Share Name Share Symbol Market Type Share ISIN Share Description
Driver Group Plc LSE:DRV London Ordinary Share GB00B0L9C092 ORD 0.4P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 55.50p 55.00p 56.00p 55.50p 55.50p 55.50p 31,828 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 62.6 2.7 4.0 13.9 29

Driver Group plc Interim Report

04/06/2019 7:00am

UK Regulatory (RNS & others)


Driver (LSE:DRV)
Historical Stock Chart

6 Months : From Apr 2019 to Oct 2019

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TIDMDRV

RNS Number : 0030B

Driver Group plc

04 June 2019

4 June 2019

DRIVER GROUP PLC

("Driver" or "the Group")

Interim Report

For the six months ended 31 March 2019

Key Points (for the six months ended 31 March 2019

 
                                              6 months        6 months 
                                               ended           ended 
                                               31 March        31 March 
                                               2019            2018                 Change 
                                               GBP000          GBP000               GBP000 
                                               Unaudited       Unaudited 
------------------------------------------  --------------  -------------  --------------- 
Revenue                                           29,711          31,694         (1,983) 
Gross Profit                                      6,695            8,887         (2,192) 
Gross Profit %                                      23%             28%            (5%) 
------------------------------------------  --------------  -------------  --------------- 
                                                    1,005                         (721) 
Profit before tax                                    (243)         1,726           (622) 
 Add: Share-based payment (credit)/charge             762           379           (1,343) 
 Underlying* profit before tax                                      2,105 
------------------------------------------  --------------  -------------  --------------- 
Underlying* profit before tax %                         3%             7%          (4%) 
Underlying* earnings per share                        1.1p          3.4p          (2.3p) 
Net cash**                                         5,011             838          4,173 
 
   --           Revenue down by 6% to GBP29.7m (2018: GBP31.7m) 
   --           Gross profit at 23% a GBP2.2m decrease to GBP6.7m (2018: GBP8.9m) 

-- Underlying* profit before tax at GBP0.8m (2018: GBP2.1m) resulting in an underlying* profit before tax margin of 3% (2018: 7%)

   --           Net cash increase year on year of GBP4.2m to GBP5.0m (2018: GBP0.8m) 

-- Fee earner headcount decreased by 32 to 355 because of reduced revenues in both APAC and Middle East.

   --           Overall utilisation rates of 76.1% (2018: 81.6%) 

-- Europe & Americas (EuAm) reported underlying* profit before tax for the period of GBP2.0m (2018: GBP1.4m) with utilisation rates at 70.3% (2018: 73.6%)

-- Middle East (ME) reported underlying* profit before tax for the period of GBP0.4m (2018: GBP1.3m) with utilisation rates at 80.9% (2018: 83.5%)

-- Asia Pacific (APAC) reported underlying* loss before tax for the period of GBP0.6m (GBP2018: profit GBP0.6m) with utilisation rates at 76.1% (2018: 91.6%)

   *     Underlying figures are stated before the share-based payment costs. 
   **    Net cash consists of cash and cash equivalents, bank loans and finance leases. 

Steve Norris, Chairman of Driver Group, said:

"Although the first half of 2019 has seen lower activity than expected in some markets we have reacted quickly to re-align the cost base of underperforming businesses in the first half and with enquiry rates at high levels the Group is well placed to record good progress for the remainder of the current financial year."

Enquiries:

 
 Driver Group plc 
  Gordon Wilkinson (CEO) 
  David Kilgour (CFO)                                   +44 (0) 20 7377 0005 
 N+1 Singer - Nominated Adviser 
  Sandy Fraser                                           +44 (0)20 7496 3000 
 Acuitas Communications- Financial                      +44 (0) 20 3687 0868 
  PR                                           simon.nayyar@acuitascomms.com 
  Simon Nayyar                         fraser.schurer-lewis@acuitascomms.com 
  Fraser Schurer-Lewis 
 

INTRODUCTION

The Group's core business is in claims and dispute management and expert witness work. We are fortunate to count many industry-leading proponents among our firm's complement which gives us strong client relationships and a competitive edge whilst having a reputation for delivering a world class service. These services are offered in all three of the Group's regions being Europe & Americas (EuAm), Middle East (ME) and Asia Pacific (APAC). The Group also has a highly respected project services business in the UK.

The six months to 31 March 2019 has been a mixed period for the Group following the significant progress in the year to 30 September 2018. The EuAm region has remained strong and has performed well during the first six months of the year. I am pleased to report that revenue and profit have all increased in the period to March 2019 which is a testament to the strong management team we have in place within the region. However, for our businesses in ME and APAC it has been a time when a number of larger commissions have concluded coinciding with the delayed start of new commissions. The consequence has been that activity levels in both these regions has been lower than expected which has impacted the overall Group performance for the period. I have frequently pointed out that our visibility of new business extends to no more than six to eight weeks and we are clear that this lower than expected revenue is not a reflection of any systemic failure in our business and is more a matter of timing. That said, we have taken steps to reduce the Group's cost base in these regions to ensure that our breakeven point is lower than before and the benefit of this will be felt in the second half of the financial year.

FINANCIAL RESULTS

Group revenue for the first half of the financial year was GBP29.7m, a decrease of 6% on the first half of 2018 (GBP31.7m). Revenue in EuAm increased by 4% to GBP14.9m (2018: GBP14.3m), offsetting this was a reduction in revenue for both ME and APAC. ME reported a decrease of 14% to GBP10.3m (2018: GBP12.0m) with APAC decreasing by 17% to GBP4.5m (2018: GBP5.4m). As a result of the reduction in revenue, gross profit has reduced by GBP2.2m to GBP6.7m (2018: GBP8.9m). Administrative expenses decreased by GBP1.4m to GBP5.7m (2018: GBP7.1m). GBP0.6m of the reduction relates to the movement in the share based payment charge.

The Group reported an underlying* profit before tax of GBP0.8m (2018: GBP2.1m). The operating profit amounted to GBP1.1m (2018: GBP1.8m) and the pre-tax profit for the period was GBP1.0m (2018: GBP1.7m).

The Group's effective tax rate is 17% reflecting the geographic make-up of the Group, with UK profits utilising brought forward losses from prior years and with profits in the current period in overseas operations at local tax rates where there are no brought forward tax losses. Underlying* profit per share was 1.1p (2018: 3.4p). After share-based payment charges the profit per share was 1.5p (2018: 2.7p).

The Group was in a net cash** position of GBP5.0m at 31 March 2019 compared to GBP6.9m at 30 September 2018 and GBP0.8m at 31 March 2018.

Net cash outflow from operations was GBP0.8m (2018: GBP1.3m cash inflow) during the first six months, including a net inflow from a decrease in trade and other receivables of GBP0.5m (2018: GBP2.1m cash outflow) and a net cash outflow from a decrease in trade and other payables of GBP2.4m (2018: GBP0.9m inflow). Tax paid totalled GBP0.5m (2018: GBP0.1m) and the acquisition of fixed assets absorbed GBP0.1m (2018: GBP0.2m). A further cash outflow during the period was the purchase of treasury shares at GBP0.5m (2018: GBPnil).

DIVID

The Board was pleased to announce the reinstatement of a dividend payment in the 30 September 2018 results of 0.5p per share which was paid to shareholders in April 2019. Reflecting our confidence in the medium term prospects for the Group and the inherently cash generative nature of our business, the Board recommends the payment of an interim dividend of 0.5p per share for 2019 (2018: GBPnil).

TRADING PERFORMANCE

During the six-month period to 31 March 2019 the overall headcount reduced by 5% to 435. The decrease was attributable to both a reduction in administrative staff and a reduction of underperforming fee earning staff in both the ME and APAC regions to ensure our cost base is aligned with the lower activity levels in those markets. Overall staff utilisation*** levels reduced during the period to 76.1% (2018: 81.6%).

The EuAm region delivered revenue growth of 4% to GBP14.9m and profit growth of 44.8% to GBP2.0m. Within this the Driver Trett UK business has continued its strong performance from 2018 and mainland Europe performance was excellent with revenue growth of GBP0.7m to GBP3.6m resulting in an increase in profit to GBP0.5m (2018: GBP0.1m). The UK Driver Project Services business revenue decreased by 9% to GBP3.0m following the conclusion of a major contract but managed to generate a profit of GBP0.3m.

Revenue for the ME region decreased by GBP1.7m to GBP10.3m. A significant proportion of this decrease (GBP1.4m) related to Kuwait where a number of significant commissions reached completion and the general manager decided to retire during the period. ME regional profit decreased by GBP0.9m to GBP0.4m due to overall lower revenues. Underperformance in UAE and Kuwait during the first half year has been addressed by actions taken to reduce the cost base and this should improve the business contribution in the second half of the year. There has been a good performance in Oman during the first half year with revenue increasing by GBP0.2m and Qatar continues to perform well.

In the APAC region revenues decreased by GBP0.9m to GBP4.5m with the decrease relating to Singapore and Malaysia. Revenue in Singapore has been impacted due to the completion of a number of significant commissions and delays in new commissions. The result for the region was a disappointing loss of GBP0.6m (2018: profit GBP0.6m). Action has been taken to significantly reduce the cost base within the region, the benefit of which should be seen in the second half. This resulted in non-recurring costs of GBP0.2m being expensed in the period up to the half year.

OUTLOOK

Although the first half of 2019 has seen lower activity than expected in some markets we have reacted quickly to re-align the cost base of underperforming businesses in the first half and with enquiry rates at high levels the Group is well placed to record good progress for the remainder of the current financial year. As a result, whilst activity levels during the fourth quarter will be critical to the outcome for the year as a whole, we currently expect to deliver underlying* profit before taxation for the year broadly in line with the guidance set out in our March trading update. The growth of the Diales expert witness and advisory brand continues to be a key objective for the Group across all regions.

On behalf of our senior leadership team of Gordon Wilkinson, Mark Wheeler and David Kilgour, I would particularly like to thank every one of our staff wherever they are in the world for their continued hard work and support for the Group. I should also like to thank all our shareholders, established and new, for their continuing support. The Group will continue to do its utmost to repay the confidence you have shown in the business.

Steven Norris

Non-Executive Chairman

3 June 2019

   *     Underlying figures are stated before the share-based payment costs. 
   **    Net cash consists of cash and cash equivalents, bank loans and finance leases. 

*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff

Consolidated Income Statement

Interim report for the six months ended 31 March 2019

 
                                                                                                            Year 
                                                                6 months           6 months                 ended 
                                                                ended              ended                      30 
                                                                31 March           31 March               September 
                                                                2019               2018                      2018 
                                                                GBP000             GBP000                   GBP000 
                                                                Unaudited          Unaudited               Audited 
----------------------------------------------------------  -----------------  ------------------  ------------------- 
REVENUE                                                            29,711              31,694          62,615 
 Cost of sales                                                     (23,016)           (22,807)          (46,338) 
----------------------------------------------------------  -----------------  ------------------  ------------------- 
                                                                        6,695               8,887               16,277 
GROSS PROFIT                                                          (5,722)             (7,146)             (13,546) 
 Administrative expenses                                                   82                  69                  139 
 Other operating income 
----------------------------------------------------------  -----------------  ------------------  ------------------- 
Underlying* operating profit                                              812          2,189              3,970 
 Share-based payment credit/(charge) and associated 
  costs                                                                   243           (379)              (1,100) 
----------------------------------------------------------  -----------------  ------------------  ------------------- 
OPERATING PROFIT                                                      1,055               1,810              2,870 
 Finance income                                                       20 (70)              2 (86)             17 (148) 
 Finance costs 
==========================================================  =================  ==================  =================== 
PROFIT BEFORE TAXATION                                              1,005              1,726               2,739 
 Tax expense (note 2)                                                (170)              (297)               (567) 
==========================================================  =================  ==================  =================== 
PROFIT FOR THE PERIOD                                                     835               1,429                2,172 
 Profit attributable to non-controlling interests                           3                   -                    3 
 Profit attributable to equity shareholders of the parent                 832               1,429                2,169 
==========================================================  =================  ==================  =================== 
                                                                          835               1,429          2,172 
==========================================================  =================  ==================  =================== 
Basic earnings per share attributable to equity                     1.5p               2.7p                4.0p 
 shareholders                                                        1.5p               2.6p                3.8p 
 of the parent (pence) 
 Diluted earnings per share attributable to equity 
 shareholders 
 of the parent (pence) 
==========================================================  =================  ==================  =================== 
 

* Underlying figures are stated before the share-based payment costs.

Consolidated Statement of Comprehensive Income

Interim report for the six months ended 31 March 2019

 
                                                                                               Year 
                                                              6 months       6 months          ended 
                                                              ended          ended              30 
                                                              31 March       31 March        September 
                                                              2019           2018              2018 
                                                              GBP000         GBP000           GBP000 
                                                              Unaudited      Unaudited        Audited 
--------------------------------------------------------  -------------  -------------  -------------- 
PROFIT FOR THE PERIOD                                              835          1,429           2,172 
--------------------------------------------------------  -------------  -------------  -------------- 
Other comprehensive income: 
 Items that could subsequently be reclassified to the 
 Income Statement: 
 
 Exchange differences on translating foreign operations              29             12              59 
========================================================  =============  =============  ============== 
Other comprehensive income for the year net of tax                   29             12              59 
--------------------------------------------------------  -------------  -------------  -------------- 
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD                           864          1,441         2,231 
--------------------------------------------------------  -------------  -------------  -------------- 
Total comprehensive income attributable to: Owners 
 of the parent 
 Non-controlling interest 
                                                                    861          1,441           2,228 
                                                                      3              -               3 
========================================================  =============  =============  ============== 
                                                                    864          1,441         2,231 
--------------------------------------------------------  -------------  -------------  -------------- 
 

Consolidated Statement of Financial Position

Interim report for the six months ended 31 March 2019

 
                                                                                                           Year 
                                                               6 months              6 months              ended 
                                                               ended                 ended                  30 
                                                               31 March              31 March            September 
                                                               2019                  2018                  2018 
                                                               GBP000                GBP000               GBP000 
                                                               Unaudited             Unaudited            Audited 
---------------------------------------------------------  --------------------  ----------------  ---------------- 
NON-CURRENT ASSETS 
 Goodwill                                                                 2,969             2,969             2,969 
 Property, plant and equipment                                              636               810               765 
 Deferred tax asset                                                          98                64                69 
=========================================================  ====================  ================  ================ 
                                                                          3,703             3,843             3,803 
=========================================================  ====================  ================  ================ 
CURRENT ASSETS 
 Trade and other receivables Derivative financial asset 
  Cash and cash equivalents Asset held for sale                          18,956            20,976            20,445 
                                                                             29               390                42 
                                                                          7,394             5,814            10,007 
                                                                              -             1,614                 - 
=========================================================  ====================  ================  ================ 
                                                                         26,379            28,794            30,494 
=========================================================  ====================  ================  ================ 
TOTAL ASSETS                                                             30,082            32,637            34,297 
=========================================================  ====================  ================  ================ 
 
CURRENT LIABLITIES                                                      (2,382)             (662)             (646) 
 Borrowings                                                             (9,076)           (9,223)          (10,623) 
 Trade and other payables Derivative financial liability                  (101)                 -             (639) 
 Current tax payable                                                      (116)             (354)             (456) 
=========================================================  ====================  ================  ================ 
                                                                       (11,675)          (10,239)          (12,364) 
=========================================================  ====================  ================  ================ 
NON-CURRENT LIABILITIES 
 Borrowings                                                                   -           (4,314)           (2,460) 
 Deferred tax liabilities                                                     -             (127)                 - 
=========================================================  ====================  ================  ================ 
                                                                              -           (4,441)        (2,460) 
=========================================================  ====================  ================  ================ 
TOTAL LIABILITIES                                                      (11,675)          (14,680)       (14,824) 
=========================================================  ====================  ================  ================ 
NET ASSETS                                                               18,407            17,957        19,473 
=========================================================  ====================  ================  ================ 
SHAREHOLDERS' EQUITY 
 Share capital Share premium Merger reserve Currency 
  reserve                                                                   215               215               215 
 Capital redemption reserve                                              11,497            11,475            11,475 
                                                                          1,055             1,055             1,055 
 Treasury shares Retained earnings Own shares                             (371)             (447)             (400) 
                                                                       18 (486)                18                18 
                                                                          6,473                 -                 - 
                                                                                            5,745             7,107 
                                                                            (3)             (107)               (3) 
=========================================================  ====================  ================  ================ 
TOTAL SHAREHOLDERS' EQUITY                                               18,398            17,954            19,467 
NON-CONTROLLING INTEREST                                                      9                 3                 6 
=========================================================  ====================  ================  ================ 
TOTAL EQUITY                                                             18,407            17,957        19,473 
=========================================================  ====================  ================  ================ 
 

Consolidated Cashflow Statement

Interim report for the six months ended 31 March 2019

 
                                                                                                                        Year 
                                                                         6 months              6 months                 ended 
                                                                         ended                 ended                     30 
                                                                         31 March              31 March               September 
                                                                         2019                  2018                     2018 
                                                                         GBP000                GBP000                  GBP000 
                                                                         Unaudited             Unaudited               Audited 
-------------------------------------------------------------------  --------------------  ------------------  ------------------ 
CASH FLOWS FROM OPERATING ACTIVITIES 
 Profit for the year                                                            835                 1,429                2,172 
===================================================================  ====================  ==================  ================== 
Adjustments for: 
                                                                                                                         551 (46) 
                                                                                                                             (52) 
 Depreciation                                                                         227                 296                (17) 
 Exchange adjustments                                                                  27                  33                 148 
 Profit on disposal of property, plant & equipment                                 - (20)               - (2)                 567 
 Finance income Finance expense Tax expense                                            70                  86               1,100 
 Equity settled share-based payment charge                                      170 (243)                 297 
                                                                                                          379 
===================================================================  ====================  ==================  ================== 
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL                                                2,518            4,423 
 AND PROVISIONS                                                              1,066                   (2,051)           (1,291) 
 Decrease/(increase) in trade and other receivables                           549 (2,415)              862             2,939 
 (Decrease)/increase in trade and other payables 
===================================================================  ====================  ==================  ================== 
CASH (USED)/GENERATED IN OPERATIONS                                         (800)                   1,329              6,071 
 Tax paid                                                                    (450)                   (115)              (385) 
===================================================================  ====================  ==================  ================== 
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES                        (1,250)                 1,214              5,686 
===================================================================  ====================  ==================  ================== 
CASH FLOWS FROM INVESTING ACTIVITIES 
===================================================================  ====================  ==================  ================== 
Interest received                                                                 20 (98)             2 (156)            17 (350) 
 Acquisition of property, plant and equipment                                           -                   -               1,650 
 Proceeds on sale and operating leaseback of property, 
  plant and equipment                                                                   -                  75                 195 
 Disposal of subsidiary net of cash acquired 
===================================================================  ====================  ==================  ================== 
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES                           (78)                       (79)          1,512 
===================================================================  ====================  ==================  ================== 
 
CASH FLOWS FROM FINANCING ACTIVITIES                                                                     (86)               (148) 
 Interest paid                                                                       (70)               (134)             (2,004) 
 Repayment of borrowings Repurchase of share options                                (724)                   -                (17) 
 Proceeds from issue of new shares Purchase of Treasury                                 -                   -                   - 
 shares                                                                          22 (486)                   -                   - 
===================================================================  ====================  ==================  ================== 
NET CASH OUTFLOW FROM FINANCING ACTIVITIES Net (decrease)/increase                (1,258) 
 in cash and cash equivalents Effect of foreign exchange                          (2,586) 
 on cash and cash equivalents                                                        (27)               (220)          (2,169) 
 Cash and cash equivalents at start of period                                      10,007            915 (33)            5,029 
                                                                                                        4,932             46 
                                                                                                                         4,932 
===================================================================  ====================  ==================  ================== 
CASH AND CASH EQUIVALENTS AT OF PERIOD                                          7,394         5,814              10,007 
===================================================================  ====================  ==================  ================== 
 

Consolidated Statement of Changes of Equity

Interim Report for the six months ended 31 March 2019

For the six months ended 31 March 2019 (Unaudited):

 
                                                                                                                                                       Non- 
                     Share          Share          Treasury       Merger         Other              Retained       Own                          controlling       Total 
                     capital        premium        shares         reserve        reserves(2)        earnings       shares       Total(1)           interest       Equity 
                     GBP000         GBP000         GBP000         GBP000         GBP000             GBP000         GBP000       GBP000               GBP000       GBP000 
--------------  ------------  -------------  --------------  ------------  -----------------  --------------  -----------  -------------  -----------------  ----------- 
CLOSING 
 BALANCE AT 
 30 SEPTEMBER 
 2018                 215         11,475                  -      1,055          (382)              7,107            (3)      19,467                       6    19,473 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Accounting 
 policy change 
 - IFRS 9                  -              -               -             -                  -       (953)                -      (953)                      -      (953) 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
OPENING 
 BALANCE AT 
 1 OCTOBER 
 2018                 215         11,475                  -      1,055          (382)              6,154            (3)       18,514                      6    18,520 
--------------  ------------  -------------  --------------  ------------  -----------------  --------------  -----------  -------------  -----------------  ----------- 
Profit for the 
 period                    -              -               -             -                  -        832                 -       832                       3       835 
Other 
 comprehensive 
 income for 
 the period                -              -               -             -                 29               -            -             29                  -           29 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Total 
 comprehensive 
 income for 
 the period                -              -               -             -          29               832                 -        861                      3       864 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Contributions 
by and 
distributions 
to owners 
Dividend                   -              -               -             -                  -       (270)                -      (270)                      -      (270) 
Share-based 
 payment 
 credit and 
 associated 
 costs                     -              -               -             -                  -       (243)                -      (243)                      -      (243) 
Issue of new 
 shares                    -          22                  -             -                  -               -            -             22                  -           22 
Purchase of 
 Treasury 
 shares                    -              -       (486)                 -                  -               -            -      (486)                      -      (486) 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Total 
 contributions 
 by and 
 distributions 
 to owners                 -          22          (486)                 -                  -         513                -      (977)                      3      (977) 
--------------  ------------  -------------  --------------  ------------  -----------------  --------------  -----------  -------------  -----------------  ----------- 
CLOSING 
 BALANCE AT 
 31 MARCH 2019        215         11,497          (486)          1,055           (353)            6,473             (3)      18,398                       9    18,407 
--------------  ------------  -------------  --------------  ------------  -----------------  --------------  -----------  -------------  -----------------  ----------- 
 

For the six months ended 31 March 2018 (Unaudited):

 
                                                                                                                                                       Non- 
                     Share          Share          Treasury       Merger         Other              Retained       Own                          controlling      Total 
                     capital        premium        shares         reserve        reserves(2)        earnings       shares       Total(1)           interest      Equity 
                     GBP000         GBP000         GBP000         GBP000         GBP000             GBP000         GBP000       GBP000               GBP000      GBP000 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
OPENING 
 BALANCE AT 
 1 OCTOBER 
 2017                 215         11,475                  -      1,055           (441)            3,937           (107)       16,134                      3     16,137 
--------------  ------------  -------------  --------------  ------------  -----------------  --------------  -----------  -------------  -----------------  ---------- 
Profit for the 
 period                    -              -               -             -                  -       1,429                -      1,429                      -      1,429 
Other 
 comprehensive 
 income for 
 the period                -              -               -             -                 12               -            -             12                  -          12 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
Total 
 comprehensive 
 income for 
 the period                -              -               -             -                 12       1,429                -      1,441                      -      1,441 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
Contributions 
by and 
distributions 
to owners 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
Share-based 
 payment 
 charge and 
 associated 
 costs                     -              -               -             -                  -         379                -       379                       -       379 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
Total 
 contributions 
 by and 
 distributions 
 to owners                 -              -               -             -                  -        379                 -       379                       -       379 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
CLOSING 
 BALANCE AT 
 31 MARCH 2018        215         11,475                  -      1,055          (429)              5,745          (107)      17,954                       3    17,957 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  ========== 
 

Consolidated Statement of Changes of Equity (continued)

Interim Report for the six months ended 31 March 2019

For the year ended 30 September 2018 (Audited):

 
                                                                                                                                                       Non- 
                     Share          Share          Treasury       Merger         Other              Retained       Own                          controlling       Total 
                     capital        premium        shares         reserve        reserves(2)        earnings       shares       Total(1)           interest       Equity 
                     GBP000         GBP000         GBP000         GBP000         GBP000             GBP000         GBP000       GBP000               GBP000       GBP000 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
OPENING 
 BALANCE AT 
 1 OCTOBER 
 2017                 215         11,475                  -      1,055           (441)            3,937           (107)       16,134                      3     16,137 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Profit for the 
 year                      -              -               -             -                  -       2,169                -      2,169                      3      2,172 
Other 
 comprehensive 
 income for 
 the year                  -              -               -             -                 59               -            -             59                  -           59 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Total 
 comprehensive 
 income for 
 the year                  -              -               -             -          59              2,169                -     2,228                       3      2,231 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Contributions 
by and 
distributions 
to owners 
Share-based 
 payment 
 charge and 
 associated 
 costs                     -              -               -             -                  -        1,100               -      1,100                      -      1,100 
Transfer of 
 reserves(3)               -              -               -             -                  -         (82)            82                -                  -            - 
Proceeds from 
 sale 
 of own shares             -              -               -             -                  -               -        22                22                  -           22 
Repurchase of 
 share 
 options                   -              -               -             -                  -         (17)               -        (17)                     -        (17) 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
Total 
 contributions 
 by and 
 distributions 
 to owners                 -              -               -             -                  -       1,001           104         1,105                      -      1,105 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
CLOSING 
 BALANCE AT 
 30 SEPTEMBER 
 2018                 215         11,475                  -      1,055          (382)              7,107            (3)      19,467                       6    19,473 
==============  ============  =============  ==============  ============  =================  ==============  ===========  =============  =================  =========== 
 
   (1)       Total equity attributable to the equity holders of the Parent 

(2) 'Other reserves' combines the currency reserve and capital redemption reserve. The movement in the current and prior year relates to the translation of foreign currency equity balances and foreign currency non-monetary items.

(3) The shortfall in the market value of the shares held by the EBT and the outstanding loan is transferred from own shares to retained earnings.

   1         BASIS OF PREPARATION 

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2019. The Group has adopted the new IFRS 9 and IFRS 15 accounting standards from 1 October 2018.

NEW STANDARDS ADOPTED

IFRS 15 Revenue from Contracts with Customers: replaces IAS 18 Revenue and IAS 11 Construction contracts. The standard establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. Revenue is recognised when a customer obtains control of a service and thus, has the ability, to direct the use and obtain the benefits from the goods or service. While this represents significant new guidance, the implementation of this new guidance has not impacted the timing or amount of revenue recognised by the Group. Much of the Group's revenue is based upon defined hourly or daily charge out rates and the work carried out is specific to the customer and project in question. There is a continual flow of benefits to the customer from the services performed and the Group does not operate on a stage payment or key milestone basis. For fixed fee projects, the fee is determined by an estimated amount of hours x the standard rate for the required level of staff for the project. Any expected under recovery from a project's original costing are recognised over the life of the project. The principle of the continual transfer of benefit to the customer remains whether a project is a fixed or variable fee. Revenue recognition is based on a contract by contract basis and the new standard has not significantly affected business practice and management judgements in respect of revenue recognition.

IFRS 9 Financial Instruments: replaces IAS 39 Financial Instruments and covers 3 different areas of potential impact. Part 1 contains new requirements for the classification and measurement of financial assets and liabilities. Part 2 relates to the impairment of financial assets and requires the calculation of impairment on an expected loss basis rather than the current incurred loss basis. Part 3 relates to less stringent requirements for general hedge accounting. Management have conducted a review of the new standard and part 1 and 3 have not impacted the Group on Transition. In part 2, under the "expected credit loss", the Group has adopted a simplified model of recognising lifetime expected credit losses to trade receivables. Due to the forward-looking nature of this new standard, which contrasts with that of IAS 39 where provisions are based on an incurred loss basis, there has been an increase in the provision for trade receivables of GBP0.95m. This new provision matrix has been calculated based on geographical location of the Group's entities using historical default rates and projecting this forward considering any specific forecasts relating to local economies. When adopting IFRS 9, the Group has applied transitional relief and opted not to restate prior periods with the difference on transition being recognised in retained earnings.

The financial information in this interim report is in compliance with the recognition and measurement principles of IFRS as adopted by the European Union (EU) but does not include all disclosures that would be required under IFRSs. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information. The financial information for the half years ended 31 March 2019 and 31 March 2018 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited but has been reviewed by our auditors.

The comparative financial information for the year ended 30 September 2018 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2018 have been filed with the Registrar of Companies. The Independent Auditor's Report on that Annual Report and Financial Statements for 2018 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim consolidated financial statements.

 
                                                    GBP000 
-------------------------------------------------  ------- 
 IAS 39: incurred loss provision at 30 September 
  2018                                               2,046 
-------------------------------------------------  ------- 
 Lifetime expected credit loss adjustment              953 
-------------------------------------------------  ------- 
 IFRS 9: expected credit loss provision at 
  1 October 2018                                     2,999 
-------------------------------------------------  ------- 
 
   2          TAXATION 

The tax charge on the profit for the half-year ended 31 March 2019 is based on the estimated tax rates in the jurisdictions in which the Group operates, for the year ending 30 September 2019.

   3          DIVID 

In view of the current trading position, the board recommends the payment of an interim dividend of 0.5p per share for 2019 (2018: GBPnil).

   4        SUMMARY SEGMENTAL ANALYSIS 

REPORTABLE SEGMENTS

For management purposes, the Group is organised into three operating divisions: Europe & Americas (EuAm), Middle East (ME) and Asia Pacific (APAC). These divisions are the basis on which the Group is structured and managed, based on its geographic structure. The following key service provisions are provided across all three operating divisions: quantity surveying, planning / programming, quantum and planning experts, dispute avoidance / resolution, litigation support, contract administration and commercial advice / management. Segment information about these reportable segments is presented

below.

 
                             Europe & 
 SIX MONTHS                  Americas           Middle           Asia              Eliminations           Unallocated            ConsolidatedED 31                      GBP000           East             Pacific           GBP000                 GBP000                 GBP000 
 MARCH 2019                                     GBP000           GBP000 
 (UNAUDITED) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Total external 
 revenue                       14,851         10,321            4,539                         -                     -           29,711 
Total 
 inter-segment 
 revenue                           11                2                15            (28)                            -                       - 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Total revenue                  14,862         10,323            4,554               (28)                            -           29,711 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Segmental 
 profit/(loss)                  1,984            363            (576)                         -                     -            1,771 
Unallocated 
 corporate 
 expenses(1)                        -                -                 -                      -          (959)                  (959) 
Share-based 
 payment 
 charge                             -                -                 -                      -                   243            243 
--------------  ---------------------  ---------------  ----------------  ---------------------  --------------------  ---------------------- 
Operating 
 profit/(loss)                  1,984            363            (576)                         -           (716)                 1,055 
Finance income                      -                -                 -                      -                    20                      20 
Finance 
 expense                            -                -                 -                      -                  (70)             (70) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 before 
 taxation                       1,984            363            (576)                         -           (766)                 1,005 
Taxation                            -                -                 -                      -           (170)                  (170) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 for the 
 period                         1,984            363            (576)                         -           (936)                  835 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
 
 
                             Europe & 
 SIX MONTHS                  Americas           Middle           Asia              Eliminations           Unallocated            ConsolidatedED 31                      GBP000           East             Pacific           GBP000                 GBP000                 GBP000 
 MARCH 2018                                     GBP000           GBP000 
 (UNAUDITED) 
--------------  ---------------------  ---------------  ----------------  ---------------------  --------------------  ---------------------- 
Total external 
 revenue                       14,258         11,994            5,442                         -                     -          31,694 
Total 
 inter-segment 
 revenue                           53               26                 2                   (81)                     -                       - 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Total revenue                  14,311         12,020            5,444                      (81)                     -          31,694 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Segmental 
 profit                         1,370          1,289             635                          -                     -           3,294 
Unallocated 
 corporate 
 expenses(1)                        -                -                 -                      -          (1,105)                (1,105) 
Share-based 
 payment 
 charge                             -                -                 -                      -           (379)                 (379) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Operating 
 profit/(loss)                  1,370          1,289             635                          -         (1,484)                  1,810 
Finance income                      -                -                 -                      -                     2                       2 
Finance 
 expense                            -                -                 -                      -                  (86)             (86) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 before 
 taxation                       1,370          1,289             635                          -         (1,568)                 1,726 
Taxation                            -                -                 -                      -           (297)                 (297) 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 for the 
 period                         1,370          1,289             635                          -         (1,865)                 1,429 
==============  =====================  ===============  ================  =====================  ====================  ====================== 
 
 
                               Europe & 
 YEARED 30                 Americas           Middle           Asia              Eliminations           Unallocated            Consolidated 
 SEPTEMBER                       GBP000           East             Pacific           GBP000                 GBP000                 GBP000 
 2018                                             GBP000           GBP000 
 (AUDITED) 
--------------  -----------------------  ---------------  ----------------  ---------------------  --------------------  ---------------------- 
Total external 
 revenue                         28,749         22,910           10,956                         -                     -          62,615 
Total 
 inter-segment 
 revenue                             55               26                 2            (83)                            -                       - 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
Total revenue                    28,804        22,936            10,958               (83)                            -          62,615 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
Segmental 
 profit                           2,968          2,139             952                          -                     -          6,059 
Unallocated 
 corporate 
 expenses(1)                          -                -                 -                      -         (2,089)               (2,089) 
Share-based 
 payment 
 charge                              13                -                 -                      -           (1,113)              (1,100) 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
Operating 
 profit/(loss)                    2,981          2,139             952                          -         (3,202)                 2,870 
Finance income                        -                -                 -                      -                    17                      17 
Finance 
 expense                              -                -                 -                      -           (148)                  (148) 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 before 
 taxation                         2,981          2,139             952                          -         (3,333)                 2,739 
Taxation                              -                -                 -                      -           (567)                 (567) 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
Profit/(loss) 
 for the 
 period                           2,981          2,139             952                          -         (3,900)                 2,172 
==============  =======================  ===============  ================  =====================  ====================  ====================== 
 

(1) Unallocated costs represent Directors' remuneration, administration staff, corporate head office costs and expenses associated with AIM.

   5         EARNINGS PER SHARE 
 
                                                                                                          Year 
                                                                     6 months           6 months          ended 
                                                                     ended              ended              30 
                                                                     31 March           31 March        September 
                                                                     2019               2018              2018 
                                                                     GBP000             GBP000           GBP000 
                                                                     Unaudited          Unaudited        Audited 
---------------------------------------------------------------  -----------------  -------------  -------------- 
Profit for the financial period attributable to equity 
 shareholders                                                            832 (243)         1,429          2,169 
 Share-based payments cost and associated costs                           589               379            1,100 
 Adjusted profit from continuing operations for the 
  financial period before share-based payments costs                                        1,808          3,269 
---------------------------------------------------------------  -----------------  -------------  -------------- 
Weighted average number of shares: 
 - Ordinary shares in issue 
                                                                    53,921,201         53,862,868     53,862,868 
 - Shares held by EBT                                               (3,677)            (155,552)      (108,052) 
===============================================================  =================  =============  ============== 
Basic weighted average number of shares                           53,917,524          53,707,316     53,754,816 
 Effect of employee share options                                  3,297,421           2,104,818      2,762,696 
 Diluted weighted average number of shares                         57,214,945          55,812,134     56,517,512 
---------------------------------------------------------------  -----------------  -------------  -------------- 
Basic earnings per share attributable to equity shareholders                  1.5p          2.7p            4.0p 
 of the Parent (pence) Diluted earnings per share attributable                1.5p           2.6p            3.8p 
 to equity shareholders of the Parent (pence)                                 1.1p           3.4p            6.1p 
 Adjusted basic earnings per share before share-based 
 payment cost 
===============================================================  =================  =============  ============== 
 
   6         POST BALANCE SHEET EVENT 

There has been no significant event requiring disclosure since 31 March 2019.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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