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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 : 2774W
Driver Group plc
10 December 2019
10 December 2019
DRIVER GROUP PLC
("Driver" or "the Group")
Dividend and Preliminary Results
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 2019.
The final dividend for the full year of 0.75 pence per share will be paid on 20 March 2020 to shareholders who are on the register of members at the close of business on 21 February 2020, with an ex-dividend date of 20 February 2020 subject to approval at the AGM.
Financial & Operational Highlights
Driver has delivered a robust set of results for the full year, with decent revenue and good profitability for the period, as a result of a markedly improved performance in the second half of the year following a challenging first six months.
-- Revenue decreased 7% to GBP58.5m (2018: GBP62.6m) -- Underlying*profit before taxation decreased by 22% to GBP3.0m (2018: GBP3.8m) -- Profit for the year increased to GBP2.7m (2018: GBP2.2m)
-- Net Cash** decreased after funding share buy-back programme and dividend payment totalling GBP1.3m to GBP5.4m (2018: GBP6.9m)
-- Earnings per share increased to 5.2p (2018: 4.0p) -- Utilisation decreased to 76.8% (2018: 80.0%) -- Prompt actions taken to rationalise & reduce cost base in APAC and ME regions to
reflect lower activity levels
-- Another good year in EuAm with both profits and revenues increased -- Increased global footprint by opening office in Riyadh to develop KSA market
-- Growth of Diales brand still a key strategy with recent appointment of a new Head of Diales in the Middle East and new experts in the UK
-- Development of software solutions to enhance data management and analysis as part of the service to clients
Positive start to the new financial year in line with management expectations.
Gordon Wilkinson, Chief Executive Officer of Driver Group plc, commented: "I am very pleased to be able to report that, following a slow first six months to 2018/19, Driver Group has benefited from a much stronger second half to the financial year, and is continuing to make good progress across markets and sectors. It has been extremely encouraging to see the effects of the review of the business's strategic priorities earlier in the year now feeding through, with a markedly improved performance over the last six months."
* Underlying figures are stated before the share-based payment costs
** Net cash consists of cash and cash equivalents, bank loans and finance leases
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
Enquiries: Driver Group plc 020 7377 0005 Gordon Wilkinson (CEO) David Kilgour (CFO N+1 Singer (Nomad & Broker) 020 7496 3000 Sandy Fraser Acuitas Communications 020 3687 0868 Simon Nayyar simon.nayyar@acuitsascomms.com Fraser Schurer-Lewis fraser.schurer-lewis@acuitascomms.com
CHAIRMAN'S STATEMENT
INTRODUCTION
The first six months of this year were a challenge for the Group as turnover fell substantially below anticipated levels. I have made the point several times that our ability to predict income much beyond two months is limited by the nature of the assignments we are asked to undertake. But the senior management team led by Gordon Wilkinson and Mark Wheeler did a sterling job to ensure that in addition to the cost reductions we initiated last year we reduced our break-even point even further. As a result although turnover in the second six months was not markedly different from the first half we were able to produce a thoroughly decent second half profit and a full year which while less than the previous year will stand us in good stead going forward. The broad geographic spread of the business has proved itself to be a strong and resilient business model, meaning that the excellent performance in Europe and Americas ('EuAm region') has offset the fall in the profitability of other regions. We are encouraged by the new business pipeline and by trading activities in the early weeks of the new financial year. Combined with the steps we have taken to reduce operating costs, the Board are confident that the Group can continue to enjoy further success in the coming year.
FINANCIAL RESULTS
The Group's revenue for the year was GBP58.5m (2018: GBP62.6m). The underlying* profit before tax was GBP3.0m (2018: GBP3.8m), which we believe more accurately reflects the underlying operating performance of the Group. The reported profit for the year increased to GBP2.7m (2018: GBP2.2m). The adjusted continuing basic earnings per share before share-based payments was 4.7p (2018: 6.1p).
There have been some regional differences in performances this year, with EuAm region the standout performer. Revenue in EuAm region grew by 3.5% to GBP29.8m (2018: GBP28.8m), and segmental profitability increased significantly by 31% to GBP3.9m (2018: GBP3.0m), reflecting an excellent year across the region. The Middle East ('ME region'), and Asia Pacific ('APAC region') have both had to weather a more challenging financial year. In the ME region, fairly steady levels of revenue and good utilisation rates (81% for the region) in Qatar and Oman were hindered by a weaker performance in UAE and Kuwait, meaning that profit reduced to GBP1.4m (2018: GBP2.1m). APAC region's revenue was down by 17% largely as a result of reduced activity in Singapore and Malaysia where large commissions were delayed during the year. This resulted in a loss for the Group in the region. We remain committed to these regions as there is a positive pipeline of work and opportunities remain that we will look to capitalise on in the coming year.
Net cash at the close of the year stood at GBP5.4m (2018: GBP6.9m). This is after funding a dividend payment of GBP0.3m and a share buy-back programme of GBP1.0m during the year.
DIVID
The Company's recently reinstated progressive dividend policy remains in place with the Directors approving the payment of an interim dividend for 2019 of 0.5p per share in October 2019 and recommending the payment of a final dividend of 0.75p per share (2018: 0.5p per share), reflecting our confidence in the renewed strength of the Group. The Board are committed to maximising 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 leading firms in its areas of expertise. 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. Your Board believes that the current share price does not fully reflect the true value of the business going forward and thus initiated a share buy-back which benefits all shareholders. We remain committed to the share buy-back programme, subject always to our being able to do so from surplus cash and in the absence of alternative uses of capital, such as infill acquisitions, with the potential to deliver higher returns.
BOARD
Driver Group appointed Elizabeth Filkin CBE to its Board as a Non-Executive Director on 1 October 2019 following a rigorous search process. Elizabeth's background and expertise further enhances our sectoral agility and reach, and we are delighted that she has joined us. We intend to appoint a third independent non-executive director in the course of the next few months.
OUTLOOK
As I have highlighted above, in a professional services business such as Driver, it is always difficult to predict activity levels and we have certainly experienced this over the past year, with projects that we expected to convert instead delayed or deferred. I have however, been pleased to see that, as we look to the future the business is capable of being profitable and cash generative in good times and less good times.
The cash position of the business remains strong and with a promising pipeline, the Board is confident that the Company can continue to build on the exceptional progress we have made in the last two years. The new financial year has started in line with expectations, and whilst a certain degree of uncertainty always exists around future projects, we are encouraged by the pipeline that we have. In the short term we continue to be well placed to benefit from the opportunities in our markets and to create value for our shareholders.
I would like to take this opportunity to thank all of the staff of Driver Group across the business for the continued loyalty and dedication that they have shown during this and previous years. Under the leadership of Gordon Wilkinson and Mark Wheeler each and every one has contributed to building a strong and resilient business and I express my profound gratitude to them all.
Finally, I should also like to thank again both our longstanding and new shareholders for their 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
10 December 2019
* Underlying figures are stated before the share-based payment costs
** Net cash consists of cash and cash equivalents, bank loans and finance leases
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
CHIEF EXECUTIVE OFFICER'S REVIEW
INTRODUCTION
I am very pleased to be able to report that, following a slow first six months to 2018/19, Driver Group has benefited from a much stronger second half to the financial year, and is continuing to make good progress across markets and sectors. It has been extremely encouraging to see the effects of the review of the business's strategic priorities earlier in the year now feeding through, with a markedly improved performance over the last six months. I am confident that Driver Group is now well positioned to move into 2019/20 as a more resilient and focused business, where we expect to capitalise on the efficiency gains which have been achieved and to benefit from the added momentum generated within the business during the second half of the year.
The Group's global operating footprint has proven to be a source of significant operational strength and diversified risk with a strong result in the EuAm region offsetting weaker performance in the ME and APAC regions following a slow down in these markets. The Company continues to perform well across markets, regions and sectors with the new business enquiry pipeline at a healthy level, and a significant upturn in the level of enquiries in the second half of the year. We fully expect to make good progress in converting these leads, based on our track record of prudent business planning and management, our exceptional team of world-class professional services experts and our specialist understanding of sectors, markets and disciplines.
The benefits of our focused and targeted restructuring across the Group were evident in the second half of the year, and we expect to continue to see the value of it flowing through in 2019/20, particularly in the APAC and ME regions. As a result of the active management of the business reducing the costs, leading to the improved operating performance that we have seen in the last six months of the year, our underlying* profit before tax was GBP3.0m.
Our utilisation rates, which are as ever, a key performance indicator for a global professional services business such as Driver, remain satisfactory at 76.8%, demonstrating that we have not been adversely impacted by the global slowdown that many have found evident over the past year.
Driver Group's plans for further strategic growth and development remain unaltered. Because the business is now on a firm financial footing, the Company has, over the last 12 months and more, run the slide rule over a number of potential acquisitions to assess whether they might add momentum to our business across key product sets and locations. Ultimately, we have concluded that none of these prospective candidates would generate the required synergies and that proceeding, therefore, with such acquisitions would fail to meet the test of being appropriate and earnings accretive; but we continue to have an open mind about future opportunities.
Your Board's confidence in the business and its strategic vision, and the business's prudent approach to long-term planning and balance sheet management, has led the Company to undertake a successful buy-back programme of GBP1.0m of shares.
The Company continues to develop data management software to enhance the service to clients and strengthen its leading global competitive market position. This has already been utilised in the APAC region where its benefits have quickly become apparent, enhancing service to our clients and delivering efficiency gains within the business. We have established an in-house data team, based in Singapore, who prepare bespoke software tools for use within the business. Typically, these tools are used for extensive data mining and add value to our clients by locating critical data quickly which saves money and, at the same time, may allow the discovery of key information within a strict court or arbitration deadline, which might otherwise not be possible. Our data services will be extended to be a direct client service within the next two years, following further development and global roll-out within the business.
I would like to take this opportunity on behalf of your Board to thank all the team at Driver Group for their hard work and commitment to the business during what has been a challenging period, and to our loyal clients around the world. We are appreciative of the support of all of them as we continue to position the business for further growth and an even better advisory offering as we begin the next decade.
Financial Performance HIGHLIGHTS
Revenue remains steady, although reduced year on year at GBP58.5m (2018: GBP62.6m). Underlying* profit before tax, given the issues in the first half of the financial year was respectable at GBP3.0m, although down from GBP3.8m in 2018. However, the reported profit for the year is up 27% on 2018 at GBP2.7m (GBP2.2m in 2018) as a result of the movement in share based payments during the year.
REGIONAL BREAKDOWN
ASIA PACIFIC
The APAC region has experienced a challenging year, and been unable to meet its performance targets. The results are partly a result of a slowdown in those markets and external challenges beyond our control; but they are, nonetheless, disappointing for the Group. Revenue was down across the region with the largest reductions being in Singapore and Malaysia which were a combined 17% below the 2018 position. As a consequence profitability was significantly down for the region and timely and effective measures have been put in place to reduce the cost base accordingly at a cost of GBP0.2m. As a result we hope to move forward with a more positive start to 2019/20 as there remains a strong pipeline of work, and we are well placed to exploit future opportunities in the region.
Middle East
In the ME region whilst Oman's revenue increased slightly by 0.6% to GBP6.1m both Qatar and UAE were down 5.7% and 8.6% at GBP3.2m and GBP9.7m respectively. Additionally the evidence of the ongoing opportunities for the Group in the ME region was hampered by a significantly weaker performance in Kuwait which was largely impacted by a local market slow down and a change in senior management. As a result, regional profit was GBP1.4m for the year, 32% down on the previous year.
The Group still attaches importance to this region, and the potential that it provides for the business; nonetheless, in the short term, decisive action has been taken to reduce overhead in the region at a cost of GBP0.2m and ensure sustainable future presence and trading performance in the ME region.
EUROPE AND AMERICAS
Across the EuAm region, there has again been a strong trading performance, resulting in an overall increase in revenue of 3.5% to GBP29.8m. The UK's revenue was encouraging at GBP21.4m, with a good performance across the whole of the UK market for both claims and project services. Other markets performed well too, but most notably Germany and Canada delivered significant increases in revenues of 35% up to GBP2.2m, and 46% up to GBP1.4m respectively. Profitability in the region rose 32% to GBP3.9m, reflecting the strength of our proposition. Our Technical Services team in London has continued to grow, increasing from 3 people 3 years ago, to 14. The team offers forensic architecture and engineering globally, from the UK. It is likely that this fast growing sector will be supplemented with further disciplines, to include geotechnical and engineering disciplines that relate directly to the exploration, extraction and refinement of oil and gas products. It is also likely that future years will see these services offered locally in our key centres of Dubai and Singapore, as well as in London. We are encouraged by the pipeline for 2019/20, and believe that the business is well positioned for further growth in the year ahead.
outlook
In spite of a challenging first half, the year has finished strongly, which is testimony to the work of all the team. That strong finish, supported by an enquiry rate which remains globally robust, has helped to ensure that there has been strong momentum into the new financial year.
We believe that we are, therefore, well positioned to deliver a sustainable and profitable business for the coming year and beyond, and that we can provide on-going success for all our stakeholders.
Gordon Wilkinson
Chief Executive Officer
10 December 2019
*Underlying figures are stated before the share-based payment costs
** Net cash consists of cash and cash equivalents, bank loans and finance leases
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
CHIEF FINANCIAL OFFICER'S REVIEW
Income Statement 2019 GBPm 2018 GBPm ------------------------------ ---------- ---------- Revenue 58.49 62.62 Cost of sales (44.95) (46.34) Impairment movement 0.40 - ------------------------------ ---------- ---------- Gross Profit 13.94 16.28 Recurring operating expenses (10.85) (12.31) Net finance costs (0.09) (0.13) ------------------------------ ---------- ---------- Underlying* profit before tax 3.00 3.84 Share based payments charge 0.25 (1.10) ------------------------------ ---------- ---------- Profit before Tax 3.25 2.74 Tax expense (0.50) (0.57) ------------------------------ ---------- ---------- Profit for the year 2.75 2.17 ------------------------------ ---------- ----------
In 2019 Driver Group performed well in the EuAm region but faced a slowdown in activity levels in the ME and APAC regions. Overall this resulted in lower revenues and underlying* profit before tax than 2018 however, profit for the year has improved by 27% as a result of the profit and loss account movement in share based payments during the year. The key financial metrics are as follows:
Key Metrics 2019 2018 ------------------------- ---------- ---------- Revenue GBP58.49m GBP62.62m Gross Margin % 23.8% 26.0% Profit for the year GBP2.75m GBP2.17m Utilisation Rates 76.8% 80.0% Basic earnings per share 5.2p 4.0p ------------------------- ---------- ----------
Total revenue decreased by 7% to GBP58.49m (2018: GBP62.62m) and gross profit decreased by 14.4% to GBP13.94m (2018: GBP16.28m). The reduction in gross margin was as a result of the lower revenues in the APAC and ME regions the impact of which has been offset by a rationalisation of the cost base. The profit before tax for the year has increased by 19% to GBP3.25m (2018: GBP2.74m) as a result of the movement in share based payments during the year. The net cash** at the year end was GBP5.4m compared to net cash** of GBP6.9m in 2018, after funding a dividend payment of GBP0.27m and a share buy-back programme amounting to GBP1.0m. Underlying* profit before tax benefited from an impairment credit of GBP0.4m during the year as a result of the collection of old previously provided debts. However, this was offset by incurring GBP0.4m of rationalisation costs in the ME and APAC regions.
The EuAm region increased revenue by 3.5% to GBP29.77m (2018: GBP28.75m) and generated an increase in segmental profit of 31.6% to GBP3.91m (2018: GBP2.97m). This excellent performance was driven by good revenues in the UK of GBP21.41m (2018: GBP21.52m) and significant growth in revenues in mainland Europe of 11% to GBP6.93m (2018: GBP6.25m) and strong growth in revenues in Canada of 46% to GBP1.44m (2018: GBP0.98m).
The ME region saw revenues drop during the year by 14.2% to GBP19.65m (2018: GBP22.91m) due to a reduction in market activity in the UAE and Kuwait. Revenues in Oman showed a small increase at GBP6.05m and revenues in Qatar were down 5.7% at GBP3.2m (2018: GBP3.4m). Segmental profit for the region decreased to GBP1.45m (2018: GBP2.14m).
The APAC region saw revenues drop by 17.2% to GBP9.07m (2018: GBP10.96m). The reduction was spread across the region although more pronounced in Singapore as it proved difficult to maintain the performance in 2018. Singapore is now well established as a regional claims and dispute hub, however, these tend to be larger commissions which result in more variable annual revenues. The segmental result for the year was a loss of GBP0.36m (2018: segmental profit GBP0.95m). The APAC region continues to be a target for further growth opportunities.
The utilisation*** rate of chargeable staff across the business as a whole for the year stood at 76.8%, a decrease from 80.0% in the prior year reflecting the weak first half to the year. Utilisation rates displayed a degree of variability throughout the year ranging from a low of 70.8% to a high of 84.2%. This overall decrease in utilisation is clearly a significant factor in the results for 2019 and is one of the businesses' key performance indicators.
After a net interest charge of GBP0.09m (2018: GBP0.13m) the underlying* profit before tax was GBP3.00m (2018: GBP3.84m) and the reported profit before tax was GBP3.25m (2018: GBP2.74m) after a credit of GBP0.24m for share-based payments (2018: charge GBP1.10m). The credit for share-based payments has been due to the criteria for the vesting of share options not being met for the year.
NET WORKING CAPITAL
At the end of the year, net cash** stood at GBP5.4m (2018: GBP6.9m) after dividend payments and a share buy-back programme amounting to GBP1.3m in aggregate during the year. Net working capital has increased slightly during the year due to a reduction in creditors and timing of debtor receipts.
TAXATION
The Group incurred a tax charge of GBP0.50m in the year (2018: GBP0.57m). 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. Consequently, the effective tax rate for the year was 15% (2018: 21%). Adjusting for the share-based payments charge the effective tax rate is 17% (2018: 15%).
EARNINGS PER SHARE
Basic earnings per share was 5.2 pence (2018: 4.0 pence). Underlying* continuing basic earnings per share was 4.7 pence (2018: 6.1 pence).
CASH FLOW
There was a net cash inflow from operating activities before changes in working capital of GBP3.44m (2018: GBP4.42m), reflecting the reported profit for the year of GBP2.75m (2018: GBP2.17m) after depreciation and amortisation of GBP0.42m (2018: GBP0.55m) and the share-based payment credit of GBP0.24m (2018: charge GBP1.10m). Within that, there was an increase of GBP0.66m in trade and other receivables (2018: increase of GBP1.29m), and a decrease in trade and other payables of GBP2.05m (2018: increase of GBP2.94m). Net tax paid in the year was GBP0.62m (2018: GBP0.39m).
There was a net cash outflow from investing activities of GBP0.29m (2018: inflow GBP1.5m) principally capital expenditure of GBP0.34m offset by interest received. The inflow in 2018 was principally due to the sale of the head office building and the disposal of a subsidiary which combined amounted to GBP1.85m offset by capital expenditure of GBP0.35m.
Net cashflow from financing activities was an outflow of GBP2.36m (2018: outflow of GBP2.17m) with the current year reflecting the dividend and share buy-back programme of GBP1.27m and scheduled term loan repayments of GBP0.98m.
cashflow GBPm ---------------------------------------- ------- Net cash** at 30 September 2018 6.90 Operating cash flow before changes in working capital 3.44 Increase in trade and other receivables (0.66) Decrease in trade and other payables (2.05) Tax paid (0.62) Net interest paid (0.09) Capital spend (0.34) Repurchase of shares (1.00) Dividends paid (0.27) Proceeds from the sale of shares 0.02 Effects of Foreign Exchange 0.07 Net cash** at 30 September 2019 5.40 ---------------------------------------- -------
DIVIDS
The Directors propose a final dividend for 2019 of 0.75p per share (2018: 0.50p per share). If approved, the dividend will be paid on 20 March 2020 to shareholders on the register on 21 February 2020.
David Kilgour
Chief Financial Officer
10 December 2019
* Underlying figures are stated before the share-based payment costs
** Net cash consists of cash and cash equivalents, bank loans and finance leases
*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff
Consolidated Income Statement
For the year ended 30 September 2019
Hot Features
Premium
2019 2018
GBP000 GBP000
REVENUE 58,486 62,615
Cost of sales (44,950) (46,338)
Impairment movement 401 -
-------------------------------------------------- -------- --------
GROSS PROFIT 13,937 16,277
Administrative expenses (10,760) (13,546)
Other operating income 155 139
-------------------------------------------------- -------- --------
Underlying* operating profit 3,089 3,970
Share-based payment charges and associated costs 243 (1,100)
-------------------------------------------------- -------- --------
OPERATING PROFIT 3,332 2,870
Finance income 44 17
Finance costs (131) (148)
-------------------------------------------------- -------- --------
PROFIT BEFORE TAXATION 3,245 2,739
Tax expense (497) (567)
-------------------------------------------------- -------- --------
PROFIT FOR THE YEAR 2,748 2,172
-------------------------------------------------- -------- --------
Profit attributable to non-controlling Interest 1 3
Profit attributable to equity shareholders of
the Parent 2,747 2,169
-------------------------------------------------- -------- --------
2,748 2,172
-------------------------------------------------- -------- --------
Basic earnings per share attributable to equity
shareholders of the Parent (pence) 5.2p 4.0p
Diluted earnings per share attributable to equity
shareholders of the Parent (pence) 4.8p 3.8p
*Underlying figures are stated before the share-based payment costs
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2019
2019 2018
GBP000 GBP000
------------------------------------------------------- ------- -------
PROFIT FOR THE YEAR 2,748 2,172
------------------------------------------------------- ------- -------
Other comprehensive income:
Items that could subsequently be reclassified to
the Income Statement:
Exchange differences on translating foreign operations (25) 59
------------------------------------------------------- ------- -------
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR NET
OF TAX (25) 59
------------------------------------------------------- ------- -------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,723 2,231
------------------------------------------------------- ------- -------
Total comprehensive income attributable to:
Owners of the Parent 2,722 2,228
Non-controlling interest 1 3
------------------------------------------------------- ------- -------
2,723 2,231
------------------------------------------------------- ------- -------
Consolidated Statement of Financial Position
For the year ended 30 September 2019
2019 2018
-------------------------------
GBP000 GBP000 GBP000 GBP000
------------------------------- ------- -------- -------- --------
NON-CURRENT ASSETS
Goodwill 2,969 2,969
Property, plant and equipment 685 765
Deferred tax asset 268 69
------------------------------- ------- -------- -------- --------
3,922 3,803
CURRENT ASSETS
Trade and other receivables 20,189 20,445
Derivative financial asset 2 42
Cash and cash equivalents 7,526 10,007
------------------------------- ------- -------- -------- --------
27,717 30,494
------------------------------- ------- -------- -------- --------
TOTAL ASSETS 31,639 34,297
------------------------------- ------- -------- -------- --------
CURRENT LIABILITIES
Borrowings (2,125) (646)
Trade and other payables (9,197) (10,623)
Derivative financial liability (398) (639)
Current tax payable (428) (456)
------------------------------- ------- -------- -------- --------
(12,148) (12,364)
------------------------------- ------- -------- -------- --------
NON-CURRENT LIABILITIES
Borrowings - (2,460)
------------------------------- ------- -------- -------- --------
- (2,460)
------------------------------- ------- -------- -------- --------
TOTAL LIABILITIES (12,148) (14,824)
------------------------------- ------- -------- -------- --------
NET ASSETS 19,491 19,473
------------------------------- ------- -------- -------- --------
SHAREHOLDERS' EQUITY
Share capital 216 215
Share premium 11,496 11,475
Merger reserve 1,055 1,055
Currency reserve (425) (400)
Capital redemption reserve 18 18
Treasury shares (1,000) -
Retained earnings 8,127 7,107
Own shares (3) (3)
------------------------------- ------- -------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 19,484 19,467
NON-CONTROLLING INTEREST 7 6
------------------------------- ------- -------- -------- --------
TOTAL EQUITY 19,491 19,473
------------------------------- ------- -------- -------- --------
Consolidated Cashflow Statement
For the year ended 30 September 2019
2019 2018
GBP000 GBP000
-------------------------------------------------------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 2,748 2,172
-------------------------------------------------------- ------- -------
Adjustments for:
Depreciation 418 551
Exchange adjustments (69) (46)
Profit on disposal of property, plant & equipment - (52)
Finance income (44) (17)
Finance expense 131 148
Tax expense 497 567
Equity settled share-based payment (credit)/charge (243) 1,100
-------------------------------------------------------- ------- -------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL
AND PROVISIONS 3,438 4,423
Increase in trade and other receivables (658) (1,291)
(Decrease)/increase in trade and other payables (2,053) 2,939
-------------------------------------------------------- ------- -------
CASH GENERATED IN OPERATIONS 727 6,071
Tax paid (623) (385)
-------------------------------------------------------- ------- -------
NET CASH INFLOW FROM OPERATING ACTIVITIES 104 5,686
-------------------------------------------------------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 44 17
Acquisition of property, plant and equipment (338) (350)
Proceeds on sale and operating leaseback of property,
plant and equipment - 1,650
Disposal of subsidiary net of cash acquired - 195
-------------------------------------------------------- ------- -------
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES (294) 1,512
-------------------------------------------------------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (131) (148)
Repayment of borrowings (981) (2,004)
Repurchase of share options - (17)
Proceeds from issue of new shares 22 -
Purchase of Treasury shares (1,000) -
Dividends paid to equity shareholders of the parent (270) -
-------------------------------------------------------- ------- -------
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (2,360) (2,169)
-------------------------------------------------------- ------- -------
Net (decrease)/increase in cash and cash equivalents (2,550) 5,029
Effect of foreign exchange on cash and cash equivalents 69 46
Cash and cash equivalents at start of period 10,007 4,932
-------------------------------------------------------- ------- -------
CASH AND CASH EQUIVALENTS AT OF PERIOD 7,526 10,007
-------------------------------------------------------- ------- -------
Consolidated Statement of Changes in Equity
For the year ended 30 September 2019
Other Non-
Share Share Treasury Merger reserves Retained Own controlling Total
capital premium shares reserve (2) earnings shares Total(1) interest Equity
GBP000 GBP0000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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 -------------- -------- -------- -------- -------- --------- --------- ------- -------- ------------ ------- Accounting policy change - IFRS 9 - - - - - (953) - (953) - (953) OPENING BALANCE AT 1 OCTOBER 2018 215 11,475 - 1,055 (382) 6,154 (3) 18,514 6 18,520 -------------- -------- -------- -------- -------- --------- --------- ------- -------- ------------ ------- Profit for the year - - - - - 2,747 - 2,747 1 2,748 Other comprehensive income for the year - - - - (25) - - (25) - (25) -------------- -------- -------- -------- -------- --------- --------- ------- -------- ------------ ------- Total comprehensive income for the year - - - - (25) 2,747 - 2,722 1 2,723 Dividends - - - - - (531) - (531) - (531) Share-based payment - - - - - (243) - (243) - (243) Purchase of Treasury shares - - (1,000) - - - - (1,000) - (1,000) Issue of new shares 1 21 - - - - - 22 - 22 -------------- -------- -------- -------- -------- --------- --------- ------- -------- ------------ ------- CLOSING BALANCE AT 30 SEPTEMBER 2019 216 11,496 (1,000) 1,055 (407) 8,127 (3) 19,484 7 19,491 -------------- -------- -------- -------- -------- --------- --------- ------- -------- ------------ -------
(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
The 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 information set out above does not constitute the Group's statutory accounts for the years ended 30 September 2019 or 2018. Statutory accounts for 2018 have been delivered to the Registrar of Companies, and those for 2019 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 9 December 2019.
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 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
Year ended 30 September Americas East Asia Pacific Eliminations Unallocated Consolidated
2019 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Total external revenue 29,771 19,645 9,070 - - 58,486
Total inter-segment revenue 47 121 20 (188) - -
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Total revenue 29,818 19,766 9,090 (188) - 58,486
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Segmental profit/(loss) 3,908 1,446 (363) - - 4,991
Unallocated corporate
expenses(1) - - - - (1,902) (1,902)
Share-based payment charge - - - - 243 243
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Operating profit/(loss) 3,908 1,446 (363) - (1,659) 3,332
Finance income - - - - 44 44
Finance expense - - - - (131) (131)
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Profit/(loss) before
taxation 3,908 1,446 (363) - (1,746) 3,245
Taxation - - - - (497) (497)
------------------------------ --------- ------- ------------ ------------ ----------- ------------
Profit/(loss) for the
period 3,908 1,446 (363) - (2,243) 2,748
------------------------------ --------- ------- ------------ ------------ ----------- ------------
OTHER INFORMATION
Non current assets 3,200 379 129 - 214 3,922
Reportable segment assets 11,707 9,609 3,832 - 6,491 31,639
Capital additions(2) 43 190 77 - 28 338
Depreciation and amortisation 99 145 100 - 74 418
------------------------------ --------- ------- ------------ ------------ ----------- ------------
(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 2019
Europe & Middle
Year ended 30 September Americas East Asia Pacific Eliminations Unallocated Consolidated
2018 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)
------------------------------ --------- ------- ------------ ------------ ----------- ------------
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) 68 123 128 - 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.
Geographical information
2019 2018
External revenue by location of customers GBP000 GBP000
------------------------------------------ ------- -------
UK 16,709 18,553
UAE 9,124 9,979
Oman 6,004 5,836
Singapore 3,608 6,212
Qatar 3,582 3,841
Germany 2,461 3,093
Netherlands 2,294 1,873
France 2,149 1,947
Malaysia 1,812 1,752
Australia 1,559 1,609
Canada 1,298 982
Spain 1,246 707
Saudi Arabia 806 560
United States 771 466
Belgium 570 465
Ireland 533 -
India 518 156
Italy 514 753
Poland 485 163
Kuwait 430 1,843
Russia 365 -
Hong Kong 288 316
Kazakhstan 122 50
Luxembourg 114 -
Austria 97 122
Vietnam 84 324
Algeria 81 211
South Korea 42 151
Other countries 820 651
------------------------------------------ ------- -------
58,486 62,615
------------------------------------------ ------- -------
Geographical information of Non current assets
2019 2018
GBP000 GBP000
------------ ------- -------
UK 3,396 3,329
Oman 129 112
UAE 184 129
Singapore 54 76
Qatar 38 37
Malaysia 43 42
Kuwait 28 22
Hong Kong 21 19
Netherlands 10 13
France 3 6
Australia 11 14
Canada 5 4
------------ ------- -------
3,922 3,803
------------ ------- -------
3 TAXATION
Analysis of the tax charge
The tax charge on the profit for the year is as follows:
2019 2018
GBP000 GBP000
------------------------------------------------- ------- -------
Current tax:
UK corporation tax on profit for the year 165 -
Non-UK corporation tax 568 636
Adjustments to the prior period estimates (37) 69
------------------------------------------------- ------- -------
696 705
Deferred tax:
Origination and reversal of temporary difference (199) (138)
------------------------------------------------- ------- -------
Tax charge for the year 497 567
------------------------------------------------- ------- -------
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:
2019 2018
GBP000 GBP000
------------------------------------------------------ ------- -------
Profit before tax 3,245 2,739
------------------------------------------------------ ------- -------
Expected tax charge based on the standard average
rate of corporation tax in the UK of 19% (2018: 19%) 617 521
Effects of:
Expenses not deductible (24) 322
Deferred tax - other differences (199) (138)
Foreign tax rate differences 206 (66)
Adjustment to prior period estimates (37) 69
Utilisation of losses (168) (60)
Share options exercised (11) (17)
Unprovided losses 113 (64)
------------------------------------------------------ ------- -------
Tax charge for the year 497 567
------------------------------------------------------ ------- -------
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.
4 EARNINGS PER SHARE
2019 2018
GBP000 GBP000
---------------------------------------------------- ---------- ----------
Profit for the financial year attributable to
equity shareholders 2,747 2,169
Share-based payment charges and associated costs (243) 1,100
---------------------------------------------------- ---------- ----------
Profit for the year before share-based payments 2,504 3,269
---------------------------------------------------- ---------- ----------
Weighted average number of shares:
Ordinary shares in issue 53,942,035 53,862,868
Shares held by EBT (3,677) (108,052)
Treasury shares (619,223) -
---------------------------------------------------- ---------- ----------
Basic weighted average number of shares 53,319,135 53,754,816
---------------------------------------------------- ---------- ----------
Effect of Employee share options 3,462,087 2,762,696
---------------------------------------------------- ---------- ----------
Diluted weighted average number of shares 56,781,222 56,517,512
---------------------------------------------------- ---------- ----------
Basic earnings per share 5.2p 4.0p
Diluted earnings per share 4.8p 3.8p
Adjusted continuing basic earnings per share before
share-based payments 4.7p 6.1p
5 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 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 GBP2,384,000 (2018: GBP2,046,000) 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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