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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Styles & Wood | LSE:STY | London | Ordinary Share | GB00BLG2TG58 | 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% | 463.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMSTY
RNS Number : 1346K
Styles & Wood Group PLC
19 September 2016
Styles&Wood Group PLC
Interim Results for the Six Month Period Ended 30(th) June 2016
Styles & Wood Group plc, the integrated property services and project delivery specialist, announces its interim results for the six months ended 30 June 2016.
Financial Results
H1:2016 H1:2015 % Change Revenue GBP47.1m GBP46.2m 2.0% Gross Margin 9.9% 8.4% 17.9% Underlying EBITDA(1) GBP1.3m GBP0.8m 63.4% Underlying Profit Before Tax(1) GBP0.5m GBP0.2m 138.8% Profit/(Loss) GBP0.4m GBP(0.5)m N/A Before Tax Underlying Earnings per Share(1) 3.9p 0.6p 550.0% Earnings per Share 2.6p (10.2)p N/A Net cash and cash equivalents(2) GBP3.70m GBP1.38m 168.1% Net debt(3) GBP3.33m GBP6.42m N/A Order Book Week 33 GBP69.9m GBP66.1m 5.7%
Notes:
1 Excludes non-recurring items and notional interest on preference shares 2 Cash balances less short term facilities
3 Net debt represents cash and cash equivalents less outstanding preference shares and loan notes
Operational Highlights:
-- Contract successfully negotiated for the Programme Management, Design and Delivery of Projects for a national, format enhancement initiative for a UK major grocery retailer, cGBP15m value.
-- Specialist design build fit out works commenced for Addleshaw Goddard's corporate offices in One St Peter's Square, Manchester.
-- Second major project commenced for Aviva in London following on from the ongoing works to Westminster House in Manchester. Around 150 000 square feet of high quality space currently under refurbishment for this strategic client.
-- Appointment confirmed as automation partner for one of the UK's major high street banks providing a turnkey solution for ATM/Rebrand services. Over 900 discrete projects and building interventions successfully programme managed and implemented with a similar volume planned for implementation during 2017.
-- Diversification strategy strengthened with Healthcare projects success, a fertility clinic for Care UK and a refurbishment scheme for BUPA, and the development of a new serial projects relationship with Easy Hotels.
Post Period Highlights
-- Appointed as one of four strategic partners by one of the world's largest banking and financial services organisations for the delivery of its UK capital plan over the next five years commencing in 2017. Anticipated annual revenues in excess of GBP20m per annum. Consolidated work streams including critical facilities, data centres, retail, office and initiatives.
Tony Lenehan, CEO of Styles&Wood Group plc, said:
'The Group has delivered a strong performance in the first half of the year with revenue, EBITDA and profit before tax all showing good growth supported by strong cash generation. This is a particularly pleasing set of interim results, which provides further positive endorsement of the Group's diversification strategy and, as demonstrated by improved margin performance, our selective approach to new business opportunities. We have had significant success in securing longer term contracts with a number of blue chip clients, illustrating the relevance and strength of our service offering. The longer term nature of these contracted framework arrangements has also strengthened the projected carry through workload position for 2016/17 relative to prior year.'
Enquiries:
Styles & Wood Group plc Tel 0161 926 6000 Tony Lenehan, Chief Executive Officer Philip Lanigan, Group Finance Director Shore Capital Tel 0207 408 4090 Edward Mansfield/Mark Percy FTI Consulting Tel 0203 727 1000 Oliver Winters/James Styles
Chief Executive Officer's Statement
Group Results
Group revenue for the six months ending 30 June 2016 increased by 2% to GBP47.1m (H1 2015: GBP46.2m). The corresponding underlying operating profit increased by 88.2% to GBP1.1m (H1 2015: GBP0.6m). The increased profitability continues the trend evidenced over the last two years where investments made in people and processes are improving operational performance. Repeat business from customers and through their professional advisers, now accounts for c75% of Group revenues which is characterised by an increase in gross margin to 9.9%.
Underlying finance costs were similar to 2015 at GBP0.2m, where reduced bank interest and charges have been offset by interest on the Loan Notes issued at the time of the refinancing in June 2015.
Following a strategic review of our interests in Dubai and in conjunction with our partner in region, the venture is being repositioned to reflect a focus on select major fit out opportunities rather than a broad based portfolio approach. A loss of GBP(0.4)m (H1 2015: GBP(0.2)m) has been incurred for the period in this respect.
The Group recorded an underlying profit before tax of GBP0.5m (H1 2015: GBP0.2m) which, after non-recurring costs of GBPnil (H1 2015: GBP0.3m) and notional interest on preference shares of GBP0.1m (H1 2015: GBP0.4m), results in a profit/(loss) before tax of GBP0.4m (H1 2015: GBP(0.5)m).
Cash flow in period, as determined by work mix and H1:H2 weighting, has assumed a more conventional characteristic with an operational cash outflow in the first half of 2016. The Group had cash balances of GBP3.7m at 30(th) June 2016 (H1 2015: GBP1.4m), and a GBP3.0m bank facility from Barclays unused throughout the period. Net debt stands at GBP3.3m (H1 2015: GBP6.4m) reflecting the strong cash conversion from trading performance.
Overview
The Group now has a proven diversification strategy and consistent, selective approach to new business opportunities. In excess of 65% of 2016 revenue is expected to be secured through serial customer relationships and formal frameworks. Our appointments as preferred service supplier, to strategic customers now typically have committed durations of between two and five years. Coupled with a tender conversion ratio better than one in three, by both number and value, the Group is now establishing more predictable income streams to further enhance profitable growth.
The restructuring of the balance sheet in June 2015 provided greater freedom to harness the developing skills and capabilities of the Group
In order to reinforce our platform for growth, we relocated our principal operational centre to Cavendish House in Sale, Great Manchester. The building provides the Group with a useable floor space of 26 000 square feet over four floor, an increase in excess of 20%. We have designed and fitted out our new office space to reflect smart integrated team working with a concentration of collaborative work areas with flexible layouts. This inspiring new working environment complements the exciting spaces we have created for our other operations centres in Nottingham and London.
Segmental Performance:
-- Professional Services: Revenue within the period of GBP19.6m (H1 2015: GBP17.2m) shows an increase of 13.4% relative to prior year. Operational performance remains strong with Portfolio Services delivering a margin of 17.1% (H1 2015: 19.5%) and Programme Management & implementation 10.1% (H1 2015: 10.4%), with both segments experiencing a growth in revenue.
- Portfolio Services: New customer consultancy concessions have been successfully converted for the Data Analytics Business Unit. Existing customer relationships with major retailers and banks have also provided sources of new opportunity in Data Analytics and extended scope for both Programme Services and Design Business Units.
- Programme Management & Implementation: Our most significant customer in the year to date has been a major UK grocery multiple for whom we are delivering several hundred discrete projects to improve store entrances. The programme was negotiated and represents an opportunity for the Group to leverage its complete range of skills through the provision of a fully integrated solution. The additional conversion, post period end, of a five year framework with one of the world's leading banking and financial services institutions reinforces our credentials as a market leader in this sector. Our diversification strategy also continues to gather momentum with the successful conversion of a number of projects in the healthcare and leisure sectors. Serial project conversions for BUPA and Easy Hotels build on our specialist credentials established in hospital critical environments and office conversions.
-- Contracting Services: Revenue at GBP27.5m (H1 2015: GBP28.9m) fell by 4.9% whilst profitability increased by 73% to GBP1.7m (H1 2015: GBP1.0m). The lower revenue in H1 is primarily due to timing issues and will give rise to a compensating enhancement of the weighting of the second half of the year.
- Project Development & Delivery: The Group's diversification strategy is now showing real traction and our specialist and strong technical skills are creating a clear point of difference. Successful contract wins in period include: Irongate House office refurbishment for Aviva Property in central London, a fertility treatment clinic for CARE and the high end fit out of One St Peter's Square, Manchester for Adddleshaw Goddard; the second major project for the Group in this flagship building. Additionally, the ATM projects' delivery for RBS continues to grow in strength of delivery performance and is fast approaching best in class in terms of quality outcomes and volumes.
Market Review([1]) :
-- Banking and Finance: With a growing emphasis on customer centric services, multi-channel operations and a necessity to transform legacy systems, there remains a requirement for revision and improvement in real estate infrastructure for UK Banks. Office consolidation and regional focus are similarly driving rationalisation and modernisation. Longer term capital plans are now under development to support and sustain the associated change programmes.
-- Commercial: A continuing high concentration of lease events and an ongoing shortage of affordable, high specification space are projected to drive demand in the short to medium term for quality refurbishment and fit out.
-- Retail and Leisure: Technological change, multi-channel operations and a prerequisite for optimising format performance are defining focus for the large Grocery multiples. Programmes to capture innovation and store interventions with minimal customer impact are being planned to better leverage existing assets and drive efficiency.
-- Public Sector: The application of formula capital funding for the UK's Universities, aligned with a goal to provide a World leading Higher education system, establishes a sustainable basis for providing a new and refurbished high quality real estate infrastructure. A new GBP6bn schools' framework is being launched by the Education Funding Agency with an increased scope and ambition to significantly increase the number of preferred suppliers. Health and social care devolution will create a demand for a more strategic approach to asset management for the corresponding estates rationalisation programmes.
Note: 1 AMA Research: Interior Refurbishment and Fit-Out Market Report UK 2016-2020 analysis
Outlook
The Board continues to actively investigate acquisition and collaborative opportunities for the Group with the goal of strengthening service line provision and/or capability enhancement. The Board is focused on potential targets that fulfil one or more of the following criteria:
-- expansion of Portfolio Services offer; -- broadening of property management service provision; and -- enhancement of specialist technical services capabilities.
The trading for the full year remains in line with market forecasts with deferral of work from live frameworks and larger longer term projects strengthening the projected carry through position for 2017.
Tony Lenehan Chief Executive Officer
Responsibility Statement
The Directors confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS34 as adopted by the European Union and that the interim management report contained herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report
The Directors of Styles & Wood Group plc are listed in the Annual Report for the year ended 31 December 2015.
By order of the Board
Tony Lenehan Philip Lanigan 19 September 2016 19 September 2016 Chief Executive Officer Chief Finance Officer Consolidated Income Statement For the six months ended 30 Unaudited Unaudited Audited June 2016 6 months ended 6 months ended Year ended 30 June 2016 30 June 2015 31 December 2015 Underlying Non-recurring Total Underlying Non-recurring Total Underlying Non-recurring items and items and items and preference preference preference share share share accounting accounting accounting Notes (note 7) (note 7) (note 7) Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Continuing operations Revenue 6 47,059 - 47,059 46,157 - 46,157 114,986 - 114,986 Cost of sales (42,411) - (42,411) (42,272) - (42,272) (104,248) - (104,248) Gross profit 4,648 - 4,648 3,885 - 3,885 10,738 - 10,738 Administrative expenses (3,545) - (3,545) (3,299) (285) (3,584) (6,854) (372) (7,226) Operating profit/(loss) 6,7 1,103 - 1,103 586 (285) 301 3,884 (372) 3,512 Finance costs 8 (232) (92) (324) (223) (387) (610) (518) (495) (1,013) Finance income 8 4 - 4 - - - 6 - 6 Share of results of joint venture 19 (376) - (376) (154) - (154) (136) - (136) Profit/(loss) before taxation 499 (92) 407 209 (672) (463) 3,236 (867) 2,369 Taxation 9 (225) - (225) (174) - (174) (758) 81 (677) Profit/(loss) for the period attributable to equity shareholders 274 (92) 182 35 (672) (637) 2,478 (786) 1,692 ----------- -------------- --------- ----------- -------------- --------- ----------- -------------- ---------- Basic earnings per share, expressed in pence per share 10 3.9p (1.3)p 2.6p 0.6p (10.8)p (10.2)p 37.2p (11.8)p 25.4p ----------- -------------- --------- ----------- -------------- --------- ----------- -------------- ---------- Diluted (loss)/earnings per share, expressed in pence per share 10 3.4p (1.1)p 2.3p 0.6p (10.8)p (10.2)p 35.0p (11.1)p 23.9p ----------- -------------- --------- ----------- -------------- --------- ----------- -------------- ----------
There is no difference between the profit/(loss) for the period and the total comprehensive income for the period. Accordingly no separate statement of comprehensive income has been presented.
Underlying results are shown before charging non-recurring expenses (note 7) and accounting for notional interest on preference shares (note 14).
The notes that follow are an integral part of the condensed interim financial statements
Consolidated Statement of Changes in Equity For the six months ended 30 June 2016 Unaudited Notes Ordinary Hurdle Preference Equity Share Capital Reverse Retained Total share Shares share reserve premium redemption acquisition earnings capital capital reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2015 20,456 - 2,975 - 16,300 2,000 (66,665) 18,325 (6,609) Comprehensive income Loss for the period - - - - - - - (637) (637) Total comprehensive income - - - - - - - (637) (637) Transactions with owners Share option
scheme - - - - - - - 12 12 Issue of new equity 5,204 - - 182 22 - - - 5,408 Redemption of Preference Shares - - 2,000 - (2,000) - Preference Share allocation to debt - - (1,488) - - - - - (1,488) Preference share notional interest 14 - (387) - - - - 387 - Total transactions with owners 5,204 (1,875) 182 22 2,000 - (1,601) 3,932 At 30 June 2015 25,660 - 1,100 182 16,322 4,000 (66,665) 16,087 (3,314) Comprehensive income Profit for the period - - - - - - - 2,329 2,329 Total comprehensive income - - - - - - - 2,329 2,329 Transactions with owners Share option scheme - - - - - - - 6 6 Issue of new equity (1) - - (22) - - - (23) Redemption of Preference Shares - - - 773 - (773) - Preference Share allocation to debt - - 1 - - - - - 1 Preference share notional interest 14 - - (108) - - - - 108 - Total transactions with owners (1) - (107) - (22) 773 - (659) (16) At 31 December 2015 25,659 - 993 182 16,300 4,773 (66,665) 17,757 (1,001) Comprehensive income Profit for the period - - - - - - - 182 182 Total comprehensive income - - - - - - - 182 182 Share option scheme - 25 - - - - - 120 145 Preference share notional interest 14 - - (92) - - - - 92 - Total transactions with owners - 25 (92) - - - - 212 145 At 30 June 2016 25,659 25 901 182 16,300 4,773 (66,665) 18,151 (674)
The notes that follow are an integral part of the condensed interim financial statements.
Consolidated Balance Sheet As at 30 June 2016 Unaudited Unaudited Audited 30 June 30 June 31 December Notes 2016 2015 2015 GBP'000 GBP'000 GBP'000 Non current assets Intangible assets - software 239 375 347 Property, plant and equipment 1,110 448 455 Deferred tax asset 11 58 11 1,360 881 813 ---------- ---------- ------------ Current assets Trade and other receivables 36,124 33,680 26,223 Amounts owed by joint venture 19 1,625 1,672 1,852 Cash and cash equivalents 12 3,697 1,381 5,596 Other financial assets: cash collateral 13 1,049 519 1,049 42,495 37,252 34,720 ---------- ---------- ------------ Current liabilities Trade and other payables (38,168) (34,575) (30,171) Financial liabilities: preference shares 14 (670) (773) (670) Current tax liabilities (235) (172) (329) (39,073) (35,520) (31,170) ---------- ---------- ------------ Net current assets 3,422 1,732 3,550 ---------- ---------- ------------ Total assets less current liabilities 4,782 2,613 4,363 ---------- ---------- ------------ Non current liabilities Financial liabilities: preference shares 14 (3,456) (3,927) (3,364) Financial liabilities: loan notes (2,000) (2,000) (2,000) ---------- ---------- ------------ (5,456) (5,927) (5,364) Net liabilities (674) (3,314) (1,001) ---------- ---------- ------------ Shareholders' equity Ordinary share capital 25,659 25,660 25,659 Hurdle Shares 15 25 - - Preference share capital 14 901 1,100 993 Share premium 16,300 16,322 16,300 Capital redemption reserve 4,773 4,000 4,773 Equity reserve 182 182 182 Reverse acquisition reserve (66,665) (66,665) (66,665) Retained earnings 18,151 16,087 17,757 Total shareholders' deficit (674) (3,314) (1,001) ---------- ---------- ------------
The notes that follow are an integral part of the condensed interim financial statements.
Consolidated Statement of Cash Flows For the six months ended 30 June 2016 Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 June 30 June 31 December Notes 2016 2015 2015 GBP'000 GBP'000 GBP'000 Cash (used in)/generated from operations 16 (559) 977 7,502 Income taxes paid (319) (282) (581) Net cash (used in)/generated from operating activities (878) 695 6,921 ---------- ---------- ------------ Cash flows used in investing activities Purchase of property, plant and equipment (757) (53) (162) Purchase of intangible assets - software (7) (55) (183) Amounts (advanced to)/returned from joint ventures (149) - (162) Net cash used in investing activities (913) (108) (507) ---------- ---------- ------------ Cash flows used in financing activities Interest received 4 - 6 Interest paid/Finance Costs (36) (78) (173) Redemption of preference share capital - (2,000) (2,773) Preference share coupon paid (76) - (174) Loan note issued - 2,000 2,000 Prepaid debt issue costs - (55) (78) Proceeds of ordinary share capital (net of fees) - 26 3 Issue of warrants - 182 182 Cash collateral deposits - (519) (1,049) Net cash generated from/(used in) financing activities (108) (444) (2,056) ---------- ---------- ------------ Net decrease in cash and cash equivalents (1,899) 143 4,358 Cash and cash equivalents at beginning of period 5,596 1,238 1,238 Cash and cash equivalents at end of period 12 3,697 1,381 5,596
---------- ---------- ------------
The notes that follow are an integral part of the condensed interim financial statements.
Notes to the interim financial information
1. General information
Styles & Wood Group plc ("the Company") is a public limited company incorporated and domiciled in the United Kingdom and listed on the London Stock Exchange. Styles & Wood Group plc and its subsidiaries (together "the Group") provide property services to banking, retail, leisure, commercial and public organisations within the UK. The Group has a joint venture in Dubai providing property services to the local market. The address of Styles & Wood Group plc's registered office is Cavendish House, Cross Street, Sale, Cheshire. M33 7BU.
This condensed consolidated financial information was approved for issue on 15th September 2016.
This condensed consolidated interim financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The interim results to 30 June 2016 and comparative results to 30 June 2015 are neither audited nor reviewed by the auditors. The financial information for the full preceding year is based on the statutory accounts for the year ended 31 December 2015 which were approved by the Board of Directors on 5 April 2015 and have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph nor any statement under section 498 of the Companies Act 2006.
2. Basis of preparation
This condensed consolidated interim financial information for the six months ended 30 June 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (formerly the Financial Services Authority) and with IAS34 "Interim financial reporting" as adopted by the European Union. The condensed interim results should be read in conjunction with the annual report and financial statements for the year ended 31 December 2015 which are available from the group's website www.stylesandwood-group.co.uk.
Going concern basis
The Group meets its day to day working capital requirements through its bank facilities. The group's current forecasts and projections, which take account of reasonably possible changes in trading conditions, show that the Group should be able to operate within the level of its current facilities, details of which can be found in note 12. Therefore the Group continues to adopt the going concern basis in preparing the consolidated interim financial information.
3. Accounting policies
The accounting policies, methods of computation and presentation followed are consistent with those applied in the annual report and financial statements which are prepared in accordance with IFRS as adopted by the European Union, except as described below:
-- Taxes on income in the interim periods are accrued using the tax rate that would be applicable to total expected annual earnings.
There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on this group.
4. Estimates
The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial information, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2015.
5. Principal Risks
The Group's operations and financial instruments expose it to a variety of financial and other risks. This interim financial information does not contain all risk management information and should be read in conjunction with the annual report and financial statements.
There have been no changes in the risk management policies or risks since the annual report for the year ended 31 December 2015 was published.
6. Revenue and profit from business segments Six months ending 30 June 2016 CONTRACTING PROFESSIONAL SERVICES SERVICES Projects Frameworks Portfolio Unallocated Group Services GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue 27,497 15,396 4,166 - 47,059 ------------ ----------- ---------- ------------ -------- Segment result 1,740 1,562 712 (2,911) 1,103 Finance costs (324) Finance income 4 Share of results of joint venture (376) -------- Profit before taxation 407 Taxation (225) Profit for the year from continuing operations 182 -------- Net profit attributable to equity shareholders 182 -------- Six months ending 30 June 2015 CONTRACTING PROFESSIONAL SERVICES SERVICES Projects Frameworks Portfolio Unallocated Group Services GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue 28,914 14,210 3,033 - 46,157 ------------ ----------- ---------- ------------ -------- Underlying segment result 1,006 1,484 591 (2,495) 586 Non-recurring items (note 7) - - - (285) (285) ------------ ----------- ---------- ------------ -------- Segment result 1,006 1,484 591 (2,780) 301 Finance costs (610) Share of results of joint venture (154) -------- Profit before taxation (463) Taxation (174) Loss for the year from continuing operations (637) -------- Net loss attributable to equity shareholders (637) -------- Year ending 31 December 2015 CONTRACTING PROFESSIONAL SERVICES SERVICES Projects Frameworks Portfolio Unallocated Group Services GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue 45,480 64,597 4,909 - 114,986 ------------ ----------- ---------- ------------ -------- Underlying segment result 2,560 6,645 779 (6,100) 3,884 Non-recurring items (note 7) - - - (372) (372) ------------ ----------- ---------- ------------ -------- Segment result 2,560 6,645 779 (6,472) 3,512 Finance costs (1,013) Finance income 6 Share of results of joint venture (136) -------- Profit before taxation 2,369 Taxation (677) Profit for the year from continuing operations 1,692 -------- Net profit attributable to equity shareholders 1,692 --------
All revenues arise from external customers for the provision of property related services in the UK. Operating segments are reported in a manner consistent with the internal reporting to the Board of Directors (the chief operating decision maker) which is used to assess performance and make strategic decisions.
Unallocated segment result reflects expenses relating to the overall Group rather than a particular segment and includes people costs, professional fees and share option expenses. Transactions between segments are eliminated on consolidation.
7. Non-recurring items and preference share accounting
The Group's results include the following items:
Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 30 June 30 June 31 December Note 2016 2015 2015 GBP'000 GBP'000 GBP'000 Charged to administrative items: Corporate finance fees (a) - (285) (372) ---------- ---------- ------------ - (285) (372) Charges to finance expense: Notional interest Note on preference shares 14 (92) (387) (495) Total non-recurring items before tax (92) (672) (867) ---------- ---------- ------------ Tax on non-recurring items (b) - - 81 Total non-recurring items after tax (92) (672) (786) ---------- ---------- ------------ (a) Corporate finance fees are for work on transactions in 2015
(b) Tax on non-recurring items reflects the non-deductibility of the notional preference share
interest (note 14). 8. Finance costs Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Interest expense: Interest on bank borrowings - 47 117 Fees on bank facilities 36 32 56 Amortisation of debt issue costs 20 57 64 Loan note 100 - 107 Notional interest on preference shares (note 14) 92 387 495 Cash coupon on preference shares (notes 11 & 14) 76 87 174 Total interest payable and similar charges 324 610 1,013 ----------- ---------- ------------ Interest income: - - - Interest receivable (4) - (6) Total interest receivable (4) - (6) ----------- ---------- ------------ 9. Taxation
Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate for the full financial year. The estimated average effective annual tax rate used for the year to 31 December 2016 is 23.2% (the estimated average effective annual tax rate for the six months ended 30 June 2015 was 22.1%).
Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Taxation comprises: Current tax 225 174 708 Prior year tax - - 16 Deferred tax - - (47) 225 174 677 ----------- ---------- ------------ 10. Earnings/(loss) per share
On 19(th) June 2015, 309,100 Ordinary Shares of 1p each were issued. In addition, GBP5.2m preference shares were converted into 554,666 Ordinary Shares of 1p each. These transactions have been taken into account in calculating the weighted average number of shares in issue for the period ended 30 June 2015.
Underlying Non-recurring items and Six months ended 30 preference June 2016 share accounting Total Profit/(loss) attributable to equity holders of the Group (GBP '000) 274 (92) 182 Weighted average number of shares in issue 7,077,585 7,077,585 7,077,585 Basic earnings per share (pence per share) 3.9p (1.3)p 2.6p ----------- ------------------ ---------- Diluted earnings per share (pence per share) 3.4 (1.1) 2.3 ----------- ------------------ ---------- Underlying Non-recurring items and Six months ended 30 preference June 2015 share accounting Total Profit/(loss) attributable to equity holders of the Group (GBP'000) 35 (672) (637) Weighted average number of shares in issue 6,239,649 6,239,649 6,239,649 Basic and diluted earnings/(loss) per share (pence per share) 0.6p (10.8)p (10.2)p ----------- ------------------ ---------- Non-recurring Underlying items and Year ended 31 December preference 2015 share accounting Total Profit/(loss) attributable to equity holders of the Group (GBP'000) 2,478 (786) 1,692 Weighted average number of shares in issue 6,653,562 6,653,562 6,653,562 Basic and diluted earnings/(loss) per share (pence per share) 37.2 (11.8) 25.4 ------------- ------------------ ---------- Diluted earnings/(loss) per share (pence per share) 35.0 (11.1) 23.9 ------------- ------------------ ----------
The Company has in issue 5,800,000 convertible preference shares which are convertible into 618,667 ordinary shares. These shares are not currently dilutive.
On 19(th) June 2015, the Company issued 740,000 warrants with an exercise price of GBP0.75 and 364,600 nil cost for a consideration of GBP182,300. The warrants and the outstanding share options in issue within the Group are considered to be dilutive, and the impact on earnings per share is show above.
11. Dividend
The Board does not consider it appropriate to pay an interim dividend on ordinary shares (2015: nil). A dividend on the preference shares accrues at a rate of 3%. The charge for the six months ended 30 June 2016 was GBP76,000 (six months ended 30 June 2015 GBP87,000, year ended 31 December 2015; GBP174,000).
12. Cash and cash equivalents Unaudited Unaudited Audited 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Cash and cash equivalents 3,697 1,381 5,596
The Group's current banking facility comprises a GBP3.0m working capital facility. This facility is available until 31(st) October 2017.
Issue costs in respect of the facilities have been prepaid and are being amortised over the life of the facilities.
13. Other financial assets: Cash collateral
At 30 June 2016 the Group had deposited cash of GBP1,049,000 (30 June 2015 GBP519,000, 31 December 2015 GBP1,049,000) as collateral for the issue of performance bonds. The cash was held by the Surety providing the bonds and deposited in a client account with the Surety's bank.
14. Preference share capital Unaudited Unaudited Audited 30 June 30 June 31 December 2016 2015 2015 GBP GBP GBP Preference share capital 5,026,860 convertible preference shares of GBP1 each (30 June 2015 5,800,000) 5,026,860 5,800,000 5,026,860 Less: amounts classified as liabilities (4,125,922) (4,700,000) (4,033,860) ------------ ------------ ------------ Total issued and fully paid share capital 900,938 1,100,000 993,000 ------------ ------------ ------------
The 5,026,860 convertible, redeemable preference shares are held by British Growth Fund plc and Henderson Global Investors. The conversion rights allow the holder to convert the 5,026,860 preference shares into 536,198 ordinary shares at a price of GBP9.375 per share, in tranches from 31 December 2015 to 31 December 2019. The shares carry a cash coupon of 3% and, unless converted by the holder, are redeemable in tranches from 31 December 2016 as follows:
GBP 31 December 2016 670,080 31 December 2017 871,356 31 December 2018 697,085 31 December 2019 2,788,339
Due to the conversion rights attached to the preference shares International Accounting Standards require them to be accounted for by separating the liability and equity components based on their respective fair value on issue. Subsequent to issue the liability component is measured at amortised cost and a notional interest charge, which is greater than the cash coupon payable on the shares, is made to the income statement. The difference between the imputed notional interest charge and the actual cash coupon is then credited to the profit and loss reserve, reducing the equity component.
A cash coupon of GBP76,000 is payable in respect of the six months ended 30 June 2016 (six months ended 30 June 2015: GBP87,000, year ended 31 December 2015: GBP174,000) has been charged within underlying profit. Notional interest of GBP92,000 has been credited back to reserves (six months ended 30 June 2015: GBP387,000, year ended 31 December 2014: GBP495,000).
15. Hurdles Shares Unaudited Unaudited Audited 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Issued Hurdle Shares 25 - of GBP2.50 each -
On 26(th) January 2016, the Company issued 10,000 GBP2.50 Hurdle Shares to six senior managers. The Hurdle Shares are "employee shareholder" shares, and have extremely limited transferability. The Hurdle Shares have conversion rights into Ordinary Shares dependent on the share price on 31(st) December and certain other defined events. These are set out in the Articles of Association.
16. Notes to the cash flow statement Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Profit/(Loss) before tax for the period 407 (463) 2,369 Adjustments for: Finance costs 324 610 1,013 Finance income (4) - (6) Depreciation and amortisation 217 222 480 Share option scheme 145 12 18 Share of loss of joint venture 376 154 136 ---------- ---------- ------------ Operating cash flows before movement in working capital 1,465 535 4,010 Changes in working capital: Decrease in trade and other receivables (9,921) 1,363 8,837 Decrease in trade and other payables 7,897 (921) (5,345) Cash (used in) generated from operations (559) 977 7,502 ---------- ---------- ------------ 17. Contingencies
The Group takes out performance bonds in the ordinary course of business. The aggregate amount of such bonds outstanding at 30 June 2016 was GBP3,055,000 (30 June 2015: GBP865,000 31 December 2015: GBP2,637,000). The aggregate amount of bonds outstanding at 30 June 2016 on projects where practical completion has been achieved was GBP866,000 (30 June 2015: nil, 31 December 2015: GBPnil).
It is not anticipated that any material liabilities will arise from the contingencies. The Group has no capital commitments.
18. Related party transactions
The executive and non-executive directors are considered to be the key management personnel of the Group. Their aggregate remuneration for the period was as follows:
Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Salaries, fees and short term benefits 264 257 597 Pension contributions 36 35 68 300 292 665 ---------- ---------- ------------
In the six months ended 30 June 2016 the Group paid no fees to Rickitt Mitchell & Partners Limited, in respect of Paul Mitchell's services as a non-executive director (six months ended 30 June 2015: GBP32,500, year ended 31 December 2015: GBP85,000). From 1 January 2016, Paul Mitchell was directly remunerated for his services through the payroll.
In the six months ended 30 June 2016 the company paid fees of GBP17,500 (six months ended 30 June 2015: GBP1,055, year ended 31 December: GBP18,555) to the Business Growth Fund and accrued interest payable of GBP50,000 (six months ended 30 June 2015: GBP3,699, year ended 31 December 2015: GBP53,699) on Loan Notes issued to the Business Growth Fund.
The following transactions have taken place between the Group and entities over which Paul Bell, who has a 31% shareholding in the Company and who was a director of the Group's trading subsidiary Styles & Wood Limited until 14 August 2015, has significant influence and are therefore considered to be related parties. All transactions were undertaken in the ordinary course of business.
Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 31 30 June 30 June December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Sales made to related parties - - - Purchases from related parties 32 204 527 Balances owed by related parties at the balance sheet date - - - Balances owed to related parties at the balance sheet date - 65 17 ---------- ---------- ----------
19. Joint ventures
The Group has a 49% investment in Dutco Styles & Wood LLC, a company registered in Dubai. The investment is held by Styles & Wood Limited and the terms of the joint venture agreement entitle Styles & Wood Limited to jointly control the entity and to a 50% share of the profits of the joint venture.
Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 30 June 30 June 31 December 2016 2015 2015 GBP'000 GBP'000 GBP'000 Net book amount At 1 January 1,852 1,826 1,826 Share of loss in the period (376) (154) (136) Working capital loan advanced/(repaid) 149 - 162 ---------- ---------- ------------ At 30 June/31 December 1,625 1,672 1,852 ---------- ---------- ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFEDATITLIR
(END) Dow Jones Newswires
September 19, 2016 02:00 ET (06:00 GMT)
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