------ ------------------ --------------
Total equity 26,498 3,783 7,270
----------------------------------------------------- ----- ------------------ ------------------ --------------
LIABILITIES
Non-current liabilities
Trade and other payables 9 3,126 3,116 4,137
Borrowings 10 161 214 224
Provisions - - -
----------------------------------------------------- ----- ------------------ ------------------ --------------
3,287 3,330 4,361
----------------------------------------------------- ----- ------------------ ------------------ --------------
Current liabilities
Trade and other payables 9 9,020 8,144 8,841
Borrowings 10 1,419 1,612 4,034
Provisions 573 13 423
----------------------------------------------------- ----- ------------------ ------------------ --------------
11,012 9,769 13,298
----------------------------------------------------- ----- ------------------ ------------------ --------------
Total liabilities 14,299 13,099 17,659
----------------------------------------------------- ----- ------------------ ------------------ --------------
Total equity and liabilities 40,797 16,882 24,929 ----------------------------------------------------- ----- ------------------ ------------------ --------------
The attached notes are an integral part of these consolidated financial statements.
Unaudited Consolidated Statement of Cash Flows
6 Months 6 Months Year ended
30 September 30 September 31 March
2017 2016 2017
Note
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit before income
tax 1,316 2,530 6,809
Adjustments for:
Finance income (24) (48) (201)
Finance expense 200 116 352
Depreciation, amortisation
and impairment 977 906 1,902
Share of profits of
associates 63 (187) (107)
Changes in operating
assets and liabilities
(net of acquisitions):
Decrease/(Increase)
in trade and other
receivables 302 2,911 4,980
(Decrease)/Increase
in trade and other
payables (1,322) (2,743) (8,472)
(Decrease)/Increase
in provisions 150 (53) 199
--------------------------------------- -------------- -------------- -----------
Cash generated by operations 1,662 3,432 5,462
Interest and other
financial costs paid (173) (89) (227)
Tax paid (3) - -
Net cash generated
by operating activities 1,486 3,343 5,235
--------------------------------------- -------------- -------------- -----------
Cash flows from investing
activities
Cash paid on acquisitions (1,648) (670) (1,745)
Purchase of property, -
plant and equipment - -
Purchase of intangible
assets (20) (6) (103)
Purchase of interest
in associates (35) (149) (193)
Dividends received - 100 100
Interest received 24 48 201
Net cash absorbed by
investing activities (1,679) (677) (1,740)
--------------------------------------- -------------- -------------- -----------
Cash flows from financing
activities
Movement in borrowings
(including finance
leases) (2,112) (712) 1,107
Proceeds from issues - -
of shares 20,205
Transactions costs
relating to issue of
shares (861) - (200)
Partner drawings (2,491) (2,141) (4,380)
--------------------------------------- -------------- -------------- -----------
Net cash (absorbed)/generated
from financing activities 14,742 (2,853) (3,473)
--------------------------------------- -------------- -------------- -----------
Net (decrease) / increase
in cash and cash equivalents 14,549 (187) 22
Cash and cash equivalents
at beginning of period (436) (458) (458)
--------------------------------------- -------------- -------------- -----------
Cash and cash equivalents
at end of period 14,113 (645) (436)
--------------------------------------- -------------- -------------- -----------
Unaudited Consolidated Statement of Changes in Equity
Reverse Other Non-
Share Share acquisition reserves Retained controlling Total
capital premium reserve earnings interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
Balance at 1
April 2016
restated 572 8,240 (8,812) - 20 1,943 1,963
Profit/(loss) and
total
comprehensive
income/(expense)
for the period - - - - 285 2,245 2,530
Transferred to
members - - - - - (710) (710)
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
Balance at 30
September 2016 572 8,240 (8,812) - 305 3,478 3,783
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
Balance at 1
October 2016 572 8,240 (8,812) - 305 3,478 3,783
================== ========= ============ =============== ========== ======================== ====================== ==========
Profit/(loss) and
total
comprehensive
income/(expense)
for the period - - - - 1,576 2,703 4,279
Shares issued for
acquisition - - 1,615 - - - 1,615
Share issue
transactions
costs - - (200) - - (200)
Transferred to
members - - - - 33 (2,240) (2,207)
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
Balance at 31
March 2017 572 8,240 (7,397) - 1,914 3,941 7,270
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
Balance at 1
April 2017 572 8,240 (7,397) - 1,914 3,941 7,270
================== ========= ============ =============== ========== ======================== ====================== ==========
Profit/(loss) and
total
comprehensive
income/(expense)
for the period - - - - (1,513) 2,826 1,313
Shares issued for
acquisition 278 38,505 (17,326) - - - 21,457
Share issue
transactions
costs - (861) - - - - (861)
Transferred to
members - - - - - (2,681) (2,681)
Balance at 30
September 2017 850 45,884 (24,723) - 401 4,086 26,498
------------------ --------- ------------ --------------- ---------- ------------------------ ---------------------- ----------
The attached notes are an integral part of these consolidated financial statements.
Notes to the Financial Statements
These interim consolidated financial statements have been approved for issue by the Board of Directors on 27 November 2017.
1. Summary of significant accounting policies 1.1 Basis of preparation and significant accounting policies
1. Accounting policies
The financial information for the year ended 31 March 2017 set out in this half yearly report does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The figures for the year ended 31 March 2017 have been extracted from the Group financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and included an independent auditor's report, which was unqualified and did not contain a statement under section 493 of the Companies Act 2006.
The half yearly financial information has been prepared using the same accounting policies and estimation techniques as will be adopted in the Group financial statements for the year ending 31 March 2018. The Group financial statements for the year ended 31 March 2017 were prepared under International Financial Reporting Standards as adopted by the European Union. These half yearly financial statements have been prepared on a consistent basis and format with the Group financial statements for the year ended 31 March 2017. The provisions of IAS 34 'Interim Financial Reporting' have not been applied in full.
1.2 Business combinations
The Group applies the acquisition method of accounting to account for business combinations in accordance with IFRS 3 'Business Combinations'. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. All transaction related costs are expensed in the period they are incurred as operating expenses. If the consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in the income statement.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 in the income statement.
1.3 Financial instruments
The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on trade date when the group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus, in the case of a financial instrument not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on trade date when the group is no longer a party to the contractual provisions of the instrument.
Financial assets are included on the balance sheet as trade and other receivables and cash and cash equivalents. Financial liabilities are included on the balance sheet as trade and other payables and borrowings.
(a) Trade receivables
Trade receivables are stated at their original invoiced value, as the interest that would be recognised from discounting future cash receipts over the short credit period is not considered to be material. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts.
(b) Trade payables
Trade payables are stated at their original invoiced value, as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material.
(c) Interest-bearing borrowings
Interest-bearing borrowings are stated at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.
1.4 Going concern
The financial statements have been prepared on the going concern basis. In deciding this, the directors have considered the detailed budgets for the current financial year and high level budgets for the succeeding year including in both cases cash flows. They have also considered the impact of adverse changes resulting from the major risks and uncertainties they consider apply to the group.
2. STAFF AND PARTNERS
The average number of staff and partners during the period, analysed by category, was as follows:
6 Months 6 Months Year
to 30 to 30 ended
September September 31 March
2017 2016 2017
--------------------------- ----------- ----------- ----------
Fee earners 139 125 128
Back office support staff 32 29 31
Other support staff 76 54 57
--------------------------- ----------- ----------- ----------
Total 247 208 216
--------------------------- ----------- ----------- ----------
The aggregate employment costs and remuneration of staff and partners were as follows:
6 Months 6 Months Year
to 30 to 30 ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------- ----------- ----------- ----------
Wages and salaries 4,163 3,042 6,615
Social security costs 402 337 606
Employee benefits costs 171 130 299
Pension costs 109 78 161
------------------------- ----------- ----------- ----------
Total staff costs 4,845 3,587 7,681
Partners remuneration 2,826 2,245 4,948
------------------------- ----------- ----------- ----------
Total staff and partner
costs 7,671 5,832 12,629
------------------------- ----------- ----------- ----------
3. Exceptional items
Exceptional items of GBP1,916,000 relate to the costs to the business of the Group of the flotation and acquisitions. They comprise the costs of the supply of services and goods by third parties of GBP1,070,000 and the internal professional costs of GBP846,000 for the services (principally legal services) which could have been supplied by third parties but which were supplied by the group itself, of which GBP302,000 related to partners' profit shares and GBP544,000 to staff costs in each case including the overheads normally applied to such direct costs. The basis of internal charging is considered not to contain a profit element to the Group..
Prior year exceptional items represent acquisition related costs for professional and other fees in respect of acquisitions completed or under negotiation during the year.
4. EARNINGS PER SHARE
Earnings per share for the year ended 31 March 2017 and 30 September 2017 are based on the weighted average number of shares of the Company in issue or issued as consideration for the entities whose results are reported in the period. The number of shares and periods are as follows:
1 April 12,732,188 being the shares issued by the
2016 Company in consideration of the
acquisition of the shares in
Culver Holdings LLP issued as
consideration for the acquisition
of Brook Street Holdings LLP
2 December 13,403,110 Being the shares issued by the
2016 Company for the acquisition of
the shares in issue by Culver
Holdings Limited immediately
following the acquisition of
Brook Street Holdings LLP
31 March 12,509,623 Being the shares issued by the
2017 Company for the acquisition of
the shares in issue by Culver
Holdings Limited immediately
following the acquisition of
Brook Street Holdings LLP allowing
for the cancelation of shares
in Culver Holdings Limited
15 June 13,417,143 Being the shares issued by the
2017 Company as consideration for
the acquisition of all of the
shares in issue by Culver Holdings
Limited at the date of the reverse
acquisition
4 August 28,597,310 Being the Company's current issued
2017 shares.
Basic Earnings per share, shown on the consolidated income statement, is based on profit after tax (GBP1,611,000) divided by 17,856,409, being the weighted average total number of ordinary shares in issue during the period.
Pre-exceptional Basic Earnings per share, shown on the consolidated income statement, is based on profit after tax with non-recurring costs added back divided by 17,856,409; being the weighted average total number of ordinary shares in issue during the period.
5. Intangible assets
Internally
Client generated Intellectual
Goodwill portfolio software property Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------------- ------------ ----------- ------------- ------------
Cost
Balance at 1
April 2017 6,734 8,014 323 189 15,260
Acquisition
of subsidiary 2,830 - - - 2,830
Additions - - 20 - 20
Revaluation/adjustment
to cost 24 - - - 24
Balance at 30
September 2017 9,588 8,014 343 189 18,134
------------------------ --------------- ------------ ----------- ------------- ------------
Amortisation
and impairment
Balance at 1
April 2017 - 3,583 38 - 3,621
Charge for the
period - 946 23 - 969
Balance at 30
September 2017 - 4,529 61 - 4,590
------------------------ --------------- ------------ ----------- ------------- ------------
Carrying value
At 31 March
2017 6,734 4,431 285 189 11,639
------------------------ --------------- ------------ ----------- ------------- ------------
At 30 September
2017 9,588 3,485 282 189 13,544
------------------------ --------------- ------------ ----------- ------------- ------------
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs), or group of units that are expected to benefit from that business combination and is analysed below.
Client portfolio represents the acquisition of the business and certain assets from other professional services firms. The client portfolio intangible asset is carried at cost less accumulated amortisation.
Amortisation is provided for in line with the fees billed and cash collections generated by the client portfolio acquired.
Internally generated software includes GBP343,000 (2017: GBP323,000) of development costs relating to development of a software application. The directors have considered the carrying value of internally generated software of GBP282,000 (2017: GBP285,000) as appropriate as it is expected to create future economic benefit.
Intellectual property includes GBP189,000 (2017:GBP189,000) of intellectual property acquired on the acquisition of certain assets and liabilities of Prolegal Limited (in administration).
The Intangible assets of the group for the prior year were as follows:-
Internally
Client generated Intellectual
Goodwill portfolio software property Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------------------ ------------ ----------- -------------- -----------
Cost
Balance at 1
April 2016 500 4,500 220 - 5,220
Subsidiaries
joining the
group 6,234 3,701 - 189 10,124
Additions - - 103 - 103
Eliminated on
disposal (187) (187)
Balance at 31
March 2017 6,734 8,014 323 189 15,260
----------------- ------------------------ ------------ ----------- -------------- -----------
Amortisation
and impairment
Balance at 1
April 2016 - 1,846 - - 1,846
Eliminated on
disposal - (94) - - (94)
Charge for the
period - 1,831 38 - 1,869
----------------- ------------------------ ------------ ----------- -------------- -----------
Balance at 31
March 2017 - 3,583 38 - 3,621
----------------- ------------------------ ------------ ----------- -------------- -----------
Carrying value
At 31 March
2016 500 2,654 220 - 3,374
----------------- ------------------------ ------------ ----------- -------------- -----------
At 31 March
2017 6,734 4,431 285 189 11,639
----------------- ------------------------ ------------ ----------- -------------- -----------
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs), or group of units that are expected to benefit from that business combination and is analysed below.
The goodwill of the Group is analysed as follows:
Gordon
Consulting Prolegal Platt
Dadds &
and Group Solicitors Hanover Associates
Technology Limited Limited Companies Limited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------------------- ------------ ----------- ---------- -------------
Cost
At 1 April 2017 500 3,392 1,432 610 800
Acquisitions - - - - -
Revaluation/adjustment
to cost - - 23 - -
At 30 September
2017 500 3,392 1,455 610 800
------------------------ -------------------- ------------ ----------- ---------- -------------
Impairment
At 1 April 2017 - - - - -
Impairment in - - - - -
year
At 30 September - - - - -
2017
------------------------ -------------------- ------------ ----------- ---------- -------------
Carrying value
At 31 March 2017 500 3,392 1,432 610 800
------------------------ -------------------- ------------ ----------- ---------- -------------
At 30 September
2017 500 3,392 1,455 610 800
------------------------ -------------------- ------------ ----------- ---------- -------------
Penlee
Legal Work Alen
Investments Group Buckley
Limited plc LLP Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------------------- ------------ ----------- ---------- -------------
Cost
At 1 April 2017 - - - 6,734
Acquisitions 227 1,246 1,357 2,830
Revaluation/adjustment
to cost - - - 23
------------------------ -------------------- ------------ ----------- ---------- -------------
At 30 September
2017 227 1,246 1,357 9,588
------------------------ -------------------- ------------ ----------- ---------- -------------
Impairment
At 1 April 2017 - - - -
Impairment in - - - -
year
At 30 September - - - -
2017
------------------------ -------------------- ------------ ----------- ---------- -------------
Carrying value
At 31 March 2017 - - - 6,734
------------------------ -------------------- ------------ ----------- ---------- -------------
At 30 September
2017 227 1,246 1,357 9,588
------------------------ -------------------- ------------ ----------- ---------- ------------- 5.1 Business combinations and acquisitions
The details set out below provide the information required under IFRS 3 'Business Combinations' for the acquisitions that occurred during the period to 30 September 2017.
Alen-Buckley LLP
On 30(th) June 2017 the Group acquired the business, as a going concern, of Alen-Buckley LLP, a legal services business with focus on property and private client sectors, for a consideration of GBP1.54m. The fair value of the net assets and liabilities acquired by the group was GBP183,000. Goodwill of GBP1.36m was recognised in accounting for the acquisition.
Following the acquisition, Alen-Buckley LLP ceased trading and its business (comprising its property, rights and assets) was transferred to Prolegal Solicitors Limited.
Acquisition-related costs of GBP96,000 relating to the acquisition of Alen-Buckley LLP are included in non recurring costs in profit or loss and in operating cash flows in the statement of cash flows.
Penlee Legal Investments Limited
On 5(th) July 2017, the Group acquired 100% of the issued share capital of Penlee Legal Investments Limited, a consultancy services firm incorporated in the Commonwealth of the Bahamas, for a consideration of GBP160,000. The fair value of the net assets and liabilities acquired by the group was (GBP67,000). Goodwill of GBP227,000 was recognised in accounting for the acquisition.
Work Group plc
On 4(th) August 2017, the Group acquired 100% of the issued share capital of Gordon Dadds Group plc (formerly Work Group plc). This acquisition has been accounted for as a reverse acquisition under IFRS 3 'Business Combinations'. The fair value of the consideration transferred was GBP1.25m. The fair value of the net assets and liabilities acquired by the Group was GBP0.01m. Goodwill of GBP1.25m was recognised in accounting for the acquisition.
On 2 December 2016, the Group acquired the entire economic interest in Brook Street Holdings LLP, the holding entity for, inter alia, Gordon Dadds LLP. As in the financial statements of Culver Holdings Limited for the year ended 31 March 2017, this was treated as a reverse acquisition of Culver Holdings Limited by Brook Street Holdings LLP
5.1.2 Identifiable assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities at the date of acquisition were as follows:
Penlee
Alen Legal Work
Buckley Investments Group Total
LLP Limited plc Acquisitions
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- ----------------- -------- -------------
Property, plant - -
and equipment - -
Identifiable -
intangible assets - - -
Trade and other
receivables 183 63 136 382
Cash and cash
equivalents - - 35 35
Trade and other
payables - (130) (165) (295)
Contingent liabilities - - - -
-------------------------- -------- ----------------- -------- -------------
Net identifiable
assets and liabilities 183 (67) 6 122
Goodwill 1,357 227 1,246 2,830
Non-controlling
interest in the
recognised amounts
of identifiable
assets and liabilities - - - -
Total consideration 1,540 160 1,252 2,952
--------------------------- -------- ----------------- -------- -------------
Satisfied by:
Cash 6 160 - 166
Equity instruments - - 1,252 1,252
Contingent consideration 1,534 - - 1,534
Total consideration
transferred 1,540 160 1,252 2,952
--------------------------- -------- ----------------- -------- -------------
Net cash outflow
arising on acquisition:
Cash consideration (6) (160) - (166)
Less: cash and
cash equivalent
balances acquired - - 35 35
--------------------------- -------- ----------------- -------- -------------
(6) (160) 35 (131)
-------------------------- -------- ----------------- -------- -------------
5.2 Disposals
There were no disposals in the group for the period to 30 September 2017.
6. Trade and other receivables
Group Group Group
6 Months Year
6 Months to 30 ended
to 30 September 31 March
September2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------- --------------- ----------- ----------
Trade receivables 6,599 5,209 6,746
Accrued income 2,873 1,793 2,343
Other receivables 1,830 1,619 1,532
Amounts due from
subsidiaries - - -
Prepayments 1,638 913 2,301
------------------- --------------- ----------- ----------
12,940 9,534 12,922
------------------- --------------- ----------- ----------
7. SHARE CAPITAL
March
September 2017 September 2017 2017 September 2016
Number GBP'000 GBP'000 GBP'000
------------------------------------ --------------- --------------- -------- ---------------
Allotted, called up and fully paid
Ordinary shares of 1p each 28,597,310 286 572 572
Deferred shares of 63p each 894,453 564 - -
850 572 572
------------------------------------ --------------- --------------- -------- ---------------
Ordinary shares rank equally as regards to dividends, other distributions and return on capital. Each ordinary share carries the right to one vote.
Deferred shares carry no right to vote.
On 4th August 2017, the original ordinary shares were consolidated and divided into new 1p ordinary shares and 63p deferred shares.
On 4th August 2017, there was the placing of 14,285,714 ordinary shares at 140p per share, with a nominal value of 1p per share.
On 4th August 2017, 13,417,143 ordinary shares were issued at 140p per share, with a nominal value of 1p per share.
8. Reserves
Share premium represents the difference between the amount received and the par value of shares issued less transaction costs.
Retained earnings represents the cumulative profits or losses net of dividends paid and other adjustments.
Other reserves include the reverse acquisition reserve arising under IFRS3 'Business Combinations'.
9. Trade and other payables
Group Group Group
6 Months 6 Months Year
to 30 to 30 ended
September2017 September 31 March
2016 2017
GBP'000 GBP'000 GBP'000
------------------------ --------------- -------------- --------------
Current:
Trade payables 2,638 2,369 2,882
Amounts due - - -
to subsidiaries
Other taxes
and social security 1,221 697 821
Deferred consideration 3,265 2,855 2,193
Other payables 570 1,094 1,591
Accruals 1,326 1,129 1,354
------------------------- --------------- -------------- --------------
9,020 8,144 8,841
------------------------ --------------- -------------- --------------
Non-current:
Deferred consideration 3,126 3,116 4,137
------------------------- --------------- -------------- --------------
Total 12,146 11,260 12,978
------------------------- --------------- -------------- --------------
10. Borrowings
Group Group Group
6 Months 6 Months Year
to 30 to 30 ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
---------------------- ----------- ----------- ---------- Bank overdrafts - 708 566 Bank loans 826 - 365 Loan stock - - 571 Other loans 707 1,061 2,704 Obligations under hire purchase and lease contracts 47 57 52 ---------------------- ----------- ----------- ---------- Total borrowings 1,580 1,826 4,258 ---------------------- ----------- ----------- ---------- Current 1,419 1,612 4,034 Non-current 161 214 224 ---------------------- ----------- ----------- ---------- Total 1,580 1,826 4,258 ---------------------- ----------- ----------- ----------
Bank loans of GBP826,000 (2017: GBP365,000) and other loans of GBP707,000 (2017: GBP2,704,000) are unsecured and carry interest at between 3.0 per cent and 12.5 per cent per annum. Bank and other loans are repayable within 12 months, except non-current other loans of GBP189,000 which has a maturity of 1-3 years.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FDLLLDFFEFBQ
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November 28, 2017 02:01 ET (07:01 GMT)
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