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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bca Marketplace Plc | LSE:BCA | London | Ordinary Share | GB00BP0S1D85 | ORD �0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 236.20 | 236.20 | 236.40 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Nov 2019 to Nov 2024
TIDMBCA
RNS Number : 4853Q
BCA Marketplace PLC
30 November 2016
BCA Marketplace plc
('BCA', 'the Company' or 'the Group)
Interim report for the six months ended 2 October 2016
HIGHLIGHTS
BCA Marketplace plc, (LSE: BCA), Europe's largest used vehicle marketplace and automotive services provider, announces its results for the six months ended 2 October 2016.
FINANCIAL HIGHLIGHTS(1,2)
-- Revenue of GBP909.8m (2015: GBP546.3m) as a result of acquisitions, vehicle buying and outsourced remarketing contracts
-- Adjusted EBITDA of GBP64.5m (2015: GBP49.2m) -- Operating profit of GBP33.6m (2015: GBP1.3m), stated after;
o amortisation of acquired intangibles of GBP18.7m (2015: GBP17.0m); and
o other acquisition and non-recurring costs of GBP1.1m (2015: GBP24.0m)
-- Net debt(3) of GBP255.9m (2015: GBP156.5m)
-- Diluted earnings per share of 3.0p and adjusted diluted earnings per share of 4.6p (up 27.8%)
-- Interim dividend of 2.2p per share (2015: 2.0p) to be paid on 31 January 2017
OPERATIONAL HIGHLIGHTS(1)
-- UK Vehicle Remarketing volume of 479,000 units, up 8.4% -- International Vehicle Remarketing volume of 168,000 units, up 5.7% -- WeBuyAnyCar sold 94,000 units, an increase of 13.3%
-- BCA Partner Finance penetration increased to 7.9% in September 2016 from 5.4% in September 2015
-- Continued development and customer growth with our inspection, valuation and imaging systems -- Former SMA sites fully integrated into the BCA network -- Newly developed Birmingham Perry Barr auction site opened in October 2016 -- Acquisition of Paragon Automotive Limited in July 2016
Notes:
1Prior period comparatives include the trading results for the six months from the acquisition of the BCA group on 2 April 2015 to 4 October 2015 and the results of the acquired businesses from their respective acquisition dates.
2Adjusted EBITDA, adjusted diluted earnings per share and adjusted basic earnings per share are non-IFRS financial measures and are referred to within the report. The adjustments between IFRS financial measures and the non-IFRS measures are explained further in the Financial Performance section of the report and in the segmental analysis and earnings per share notes (note 3 and note 6 of the condensed consolidated interim financial statements).
3The Group definition of Net Debt excludes the BCA Partner Finance funding, finance leases and the acquired Paragon invoice discounting facility - see Cash Flow and Net Debt section for further details.
Avril Palmer-Baunack, Executive Chairman, commented
"I am pleased to report another strong set of results, with significant growth in all key areas. Adjusted EBITDA growth of 31.1% translated into adjusted earnings per share up 27.8% and a 10.0% increase in the interim dividend.
These results have been underpinned by the continued organic growth in our core divisions. The UK and International Vehicle Remarketing divisions have delivered further volume growth and an increase in adjusted EBITDA per unit, while WeBuyAnyCar again achieved double-digit volume growth. Our development of valuation, inspection, imaging and data tools, plus the logistical and physical infrastructure of BCA, continues to enhance and develop long term relationships with our current customers and also drive new business wins across the automotive landscape.
The former SMA sites acquired in 2015 have been rebranded as BCA and are now fully integrated into the UK Vehicle Remarketing division.
The acquisition of Paragon Automotive, the outsourced vehicle services group, represents a significant step in our strategy to offer a comprehensive suite of services to our customers that follows the life cycle of a vehicle. Our services revenue has grown to a scale where we will now manage these results under a new division, Automotive Services.
I am delighted by the continued progress being made throughout the business as we broaden our offering across the range of vehicle services and there remain opportunities for further expansion in both the UK and continental Europe in line with our stated strategy.
The second half to date has continued to perform well and in line with our expectations and we remain confident that we can continue to deliver our profit and growth targets".
About BCA Marketplace plc
From the dock to defleet and beyond, BCA touches over 3.5m vehicles a year, working with OEMs, fleet operators and dealers to provide the backbone of the UK's automotive supply chain.
From technical and logistics services for new vehicles, refurbishment, storage and logistics for the growing used sector and the core remarketing and auction operation, BCA offers the economies of scale and diversity of services to meet the needs of an impressive portfolio of customers.
As the automotive industry faces a period of change, BCA is uniquely placed to deliver a range of linked services through the combined infrastructure of regional defleet facilities, vehicle logistics and preparation centres and physical, hybrid and digital remarketing channels.
BCA is investing and innovating today to address the changing face of the automotive industry tomorrow.
www.bcamarketplaceplc.com
For Information
BCA Marketplace plc (Investor Relations) tim.richmond@bca.com
Tim Richmond
Bell Pottinger (Financial PR) +44 (0)20 3772 2500
David Rydell
Square1 Consulting (Financial PR) +44 (0)20 7929 5599
David Bick
OPERATIONAL AND FINANCIAL REVIEW
Introduction
We are pleased to announce another strong set of results for BCA Marketplace plc (the 'Group' or 'BCA'), with underlying volumes and profit advancing in all four divisions. During the first half, we completed the acquisition of Paragon Automotive Limited ('Paragon'), significantly enhancing our used vehicle refurbishment and automotive services capability, allowing us to provide a more comprehensive offering of services to our customers, whilst also adding a new revenue stream, from the processing of new vehicles imported into, or manufactured in, the UK.
Our UK Vehicle Remarketing division continues to grow with both existing customers and new business wins, recording overall volume growth of 8.4% resulting in an adjusted EBITDA growth of 23.4%. This includes volume generated by the former SMA sites, which have been rebranded as BCA during the period, and are now fully integrated into the UK Vehicle Remarketing division. BCA Partner Finance has had success and made further progress during the first half, increasing both the number of dealers it serves and the penetration of auction volume.
We are pleased to have built on our established customer relationships and also to be winning new longer term contracts, by offering a broader range of remarketing solutions for our customers. Our new and existing customers are continuing to grow their usage of our various IT tools, products and data solutions. Our valuation tools, Dealer Pro in the UK and MarketPrice in Europe, are becoming the applications of choice for valuation and disposal routes, not only for dealer and leasing customers, but also OEMs and their captive finance companies.
Our imaging App from our AutosOnShow business is having success as a product of choice with dealer groups, leasing companies and OEMs, in the UK, Europe and globally. Our newly built 'Inspect and Collect' system has also had good success with wins in these first months of launch with OEM and leasing companies. We are pleased that our knowledge, gained over 70 years in the marketplace, is now being blended with the development of market leading innovation, data science and IT solutions, to develop, evolve and cement BCA as the preferred supplier for the whole automotive value chain.
Our International Vehicle Remarketing division performed well in the first half, achieving volume growth of 5.7%. Adjusted EBITDA improved by 33.3% (up 18.4% excluding the benefit of exchange rate movement). Our strategy to raise the awareness of auction outside the UK as a means of vehicle remarketing continues. We have strengthened our European management team and the standardisation of IT systems has begun, which is key to achieving our goal of providing a pan-European proposition to our customers.
WeBuyAnyCar continues to gain traction with UK consumers looking for an efficient method of selling their cars, and continues to be the consumer's choice for valuing their vehicle for sale. WeBuyAnyCar again delivered double-digit volume growth during the period (13.3%), along with an increase in adjusted EBITDA providing a controlled and diverse mix of vehicles into our auction operations.
Our newly formed Automotive Services division provides logistics, technical and support services to the new and used vehicle sector. BCA now offers a suite of services along the automotive value chain, from handling new vehicles at the point of entry into the UK, new and used car delivery either in bulk or singularly, inspection, imaging, refurbishment, valuation and remarketing of used vehicles back into the distribution chain. We are the market leader in this area, with the capability to offer a volume solution for automotive OEMs, corporate fleets and dealers. We believe that there are significant organic growth opportunities for the Group in the future. Paragon is a natural fit into the Group and plays a key role in our strategy to develop innovative solutions for our customers and deliver a range of automotive services across the vehicle life cycle.
In the 18 months since the original BCA business acquisition, the Group has made significant progress in broadening its offering into complementary vehicle services in line with our stated strategy and there remain opportunities for further expansion in both the UK and continental Europe.
We welcome our new colleagues from Paragon to the Group and thank the whole BCA team for working together to deliver our T4G (Together for Growth) programme and succeeding in delivering another strong set of results in the first half of the financial year. The second half has begun well and trading is in line with our expectations for the full year.
On behalf of the Board, I am pleased to announce an increased interim dividend of 2.2p per share payable on 31 January 2017 to shareholders on the register on 13 January 2017, an increase of 10.0% on last year.
Forward-looking statements
This document may contain forward-looking statements that may or may not prove accurate. For example statements referring to growth, trends, second half, perform well, in line with expectations are intended to be forward-looking statements. The business is not highly seasonal between the reported period and the second half. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements.
Results Summary (1)
Hot Features
Premium
H1 2016 H1 20151 % change
Adjusted Adjusted Adjusted
Revenue EBITDA Revenue EBITDA Revenue EBITDA
GBPm GBPm GBPm GBPm
------------------------ -------- --------- -------- --------- -------------------
UK Vehicle Remarketing 333.1 42.7 117.9 34.6 182.5% 23.4%
International Vehicle
Remarketing 62.6 11.6 49.5 8.7 26.5% 33.3%
Vehicle Buying 394.7 8.8 343.4 7.4 14.9% 18.9%
Automotive Services 119.4 6.4 35.5 2.6 236.3% 146.2%
Group Costs - (5.0) - (4.1) - 22.0%
------------------------ -------- --------- -------- --------- -------- ---------
Total 909.8 64.5 546.3 49.2 66.5% 31.1%
------------------------ -------- --------- -------- --------- -------- ---------
1Prior period comparatives relate to the 6 month period from acquisition of the BCA group to 4 October 2015, and incorporate other acquired companies from their respective date of acquisition by the Group.
Group revenue was GBP909.8m (2015: GBP546.3m) in the period with Remarketing revenue of GBP395.7m (2015: GBP167.4m) an increase of 182.5% from the UK and 26.5% from the International Vehicle Remarketing divisions (including the impact of favourable exchange rate movements). UK Vehicle Remarketing revenue has grown substantially as a result of increased outsourced remarketing contracts where we take ownership of the vehicles before onward sale through the remarketing channel and have sold vehicles in our own right as opposed to on an agency basis.
Vehicle Buying division revenue increased by GBP51.3m, an increase of 14.9%, while the newly created Automotive Services division delivered revenue of GBP119.4m, including 10 weeks' trading of Paragon and the impact of a full six months' results for BCA Automotive and Ambrosetti, which were acquired during the prior financial period.
Adjusted EBITDA in the first half was GBP64.5m, (2015: GBP49.2m), an increase of 31.1%. Adjusted EBITDA growth was reported across all divisions, with Vehicle Remarketing up 25.4% (UK 23.4%; International 33.3%), Vehicle Buying up 18.9% and the Automotive Services division up 146.2% compared to the prior period (partly due to the full impact of acquisitions described above).
Operating Divisions
In the first half, management have made significant progress in integrating the acquired businesses to form the Automotive Services division, bringing together the three acquisitions (Stobart Automotive, Ambrosetti and Paragon) and BCA Logistics (previously included in UK Vehicle Remarketing). At the start of the year, the former SMA sites were rebranded as BCA and are now included in the UK Vehicle Remarketing division.
As a result of the new divisional structure, the prior period comparatives have been re-presented. We now operate through four operating divisions, UK Vehicle Remarketing, International Vehicle Remarketing, Vehicle Buying and Automotive Services. Group costs are reported separately.
The divisional operating reviews are focused on adjusted EBITDA in order to provide more meaningful analysis, since depreciation, interest and tax are principally managed on behalf of the Group, and do not directly correlate to divisional operating performance. A reconciliation of adjusted EBITDA to operating profit is provided in the Financial Performance section.
UK Vehicle Remarketing
The volume of vehicles sold through our UK auction operations continues to grow, a result of new customer wins, increased volume from existing customers and the benefit of new outsourced remarketing services driving incremental volumes into the division. Buyer demand is strong, conversion rates have improved across our enlarged branch network and BCA Partner Finance penetration has increased. UK auction volume sold, including the former SMA sites, of 479,000 units showed an increase of 8.4% compared to the same period in 2015, producing adjusted EBITDA growth of 23.4%.
6 months 6 months Change (%)
ended ended
2 October 4 October
Highlights 2016 2015(1)
----------------------- ---------- ---------- ------------
Vehicles sold ('000) 479 442 +8.4%
Revenue per vehicle
sold (GBP) 695 267 +160.3%
Revenue (GBPm) 333.1 117.9 +182.5%
Adjusted EBITDA (GBPm) 42.7 34.6 +23.4%
Adjusted EBITDA per
vehicle sold (GBP) 89 78 +14.1%
Adjusted EBITDA margin
(%) 12.8 29.3
------------------------ ---------- ---------- ------------
1Prior period comparatives have been re-presented to reflect the new operating divisions - See Operating Divisions section for further details.
Structural changes in the market, including wider corporate ownership of vehicles, coupled with our own initiatives, continue to generate greater volumes of vehicles through our remarketing channels. Greater diversity in the range of vehicles acquired by the Vehicle Buying division means that we are able to present an increasingly attractive product range to our buyer base, cementing our position as a key supplier of used vehicles to the automotive trade.
On-going investment in value added-services such as appraisal, imagery and warranty products continues to improve the experience and confidence that buyers have in transacting at BCA, resulting in a greater penetration of BCA Live Online purchases, which drives better price performance and strong conversion rates. During the period, we have started to provide a more integrated range of outsourced remarketing services. This has helped drive volumes and allowed us to increase our revenue and profit per vehicle.
We are enhancing the performance of the former SMA sites and have introduced BCA products and services (including BCA Assured, Live Online and BCA Partner Finance) and through the alignment of internal systems and processes, we have seen the former SMA sites improve efficiency, contributing to the strong UK Vehicle Remarketing performance.
BCA Partner Finance continues to add liquidity and buyer demand in our marketplace. The number of financed units has grown throughout the period and penetration has increased to 7.9% of all BCA vehicles sold in September 2016 (5.4% in the month of September 2015). The resultant loan book of GBP79.4m (2015: GBP40.9m) reflects the increased number of financed vehicles and an expanded user base of close to 1,200 dealers at the period end (September 2015: 700). This product is an integral part of our proposition to dealers and we are now expanding the product offering to include the financing of part exchange vehicles for our existing BCA Partner Finance customers.
Adjusted EBITDA per unit increased by 14.1% to GBP89, reflecting the increased penetration of Partner Finance and other services (BCA Assured, Live Online, transport) and the improved operational efficiency through increased volume throughput, increased sales programmes and higher conversion rates. Adjusted EBITDA margin in the UK reduced to 12.8% as a result of increased outsourced remarketing contracts, where BCA takes ownership of the vehicles before onward sale through the remarketing channel and sells the vehicles in its own right as opposed to on an agency basis, giving rise to the recognition of the vehicle sale revenue, reducing the reported margin percentage.
Our new auction centre in Perry Barr, a 20 acre site in Birmingham, has been completed and held its inaugural sale in October 2016. We also have an ongoing continuous improvement programme to improve site efficiencies across the network to ensure growing volumes are processed effectively.
International Vehicle Remarketing
The International Vehicle Remarketing division continues to grow, with a sold volume of 168,000 units, an increase of 5.7% compared to the same period in 2015. This, along with favourable exchange rate movements, resulted in a 33.3% increase in adjusted EBITDA.
6 months 6 months Change (%)
ended ended
2 October 4 October
Highlights 2016 2015
----------------------- ---------- ---------- ------------
Vehicles sold ('000) 168 159 +5.7%
Revenue per vehicle
sold (GBP) 373 311 +19.9%
Revenue (GBPm) 62.6 49.5 +26.5%
Adjusted EBITDA (GBPm) 11.6 8.7 +33.3%
Adjusted EBITDA per
vehicle sold (GBP) 69 55 +25.5%
Adjusted EBITDA margin
(%) 18.5 17.6
------------------------ ---------- ---------- ------------
Exchange rates produced an 11% favourable movement to our reported results compared to the prior period. If measured at constant exchange rates, revenue and adjusted EBITDA per unit for the period would have been GBP331 and GBP61. The average exchange rate for this interim period was EUR1.221:GBP1, compared to a rate of EUR1.375:GBP1 in the prior period.
In Europe, we are focused on initiatives that raise brand and auction awareness, to build strong relationships with our vendors and buyers and to provide an efficient exchange for the remarketing of vehicles. As a result of the continued roll-out of software solutions including BCA Dealer Pro and BCA MarketPrice, we are pleased that the number of dealer partners has increased significantly over the prior period, with an increase in the number of units sold through our BCA MarketPrice product. We continue to roll-out the Chrono45 solution (extended payment terms, images and transport package) which is now live in France and Spain.
Our wide geographical coverage including a number of flexible sites (meaning we are close to our vendors and buyers), supports the efficient inspection, storage and delivery of vehicles, making them available to a wide number of buyers through online platforms, electronic and physical auctions. These flexible sites will enable us to grow efficiently as demand increases both from vendors and buyers.
Adjusted EBITDA has improved by 33.3% in the first half and 25.5% on a per unit basis. Adjusted EBITDA growth has been driven by a combination of volume increases through our existing infrastructure, penetration of services, maintaining a flexible cost base and the favourable currency impact.
We have further invested in the European management team during the period to support the growth of this division, through our "One Europe" programme. This initiative will bring standardisation of IT systems, products and processes across our markets, including a standard portal for our buyers, who were spread across 48 countries in the first half of the year.
Vehicle Buying
The Vehicle Buying division incorporates WeBuyAnyCar in the UK and CarTrade2B in Europe. The Vehicle Buying division brings both additional volume and a diverse range of vehicles to our remarketing exchanges.
6 months 6 months Change (%)
ended ended
2 October 4 October
Highlights - UK 2016 2015
----------------------- ---------- ---------- ------------
Vehicles sold ('000) 94 83 +13.3%
Revenue per vehicle
sold (GBP) 4,119 4,081 +0.9%
Revenue (GBPm) 387.2 338.7 +14.3%
Adjusted EBITDA (GBPm) 8.8 8.3 +6.0%
Adjusted EBITDA per
vehicle sold (GBP) 94 100 -6.0%
Adjusted EBITDA margin
(%) 2.3 2.5
------------------------ ---------- ---------- ------------
6 months 6 months Change (%)
ended ended
2 October 4 October
Highlights - International 2016 2015
----------------------------- ---------- ---------- ------------
Vehicles sold ('000) 1.9 2.1 -9.5%
Revenue (GBPm) 7.5 4.7 +59.6%
Adjusted EBITDA (GBPm) 0.0 (0.9)
------------------------------ ---------- ---------- ------------
WeBuyAnyCar continues to deliver strong volume growth into our UK Vehicle Remarketing division, increasing volumes by 13.3% in the period to 94,000 units sold. Revenue was GBP387.2m (up 14.3%) driven by increased volume and a marginally higher average selling price of vehicles (up 0.9%) as we continue to diversify the range of vehicles. Vehicle Buying in the UK delivered an adjusted EBITDA of GBP8.8m (up 6%), at an operating margin within our target range.
WeBuyAnyCar provides the Group with a controlled supply of targeted vehicles into our remarketing network and the proportion of vehicles sold originating from this "third disposal channel" for consumers continues to increase (representing c.20% of our UK Vehicle Remarketing volume).
We continue to invest in the WeBuyAnyCar brand and promote to consumers the significant benefits of our quick, easy and secure service to facilitate the disposal of their cars. Our business model and advertising are reaching a wider audience than in previous periods and this is evident in the increased diversity and volume we are handling. Through a network of over 200 branches, WeBuyAnyCar is ideally placed to offer a convenient service to customers throughout the UK. WeBuyAnyCar continue to offer the customer choice, including our premium option, which allows customers to be paid in as little as 30 minutes.
In Europe, our vehicle buying initiative is operating in three markets, Germany, Sweden and the Netherlands. We are focused on purchasing batches of vehicles direct from corporate entities and remarketing those vehicles through the International Vehicle Remarketing division. These initiatives are deployed in certain markets to drive benefits in auction volume, awareness and efficiency.
Automotive Services
Following the acquisitions of Stobart Automotive, Ambrosetti and Paragon, we have formed the Automotive Services division, which also incorporates the BCA Logistics business previously reported within UK Vehicle Remarketing. This division comprises new and used vehicle storage, handling, enhancement, refurbishment and transport capabilities, enabling us to offer a comprehensive suite of services to our customers. The integration of recent acquisitions in the services sector has led to an improved customer offering and a broader geographic coverage.
6 months 6 months Change
ended ended (%)
2 October 4 October
Highlights 2016 2015(1)
----------------------- ---------- ---------- -------
GBPm GBPm
Revenue 119.4 35.5 +236.3%
Adjusted EBITDA 6.4 2.6 +146.2%
Adjusted EBITDA Margin
(%) 5.4 7.3
------------------------ ---------- ---------- -------
1Prior period comparatives have been re-presented to reflect the new operating divisions - See Operating Divisions section for further details
This division operates across a network of new and used vehicle processing centres in the UK.
Our new vehicle operation handles, processes, enhances, stores and distributes vehicles (imported into, or manufactured in, the UK) to the franchised dealer network or direct to fleet customers, on behalf of the automotive OEMs.
Our used vehicle sites provide refurbishment and associated services to the marketplace (principally corporate fleet owners including OEMs and their captive finance companies, rental and leasing companies), to enhance vehicles to agreed standards before the remarketing of those vehicles back through the distribution network.
This division also owns and operates a logistics network comprising transporters, sites, plated drivers, and inspect and collect services.
The ongoing integration programme of our logistics network, including branch transport, single and multiple vehicle movements and the movement of vehicles to and from our technical centres, is progressing well. During the first half we have increased the number of our own transporters dedicated to serving the auction branch network, improving efficiencies within the Group and reducing our dependency on third parties.
The cost pressures experienced in UK logistics in the prior year have been largely addressed through a rebalancing of the workforce towards self-employed and employed drivers (rather than agency drivers) and a change in the business model to roll out a hub and spoke network, enabling the use of our own fleet for longer distance moves. We are seeing profitability improve as a result of these actions.
Group Costs
Group costs of GBP5.0m were incurred in the period (2015: GBP4.1m), an increase of 22% compared to the prior period, reflecting a full Board of Directors for the six month period along with the associated costs of a larger business.
Financial performance
The divisional operating reviews are focused on adjusted EBITDA(1) in order to provide more meaningful analysis, since depreciation, interest and tax are principally managed at a Group level, and do not directly correlate to divisional operating performance. The following table reconciles adjusted EBITDA to operating profit and profit before tax.
6 months 9 months
ended ended
2 October 4 October
2016 2015(2)
------------------------------------- ---------- --------------------
Adjusted EBITDA GBPm GBPm
UK Vehicle Remarketing 42.7 34.6
International Vehicle Remarketing 11.6 8.7
Vehicle Buying - WeBuyAnyCar 8.8 8.3
Vehicle Buying - International 0.0 (0.9)
Automotive Services 6.4 2.6
Group Costs (5.0) (4.1)
-------------------------------------- ---------- --------------------
Total Adjusted EBITDA 64.5 49.2
Less:
Depreciation and amortisation (11.1) (6.9)
Amortisation of acquired intangibles (18.7) (17.0)
Significant or non-recurring
items (1.1) (24.0)
-------------------------------------- ---------- --------------------
Operating profit 33.6 1.3
Interest (6.9) (6.4)
-------------------------------------- ---------- --------------------
Profit / (loss) before tax 26.7 (5.1)
-------------------------------------- ---------- --------------------
1 Adjusted EBITDA represents earnings before interest, tax, depreciation and amortisation, and excludes acquisition costs, pre-acquisition costs and other significant or non-recurring items.
2Prior period comparatives have been re-presented to reflect the new operating divisions - See Operating Divisions section for further details.
Significant or non-recurring items of GBP1.1m consist predominantly of the acquisition costs (GBP2.2m) in relation to Paragon partially offset by a GBP0.7m non-recurring credit in respect of property lease no longer required.
Tax
The tax charge of GBP2.4m (2015: GBP2.7m) includes a GBP7.1m (2015: GBP4.9m) net tax credit in relation to significant or non-recurring items, including GBP4.0m in relation to amortisation of acquired intangible assets and GBP3.4m in relation to the reduction in the future UK corporation tax rate. The underlying effective tax rate before significant or non-recurring items is 20.4%, reflecting the fact the majority of the Group's taxable profits are generated in the UK.
Pension deficit
The net pension liability has increased to GBP19.3m (2015: GBP7.8m). The deficit has increased compared to the prior period due to the reduction in corporate bond yields, which are a key valuation measure prescribed by the accounting standards. This increase, arising as a result of these actuarial assessments, is accounted for in the statement of other comprehensive income.
Cash flow and net debt position
In the first half, the Group generated cash flows from operations of GBP75.0m (2015: GBP35.5m) and ended the period with net debt of GBP255.9m (2015: GBP156.5m). During the period, the Group utilised GBP60m of the revolving credit facility to partially fund the acquisition of Paragon, with the balance of the acquisition funded from existing resources.
The Group definition of net debt excludes the debts relating to finance leases, the acquired invoice discounting facility of Paragon and BCA Partner Finance. These are funded under separate asset-backed lending agreements and therefore, in the Group's view, these balances should be treated as components of working capital and are excluded from net debt.
Acquisition accounting
As a result of the acquisition of Paragon, the Group has recognised intangible assets in respect of customer relationships and brand, together with the associated deferred tax liability. The excess of consideration over the fair value of acquired assets represents goodwill arising on the acquisition and is discussed further in note 4.
Earnings per share and dividends
Adjusted basic and diluted earnings were 4.7 and 4.6 pence per share respectively (2015: both adjusted basic and diluted earnings per share of 3.6 pence). The adjusted earnings per share measure uses adjusted earnings (see note 6) and for the prior period calculates the weighted average number of shares in issue for the six month period from the acquisition of the BCA business on 2 April 2015 to 4 October 2015. Basic and diluted earnings per share were 3.1 and 3.0 pence per share respectively (2015: both basic and diluted loss per share of 1.4 pence).
The Board has set out its intention to adopt a progressive dividend policy for the Group, reflecting its strong earnings and cash flow characteristics, while retaining sufficient capital to fund ongoing operational requirements and to invest in the Group's long-term growth plans. We remain committed to paying a significant proportion of after-tax profits as dividends. We are pleased to announce an interim dividend of 2.2 pence per share (2015: 2.0p) an increase of 10.0%, payable to shareholders on the register on 13 January 2017 and which will be paid on 31 January 2017.
Related party transactions
There have been no changes in the nature of the related party transactions as described in note 28 to the Annual Report and Accounts 2016 and there have been no new related party transactions which have had a material effect on the financial position or performance of the Group in the six months ended 2 October 2016.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties affecting the Group's business remain largely unchanged from 3 April 2016 and comprise the following risks: economic environment; strategic; commercial; operational; competition; IT systems and information security; intellectual property and brand; management; financial; regulation and legislation; and physical damage and loss. A full assessment of the risks and uncertainties that the Directors believe could have the most significant adverse impact on the Groups business are set out on pages 24 to 25 of the Annual Report and Accounts 2016, which is available on the Company's website, www.bcamarketplaceplc.com. The risks identified in the Annual Report and Accounts 2016 remain relevant for the second half of the financial year.
The UK's EU referendum on 23 June 2016 has resulted in a decision to leave the EU (Brexit). We recognise that we are entering a period of increased uncertainty as the EU exit process is agreed and continue to monitor the political and macro-economic developments closely.
The Group has a direct presence and trading relationship in a number of EU countries and the Board believes that the outcome of the EU referendum does not significantly impact the Group's ability to conduct business into or out of the EU in the short to medium term. Cross border transactions between the UK right-hand drive market and international predominantly left-hand drive market, are limited.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE INTERIM FINANCIAL REPORT
Each of the Directors confirms that to the best of their knowledge:
-- The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union;
-- The interim management report includes a fair review of the information required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules (DTR), being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b. DTR 4.2.8R of the DTR, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
For and on behalf of the Directors:
A Palmer-Baunack T Lampert Executive Chairman Chief Financial Officer 29 November 2016
Directors
M Brangstrup Watts | P Coelewij | J Corsellis | S Gutteridge | J Kamaluddin | T Lampert | D Lis | A Palmer-Baunack
UNAUDITED CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
Note For the For the
6 months 9 months
ended ended
2 October 4 October
2016 2015(1)
-------------------------------- ------------------------ ----- -------------- ---------------
GBPm GBPm GBPm GBPm
Revenue 3 909.8 546.3
Cost of sales (718.8) (399.2)
----------------------------------------------------------- ----- -------------- ----- --------
Gross profit 191.0 147.1
Operating costs (157.4) (145.8)
--------------
Operating profit 3 33.6 1.3
Operating profit: 33.6 1.3
- Depreciation and
Add: amortisation 3 11.1 6.9
- Amortisation of
acquired intangibles 3 18.7 17.0
- Acquisition costs 3 2.2 22.7
- Business closure
costs 3 - 0.8
- Other significant
or non-recurring items 3 (1.1) 0.5
Adjusted EBITDA 64.5 49.2
----------------------------------------------------------- ----- ------ ------ ----- --------
Finance income 0.1 0.1
Finance costs (7.0) (6.5)
Profit/(loss) before income
tax 26.7 (5.1)
Income tax charge 7 (2.4) (2.7)
----------------------------------------------------------- ----- ------ ------ ----- --------
Profit/(loss) for the period 24.3 (7.8)
=========================================================== ===== ====== ====== ===== ========
Attributable to:
Equity owners of the parent 24.2 (7.7)
Non-controlling interests 0.1 (0.1)
----------------------------------------------------------- ----- ------ ------ ----- --------
24.3 (7.8)
========================================================== ===== ====== ====== ===== ========
Earnings/(loss) per share from
continuing operations attributable
to the equity holders of the
parent during the period
(expressed in pence per
share)
--------------------------------- ------------------------------- ------ ------ ----- --------
Basic earnings/(loss)
per share 6 3.1 (1.4)
Diluted earnings/(loss)
per share 6 3.0 (1.4)
================================= =============================== ====== ====== ===== ========
(1) Prior period represents a 9 month period that contains the 6 months of trading of the BCA group from its acquisition to 4 October 2015, and incorporates other acquired companies from their respective dates of acquisition by the Group.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the For the
6 months 9 months
ended ended
2 October 4 October
2016 2015
--------------------------------------- ----------- -----------
GBPm GBPm
Profit/(loss) for the period 24.3 (7.8)
Other comprehensive income:
Items that will not be reclassified
to the income statement
Remeasurements on defined benefit
schemes, including deferred tax (10.0) 0.5
Deferred tax on net movements in 0.1 -
share based payments
Items that may be subsequently
reclassified to the income statement
Foreign exchange translation 26.7 0.2
----------------------------------------
Total other comprehensive income,
net of tax 16.8 0.7
---------------------------------------- ----------- -----------
Total comprehensive profit/(loss)
for the period 41.1 (7.1)
======================================== =========== ===========
Attributable to:
Equity owners of the parent 41.0 (7.0)
Non-controlling interests 0.1 (0.1)
---------------------------------------- ----------- -----------
41.1 (7.1)
======================================= =========== ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Attributable to equity owners
of the parent
------------------------------------------------------------------
(Accumulated
Foreign deficit)
Share Share Merger exchange / retained Non-controlling Total
Note capital premium reserve reserve profit Total interests equity
----------------- ----- -------- ---------- -------- --------- ------------- -------- ---------------- --------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 31 December
2014 (audited) 0.3 28.7 - - (0.3) 28.7 - 28.7
Total
comprehensive
income for the
period
Loss for the
period - - - - (7.7) (7.7) (0.1) (7.8)
Other
comprehensive
income - - - 0.2 0.5 0.7 - 0.7
----------------- -----
Total
comprehensive
loss for the
period - - - 0.2 (7.2) (7.0) (0.1) (7.1)
Contributions
and distributions
Net proceeds
from shares
issued 7.5 986.6 103.6 - - 1,097.7 - 1,097.7
Capital
reduction - (1,015.3) - - 1,015.3 - - -
Share based
payments - - - - 0.1 0.1 - 0.1
Changes in
ownership
interests
Acquisition of
subsidiary with
non-controlling
interest - - - - - - (0.2) (0.2)
----------------- -----
Total
transactions
with owners 7.5 (28.7) 103.6 - 1,015.4 1,097.8 (0.2) 1,097.6
------------------ -----
Balance at 4
October
2015 (unaudited) 7.8 - 103.6 0.2 1,007.9 1,119.5 (0.3) 1,119.2
------------------ -----
Total
comprehensive
income for the
period
Profit for the
period - - - - 15.4 15.4 0.1 15.5
Other
comprehensive
income - - - 28.8 (0.8) 28.0 - 28.0
----------------- -----
Total
comprehensive
income for the
period - - - 28.8 14.6 43.4 0.1 43.5
Contributions
and distributions
Equity-settled
share based
payments - - - - 0.5 0.5 - 0.5
Dividends paid - - - - (15.6) (15.6) - (15.6)
----------------- -----
Total
transactions
with owners - - - - (15.1) (15.1) - (15.1)
------------------ ----- --------
Balance at 3
April
2016 (audited) 7.8 - 103.6 29.0 1,007.4 1,147.8 (0.2) 1,147.6
================== ===== ======== ========== ======== ========= ============= ======== ================ ========
Total
comprehensive
income for the
period
Profit for the
period - - - - 24.2 24.2 0.1 24.3
Other
comprehensive
income - - - 26.7 (9.9) 16.8 - 16.8
----------------- -----
Total
comprehensive
income for the
period - - - 26.7 14.3 41.0 0.1 41.1
Contributions
and distributions
Equity-settled
share based
payments - - - - 0.7 0.7 - 0.7
Dividends paid 11 - - - - (31.2) (31.2) - (31.2)
----------------- -----
Total
transactions
with owners - - - - (30.5) (30.5) - (30.5) ------------------ ----- Balance at 2 October 2016 (unaudited) 7.8 - 103.6 55.7 991.2 1,158.3 (0.1) 1,158.2 ================== ===== ======== ========== ======== ========= ============= ======== ================ ========
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
Note As at As at
2 October 3 April
2016 unaudited 2016 audited
------------------------------- ----- ---------------- --------------
GBPm GBPm
Non-current assets
Intangible assets 8 1,582.3 1,449.5
Property, plant and equipment 8 144.0 115.5
Deferred tax assets 18.5 15.9
---------------- --------------
Total non-current assets 1,744.8 1,580.9
------------------------------- ----- ---------------- --------------
Current assets
Inventories 45.1 19.3
Trade and other receivables 278.5 210.0
Cash and cash equivalents 81.8 102.4
Current tax - 0.3
------------------------------- ----- ---------------- --------------
Total current assets 405.4 332.0
------------------------------- ----- ---------------- --------------
Total assets 2,150.2 1,912.9
------------------------------- ----- ---------------- --------------
Non-current liabilities
Bank borrowings 9 (277.7) (273.1)
Trade and other payables (92.9) (88.7)
Pension deficit (19.3) (7.6)
Provisions (18.0) (18.7)
Deferred tax liabilities (115.0) (110.8)
------------------------------- ----- ---------------- --------------
Total non-current liabilities (522.9) (498.9)
------------------------------- ----- ---------------- --------------
Current liabilities
Bank borrowings 9 (60.0) -
Buyer finance borrowings 10 (61.7) (40.2)
Trade and other payables (335.8) (225.3)
Current tax (8.9) -
Provisions (2.7) (0.9)
------------------------------- ----- ---------------- --------------
Total current liabilities (469.1) (266.4)
------------------------------- ----- ---------------- --------------
Total liabilities (992.0) (765.3)
------------------------------- ----- ---------------- --------------
Net assets 1,158.2 1,147.6
=============================== ===== ================ ==============
Equity shareholders' funds
Share capital 7.8 7.8
Merger reserve 103.6 103.6
Foreign exchange reserve 55.7 29.0
Retained profit 991.2 1,007.4
------------------------------- ----- ---------------- --------------
Equity shareholders' funds 1,158.3 1,147.8
Non-controlling interests (0.1) (0.2)
------------------------------- ----- ---------------- --------------
Total shareholders' funds 1,158.2 1,147.6
=============================== ===== ================ ==============
UNAUDITED CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT
For the For the
6 months 9 months
ended ended
2 October 4 October
Note 2016 2015
---------------------------------------- ----- ----------- -----------
GBPm GBPm
Cash generated from operations 5 75.0 35.5
Increase in buyer finance loan
book (14.7) (14.8)
Interest paid (4.0) (3.6)
Interest received 0.1 0.1
Tax paid (1.9) (1.0)
---------------------------------------- ----- ----------- -----------
Net cash inflow from operating
activities before acquisition
related cash flows 54.5 16.2
Acquisition related cash flows (2.2) (47.6)
----------- -----------
Net cash inflow/(outflow) from
operating activities 52.3 (31.4)
---------------------------------------- ----- ----------- -----------
Cash flows from investing activities
Purchase of property, plant
and equipment (23.3) (8.6)
Purchase of intangible assets (5.0) (5.8)
Proceeds from sale of property,
plant and equipment 2.0 0.7
Acquisition of subsidiary undertaking,
net of cash acquired (98.1) (677.2)
----------- -----------
Net cash outflow from investing
activities (124.4) (690.9)
---------------------------------------- ----- ----------- -----------
Cash flows from financing activities
Proceeds from share issue - 993.4
Dividends paid 11 (31.2) -
Proceeds from borrowings 9 60.0 275.0
Repayments of borrowings - (468.6)
Financing fees paid - (7.9)
Payment of finance lease liabilities (2.7) -
Increase in buyer finance borrowings 21.5 12.9
----------- -----------
Net cash inflow from financing
activities 47.6 804.8
---------------------------------------- ----- ----------- -----------
Net (decrease)/increase in
cash and cash equivalents (24.5) 82.5
Foreign exchange on cash held 3.9 0.8
Cash and cash equivalents at
period start 102.4 28.8
---------------------------------------- -----
Cash and cash equivalents at
period end 81.8 112.1
======================================== ===== =========== ===========
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
BCA Marketplace plc (the 'Company') was incorporated in April 2014 with the aim to acquire and manage companies in the UK and European automotive sector. On 2 April 2015, BCA Marketplace plc acquired the BCA group ('BCA group'). This was followed by the acquisitions of SMA Vehicle Remarketing Limited ('SMA') on 1 June 2015, Stobart Automotive Limited ('BCA Automotive') on 25 August 2015, and Ambrosetti (U.K.) Limited ('Ambrosetti') on 4 February 2016. Paragon Automotive Limited ('Paragon') was acquired on 18 July 2016 and is discussed further in note 4.
The comparative period in these accounts represents a 9 month period ended 4 October 2015, however, they represent 6 months of trading from the date of the BCA group acquisition on 2 April 2015.
BCA Marketplace plc is incorporated and domiciled in the UK with the registered number 09019615. The address of the Company's registered office is BCA Bedford, Coronation Business Park, Kempston Hardwick, Bedford MK43 9PR.
2. ACCOUNTING POLICIES (a) Basis of preparation
These condensed consolidated financial statements for the period ended 2 October 2016 do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union and the Disclosure and Transparency Rules of the Financial Conduct Authority.
The annual financial statements of BCA Marketplace plc are prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRS Interpretations Committee ('IFRS IC') interpretations as adopted by the European Union ('Adopted IFRS') and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The condensed consolidated set of financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 3 April 2016. These condensed consolidated interim financial statements and notes to the accounts disclose only those material changes in balances and accounting policies by reference to those documents.
The comparative figures as at 3 April 2016 are extracted from the BCA Marketplace plc annual report and accounts. Those accounts have been reported on by the auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 498 (2) and (3) of the Companies Act 2006.
These condensed consolidated interim financial statements were approved for issue on 29 November 2016. The interim results for the current and comparative period are unaudited. The Group's auditor, PricewaterhouseCoopers LLP, has carried out a review of the condensed consolidated interim financial statements and their report is set out at the end of this document.
The financial statements and the notes to the financial statements are presented in millions of pounds sterling ('GBPm') except where otherwise indicated.
(b) Going concern
The Group maintains a mixture of medium-term debt, committed credit facilities, finance lease arrangements and cash reserves, which together are designed to ensure that the Group has sufficient available funds to finance its operations. The Board reviews forecasts of the Group's liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
After making appropriate enquiries and having considered the business activities and the Group's principal risks and uncertainties, the Directors are satisfied that the Company and the Group as a whole have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the condensed consolidated financial statements have been prepared on a going concern basis.
(c) Basis of consolidation
The condensed consolidated interim financial statements have been prepared under the historical cost convention. The same accounting policies, presentation and methods of computation have been applied in these condensed consolidated interim financial statements as were applied in the consolidated financial statements of the Group as at and for the period ended 3 April 2016.
The only accounting policy that differs relates to taxes on income, which in the interim period are accrued using the effective tax rate that would be applicable to the expected total annual earnings.
In the application of the Group's accounting policies the Directors are required to make judgements, estimates and assumptions about the carrying value of the assets and liabilities that are not readily apparent from the other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The critical judgements affecting the Group's interim financial statements are acquisition accounting (including the fair value of acquired assets and liabilities and the valuation of acquired intangible assets), accruals for taxation, the recoverability of deferred tax assets, provisions for onerous leases, fair value of share based payments and the net retirement benefit obligation.
(d) New standards, amendments and interpretations
There are no new standards or amendments that are mandatory for the first time for the financial year beginning 4 April 2016 that have an impact on the Group's financial statements. Standards that are in issue but not yet effective at the balance sheet date and that have not been early adopted by the Group are presented in the consolidated financial statements of the Group as at and for the period ended 3 April 2016.
3. SEGMENTAL REPORTING
Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used both to assess performance and make strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8 'Operating Segments'.
The Board of Directors consider the business to be split into four main segments generating revenue: Vehicle Remarketing, comprising the UK and International segments, Vehicle Buying and Automotive Services. Group Costs comprises central head office functions and any costs not directly attributable to the segments.
For the 6 months ended 2 October
2016
------------------------ -------------------------------------------------------------------------
Vehicle Remarketing Vehicle Automotive Group Total
Buying Services Costs
-------------------------------- -------- ----------- ------- -------
UK International Total
------ -------------- --------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Total revenue 334.4 62.9 397.3 394.7 126.9 - 918.9
Inter-segment revenue (1.3) (0.3) (1.6) - (7.5) - (9.1)
------------------------
Total revenue from
external customers 333.1 62.6 395.7 394.7 119.4 - 909.8
Adjusted EBITDA 42.7 11.6 54.3 8.8 6.4 (5.0) 64.5
Depreciation and
amortisation (5.4) (1.6) (7.0) (0.8) (3.2) (0.1) (11.1)
------------------------
37.3 10.0 47.3 8.0 3.2 (5.1) 53.4
------------------------
Amortisation of
acquired intangibles (18.7)
Acquisition costs (2.2)
Other significant
or non-recurring
items 1.1
------------------------
Operating profit 33.6
Finance income 0.1
Finance cost (7.0)
Profit before taxation 26.7
======================== ====== ============== ======== ======== =========== ======= =======
Capital expenditure 17.1 1.2 18.3 0.5 12.5 0.5 31.8
======================== ====== ============== ======== ======== =========== ======= =======
Acquisition costs of GBP2.2m relate to the acquisition of the Paragon Group. Non-recurring items of GBP1.1m mainly reflect a GBP0.7m credit in respect of property.
For the 9 month period ended 4
October 2015
----------------------- -------------------------------------------------------------------------
Vehicle Automotive Group
Vehicle Remarketing Buying Services Costs Total
-------------------------------- -------- ----------- ------- -------
UK International Total
------ -------------- --------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue
Total revenue 119.5 49.7 169.2 343.4 39.0 - 551.6
Inter-segment revenue (1.6) (0.2) (1.8) - (3.5) - (5.3)
-----------------------
Total revenue from
external customers 117.9 49.5 167.4 343.4 35.5 - 546.3
Adjusted EBITDA 34.6 8.7 43.3 7.4 2.6 (4.1) 49.2
Depreciation and
amortisation (4.5) (1.3) (5.8) (0.5) (0.5) (0.1) (6.9)
-----------------------
30.1 7.4 37.5 6.9 2.1 (4.2) 42.3
======================= ====== ============== ======== ======== =========== ======= =======
Amortisation of
acquired intangibles (17.0) Acquisition costs (22.7) Business closure costs (0.8) Other significant or non-recurring items (0.5) ----------------------- Operating profit 1.3 Finance income 0.1 Finance cost (6.5) Loss before taxation (5.1) ======================= ====== ============== ======== ======== =========== ======= ======= Capital expenditure 10.7 1.5 12.2 0.7 2.1 0.2 15.2 ======================= ====== ============== ======== ======== =========== ======= =======
The segmental reporting table above has been re-presented from that disclosed in the interim report for the nine months ended 4 October 2015. The re-presentation reflects the changes to the Group segments and therefore provides a more meaningful comparison. The total amounts adjusted between segments can be seen in the table below. Further details of the change in segmentation are discussed in the Operating Divisions section.
Segmental re-presented for the 9
month period ended 4 October 2015
------------------ ----------------------------------------------------------------------------
Other
Vehicle / Automotive Group
Vehicle Remarketing Buying Services Costs Total
--------------------------------- -------- -------------- ------- ------
UK International Total
------- -------------- --------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
External revenue
as reported 132.9 49.5 182.4 343.4 20.5 - 546.3
Adjustments (15.0) - (15.0) - 15.0 - -
------------------ ------- -------------- -------- -------- -------------- ------- ------
External revenue
re-presented 117.9 49.5 167.4 343.4 35.5 - 546.3
================== ======= ============== ======== ======== ============== ======= ======
Adjusted EBITDA
as reported 35.1 8.7 43.8 7.4 (2.0) - 49.2
Adjustments (0.5) - (0.5) - 4.6 (4.1) -
------------------
Adjusted EBITDA
re-presented 34.6 8.7 43.3 7.4 2.6 (4.1) 49.2
================== ======= ============== ======== ======== ============== ======= ======
4. ACQUISITIONS
The following acquisition has been made by the Group in the period.
Paragon Automotive:
On 18 July 2016 the Group acquired 100% of the Ordinary shares of Paragon Automotive Limited and subsidiary companies for initial consideration of GBP102.7m, which is subject to adjustment based on certain circumstances and contingent earn-out payments of up to a maximum of GBP30m, subject to the achievement of financial and market targets over the two financial years ending March 2017 and 2018. Management provisionally estimates that earn-out payments of GBP20m will be made over this period, which together with expected adjustments to the initial consideration and discounting for the time-value of money, represent a fair value of GBP18.6m.
As the leading provider of outsourced vehicle services in the UK, Paragon supplements recent acquisitions and the Group's current offerings in logistics, refurbishment, imaging, inspection and finance. The acquisition will enable BCA to provide a comprehensive suite of services across the automotive supply chain to OEMs, corporate fleets and dealers alike. The fair values of the assets and liabilities (excluding cash and borrowings) have been determined on a provisional basis whilst being formally reviewed and will be finalised within 12 months of acquisition.
Provisional
Fair
value
----------------------------------------------------------- ------------
GBPm
Intangible assets: - Brand 5.9
- Customer relationships 44.6
- Software net book value 0.3
Property, plant and equipment 8.4
Inventories 1.9
Trade and other receivables 28.1
Cash and cash equivalents 4.6
Trade and other payables (30.9)
Deferred tax liability (9.3)
Borrowings (2.8)
------------------------------------------------------------- ------------
Net assets acquired 50.8
Goodwill 70.5
------------------------------------------------------------- ------------
Consideration
Initial consideration 102.7
Consideration contingent upon events
after the acquisition date 18.6
Total consideration 121.3
============================================================= ============
Goodwill arising on the acquisition represents the assembled workforce, geographical coverage and buyer synergies from combining the operations of Paragon with Ambrosetti.
The fair value of acquired receivables was GBP25.5m. The gross contractual amounts receivable were GBP25.9m, of which GBP0.4m were not expected to be received.
Impact of acquisition
Paragon's revenue and profit before tax, before non-recurring items included in the consolidated income statement from 18 July 2016 to 2 October 2016 were GBP35.3m and GBP1.4m respectively. Had the Paragon acquisition occurred on 4 April 2016, it is estimated that its revenue and profit before tax, before non-recurring items, for the 6 months to 2 October 2016 would have been GBP86.3m and GBP3.4m respectively. In determining these amounts management has assumed that the fair value adjustments that arose on the date of acquisition and all circumstances of the acquisition would have been the same if the acquisition had occurred on 4 April 2016.
5. CASH GENERATED FROM OPERATIONS
For the For the
6 months 9 months
ended ended
2 October 4 October
Note 2016 2015
------------------------------------------ ----- ----------- -----------
Cash flows from operating activities GBPm GBPm
Profit/(loss) for the period 24.3 (7.8)
Adjustments for:
Income tax charge 7 2.4 2.7
Finance income (0.1) (0.1)
Finance costs 7.0 6.5
Depreciation 6.5 3.1
Amortisation 23.3 20.8
Loss on sale of property, plant
and equipment 0.1 0.4
Equity settled share based payments 0.7 0.1
Retirement benefit obligations (0.2) 0.2
Acquisition costs 2.2 22.7
Other - 0.1
Changes in working capital:
Increase in inventories (23.6) (11.7)
(Increase)/decrease in trade and
other receivables (22.9) 6.6
Increase/(decrease) in trade and
other payables 54.6 (7.7)
Increase/(decrease) in provisions 0.7 (0.4)
------------------------------------------ ----- ----------- -----------
Cash generated from operations 75.0 35.5
========================================== ===== =========== ===========
6. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
For the For the
6 months 9 months
ended ended
2 October 4 October
2016 2015
------------------------------------------- ----------- -----------
Profit/(loss) for the period attributable
to equity shareholders (GBPm) 24.2 (7.7)
------------------------------------------- ----------- -----------
m m
Weighted average number of shares
used in calculating basic earnings
per share 780.2 531.2
Incremental shares in respect of 14.4 -
employee share schemes (1)
------------------------------------------- ----------- -----------
Weighted average number of shares
used in calculating diluted earnings
per share 794.6 531.2
------------------------------------------- ----------- -----------
Basic earnings/(loss) per share (pence) 3.1 (1.4)
Diluted earnings/(loss) per share
(pence) 3.0 (1.4)
=========================================== =========== ===========
(1) In the prior period, no incremental shares in respect of employee share schemes have been recognised because the basic earnings per share, from continuing operations, were a loss.
Adjusted earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary shareholders, adjusted for significant or non-recurring items and their associated tax impact, by the weighted average number of ordinary shares outstanding during the period.
The prior period adjusted diluted earnings per share figure below has been calculated using the weighted average number of shares in issue for the 6 month period to 4 October 2015, as opposed to the full 9 month period that the comparative represents. Management believe this adjustment to the weighted average number of shares is consistent with the earnings of the BCA group which are included for the same 6 month period.
Note For the For the
6 months 9 months
ended ended
2 October 4 October
2016 2015
-------------------------------------------- ----- ----------- -----------
GBPm GBPm
Profit/(loss) for the period attributable
to equity shareholders 24.2 (7.7)
Add back:
Significant or non-recurring items 3 19.8 41.0
Tax credit on significant or non-recurring
items (7.1) (4.9)
-------------------------------------------- -----
Adjusted earnings 36.9 28.4
-------------------------------------------- ----- ----------- -----------
m m
Weighted average number of shares
used in calculating adjusted basic
earnings per share 780.2 780.2
Incremental shares in respect
of employee share schemes 14.4 9.6
-------------------------------------------- -----
Weighted average number of shares
used in calculating adjusted diluted
earnings per share 794.6 789.8
-------------------------------------------- ----- ----------- -----------
Adjusted basic earnings per share
(pence) 4.7 3.6
Adjusted diluted earnings per
share (pence) 4.6 3.6
============================================ ===== =========== ===========
7. INCOME TAX
The income tax charge is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year.
The income tax charge of GBP2.4m (2015: GBP2.7m) includes a GBP7.1m (2015: GBP4.9m) net tax credit comprising GBP4.0m in relation to amortisation of acquired intangible assets and GBP3.4m in relation to the reduction in the future UK corporation tax rate, offset by a GBP0.3m charge in relation to significant or non-recurring items. The underlying effective tax rate before significant or non-recurring items is 20.4%.
8. NON CURRENT ASSETS
Property,
Intangible plant and
assets equipment Total
------------------------------- ----------- ----------- --------
GBPm GBPm GBPm
Net book value at 3 April
2016 1,449.5 115.5 1,565.0
Acquired through business
combinations 121.3 8.4 129.7
Transfers 1.0 (1.0) -
Additions 5.0 26.8 31.8
Disposals - (2.1) (2.1)
Depreciation and amortisation
charge (23.3) (6.5) (29.8)
Exchange difference 28.8 2.9 31.7
Net book value at 2 October
2016 1,582.3 144.0 1,726.3
=============================== =========== =========== ========
Finalisation of the valuation of intangible fixed assets for SMA and BCA Automotive resulted in a GBP1.0m increase to goodwill following the revaluation of one of the properties.
9. BANK BORROWINGS
As at As at
2 October 3 April
2016 2016
------------------------------ ----------- ---------
GBPm GBPm
Non-current
Bank borrowings 277.7 273.1
------------------------------- ----------- ---------
Current
Bank borrowings 60.0 -
Invoice discounting facility - -
------------------------------- ----------- ---------
The Group has a five year committed GBP375m multi-currency facility, including a GBP100m revolving facility and a GBP275m term facility. The term facility is fully drawn down and matures at the end of the five year period, with no repayment of capital due before that time. In July 2016, GBP60m was drawn down in sterling from the revolving facility.
Following the acquisition of Paragon the Group now has an invoice discounting facility. Interest is charged on the drawn down element of the facility at a variable rate of interest, based on the Bank of England base rate. At 2 October 2016 the borrowings were GBP49,000.
10. BUYER FINANCE BORROWINGS
The Group has an asset-backed finance facility to fund the buyer finance business. This is a revolving facility that allows a drawdown of up to GBP90.0m. The amount is advanced solely to a buyer finance subsidiary in respect of specific receivables. Interest is charged on the drawn down element of the facility at a variable rate of interest, based on the Bank of England base rate. At 2 October 2016, the borrowings were GBP61.7m (3 April 2016: GBP40.2m).
11. DIVIDS
A final dividend of GBP31.2m, 4.0p per share, (2015: GBPnil) was paid on 30 September 2016 to shareholders on the Register on 23 September 2016.
After the interim balance sheet date dividends of 2.2p per qualifying ordinary share (2015: 2.0p) were proposed by the Directors payable on 31 January 2017 to shareholders on the Register on 13 January 2017. The dividends have not been provided for.
INDEPENT REVIEW REPORT TO BCA MARKETPLACE PLC
Report on the consolidated interim financial statements
Our conclusion
We have reviewed BCA Marketplace plc's condensed interim financial statements (the "interim financial statements") in the interim report of BCA Marketplace plc for the 6 month period ended 2 October 2016. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the condensed consolidated interim balance sheet as at 2 October 2016;
-- the condensed consolidated interim income statement and condensed consolidated interim statement of comprehensive income for the period then ended;
-- the condensed consolidated interim cash flow statement for the period then ended;
-- the condensed consolidated interim statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The interim report, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the interim report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
29 November 2016
For more information
bcamarketplaceplc.com
BCA Marketplace plc
Coronation Business Park
Bedford
MK43 9PR
Registered in England & Wales No. 09019615
(c) BCA Marketplace plc
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LKLLLQFFXFBX
(END) Dow Jones Newswires
November 30, 2016 02:01 ET (07:01 GMT)
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