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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Adept Technology Group Plc | LSE:ADT | London | Ordinary Share | GB00B0WY3Y47 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 200.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMADT
RNS Number : 0278F
AdEPT Telecom plc
10 November 2015
AdEPT Telecom plc
("AdEPT" or the "Company")
Interim results for the 6 months ended 30 September 2015
AdEPT, one of the UK's leading independent communications integrator and managed service providers, announces its results for the 6 months ended 30 September 2015.
Highlights
-- Total revenue increased by 22.8% to GBP13.9 million (2014: GBP11.3 million) -- EBITDA increased by 24.8% to GBP2.9 million (2014: GBP2.4 million) -- EBITDA margin increased to 21.1% (2014: 20.8%) -- Adjusted profit before tax increased by 19.7% to GBP2.6 million (2014: GBP2.2 million) -- Adjusted EPS increased by 23.1% to 10.32p (2014: 8.38p) -- Interim dividend increased by 33.3% to 3.00p per share (2014: 2.25p) -- Operating cash flow before tax of GBP2.5 million (2014: GBP2.3 million) -- New GBP15 million Revolving Credit Facility with Barclays completed in April 2015 -- Acquisition of Centrix Limited completed on 1 May 2015
-- Net debt, after GBP7.2 million acquisition payments, of GBP7.6 million (2014: GBP3.2 million)
-- Managed services revenue increased by 88.7% to GBP5.7 million (2014: GBP3.0 million)
Business review
Total revenue increased by 22.8% to GBP13.9 million with the increase being a reflection of the 5 month revenue contribution from Centrix Limited ("Centrix") following the completion of the acquisition on 1 May 2015. Centrix is a UK based specialist provider of complex unified communications, Avaya IP telephony, hosted IP solutions and managed services. With over 300 Avaya solutions in the UK and across the world Centrix has one of the largest customer bases backed by specialist knowledge of the Avaya Aura solution in particular, which has extended the Group's ability to provide a complete unified communications solution.
AdEPT has had continued success in the public sector and healthcare space during the period winning a number of new contracts with councils and other public sector bodies. Over the last 24 months AdEPT has been successful in gaining new contracts with public sector and healthcare organisations as a result of its various framework agreements. This has seen an increase to 28 councils from 18 in the comparative period. The acquisition of Centrix provided a complementary customer focus both in terms of size and sector. The continued targeting of larger contracts has seen the Premier Customer division now accounting for just over 70% of total revenue at 30 September 2015 (2014: 55%). The public and healthcare sector customer base has been extended and now accounts for 24.3% of total revenue at 30 September 2015 (2014: 13.3%).
In July 2015 AdEPT was awarded approved supplier status under the RM1045 Network Services Framework by the Crown Commercial Service and AdEPT has already been successful in winning new public sector customers under this framework by utilising its extended product portfolio acquired with Centrix. The Company holds additional framework agreements, including the Ja.Net framework agreement under which AdEPT is one of only a small number of companies approved to sell data connectivity and networks to UK universities and colleges, the Eastern Shires Purchasing Organisation sole supplier Telecom Framework to local government and charities for calls, lines, broadband, super-fast broadband (fibre), data connectivity and SIP trunks, and the G-Cloud 6 RM1557vi framework with Crown Commercial Service. Approved supplier status under these framework agreements gives the Company authority to provide services to both local and central government bodies.
In September 2015 Centrix was recognised by being awarded Avaya Partner in Customer Excellence based on independent customer feedback. Subsequently, in October 2015 Centrix was awarded Avaya Certified Gold Partner status, recognising the ability of the Company to deliver leading-edge and world-class communications solutions and support.
AdEPT continues to successfully make the transition from a traditional fixed line service provider to a complete communications integrator offering best of breed products from all major UK networks. Revenue from managed services, including data connectivity, hardware and cloud-based contact centre solutions, increased by 88.7% now accounting for 41.2% of total revenue for the six months ended 30 September 2015 (September 2014: 26.8%). The demand for faster data connectivity speeds continues, and this is being met through a wider data connectivity service offering, including up to 10Gb Optical Spectrum Services (OSA) data connectivity being provided to customers solutions under the Ja.Net framework for universities and colleges.
Financing and cash flow
Cash generated from operating activities before tax increased by 10.3% to GBP2.5 million (September 2014: GBP2.3 million), which equates to 99.2% reported EBITDA conversion (after GBP0.39m one-off acquisition fees). GBP0.6 million corporation tax instalments were paid during the period ended 30 September 2015 compared to GBPnil in the comparative period, due to a combination of share option relief and the timing of the instalment payments in the prior period.
Dividends paid in the period absorbed GBP0.5 million of funds (September 2014: GBP0.3 million), which is a reflection of the progressive dividend policy of the Company. The Company operates a capex-light model but after 12 years of operation, to ensure that the billing system remains fully supported, GBP0.2 million has been spent on essential upgrades during the period ended 30 September 2015.
GBP7.0 million of available funds (net of cash acquired) was used to fund the initial cash consideration for the acquisition of the entire issued share capital of Centrix on 1 May 2015. The interim results for the current period include a 5 month contribution from Centrix, further details of which are included in Note 6. GBP0.2 million was used to fund the deferred consideration in relation to the acquisition of the entire issued share capital of Bluecherry Telecom Limited on 1 April 2014.
Net debt and bank facilities
A new GBP15 million Revolving Credit Facility was agreed with Barclays Bank plc on 22 April 2015, part of which was used to fund the initial cash consideration for the acquisition of Centrix. The flexible structure of the new agreement has resulted in a facility which is larger, cheaper and of longer duration than the previous arrangement. The remaining debt facility will be used by the Company to fund the strategic acquisition of earnings-enhancing businesses within the fragmented telecoms and managed services market.
Net borrowings have been increased to GBP7.6 million at 30 September 2015 largely as a result of GBP7.2 million acquisition payments. Increased net borrowings following the acquisition resulted in increased gearing to 61% (September 2014: 29%). Net Debt:EBITDA (annualised) ratio remains low at 1.3x at 30 September 2015.
Profit before and after tax
Adjusted profit before tax (adding back non-cash amortisation and one-off acquisition related fees) increased by 19.7% to GBP2.6 million (September 2014: GBP2.2 million) arising entirely from the improved underlying operating profit. Reported profit before tax increased by 4.1% to GBP1.2 million (2014: GBP1.1 million) and reported profit after tax increased by 8.1% to GBP0.8 million (2014: GBP0.8 million).
Earnings per share
Adjusted (basic) earnings per share has increased 23.1% to 10.32p for the six months ended 30 September 2015 (September 2014: 8.38p) as a result of the GBP0.45 million increase to underlying EBITDA.
Dividends
The Directors have declared an interim dividend of 3.00p per Ordinary Share in respect of the period ended 30 September 2015, an increase of 33.3% over the interim dividend for the comparative period (September 2014: 2.25p). This will absorb approximately GBP0.67 million of shareholders' funds (September 2014: GBP0.50 million). It is proposed by the Directors that this dividend will be paid on 8 April 2016 to shareholders who are on the register of members on the record date of 18 March 2016. Subject to the audited results for the year ending 31 March 2016, it is the intention of the Board to propose a final dividend with the March 2016 final results.
Strong free cash flow generation has continued since the end of the period, and there continues to be considerable scope for the Board to continue its progressive future dividend policy.
Director change
The Company announces that after more than 10 years with AdEPT its Sales Director, Joe Murphy, has decided to pursue other opportunities. Joe was instrumental in the development of the partner sales channel for the Company, and the Board would like to take this opportunity to thank Joe for his valuable contribution to AdEPT. Joe will leave the Company with effect from 20 November 2015 with our best wishes for the future.
Outlook
This has been an excellent 6 months with improved results in all key areas and an extremely positive contribution from the Centrix acquisition. We continue to be highly cash generative with adequate debt facilities in place to enable to Board to continue to identify earnings-enhancing acquisitions whilst retaining scope for a progressive dividend policy.
Roger Wilson
Chairman
10 November 2015
Enquiries:
AdEPT Telecom
Roger Wilson, Chairman 07786 111535 Ian Fishwick, Chief Executive 01892 550225 John Swaite, Finance Director 01892 550243 Northland Capital Partners Limited 020 7382 1100
Nominated Adviser
Edward Hutton/Gerry Beaney
Broking
John Howes/Abigail Wayne
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November 10, 2015 02:00 ET (07:00 GMT)
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 30 September 2015 2014 Note GBP'000 GBP'000 ------------------------------------------- ----- ------------- ------------- REVENUE 13,908 11,323 Cost of sales (8,326) (7,115) ------------------------------------------- ----- ------------- ------------- GROSS PROFIT 5,582 4,208 Administrative expenses (4,185) (2,960) ------------------------------------------- ----- ------------- ------------- OPERATING PROFIT 1,397 1,248 Total operating profit - analysed: Operating profit before depreciation and amortisation 2,940 2,356 Share based payments - 3 Acquisition fees (390) - Depreciation of tangible fixed assets (64) (23) Amortisation of intangible fixed assets (1,089) (1,088) ------------------------------------------- ----- ------------- ------------- Total operating profit 1,397 1,248 ------------------------------------------- ----- ------------- ------------- Finance costs (230) (126) Finance income 1 - ------------------------------------------- ----- ------------- ------------- PROFIT BEFORE INCOME TAX 1,168 1,122 Income tax expense (345) (360) ------------------------------------------- ----- ------------- ------------- TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 823 762 ------------------------------------------- ----- ------------- ------------- Attributable to: Equity holders 823 762 Earnings per share Basic earnings per share (pence) 3 3.69p 3.45p Diluted earnings per share (pence) 3 3.47p 3.19p Adjusted earnings per share, after adding back amortisation Basic earnings per share (pence) 3 10.32p 8.38p Diluted earnings per share (pence) 3 9.69p 7.75p
UNAUDITED STATEMENT OF FINANCIAL POSITION
Restated 30 September 30 September 31 March 2015 2014 2015 GBP'000 GBP'000 GBP'000 ------------------------------- ------------- ------------- --------- ASSETS Non-current assets Intangible assets 23,599 16,012 14,874 Property, plant and equipment 212 101 82 Deferred income tax 107 118 145 -------------------------------- ------------- ------------- --------- 23,918 16,231 15,101 Current assets Inventories 63 4 4 Trade and other receivables 4,034 2,497 2,198 Cash and cash equivalents 1,470 1,942 2,094 -------------------------------- ------------- ------------- --------- 5,567 4,443 4,296 Total assets 29,485 20,674 19,397 LIABILITIES Current liabilities Trade and other payables 7,799 3,621 3,165 Income tax 39 393 324 Short term borrowings 1,189 1,189 538 -------------------------------- ------------- ------------- --------- 9,027 5,203 4,027 Non-current liabilities Long term borrowings 7,911 3,953 3,095 -------------------------------- ------------- ------------- --------- Total liabilities 16,938 9,156 7,122 -------------------------------- Net assets 12,547 11,518 12,275 SHAREHOLDERS' EQUITY Share capital 2,230 2,207 2,230 Share premium 335 231 335 Capital redemption reserve 12 - 12 Retained earnings 9,970 9,080 9,699 -------------------------------- ------------- ------------- --------- Total equity 12,547 11,518 12,275 -------------------------------- ------------- ------------- ---------
UNAUDITED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of parent Share Capital Share Share capital redemption Retained Total to capital premium be issued reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------- -------- -------- ---------- ----------- --------- -------- Equity at 1 April 2014 2,194 189 72 - 8,248 10,703 Profit for 6 months ended 30 September 2014 - - - - 762 762 Issue of new equity 13 42 - - - 55 Share based payments - - (2) - - (2) Balance at 30 September 2014 (restated) 2,207 231 70 - 9,010 11,518 Profit for 6 months ended 31 March 2015 - - - - 772 772 Issue of new equity 35 104 - - - 139 Deferred tax asset adjustment - - - - 23 23 Share based payments - - (12) - 17 5 Shares repurchased and cancelled (12) - - 12 (182) (182) Balance at 31 March 2015 2,230 335 58 12 9,640 12,275 Profit for 6 months ended 30 September 2015 - - - - 823 823 Share based payments - - 1 - - 1 Dividend - - - - (552) (552) Balance at 30 September 2015 2,230 335 59 12 9,911 12,547 ------------------------------- -------- -------- ---------- ----------- --------- --------
UNAUDITED STATEMENT OF CASH FLOWS
Six months ended Year ended 30 September 30 September 31 March 2015 2014 2015 GBP'000 GBP'000 GBP'000 ------------------------------------------------- ------------- ------------- ----------- Cash flows from operating activities Profit before income tax 1,168 1,122 2,137 Depreciation and amortisation 1,153 1,111 2,218 Share based payments - (3) 3 Net finance costs 229 126 233 Decrease in inventories - - - Decrease/(increase) in trade and other receivables (485) (194) 76 Increase in trade and other payables 463 129 153 -------------------------------------------------- ------------- ------------- ----------- Cash generated from operations 2,528 2,291 4,820 Income taxes paid (602) - (315) -------------------------------------------------- ------------- ------------- ----------- Net cash from operating activities 1,926 2,291 4,505 -------------------------------------------------- ------------- ------------- ----------- Cash flows from investing activities Interest paid (160) (97) (175) Acquisition of trade and assets (7,229) (2,058) (2,152)
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November 10, 2015 02:00 ET (07:00 GMT)
Purchase of intangible assets (164) (27) (11) Purchase of property, plant and equipment (85) (45) (52) -------------------------------------------------- ------------- ------------- ----------- Net cash used in investing activities (7,638) (2,227) (2,390) Cash flows from financing activities Dividends paid (502) (329) (660) Payments made for share repurchases - - (182) Share capital issued - 55 194 Repayment of borrowings - (1,625) (5,399) Increase in bank loan 5,589 - 2,250 Net cash (used in)/from financing activities 5,087 (1,899) (3,797) -------------------------------------------------- ------------- ------------- ----------- Net increase/(decrease) in cash and cash equivalents (625) (1,834) (1,682) Cash and cash equivalents at beginning of period/year 2,095 3,776 3,777 Cash and cash equivalents at end of period/year 1,470 1,942 2,095 -------------------------------------------------- ------------- ------------- ----------- Cash at bank and in hand 1,470 1,942 2,095 Bank overdrafts - - - ------------------------------------------------- ------------- ------------- ----------- Cash and cash equivalents 1,470 1,942 2,095 -------------------------------------------------- ------------- ------------- -----------
ACCOUNTING POLICIES
1 Basis of preparation
The financial information set out in this interim report, which has not been audited, does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Company's statutory financial statements for the year ended 31 March 2015, prepared under International Financial Reporting Standards, were approved by the board of directors on 10 July 2015 and have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified, did not contain any emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
The interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting", as adopted by the EU. Comparatives for the year ended 31 March 2015 have been extracted from the audited statutory accounts.
2 Accounting policies
The same accounting policies, presentation and methods of computation are followed in this interim report as were applied in the preparation of the Company's annual financial statements for the year ended 31 March 2015.
In order to comply with the requirements of IFRIC 17, as applied in the audited financial statements for the year ended 31 March 2015, the statement of financial position as at 30 September 2014 has been restated to include the dividend charge only from the actual payment date.
3 Earnings per share Six months ended Year ended 30 September 30 September 31 March 2015 2014 2015 GBP'000 GBP'000 GBP'000 ------------------------------------------- ------------- ------------- ----------- Earnings for the purposes of basic and diluted earnings per share Profit for the period attributable to equity holders of the parent 823 761 1,534 Amortisation 1,089 1,088 2,169 Acquisition fees 390 - - Adjusted profit attributable to equity holders of the parent, adding back amortisation and non-recurring costs 2,302 1,849 3,703 Number of shares Weighted average number of shares used for earnings per share 22,297,400 22,069,603 22,219,140 Dilutive effect of share plans 1,440,759 1,797,191 1,430,730 ------------------------------------------- ------------- ------------- ----------- Diluted weighted average number of shares used to calculate fully diluted earnings per share 23,738,159 23,866,794 23,649,870 Earnings per share Basic earnings per share (pence) 3.69p 3.45p 6.90p Fully diluted earnings per share (pence) 3.47p 3.19p 6.49p Adjusted earnings per share, after adding back amortisation and non-recurring costs Adjusted basic earnings per share (pence) 10.32p 8.38p 15.76p Adjusted fully diluted earnings per share (pence) 9.69p 7.75p 14.81p
Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue.
Adjusted earnings per share is calculated by dividing the profit attributable to equity holders of the Company (after adding back amortisation) by the weighted average number of ordinary shares in issue.
Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options, assuming dilution through conversion of all existing options.
4 Segmental information
The chief operating decision maker has been identified as the Board. The Board reviews the Company's internal reporting in order to assess performance and allocate resources. The operating segments are fixed line services and managed services, which incorporates cloud-based contact centre solutions, data connectivity, mobile, hardware and VoIP services. These are reported in a manner consistent with the internal reporting to the Board. The Board assesses the performance of the operating segments based on revenue, gross profit and EBITDA.
Unaudited Unaudited 6 months ended 30 September 6 months ended 30 September 2015 2014 ---------------------------------------- ---------------------------------------- Fixed Fixed line Managed Central line Managed Central services services costs Total services services costs Total ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Revenue 8,174 5,734 - 13,908 8,285 3,038 - 11,323 Gross profit 3,211 2,371 - 5,582 3,217 991 - 4,208 Gross margin % 39.3% 41.3% - 40.2% 38.8% 32.6% - 37.2% ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- EBITDA 1,888 1,052 - 2,940 1,811 546 - 2,356 EBITDA % 23.1% 18.3% - 21.2% 21.9% 18.0% - 20.8% ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Amortisation (1,089) - - (1,089) (1,088) - - (1,088) Depreciation - - (64) (64) - - (23) (23) One-off costs - - (390) (390) - - - - Share-based payments - - - - - - 2 2 ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Operating profit/(loss) 799 1,052 (454) 1,397 723 546 (20) 1,248 ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Finance costs (229) (229) (126) (126) Income tax (345) (345) (361) (361) ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Profit after tax 799 1,052 (1,028) 823 723 546 (507) 762 ------------------------- --------- --------- -------- -------- --------- --------- -------- -------- Audited Year ended 31 March 2015 ---------------------------------------- Fixed line Managed Central services services costs Total ------------------------- --------- --------- -------- --------
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November 10, 2015 02:00 ET (07:00 GMT)
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