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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% | 26.00 | 24.00 | 28.00 | 26.00 | 26.00 | 26.00 | 6,086 | 07:37:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Heavy Construction, Nec | 42.63M | -336k | -0.0064 | -40.63 | 13.66M |
From Apr 2019 to Apr 2024
TIDMDRV
RNS Number : 0376K
Driver Group plc
11 December 2018
11 December 2018
DRIVER GROUP PLC
("Driver" or "the Group")
Preliminary Results
Driver Group PLC (AIM: DRV), the global professional services consultancy to construction and engineering industries, is pleased to announce its results for the financial year ended 30 September 2018.
Financial Highlights
Significant improvement on all fronts
Hot Features
Premium
-- Revenue increased 4% to GBP62.6m (2017: GBP60.2m) with
continued focus on core claims and disputes
-- Gross profit increased to GBP16.3m (2017: GBP14.8m) resulting
in a gross margin % increased to 26.0% (2017: 24.6%)
-- Underlying*profit before taxation increase of 54% to
GBP3.8m (2017: GBP2.5m)
-- Profit for the year GBP2.2m (2017: GBP0.3m)
-- Net Cash** GBP6.9m (2017: borrowings GBP0.2m)
-- Earnings per share increased to 4.0p (2017: 0.7p)
-- Utilisation increased to 80.0% (2017: 76.2%) contributing
to the increased gross margin %
Positive start to the new financial year in line with management expectations
Operational Highlights
-- Completed strategic actions the Board committed to implementing
in February 2017 at the time of the equity raise and refinancing
-- Strong and sustained focus on the Group's existing expertise
of Claims and Dispute Resolution and Expert Witness Support
Services
-- Positive performance by both the Diales and Driver Trett
brands, notably in the UK, Singapore, Qatar and Kuwait
-- Awarded Large Company Turnaround of the Year at the national
2018 Institute for Turnaround Awards
-- Plans in place to broaden the offering into new sectors
and have a wider geographical spread
Gordon Wilkinson, Chief Executive Officer of Driver Group plc, commented: "The transformative turnaround in Driver Group's fortunes reflects a job carefully judged and executed by its management team and staff. The result of this has been to return significant value to our shareholders and to deliver expert, sustainable and truly world-class professional service to our clients."
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
** Net cash / (borrowings) 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
Enquiries: Driver Group plc 020 7377 0005 Gordon Wilkinson (CEO) David Kilgour (CFO) N+1 Singer (Nomad & Broker) 0207 496 3000 Sandy Fraser Acuitas Communications 020 3687 0868 Simon Nayyar Fraser Schurer-Lewis fraser.schurer-lewis@acuitascomms.com
Chairman's Statement
INTRODUCTION
I am pleased to report that our performance this year has built on the good progress achieved last year and the Group has produced an excellent result ahead of original market expectations. We have seen during the period that demand for our services continues to be strong across the globe and we have broadened our offering into new sectors. Last year was a period of significant change during which we carried out an equity raise, disposed of underperforming businesses and streamlined our operations. Following this transformation, the shape of the Group is now largely as our strategy requires and we have been able to progress and significantly improve performance across the business with all regions contributing to the overall excellent result.
FINANCIAL RESULTS
The Group's revenue for the year was GBP62.6m (2017: GBP60.2m) and the underlying* profit before tax was GBP3.8m (2017: GBP2.5m), which we believe more accurately reflects the underlying, operating performance of the Group. The underlying* continuing earnings per share was 6.1p (2017: 5.8p). The reported profit was GBP2.2m (2017: GBP0.3m) which includes a share-based payment charge of GBP1.1m (2017: GBP0.2m). In the prior year, there were also exceptional costs associated with the restructuring of the business of GBP1.1m, which I am pleased to report were GBPnil in the current year.
During the year all regions performed well. Revenue in Europe and Americas 'EuAm' grew by 10% to GBP28.8m, with a 27% improvement in segmental profitability to GBP3.0m (2017: GBP2.3m). Growth in the Asia Pacific region 'APAC', was particularly pleasing at 32% to GBP11.0m and the region's segmental profitability improved significantly recording a profit of GBP1.0m against a profit of GBP0.5m in the prior year. The Middle East 'ME' region saw especially strong performances from Kuwait and Qatar and although there was a reduction in regional revenues to GBP22.9m (2017: GBP25.2m) partly as a result of a large commission completing early and not being replaced in the year, segmental profitability improved by 11% to GBP2.1m (2017 GBP1.9m) through careful cost management.
Net cash** at the close of the year was an improvement on expectations, standing at GBP6.9m (2017: net borrowings GBP0.2m), reflecting significant progress made during the year in cash collections and the continued focus on working capital management generally.
DIVID
I am pleased to report the Directors propose a return to dividends with the payment of a dividend for 2018 of 0.5p per share (2017: GBPnil) reflecting our confidence in the transformation of the Group. Looking forward, the Board intends to pursue a progressive dividend policy which will seek to maximise shareholder value, while retaining balance sheet flexibility to fund ongoing operating requirements.
STRATEGY
The Group's strategy remains to focus on those areas of expertise where we have a particularly strong position, in claims and dispute resolution and in expert witness work, and to consolidate the Group's position as one of the pre-eminent firms in its areas of expertise. Concentration on this clearly articulated aim has so far demonstrably delivered improved revenue growth and increased profitability leading to the generation of more attractive returns for shareholders. In support of this strategy we also keep under review broadening our sector, geographic and service offerings. We see no reason at this stage to amend our objective or strategy, although of course they remain under continual review.
BOARD
Following the appointment of David Kilgour as Group Chief Financial Officer on 12th December 2017, the composition of the Board has remained unchanged for the remainder of the year. During the year, the Board elected to adopt the QCA Corporate Governance Code which was published on 25 April 2018 as its corporate governance code. The Board believes that this provides an appropriate and suitable framework for a group of our size and complexity.
OUTLOOK
The start of the current financial year has shown a continuation of the positive trading and improvements that we enjoyed during last year. I have always stressed that in a professional services business like ours, it is notoriously difficult to predict activity levels, but your Board will continue to monitor costs and margins to ensure that the Company deals appropriately with the fluctuations in activity that are an inevitable feature of our business. Nonetheless, your Board is confident that we can continue to build on the exceptional progress we have made so far. There is no question that in every significant respect the Company is in a far better position than it has been for several years.
I would particularly like to take this opportunity to thank all of the staff of Driver Group in every part of our business for the loyalty, hard work and support that they have shown during this and previous years. Under the leadership of the Executive Board they have all contributed to delivering an excellent result for the Group and my Board colleagues join me in thanking them most sincerely. As a mark of how far the company has come in recent times on the 22(nd) of November Gordon Wilkinson and David Kilgour on behalf of the whole Board collected the Large Company Turnaround of the Year award from the Institute for Turnarounds. It is a remarkable achievement to which everyone in the business contributed.
Finally, I should also like to thank again both our longstanding and new shareholders for their continued support throughout the year. Your Board will continue to do all it can to reward the confidence you have shown in us.
Steven Norris
Non-Executive Chairman
11 December 2018
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
** Net cash / (borrowings) 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
Chief Executive Officer's Review
INTRODUCTION
I am pleased to report on what has been a year of substantial and sustainable improvement in Driver Group's performance. We have made very significant progress with implementing the strategy to address and resolve the challenges that the business faced some years ago, and to put those issues firmly in the past.
I am delighted to report that the headwinds that had affected the business 36 months ago are now a thing of the past. We have turned in a strong performance, and one that the business can be justly proud of, and results are well ahead of original market expectations. We have done this as a consequence of the resilience and determination of our dedicated people to turn around the fortunes of our business. This has meant a relentless and energetic focus on new business pipeline building, developing and growing existing client relationships, strengthening the Group's global market presence and a continuous drive on cash collections.
We enjoyed a remarkably strong start to the year with high levels of activity and a healthy pipeline of assignments for short to medium term conversion. In April 2018 the Board successfully completed the sale and leaseback of the Group's registered office in Haslingden, Lancashire; this represented the final strategic action we had committed to at the time of the equity raise and re-financing in February 2017. This contributed to a significant improvement in the Group's overall net cash** position by GBP7.1m to GBP6.9m (2017: net borrowings GBP0.2m).
We undertook a major overhaul of our online presence in the first half of 2018, with a structural review of our website, to improve its performance and effectiveness with prospective clients and existing and prospective investors. Feedback on the new global website platform has been resoundingly positive. Taken together with the exceptional progress and pick-up that our Diales app has achieved, which enables clients and introducers to source our expert witness services in whichever market they are required, I am confident that our digital performance has significantly improved, and there is more we will do.
Through successful new business acquisition across our key markets - particularly in Europe and Americas and in Asia Pacific - and as a consequence of careful management of cash flow and debtors, our underlying* operating profit has seen a dramatic recovery, up 45% on 2017 and profit for the year increased by 736% on the prior year.
I am also happy to report a further incremental improvement in utilisation*** rates by 3.8 percentage points to 80%, a significant key performance indicator for any global professional services business such as ours.
Driver Group is now uniquely well positioned to consolidate our leading competitive positions in the key markets in which we operate.
Driver Group can look forward to a future filled with significant commercial potential. I am confident that, now we have a more resilient, more focused and better managed operating platform, we shall be able to make the most of those opportunities in the future.
I would like to take this opportunity on behalf of your Board to thank all the team at Driver Group for their tremendous efforts and unstinting loyalty. It is their dedication and tireless work ethic that has enabled us to manage the turnaround in the business over the last 18 months so efficiently and effectively.
Financial Performance HIGHLIGHTS
Revenue is up 4% on 2017 at GBP62.6m (2017: GBP60.2m). Underlying* operating profit is up 45% on 2017 at GBP4.0m (2017: GBP2.7m). Reported profit increased significantly to GBP2.2m from GBP0.3m in 2017.
REGIONAL BREAKDOWN
In this, the fortieth anniversary year since the foundation of Driver Group and its antecedents, I am delighted to report a strong surge back to profitability across our key global markets. This is eloquent testimony to the commitment and professionalism of our team.
ASIA PACIFIC
I am pleased to report that the Asia Pacific region has experienced a positive regional revenue performance increasing by 32% (GBP2.7m) to GBP11.0m. The Singapore market has continued to grow significantly, with revenue up 47% (GBP2.6m), and remains the central hub for the business in the region. Malaysia also demonstrated further sustainable growth. In Australia, after a challenging year in 2016-17, we have seen steady improvements and look forward with confidence to growth potential in this market.
Although Hong Kong's performance was slightly below our expectations, the ground work has been laid to ensure the business is well positioned for future growth as evidenced by significant improvement in staff utilisation rates*** (up 22% points) to 82%. As a result we are well placed to exploit the strategic opportunities for growth in mainland China.
MIDDLE EAST
The Middle East was the only region which was unable to meet its performance targets this year with strong performances in Qatar and Kuwait countered by our performance in UAE. As a region, revenue was down 9% (GBP2.3m) to GBP22.9m. UAE revenue was down 22% (GBP2.9m), but this was partially offset by UAE staff being deployed to support the delivery of projects in Qatar and Kuwait where revenue was up by a very encouraging 35% and 29%, respectively.
The importance that Driver Group continues to attach to this region is reflected in the fact that in April 2018 we were delighted to open our own office in Kuwait City, which opened to considerable regional acclaim. We have also refreshed and enhanced our strategic referral network relationships in the region, and held a very successful marketing initiative in UAE in April 2018. Over the coming year, we will be seeking to pursue a range of large projects. This is in addition to ongoing work from the delivery of power projects that are already in their build phase, as well as scope for expansion of our high value Diales expert witness work.
EUROPE AND AMERICAS
Across the Europe and Americas region, revenue rose by an encouraging 10% (GBP2.7m) to GBP28.8m. In particular, Driver Trett UK revenue was up GBP1.9m, a very commendable performance - and, in fact, a new record for the business and region.
Canada, which experienced challenging trading conditions and a change of management in the preceding year, returned a modest profit. The business is well positioned for growth in the coming financial year.
OUTLOOK
After a very successful 12 month period for your business, and a positive trading performance in the early part of the new financial year, we have a realistic expectation that it can make significant further progress in growing its global offering, achieving even more competitive local market positions, and adding further to our extensive blue chip client base. As a global business with operations worldwide, we do not, at present, foresee a significant impact on the Group as a result of the UK leaving the EU. Our strategy has delivered outstanding performance over the past year. I believe we are, therefore, exceptionally well placed to build on that performance in the year ahead.
Gordon Wilkinson
Chief Executive Officer
11 December 2018
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
** Net cash / (borrowings) 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
Chief Financial Officer's Review
SUMMARY INCOME STATEMENT 2018 GBPm 2017 GBPm -------------------------------------------- ---------- ---------- Revenue 62.62 60.23 Cost of sales (46.34) (45.39) -------------------------------------------- ---------- ---------- Gross Profit 16.28 14.84 Recurring operating expenses (12.31) (12.09) Net finance cost (0.13) (0.26) -------------------------------------------- ---------- ---------- Underlying* profit before tax 3.84 2.49 Exceptional items - (1.08) Share based payments charge (1.10) (0.17) -------------------------------------------- ---------- ---------- Profit before Tax 2.74 1.23 Tax (expense)/credit (0.57) 0.04 -------------------------------------------- ---------- ---------- Profit from continuing operations 2.17 1.27 Loss on discontinued operation, net of tax - (0.98) -------------------------------------------- ---------- ---------- Profit for the year 2.17 0.30 -------------------------------------------- ---------- ----------
In 2018 Driver Group delivered an excellent performance with the Group's Income Statement, Cashflow and Balance Sheet all strengthened as progress continued during the year. Over the past year, the following key financial metrics have improved:
KEY METRICS 2018 2017 -------------------------- ---------- ---------- Revenue GBP62.62m GBP60.23m Gross Margin % 26.0% 24.6% Underlying* Net Margin % 6.1% 4.1% Utilisation Rates 80.0% 76.2% NWC% 14.6% 18.3% Cash Conversion % 136% 85% -------------------------- ---------- ----------
Revenue increased by 4.0% to GBP62.62m (2017: GBP60.23m) and gross margin increased by 9.7% to GBP16.28m (2017: GBP14.84m). This improvement in gross margin along with our careful management of overheads (excluding share-based payments) following the restructuring in 2017, has resulted in an improved underlying* profit before tax margin of 6.1% (2017: 4.1%). The net cash** at the year end was GBP6.90m compared to net borrowings of GBP0.18m in 2017, which is a result of excellent cash management during the financial year as evidenced by a cash conversion rate of 136%.
The Europe and Americas 'EuAm' region increased revenue by 10.3% to GBP28.75m (2017: GBP26.05m) and generated an increase in segmental profit of 27.3% to GBP2.97m (2017: GBP2.33m). This increase was predominantly driven by an excellent performance in the UK delivering an increase in revenues of 12.8% to GBP21.52m (2017: GBP19.08m) due to a combination of significant growth in the Diales technical business complemented by a strong performance from the Driver Project Services business. Contributions from the Netherlands and Germany helped contribute to the overall performance in the EuAm region.
The Middle East 'ME' region saw revenues drop during the year by 9.1% to GBP22.91m (2017: GBP25.19m) largely due to a major commission completing early in the year in the UAE and scaling back of the business in Oman. Partially offsetting this, significant growth was seen during the year in Qatar and Kuwait with an increase in revenues of 35.3% to GBP3.36m (2017: GBP2.48m) and 28.9% to GBP2.96m (2017: GBP2.30m) respectively. Segmental profit for the region increased to GBP2.14m (2017: GBP1.93m).
The Asia Pacific region 'APAC' saw revenues increase by 32.2% to GBP10.96m (2017: GBP8.29m). The majority of the significant growth in the year was in Singapore, with an increase in revenues of 47% to GBP8.07m (2017: GBP5.48m) and is now well established as a regional claims and dispute hub. Both Malaysia and Australia had a small and encouraging increase in revenue offset by a decrease in Hong Kong. Segmental profit for the region increased to GBP0.95m (2017: GBP0.53m) an increase of 80.0%. The APAC region continues to be a target for further growth opportunity.
The utilisation*** rate of chargeable staff across the business as a whole for the year stood at 80.0%, an increase from 76.2% in the prior year, with a degree of variability throughout the year ranging from a low of 69.9% to a high of 89.7%. This overall increase in utilisation is clearly a significant factor in the improved results for 2018 and is one of the businesses' key performance indicators.
After a net interest charge of GBP0.13m (2017: GBP0.26m) the underlying* profit before tax was GBP3.84m (2017: GBP2.49m) and the reported profit before tax was GBP2.74m (2017: GBP1.23m) after deduction of GBP1.10m for share-based payments (2017: GBP0.17m). The increase in the share-based payment charge has been due to the issue of new options in the year and the strong performance of the Group. Details of the outstanding options can found in the Report of the Directors.
NET WORKING CAPITAL
At the end of the year, net cash** stood at GBP6.90m which compares very favourably to the net borrowings of GBP0.18m at the end of last year. This was a result of continued focus on working capital management as evidenced by the Net Working Capital percentage (NWC%(1) ) of 14.6% (2017: 18.3%) and Cash Conversion(2) of 136% achieved during the year (2017: 85%).
TAXATION
The Group showed a tax charge of GBP0.57m (2017: credit GBP0.04m). The tax charge includes the effects of expenses not deductible for tax purposes and is calculated at the prevailing rates for the jurisdictions the Group operates, consequently, the effective tax rate for the year was 21% (2017: negative 3%). Adjusting for the share-based payments charge the effective tax rate reduces to 15% (2017: negative 3%).
EARNINGS PER SHARE
Underlying* continuing basic earnings per share was 6.1 pence (2017: 5.8 pence). The basic earnings per share was 4.0 pence (2017: 0.7 pence).
CASH FLOW
There was a net cash inflow from operating activities of GBP5.69m (2017: GBP2.18m), reflecting the reported profit for the year of GBP2.17m (2017: GBP0.30m) after depreciation and amortisation of GBP0.55m (2017: GBP1.22m) and the share-based payment charge of GBP1.10m (2017: GBP0.17m). Within that, there was an increase of GBP1.29m in trade and other receivables (2017: decrease of GBP0.83m), which was more than offset by the increase in trade and other payables of GBP2.94m (2017: decrease of GBP1.38m). Net tax paid in the year was GBP0.39m (2017: GBP0.03m).
There was a net cash inflow from investing activities of GBP1.50m (2017: outflow GBP0.25m) principally due to the sale of the head office building in May 2018 at GBP1.65m offset by capital expenditure of GBP0.35m (2017: GBP0.26m).
Net cashflow from financing activities was an outflow of GBP2.17m (2017: inflow of GBP5.73m) with the current year reflecting the repayment of borrowings of GBP2.00m largely due to the proceeds received from the sale of the head office building and the sale of initiate and scheduled term loan repayments. The prior year inflow was hugely influenced by the net proceeds of GBP8.11m due to the equity raise in February/March of 2017.
SUMMARY CASHFLOW GBPm ----------------------------------------------- ------- Net borrowings** at 30 September 2017 (0.18) Operating cash flow before changes in working capital 4.42 Increase in Trade and other receivables (1.29) Increase in Trade and other payables 2.94 Tax paid (0.39) Net interest paid (0.13) Capital spend (0.35) Repurchase of shares (0.02) Disposal of subsidiary, net of cash disposed of 0.20 Proceeds from the disposal of property, plant and equipment 1.65 Effects of Foreign Exchange 0.05 Net cash** at 30 September 2018 6.90 ----------------------------------------------- -------
DIVIDS
The Directors propose a dividend for 2018 of 0.5p per share (2017: GBPnil).
David Kilgour
Chief Financial Officer
11 December 2018
(1) Net Working Capital is calculated by taking the net sum of trade receivables, trade payables and financial derivatives and dividing by the sum of revenue and other operating income.
(2) Cash conversion is calculated by taking underlying* EBITDA divided by Cash generated from operations.
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
** Net cash / (borrowings) 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
For the year ended 30 September 2018
2018 2017
GBP000 GBP000
--------------------------------------------- --------- ---------
REVENUE 62,615 60,227
Cost of sales (46,338) (45,391)
---------------------------------------------- --------- ---------
GROSS PROFIT 16,277 14,836
Administrative expenses (13,546) (13,485)
Other operating income 139 143
---------------------------------------------- --------- ---------
Underlying* operating profit 3,970 2,747
Exceptional items - (1,083)
Share-based payment charges and associated
costs (1,100) (170)
Amortisation of intangible assets - -
--------------------------------------------- --------- ---------
OPERATING PROFIT 2,870 1,494
Finance income 17 1
Finance costs (148) (262)
---------------------------------------------- --------- ---------
PROFIT BEFORE TAXATION 2,739 1,233
Tax (expense)/credit (567) 38
---------------------------------------------- --------- ---------
PROFIT FROM CONTINUING OPERATIONS 2,172 1,271
Loss on discontinued operation, net
of tax - (976)
---------------------------------------------- --------- ---------
PROFIT FOR THE YEAR 2,172 295
---------------------------------------------- --------- ---------
Profit attributable to non-controlling
interests from continuing operations 3 4
Profit attributable to non-controlling
interests from discontinued operations - -
Profit attributable to equity shareholders
of the Parent from continuing operations 2,169 1,267
Loss attributable to equity shareholders
of the Parent from discontinued operations - (976)
---------------------------------------------- --------- ---------
2,172 295
---------
Basic earnings per share attributable
to equity shareholders of the Parent
(pence) 4.0p 0.7p
---------------------------------------------- --------- ---------
Diluted earnings per share attributable
to equity shareholders of the Parent
(pence) 3.8p 0.6p
---------
Basic earnings per share attributable
to equity shareholders of the Parent
(pence) from continuing operations 4.0p 2.9p
---------
Diluted earnings per share attributable
to equity shareholders of the Parent
(pence) from continuing operations 3.8p 2.8p
---------
* Underlying figures are stated before the share-based payment costs, exceptional items and amortisation of intangible assets
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2018
2018 2017
GBP000 GBP000
------------------------------------------------------------------------ -------- --------
PROFIT FOR THE YEAR 2,172 295
------------------------------------------------------------------------ -------- --------
Other comprehensive income:
Items that could subsequently be reclassified to the Income Statement:
Exchange differences on translating foreign operations 59 (18)
======================================================================== ======== ========
OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR NET OF TAX 59 (18)
------------------------------------------------------------------------ -------- --------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,231 277
------------------------------------------------------------------------ -------- --------
Total comprehensive income attributable to:
Owners of the Parent 2,228 273
Non-controlling interest 3 4
======================================================================== ======== ========
2,231 277
------------------------------------------------------------------------ -------- --------
Consolidated Statement of Financial Position
For the year ended 30 September 2018
2018 2017
GBP000 GBP000 GBP000 GBP000
-------------------------------- --------- --------- -------- ---------
NON-CURRENT ASSETS
Goodwill 2,969 2,969
Property, plant and equipment 765 950
Intangible assets - -
Deferred tax asset 69 58
--------------------------------- --------- --------- -------- ---------
3,803 3,977
CURRENT ASSETS
Trade and other receivables 20,445 18,859
Derivative financial asset 42 531
Cash and cash equivalents 10,007 4,932
Asset held for sale - 1,614
30,494 25,936
-------------------------------- --------- --------- -------- ---------
TOTAL ASSETS 34,297 29,913
--------------------------------- --------- --------- -------- ---------
CURRENT LIABLITIES
Borrowings (646) (527)
Trade and other payables (10,623) (8,352)
Derivative financial liability (639) (12)
Current tax payable (456) (175)
--------------------------------- --------- --------- -------- ---------
(12,364) (9,066)
-------------------------------- --------- --------- -------- ---------
NON-CURRENT LIABILITIES
Borrowings (2,460) (4,583)
Deferred tax liabilities - (127)
================================= ========= ========= ======== =========
(2,460) (4,710)
-------------------------------- --------- --------- -------- ---------
TOTAL LIABILITIES (14,824) (13,776)
--------------------------------- --------- --------- -------- ---------
NET ASSETS 19,473 16,137
--------------------------------- --------- --------- -------- ---------
SHAREHOLDERS' EQUITY
Share capital 215 215
Share premium 11,475 11,475
Merger reserve 1,055 1,055
Currency reserve (400) (459)
Capital redemption reserve 18 18
Retained earnings 7,107 3,937
Own shares (3) (107)
--------------------------------- --------- --------- -------- ---------
TOTAL SHAREHOLDERS' EQUITY 19,467 16,134
NON-CONTROLLING INTEREST 6 3
--------------------------------- --------- --------- -------- ---------
TOTAL EQUITY 19,473 16,137
--------------------------------- --------- --------- -------- ---------
Consolidated Cashflow Statement
For the year ended 30 September 2018
2018 2017
GBP000 GBP000
----------------------------------------------- ---------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 2,172 295
------------------------------------------------ ---------- --------
Adjustments for:
Depreciation 551 601
Amortisation - 621
Exchange adjustments (46) 51
Loss on disposal of subsidiary - 796
Profit on disposal of property, plant (52) -
& equipment
Finance income (17) (1)
Finance expense 148 262
Tax expense/(credit) 567 (38)
Equity settled share-based payment charge 1,100 170
------------------------------------------------ ---------- --------
OPERATING CASH FLOW BEFORE CHANGES IN
WORKING CAPITAL AND PROVISIONS 4,423 2,757
------------------------------------------------ ---------- --------
(Increase)/decrease in trade and other
receivables (1,291) 833
Increase/(decrease) in trade and other
payables 2,939 (1,378)
------------------------------------------------ ---------- --------
CASH GENERATED IN OPERATIONS 6,071 2,212
Tax paid (385) (29)
------------------------------------------------ ---------- --------
NET CASH INFLOW FROM OPERATING ACTIVITIES 5,686 2,183
------------------------------------------------ ---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 17 1
Acquisition of property, plant and equipment (350) (264)
Proceeds on sale and operating leaseback
of property, plant and equipment 1,650 -
Disposal of subsidiary net of cash acquired 195 12
================================================ ========== ========
NET CASH INFLOW/(OUTFLOW) FROM INVESTING
ACTIVITIES 1,512 (251)
------------------------------------------------ ---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (148) (262)
Repayment of borrowings (2,004) (7,123)
Proceeds of borrowings - 5,000
Repurchase of share options (17) -
Proceeds from issue of new shares - 8,560
Costs directly attributable to the issue
of new shares - (450)
================================================ ========== ========
NET CASH (OUTFLOW)/INFLOW FROM FINANCING
ACTIVITIES (2,169) 5,725
------------------------------------------------ ---------- --------
Net increase in cash and cash equivalents 5,029 7,657
Effect of foreign exchange on cash and
cash equivalents 46 (51)
Cash and cash equivalents at start of
period 4,932 (2,674)
------------------------------------------------ ---------- --------
CASH AND CASH EQUIVALENTS AT OF PERIOD 10,007 4,932
------------------------------------------------ ---------- --------
Consolidated Statement of Changes in Equity
For the year ended 30 September 2018
Non-controlling
Share Share Merger Other Retained Own interest Total
capital premium reserve reserves(2) earnings shares Total(1) GBP000 Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
OPENING
BALANCE
AT 1 OCTOBER
2016 127 3,453 1,702 (423) 2,829 (107) 7,581 (1) 7,580
--------------- --------- --------- --------- ------------- ---------- -------- ---------- ---------------- --------
Profit for
the year - - - - 291 - 291 4 295
Other
comprehensive
income for
the year - - - (18) - - (18) - (18)
--------------- --------- --------- --------- ------------- ---------- -------- ---------- ---------------- --------
Total
comprehensive
income for
the year - - - (18) 291 - 273 4 277
Transfer
on disposal
of Initiate - - (647) - 647 - - - -
Share-based
payment - - - - 170 - 170 - 170
Issue of
share capital 88 8,472 - - - - 8,560 - 8,560
Costs directly
attributable
to the issue
of new shares - (450) - - - - (450) - (450)
=============== ========= ========= ========= ============= ========== ======== ========== ================ ========
CLOSING
BALANCE
AT 30
SEPTEMBER
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
Transfer
of
reserves(3) - - - - (82) 82 - - -
Share-based
payment - - - - 1,100 - 1,100 - 1,100
Proceeds
from sale
of own shares - - - - - 22 22 - 22
Repurchase
of share
options - - - - (17) - (17) - (17)
=============== ========= ========= ========= ============= ========== ======== ========== ================ ========
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
Notes
1 BASIS OF PREPARATION AND STATUS OF FINANCIAL INFORMATION
The Financial information set out above has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the EU (Adopted IFRSs).
The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 September 2018 or 2017. Statutory accounts for 2017 have been delivered to the Registrar of Companies, and those for 2018 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
These results were approved by the Board of Directors on 10 December 2018.
2 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 changed from the previous operating divisions of Europe & Americas (EuAm) and Africa, Middle East and Asia Pacific (AMEA), due to the disposal of the African subsidiary in May 2017 and the dismantling of the AMEA central management team in late 2016. These divisions are now 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.
Year ended 30 September 2018
Continuing operations
Europe Middle Asia Discontinued
& East Pacific Africa Eliminations Unallocated Consolidated Initiate
Americas
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- --------- ------- -------- -------- -------------- ------------- -------------- ---------------
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) -
Exceptional - - - - - - - -
items
Amortisation - - - - - - - -
of intangible
assets
---------------- --------- ------- -------- -------- -------------- ------------- -------------- ---------------
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 -
---------------- --------- ------- -------- -------- -------------- ------------- -------------- ---------------
OTHER
INFORMATION
Non current
assets 3,202 300 151 - - 150 3,803 -
Reportable
segment
assets 13,636 10,510 4,302 - - 5,849 34,297 -
Capital
additions(2) 68 251 - - - 31 350 -
Depreciation
and
amortisation 108 245 114 - - 84 551 -
---------------- --------- ------- -------- -------- -------------- ------------- -------------- ---------------
(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
including additions resulting from acquisitions through
business combinations.
No client had revenue exceeding 10% of the Group's revenue in the
year to 30 September 2018
Year ended 30 September 2017
Europe Middle Asia Discontinued
& East Pacific Africa Eliminations Unallocated Consolidated Initiate
Americas
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
Total external
revenue 26,049 25,190 8,289 699 - - 60,227 3,229
Total
inter-segment
revenue 601 4 125 200 (961) - (31) 31
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
Total revenue 26,650 25,194 8,414 899 (961) - 60,196 3,260
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
Segmental
profit/(loss) 2,331 1,931 529 (299) - - 4,492 2
Unallocated
corporate
expenses(1) - - - - - (1,745) (1,745) -
Share-based
payment
charge - - - - - (170) (170) -
Exceptional
items - - - (449) - (634) (1,083) (475)
Amortisation
of intangible
assets - - - - - - - (621)
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
Operating
profit/(loss) 2,331 1,931 529 (748) - (2,549) 1,494 (1,094)
Finance
income - - - - - 1 1 -
Finance
expense - - - - - (262) (262) -
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
Profit/(loss)
before
taxation 2,331 1,931 529 (748) - (2,810) 1,233 (1,094)
Taxation - - - - - 38 38 118
Profit/(loss)
for the
period 2,331 1,931 529 (748) - (2,772) 1,271 (976)
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
OTHER
INFORMATION
Non current
assets 3,241 404 137 - - 195 3,977 -
Reportable
segment
assets 14,745 9,620 3,498 - - 2,050 29,913 -
Capital
additions(2) 39 59 91 - - 78 267 -
Depreciation
and
amortisation 110 289 64 8 - 130 601 621
--------------- --------- ------- -------- --------- -------------- ------------- -------------- -------------
(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 including additions resulting from acquisitions through business combinations.
No client had revenue exceeding 10% of the Group's revenue in the year to 30 September 2017.
Geographical information:
External revenue
by location of customers
2018 2017
GBP000 GBP000
----------------- ------------- -------------
UK 18,553 20,517
UAE 9,974 11,723
Singapore 6,212 3,864
Oman 5,836 6,778
Qatar 3,841 3,378
Germany 3,093 2,111
France 1,947 1,806
Netherlands 1,873 2,630
Kuwait 1,843 1,783
Malaysia 1,752 1,487
Australia 1,609 930
Canada 982 707
Italy 753 401
Spain 707 33
Saudi Arabia 560 1,233
United States 466 19
Belgium 465 837
Vietnam 324 209
Hong Kong 316 810
Algeria 211 107
Poland 163 157
India 156 67
South Korea 151 29
South Africa 21 643
China - 486
Other countries 807 711
================= ============= =============
62,615 63,456
----------------- ------------- -------------
Reconciliation to total Group revenue
2018 2017
GBP000 GBP000
--------------------------------------------------- -------- --------
Total external revenue from continuing operations 62,615 60,227
Total external revenue from discontinued
operation - 3,229
=================================================== ======== ========
62,615 63,456
--------------------------------------------------- -------- --------
Geographical information of Non current assets
2018 2017
GBP000 GBP000
------------- -------- --------
UK 3,329 3,408
Oman 112 204
UAE 129 164
Singapore 76 99
Qatar 37 20
Malaysia 42 19
Kuwait 22 16
Hong Kong 19 11
Netherlands 13 12
France 6 10
Australia 14 8
Canada 4 6
============= ======== ========
3,803 3,977
------------- -------- --------
3 EXCEPTIONAL ITEMS
2018 2017
GBP000 GBP000
--------------------------------------- --------- --------
Restructuring costs (1) - 634
Disposal of subsidiary (2) - 449
======================================= ========= ========
- 1,083
------------------------------------------------- --------
(1) Restructuring costs include bank charges and legal and professional fees in relation to the refinancing in the prior year.
(2) Disposal of subsidiary in the prior year includes the loss on the disposal of Driver Trett South Africa (pty) Ltd and the associated legal and professional fees for the disposal.
4 TAXATION
Analysis of the tax charge/(credit)
The tax charge/(credit) on the profit for the year is as follows:
2018 2017
GBP000 GBP000
------------------------------------------------------ -------- --------
Current tax:
UK corporation tax on profit for the year - -
Non-UK corporation tax 636 126
Adjustments to the prior period estimates 69 (71)
------------------------------------------------------ -------- --------
705 55
Deferred tax:
Origination and reversal of temporary difference (138) (211)
------------------------------------------------------ -------- --------
Tax charge/(credit) for the year 567 (156)
------------------------------------------------------ -------- --------
2018 2017
GBP000 GBP000
----------------------------------------- -------- --------
Current tax:
From continuing operations 705 55
From discontinued operations - -
----------------------------------------- -------- --------
705 55
Deferred tax:
From continuing operations (138) (93)
From discontinued operations - (118)
----------------------------------------- -------- --------
(138) (211)
----------------------------------------- -------- --------
Tax charge/(credit) for the year 567 (156)
----------------------------------------- -------- --------
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:
2018 2017
GBP000 GBP000
--------------------------------------------------- ------------ --------
Profit from continuing operations 2,739 1,233
--------------------------------------------------- ------------ --------
Loss from discontinued operations - (1,094)
--------------------------------------------------- ------------ --------
Profit before tax 2,739 139
--------------------------------------------------- ------------ --------
Expected tax credit based on the standard average
rate of corporation tax in the UK of 19% (2017:
19%) 521 26
Effects of:
Expenses not deductible 322 477
Deferred tax - other differences (138) (211)
Foreign tax rate difference (66) (288)
Adjustment to prior period estimates 69 (71)
Utilisation of losses (60) (313)
Share options exercised (17) (32)
Unprovided losses (64) 256
=================================================== ============ ========
Tax charge/(credit) for the year 567 (156)
--------------------------------------------------- ------------ --------
Factors that may affect future tax charges
As enacted in the Finance Act 2016, from 1 April 2020 there will be a reduction in the main rate of corporation tax to 17%. This will affect future tax charges accordingly.
5 EARNINGS PER SHARE
2018 2017
GBP000 GBP000
--------------------------------------------------------------- ----------- -----------
Profit for the financial year attributable
to equity shareholders 2,169 291
Share-based payment charges and associated
costs 1,100 170
Exceptional items - 1,083
Loss from discontinued operations - 976
=============================================================== =========== ===========
Profit for the year from continuing operations
before share-based payments, amortisation of
intangible assets and exceptional items 3,269 2,520
--------------------------------------------------------------- ----------- -----------
Weighted average number of shares:
* Ordinary shares in issue 53,862,868 43,775,690
* Shares held by EBT (108,052) (267,760)
=============================================================== =========== ===========
Basic weighted average number of shares 53,754,816 43,507,930
=============================================================== =========== ===========
Effect of Employee share options 2,762,696 1,972,870
=============================================================== =========== ===========
Diluted weighted average number of shares 56,517,512 45,480,800
--------------------------------------------------------------- ----------- -----------
Basic earnings per share 4.0p 0.7p
Diluted earnings per share 3.8p 0.6p
Adjusted continuing basic earnings per share
before share-based payments, amortisation of
intangible assets and exceptional items 6.1p 5.8p
Basic earnings per share attributable to equity
shareholders of the Parent from continuing
operations 4.0p 2.9p
Diluted earnings per share attributable to
equity shareholders of the Parent from continuing
operations 3.8p 2.8p
6 DISCONTINUED OPERATION - prior year
In line with the Group's strategy to focus on claims, disputes and expert witness assignments the Directors made the decision to dispose the Group's 100% share of initiate Consulting Limited ('Initiate') on 30 September 2017. As a result of this disposal Initiate has been classed as a discontinued operation and is the only operation presented as discontinued in these financial statements.
At the date of disposal Initiate had net assets of GBP0.1m. The consideration received for the disposal was GBP0.2m. The loss on disposal is due to a goodwill write-off of GBP0.5m.
Loss on disposal
2018 2017
GBP000 GBP000
----------------------------- ---------------------- ---------------------
Net assets at disposal date - 113
Goodwill write-off - 487
Anticipated proceeds - (188)
Loss on disposal - 412
----------------------------- ---------------------- ---------------------
Results of discontinued operations
2018 2017
GBP000 GBP000
---------------------------------- ---------------------- ---------------------
Revenue - 3,229
Expenses - (3,290)
Finance costs - -
Tax - 118
Amortisation of intangible asset - (621)
Loss on disposal - (412)
================================== ====================== =====================
Loss for the year - (976)
---------------------------------- ---------------------- ---------------------
Earnings per share from discontinued operations
2018 2017
GBP000 GBP000
---------------------- --------- --------
Basic loss per share - (2.2)p
---------------------- --------- --------
Results of discontinued operations
The statement of cash flows includes the following amounts relating to discontinued operations
2018 2017
GBP000 GBP000
---------------------- ---------------------- ---------------------
Operating activities - (1,244)
Investing activities - -
Financing activities - -
====================== ====================== =====================
Loss for the year - (1,244)
---------------------- ---------------------- ---------------------
Disposal of Driver Trett South Africa (pty) Ltd
The Directors also took the decision in the prior year to dispose of Driver Trett South Africa (pty) Ltd ('DTSA') in South Africa to the local management team on 12 May 2017. This decision was made due to specific market constraints imposed by the government upon ownership which prevented effective bidding for most of the key projects.
At the date of disposal DTSA had net assets of GBP0.54m. The consideration paid was GBP0.15m in cash. A loss on disposal of GBP0.39m was recognised in the financial statements. As DTSA formed part of the Africa, Middle East and Asia Pacific operating segment it has not be disclosed separately as a discontinued operation.
During the prior year the DTSA contribution to revenue was GBP0.70m and a loss before tax of GBP0.30m.
7 ASSET HELD FOR SALE
At 30 September 2017 the Directors took the decision to reclassify the Group's head office at St Crispin Way from land and buildings to an asset held for sale. During the year the head office was disposed for proceeds of GBP1.65m less costs to sell of GBP0.04m in a sale and leaseback arrangement. At the date of disposal and at 30 September 2017 the land and buildings had a carrying value of GBP1.61m and was derecognised from the Group's assets at disposal. The subsequent lease is classified as an operating lease.
8 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 prior experience and their assessment of the present value of estimated future cash flows. At the Statement of Financial Position date a GBP2,046,000 (2017: GBP2,109,000) provision was required. If managements 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.
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
FR KBLFFVLFXFBX
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December 11, 2018 02:01 ET (07:01 GMT)
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