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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Science Group Plc | LSE:SAG | London | Ordinary Share | GB00B39GTJ17 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 5.00 | 1.19% | 424.00 | 420.00 | 434.00 | 430.00 | 419.00 | 419.00 | 28,494 | 16:35:23 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Consulting Svcs,nec | 98.82M | 10.56M | 0.2322 | 18.39 | 194.11M |
From May 2019 to May 2024
TIDMSAG
RNS Number : 9425L
Science Group PLC
25 July 2017
Hot Features
Premium
25 July 2017
SCIENCE GROUP PLC
("Science Group" or the "Group" or the "Company")
INTERIM RESULTS
FOR THE SIX MONTH PERIODED 30 JUNE 2017
Summary
H1-17 H1-16
------------------------------------------- ------------ ------------
Group revenue GBP18.0m GBP17.7m
------------------------------------------- ------------ ------------
Adjusted operating profit * GBP3.2m GBP2.5m
------------------------------------------- ------------ ------------
Statutory operating profit GBP2.5m GBP1.4m
------------------------------------------- ------------ ------------
Statutory profit before tax GBP2.3m GBP1.1m
------------------------------------------- ------------ ------------
Adjusted basic earnings per share ** 6.1p 4.4p
------------------------------------------- ------------ ------------
Statutory basic earnings per share 5.1p 2.4p
------------------------------------------- ------------ ------------
Net funds GBP12.1m GBP9.9m
------------------------------------------- ------------ ------------
Net-funds-plus-freehold-property-per-share 86.2p 76.0p
------------------------------------------- ------------ ------------
Enquiries:
Science Group plc
Martyn Ratcliffe, Chairman Tel: +44 (0) 1223 875
200
Rebecca Hemsted, Finance Director www.sciencegroup.com
Numis Securities Limited
Nominated Adviser: Paul Gillam / Simon Tel: +44 (0) 20 7260
Willis 1000
Corporate Broking: Michael Burke
* Throughout this statement, adjusted operating profit is calculated as operating profit excluding impairment of goodwill and investments, amortisation of acquisition related intangible assets, acquisition integration costs, share based payment charges and other specified items.
** Throughout this statement, adjusted earnings per share is calculated as adjusted profit after tax divided by the weighted average number of shares in issue. This includes a tax charge at the substantively enacted UK Corporation Tax Rate for the year.
Interim Results 2017
Science Group is an international Science & Technology Group providing consultancy, advisory and product development services to a diverse client base across multiple vertical markets.
The first half of 2017 has seen continued solid financial performance combined with investment in the future of the Group. Due to the international nature of the Group's revenue sources, serviced by a predominantly UK resource and cost base, the Group has benefitted from currency exchange rate movements relative to the first half of the prior year.
Group Financial Performance
For the six months ended 30 June 2017, the Group generated adjusted operating profit of GBP3.2 million (H1 2016: GBP2.5 million) in line with the Board's expectations, on revenue of GBP18.0 million (H1 2016: GBP17.7 million).
Approximately 80% (H1 2016: 70%) of the Group's Core Business revenue is derived from international markets, with approximately 32% being denominated in US Dollars (H1 2016: 35%) and 9% in Euros (H1 2016: 11%). The remaining international clients, primarily in Europe, are invoiced in Sterling. The average US Dollar exchange rate in the period was 1.26 (H1 2016: 1.44 and H2 2016: 1.29) and the average Euro exchange rate in the period was 1.17 (H1 2016: 1.30 and H2 2016: 1.17). Customer concentration has increased slightly with 31% (H1 2016: 27%) of Core Business revenue being generated from the 5 largest Group clients. Non Core Business revenue has remained stable at GBP0.6 million (H1 2016: GBP0.6 million).
The Medical sector delivered a particularly strong recovery in the period while the Commercial sector, which had some large projects complete late in 2016, had a more subdued period. In aggregate, the combined Outsourced Product Development (Sagentia) business reported good organic growth on an actual and constant currency basis.
The Food & Beverage sector reported a decline in revenue as the effects of the 2016 rationalisation/restructuring programme pass through and, as anticipated, the Oil & Gas market continued to be challenging. The Group's other market areas performed satisfactorily.
The Board continues to use the currency benefit to invest in longer term growth opportunities. The San Francisco office was opened in April and is now fully staffed, with the benefits from this enhanced US geographical coverage already becoming apparent. Additional investment in the Group's business development and technical capabilities, including exploring new market sectors, is ongoing. In parallel, the potential to accelerate the Group's development through acquisitions continues to be explored, but the Board remains cautious and prudent in evaluating opportunities and there can be no certainty that any such transactions will be completed.
Profit before tax was GBP2.3 million (H1 2016: GBP1.1 million) reflecting the effects of the 2016 rationalisation activities referenced above. Profit after tax of GBP2.0 million (H1 2016: GBP1.0 million) includes a corporation tax charge of GBP0.3 million (H1 2016: GBP0.1 million) with a modest net tax cash outflow now anticipated in the second half of 2017. Basic earnings per share was 5.1 pence (H1 2016: 2.4 pence) and diluted earnings per share in H1 2017 was 5.0 pence (H1 2016: 2.3 pence).
The Group retains a very robust balance sheet with Gross Cash at 30 June 2017 of GBP26.3 million (30 June 2016: GBP17.2 million) and Net Funds of GBP12.1 million (30 June 2016: GBP9.9 million). Since 30 June 2016, a total of GBP4.4 million has been returned to shareholders, through the share buy-backs in the second half of last year and the recent dividend payment. In aggregate, Net Funds plus Freehold Property total GBP33.9 million (30 June 2016: GBP31.3 million) equivalent to 86.2 pence per share (30 June 2016: 76.0 pence per share). As a result of the share buy backs, at 30 June 2017 the Company had 39.4 million shares in issue (excluding treasury shares) compared to 41.2 million at 30 June 2016.
In summary, the Group performance in the first half of 2017 has been in line with the Board's expectations. The benefit from the weakness of Sterling is enabling the Board to increase the investment in the long term organic development of the Group's businesses. In addition, with a robust balance sheet, including significant cash resources, the Board continues to explore acquisition opportunities which could accelerate the strategic development of the Group.
Consolidated Income Statement
For the period ended 30 June 2017
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Restated
Notes (Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ------------
Revenue 18,020 17,693 36,899
Operating expenses before
adjusting items (14,783) (15,182) (30,683)
Adjusted operating profit 4 3,237 2,511 6,216
------------ ------------ ------------
Amortisation and impairment
of intangible assets (557) (409) (1,857)
Impairment of other investments - - (50)
Acquisition integration costs - (311) (317)
Share based payment charge (132) (427) (597)
Operating profit 4 2,548 1,364 3,395
Finance income - 2 2
Finance costs (245) (233) (429)
Profit before tax 2,303 1,133 2,968
Income tax charge 5 (306) (147) (219)
------------ ------------ ------------
Profit for the period 4 1,997 986 2,749
------------ ------------ ------------
Profit for the period attributable
to equity holders of the
parent 1,997 986 2,749
Earnings per share
Earnings per share from continuing
operations (basic) 6 5.1p 2.4p 6.8p
Earnings per share from continuing
operatioins (diluted) 6 5.0p 2.3p 6.6p
Adjusted earnings per share
from continuing operations
(basic) 6 6.1p 4.4p 11.4p
Adjusted earnings per share
from continuing operations
(diluted) 6 6.0p 4.3p 11.1p
------------ ------------ ------------
Restatement: Costs have been reclassified within the adjusting items for the six months ended 30 June 2016. Refer to Note 7 for an explanation. Operating profit was not affected by this reclassification.
Consolidated Statement of Comprehensive Income
For the period ended 30 June 2017
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ------------
Profit for the period 1,997 986 2,749
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Fair value gain on interest
rate swap, net of tax 70 - 197
Exchange differences on translating
foreign operations 3 50 30
------------ ------------ ------------
Other comprehensive income
for the period 73 50 227
------------ ------------ ------------
Total comprehensive income
for the period 2,070 1,036 2,976
------------ ------------ ------------
Total comprehensive income
for the period attributable
to owners of the parent 2,070 1,036 2,976
------------ ------------ ------------
Consolidated Statement of Changes in Shareholders' Equity
For the period ended 30 June 2017
Group Issued Share Treasury Merger Translation Share based Retained Total
capital premium Stock reserve reserve payment earnings -
reserve Shareholders
funds
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
GBP000
---------------------- -------- -------- -------- -------- ----------- ----------- --------- -------------
Balance at 1 January
2016 421 8,230 (1,215) 10,343 308 2,359 16,785 37,231
Issue of shares
out of treasury
stock - - 109 - - - (12) 97
Equity interest
of cancelled share
options - - - - - (361) - (361)
Dividends paid - - - - - - (1,646) (1,646)
Share based payment
charge - - - - - 183 - 183
Deferred tax on
share based payment
transactions - - - - - - (97) (97)
---------------------- -------- -------- -------- -------- ----------- ----------- --------- -------------
Transactions with
owners - - 109 - - (178) (1,755) (1,824)
---------------------- -------- -------- -------- -------- ----------- ----------- --------- -------------
Profit for the
period - - - - - - 986 986
Other comprehensive
income:
Exchange differences
on translating
foreign operations - - - - 50 - - 50
Total comprehensive
income for the
period - - - - 50 - 986 1,036
---------------------- -------- -------- -------- -------- ----------- ----------- --------- -------------
Balance at 30 June
2016 421 8,230 (1,106) 10,343 358 2,181 16,016 36,443
---------------------- -------- -------- -------- -------- ----------- ----------- --------- -------------
Balance at 1 July
2016 421 8,230 (1,106) 10,343 358 2,181 16,016 36,443
Purchase of own
shares - - (2,757) - - - - (2,757)
Issue of shares
out of treasury
stock - - 255 - - - (71) 184
Share based payment
charge - - - - - 170 - 170
Deferred tax on
share based payment
transactions - - - - - - 23 23
------------------------ --- ----- ------- ------ ---- ----- ------ -------
Transactions with
owners - - (2,502) - - 170 (48) (2,380)
------------------------ --- ----- ------- ------ ---- ----- ------ -------
Profit for the
period - - - - - - 1,763 1,763
Other comprehensive
income:
Fair value gain
on interest rate
swap - - - - - - 197 197
Exchange differences
on translating
foreign operations - - - - (20) - - (20)
Total comprehensive
income for the
period - - - - (20) - 1,960 1,940
------------------------ --- ----- ------- ------ ---- ----- ------ -------
Balance at 31 December
2016 421 8,230 (3,608) 10,343 338 2,351 17,928 36,003
------------------------ --- ----- ------- ------ ---- ----- ------ -------
Balance at 1 January
2017 421 8,230 (3,608) 10,343 338 2,351 17,928 36,003
Issue of shares
out of treasury
stock - - 34 - - - (20) 14
Dividends paid - - - - - - (1,653) (1,653)
Share based payment
charge - - - - - 132 - 132
Deferred tax on
share based payment
transactions - - - - - - 145 145
---------------------- --- ----- ------- ------ --- ----- ------- -------
Transactions with
owners - - 34 - - 132 (1,528) (1,362)
---------------------- --- ----- ------- ------ --- ----- ------- -------
Profit for the
period - - - - - - 1,997 1,997
Other comprehensive
income:
Fair value gain
on interest rate
swap - - - - - - 70 70
Exchange differences
on translating
foreign operations - - - - 3 - - 3
---------------------- --- ----- ------- ------ --- ----- ------- -------
Total comprehensive
income for the
period - - - - 3 - 2,067 2,070
---------------------- --- ----- ------- ------ --- ----- ------- -------
Balance at 30 June
2017 421 8,230 (3,574) 10,343 341 2,483 18,467 36,711
---------------------- --- ----- ------- ------ --- ----- ------- -------
Consolidated Balance Sheet
At 30 June 2017
At 31
At 30 June At 30 June December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------- ------------- ----------
Assets
Non-current assets
Acquisition related intangible
assets 4,626 5,591 5,183
Goodwill 4,033 5,073 4,033
Property, plant and equipment 23,556 22,646 23,793
Investments 50 100 50
Derivative financial assets 267 - 197
Deferred tax assets 333 903 287
32,865 34,313 33,543
------------- ------------- ----------
Current assets
Trade and other receivables 5,716 5,183 8,219
Current tax asset 21 595 537
Cash and cash equivalents 26,284 17,199 25,996
------------- ------------- ----------
32,021 22,977 34,752
------------- ------------- ----------
Total assets 64,886 57,290 68,295
------------- ------------- ----------
Liabilities
Current liabilities
Trade and other payables 11,859 10,852 15,213
Borrowings 1,000 1,000 1,000
------------- ------------- ----------
12,859 11,852 16,213
------------- ------------- ----------
Non-current liabilities
Borrowings 13,169 6,250 13,664
Derivative financial liabilities - 215 -
Deferred tax liabilities 2,147 2,530 2,415
------------- ------------- ----------
15,316 8,995 16,079
------------- ------------- ----------
Total liabilities 28,175 20,847 32,292
------------- ------------- ----------
Net assets 36,711 36,443 36,003
------------- ------------- ----------
Shareholders' equity
Share capital 421 421 421
Share premium 8,230 8,230 8,230
Treasury stock (3,574) (1,106) (3,608)
Merger reserve 10,343 10,343 10,343
Translation reserves 341 358 338
Share based payment reserve 2,483 2,181 2,351
Retained earnings 18,467 16,016 17,928
------------- ------------- ----------
Total equity 36,711 36,443 36,003
------------- ------------- ----------
Consolidated Statement of Cash Flows
For the period ended 30 June 2017
Six months Six months Year ended
ended ended 31
30 June 30 June December
2017 2016 2016
Restated
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ----------
Operating profit 2,548 1,364 3,395
Adjustments for:
Depreciation and amortisation
charges 915 741 1,562
Loss on disposal of property,
plant and equipment - - 57
Change in fair value on interest
rate swap - 74 -
Share based payment charge 132 427 597
Impairment of goodwill - - 1,040
Impairment of cost of investment - 50
Decrease in receivables 2,508 3,797 675
(Decrease) / Increase in payables (3,329) (840) 4,211
------------ ------------ ----------
Cash generated from operations 2,774 5,563 11,587
Finance costs (245) (233) (354)
UK corporation tax received /
(paid) 41 (12) 560
Foreign corporation tax paid - (61) (123)
------------ ------------ ----------
Cash flows from operating activities 2,570 5,257 11,670
------------ ------------ ----------
Interest received - 2 2
Purchase of property, plant and
equipment (121) (634) (2,432)
Cash flow used in investing
activities (121) (632) (2,430)
Issue of shares out of treasury 14 97 281
Payment in lieu of cancelled
share options - - (605)
Repurchase of own shares - - (2,757)
Dividends paid (1,653) (1,646) (1,646)
Proceeds from bank loans - - 15,000
Repayment of bank loans (500) (500) (8,000)
Repayment of interest rate swap - - (216)
Cash flows used in financing
activities (2,139) (2,049) 2,057
------------ ------------ ----------
Increase in cash and cash equivalents
in the period 310 2,576 11,297
Cash and cash equivalents at
the beginning of the period 25,996 14,516 14,516
Exchange (losses) / gains on
cash (22) 107 183
Cash and cash equivalents at
the end of the period 26,284 17,199 25,996
------------ ------------ ----------
Extracts from notes to the financial statements
1. General information
The financial information for the 6 months ended 30 June 2017 set out in this interim report is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information included has been extracted from the 2016 Financial Statements of Science Group plc. The Group's statutory financial statements for the year ended 31 December 2016 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.
These un-audited interim results have been approved for issue by the Board of Directors on 24 July 2017.
The group and company financial statements of Science Group plc for the year ended 31 December 2016 were prepared under IFRS (as adopted by the EU) and have been audited by KPMG LLP. Copies of the Financial Statements are available from the company's registered office: Harston Mill, Harston, Cambridge, CB22 7GG and can be found on the company's website at www.sciencegroup.com.
Science Group provides independent advisory and product development services focused on science and technology through subsidiary companies branded Sagentia, Oakland Innovation, OTM Consulting and Leatherhead Food Research. Science Group's facilities include offices and laboratories located in Harston near Cambridge, Epsom, Surrey and London in the UK and in the US in Boston, Massachusetts, Houston, Texas and San Fransisco, California.
The Company is the ultimate parent company in which results of all the Science Group companies are consolidated.
The Company is incorporated in England and Wales and has its primary listing on the AIM Market of the London Stock Exchange (SAG).
Alternative performance measures
The Group uses alternative (non-Generally Accepted Accounting Practice ('non-GAAP')) performance measures of 'adjusted operating profit', 'adjusted earnings per share' and 'net-funds-plus-freehold-property-per-share in issue' which are not defined within the International Financial Reporting Standards (IFRS). These are explained in the 2016 Financial Statements and the calculations are as follows:
(a) Adjusted operating profit
The calculation of this measure is shown on the Consolidated Income Statement.
(b) Adjusted earnings per share
The calculation of this measure is disclosed in Note 6.
(c) Net-funds-plus-freehold-property-per-share in issue
The Group calculates this measure by dividing the sum of cash and cash equivalents plus freehold land and buildings less borrowings by the number of shares in issue at the balance sheet date. This is calculated as follows:
In GBP000 unless otherwise At 31 December
stated At 30 June At 30 June 2016
2017 2016
------------------------------------------- ------------ ------------ --------------
Cash and cash equivalents 26,284 17,199 25,996
Borrowings (14,169) (7,250) (14,664)
------------------------------------------- ------------ ------------ --------------
Net funds 12,115 9,949 11,332
Freehold land and buildings 21,799 21,325 21,882
------------------------------------------- ------------ ------------ --------------
Net funds plus freehold property 33,914 31,274 33,214
Number of shares in issue
(excluding treasury shares)
('000 shares) 39,363 41,155 39,329
------------------------------------------- ------------ ------------ --------------
Net-funds-plus-freehold-property-per-share in issue (pence) 86.2 76.0 84.5 ------------------------------------------- ------------ ------------ --------------
2. Accounting policies
The principal accounting policies applied in the preparation of these interim financial statements are unchanged from those set out in the financial statements for the year ended 31 December 2016. These policies have been consistently applied to all the periods presented.
2.1 Basis of preparation
These interim consolidated financial statements are for the six months ended 30 June 2017. They have been prepared based on the measurement and recognition principles of International Financial Reporting Standards (IFRS) as adopted by the EU and IFRC interpretations issued and effective at the time of preparing these statements.
The financial statements have been prepared on the historical cost basis except for certain financial instruments and share-based payments which are measured at fair value.
3. Financial risk management
3.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest risk and price risk), credit risk, liquidity risk and cash flow interest-rate risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
4. Segmental information
Science Group is organised on a worldwide basis into two segments, Core Business and Non-Core Business. Core Business services revenue includes consultancy fees for services operations. Core Business other revenue includes recharged materials and expenses and product/licence revenue generated directly from Core Business activities. Non-Core Business activities include rental income from Harston Mill and income from the provision of external IT services. The segmental analysis is reviewed to operating profit. Other resources are shared across the Group.
Period ended 30 June 2017 Core Non-Core Total
(Unaudited) Business Business
GBP000 GBP000 GBP000
--------- --------- -------
Services revenue 16,801 18 16,819
Third party property income - 544 544
Other 657 - 657
Revenue 17,458 562 18,020
--------- --------- -------
Adjusted operating profit 3,132 105 3,237
--------- --------- -------
Amortisation and impairment of intangible
assets (557) - (557)
Share based payment charge (132) - (132)
Operating profit 2,443 105 2,548
--------- --------- -------
Finance charges (net) (245)
--------- --------- -------
Profit before tax 2,303
--------- --------- -------
Income tax charge (306)
--------- --------- -------
Profit for the period 1,997
--------- --------- -------
Period ended 30 June 2016 Core Non-Core Total
Restated Business Business
(Unaudited) GBP000 GBP000 GBP000
--------- --------- -------
Services revenue 16,394 17 16,411
Third party property income - 539 539
Other 743 - 743
Revenue 17,137 556 17,693
--------- --------- -------
Adjusted operating profit 2,464 47 2,511
--------- --------- -------
Amortisation and impairment of intangible
assets (409) - (409)
Acquisition integration costs (311) - (311)
Share based payment charge (427) - (427)
Operating profit 1,317 47 1,364
--------- --------- -------
Finance charges (net) (231)
--------- --------- -------
Profit before tax 1,133
--------- --------- -------
Income tax charge (147)
--------- --------- -------
Profit for the period 986
--------- --------- -------
Year ended 31 December 2016 Core Non-Core Total
Business
(Audited) Business GBP000
GBP000 GBP000
--------- --------- -------
Services revenue 34,228 36 34,264
Third party property income - 1,079 1,079
Other 1,556 - 1,556
Revenue 35,784 1,115 36,899
--------- --------- -------
Adjusted operating profit 6,121 95 6,216
--------- --------- -------
Amortisation and impairment of intangible
assets (1,857) - (1,857)
Impairment of other investments (50) - (50)
Acquisition integration costs (317) - (317)
Share based payment charge (597) - (597)
Operating profit 3,300 95 3,395
--------- --------- -------
Finance charges (net) (427)
--------- --------- -------
Profit before tax 2,968
--------- --------- -------
Income tax charge (219)
--------- --------- -------
Profit for the period 2,749
--------- --------- -------
5. Income tax
The income tax charge for the period ended 30 June 2017 is charged at the effective tax rate calculated for the period using reasonable estimates and incorporating both current and deferred taxation:
Six months Six months Year ended
ended ended 31
30 June 30 June December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ----------
Profit before tax 2,303 1,133 2,968
------------ ------------ ----------
Current taxation (630) 53 (173)
Deferred taxation 169 (200) (721)
R&D tax credit 155 - 675
------------ ------------ ----------
Tax charge (306) (147) (219)
------------ ------------ ----------
Effective tax rate 13.3% 13.0% 7.4%
------------ ------------ ----------
The Group claims Research and Development tax credits under both the R&D Expenditure Credit scheme and the Small or Medium-sized scheme. In period ended 30 June 2016, the R&D tax credit had been provided for on a cash basis due to uncertainties with respect to estimating the amounts involved. The R&D tax credit provided for in the year ended 31 December 2016 relates to the 2015 and 2016 financial years recognised on an accruals basis. The R&D tax credit provided for in the period ended 30 June 2017 is recognised on an accruals basis for the period to which the R&D tax credit relates and based on a reasonable estimate of the amounts involved.
6. Earnings per share
The calculation of earnings per share is based on the following results and number of shares:
Six months Six months Year ended
ended ended 31
30 June 30 June December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ----------
Profit for the financial
period 1,997 986 2,749
------------ ------------ ----------
Weighted average number of Number Number Number
shares:
For basic earnings per share 39,344,121 41,128,774 40,542,379
For fully diluted earnings
per share 40,327,332 42,043,546 41,636,652
------------ ------------ ----------
Earnings per share: Pence Pence Pence
Basic earnings per share 5.1 2.4 6.8
Fully diluted earnings per
share 5.0 2.3 6.6
------------ ------------ ----------
The calculation of adjusted earnings per share is as follows:
Six months Six months Year ended
ended ended 31
30 June 30 June December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------ ------------ ----------
Adjusted* profit after tax
for the period 2,415 1,824 4,631
------------ ------------ ----------
Weighted average number of Number Number Number
shares:
For basic earnings per share 39,344,121 41,128,774 40,542,379
For fully diluted earnings
per share 40,327,332 42,043,546 41,636,652
------------ ------------ ----------
Adjusted earnings per share: Pence Pence Pence
Basic earnings per share 6.1 4.4 11.4
Fully diluted earnings per
share 6.0 4.3 11.1
------------ ------------ ----------
*Calculation of adjusted profit after tax:
Six months Six months Year ended
ended ended 31
30 June 30 June December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---------------------------- ------------ ------------ ----------
Adjusted operating profit 3,237 2,511 6,216
Finance income - 2 2
Finance costs (245) (233) (429)
---------------------------- ------------ ------------ ----------
Adjusted profit before tax 2,992 2,280 5,789
Tax charge at substantively
enacted tax rate of 19.3%
(2016: 20%) (577) (456) (1,158)
---------------------------- ------------ ------------ ----------
Adjusted profit after tax 2,415 1,824 4,631
---------------------------- ------------ ------------ ----------
7. Explanation of restatement in the six months ended 30 June 2016
A cost of GBP244,000 relating to a one-off accelerated charge due to cancelation of share options in the period was reclassified in the Consolidated Income Statement from other exceptional costs to share based payment charges to align with the Financial Statements for the year ended 31 December 2016. Operating profit was not affected by this reclassification.
The Consolidated Statement of Cash Flows and Note 4 were also restated in line with this change.
8. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Science Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a) Critical accounting estimate
Project accounting
Science Group undertakes a number of consultancy projects where the final price to complete the project may be uncertain. The state of completeness of each project, and hence revenue recognised, requires the use of estimates. The value of work done is calculated based on proportion of time spent on the project or value of stage gates achieved as set out in the project. Management apply their judgement in assessing time required to complete the projects and the ability to recover the full project costs. Where significant uncertainty exists, income is deferred until costs are recovered or the project is completed.
(b) Significant accounting judgement
Accounting for freehold property at Harston Mill
Science Group owns and maintains the freehold property at Harston Mill for use in the supply of its Core consultancy services and for administrative purposes.
Whilst there is surplus space on site not required to fulfil the Group's core operational activities, Science Group lets out space to third party tenants. The revenues and costs attributable to this activity are disclosed as third party property income activities within the business segment disclosures. It is not accounted for as an investment property, the reasons being:
(i) the third party leases include the use of common areas and because of this the areas that are leased to third parties could not be sold separately;
(ii) the leases normally have notice periods of no more than six months giving Science Group the flexibility to start using the areas if required, i.e. the leased areas are not held for capital appreciation or a return of investment through rental income.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKQDDABKDNOB
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July 25, 2017 02:00 ET (06:00 GMT)
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