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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Volvere Plc | LSE:VLE | London | Ordinary Share | GB0032302688 | ORD 0.00001P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,225.00 | 1,150.00 | 1,300.00 | 1,225.00 | 1,225.00 | 1,225.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Consulting Svcs,nec | 41.56M | -537k | -0.2292 | -53.45 | 28.71M |
From Apr 2019 to Apr 2024
TIDMVLE
RNS Number : 4754Z
Volvere PLC
27 May 2016
Press Release 27 May 2016
Volvere plc
("Volvere" or the "Group")
Preliminary results for the year ended 31 December 2015
Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its preliminary results for the year ended 31 December 2015.
Highlights
Hot Features
Premium
As at
As at 31 As at 31 30 June
2015
GBP million except where December December (unaudited)
stated 2015 2014
Consolidated net assets
per share GBP5.69 GBP4.31 GBP4.32
(excluding non-controlling
interests)(1)
Group net assets 24.3 19.0 18.9
Cash and marketable securities 16.3 13.1 11.7
Year ended Six months
ended
31 December 31 December 30 June
2015 2014 2015
(re-presented) (re-presented)
(2) (2)
Group revenue from continuing
businesses 27.9 12.4 10.5
Group profit before tax
from continuing operations 1.34 1.20 0.46
Group profit before tax
from continuing operations
before one-off exceptional
credit(3) 1.34 0.35 0.46
Note
1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue of 4,085,958, 4,145,958 and 4,085,958.
2 The results for the year ended 31 December 2014 and the six months ended 30 June 2015 have been re-presented to reflect the results of discontinued operations.
3 In 2014 there was a one-off exceptional credit in Shire Foods amounting to GBP0.85 million.
-- Shire Foods delivered record performance with profit before tax and intra-group management and interest charges of GBP1.59 million on revenue of GBP15.48 million.
-- Impetus Automotive, acquired in March 2015, achieved revenue and profit before tax and intra-group management and interest charges of GBP12.1 million and GBP0.58 million respectively.
-- Group disposed of its 76% share in JMP Consultants in December 2015 for GBP6.48 million (acquired in May 2013 for GBP0.42 million).
-- Balance sheet continues to remain strong with high liquidity.
For further information:
Volvere plc
Jonathan Lander, CEO Tel: +44 (0) 20 7634 9707
www.volvere.co.uk
N+1 Singer
Aubrey Powell/Liz Yong Tel: + 44 (0) 20 7496 3000
Chairman's statement
I am pleased to report on the results for the year ended 31 December 2015.
In 2015 we saw a number of changes in the Group, notably the acquisition in March of Impetus Automotive and the disposal in December of JMP Consultants. Both Impetus and JMP, along with Shire Foods, performed well in the period.
The sale of JMP for well in excess of book value significantly boosted our net assets per share and added 1% per annum to the annual growth rate that we have achieved to date. At the year-end, our net assets per share had risen to GBP5.69 from GBP4.31, increasing the compound growth rate from 14% to 15% per annum since the company's inception in 2002.
We are looking forward to continued progress in 2016.
David Buchler
Chairman
26 May 2016
*Net assets attributable to owners of the parent company divided by total number of ordinary shares outstanding at the reporting date (less those held in treasury), see note 20
Chief Executive's statement
Introduction
2015 was an excellent year for the Group with good underlying profits generated by our ongoing businesses and a successful disposal.
Our transport planning and engineering consultancy, JMP Consultants Limited, was sold in December for total cash consideration of GBP8.5 million (of which the Group's share was GBP6.48 million before related costs). We are delighted to have restored JMP to growth and secured the future for the company and staff as part of a larger group. The sale also achieved an excellent financial outcome for our shareholders.
We were also very pleased to complete the acquisition in March of Impetus Automotive Limited which we believe is an excellent addition to the Group.
Principal activities
The Company is a holding company that identifies and invests in undervalued and/or distressed businesses and securities as well as businesses that are complementary to existing Group companies. The Company provides management services to those businesses.
The trading subsidiaries' activities during the year were food manufacturing, security solutions and automotive consulting, and each of these is reported as a separate segment. The transport planning & engineering segment activities ceased during the year following the disposal of JMP.
Operating review
The financial performance of each segment is summarised below and in the financial review and further detailed in note 5 to this announcement.
Food manufacturing
Shire Foods Limited ("Shire"), in which the Group has an 80% stake, was acquired in 2011 and manufactures frozen pies, pasties and other pastry products for retailers and food service customers. This year was Shire's fourth full year of trading within the Group. Its performance was exceptionally good, producing the highest underlying yearly profit of any company that we have owned to date.
Shire's revenue for the year increased to GBP15.48 million (2014: GBP12.13 million) and it achieved a profit before tax and intra-group management and interest charges of GBP1.59 million (2014: GBP1.65 million). Underlying profits improved significantly as 2014's result was flattered by an exceptional, non-recurring, credit of GBP0.85 million relating to the conclusion of the company voluntary arrangement entered into in 2012.
Shire has continued to develop the relationships it has within the UK retail market and has seen growth arise from both wider ranges and from key customers' market share growth. Although the business is performing well, since the end of the year, one customer (whose volumes have been on a declining trend in recent years) has brought some of its manufacturing in-house, which will result in lower revenue for that customer and is likely to reduce profitability as a whole for 2016. This reduction was expected by us for some time and we have been and are actively seeking additional opportunities to utilise our available capacity and are positive about being able to do so.
Further information about Shire can be found at www.shirefoods.com.
Automotive consulting
On 25 March 2015, we announced the acquisition of Impetus Automotive Limited ("Impetus"). Impetus's principal activity is the provision of consulting services to the automotive sector, including vehicle manufacturers, dealerships and national sales companies. The company, which has UK offices in Warwick and Cranfield, employs approximately 200 people serving clients in the UK and a number of other international markets. Further information on Impetus's activities can be found at www.impetusautomotive.com.
The Group paid a total, including costs, of GBP1.25 million for Impetus and related intellectual property assets. During the period from acquisition to the end of the year (just over nine months) Impetus had revenue of GBP12.1m and profit before tax and intra-group management and interest charges of GBP0.58 million.
We have spent time with both customers and staff to stabilise the business and prepare it for growth. We are part way through a programme to decentralise decision-making and the winning of work, improve our core back-office systems and processes whilst ensuring that the success of our client programmes remain the absolute focus of everyone at all levels in the business. Geographically, we are now operating in the UK, Australia, China, Japan and a number of European countries for a range of different clients.
The automotive sector undoubtedly faces many challenges, but there remains the need for manufacturers and their distribution networks to develop sustainable profit from long-term relationships with customers, whether-they are trade or end-user. The improvement of vehicle parts and accessories sales and distribution, after-sales service, and vehicle sales and profit margins, are all areas where Impetus's people have wide knowledge and expertise. As a result, we are optimistic about Impetus's prospects and look forward to its contribution to the Group.
Security solutions
Sira Defence & Security Limited ("Sira"), the Group's digital CCTV viewing software business, continued its progress with revenue increasing to GBP0.31 million (2014: GBP0.25 million) and achieving a profit of GBP0.12 million (2014: GBP0.08 million).
Sira remains focused on being the universal interface for accessing multiple format CCTV footage in the law enforcement sector.
Further information about Sira can be found at www.siraview.com.
Transport planning & engineering - discontinued
The Group sold JMP Consultants Limited ("JMP"), its transport planning & engineering business, in December 2015. JMP is a consultancy that supports the transport planning aspects of property and land development, as well as providing a range of design, engineering and travel behaviour services. The Group owned approximately 76% of JMP.
JMP's turnover grew from GBP11.76 million in 2014 (full year) to GBP12.82 million for the 11 1/2 month period to sale, and generated profits before tax and intra-group management and interest charges of GBP1.1 million in the period to disposal compared to GBP0.45 million in the previous full year.
The Group's share of the disposal proceeds of GBP8.5 million amounted to GBP6.48 million. We were pleased with the outcome given that JMP had been acquired for GBP0.42m in 2013, had already repaid all working capital loans provided by the Group, and paid us a dividend of GBP0.45 million as well.
Future strategy
The Group's success to date reflects our consistent approach to value creation by sourcing businesses where we believe we can make operational and financial improvements. We are optimistic that our approach will give continued positive returns to shareholders.
Jonathan Lander
Chief Executive
26 May 2016
Financial review
Financial performance
Detailed information about the Group's segments is set out in note 5 to the preliminary announcement which should be read in conjunction with this financial review and the Chairman's and Chief Executive's statements.
Overview
In 2015 our Group revenue including the discontinued operations of JMP Consultants Limited ("JMP"), reached a record level of more than GBP40 million, with peak staff numbers in excess of 500 people. Total revenue from continuing operations increased from GBP12.4 million to GBP27.9 million, largely due to the acquisition of Impetus Automotive Limited ("Impetus"), but also reflecting strong growth in Shire Foods Limited ("Shire").
The total profit for the year was GBP6.68 million (2014: GBP1.47 million), stated after the profit arising (GBP5.67 million) on the sale of JMP. Profit before tax from continuing operations rose from GBP1.2m in 2014 to GBP1.34m despite 2014's figures being flattered by an exceptional credit in Shire of GBP0.85 million.
Continuing businesses
The trading performance of each of our businesses is outlined in the Chief Executive's statement and set out further in note 5.
Food manufacturing
This segment reflects the trading of Shire Foods, owned since July 2011.
Shire's revenue for the year increased by 28% to GBP15.48 million (2014: GBP12.13 million). Profit before tax and intra-group management and interest charges was GBP1.59 million (2014: GBP1.65 million). The 2014 result included an exceptional credit of GBP0.85 million relating to the conclusion of the company voluntary arrangement entered into in 2012.
The 5-year financial performance of Shire is summarised in the table below:
Year ended 31 Year ended 31 Year ended 31 Year ended 31 29 July - 31
December December December December December
2015 2014 2013 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 15,476 12,134 8,531 6,166 3,322
Profit/(loss)
before tax,
intra-group
management and
interest charges 1,588 1,651 117 (441) (668)
Exceptional - (852) - - -
credit
Underlying
profit/(loss)
before tax,
intra-group
management and
interest charges 1,588 799 117 (441) (668)
Automotive consulting
This segment reflects the trading of Impetus, which was acquired in March 2015. For the 9 month period to 31 December Impetus's revenue was GBP12.1m and profit before tax and intra-group management and interest charges was GBP0.58 million.
The overall purchase consideration for Impetus and related intellectual property assets was approximately GBP1.25 million, of which GBP1.08 million was to repay bank debt at acquisition. The internal funding of this was principally by way of loan. Additionally, the Group supported Impetus with working capital loans throughout the period. During the period Impetus was charged interest by the Group on outstanding loans amounting to GBP0.1 million and the Group received management charges of GBP0.2 million.
The combination of trading profits and the working capital cycle following the year end has meant that the outstanding loan balance at the date of this report is GBP1.1 million. At the end of the period, Impetus had net assets before deducting Group loans (and excluding goodwill arising on consolidation) of GBP2.1 million.
Discontinued operations - Transport planning & engineering
As outlined in the Chief Executive's statement, the Group sold JMP in December 2015 for GBP8.5 million, of which the Group received GBP6.48 million. The total profit from discontinued activities was GBP5.67 million. This represents the Group's share of JMP's profit after tax for 2015 to the date of disposal, plus the Group's share of the sale consideration less the Group's share of the net assets sold. Further details are set out in note 6.
Investment revenues, other gains and losses and finance income and expense
Whilst continuing to review and assess further investments in trading activities, the Group had significant cash on hand and has continued with active treasury management in response to prevailing low interest rates. This strategy achieved investment revenues and other gains and losses totalling GBP0.59 million (2014: GBP0.21 million).
The Group's net finance expense was GBP0.12 million (2014: GBP0.11 million). In spite of the Group's significant cash balances, individual Group trading companies utilise leverage where possible, and without recourse to the remaining Group.
Statement of financial position
Cash
Cash at the year end totalled GBP11.97 million (2014: GBP12.22 million). As noted below, the Group made purchases during the year of its own shares for treasury for a total consideration of GBP0.18 million (2014: GBP0.31 million).
Available for sale investments
At the year end the Group held available for sale investments with a market value of GBP4.31 million (2014: GBP0.92 million). The value of these investments was below their cost, resulting in an unrealised loss on valuation of GBP0.61 million.
Overall position
The Group balance sheet has strengthened substantially in the year as a result of the profits achieved not only from the sale of JMP, but also because of the underlying performance of the Group's continuing businesses. Total net assets increased from GBP19.0 million to GBP24.3 million at the end of 2015.
Dividends
In accordance with the policy set out at the time of admission to AIM, the Board does not currently intend to recommend payment of a dividend and prefers to retain profits as they arise for investment in future opportunities, or to purchase own shares for treasury where that is considered to be in the best interests of shareholders.
Purchase of own shares
The Group purchased for treasury a total of 60,000 shares (2014: 114,000 shares) for total consideration of GBP0.18 million (2014: GBP0.31 million) representing an average price of GBP3 per share (2014: GBP2.69 per share). As of 31 December 2015, the Group's share repurchases total GBP5.94 million.
Earnings per share
Basic and diluted earnings per ordinary share were 158.8p compared to 25.6p in the previous year.
Key performance indicators (KPIs)
The Group uses key performance indicators suitable for the nature and size of the Group's businesses.
The key financial performance indicators are revenue and profit before tax. The performance of the Group and the individual trading businesses against these KPIs is outlined above, in the Chief Executive's statement and disclosed in note 5.
Internally, management uses a variety of non-financial KPIs as follows: in respect of the food manufacturing sector order intake, manufacturing output and sales are monitored weekly and reported monthly; in the automotive consulting segment staff utilisation, amounts billed to clients and cash collected are closely monitored; order intake is monitored monthly in respect of the security solutions segment.
Risk factors
The Company and Group face a number of specific business risks that could affect the Company's or Group's success. The Company and Group invests in distressed businesses and securities, which by their nature often carry a higher degree of risk than those that are not distressed. The Group's businesses are principally engaged in the provision of services that are dependent on the continued employment of the Group's employees and availability of suitable, profitable workload. Also, in the automotive consulting and food manufacturing segments, there is a dependency on a small number of customers and a reduction in the volume or range of products or services supplied to those customers or the loss of any one of them could impact the Group materially.
These risks are managed by the Board in conjunction with the management of the Group's businesses.
More information on the Group's financial risks is disclosed in note 17.
Directors' interests
The Directors' interests in the share capital of the Company at 31 December are disclosed below:
Number Number
of % of Total of % of Total
Ordinary Voting Ordinary Voting
Shares Rights Shares Rights
31 December 31 December 31 December 31 December
2015 2015 2014 2014
David Buchler 129,893 3.18% 129,893 3.13%
Jonathan Lander 1,023,677 25.05% 1,023,677 24.69%
Nick Lander 548,277 13.42% 548,277 13.22%
No director held any share options at 31 December 2015 or 2014.
No changes in directors' shareholdings (or options) occurred between 31 December and the date of this announcement.
Nick Lander
Chief Financial & Operating Officer
26 May 2016
Consolidated income statement
Note 2015 2014
GBP'000 GBP'000
(re-presented)
Continuing operations
Revenue 5 27,864 12,387
Cost of sales (21,540) (10,031)
Gross profit 6,324 2,356
Distribution costs (893) (713)
----------------------------- ----- ---------- ----------------
Administrative expenses:
- Before amortisation and
share based payments (4,469) (1,398)
- Amortisation 11 (89) -
- Share based payments 24 - -
Administrative expenses (4,558) (1,398)
Operating profit 2 873 245
Investment revenues 7 163 65
Other gains and losses 7 429 142
Finance expense 7 (172) (156)
Finance income 7 50 50
Exceptional items 16 - 852
Profit before tax 1,343 1,198
Income tax expense 8 (335) -
Profit for the year from
continuing operations 1,008 1,198
Discontinued operations
Profit for the year from
discontinued operations
after tax 6 5,667 273
Profit for the year 6,675 1,471
Attributable to:
- Equity holders of the
parent 6,499 1,069
- Non-controlling interests 176 402
6,675 1,471
Earnings per share 9
Continuing operations
- Basic 20.3p 19.1p
- Diluted 20.3p 19.1p
Discontinued operations
- Basic 138.5p 6.5p
- Diluted 138.5p 6.5p
Total
- Basic 158.8p 25.6p
- Diluted 158.8p 25.6p
Consolidated statement of comprehensive income
2015 2014
GBP'000 GBP'000
Profit for the year 6,675 1,471
Other comprehensive income (items
that will be reclassified to
profit or loss)
Fair value gains and losses on
available for sale financial
assets
- current period gains/(losses) (611) 89
- reclassified to profit and
loss (318) (34)
Other comprehensive income (929) 55
Total comprehensive income for
the year 5,746 1,526
Attributable to:
- Equity holders of the parent 5,570 1,124
- Non-controlling interests 176 402
5,746 1,526
Consolidated statement of changes in equity
Share Share Revaluation Retained Non-controlling
capital premium reserve earnings Total interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2014
Other comprehensive
income - - 89 - 89 - 89
Transfer to
profit and loss
on disposal - - (34) - (34) - (34)
Profit for the
year - - - 1,069 1,069 402 1,471
Total comprehensive
income for the
year - - 55 1,069 1,124 402 1,526
Balance at 1
January 50 3,640 257 13,094 17,041 542 17,583
Transactions
with owners:
Increase in
non-controlling
interest - - - - - 197 197
Purchase of
own shares - - - (307) (307) - (307)
Total transactions
with owners - - - (307) (307) 197 (110)
Balance at 31
December 50 3,640 312 13,856 17,858 1,141 18,999
2015
Other comprehensive
income - - (611) - (611) - (611)
Transfer to
profit and loss
on disposal - - (318) - (318) - (318)
Profit for the
year - - - 6,499 6,499 176 6,675
Total comprehensive
income for the
year - - (929) 6,499 5,570 176 5,746
Balance at 1
January 50 3,640 312 13,856 17,858 1,141 18,999
Transactions
with owners:
Decrease in
non-controlling
interest - - - - - (271) (271)
Purchase of
own shares - - - (180) (180) - (180)
Total transactions
with owners - - - (180) (180) (271) (451)
Balance at 31
December 50 3,640 (617) 20,175 23,248 1,046 24,294
Consolidated statement of financial position
2015 2014
Note GBP'000 GBP'000
Assets
Non-current assets
Goodwill 11 380 -
Other intangible assets 11 71 -
Property, plant and equipment 12 5,773 5,361
Deferred tax asset 19 - -
Total non-current assets 6,224 5,361
Current assets
Inventories 13 1,106 937
Trade and other receivables 15 8,073 6,610
Cash and cash equivalents 11,967 12,215
Available for sale investments 14 4,313 921
Total current assets 25,459 20,683
Total assets 31,683 26,044
Liabilities
Current liabilities
Loans and other borrowings 18 (787) (1,999)
Finance leases 18 (104) (159)
Trade and other payables 16 (4,058) (4,066)
Total current liabilities (4,949) (6,224)
Non-current liabilities
Loans and other borrowings 18 (1,541) (821)
Finance leases 18 (450) -
Trade and other payables 16 - -
Total non-current liabilities (1,991) (821)
Total liabilities (6,940) (7,045)
Provisions - deferred tax 19 (335) -
Provisions - lease incentive (114) -
Net assets 24,294 18,999
Equity
Share capital 20 50 50
Share premium account 21 3,640 3,640
Revaluation reserve 21 (617) 312
Retained earnings 20,175 13,856
Capital and reserves attributable
to equity holders of the
Company 23,248 17,858
Non-controlling interests 27 1,046 1,141
Total equity 24,294 18,999
Consolidated statement of cash flows
2015 2015 2014 2014
Note GBP'000 GBP'000 GBP'000 GBP'000
Profit for the year from
continuing operations 1,008 1,198
Adjustments for:
Investment revenues 7 (163) (65)
Other gains and losses 7 (429) (142)
Finance expense 7 172 156
Finance income 7 (50) (50)
Depreciation 12 370 334
Amortisation of intangible
assets 11 89 -
Foreign exchange differences 14 -
Loss on disposal of property,
plant and equipment 12 -
Income tax expense 335 -
350 233
Operating cash flows before
movements in working capital 1,358 1,431
Increase in trade and
other receivables (1,015) (1,128)
Increase/(decrease) in
trade and other payables 166 (608)
Increase in inventories (169) (249)
Cash generated from continuing
operations 340 (554)
Net cash generated from
discontinued operations 652 880
Net cash generated from
operations 992 326
Investing activities
Proceeds from sale of
discontinued operations
net of cash sold 6 4,860 -
Acquisition of business 22 (1,013) -
Purchase of available
for sale investments (8,733) (3,732)
Income from available
for sale investments 163 65
Disposal of available
for sale investments 4,840 3,997
Purchase of property,
plant and equipment 12 (955) (245)
Disposal of property,
plant and equipment 4 -
Interest received 7 50 50
Net cash (used by)/generated
from investing activities (784) 135
Financing activities
Interest paid (172) (156)
Purchase of own shares
(treasury shares) 20 (180) (307)
Net (repayment of)/increase
in borrowings (104) 937
Net cash (used by)/generated
from financing activities (456) 474
Net (decrease)/increase
in cash (248) 935
Cash at beginning of year 12,215 11,280
Cash at end of year 11,967 12,215
Notes forming part of the preliminary announcement
The financial information set out above, which was approved by the Board on 26 May 2016, is derived from the full Group accounts for the year ended 31 December 2015 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2015, will be delivered to the Registrar of Companies in due course.
Copies of the Company's Annual Report and Financial Statements are expected to be sent to shareholders on 1 June 2016 and will be available from the Company's registered office, Warnford Court, 29 Throgmorton Street, London, EC2N 2AT and website at www.volvere.co.uk.
1 Accounting policies
Basis of accounting
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) as adopted by the European Union ("adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under adopted IFRS.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. In addition, note 17 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The Group has considerable financial resources and operates in a number of different market sectors. As a consequence, the directors believe that the Group is well placed to manage the business risks inherent in its activities despite the current uncertain economic outlook.
The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The following principal accounting policies have been applied consistently, in all material respects, in the preparation of these financial statements:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All subsidiaries have a reporting date of 31 December.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.
Business combinations
The Group applies the acquisition method of accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of the fair value of consideration transferred, the recognised amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately.
The purchase of a non-controlling interest is not a business combination within the scope of IFRS 3, since the acquiree is already controlled by its parent. Such transactions are accounted for as equity transactions, as they are transactions with equity holders acting in their capacity as such. No change in goodwill is recognised and no gain or loss is recognised in profit or loss.
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See above for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses and is reviewed annually for impairment.
Other intangible assets
All other intangible assets are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis as set out below over their estimated useful lives, which are considered finite. Registered design rights are amortised over the life of the registration. Residual values and useful lives are reviewed at each reporting date and they are subject to impairment testing where indicators of impairment are present.
Intellectual property rights - 10% straight line Software - 33% straight line
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Sale of goods is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership, generally when the customer has taken undisputed delivery of the goods. There are no service obligations attached to the sale of goods.
Revenue earned on time and materials contracts is recognised as costs are incurred. Income from fixed price contracts is recognised in proportion to the stage of completion, determined on the basis of work done, of the relevant contract.
Revenue from consulting services is recognised when the services are provided by reference to the contract's stage of completion at the reporting date. When the outcome can be assessed reliably, contract revenue and associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs that have been incurred and are recoverable. Contract costs are recognised in the period in which they are incurred.
If it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in profit or loss.
The gross amount due from customers for contract work is presented within trade and other receivables for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. The gross amount due to customers for contract work is presented within other liabilities for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).
Discontinued operations
Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a separate major line of business. Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within continuing operations until they meet the criteria to be held for sale. The post-tax profit or loss of the discontinued operation is presented as a single line on the face of the consolidated income statement, together with any post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on the disposal of the assets or disposal group constituting the discontinued operation. On changes to the composition of groups of units comprising discontinued operations, the presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.
Operating segments
IFRS 8 "Operating Segments" requires the disclosure of segmental information for the Group on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed collectively by the Board of Directors.
Volvere plc is a holding company that identifies and invests principally in undervalued and distressed businesses and securities as well as businesses that are complementary to existing Group companies. Its customers are based primarily in the UK, Europe and the USA.
Financial information (including revenue and operating profits) is reported to the board on a segmental basis. Segment revenue comprises sales to external customers and excludes gains arising on the disposal of assets and finance income. Segment profit reported to the board represents the profit earned by each segment before tax. For the purposes of assessing segment performance and for determining the allocation of resources between segments, the board reviews the non-current assets attributable to each segment as well as the financial resources available. All assets are allocated to reportable segments. Assets that are used jointly by segments are allocated to the individual segments on a basis of revenues earned.
All liabilities are allocated to individual segments. Information is reported to the board of directors on a segmental basis as management believes that each segment exposes the Group to differing levels of risk and rewards due to their varying business life cycles. The segment profit or loss, segment assets and segment liabilities are measured on the same basis as amounts recognised in the financial statements. Each segment is managed separately.
Leasing
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and the reduction of lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Gains and losses arising on retranslation are included in net profit or loss for the period.
Retirement benefit costs
The Group's subsidiary undertakings operate defined contribution retirement benefit schemes. Payments to these schemes are charged as an expense in the period to which they relate. The assets of the schemes are held separately from those of the relevant company and Group in independently administered funds.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Freehold property is revalued on a periodic basis. Depreciation is charged so as to write off the cost or valuation of assets, less their residual values, over their estimated useful lives, using the straight line method, on the following bases:
Freehold property - 1.5% per annum
Improvements to short-term leasehold property - Over the life of the lease
Plant and machinery - 4%-33% per annum
Investments
Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs. Available for sale current asset investments are carried at fair value with adjustments recognised in other comprehensive income.
Investment income
Income from investments is included in the income statement at the point the Group becomes legally entitled to it. Interest income and expenses are reported on an accruals basis using the effective interest method.
Impairment of property, plant and equipment and intangible assets (including goodwill)
At each reporting date the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and any risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Share-based payments
The Group issues equity-settled share-based payments to certain directors and employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of options that will ultimately vest.
Fair value is measured by use of a Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
In determining the Group's share-based payment charge in 2014 arising in respect of the shares issued to non-controlling interests (as set out in note 24), the Group evaluated the enterprise value of JMP (in 2015 treated as a discontinued business). This evaluation considered the range of possible earnings multiples that could apply on an exit to a business such as JMP, the rights attaching to the shares issued, the proportion of the resulting equity participation and the existence of a single large shareholder with significant influence.
Inventories
Inventories are stated at the lower of cost and net realisable value. Raw materials are valued at purchase price and the costs of ordinarily interchangeable items are assigned using a weighted average cost formula. The cost of finished goods comprises raw materials directly attributable to manufacturing processes based on product specification and packaging cost. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, overnight deposits and treasury deposits. The Group considers all highly liquid investments with original maturity dates of three months or less to be cash equivalents.
Financial assets
The Group classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:
Fair value through profit or loss (FVTPL): This category comprises only in-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.
Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method less any provision for impairment. Receivables are considered for impairment when there is a risk of counterparty default.
Available-for-sale: Non-derivative financial assets not included in the above categories are classified as available-for-sale and comprise the Group's investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. They are carried at fair value with changes in fair value recognised directly in equity (other comprehensive income). Fair value is determined by reference to independent valuation statements provided by the investment manager or broker (as the case may be) through whom such investments are made. Where the underlying investments are exchange-traded, the mid-price of the investment is used.
Impairment: All financial assets except those at FVTPL are reviewed for impairment at each reporting date to identify whether there is any objective evidence that a financial asset or group of assets is impaired. Different methods are used to determine impairment as described above.
Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group's accounting policy for each category is as follows:
FVTPL: This category comprises only out-of-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement.
Other financial liabilities: Other financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
Bank and other borrowings are initially recognised at the fair value of the amount advanced net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense in this context includes initial transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Invoice discounting
The Group uses an invoice discounting facility and retains all significant benefits and risks relating to the relevant trade receivables. The gross amounts of the receivables are included within assets and a corresponding liability in respect of proceeds received from the facility is included within liabilities. The interest and charges are recognised as they accrue and are included in the income statement with other interest charges.
Significant management judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The nature of the Group's business is such that there can be unpredictable variation and uncertainty regarding its business. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Significant management judgements
The judgements that have a significant impact on the carrying value of assets and liabilities are discussed below:
Deferred tax asset
The Group recognises a deferred tax asset in respect of temporary differences relating to capital allowances, revenue losses and other short term temporary differences when it considers there is sufficient evidence that the asset will be recovered against future taxable profits.
Current asset investments
Declines in the fair value of current asset investments are considered for indicators of impairment. Where the decline in value is significant or prolonged the asset may be considered to be impaired with the resulting impairment losses recognised in the income statement. Short term and insignificant declines in fair value that are considered to be temporary are reflected in other comprehensive income.
Significant estimates
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Revenue recognition
Due to the nature of some services provided by certain of the Group's businesses the recoverability of receivables can be subject to management estimates. Whilst the Group has a thorough process for reviewing the requirement for receivables and credit note provisions, this area is inherently subjective.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain equipment used in the production of food.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by market-driven changes that may reduce future selling prices.
Consolidation
Management have concluded that is not appropriate to utilise the exemption from consolidation available to investment entities under IFRS10. Accordingly the consolidation includes all entities which the Company controls.
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business combination (see note 22).
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.
New standards and interpretations - in issue but not yet effective
At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Group. Information on those expected to be relevant to the Group's financial statements is provided below.
Management anticipates that all relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on the Group's financial statements.
IFRS 9 'Financial Instruments' (2015)
The IASB recently released IFRS 9 'Financial Instruments' (2015), representing the completion of its project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. The new standard introduces extensive changes to IAS 39's guidance on the classification and measurement of financial assets and introduces a new 'expected credit loss' model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting.
IFRS 9 is effective for reporting periods beginning on or after 1 January 2018. The Group's management have not yet assessed the impact of IFRS 9 on the consolidated financial statements.
IFRS 15 'Revenue from Contracts with Customers'
IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.
IFRS 15 is effective for reporting periods beginning on or after 1 January 2017. The Group's management have not yet assessed the impact of IFRS 15 on the consolidated financial statements.
2 Operating profit
Operating profit is stated after charging/(crediting):
2015 2014
GBP'000 GBP'000
(re-presented)
Staff costs 10,321 2,106
Depreciation of property, plant and
equipment:
- owned assets 370 334
Amortisation of intangible assets 89 -
Operating lease expense 207 7
Audit fees 65 38
The analysis of audit fees is as follows:
- for the audit of the Company's annual
accounts 19 15
- for the audit of the Company's subsidiaries'
accounts 46 23
65 38
3 Staff costs
Staff costs comprise:
2015 2014
GBP'000 GBP'000
(re-presented)
Wages and salaries 9,036 1,919
Employer's National Insurance contributions 905 151
Defined contribution pension cost 380 36
10,321 2,106
The average number of employees (including Directors) in the Group was as follows:
2015 2014
Number Number
(re-presented)
Engineering and production 266 76
Sales and marketing 11 8
Administration and management 40 18
317 102
4 Directors' remuneration
The remuneration of the directors was as follows:
Salaries Other
& fees benefits Total
2015 2015 2015
GBP'000 GBP'000 GBP'000
David Buchler 58 - 58
Jonathan Lander 11 - 11
Nick Lander 11 1 12
80 1 81
Salaries Other
& fees benefits Total
2014 2014 2014
GBP'000 GBP'000 GBP'000
David Buchler 30 - 30
Jonathan Lander 11 - 11
Nick Lander 11 1 12
52 1 53
The services of Jonathan Lander and Nick Lander are provided under the terms of a Service Agreement with D2L Partners LLP. The amount due under these agreements, which is in addition to the amounts disclosed above, for the year amounted to GBP1,128,000 (2014: GBP551,000). The amount paid to David Buchler in the year was paid to a third party on an invoice basis. The increase in directors' remuneration reflects the performance of the Group for the year. None of the directors were members of the Group's defined contribution pension plan in the year (2014: none).
5 Operating segments
Analysis by business segment:
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2015 2015 services 2015 2015 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Revenue 12,077 311 - 15,476 27,864 12,823 40,687
Profit/(loss) before
tax(1) 583 118 (946) 1,588 1,343 5,667(2) 7,010
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2014 2014 services 2014 2014 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Revenue - 253 - 12,134 12,387 11,761 24,148
Profit/(loss) before
tax(1) - 81 (534) 1,651(3) 1,198 273 1,471
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2015 2015 services 2015 2015 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Assets 5,095 148 16,277 10,163 31,683 - 31,683
Liabilities/provisions (2,600) (163) (339) (4,287) (7,389) - (7,389)
Net assets(4) 2,495 (15) 15,938 5,876 24,294 - 24,294
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2014 2014 services 2014 2014 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Assets - 33 11,932 9,553 21,518 4,526 26,044
Liabilities/provisions - (166) (256) (3,806) (4,228) (2,817) (7,045)
Net assets(4) - (133) 11,676 5,747 17,290 1,709 18,999
(1) stated before intra-group management and interest charges
(2) discontinued segment result stated after tax
(3) stated after an exceptional credit of GBP852,000
(4) assets and liabilities stated excluding intra-group
balances
Investing
Automotive Security and Food Total continuing
consulting solutions management manufacturing 2015 Discontinued Total
2015 2015 services 2015 GBP'000 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000
GBP'000
Capital spend 25 1 1 821 848 108 956
Depreciation 26 - 1 343 370 91 461
Amortisation/
impairment 89 - - - 89 - 89
Interest
income
(non-Group) - - 50 - 50 - 50
Interest
expense
(non-Group) 38 - - 134 172 - 172
Tax expense 58 - - 277 335 250(5) 585
Investing
Automotive Security and Food Total continuing
consulting solutions management manufacturing 2014 Discontinued Total
2014 2014 services 2014 GBP'000 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000
GBP'000
Capital spend - - - 82 82 163 245
Depreciation - 1 7 326 334 82 416
Amortisation/
impairment - - - - - - -
Interest
income
(non-Group) - - 50 - 50 - 50
Interest
expense
(non-Group) - - - 156 156 - 156
Tax expense - - - - - - -
(5) included in profit from discontinued operations after tax
Geographical analysis:
External revenue Non-current assets
by by
location of customers location of assets
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
(re-presented)
UK 25,039 11,937 6,224 5,361
Rest of Europe 1,761 446 - -
Other 1,064 4 - -
27,864 12,387 6,224 5,361
The Group had 2 (2014: 3) customers that individually
accounted for in excess of 10% of the Group's continuing
revenues as follows:
2015 2014
GBP'000 GBP'000
First customer 5,501 3,210
Second customer 3,672 2,775
Third customer - 2,659
6 Discontinued operations
The Group's stake in JMP Consultants Limited ("JMP"), which formed the Group's transport planning and engineering segment, was sold on 18 December 2015 for cash consideration of GBP8,506,000, of which the Group's share was GBP6,477,000.
In accordance with IFRS 5 the total profits relating to discontinued activities for the year are presented on a single line on the income statement, and are analysed below:
2015 2014
GBP'000 GBP'000
Revenue 12,823 11,761
Cost of sales (6,817) (6,387)
Administrative expenses (4,898) (4,924)
Interest (11) -
Income tax expense (250) -
Profits for the period to disposal/year 847 450
Non-controlling interests' share of (190) -
losses in period to disposal
Group share of profits 657 450
Profit on disposal (see below) 5,010 -
Profit on discontinued operations - JMP
Consultants Limited 5,667 450
Loss on discontinued operations - Interactive
Prospect Management Limited(1) - (177)
Total profit on discontinued operations 5,667 273
Note 1:additional costs recognised in
2014 in respect of disposal in 2013.
The net assets disposed, and resulting
profit on sale is analysed below:
========= =========
2015
GBP'000
Property, plant and equipment 248
Work in progress 1,698
Receivables 2,404
Cash and cash equivalents 833
Income tax expense (3,256)
Net assets at date of disposal 1,927
Non-controlling interests' share of
net assets at date of disposal (460)
Group share of net assets at date of
disposal 1,467
Profit on disposal 5,010
Consideration 6,477
The consideration receivable is analysed
as follows:
=========
Received on date of disposal 5,693
Receivable following determination of
net assets at disposal (included in other
receivables at year-end) 385
Receivable one year after disposal (included
in other receivables at year-end) 399
Total consideration receivable 6,477
The cash flows associated with the disposal
are as follows:
=========
Cash received on date of disposal 5,693
Cash disposed (833)
Net cash flows on disposal 4,860
7 Investment revenues, other gains and losses and finance income and expense
2015 2014
GBP'000 GBP'000
Investment revenues 163 65
Other gains and losses 429 142
Finance income
Bank interest receivable 50 50
Finance expense
Bank interest (86) (64)
Finance lease interest 7 (15)
Other interest and finance charges (93) (77)
(172) (156)
Investment revenues and other gains and losses represent respectively interest and dividends receivable from, and the gains arising upon disposal of, investments made pursuant to the Group's investing and treasury management policies.
8 Income tax
2015 2014
GBP'000 GBP'000
Current tax expense - -
Deferred tax expense recognised 335 -
in income statement
Total tax expense recognised 335 -
in income statement
Tax recognised directly - -
in equity
Total tax recognised (continuing 335 -
operations)
The reasons for the difference between the actual tax expense for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:
2015 2014
GBP'000 GBP'000
(re-presented)
Profit before tax 1,343 1,471
Expected tax charge based on the prevailing
rate of corporation tax in the UK of
20.25% (2014: 21.5%) 272 316
Effects of:
Expenses not deductible for tax purposes 49 75
Income/gains not subject to tax (33) (197)
Depreciation for period (less than)/in
excess of capital allowances - (16)
Short term timing differences - 12
Unrecognised deferred tax assets 33 4
Utilisation of previously unrecognised
losses - (194)
Effect of changes in rate of tax (33) -
Adjustments in respect of prior years 47 -
Total tax recognised (continuing operations) 335 -
9 Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings for the purposes of earnings 2015 2014 per share: GBP'000 GBP'000 From continuing operations 832 796 From discontinued operations 5,667 273 Total 6,499 1,069 EEa Weighted average number of shares for 2015 2014 the purposes of earnings per share: No. No. Weighted average number of ordinary shares in issue 4,091,547 4,175,676 Dilutive effect of potential ordinary - - shares Weighted average number of ordinary shares for diluted EPS 4,091,547 4,175,676
There were no share options (or other dilutive instruments) in issue during the year or the previous year.
10 Subsidiaries
The principal subsidiaries of Volvere plc, all of which have been included in these consolidated financial statements, are as follows:
Proportion
Country Principal of ownership
Name of Activity interest
Incorporation in ordinary
shares
Volvere Central Services England Group support
Limited and Wales services 100%
NMT Group Limited Scotland Investment 98.6%
Sira Defence & Security England Software
Limited and Wales publishing 100%
England
Shire Foods Limited and Wales Food manufacturing 80%
Impetus Automotive England Automotive 100%*
Limited and Wales consulting 100%
Impetus Automotive England Investment
Solutions Limited and Wales
*as a subsidiary of Impetus Automotive Solutions Limited
11 Goodwill and other intangible assets
Other
intangible
Goodwill assets Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 and at 1 January
2015 - 441 441
Acquisitions 380 95 475
Additions - 65 65
At 31 December 2015 380 601 981
Amortisation and impairment charges
At 1 January 2014 and at 1 January
2015 - 441 441
Amortisation and impairment charge
for the year - 89 89
At 31 December 2015 - 530 530
Net book value
At 31 December 2015 380 71 451 At 31 December 2014 - - -
Goodwill is that arising on the acquisition of Impetus Automotive Limited as outlined in note 22.
As required by IAS 38 goodwill is not amortised and is instead tested annually for impairment in the year following acquisition.
Other intangible assets comprise a mix of intellectual property rights and software. The net book value of internally-generated intangible assets was GBP71,000 (2014: nil).
12 Property, plant and equipment
Short
Leasehold Freehold Plant
Property Property & Machinery Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 85 2,430 3,646 6,161
Additions 54 - 191 245
Disposals (9) - (8) (17)
At 31 December 2014 and
1 January 2015 130 2,430 3,829 6,389
Acquisitions 180 - 188 368
Additions 92 - 863 955
Disposals - - (24) (24)
Disposals - discontinued
operations (222) - (216) (438)
At 31 December 2015 180 2,430 4,640 7,250
Accumulated depreciation
At 1 January 2014 11 53 566 630
Disposals (9) - (9) (18)
Charge for the year 24 22 370 416
At 31 December 2014 and
1 January 2015 26 75 927 1,028
Acquisitions 54 - 131 185
Disposals - - (8) (8)
Disposals - discontinued
operations (52) - (138) (190)
Charge for the year -
including discontinued
operations 35 20 407 462
At 31 December 2015 63 95 1,319 1,477
Net book value
At 31 December 2015 117 2,335 3,321 5,773
At 31 December 2014 104 2,355 2,902 5,361
The net book value of property, plant and equipment held on finance leases was GBP695,000 (2014: GBP501,000). Freehold property was subjected to an independent valuation on 15 April 2014. The valuation was GBP2,450,000. The net book value of the revalued property is GBP2,335,000 (2014: GBP2,355,000) and its historical cost was GBP1,964,200.
13 Inventories
2015 2014
GBP'000 GBP'000
Raw materials 360 378
Finished products 746 559
1,106 937
14 Financial assets (current)
2015 2014
GBP'000 GBP'000
Available-for-sale investments 4,313 921
During the year the Group invested in equity funds pursuant to its treasury management policies. At the year end the cost of these investments was GBP4,930,000 (2014: GBP603,000).
15 Trade and other receivables
2015 2014
GBP'000 GBP'000
Trade receivables 6,400 5,151
Less: provision for impairment of trade
receivables (1) (75)
Net trade receivables 6,399 5,076
Other receivables 1,166 119
Amounts recoverable on contracts 260 1,078
Prepayments and accrued income 248 337
8,073 6,610
The fair value of trade receivables approximates to carrying value at 31 December 2015 and 2014.
The Group is exposed to credit risk with respect to trade receivables due from its customers, primarily in the automotive consulting and food manufacturing segments. Both segments have a relatively large number of customers, however there is a significant dependency on a small number of large customers who can and do place significant contracts. Provisions for bad and doubtful debts are made based on management's assessment of the risk taking into account the ageing profile, experience and circumstances. There were no significant amounts due from individual customers where the credit risk was considered by the Directors to be significantly higher than the total population.
There is no significant currency risk associated with trade receivables as the vast majority are denominated in Sterling.
The ageing analysis of trade receivables is disclosed below:
2015 2014
GBP'000 GBP'000
Up to 3 months 6,206 5,057
3 to 6 months 190 64
6 to 12 months 4 27
Over 12 months - 3
6,400 5,151
16 Trade and other payables
2015 2014
GBP'000 GBP'000
Current:
Trade payables 1,200 997
Other tax and social security 729 755
Other payables 84 655
Accruals 1,479 1,169
Deferred income 566 490
4,058 4,066
One of the Group's subsidiaries, Shire Foods Limited ("Shire"), entered into a company voluntary arrangement ("CVA") in January 2012. Under the terms of the CVA Shire were to pay GBP350,000 over a maximum 3 year period in satisfaction of unsecured liabilities of approximately GBP1,200,000.
During 2014 Shire made the final payments due under the CVA and, in so doing, was released from all remaining liabilities that were subject to the CVA. The balances released totalled GBP852,000 and the associated credit is shown separately in the income statement, under the caption "exceptional items".
The fair value of all other trade and other payables approximates to book value at 31 December 2015 and at 31 December 2014.
17 Financial instruments - risk management
The Group's principal financial instruments are:
-- Trade receivables -- Cash at bank -- Current asset investments -- Loans and finance leases -- Trade and other payables
The Group is exposed through its operations to one or more of the following financial risks:
-- Cash flow interest rate risk -- Foreign currency risk -- Liquidity risk -- Credit risk -- Other market price risk
Policy for managing these risks is set by the Board following recommendations from the Chief Financial & Operating Officer. Certain risks are managed centrally, while others are managed locally following guidelines communicated from the centre. The policy for each of the above risks is described in more detail below.
Interest rate risk
Due to the relatively low level of borrowings, the Directors do not have an explicit policy for managing cash flow interest rate risk. All current and recent borrowing has been on variable terms, with interest rates of between 3% and 4% above base rate, and the Group has cash reserves sufficient to repay all borrowings promptly in the event of a significant increase in market interest rates. All cash is managed centrally and subsidiary operations are not permitted to arrange borrowing independently.
The Group's investments may attract interest at fixed or variable rates, or none at all. The market price of such investments may be impacted positively or negatively by changes in underlying interest rates. It is not considered relevant to provide a sensitivity analysis on the effect of changing interest rates since, at the year end, the Group's investments had the following interest profiles which contained no variable rates:
2015 2014
GBP'000 GBP'000
No interest 4,313 -
Fixed interest - 921
4,313 921
Foreign currency risk
Foreign exchange risk arises when individual Group operations enter into transactions denominated in a currency other than their functional currency (sterling). The Directors monitor and review their foreign currency exposure on a regular basis; they are of the opinion that as the Group's trading exposure is limited to transactions with a small number of customers and suppliers it is not appropriate to actively hedge that element of its foreign currency exposure, nor is its exposure to foreign currency risk considered to be significant.
Liquidity risk
The Group maintains significant cash reserves and therefore does not require facilities with financial institutions to provide working capital. Surplus cash is managed centrally to maximise the returns on deposits.
Credit risk
The Group is mainly exposed to credit risk from credit sales. The Group's policy for managing and exposure to credit risk is disclosed in note 15.
Other market price risk
The Group has generated a significant amount of cash and this has been held partly as cash deposits and partly invested pursuant to the Group's investing strategy. Investments have been made in 2015 in equity funds, which reflect the Group's need to access capital. Market price movements of these investments could materially affect the value of the Group's assets. The directors believe that the exposure to market price risk from this activity is acceptable in the Group's circumstances.
Capital management
The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade profitably in the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.
The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by monitoring its gearing ratio on a regular basis.
The Group considers its capital to include share capital, share premium, revaluation reserve and retained earnings. Net debt includes short and long-term borrowings (including lease obligations) and shares classed as financial liabilities, net of cash and cash equivalents. The Group has not made any changes to its capital management during the year. The Group is not subject to any externally imposed capital requirements.
An analysis of what the Group manages as capital is outlined below:
2015 2014
GBP'000 GBP'000
Total debt 2,882 2,979
Less cash and cash equivalents (11,967) (12,215)
Net debt/(funds) (9,085) (9,236)
Total equity (capital) 24,294 18,999
Net debt/(funds) to capital ratio (37.4)% (48.6)%
18 Financial assets and liabilities - numerical disclosures
Analysis of financial assets by category:
2015 2014
GBP'000 GBP'000
Available for sale investments 4,313 921
Loans and receivables 7,825 6,273
Cash and cash equivalents 11,967 12,215
Total financial assets 24,105 19,409
Fair values
The Directors consider the carrying values of all financial assets and liabilities to be a reasonable approximation of their fair values. Investments held at fair value are all listed on a recognised market and hence their valuation is not subject to significant judgement or uncertainty. Such investments are therefore considered to fall under Level 1 in the IFRS 7 fair value hierarchy.
Maturity of financial assets
The maturities and denominations of financial assets at the year end, other than cash and cash equivalents, and loans and receivables (note 15 above) are as follows:
2015 2014
GBP'000 GBP'000
Sterling
No fixed maturity 4,313 921
Maturity of financial liabilities
The maturity of borrowings (including finance leases) carried at amortised cost is as follows:
2015 2014
GBP'000 GBP'000
Less than six months 770 2,072
Six months to one year 121 85
One to two years 198 103
Two to five years 641 164
More than five years 1,152 555
2,882 2,979
The above borrowings are analysed on the balance sheet as follows:
2015 2014
GBP'000 GBP'000
Loans and other borrowings (current) 787 1,999
Finance leases (current) 104 159
Loans and other borrowings (non-current) 1,541 821
Finance leases (non-current) 450 -
2,882 2,979
Borrowings are secured on certain assets of the Group, and interest was charged at rates of between 2.5% and 3.2% during the year.
The maturity of other financial liabilities, excluding loans and borrowings, carried at amortised cost is as follows:
2015 2014
GBP'000 GBP'000
Less than six months 2,013 2,407
19 Deferred tax
Movements in deferred tax provisions are outlined below:
Accelerated Other
tax depreciation timing
differences Losses Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2015 (373) 22 351 -
Recognised during the year (59) (58) (218) (335)
At 31 December 2015 (432) (36) 133 (335)
In addition, there are unrecognised net deferred tax assets as follows:
2015 2014
GBP'000 GBP'000
Tax losses carried forward 619 600
Excess of depreciation over capital allowances 5 7
Short term temporary differences 9 11
Net unrecognised deferred tax asset 633 618
Deferred tax assets and liabilities have been calculated using the rate of corporation tax expected to apply when the relevant temporary differences reverse. Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.
The unrecognised elements of the deferred tax assets have not been recognised because there is insufficient evidence that they will be recovered.
20 Share capital
Authorised
2015 2015 2014 2014
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.0000001
each 100,100,000 - 100,100,000 -
A shares of GBP0.49999995
each 50,000 25 50,000 25
B shares of GBP0.49999995
each 50,000 25 50,000 25
Deferred shares of GBP0.00000001
each 4,999,999,500,000 50 4,999,999,500,000 50
100 100
Issued and fully paid
2015 2015 2014 2014
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.0000001
each 6,207,074 - 6,207,074 -
Deferred shares of GBP0.00000001
each 4,999,994,534,696 50 4,999,994,534,696 50
50 50
Treasury shares
During the year the Company acquired 60,000 (2014: 114,000) of its own Ordinary shares for total consideration of GBP180,000 (2014: GBP307,000). This brings the total number of Ordinary shares held in treasury to 2,121,116 (2014: 2,061,116) with an aggregate nominal value of less than GBP1.
Rights attaching to deferred shares
The Deferred shares carry no rights to participate in the profits or assets of the Company and carry no voting rights.
21 Reserves
All movements on reserves are disclosed in the consolidated statement of changes in equity.
The following describes the nature and purpose of each reserve within owners' equity:
Reserve Nature and purpose
Share premium Amount subscribed for share capital
in excess of nominal value
Revaluation reserve Cumulative net unrealised gains
and short-term losses arising on
the revaluation of the Group's
available for sale investments
Retained earnings Cumulative net gains and losses
recognised in the consolidated
income statement
22 Business combinations
The Group acquired Impetus Automotive Limited (an automotive consultancy business) on 26 March 2015 for total consideration of GBP1.18 million comprising cash and the settlement of certain liabilities of IAL's parent company.
The provisional fair values of assets and liabilities acquired and resulting goodwill are summarised below:
Fair Fair
Book value values
value adjustments GBP'000
GBP'000 GBP'000
Intangible assets 95 - 95
Property, plant and equipment 185 - 185
Cash and cash equivalents 234 - 234
Trade and other receivables 3,042 - 3,042
Trade and other payables (note
(a)) (2,754) - (2,754)
Net assets acquired 802 - 802
Goodwill recognised 380
Consideration (settled in cash) 1,182
Note (a): the creditors of IAL noted above include the debt obligations held in another former Impetus group company, which Volvere settled as part of the acquisition. The consideration of GBP1.18 million includes a debt settlement of GBP1.08 million. Costs of undertaking the transaction amounting to GBP0.07 million have been charged to the income statement as administrative expenses. It is not practicable, because of the changes in IAL's former group structure and management, to disclose the revenue and profit or loss for the Group as if IAL had been acquired on 1 January 2015.
The cash flows associated with the acquisition are as follows:
Book
value
GBP'000
Consideration (settled in cash) 1,182
Purchase of intellectual property 65
Cash acquired (234)
Net cash outflow 1,013
Goodwill arose on the acquisition because of value inherent in the acquired business' staff and reputation, neither of which are considered to be separately identifiable intangible assets under IFRS 3 (Revised).
The acquired business' revenue and profit for the period from acquisition to the balance sheet date are disclosed in note 5 as the acquired business forms the entire Automotive Consulting segment.
23 Leases
Operating leases - lessee
The Group leases certain of its properties. The terms of property leases vary, although they all tend to be tenant repairing with rent reviews every 2 to 5 years; some have break clauses. The total future values of minimum lease payments are due as follows:
Land Land
and buildings Other and buildings Other
2015 2015 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
Not later than one year 170 108 127 -
Later than one year and
not later than five years 658 51 670 -
Later than five years 543 - 14 -
1,371 159 811 -
24 Share-based payments
The Company has operated two share-based payment schemes, an approved EMI equity-settled share-based remuneration scheme for certain employees and an unapproved equity-settled share scheme for certain management. Under the EMI scheme, the options vested on achievement of employee-specific targets subject to a compulsory 2.5 or 3 year vesting period and can be exercised for a further 7.5 or 7 years after vesting. All options issued have now either lapsed or been exercised, such that there are no options in issue as at 31 December 2015 (2014: nil).
Options in issue during the year are summarised below:
Weighted Weighted
average average
exercise Number exercise Number
price 2015 price 2014
2015 2014
Outstanding at beginning
of the year - - 187.5p 31,000
Granted during the year - - - -
Exercised during the year - - - -
Lapsed during the year - - (187.5)p (31,000)
Outstanding at the end N/A - N/A -
of the year
All options in issue were fully vested prior to 1 January 2014, hence there is no share based payment charge in 2015 or 2014, in respect of share options.
A share based payment charge of GBP158,000 was included in the income statement for 2014 (discontinued activities) in respect of shares issued in JMP Consultants Limited to certain management of that business. In determining the Group's share-based payment charge arising in respect of the shares issued to non-controlling interests (as set out in note 27), the Group evaluated the enterprise value of JMP. This evaluation considered the range of possible earnings multiples that could apply on an exit to a business such as JMP, the rights attaching to the shares issued, the proportion of the resulting equity participation and the existence of a single large shareholder with significant influence.
25 Related party transactions
Details of amounts payable to Directors are disclosed in note 4. There were no other transactions with key members of management, and no other material transactions with related parties.
26 Contingent liabilities
The Group had no material contingent liabilities as at the date of these financial statements.
27 Non-controlling interests
The non-controlling interests of GBP1,046,000 (2014: GBP1,141,000 ) relate to the net assets attributable to the shares not held by the Group at 31 December 2015 in the following subsidiary undertakings:
2015 2014
Name of subsidiary undertaking GBP'000 GBP'000
NMT Group Limited 74 75
JMP Consultants Limited - 271
Shire Foods Limited 972 795
1,046 1,141
Summarised financial information (before intra-group eliminations) in respect of those subsidiaries with material non-controlling interests is presented below.
JMP Consultants Shire Foods
Limited Limited
2014 2015 2014
GBP'000 GBP'000 GBP'000
Property, plant and equipment 231 5,591 5,129
Current assets 4,295 4,569 4,424
Non-current liabilities - (1,988) (822)
Current liabilities (3,444) (3,023) (4,748)
Provisions - (277) -
Net assets (equity) 1,082 4,872 3,983
Attributable to:
Group 811 3,901 3,188
Non-controlling interests 271 971 795
1,082 4,872 3,983
Revenue 11,761 15,476 12,133
Profit for the year (stated
after intra-group management
and interest charges) 293 888 1,651
Profit for the year attributable
to non-controlling interests 73 177 330
28 Post balance sheet events
Following the end of the year, Impetus Automotive Limited ("IAL") issued shares to certain of its management, which are subject to vesting conditions. Upon full vesting, the Group's share of IAL is expected to reduce to approximately 79%. The financial effect will be to reduce the Group's participation in the results of IAL and its net assets.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
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May 27, 2016 02:00 ET (06:00 GMT)
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