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| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.50 | 23.00 | 26.00 | 24.50 | 24.50 | 24.50 | 0.00 | 07:30:11 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Heavy Construction, Nec | 42.63M | -336k | -0.0064 | -38.28 | 12.87M |
From Apr 2022 to Apr 2024
TIDMDRV
RNS Number : 7743Q
Driver Group plc
23 February 2023
23 February 2023
DRIVER GROUP PLC
("Driver" or "the Group")
Preliminary Results and Dividend Declaration
Driver Group PLC (AIM: DRV), the global professional services consultancy to construction and engineering industries, is pleased to announce the dividend for the full year and its results for the financial year ended 30 September 2022.
The final dividend for the full year of 0.75 pence per share will be paid on 13 April 2023 to shareholders who are on the register of members at the close of business on 3 March 2023, with an ex-dividend date of 2 March 2023 subject to approval at the forthcoming AGM.
Operational Highlights
-- De-risked Middle East business - Including reduced headcount -30 -- De-risked Asia Pacific business - Including reduced headcount -11 -- Successful focus on global office collaboration, impacting utilisation -- Increased Diales headcount to 53 from 47 -- Improving pipeline of new enquires
-- Strengthened Board through the appointment of Charlotte Parsons as CFO and appointment of Shaun Smith as non-executive Chair (effective at the AGM)
Financial Summary
-- Revenue decreased by 4% to GBP46.9m (2021: GBP48.8m) -- Underlying* loss before tax of GBP1.0m (2021: profit GBP2.0m) -- Net cash** of GBP4.9m (2021: GBP6.5m) -- Utilisation*** of 67.5% (2021: 72.4%)
Post period end: Financial Summary Q1
-- Q1 revenue increased by 5% to GBP11.8m -- Operating profit of GBP0.25m -- Net cash of GBP4.7m as at 31 January 2023 -- Utilisation increased to 70% (2022: 67.5%) -- Interim Dividend approved -- Overhead reduction implemented, with further savings in progress -- The Board expects to return to profitability for FY23
* Underlying figures are stated before the share-based payment costs and one off severance costs
** Net cash consists of cash and cash equivalents and bank loans
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
Mark Wheeler, Chief Executive Officer of Driver Group plc, commented:
The FY22 trading year encompassed some unpredicted challenges for the Group, in particular in the Middle East and APAC markets. We reduced headcount and cost very significantly in these regions in a very short space of time. Management took steps to minimise the impact of the exit of these people while at the same time taking the opportunity to de-risk these historic problem areas for the strategic aims of the Group. Our UK and European businesses continued to perform creditably. Trading in the first quarter has begun profitably and we are sharply focussed on delivering cost savings and delivering a return to profitability in the current financial year.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
* Underlying figures are stated before the share-based payment costs and one off severance costs
** Net cash consists of cash and cash equivalents and bank loans
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
Enquiries
Driver Group plc 020 7377 0005 Mark Wheeler (CEO) Charlotte Parsons (CFO) Singer Capital Markets (Nomad & Broker) 020 7496 3000 Sandy Fraser Jen Boorer Alex Emslie Acuitas Communications 020 3745 0293 / 07799 767676 Simon Nayyar simon.nayyar@acuitascomms.com Arthur Dingemans arthur.dingemans@acuitascomms.com
CHAIRMAN'S STATEMENT
OVERVIEW
As I reported in our 2022 interim results, Driver Group's key focus this year has been to take significant early action to address underperforming areas in our global business, mitigate commercial risk, improve operational resilience, and implement systems to enhance profitability and margin performance.
The year was defined by the long-tail legacy effects of the COVID-19 pandemic across the markets in which Driver operates. These post-pandemic issues have been conflated by global energy and supply chain uncertainties, rising interest rates, and the inflationary pressures caused by the conflict in Ukraine. I believe that we have managed these external challenges well for our shareholders and clients, whilst executing our reorganisation strategy in a decisive and effective way. In spite of this difficult global trading environment the measures we have taken have put the business on a strong and sustainable footing which leaves the business well placed to capitalise on future opportunities.
Europe and the Americas continue to be our best performing regions and are a central focus of our growth plans in 2023. The Driver Project Services team based in the UK and our Driver Trett team both made a significant contribution to the results, and our US team continues to develop organically into a valuable asset, building out our bridgehead into the highly profitable markets of Central and South America.
A major strategic aim this year has been a policy of risk-reduction across the whole business. We have tackled major legacy issues in the Middle East, streamlining our presence and disposing of loss-making operations and assets. Although reducing our operations in the region has crystallised a charge in the 2022-23 financial year, we are confident that as a result of this reorganisation our presence in the UAE, KSA, Qatar and Oman will now deliver more consistent profitability within the region.
I am pleased to report that we have also executed significant internal administrative changes to improve our performance this coming financial year and beyond. We expect the successful implementation of our new accounting software at the start of the second half of FY22 to have a positive impact on future periods performance, improving visibility over utilisation levels, supporting the collection of outstanding debts, and providing us with cutting edge tools to maximise control over our cashflow. Taken together these measures are expected to have a positive impact on future business efficiency and productivity levels.
TRADING PERFORMANCE
While these changes leave us well-placed for growth, our mission to de-risk and improve the efficiency of our business continues. It is in the nature of a professional services business such as ours that predicting revenue beyond a rolling six-week window has always been difficult. We continue our focus on controlling overhead costs and delivering client servicing more efficiently to enhance our ability to be consistently profitable.
The cost of implementing these risk reduction strategies has been significant but we have ended the year with a healthy cash balance of GBP4.9m and no debt, reflecting our careful and prudent stewardship.
DIVID
I am pleased to confirm that in spite of a challenging year the Directors have recommended a final dividend of 0.75p (2021: 0.75p per share) in addition to the interim dividend declared at the half year, demonstrating the Directors confidence in the business.
BOARD CHANGES
The financial year has seen several changes at board level. Our CEO Mark Wheeler continues to guide our strategy and has been greatly assisted by our CFO Charlotte Parsons who has done a first class job since joining us permanently in July 2022. She will continue to provide insightful stewardship over the coming year. Finally, I want to express my thanks to Tom Comerford who has stepped up to the COO role in order to support Mark. These changes have already significantly enhanced our ability to improve our business in the face of global pressures.
On a personal note, having served as your Chairman for over eight years, I will be handing the stewardship of the Group to Shaun Smith who will join the Board and become the Group's new Non-Executive Chair following my retirement at the conclusion of the forthcoming AGM on 23rd March 2023. It has been an enormous privilege to lead Driver Group over this period and I am confident that Shaun will continue to drive the business forward.
OUTLOOK
The 2022 financial year has been a period of dynamic change and transition for us all and, for Driver Group, it has been no different. As the world has adjusted to the post-Covid settlement, one characterised by supply chain pressures and rapidly rising inflation across many of our key markets, Driver Group has taken a considered and commercial view about how to get the business on the front foot and ready to take advantage of the opportunities ahead of us.
It is no coincidence that over the last many years Driver Group has sustained a global reputation for competitive performance and professionalism. We have done so directly as a consequence of the loyalty, ingenuity and teamwork of our brilliant staff around the world. I would like to take this opportunity to send every one of them my thanks and best wishes.
I want to express my gratitude to Mark and the executive team and to my non-executive board colleagues for making my role such a rewarding one to fulfil. I am confident that Driver Group will go from strength to strength under my successor and trust he will find his time at the helm as satisfying as I have.
The Board expects to deliver a return to profitability for FY23 and I shall continue to watch Driver Group's fortunes with great affection and interest.
Steve Norris
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER'S REVIEW
INTRODUCTION
FY22 has been a period of dynamic change and transition for us all and, for Driver Group, it has been no different. As the world has adjusted to the post-Covid settlement, one characterised by supply chain pressures and rapidly rising inflation across many of our key markets, Driver Group has taken a considered and commercial view about how to get the business on the front foot and ready to take advantage of the opportunities that we can already see ahead of us.
Accordingly, we have implemented a raft of measures designed to improve the resilience and competitiveness of our business going forward: in particular, a focus on risk reduction in the Middle East and Asia Pacific regions has brought Driver the early advantages of significantly stronger long-term positioning.
As we emerged from the pandemic, workload began to increase in line with expectations, and in the second quarter of the year we took steps to restructure our presence in the Middle East. Management has executed a strategy designed to reduce our exposure in this region whilst ensuring seamless continuity of client servicing, which has involved balancing the staff profile with workload and the levels of income that could be generated.
Elsewhere, our businesses in Europe and the UK have delivered strong performance and the growth of our organically generated business in the United States has progressed significantly and successfully, tapping into opportunities in fast growing Latin American markets.
As with many businesses, the ongoing conflict in Ukraine has caused disruption in relation to, a number of our markets for arbitration and major project disputes, for clients working in Russia. Although travel restrictions remain in place, and sanctions are preventing multiple disputes and hearings progressing until the conflict ends, we expect to reengage in these disputes once the situation normalises.
During the current financial year, our management teams will continue to realign our cost base with the revised requirements for business support across our global operations. They will be extracting efficiency gains wherever we deem this appropriate and ensuring the business is exceptionally well positioned for the future development that we anticipate in FY23.
Our key staff have returned to extensive travel post-pandemic to reinforce global relationships and their delivery upon key commissions provides encouragement as we look ahead. We have moved away from regional silos and now operate fluidly around the globe, which will improve our utilisation over the next 12 months.
I would like personally to thank our outgoing Chairman Steven Norris for his service to Driver Group and for his insights and experience which I and my colleagues around the business have benefited from enormously over the last 8 years. I would also like to thank our new CFO, Charlotte Parsons, who has proved to be a great asset to the business; and our new COO, Tom Comerford, for his support over recent months and indeed over 20 years service to date. I also look forward to welcoming Shaun Smith to the Board at our AGM and look forward to working together.
We remain one of the world's largest and most respected practitioners in the specialist fields of Construction, Expert Witness, and Dispute Resolution. Our staff continue to be our greatest asset and enable us to retain and recruit business in a way that promises enhanced levels of profitability in the year ahead.
STRATEGY
Our strategy for developing the business has seen us focused on our staff, our margin, and growth in the areas we have identified. Our business culture and ethos will prioritise the maximal utilisation and profitability of our staff, while our management team remains committed to ensuring these areas receive the attention they deserve and that the benefits flow through to the bottom line in a timely and efficient way.
As a people-led business, we see staff retention as a key area of focus and have made significant progress to ensure that, in a marketplace where disruption from private equity-backed organisations has proved a challenge, our staff benefit to the full from Driver's exceptionally positive working environment and collegiate and inclusive culture. We have taken steps to support our staff around the world during the cost of living crisis, introducing new and innovative staff benefit schemes to ensure our people are best placed to weather the current economic storm. Coupled with the updated staff retention programmes, we are confident this will help the business both secure its existing talent and be well placed to hire additional staff of the appropriately high calibre to work in our business.
Our marketing team have performed extremely effectively in recent years and are now fully integrated with business development to bring in the larger international commissions which have a major positive impact on our utilisation levels. The number of leads in this pipeline of major commissions has significantly increased over the last quarter and we hope to see these early signs of success develop well into 2023 and beyond.
We have now completed the installation of our ERP IT system and expect this to contribute significant new efficiencies over the next 6 to 12 months. I would like to pay particular thanks to our finance team who have worked tirelessly alongside our new CFO to ensure this system runs effectively. The provision of real time management data will be an enormous asset to the business moving forward.
Running a global business in an environmentally responsible and sustainable way, and one that is imbued with high standards of governance and ethics is vital to all of us at Driver Group. The importance that, like our clients, we attach to high standards of ESG performance has been reflected by a migration within the business towards e-communications with our investors and staff, which promises greater time-efficiency, effectiveness and a reduced environmental footprint. The Board remains deeply committed to living our ESG values.
REGIONAL BREAKDOWN
EUROPE AND AMERICAS
The business had another good year in Europe with a significant recovery in the Paris office following a reorganisation of our operations there in the preceding year. We are also delighted to see the addition of a new testifying expert in that office, further developing this aspect of our business and reflecting our desire to compete even more vigorously in this market in the future.
The business in Germany continued to grow consistently and organically in alignment with our strategic outlook, and our longstanding business in the Netherlands also performed well during this period. We are delighted to see the business in Madrid going from strength to strength following a start-up during the pandemic, enhancing our ability to service the important global Spanish-speaking market.
Within the UK business, we supported some staff members through challenging periods of ill health. Despite these challenges, the business achieved similar levels of revenue and profit compared to the preceding year, and is expected to return to its trend growth rate in the current financial year - a level of performance which has been achieved, year over year, for the previous 10 years.
I would like particularly to mention our Driver Project Services business in the North East of England, which has enjoyed a year of exceptional and highly commendable growth. DPS has grown the number of its clients and the number of staff placed on projects significantly during the year, whilst assisting with the challenges of clients in the manufacturing, pharmaceutical and petrochemical industries. It has helped our clients re-engage following the pandemic and then manage the challenging impact of the energy and cost of living crises.
Our business in Canada unfortunately also suffered from some ill-health in its leadership and we have restructured to take that team forward in 2022 and beyond. I would particularly like to thank Kevin O'Neil our former Country Manager, for his unstinting support over the last few years.
Having launched our presence in the US during the pandemic, I am pleased to report that major project work has been secured; the team has doubled every six months since its inception; and we now have a well-established platform ensuring that we are positioned for sustainable future growth. This is a tribute to the team on the ground.
ASIA PACIFIC
In view of the need to resolve decisively an especially large contract and management changes, the business in the Asia Pacific region has seen the creation of a new leadership team in order to capitalise on our business potential there. As part of this restructuring, we no longer operate from within Hong Kong or Malaysia but continue to service clients in those markets from our operations in Singapore and Australia, delivered in a more flexible, efficient and client-focused way.
Our leadership team in this region has been with us for a considerable length of time and has a great track record of success. I am very confident that we can see the return to profit that has taken place in Asia Pacific not only stabilise, but grow, in the next 2 to 3 years, to make a positive contribution to the Group.
I would like particularly to praise our team in Australia who have run a positive and profitable business throughout both the closing phase of the pandemic and some of the global challenges of 2022.
MIDDLE EAST
Staff turnover in this region confirmed our strategy to de-risk without placing undue pressure on debtor balances. The careful implementation of this strategy has equipped us with a more resilient business which is able to respond to client demand across this region and allows us to continue to provide a world-class service.
Thanks to the disposal of loss-making assets in the region, our business in the UAE has returned to profit and has started to contribute to other operations by securing work for Europe or Asia Pacific to deliver. Our business in Qatar has also returned to profit and we look forward to working with enquiries over the legacy of World Cup 2022 projects, which we expect to take this business forward profitably and sustainably over the next couple of years.
The Company no longer operates from Kuwait, although we will continue seamlessly to service clients there from our operations in UAE or Qatar. As in Asia Pacific, this means an identical or even better level of client servicing delivered from a more efficient and effective service platform.
I would like particularly to thank our staff in our office in Oman, who have been admirably resilient and have helped us to secure a very significant reduction in the aging debt relating to this office over the last 12 months: GBP650,000 was recovered at the end of the financial year, and a further GBP1.2m was received in October. They have worked tirelessly to return that business to profit and I commend their contribution.
CURRENT TRADING AND OUTLOOK
The year has been one of reviewing, restructuring and resetting. It has been informed by the Board's proactive and prudent approach to servicing our clients in the most efficient and responsible manner, and our desire to return value to shareholders whenever and wherever possible.
The benefits of the steps we took last year are now starting to feed through. We are trading profitably and are now well positioned in FY23 to benefit from that earlier action and I am, therefore, very positive about our ability to meet our strategic aims of driving sustainable value creation for the benefit of our shareholders in the short term, and of delivering an expanding range of opportunities and incentives for our wider stakeholders.
This positive outlook is further encouraged and endorsed by the welcome progress I am pleased to report that we have made in Q1 of FY23. Profitable performance in the first quarter serves only to confirm that the tough decisions we took in the last financial year in order to position ourselves better for the future are already beginning to pay off. Where challenges have emerged, we have dealt with them in a thoughtful, diligent and decisive way, recognising the positive impact on our current cost base and competitiveness and with a keen awareness of the strength such action brings to Driver Group during the current financial year and in future ones.
The collection of GBP1.85m of aged debts from Oman at the end of the financial year serves as powerful testimony to our staff's patience determination and resourcefulness in helping us deal with legacy issues effectively and to reset our presence in the region where we will in the future pursue a more flexible and dynamic approach.
Going forward, we will be even more focused on ensuring we meet client needs in the most efficient and seamless way, which may mean delivering service from wherever in the world the business's most relevant talents and expertise sit. We will do this in a disciplined and resourceful way that delivers even better value to our clients and, in the process, improves the utilisation of our bench of professional talents and skills. Over the coming year, we expect to see further benefits arising from this enhanced operational focus.
The performance of our operations in Europe and the Americas demonstrates clearly the value Driver Group creates for its shareholders and clients. We ended the year with total revenue exceeding GBP36.2m and our operations here are a model for us to replicate elsewhere across our global business. Elsewhere, our footprint has been more closely aligned with client need and, again, this is a trend which we expect will continue over the coming period in order to maximise benefits to the Group and its shareholders.
Our healthy cash balance of GBP4.9m at the end of the year stands us in good stead as we have evolved further our approach and method of client servicing. The financial results for FY22 reflect our strategy of risk and cost reduction and their benefits have, as I have already indicated, been confirmed by our return to profit in the first quarter of the new financial year. I am, therefore, confident that the way in which we have dealt with past challenges leaves us operationally and competitively well positioned for the future.
SUMMARY AND CONCLUSIONS
Despite the success of our strategy to remain focused on higher margins and to increase our profile within expert witness services, 2022 has certainly presented challenges. We have maintained a steady pipeline of work and opportunities whilst effectively securing our long-term prospects through the restructuring of our business in the Middle East this year.
We no longer see COVID restrictions having a significant impact upon the business except in relation to Chinese entities although, at the time of writing, those restrictions appear to be lessening significantly: this holds out the prospect of significant opportunities and progress in the near term in this jurisdiction.
The challenges created by the conflict in Ukraine are still present, but that pipeline of work has not gone away but been deferred pending the resolution of that conflict.
Whilst the increases in the cost of living and fuel prices have undoubtedly posed a number of challenges for our clients and our staff, we have met those challenges with targeted measures designed to support our team through this period. We note that clients experiencing challenges on projects where prices are rising significantly represents a strong stream of work for the Group. In the face of these global challenges, our experts in construction cost and planning and technical matters are exceptionally well placed to help clients deal with finding the right strategy for their projects to cope with rising costs, and I anticipate that further work will result from the current macro-economic and trading environment.
The renewed scope for international travel, to an extent not seen since early 2020, at long last, allows us to return to other important business development activities. These will undoubtedly secure some valuable additional revenue but, above all, the Group's key asset is - as it has always been - its people.
Trading in the first quarter has begun profitably. We have an incredibly talented and committed pool of staff around the globe who I am confident will help the Board steer the business to a return to a profitable trading performance this year and beyond. Taken together with the strategic steps that we have taken to right-size our operations around the world and to make our client servicing more targeted, efficient and cost-effective, the opportunities going forward are, I believe, very significant.
Mark Wheeler
Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REVIEW
INCOME STATEMENT 2022 GBPm 2021 GBPm --------------------------------- ---------- ---------- Revenue 46.90 48.77 Cost of sales (37.10) (36.35) Impairment movement (0.19) (0.19) --------------------------------- ---------- ---------- Gross Profit 9.61 12.23 Recurring operating expenses (9.90) (10.11) Net finance costs (0.10) (0.11) --------------------------------- ---------- ---------- Operational (loss)/profit before tax (0.39) 2.01 One off non-recurring expenses (0.57) - Underlying* (loss)/profit before tax (0.96) 2.01 --------------------------------- ---------- ---------- Exceptional costs (1.00) - Share-based payments charge (0.47) (0.15) --------------------------------- ---------- ---------- (Loss)/profit before Tax (2.43) 1.86 Tax expense (0.46) (0.75) --------------------------------- ---------- ---------- (Loss)/profit for the year (2.89) 1.11 --------------------------------- ---------- ----------
During the first quarter of the financial year to 30 September 2022, as we emerged from the pandemic, workload increased in line with budget. The results in the second quarter were impacted by a combination of a loss-making contract in the APAC region and a drop in revenues in the Middle East region. The Middle East region was also further impacted in Q3 due to the management team transferring to a counterparty from 1 June 2022, along with 25 employees. The EuAm region had another good year with revenues continuing to increase, but, across all regions there was an operational loss before tax of GBP0.39m for the financial year to 30 September 2022, before one-off APAC and Middle East regions reorganisation costs of GBP0.57m and an onerous lease provision of GBP1.0m. The key financial metrics are as follows:
KEY METRICS 2022 2021 -------------------------------- ----------- ---------- Revenue GBP46.90m GBP48.77m Gross Margin % 20.5% 25.1% (Loss)/profit for the year GBP(2.89)m GBP1.11m Utilisation Rates** 67.5% 72.4% Basic (loss)/earnings per share (5.5)p 2.1p -------------------------------- ----------- ----------
Total revenue decreased by 3.8% to GBP46.90m (2021: GBP48.77m) and gross profit decreased by 21.4% to GBP9.61m (2021: GBP12.23m). The reduction in gross profit was a result of the loss-making contract in the APAC region and decreased revenue in the ME region, the impact of which has been offset by a reduction in costs. This resulted in an underlying* loss for the year of GBP0.96m, in-line with our expectations, compared to an underlying profit before tax of GBP2.01m in 2021. The net cash** at the year-end was GBP4.93m (2021: GBP6.47m), after funding a dividend payment of GBP0.78m (2021: GBP0.39m) and a share buyback programme of GBP0.50m (2021:Nil).
The EuAm region increased revenue by 3.8% to GBP35.01m (2021: GBP33.73m) with a decrease in segmental profit of 20.8% to GBP3.92m (2021: GBP4.95m). This strong performance was driven by good revenues in the UK of GBP24.88m (2021: GBP25.25m) an increase in revenues in mainland Europe of 12.6% to GBP7.35m (2021: GBP6.53m) and an increase in revenues in North America of 45.9% to GBP2.86m (2021: GBP1.96m).
The ME region saw revenues decrease during the year by 26.2% to GBP8.06m (2021: GBP10.92m) primarily as a result of the management team responsible for the APAC and Middle East regions transferring to a counterparty from 1 June 2022, along with 25 employees. The segmental result for the region was a loss of GBP1.81m (2021: segmental loss GBP0.74m).
The APAC region saw revenues reduce by 9.0% to GBP3.75m (2021: GBP4.12m). The revenues in Australia increased by 12.4% to GBP1.63m (2021: GBP1.45m), which helped to offset the reduction in the remainder of the region. The segmental result for the year was a loss of GBP0.54m (2021: segmental loss GBP0.41m) which reflects the impact of the loss-making contract in the region. Increasing utilisation will continue to be a key focus for the Group going forward.
The utilisation*** rate of chargeable staff across the business as a whole for the year fell to 67.5% (2021: 72.4%). Across the regions this was 71.9% in EuAm, 68.1% in APAC and 52.6% in the Middle East, reflecting the challenges highlighted above in APAC and the Middle East.
After a net interest charge of GBP0.10m (2021: GBP0.11m) the operational loss before tax was GBP0.39m (2021: GBP2.01m) and the reported loss before tax was GBP2.43m post one-off Middle East reorganisation costs of GBP0.57m and an onerous lease provision of GBP1.00m (2021: GBP1.86m). The current year profit before tax includes a charge for share-based payments of GBP0.47m (2021:GBP0.15m).
NET WORKING CAPITAL
Net cash** remained healthy, closing the year at GBP4.93m (2021: GBP6.47m) with a reduction in net working capital following an increase in outstanding debtors and an increase in creditors.
TAXATION
The Group incurred a tax charge of GBP0.46m (2021: GBP0.75m). The tax charge includes the effects of expenses not deductible for tax purposes and is calculated at the prevailing rates for the jurisdictions in which the Group operates and, consequently, the effective tax rate for the year was 18.9% (2021: 40.3%). The decrease in the effective rate is mainly due to the onerous lease provision offset by losses or reduced profits made in jurisdictions with either nil or lower tax rates which results in no relief for tax losses.
EARNINGS PER SHARE
The basic loss per share was 5.5 pence (2021: profit 2.1 pence). Underlying* continuing basic loss per share was 2.7p pence (2021: profit 2.4 pence).
CASH FLOW
There was a net cash outflow from operating activities before changes in working capital of GBP1.26m (2021: GBP3.36m), including the current year benefit of GBP0.96m (2021: GBP0.97m) from the amortisation of right of use assets under IFRS16. The movement also reflects the reported loss for the year of GBP2.89m (2021: profit GBP1.11m) after depreciation of GBP0.24m (2021: GBP0.26m). There was an increase of GBP1.33m in trade and other receivables (2021: increase of GBP0.88m) reflecting the more difficult market conditions during the year, and an increase in trade and other payables of GBP4.00m (2021: decrease GBP1.47m) resulting in a net cash inflow from operating activities of GBP0.87m (2021: GBP0.25m). Net tax paid in the year was GBP0.54m (2021: GBP0.76m).
There was a net cash outflow from investing activities of GBP0.57m (2021: GBP0.52m) which is a result of increased capital expenditure, including IT spend.
Net cash flow from financing activities was an outflow of GBP2.20m (2021: GBP4.43m) with the current year reflecting the dividends paid of GBP0.78m (2021: GBP0.39m), share buyback programme GBP0.50m and lease repayments under IFRS 16 of GBP0.82m (2021: GBP0.93m).
cash flow GBPm ---------------------------------------- ------- Net cash** at 30 September 2021 6.47 Operating cash flow before changes in working capital (1.26) Increase in Trade and other receivables (1.33) Increase in Trade and other payables 4.00 Tax paid (0.54) Net interest paid (0.10) Net Capital spend (0.57) Dividends paid (0.78) Purchase of Treasury shares (0.50) Repayment of leases (0.82) Effects of Foreign Exchange 0.36 Net cash** at 30 September 2022 4.93 ---------------------------------------- -------
LIQUIDITY AND GOING CONCERN
The Group is in a strong financial position. At the year end the Group had net cash balances of GBP4.93m (2021: GBP6.47m). The net cash position is appropriate for the Group's operating requirements going forward but the current borrowing facilities are no longer suitable and will be replaced by a more flexible working capital arrangement.
The Directors have completed a review of the Group's financial forecasts for a period of more than twelve months from the date of approving these financial statements. This review has included sensitivity analysis and stress tests which took account of reasonable and foreseeable scenarios including any continuing impact of the COVID-19 pandemic and related risks. Under all scenarios modelled the Directors anticipate that any funding needs required would be sufficiently covered by the existing cash reserves. As such the Directors have a reasonable expectation that the Group has sufficient resources and hence these financial statements include information prepared on a going concern basis.
DIVIDS
The Directors propose a final dividend for 2022 of 0.75p per share (2021: 0.75p per share) in addition to the interim dividend paid in October 2022 of 0.75p per share (2021: 0.75p) This will be paid on 13 April 2023 to shareholders who are on the register of members at the close of business on 3 March 2023, with an ex-dividend date of 2 March 2023, subject to approval at the Group's forthcoming Annual General Meeting.
CHARLOTTE PARSONS
CHIEF FINANCIAL OFFICER
* Underlying figures are stated before the share-based payment costs and exceptional costs
**Net cash consists of cash and cash equivalents and bank loans.
***Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
CONSOLIDATED INCOME STATEMENT
For the year ended 30 September 2022
Hot Features
Premium
2022 2021
GBP000 GBP000
----------------------------------------------- -------- --------
REVENUE 46,897 48,772
Cost of sales (37,095) (36,350)
Impairment movement (188) (187)
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GROSS PROFIT 9,614 12,235
Administrative expenses (12,107) (10,459)
Other operating income 167 194
----------------------------------------------- -------- --------
Underlying* operating (loss)/profit (861) 2,119
Exceptional costs (1,000) -
Share-based payment charges and associated
costs (465) (149)
----------------------------------------------- -------- --------
OPERATING (LOSS)/PROFIT (2,326) 1,970
Finance income - -
Finance costs (100) (110)
----------------------------------------------- -------- --------
(LOSS)/PROFIT BEFORE TAXATION (2,426) 1,860
Tax expense (460) (746)
(LOSS)/PROFIT FOR THE YEAR (2,886) 1,114
----------------------------------------------- -------- --------
Loss attributable to non-controlling (2) -
interest
(Loss)/Profit attributable to equity
shareholders of the Parent (2,884) 1,114
----------------------------------------------- -------- --------
(2,886) 1,114
----------------------------------------------- -------- --------
Basic (loss)/earnings per share attributable
to equity shareholders of the Parent
(pence) (5.5)p 2.1p
Diluted (loss)/earnings per share attributable
to equity shareholders of the Parent
(pence) (5.3)p 2.1p
----------------------------------------------- -------- --------
* Underlying figures are stated before the share-based payment costs and exceptional costs
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2022
2022 2021
GBP000 GBP000
------------------------------------------------------- ------- -------
(LOSS)/PROFIT FOR THE YEAR (2,886) 1,114
------------------------------------------------------- ------- -------
Other comprehensive income:
Items that could subsequently be reclassified to
the Income Statement:
Exchange differences on translating foreign operations (970) 38
------------------------------------------------------- ------- -------
OTHER COMPREHENSIVE (LOSS)/PROFIT FOR THE YEAR
NET OF TAX (970) 38
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR (3,856) 1,152
------------------------------------------------------- ------- -------
Total comprehensive income attributable to:
Owners of the Parent (3,854) 1,152
Non-controlling interest (2) -
------------------------------------------------------- ------- -------
(3,856) 1,152
------------------------------------------------------- ------- -------
Consolidated Statement of Financial Position
For the year ended 30(th) September 2022
2022 2021
-------------------------------
GBP000 GBP000 GBP000 GBP000
------------------------------- -------- -------- ------- --------
NON-CURRENT ASSETS
Goodwill 2,969 2,969
Property, plant and equipment 384 405
Intangible asset 798 516
Right of use asset 1,375 1,854
Deferred tax asset 192 272
------------------------------- -------- -------- ------- --------
5,718 6,016
------------------------------- -------- -------- ------- --------
CURRENT ASSETS
Trade and other receivables 20,281 18,865
Derivative financial asset - 57
Current tax receivable 470 -
Cash and cash equivalents 4,931 6,474
------------------------------- -------- -------- ------- --------
25,682 25,396
------------------------------- -------- -------- ------- --------
TOTAL ASSETS 31,400 31,412
------------------------------- -------- -------- ------- --------
CURRENT LIABILITIES
Lease creditor (754) (778)
Trade and other payables (11,296) (8,009)
Derivative financial liability (1,938) (169)
Current tax payable (251) (165)
------------------------------- -------- -------- ------- --------
(14,239) (9,121)
------------------------------- -------- -------- ------- --------
NON-CURRENT LIABILITIES
Lease creditor (634) (1,023)
Deferred tax liabilities (169) -
------------------------------- -------- -------- ------- --------
(803) (1,023)
TOTAL LIABILITIES (15,042) (10,144)
------------------------------- -------- -------- ------- --------
NET ASSETS 16,358 21,268
------------------------------- -------- -------- ------- --------
SHAREHOLDERS' EQUITY
Share capital 216 216
Share premium 11,496 11,496
Merger reserve 1,055 1,055
Currency reserve (1,381) (411)
Capital redemption reserve 18 18
Treasury shares (1,525) (1,025)
Retained earnings 6,478 9,916
Own shares (3) (3)
------------------------------- -------- -------- ------- --------
TOTAL SHAREHOLDERS' EQUITY 16,354 21,262
NON-CONTROLLING INTEREST 4 6
------------------------------- -------- -------- ------- --------
TOTAL EQUITY 16,358 21,268
------------------------------- -------- -------- ------- --------
CONSOLIDATED CASHFLOW STATEMENT
For the Year Ended 30 September 2022
2022 2021
GBP000 GBP000
------------------------------------------ ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit for the year (2,886) 1,114
------------------------------------------ ------- -------
Adjustments for:
Depreciation 239 261
Exchange adjustments (361) 38
Amortisation of right of use asset 917 969
Amortisation of intangible asset 40 -
Finance expense 100 110
Tax expense 460 746
Equity settled share-based payment charge 229 118
------------------------------------------ ------- -------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING
CAPITAL AND PROVISIONS (1,262) 3,356
Increase in trade and other receivables (1,330) (881)
Increase/(decrease) in trade and other payables 4,000 (1,465)
CASH GENERATED IN OPERATIONS 1,408 1,010
Tax paid (539) (763)
----------------------------------------------------- ------- -------
NET CASH INFLOW FROM OPERATING ACTIVITIES 869 247
----------------------------------------------------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received - -
Acquisition of property, plant and equipment (398) (187)
Proceeds from the disposal of property, plant
and equipment 150 -
Acquisition of intangible assets (321) (334)
----------------------------------------------------- ------- -------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (569) (521)
----------------------------------------------------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (100) (110)
Repayment of borrowings (1,000) (3,250)
Proceeds of borrowings 1,000 250
Repayment of lease liabilities (821) (928)
Purchase of Treasury shares (500) -
Dividends paid to equity shareholders of the
Parent (783) (391)
----------------------------------------------------- ------- -------
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (2,204) (4,429)
----------------------------------------------------- ------- -------
Net (decrease)/increase in cash and cash equivalents (1,904) (4,703)
Effect of foreign exchange on cash and cash
equivalents 361 (38)
Cash and cash equivalents at start of period 6,474 11,215
----------------------------------------------------- ------- -------
CASH AND CASH EQUIVALENTS AT OF PERIOD 4,931 6,474
----------------------------------------------------- ------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year ended 30 September 2022
Share Share Treasury Merger Other Retained Own Non- Total
capital premium shares reserve reserves(2) earnings shares(3) Total(1) controlling Equity
interest
==============
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ==========
OPENING
BALANCE AT
1 OCTOBER
2020 216 11,496 (1,025) 1,055 (431) 9,075 (3) 20,383 6 20,389
============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ==========
Pro t for the
year - - - - - 1,114 - 1,114 - 1,114
Other
comprehensive
income for
the year - - - - 38 - - 38 - 38
============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ==========
Total
comprehensive
income for
the year - - - - 38 1,114 - 1,152 - 1,152
Dividends - - - - - (391) - (391) - (391) Share-based payment (4) - - - - - 118 - 118 - 118 Purchase of - - - - - - - - - - Treasury shares ============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ========== CLOSING BALANCE AT 30 SEPTEMBER 2021 216 11,496 (1,025) 1,055 (393) 9,916 (3) 21,262 6 21,268 ============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ========== OPENING BALANCE AT 1 OCTOBER 2021 216 11,496 (1,025) 1,055 (393) 9,916 (3) 21,262 6 21,268 ============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ========== Loss for the year - - - - - (2,884) - (2,884) (2) (2,886) Other comprehensive loss for the year - - - - (970) - - (970) - (970) ============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ========== Total comprehensive loss for the year - - - - (970) (2,884) - (3,854) (2) (3,856) Dividends - - - - - (783) - (783) - (783) Share-based payment (4) - - - - - 229 - 229 - 229 Purchase of Treasury shares - - (500) - - - - (500) - (500) ============== ========== =========== ========= ========= =============== ========= ============= ========= =========== ========== CLOSING BALANCE AT 30 SEPTEMBER 2022 216 11,496 (1,525) 1,055 (1,363) 6,478 (3) 16,354 4 16,358
(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.
(4) The amount stated reflects only the share-based payment charge and does not include the associated costs that are included within the amount stated on the consolidated Income Statement.
BASIS OF PREPARATION
T he Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets, and in accordance with Applicable Accounting Standards.
The Financial Statements have been prepared on a going concern basis. In reaching their assessment, the Directors have considered a period extending at least twelve months from the date of approval of this financial report.
The Directors have prepared cash flow forecasts covering a period of more than 12 months from the date of releasing these financial statements. This assessment has included consideration of the forecast performance of the business for the foreseeable future, the cash and financing facilities available to the Group. At 30 September 2022 the Group had cash reserves of GBP4.9m with an undrawn amount of GBP5.0m from a revolving credit facility of GBP5.0m. However, post period end this GBP5.0m revolving credit facility was cancelled. The strong cash position was after a year of change and restructure within the Group, particularly for the Middle East and Asia Pacific regions during the year which meant the Group incurred one off losses.
The Directors have also prepared a stress case scenario that demonstrates the Group's ability to continue as a going concern even with a significant drop in revenues and limited mitigating cost reduction to re-align with the revenue drop.
Based on the cash flow forecasts prepared including appropriate stress testing, the Directors are confident that any funding needs required by the business will be sufficiently covered by the existing cash reserves. As such these Financial Statements have been prepared on a going concern basis.
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). This has remained unchanged from the previous year. 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 Middle Asia
Year ended 30 September & Americas East Pacific Eliminations Unallocated Consolidated
2022 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Total external revenue 35,089 8,063 3,745 - - 46,897
Total inter-segment revenue 1,093 754 551 (2,398) - -
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Total revenue 36,182 8,817 4,296 (2,398) - 46,897
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Segmental profit/(loss) 3,923 (1,814) (544) - - 1,565
Unallocated corporate
expenses(1) - - - - (2,426) (2,426)
Share-based payments charge
and associated costs - - - - (465) (465)
Exceptional costs - - - - (1,000) (1,000)
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Operating profit/(loss) 3,923 (1,814) (544) - (3,891) (2,326)
Finance income - - - - - -
Finance expense - - - - (100) (100)
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Profit/(loss) before taxation 3,923 (1,814) (544) - (3,991) (2,426)
Taxation - - - - (460) (460)
------------------------------ ----------- ------- -------- ------------ ----------- ------------
Profit/(loss) for the
period 3,923 (1,814) (544) - (4,451) (2,886)
------------------------------ ----------- ------- -------- ------------ ----------- ------------
OTHER INFORMATION
Non current assets 3,241 245 48 - 2,184 5,718
Reportable segment assets 17.780 9,617 2,148 - 1,855 31,400
Capital additions(2) 138 249 6 - 326 719
Depreciation and amortisation 566 214 157 - 259 1,196
------------------------------ ----------- ------- -------- ------------ ----------- ------------
(1) Unallocated costs represent Directors' remuneration, administration staff, corporate head office costs and expenses associated with AIM.
(2) Capital additions comprise additions to property, plant and equipment and intangible assets. No client had revenue exceeding 10% of the Group's revenue in the year to 30 September 2022.
Europe Middle Asia
Year ended 30 September & Americas East Pacific Eliminations Unallocated Consolidated
2021 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- ----------- ------- -------- ------------ ----------- ------------
Total external revenue 33,734 10,919 4,119 - - 48,772
Total inter-segment revenue 468 798 220 (1,486) - -
---------------------------------- ----------- ------- -------- ------------ ----------- ------------
Total revenue 34,202 11,717 4,339 (1,486) - 48,772
---------------------------------- ----------- ------- -------- ------------ ----------- ------------
Segmental profit/(loss) 4,947 (737) (408) - - 3,802
Unallocated corporate expenses(1) - - - - (1,683) (1,683) Share-based payments charge and associated costs - - - - (149) (149) Exceptional costs - - - - - - ---------------------------------- ----------- ------- -------- ------------ ----------- ------------ Operating profit/(loss) 4,947 (737) (408) - (1,832) 1,970 Finance income - - - - - - Finance expense - - - - (110) (110) ---------------------------------- ----------- ------- -------- ------------ ----------- ------------ Profit/(loss) before taxation 4,947 (737) (408) - (1,942) 1,860 Taxation - - - - (746) (746) Profit/(loss) for the period 4,947 (737) (408) - (2,688) 1,114 ---------------------------------- ----------- ------- -------- ------------ ----------- ------------ OTHER INFORMATION Non current assets 3,224 249 74 - 2,449 6,016 Reportable segment assets 14,865 10,051 2,401 - 4,095 31,412 Capital additions(2) 88 71 12 - 350 521 Depreciation and amortisation 602 240 157 - 231 1,230 ---------------------------------- ----------- ------- -------- ------------ ----------- ------------
(1) Unallocated costs represent Directors' remuneration, administration staff, corporate head office costs and expenses associated with AIM.
(2) Capital additions comprise additions to property, plant and equipment and intangible assets. No client had revenue exceeding 10% of the Group's revenue in the year to 30 September 2021.
Geographical information
2022 2021
External revenue by location of customers GBP000 GBP000
------------------------------------------ ------- -------
United Kingdom 21,624 18,892
Netherlands 3,241 3,186
Germany 3,154 1,856
United Arab Emirates 2,074 3,474
Australia 2,041 1,462
South Korea 1,372 437
Qatar 1,357 2,581
Oman 1,327 3,065
Singapore 1,156 1,266
Saudi Arabia 1,150 3,137
France 1,107 1,030
Canada 1,059 1,146
Spain 975 955
United States 876 932
Italy 707 502
Hong Kong 626 74
Ireland 403 1,151
Kuwait 341 845
Peru 328 16
Belgium 279 224
Serbia 233 -
Norway 198 43
Russia 192 391
Malaysia 170 473
South Africa 149 209
Philippines 107 -
Chile 105 -
Indonesia 99 255
Other countries 447 1,170
------------------------------------------ ------- -------
46,897 48,772
------------------------------------------ ------- -------
Geographical information of Non current assets
2022 2021
GBP000 GBP000
------------ ------- -------
UK 5,094 5,347
Oman 140 123
UAE 63 125
Singapore 121 25
Qatar 42 41
Malaysia 34 58
Kuwait - 8
Hong Kong - 9
Netherlands 148 211
France 11 21
Australia 9 10
Canada 3 5
USA 8 8
Spain 6 25
Germany 39 -
------------ ------- -------
5,718 6,016
------------ ------- -------
Analysis of the tax charge
The tax charge on the profit for the year is as follows:
2022 2021
GBP000 GBP000
-------------------------------------------------- ------- -------
Current tax:
UK corporation tax on profit for the year 71 540
Non-UK corporation tax 140 173
Adjustments to the prior period estimates - (3)
-------------------------------------------------- ------- -------
211 710
Deferred tax:
Origination and reversal of temporary differences 249 36
-------------------------------------------------- ------- -------
Tax charge for the year 460 746
-------------------------------------------------- ------- -------
FACTORS AFFECTING THE TAX CHARGE
The tax assessed for the year varies from the standard rate of corporation tax in the UK. The difference is explained below:
2022 2021
GBP000 GBP000
-------------------------------------------------- ------- -------
(Loss)/profit before tax (2,426) 1,860
-------------------------------------------------- ------- -------
Expected tax charge based on the standard average
rate of corporation tax in the UK of 19% (2021:
19%) (461) 353
Effects of:
Expenses not deductible 237 20
Deferred tax - other differences 249 36
Share options exercised (99) -
Foreign tax rate differences 554 375
Adjustment to prior period estimates - (3)
Utilisation of losses (32) (24)
Unprovided losses 12 (11)
-------------------------------------------------- ------- -------
Tax charge for the year 460 746
-------------------------------------------------- ------- -------
Factors that may affect future tax charges
Following Royal Assent of the Finance Bill 2021 an increase to the main rate of UK corporation tax has been announced, increasing this to 25% from 1 April 2023.
earnings per share
2022 2021
GBP000 GBP000
-------------------------------------------------- ----------- -----------
(Loss)/profit for the financial year attributable
to equity shareholders (2,884) 1,114
Exceptional costs 1,000 -
Share-based payment charges and associated
costs 465 149
-------------------------------------------------- ----------- -----------
Underlying (loss)/profit for the year before
share-based payments and exceptional costs (1,419) 1,263
Weighted average number of shares:
Ordinary shares in issue 53,962,868 53,962,868
Shares held by EBT (3,677) (3,677)
Treasury shares (1,405,839) (1,787,811)
-------------------------------------------------- ----------- -----------
Basic weighted average number of shares 52,553,352 52,171,380
-------------------------------------------------- ----------- -----------
Effect of Employee share options 2,309,028 2,125,958
-------------------------------------------------- ----------- -----------
Diluted weighted average number of shares 54,862,380 54,297,338
-------------------------------------------------- ----------- -----------
Basic (loss)/earnings per share (5.5)p 2.1p
Diluted (loss)/earnings per share (5.3)p 2.1p
Underlying basic earnings per share before
share-based payments and exceptional costs (2.7)p 2.4p
-------------------------------------------------- ----------- -----------
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Some asset and liability amounts reported in the Consolidated Financial Statements contain a degree of management estimation and assumptions. There is therefore a risk of significant changes to the carrying amounts for these assets and liabilities within the next financial year. The estimates and assumptions are made on the basis of information and conditions that exist at the time of the valuation.
The following are considered to be key accounting estimates:
Impairment reviews
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires an entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. An impairment review test has been performed at the reporting date and no impairment is required.
Receivables impairment provisions
The amounts presented in the Consolidated Statement of Financial Position are net of allowances for doubtful receivables, estimated by the Group's management based on the expected credit loss within IFRS 9. This is calculated using a simplified model of recognising lifetime expected losses based on the geographical location of the Group's entities and considers historical default rates, projecting these forward taking into account any specific debtors and forecasts relating to local economies. At the Statement of Financial Position date a GBP3,159,000 (2021: GBP2,561,000) provision was required. If management's estimates changed in relation to the recoverability of specific trade receivables the provision could increase or decrease. Any future increase to the provision would lead to a corresponding increase in reported losses and a reduction in reported total assets.
Revenue recognition on fixed fee projects
Where the Group enters into a formal fixed fee arrangement revenue is recognised by reference to the stage of completion of the project. The stage of completion will be estimated by the Group's management based on the Project Manager's assessment of the contract terms, the time incurred, and the performance obligations achieved and remaining.
POST BALANCE SHEET EVENTS
There have been no significant events requiring disclosure since 30 September 2022.
END
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FR TTMBTMTATTRJ
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February 23, 2023 02:01 ET (07:01 GMT)
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