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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hydrogen Group Plc | LSE:HYDG | London | Ordinary Share | GB00B1DJTV45 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 42.50 | 35.00 | 50.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMHYDG
RNS Number : 9759I
Hydrogen Group PLC
07 April 2020
7 April 2020
HYDROGEN GROUP PLC
("Hydrogen" or the "Company" or the "Group")
(AIM: HYDG)
Final results for the year ended 31 December 2019
Hydrogen Group, the global specialist recruitment group, announces audited results for the year ended 31 December 2019.
Key points
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-- Group revenue to 31 December 2019 totaled GBP121.3m (2018: GBP135.6m);
-- Full year Net Fee Income (1) ("NFI") fell by 3.6% to GBP29.4m (2018: GBP30.5m);
-- Contractor gross margin increased to 11.4% (2018: 10.8%);
-- Profit conversion ratio(2) fell to 9.9% (2018: 10.5% as restated(3) );
-- Underlying profit before tax(4) ("PBT") decreased by GBP0.3m to GBP2.9m (2018: GBP3.2m as restated(3) );
-- Net cash generated from operations of GBP3.4m (2018: GBP7.8m as restated(3) ); -- Net cash as at 31 December 2019 of GBP4.5m (31 December 2018: GBP4.9m); -- Statutory profit before tax for the year of GBP1.7m (2018: GBP3.0m as restated(3) );
-- In light of the rapidly evolving situation with COVID-19 and impact it may have on the Group's trading, no final dividend is proposed for the year (2018: 1.0p); and
-- Basic EPS in the year of 4.0p (2018: 7.8p as restated). Underlying EPS in the year at 7.5p (2018: 8.9p as restated).
(1) Net Fee Income - which is the equivalent of gross profit
(2) Underlying PBT divided by NFI
(3) Restatement following the application of IFRS 16. Further details are set out in note 24.
(4) Underlying PBT excludes amounts in respect of NCI profit or loss, foreign exchange gains/(losses), amortisation of acquired intangibles, share based payments and exceptional items
Ian Temple, CEO, commented:
"In common with many businesses, Hydrogen currently faces unprecedented uncertainty as a result of COVID-19. While our first priority is to do everything that we can to ensure that our staff and other stakeholders are as safe as possible, we are also focussed on ensuring that we preserve cash while maintaining a critical mass in all of our key markets. Our balance sheet is strong and our stress testing shows that the business could withstand both a prolonged and material decline in revenue.
The Group faced a more challenging year in 2019, particularly during the fourth quarter when a number of external market factors in both the UK and parts of APAC combined to reduce activity levels and, in turn, the Group's net fee income and profit.
We have continued to actively manage our portfolio of niche businesses and have remained focussed on further refining our operating model based around the four key drivers of our Proposition, People, Platform and Performance, and, as a result, we are confident that the business will return to growth when the current uncertainty passes and market conditions improve."
Enquiries:
Hydrogen Group plc 020 7090 7702
Ian Temple CEO
John Hunter COO & CFO
Shore Capital (NOMAD and Joint Broker) 020 7468 7904
Edward Mansfield / James Thomas
Whitman Howard (Joint Broker) 020 7659 1234
Hugh Rich
Notes to Editors:
Hydrogen Group's mission is to empower peoples' careers whilst powering businesses by providing their key people from a proven global platform with clients' in over 50 countries. We deliver by building market leading specialist teams that develop a deep understanding of candidate and clients' needs and developing solutions.
http://www.hydrogengroup.com
CHAIRMAN'S STATEMENT
Coronavirus ("COVID-19")
I begin with an assessment of the risk that COVID-19 poses to the business. The Coronavirus first began to impact our operations in late January in Hong Kong, where most offices and schools have been closed since Chinese New Year. Although the impact has been less acute, our other operations elsewhere in Asia have also faced similar disruption since that time. To date, this disruption has primarily manifested itself in candidate start dates being deferred, which has in turn depressed our reported revenue. In recent days and weeks, as the situation has escalated, the impact has spread to our EMEA and US businesses, so that currently all our staff globally and a significant majority of our clients and candidates are working from home.
We have no experience of a similar crisis so there is no way of predicting the extent of the impact that the virus will have on the Group. It is not yet clear how widespread the virus will be at any one time, how long the pandemic will last and what the medium to long term effect of the pandemic may be on global business investment and demand for recruitment services.
The evidence we have to date suggests that:
-- client demand will be the biggest issue rather than our operational capability to transact work. Fortunately, we had already invested in technology throughout the Group that supports remote working and adopted flexible working practices in many of our offices;
-- permanent recruitment activity will be more impacted than contract recruitment. Our experience in Hong Kong suggests that the resulting business uncertainty may promote short term demand for contract recruitment solutions; and
-- some sectors and markets, for example the consumer sector, will be more adversely affected than others.
Our priority as we navigate the business through the crisis is to do everything we can to ensure that our staff and other stakeholders are as safe as possible and that we comply with different levels of local government restrictions as they come into place.
The Group's balance sheet is strong and we have significant, largely unutilised, banking facilities in place. As a result, our stress testing, which excludes the impact of any Government support or business interruption insurance that we may be able to draw upon, shows that the Group can withstand both a material and prolonged decline in revenue, however, there are also some material uncertainties that exist (see Going Concern review in Strategic Report). Notwithstanding this, we will continue to review activity levels throughout the Group and actively manage our cost base accordingly so as to conserve cash, while remaining mindful that we should maintain critical mass in all of our key markets so that the Group is in the best position possible to benefit from the opportunities that will present themselves when the crisis ends.
2019 Review
The Group traded satisfactorily for the first three quarters of the year. During that period, the Group's performance was impacted by weaker trading conditions in certain of its APAC businesses and by Brexit related uncertainty dampening demand in the UK, however, the resilience of its businesses in other markets and, in particular, very strong trading in its US operations, enabled the Group to continue to grow, albeit modestly.
However, trading conditions deteriorated markedly during the fourth quarter. In the UK, the effect of growing political uncertainty on demand levels was exacerbated by the impact of the proposed changes to the IR35 legislation on clients' contract hiring plans. In the Asia Pacific region, the public disorder and demonstrations in Hong Kong had a material impact on local activity levels. In the US, the Group experienced a significant slowdown in quarter-on-quarter growth rates as investment in both new staff and physical infrastructure was onboarded and bedded in. Together, these factors negated the growth experienced earlier in the year and have resulted in a reduction in both net fee income ("NFI") and profit for the year.
Notwithstanding these challenges, we have continued to invest in, and develop, our operating model, which we are confident will help support a return to growth when market conditions improve.
Performance
In 2019, Group NFI (or Gross Profit) fell by 3.6% to GBP29.4m (2018: GBP30.5m). This was driven by declining NFI in both the EMEA and APAC regions, however, the Group's performance in the US was notable. Two new offices were opened in Charlotte and Los Angeles and US NFI increased by 82%, and by 81% on a constant currency basis, during the year.
The Group has adopted IFRS 16 on a fully retrospective basis. The impact of this change in accounting policy on the comparative figures previously reported is disclosed in note 24. The change resulted in a GBP0.3m increase in net assets as at 1 January 2018 and an increase of GBP0.2m to profit before tax in 2018.
The Board considers that the Group's underlying profit before exceptional items and tax (further details are set out in the Strategic report) continues to be the best way to judge its trading performance as it excludes non-trading items and non-repeatable gains and losses. Underlying profit before exceptional items and tax decreased to GBP2.9m (2018: GBP3.2m as restated). Key adjustments include one-off exceptional expenses of GBP0.9m, as set out in note 4 (2018: net GBPnil), foreign exchange losses of GBP0.1m (2018: GBP0.1m), non-controlling loss of GBP0.1m (2018: profit of GBP0.2m), share based costs of GBP0.1m (2018: GBP0.1m) and the amortisation of acquired intangibles of GBP0.1m (2018: GBP0.1m). Underlying EPS was 7.5p (2018: 8.9p as restated). The statutory profit for the year was GBP1.3m (2018: GBP2.7m as restated).
The weak fourth quarter performance resulted in a reversal of the continued development of profit conversion that the Group had experienced in recent years. Underlying profit before tax margin (calculated as underlying profit divided by net fee income) decreased to 9.9% (2018: 10.5% as restated). Prior to Q4, profit conversion rates had been continuing to expand.
Net cash at 31 December 2019 was GBP4.5m (31 December 2018: GBP4.9m). Although a strong focus on working capital management was maintained throughout the year, the Group's net cash position was impacted by an increase in working capital as a result of changes in client payment terms. Moreover, the Group made payments during the year of approximately GBP1.3m in respect of dividends, share buy backs, and the earn out in relation to the acquisition of Argyll Scott in 2017.
Strategy
Hydrogen Group's strategy is to build market leading specialist teams in high growth markets with a focus on developing each through a journey from incubator through fast growth to market leader where they have much greater profit conversion. Globally, the STEM (Science, Technology, Engineering & Mathematics) and Professional Services markets in which we operate are being increasingly disrupted by a combination of technological, cultural, and political change. Our model allows us to efficiently identify and appraise the niche skill sets for which this disruption will drive increased demand, and conversely those where it will destroy demand, allowing us to deploy our resources accordingly.
To support this strategy, we have developed, and are continuing to refine, an operating model that, by focusing on the key drivers of our Proposition, People, Platform and Performance, is further facilitating the development of scalable market leading teams.
The Group has continued to explore selective acquisition opportunities that may have the potential to accelerate future growth plans. Strict assessment criteria relating to financial, strategic, operational, and cultural fit are applied to any potential target. No opportunities were identified during the year that the Board believes fully met these criteria.
Dividend
An interim dividend was paid in October 2019 of 0.6p (2018: 0.5p). It has been the Board's policy to pay a progressive and sustainable dividend. As noted above the Group has a robust balance sheet, however in light of the exceptional and open-ended uncertainty caused by the Covid-19 pandemic and the still rapidly changing environment, the Board has decided, in the interests of prudence, not to recommend a dividend (2018: 1.0p) until there is more certainty. When circumstances stabilise, the Board will review whether it is appropriate to re-instate the dividend retrospectively via a special dividend.
The Board
The Board complies with the QCA guidelines and has maintained the high standards of corporate governance appropriate to Hydrogen Group's size and market capitalisation. There were no changes in the membership of the Board during the year. In line with best practice, all Directors will stand for re-election by shareholders at the AGM.
Outlook
The challenging trading conditions experienced during the fourth quarter of 2019 have continued into the first quarter of 2020. In the UK, clients' contractor hiring plans have continued to be impacted by the new IR35 legislation in the private sector, which was planned to be implemented in April 2020 but has now been delayed until April 2021. Moreover, as reported above, since Chinese New Year disruption arising from the COVID-19 virus has impacted activity levels in the APAC region. In recent weeks this disruption has spread to our EMEA and US operations. While the impact this will have on the business is as yet unclear, it creates a material uncertainty over management's expectations for trading for the year and in line with many other quoted companies we will no longer be giving guidance.
Stephen Puckett
Chairman
6 April 2020
BUSINESS REVIEW
The key financial highlights in 2019 were:
-- revenue decreased to GBP121.3m (2018: GBP135.6m); -- NFI(1) fell by 3.6% to GBP29.4m (2018: GBP30.5m); -- NFI earned outside the UK increased to 57% of total NFI from 54%; -- profit conversion(2) ratio fell to 9.9% (2018: 10.5% as restated(3) ).
-- statutory profit before tax in the year decreased by GBP1.3m to GBP1.7m (2018: GBP3.0m as restated(3) );
-- underlying profit before tax(4) in the year decreased by GBP0.3m to GBP2.9m (2018: GBP3.2m as restated(3) );
-- net cash generated from operations of GBP3.4m (2018: GBP7.8m as restated(3) ); and -- net cash as at 31 December 2019 of GBP4.5m (31 December 2018: GBP4.9m).
(1) Net Fee Income - which is the equivalent of gross profit
(2) Underlying PBT divided by NFI
(3) Restatement following the application of IFRS 16. Further details are set out in note 24.
(4) Underlying PBT excludes amounts in respect of NCI profit or loss, foreign exchange gains/(losses), amortisation of acquired intangibles, share based payments and exceptional items. Further details are set out in the Strategic report in note 4.
The Group has continued to develop and refine its operating model during the year, which we believe will provide the basis for a return to sustainable growth moving forward as market conditions improve.
Proposition - By being closer to niche disrupted markets, we will take advantage of job creation and focus on what our clients and candidates need
The Group is committed to a multi brand strategy and to investing in developing strong operating brands with robust client and candidate propositions. Our operating brands are sub-divided into specialist niche teams each focused on a single skill set and discipline in its local market, enabling our consultants to provide genuine insight to their clients and candidates. Using objective criteria, each niche is categorised as being either an incubator, a fast growth, or a market leading business; and each is driven, through a consistent targeting and reporting model, to grow to be a market leader in its niche where both profit conversion and the sustainability of earnings are strongest.
We have actively managed the Group's portfolio of niches during the year. We closed 16 low growth teams and entered nine new niche markets with greater growth prospects, reducing the total number of niche teams from 70 to 63. In total, six teams were promoted either from incubator to fast growth or from fast growth to market leader. However, predominantly due to the more challenging conditions experienced in the final months of the year, a further eight teams were demoted either from fast growth to incubator or from market leader to fast growth.
People - Adopting a growth mindset, we develop our people so they can over-deliver and reap the rewards
We are committed to creating a genuine learning and development culture throughout the Group. Bespoke training programmes have been developed for each job function and grade that are delivered across the Group by the leadership and management teams; and which are complemented by selective third-party training. There is a clear promotion pathway for everybody in the Group. The Group has a performance management system and transparent reward at every level to promote an objective and high-performance working culture.
The leadership team and all managers of fast growth and market leading teams qualify to join the Group's minority share scheme. Currently 36 individuals are members of the scheme (2018: 35) with a further two staff expected to join during 2020. The Board is pleased with the way the scheme is impacting performance through the attraction, retention, motivation and development of key staff.
We have moderated our investment in headcount in certain of our more challenging markets during the year. As a result, group headcount decreased by 7% from 345 to 320 during the year.
As a diverse global organisation, we are in a position to support our clients to ensure they get the best people irrespective of background, gender, religion or sexual orientation and have delivered a number of initiatives to highlight positive role models and the benefits of a diverse workforce.
Platform - "Powering our business with technology to drive productivity and build closer customer relationships"
The Group operates on a single global technology and CRM platform. We have continued to invest both in the development of the CRM and in staff training in order to drive a "go to market" strategy that is both consistent and effective.
We continue to develop our digital marketing and social engagement programmes. Digital marketing supports a multi brand specialist niche business strategy by allowing the development of key client and candidate relationships on a scalable, but bespoke, one to one basis. Social engagement enables us to create and develop leads which our consultants use to facilitate sales conversions.
Furthermore, we have progressed investment in our off-shore research centre in Bangkok, which conducts some of the more transactional and lower value-add candidate identification and screening processes in support of our higher cost business centres.
Performance - Deeper understanding of data informs decisions and ensures we achieve our goals
We have continued to develop our Business Intelligence systems to combine financial and operating data. During the year we invested in a new partnership with a data analytics partner to enable us to present more insightful and focused management information to different decision maker groups across the business. We are also using innovative ways of comparing the relative performance of different managers to drive transparency, accountability and competition.
EMEA
NFI in EMEA fell by 8.5%, or GBP1.5m, to GBP16.1m (2018: GBP17.6m) during the year principally due to the impact of the proposed changes to the IR35 legislation on clients' contract hiring plans in the UK. The broader political uncertainty that was prevalent throughout the year in the UK also created trading headwinds, however, our permanent led UK businesses performed creditably despite this. Declining UK NFI was partially offset by growth in our non-UK EMEA operations, particularly in the Middle East where our business grew rapidly.
Despite the fall in NFI, operating profit before exceptional items increased by 52% to GBP4.7m (2018: GBP3.1m as restated) as a result of a strong focus on the management of our portfolio of niches in the region and on tight cost control.
APAC
The APAC region had a challenging year. NFI fell by 12%, or by 13% on a constant currency basis, to GBP9.7m (2018: GBP11.0m). The fall was driven by weaker trading conditions in both our Singapore and Hong Kong businesses, with the deterioration in the latter becoming particularly marked during the fourth quarter as the political unrest and public disorder experienced locally further impacted demand levels. Conversely, our Thai and Australian businesses have continued to grow.
As a result, operating profit before exceptional items fell from GBP1.3m in 2018 to a loss of GBP0.1m for the year.
We restructured our APAC business during Q4, and reduced costs in Hong Kong in particular.
USA
The Board continues to believe that the US market provides the Group an exciting growth opportunity. Therefore, we have continued to invest in our operational capability in the region and have opened two new offices in Charlotte and Los Angeles during the year. The Group now has five offices in the region, up from one 18 months ago. As a result, NFI grew by 82%, or 81% on a constant currency basis, to GBP3.5m (2018: GBP1.9m) during the year.
The investment contributed to a fall in operating profit before exceptional items to GBPnil (2018: profit of GBP0.1m).
Permanent and Contract
Hydrogen Group places candidates in permanent roles and provides contract solutions. Permanent placements play to the Group's experience in satisfying demand for scarce niche skills. Contract solutions provide clients with flexible resources usually to complete specific projects.
The Group's NFI that is derived from permanent placements was broadly flat at GBP17.6m (2018: GBP17.8m), while NFI derived from contract solutions declined by 7.1% to GBP11.8m (2018: GBP12.7m). These dynamics resulted in a shift of NFI to 60% permanent : 40% contract (2018: 58% permanent : 42% contract). The shift was driven principally by the impact of the planned changes to the IR35 legislation on UK contract recruitment activity supplemented by the growth in our US business where, as an immature and high growth business, reported NFI was skewed towards permanent NFI. NFI for permanent contracts is recognised in full at the start of a placement whereas contract NFI is recognised over the life of a placement. As the business matures the balance of permanent to contract NFI should stabilise.
The trend of improving contract margins experienced in recent years has continued with the Group achieving a contract margin of 11.4% in 2019 (2018: 10.8%). This growth was driven by both a change in contract client mix in the UK, and by a geographical shift in contract NFI away from the generally lower margin UK market to higher margin overseas markets, particularly Australia and the USA.
Clients and Candidates
Hydrogen Group has built strong and effective relationships with its clients based around its longstanding track record of delivery in specialist markets. We would like to thank all our clients for their support over the last year.
The Group has a very strong candidate database and a proven methodology for building candidate relationships in our niche specialist teams. The Group works with highly talented candidates and contractors and would like to thank them for trusting us to empower their careers.
Brexit
The UK is the largest geographical market for the Group, representing some 43% of NFI during 2019. Therefore, we have continued to review the possible impact on the business of the UK leaving the European Union.
Possible positive impact on the business:
-- Continued UK talent shortages may increase the use of recruitment consultancies in the UK;
-- The ability to use our international network to bring talent to the UK from outside the European Union due to new visa processes;
-- Business transformation projects driven by change in arrangements and regulation creating demand for our specialist staff;
-- Possible faster growth in the UK economy, increasing employment growth, as it builds trade with faster growing international markets than the EU; and
-- Should Sterling devalue, our overseas reported revenue and profit increase.
Possible negative impact on the business:
-- Delay of projects affecting the demand for resource until greater certainty of the future landscape;
-- Possible slowdown in the UK economy, decreasing employment growth and therefore the demand for staff; and
-- A strengthening of Sterling decreases our reported overseas revenue and profit.
FINANCIAL REVIEW
The Group has adopted IFRS 16, with respect to the recognition and measurement of leases, on a fully retrospective basis. The impact of this change in accounting policy on the comparative figures previously reported is disclosed in note 24. The change resulted in a GBP0.3m increase in net assets as at 1 January 2018 and an increase of GBP0.2m to profit before tax in 2018.
Revenue
Group revenue for 2019 totalled GBP121.3m (2018: GBP135.6m). The reduction was primarily driven by the fall in contract recruitment in the UK.
Key Profit Indicators
Profit conversion
Profit conversion is the underlying profit before tax (PBT adjusted for amounts in respect of NCI profit or loss, foreign exchange gains/(losses), amortisation of acquired intangibles, share based payments and exceptional items) divided by total NFI. This is key for the business to assess the level of underlying profitability.
In 2019, profit conversion in the Group fell to 9.9% (2018 as restated: 10.5%). The fall was driven by the reduction in activity levels in the fourth quarter.
Productivity per head
Productivity per head represents total NFI divided by the average number of employees. This is an important monitor of activity levels and efficiency in the business and also facilitates the identification of fee earners who are not at full productivity.
Productivity per head fell by 4.4% to GBP87,000 (2018: GBP91,000), broadly in line with the fall in NFI.
NFI split between the UK and the rest of the world
This is the NFI from the UK and that from the rest of the world expressed as a percentage of total NFI indicating the diversification of the business.
Driven by the performance of our US business, NFI from the rest of the world increased by GBP0.2m to GBP16.8m and now represents 57% of the NFI for the year (2018: 54%).
Net fee income (NFI - equivalent to gross profit)
Group NFI reduced by 3.6% to GBP29.4m (2018: GBP30.5m).
The fluctuation of sterling increased the value of reported NFI from overseas by 2% (GBP0.2m) during the year.
Operating segments
Our current management and reporting structure focusses on the performance of our three core geographic markets: EMEA, APAC & the USA. The segmental analysis disclosed in note 1 reflects this.
NFI from the EMEA operating segment totalled GBP16.1m (2018: GBP17.6m) and contributed 55% (2018: 58%) of total NFI. NFI from the APAC operating segment totalled GBP9.7m (2018: GBP11.0m) and contributed 33% of total NFI (2018: 36%). NFI from the USA operating segment totalled GBP3.5m (2018: GBP1.9m) and contributed 12% (2018: 6%) of total NFI.
Exceptional costs
Exceptional costs incurred in the year amounted to GBP0.9m (2018: net GBPnil) and principally relate t o the impairment of loans, and professional fees for non-trading M&A expenditure. Further details of exceptional costs are set out in note 4.
Finance cost/income
Group finance cost for the year decreased to GBP0.1m (2018 as restated: GBP0.2m).
Profit and loss before taxation
Reported profit before taxation (PBT) for the year was GBP1.7m (2018 as restated: GBP3.0m).
The Board's preferred measure of trading performance of the business, underlying PBT, fell to GBP2.9m (2018 as restated: GBP3.2m) during the year.
Underlying PBT is calculated as follows:
2019 2018
GBP'm GBP'm
-------------------------------------- ------- -------
Profit Before Tax 1.7 3.0
Non-controlling loss/(profit) - (0.2)
Non-trading/exceptional items* 0.9 0.1
Amortisation of acquired intangibles 0.1 0.1
Share based payments 0.1 0.1
Foreign exchange losses 0.1 0.1
---------------------------------------- ------- -------
Underlying PBT 2.9 3.2
---------------------------------------- ------- -------
*Non trading costs incurred in the year principally relate to the impairment of loans and professional fees for non-trading M&A expenditure. These are included within administrative expenses in the Consolidated Statement of Comprehensive Income.
Underlying EPS is calculated as follows:
2019 2018
GBP'm GBP'm
----------------------------------- ------- ------
Underlying PBT 2.9 3.2
Tax expense (0.4) (0.3)
------------------------------------- ------- ------
Underlying PAT 2.5 2.9
------------------------------------- ------- ------
Weighted average number of shares
(million) 33.5 32.6
------------------------------------- ------- ------
Underlying EPS 7.5p 8.9p
------------------------------------- ------- ------
Taxation
There was a GBP0.39m tax charge for the year (2018 as restated: GBP0.32m), giving an effective tax rate of 23% (2018 as restated: 11%).
At 31 December 2019 the Group had unutilised tax losses of GBP7.3m (2018: GBP6.5m) available to offset against future profits, for which a deferred tax asset of GBP0.2m has been recognised. Further tax assets have not been recognised due to the uncertainty of future profits being recognised where the losses have arisen.
Dividend
An interim dividend of 0.6p per share was paid in October 2019 (2018: 0.5p). In light of the rapidly evolving situation with COVID-19 and impact it may have on the Group's trading, no final dividend is proposed for the year (2018: 1.0p).
Earnings per share
The basic earnings per share was 4.0p (2018 as restated: 7.8p). Diluted earnings per share was 3.7p (2018 as restated: 7.1p).
Balance Sheet
Net assets at 31 December 2019 increased by GBP1.8m to GBP23.5m (2018 as restated: GBP21.7m).
Goodwill in the year remains flat at GBP12.2m (2018: GBP12.2m).
Current trade and other receivables decreased by 13% to GBP17.1m (2018: GBP19.7m) broadly in line with the fall in Group revenue. Within this balance, however, there was an underlying shift in the balance to trade receivables, which increased by GBP0.4m to GBP11.2m (2018: GBP10.8m), from contract assets, which reduced by GBP2.7m to GBP4.9m (2018: GBP7.4m). The shift was driven primarily by an increased proportion of the Group's contract work being invoiced weekly rather than monthly. Alongside this, days sales outstanding as at 31 December 2019 increased to 33 days (2018: 28 days) due to a small net adverse change in client payment terms.
Current trade and other payables decreased by 18% to GBP11.3m (2018: GBP13.7m as restated) principally as a result of a fall in accruals, which predominantly relate to monies owed to contract staff for time worked in December and which fell in sympathy with the lower contract activity levels experienced at the end of the year.
Non-current liabilities decreased by GBP2.1m, largely due to the revalued redemption liability in relation to the expected future earn out payments associated to the purchase of certain minority interest holdings in certain subsidiaries of Argyll Scott, the arrangements for which were in place at the time of the acquisition in 2017. Further details are set out in note 21.
Short term bank deposits remain positive at GBP4.6m (2018: GBP5.2m).
Reserves
As a result of the Group's profitable trading in the year and the impact of the revised redemption liability (note 21), net of dividends and share buy backs, total equity has increased by GBP1.8m to GBP23.5m (2018 as restated: GBP21.7m).
Treasury management and currency risk
Approximately 69% of the Group's revenue in 2019 (2018: 73%) was denominated in Sterling. The Group aims to match cost and revenue in the same currency to provide a natural hedge in its major markets.
The Group did not enter into any forward contracts and no foreign currency contracts were open as at 31 December 2019.
Cash flow and cash position
Net cash at 31 December 2019 was GBP4.5m (2018: GBP4.9m). During 2018 the Group benefited from a reduction in working capital arising from the implementation of improved invoicing and credit control processes. Although these improved processes have been maintained throughout 2019, working capital levels increased due to changes in client payment terms, which together with the lower profitability in the year led to a GBP4.4m reduction in net cash generated from operating activities of GBP3.4m (2018: GBP7.8m as restated). Furthermore, the Group made payments during the year of approximately GBP1.3m in respect of dividends, share buy backs, and the earn out in relation to the acquisition of Argyll Scott in 2017.
The Group had borrowings at year end of GBP0.2m (2018: GBP0.3m).
The Group has an Invoice Discounting facility of GBP18.0m with HSBC with a commitment to January 2022. After this date the facility shall continue until terminated by either party giving to the other not less than three months written notice.
The average facility available during the year was GBP6.3m (2018: GBP7.3m). Average utilisation in the year decreased from 42% to 2% (GBP0.1m). T he average available funds (including cash) for the Group grew by GBP2.1m to GBP10.5m.
Since 31 December 2019, the Group has further extended its facilities by entering into new working capital agreements with HSBC in the USA for USD1.5m, Australia for AUD2.0m and Singapore for SGD1.7m.
Foreign Exchange Risk
The appreciation of Sterling during the year had a negative impact on the translation of the earnings of the Group's overseas subsidiaries. The extent of the appreciation of Sterling is detailed below:
Major currencies Depreciation/(Appreciation) 2019 NFI in local
in Sterling over the currency as a proportion
2019 financial year (average of Group NFI
rates)
USA Dollar 4% 13%
Singapore Dollar 3% 11%
Hong Kong Dollar 4% 8%
Thai Bhat 8% 7%
Euro (1%) 4%
Australian Dollar (3%) 5%
United Arab Emirates
Dirham 4% 4%
Malaysian Ringgit 2% 2%
The Group is currently not hedged against this translation exposure.
Going concern
As at 31 December 2019, the Group had net cash of GBP4.5m and an GBP18.0m Invoice Discounting facility with a commitment from HSBC to January 2022. The average facility available during the year was GBP6.3m (2018: GBP7.3m). This facility is subject to standard debt turn and dilution percentage covenants. Since 31 December 2019 and prior to the UK government's 'lock down' policy, the Group entered into new working capital agreements with HSBC in the USA for USD1.5m, Australia for AUD2.0m and Singapore for SGD1.7m, further increasing the Group's available facilities.
The Directors have prepared base case financial forecasts for the period ending 30 June 2021.
The uncertainty as to the future impact of the COVID-19 pandemic has been considered as part of the Group's adoption of the going concern basis.
Forecast stress testing scenarios, in light of COVID-19, has demonstrated that the Group could withstand both a material and prolonged decrease in revenue without breaching its banking facilities. For example, the Group could withstand a more than 60% decrease in revenues for 6 months and still operate within existing facilities. Importantly, this scenario is prior to any cost saving, other mitigating action or government support that may available to the Group. In the event that such a scenario arose, the Directors would of course take appropriate mitigating action. Such mitigating action may include furloughing staff and/or reducing overheads. On this basis, the Directors have a reasonable expectation that the Group will have sufficient cash flow and available resources to continue operating for at least 12 months from the approval date of these Financial Statements. Accordingly, the Group and the Company continues to adopt the going concern basis in preparing its Financial Statements.
However, if the impacts of COVID-19 are worse or more prolonged than the Directors' expectations, the Group may need to seek additional support from funders. Given the lack of certainty that COVID-19 will have on the Group's customers and the markets in which it operates, and the support from funders that may be required if pronounced sensitivity scenarios arise, these events and conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's and the Company's ability to continue as a going concern. The financial statements do not include any adjustments should the going concern basis of preparation be inappropriate.
Consolidate statement of comprehensive income
For the year ended 31 December 2019
2019 2018
Note As restated
GBP'000 GBP'000
-------------------------------------- ------- --------- -------------
Revenue 1 121,277 135,637
Cost of sales (91,865) (105,111)
-------------------------------------- ------- --------- -------------
Gross profit 1 29,412 30,526
--------- -------------
Other administrative expenses (27,371) (27,925)
Exceptional impairment on
loans 4 (542) -
Exceptional administrative
expenses 4 (333) (1)
--------- -------------
Administrative expenses (28,246) (27,926)
Other income 1 526 529
Operating profit before exceptional
items 1 2,567 3,130
Exceptional impairment on
loans 4 (542) -
Exceptional administrative
expenses 4 (333) (1)
--------- -------------
Operating profit 1,692 3,129
Share of profit in associate 66 70
Finance costs 2 (108) (192)
Finance income 3 38 22
Profit before taxation 1,688 3,029 Income tax expense 6 (391) (318) -------------------------------------- ------- --------- ------------- Profit for the year 1,297 2,711 -------------------------------------- ------- --------- ------------- Other comprehensive gains and losses: Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations 86 6 Exchange differences on intercompany loans (222) (222) Other comprehensive (loss)/profit for the year, net of tax (136) 213 ----------------------------------------------- --------- ------------- Total comprehensive gains for the year 1,311 1,161 ----------------------------------------------- --------- ------------- Profit attributable to: Equity holders of the parent 1,340 2,552 Non-controlling (loss)/interest (43) 159 -------------------------------------- ------- --------- ------------- Total comprehensive income attributable to: Equity holders of the parent 1,204 2,765 Non-controlling (loss)/interest (43) 159 -------------------------------------- ------- --------- ------------- Profit per share: Basic profit per share (pence) 19 4.0p 7.8p Diluted profit per share (pence) 19 3.7p 7.1p The above results relate to continuing operations.
Consolidated statement of financial position
As at 31 December 2019
Company no: 05563206 2019 2018 2017
Note As restated As restated
GBP'000 GBP'000 GBP'000
----------------------------- ------- --------- ------------- -------------
Non-current assets
Goodwill 7 12,198 12,244 12,214
Investment in associate 8 186 120 50
Other intangible assets 9 739 710 789
Property, plant and
equipment 10 857 947 882
Right of use assets 22 1,915 2,298 3,763
Deferred tax assets 11 296 282 311
Other receivables 12 417 274 312
----------------------------- ------- --------- ------------- -------------
16,608 16,875 18,321
----------------------------- ------- --------- ------------- -------------
Current assets
Trade and other receivables 12 17,133 19,709 23,765
Current tax receivable - - 290
Cash and cash equivalents 13 4,620 5,227 2,770
----------------------------- ------- --------- ------------- -------------
21,753 24,936 26,825
----------------------------- ------- --------- ------------- -------------
Total assets 38,361 41,811 45,146
----------------------------- ------- --------- ------------- -------------
Current liabilities
Trade and other payables 14 (11,313) (13,748) (14,690)
Redemption liability 21 - (615) (69)
Lease liabilities 23 (512) (649) (1,230)
Current tax payable (156) (2) -
Borrowings 15 (154) (293) (3,132)
Provisions 16 - - (602)
----------------------------- ------- --------- ------------- -------------
(12,135) (15,307) (19,723)
----------------------------- ------- --------- ------------- -------------
Non-current liabilities
Redemption liability 21 (236) (1,640) (951)
Lease liabilities 23 (2,052) (2,641) (3,290)
Deferred tax liabilities 11 (96) (117) (136)
Provisions 16 (326) (384) (503)
----------------------------- ------- --------- ------------- -------------
(2,710) (4,782) (4,880)
----------------------------- ------- --------- ------------- -------------
Total liabilities (14,845) (20,089) (24,603)
----------------------------- ------- --------- ------------- -------------
Net assets 23,516 21,722 20,543
----------------------------- ------- --------- ------------- -------------
Equity
Share capital 17 343 341 334
Share premium 3,607 3,520 3,520
Merger reserve 19,240 19,240 19,240
Own shares held 18 (1,171) (1,546) (1,338)
Share option reserve 1,627 2,014 1,735
Translation reserve (522) (386) (599)
Forward purchase reserve (236) (2,255) (1,020)
Retained earnings/(Deficit) 554 529 (1,541)
----------------------------- ------- --------- ------------- -------------
23,442 21,457 20,331
Non-controlling interest 74 265 212
Total equity 23,516 21,722 20,543
----------------------------- ------- --------- ------------- -------------
T he financial statements were approved by the Board of Directors and authorised for issue on 6 April 2020 and were signed on its behalf by:
Ian Temple
Chief Executive
Consolidated
statement of
changes in
equity
As at 31 December
2019
------------------------------------------------------------------------------------------------------------------------------------------------
Share Own Share Trans-lation Forward (Deficit)/
Share premium Merger shares option reserve purchase Retained Total
capital account reserve held reserve GBP'000 reserve earnings Owners NCI equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ----------
At 1 January
2018 (as
reported) 334 3,520 19,240 (1,338) 1,735 (599) (1,020) (1,871) 20,001 212 20,213
Prior year
adjustment
(net of tax)
- note 24 - - - - - - - 330 330 - 330
At 1 January
2018 (as
restated) 334 3,520 19,240 (1,338) 1,735 (599) (1,020) (1,541) 20,331 212 20,543
New shares
issued 7 - - - 204 - - - 211 - 211
NCI purchase - - - - - - 142 (62) 80 (106) (26)
Movement in
redemption
liability -
note 21 - - - - - - (1,377) - (1,377) - (1,377)
Share
repurchase - - - (208) - - - - (208) - (208)
Share option
charge - - - - 75 - - - 75 - 75
Dividends - - - - - - - (420) (420) - (420)
Transactions
with owners 7 - - (208) 279 - (1,235) (482) (1,639) (106) (1,745)
Profit for
the year - - - - - - - 2,552 2,552 159 2,711
Other comprehensive
income:
Exchange differences
on intercompany
loans - - - - - 207 - - - 207 -
Foreign
currency
translation
charge - - - - - 6 - - 6 - 6
---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ----------
Total
comprehensive
profit for
the year - - - - - 213 - 2,552 2,765 159 2,924 At 31 December 2018 (as restated) 341 3,520 19,240 (1,546) 2,014 (386) (2,255) 529 21,457 265 21,722 NCI purchase - note 21 - - - - - - 506 (460) 46 (46) - Movement in redemption liability - note 21 - - - - - - 1,513 - 1,513 - 1,513 EBT share transfer - - - 170 - - - (440) (270) - (270) Share contribution - - - - (507) - - - (507) - (507) MI scheme pay out 2 87 - 205 - - - 106 400 - 400 Share option charge - - - - 120 - - - 120 - 120 Dividends - - - - - - - (521) (521) (102) (623) ---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ---------- Transactions with owners 2 87 - 375 (387) - 2,019 (1,315) 781 (148) 633 ---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ---------- Profit for the year - - - - - - - 1,340 1,340 (43) 1,297 Other comprehensive income: Exchange differences on intercompany loans - - - - - (222) - - (222) - (222) Foreign currency translation charge - - - - - 86 - - 86 - 86 ---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ---------- Total comprehensive profit for the year - - - - - (136) - 1,340 1,204 (43) 1,161 At 31 December 2019 343 3,607 19,240 (1,171) 1,627 (522) (236) 554 23,442 74 23,516 ---------------- --------- -------- --------- ---------- -------- ------------- ---------- ----------- --------- --------- ----------
Consolidated statement of cash flows
For the year ended 31 December 2019
2019 2018
Note As restated
GBP'000 GBP'000
------------------------------------- ------- ------------- -------------
Cash generated from operating
activities 20a 3,623 7,808
Income taxes paid (183) (30)
Net cash generated from operating
activities 20a 3,440 7,778
Investing activities
Purchase of property, plant
and equipment 10 (134) (269)
Purchase of software assets 9 (208) (102)
Net cash used in investing
activities (342) (371)
------------------------------------- ------- --------- -------------
Financing activities
Finance costs 2 (37) (100)
Finance income 3 38 22
Principal paid on lease liabilities (1,418) (1,392)
Decrease in borrowings 15 (139) (2,839)
Decrease in redemption liability
on NCI pay-out 21 (506) (142)
Purchase of treasury shares (240) (118)
Equity dividends paid 5 (521) (420)
Dividends paid to NCI (102) -
Net cash (used)/generated from
financing activities (2,925) (4,989)
------------------------------------- ------- --------- -------------
Net increase in cash and cash
equivalents 173 2,418
Cash and cash equivalents at
beginning of year 13 5,227 2,770
Exchange (loss)/gain on cash
and cash equivalents (780) 39
------------------------------------- ------- --------- -------------
Cash and cash equivalents at
end of year 13 4,466 5,227
------------------------------------- ------- --------- -------------
Notes to the consolidated financial statements
Basis of preparation
Hydrogen Group plc is the Group's ultimate parent company. The Company is a limited liability company incorporated and domiciled in the United Kingdom. The registered office address and principal place of business is 30 Eastcheap, London, EC3M 1HD, England. Hydrogen Group plc's shares are listed on the AIM Market. Registered company number is 05563206.
The consolidated financial statements of Hydrogen Group plc have been prepared under the historical cost convention, apart from the treatment of certain financial assets, and in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union and also comply with IFRIC interpretations and Company Law applicable to companies reporting under IFRS. The Group's accounting policies have been consistently applied to all the periods presented other than for the adoption of IFRS 16.
The factors considered by the Directors in exercising their judgement of the Group's ability to continue to operate in the foreseeable future are set out in the Annual Report and summarised in the Financial Review. The Directors have prepared base case financial forecasts for the period ending 30 June 2021. The uncertainty as to the future impact of the COVID-19 pandemic has been considered as part of the Group's adoption of the going concern basis.
Forecast stress testing scenarios, in light of COVID-19, has demonstrated that the Group could withstand both a material and prolonged decrease in revenue without breaching its banking facilities. For example, the Group could withstand a more than 60% decrease in revenues for 6 months and still operate within existing facilities. Importantly, this scenario is prior to any cost saving, other mitigating action or government support that may available to the Group. In the event that such a scenario arose, the Directors would of course take appropriate mitigating action. Such mitigating action may include furloughing staff and/or reducing overheads. On this basis, the Directors have a reasonable expectation that the Group will have sufficient cash flow and available resources to continue operating for at least 12 months from the approval date of these Financial Statements. Accordingly, the Group and the Company continues to adopt the going concern basis in preparing its Financial Statements.
However, if the impacts of COVID-19 are worse or more prolonged than the Directors' expectations, the Group may need to seek additional support from funders. Given the lack of certainty that COVID-19 will have on the Group's customers and the markets in which it operates, and the support from funders that may be required if pronounced sensitivity scenarios arise, these events and conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's and the Company's ability to continue as a going concern. The financial statements do not include any adjustments should the going concern basis of preparation be inappropriate.
The consolidated financial statements for the year ended 31 December 2019 (including comparatives) are presented in GBP '000 and were approved and authorised for issue by the Board of Directors on 6 April 2020.
1 Segment reporting
Segment operating profit is the profit earned by each operating segment excluding the allocation of central administration costs, and is the measure reported to the Group's Board, the Group's Chief Operating Decision Maker (CODM), for performance management and resource allocation purposes.
(a) Revenue, gross profit, and operating profit by discipline
For management purposes, the Group is organised into the following three operating segments based on the geography of the business unit: EMEA (covering Europe, Middle East and Africa); USA; and APAC (covering Asia and Australia). The operating segments noted reflect the information that is regularly reviewed by the Group's Chief Operating Decision Maker which is the Board of Hydrogen Group plc. All operating segments have similar economic characteristics and share a majority of the aggregation criteria set out in IFRS 8:12.
31 December 2019 31 December 2018 (as restated)
EMEA USA APAC Group Total EMEA USA APAC Group Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- -------- --------- ------------ -------- -------- -------- ---------
Revenue 93,160 7,733 20,354 30 121,277 108,060 6,895 20,672 30 135,637
Gross profit 16,146 3,496 9,740 30 29,412 17,617 1,921 10,958 30 30,526
Depreciation
and
amortisation (640) (16) (652) (89) (1,397) (719) (2) (660) (89) (1,470)
Other income 526 - - - 526 529 - - - 529
Operating
profit
before
exceptional
items 4,652 9 (132) (1,962) 2,567 3,114 148 1,347 (1,479) 3,130
Exceptional
items (12) - (28) (835) (875) (1) - - - (1)
Operating
profit
/(loss) 4,640 9 (160) (2,797) 1,692 3,113 148 1,347 (1,479) 3,129
-------- -------- -------- -------- --------- ------------ -------- -------- -------- ---------
Finance costs ( 108) (192)
Finance income 38 22
Profit from associate 66 70
--------- ---------
Profit before tax 1,688 3,029
--------- ---------
Total Assets 7,275 2,233 5,328 23,525 38,361 12,534 1,661 6,390 21,226 41,811
Total
Liabilities (6,617) (480) (2,015) (5,733) (14,845) (7,232) (775) (2,251) (9,831) (20,089)
Group costs represent central management costs that are not allocated to operating segments.
The majority of exceptional items included principally relate to the impairment of loans, and professional fees for non-trading M&A expenditure. Refer to note 4 for a breakdown.
Revenue reported above is generated from external customers. There were no sales between segments in the year (2018: nil).
The accounting policies of the operating segments are the same as the Group's accounting policies described above. Segment profit represents the profit earned by each segment without allocation of Group administration costs, finance costs and finance income.
Other income relates to rentals receivable by the Group for the two floors subleased in its London offices.
There is one external customer that represented 14% (2018: 21%) of the entity's revenues, with revenue of GBP17.3m (2018: GBP29.1m), and approximately 4% (2018: 8%) of the Group's NFI which is included in the EMEA segment.
(b) Revenue and gross profit by geography:
Revenue Gross profit
---------------- -------------------- -------------
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- --------- ----------------- ---------
UK 83,651 98,822 12,566 13,903
Rest of world 37,626 36,815 16,846 16,623
---------------- --------- --------- ----------------- ---------
121,277 135,637 29,412 30,526
--------------- --------- --------- ----------------- ---------
The 'Rest of world' revenue and gross profit numbers disclosed above have been accumulated for geographies outside of the UK on the basis that no one geography is significant in its entirety, other than the UK.
(c) Revenue and gross profit by recruitment classification:
Revenue Gross profit
----------- -------------------- --------------------
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
----------- --------- --------- --------- ---------
Permanent 17,648 17,828 17,645 17,802
Contract 103,629 117,809 11,767 12,724
------------ --------- --------- --------- ---------
121,277 135,637 29,412 30,526
----------- --------- --------- --------- ---------
The information reviewed by the Chief Operating Decision Maker, or otherwise regularly provided to the Chief Operating Decision Maker, does not include information on total assets and liabilities. The cost to develop this information would be excessive in comparison to the value that would be derived.
2 Finance costs
2019 2018
As restated
GBP'000 GBP'000
-------------------------------------- --------- -------------
Invoice discounting and associated
costs 37 100
Finance costs on lease liabilities 71 92
---------------------------------------- --------- -------------
108 192
-------------------------------------- --------- -------------
3 Finance income
2019 2018
GBP'000 GBP'000
----------------- --------- ---------
Bank interest 38 22
------------------- --------- ---------
38 22
----------------- --------- ---------
4 Underlying profit before tax and exceptional items
Underlying PBT is calculated as follows:
2019 2018
As restated
GBP'000 GBP'000
-------------------------------------- --------- -------------
Profit Before Tax 1,688 3,029
Non-controlling loss/(profit) 43 (159)
Non-trading/exceptional items* 875 51
Amortisation of acquired intangibles 89 89
Share based payments 120 75
Foreign exchange losses 74 101
---------------------------------------- --------- -------------
Underlying PBT 2,889 3,186
---------------------------------------- --------- -------------
Underlying EPS is calculated as follows:
2019 2018
As restated
GBP'000 GBP'000
----------------------------------- --------- ------------
Underlying PBT 2,889 3,187
Tax expense (391) (318)
------------------------------------- --------- ------------
Underlying PAT 2,498 2,869
------------------------------------- --------- ------------
Weighted average number of shares
(million) 33.5 32.6
------------------------------------- --------- ------------
Underlying EPS 7.5p 8.9p
------------------------------------- --------- ------------
*Exceptional items are costs/(income) that are separately disclosed due to their material and non-recurring nature.
2019 2018
GBP'000 GBP'000
-------------------------------- --------- ---------
Restructuring costs 40 66
Rates rebate - (520)
Right of use asset impairment - 455
Impairment of loans 542 -
Professional fees 293 -
Total 875 1
-------------------------------- --------- ---------
Non trading costs incurred in the year principally relate to the impairment of loans and professional fees for non-trading M&A expenditure. These are included within administrative expenses in the Consolidated Statement of Comprehensive Income.
5 Dividends
2019 2018
GBP'000 GBP'000
------------------------------------------------------ --------- ---------
Amounts recognised and distributed to shareholders
in the year
Final dividend for the year ended 31 December
2018 of 1.0p per share (2017: 0.8p per share) 324 257
Interim dividend for the year ended 31 December
2019 of 0.6p per share (2018: 0.5p per share) 197 163
------------------------------------------------------ --------- ---------
521 420
------------------------------------------------------ --------- ---------
A final dividend has not been proposed for the year ended 31 December 2019.
6 Tax
(a) Analysis of tax charge for
the year: 2019 2018
As restated
The charge based on the profit GBP'000 GBP'000
for the year comprises:
----------------------------------------------- --------- -------------
Corporation tax:
UK corporation tax on profits
for the year 426 348
Adjustment to tax charge in respect
of previous periods - (44)
------------------------------------------------- --------- -------------
Foreign tax 426 304
Current tax - 4
Total current tax 426 308
------------------------------------------------- --------- -------------
Deferred tax:
Origination and reversal of temporary
differences - 62
Adjustment to tax charge in respect
of previous periods (35) (52)
Total deferred tax (35) 10
------------------------------------------------- --------- -------------
Tax charge on profit for the year 391 318
------------------------------------------------- --------- -------------
UK corporation tax is calculated at 19.00% (2018: 19.00%) of
the estimated assessable profits for the year. Taxation for
other jurisdictions is calculated at the rates prevailing in
the respective jurisdictions.
(b) The charge for the year can be reconciled to the profit
per the Consolidated Statement of Comprehensive Income as follows:
Profit before tax 1,688 3,029
------------------------------------------------- --------- -------------
Tax at the UK corporation tax rate of 19.00%
(2018: 19.00%) 320 576
Effects of:
Fixed asset differences 17 1
Expenses not deductible for tax
purposes 227 80
Income not taxable (150) (68)
Effect of difference in tax rates (78) (33)
Utilisation of tax losses and
other deductions (100) (224)
Tax losses carried forward not
recognised for deferred tax 238 227
Adjustment to tax charge in respect
of prior periods (83) (216)
Share-based payments - (25)
Tax charge for the year 391 318
------------------------------------------------- --------- -------------
Short term timing differences relate to the differences between taxable profits and total comprehensive income as stated in the financial statements throughout the Group.
In total, at the reporting date, the Group had unutilised tax losses of GBP7.3m (2018: GBP6.5m) available for offset against future profits, for which a deferred tax asset of GBP0.2m has been recognised. Further tax assets have not been recognised due to the uncertainty of future profits being recognised where the losses have arisen. There has been no deferred tax charge relating to share options charged directly to equity (2018: nil). The Group is unaware of any uncertain or irregular tax judgements or treatments that would have a material impact on the tax charge for the current or prior year.
7 Goodwill
2019 2018
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Cost
At 1 January 21,331 21,301
Additions - 30
Gain of bargain purchase (46) -
-------------------------------------------- ---------- ----------
At 31 December 21,285 21,331
Accumulated impairment losses
At 1 January (9,087) (9,087)
At 31 December (9,087) (9,087)
Carrying amount at 31 December 12,198 12,244
-------------------------------------------- ---------- ----------
Allocation of goodwill to cash generating
units (CGU):
EMEA (including USA) Professional
Support Services 10,141 10,141
Argyll Scott Group 2,057 2,103
-------------------------------------------- ---------- ----------
Goodwill arising on business combinations is tested annually for impairment or more frequently if there are indications that the value of goodwill may have been impaired. Goodwill has been tested for impairment by comparing the carrying value with the recoverable amount.
The recoverable amount is determined on a value-in-use basis utilising the value of cash flow projections over five years with a terminal value added. Multiple scenarios were tested, firstly using the 2019 actuals (of which key assumptions are detailed below) and secondly using detailed budgets prepared as part of the Group's performance and control procedures. Subsequent years are based on further extrapolations using the key assumptions listed below. Cash flows are discounted by the cash generating unit's weighted average cost of capital. Management determines that there has been no impairment in the carrying value of goodwill in 2019 (GBPnil).
The key assumptions for revenue growth rates and discount rates used in the impairment review are stated below:
Growth rates
Discount
rate
Net fee income growth rate on actuals 2020 2021-2024 %
% %
EMEA (including USA) Professional Support
Services 2.5% 2.5% 13.4%
Argyll Scott Group 2.5% 2.5% 13.4%
------------------------------------------- --------- -------------- ----------
For the purposes of the goodwill impairment review, the Board consider it prudent to assume a 2.5% revenue growth on pre-tax actuals for 2020 through to 2024. The revenue growth rates for 2020-2024 are the Group's own internal forecasts, supported by external industry reports. The discount rate used is an estimate of the Group's weighted average cost of capital, based on the risk adjusted average weighted cost of its debt and equity financing. The Group has sensitised both the discount rate and growth rate by 2.5% with no material impact noted. Following the outbreak of Covid-19, the Group has further sensitised the numbers which the Board are confident will have no material impact on goodwill.
8 Investment in associate
The following table provides summarised information of the Group's investment in the associated undertaking:
2019 2018
GBP'000 GBP'000
---------------------- --------- ---------
1 January 120 50
Share of associate's
profit 66 70
---------------------- --------- ---------
31 December 186 120
---------------------- --------- ---------
Principle associate Investment Principal Country Equity
held by activity of incorporation interest
--------------------- ---------------- ------------------- ------------------- ----------
Tempting Ventures Hydrogen Group
Limited Plc Advisory services UK 49%
Tempting Ventures Limited aggregated results
2019 2018
------------------------------------- ---------- --------
Net (Liabilities) (GBP0.2m) GBP0.0m
Assets:
Gross Profit: GBP6.0m GBP4.7m
Net Profit GBP0.1m GBP0.2m
9 Other intangible assets
Computer
software Database Brand Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---------- ----------- ---------- ----------
Cost
At 1 January 2018 2,125 500 125 2,750
Additions 102 - - 102
At 31 December 2018 2,227 500 125 2,852
Additions 208 - - 208
Disposals (1,815) - - (1,815)
At 31 December 2019 620 500 125 1,245
------------------------------ ---------- ----------- ---------- ----------
Amortisation and impairment
At 1 January 2018 (1,909) (42) (10) (1,961)
Charge for the year (93) (70) (18) (181)
At 31 December 2018 (2,002) (112) (28) (2,142)
Charge for the year (91) (70) (18) (179)
Disposals 1,815 - - 1,815
At 31 December 2019 (278) (182) (46) (739)
------------------------------ ---------- ----------- ---------- ----------
Net book value at 31
December 2019 342 318 79 739
------------------------------ ---------- ----------- ---------- ----------
Net book value at 31
December 2018 225 388 97 710
------------------------------ ---------- ----------- ---------- ----------
During the year, the Group disposed of fully written down assets no longer utilised by the Group of GBP1.8m.
Amortisation of intangible assets is charged to administration expenses in the Consolidated Statement of Comprehensive Income.
10 Property, plant and equipment
Computer
and office Leasehold
equipment improvements Total
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ -------------- ----------
Cost
At 1 January 2018 668 1,959 2,627
Additions 255 14 269
At 31 December 2018 923 1,973 2,896
Additions 126 8 134
Disposals (670) (294) (964)
At 31 December 2019 379 1,687 2,066
--------------------------------- ------------ -------------- ----------
Accumulated depreciation and
impairment
At 1 January 2018 (544) (1,201) (1,745)
Charge for the year (121) (88) (209)
Exchange differences 5 - 5
At 31 December 2018 (660) (1,289) (1,949)
Charge for the year (123) (91) (214)
Disposals 670 294 964
Exchange differences (6) (4) (10)
At 31 December 2019 (119) (1,090) (1,209)
--------------------------------- ------------ -------------- ----------
Net book value at 31 December
2019 260 597 857
--------------------------------- ------------ -------------- ----------
Net book value at 31 December
2018 263 684 947
--------------------------------- ------------ -------------- ----------
11 Deferred tax
Short term
timing
Unutilised differences Total
Deferred tax asset tax losses GBP'000 GBP'000
GBP'000
--------------------------------- ------------- ------------- ----------
At 1 January 2019 (as restated) - 282 282
Credited/(charged) to profit
or loss 150 (136) 14
At 31 December 2019 150 146 296
--------------------------------- ------------- ------------- ----------
Accelerated
capital Intangible
allowances Assets Total
Deferred tax (liability) GBP'000 GBP'000 GBP'000
--------------------------- ------------ ------------- ----------
At 1 January 2019 (20) (97) (117)
Credited to profit or
loss 3 18 21
At 31 December 2019 (17) (79) (96)
---------------------------- ------------ ------------- ----------
In total, at the reporting date, the Group had unutilised tax losses of GBP7.3m (2018: GBP6.5m) available for offset against future profits, for which a deferred tax asset of GBP0.2m has been recognised.
12 Trade and other receivables Trade and other receivables are as 2019 2018 follows: GBP'000 GBP'000 --------------------------------------- --------- --------- Trade receivables 11,151 10,780 Expected credit losses (123) (279) Contract assets 4,921 7,414 Prepayments 645 749 Other taxes and social security costs 109 - Other receivables: - due within 12 months 430 1,045 - due after more than 12 months 417 274 Total 17,550 19,983 ---------------------------------------- --------- --------- Current 17,133 19,709 Non- current 417 274 ---------------------------------------- --------- ---------
As at 31 December 2019, the average credit period taken by clients was 33 days (2018: 28 days) from the date of invoicing, and the receivables are predominantly non-interest bearing. Expected credit losses of GBP123,000 (2018: GBP279,000) has been made for estimated irrecoverable amounts. Due to the short-term nature of trade and other receivables, the Directors consider that the carrying value approximates to their fair value.
12 Trade and other receivables (continued)
Contract assets principally comprises accruals for amounts to be billed for contract staff for time worked in December. Other receivables due after more than 12 months are predominantly rental deposits on leasehold properties.
The Group does not recognise expected credit losses against receivables solely on the basis of the age of the debt, as experience has demonstrated that this is not a reliable indicator of recoverability. The Group provides fully against all receivables where it has positive evidence that the amount is not recoverable.
The Group uses an external credit scoring system to assess the creditworthiness of new customers. The Group supplies mainly major companies and major professional partnerships.
Included in the Group's trade receivable balances are receivables with a carrying amount of GBP4.1m (2018: GBP2.9m) which are past due date at the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not hold any collateral over these balances.
Movement in expected credit 2019 2018 losses: GBP'000 GBP'000 ------------------------------ ---- ---- ------------- --------- 1 January (279) (135) Expected credit losses (123) (279) Impairment losses reversed 279 135 31 December (123) (279)
In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The Directors believe that there is no further credit provision required.
There are no individually impaired trade receivables that have been placed in administration or liquidation included in calculation of expected credit losses (2018: nil).
Gross Expected Total Gross Expected Total
Ageing of expected carrying loss carrying loss
credit losses: amount rate amount rate
2019 2019 2019 2018 2018 2018
GBP'000 % GBP'000 GBP'000 % GBP'000
0-30 days 7,265 0.7 51 6,715 0.5 34
31-60 days 2,950 1.5 44 2,236 1.5 34
61-90 days 585 2.6 15 978 2.5 24
90+ days 351 3.7 13 851 3.6 31
31 December 11,151 123 10,780 123
As at 31 December 2019 trade receivables of nil (2018: GBP156,000) had lifetime credit losses of the full value of receivables.
As at 31 December 2019 trade receivables to a value of GBP5.7m were subject to an invoice financing facility (2018: GBP6.2m).
13 Cash and cash equivalents
Cash and cash equivalents are 2019 2018
as follows: GBP'000 GBP'000
Short-term bank deposits 4,620 5,227
4,620 5,227
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less, less bank overdrafts repayable on demand. The carrying amount of these assets approximates their fair value.
14 Trade and other payables
Trade and other payables are
as follows: 2019 2018
As restated
GBP'000 GBP'000
Trade payables 1,216 1,516
Other taxes and social security
costs 998 1,279
Other payables 1,081 1,806
Accruals 8,018 9,147
11,313 13,748
Accruals principally comprise accruals for amounts owed to contract staff for time worked in December, in addition to a rental accrual and a bonus and commission accrual.
The average credit period taken on trade purchases, excluding contract staff costs, by the Group is 18 days (2018: 20 days), based on the average daily amount invoiced by suppliers. Interest charged by suppliers is at various rates on payables not settled within terms. The Group has procedures to ensure that payables are paid to terms wherever possible. Due to the short-term nature of trade and other payables, the Directors consider that the carrying value approximates to their fair value.
15 Borrowings
2019 2018
GBP'000 GBP'000
Invoice discounting 154 293
As at 31 December 2019, the Group had one (2018: two) invoice discounting facility in operation.
The HSBC facility has a maximum drawdown of GBP18.0m with no year-end balance outstanding. Interest on the facility is charged at 1.7% over UK Base Rate on actual amounts drawn down, and the margin is fixed to January 2022.
The Barclays facility was terminated in January 2019.
16 Provisions
Leasehold System Onerous Onerous
dilapidations Integration short-term contracts Total
GBP'000 GBP'000 leaseholds GBP'000 GBP'000
GBP'000
At 1 January 2018
(as restated) 447 217 379 62 1,105
New provision 11 - - - 11
Utilised (74) (217) (379) (62) (732)
At 31 December 2018
(as restated) 384 - - - 384
Utilised (58) - - - (58)
At 31 December 2019 326 - - - 326
Current - - - - -
Non-current 326 - - - 326
The dilapidations provisions relate to the Group's current leased offices in UK, Singapore, Hong Kong, Malaysia and Thailand. This provision will unwind over the course of the lease agreements which range from 2-10 years.
17 Share capital
The share capital at 31 December 2019 was as follows:
2019 2018
Ordinary shares of 1p each Number Number
of shares GBP'000 of shares GBP'000
Issued and fully paid:
At 1 January 34,127,927 341 33,425,823 334
Issuance of new shares 207,000 2 702,104 7
31 December 34,334,927 343 34,127,927 341
During 2019, 100,000 options were exercised (2018: 400,000), all of which were satisfied by the issuance of new shares.
At 31 December 2019, 766,301 (2018: 1,162,051) shares were held in the EBT.
At 31 December 2019, 545,521 (2018: 385,000) shares were held in Treasury.
At 31 December 2019, 212,895 (2018: 212,895) ordinary shares were held in the Hydrogen Group plc Share Incentive Plan trust for employees.
18 Own shares held
During the year, there was no movement in the number of shares held by the EBT.
At 31 December 2019, the total number of ordinary shares held in the EBT and their values were as follows:
Shares held for share option 2019 2018
schemes
As at 1 January 1,162,051 1,162,051
Transferred out (395,750) -
As at 31 December 766,301 1,162,051
GBP'000 GBP'000
Nominal value 8 12
Carrying value 882 1,338
At 31 December 2019, the total number of ordinary shares held in Treasury and their values were as follows:
Shares held in Treasury 2019 2018
As at 1 January 385,000 -
Transferred out (379,479) -
New shares purchased 540,000 385,000
As at 31 December 545,521 385,000
GBP'000 GBP'000
Nominal value 5 4
Carrying value 289 208
Reconciliation of own shares held
2019 2018
GBP'000 GBP'000
As at 1 January 1,546 1,338
Additions 286 208
Transfers out (661) -
As at 31 December 1,171 1,546
19 Earnings per share
Earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options and share incentive plans, assuming dilution through conversion of all existing options and shares held in share plans. The Employee Benefit Trust shares are ignored for the purposes of calculating the Group's earnings per share.
From continuing operations 2019 2018
As restated
GBP'000 GBP'000
Earnings
Profit attributable to equity
holders of the parent 1,340 2,552
Adjusted earnings
Profit for the year 1,340 2,552
Add back: exceptional costs 875 1
2,215 2,553
2019 2018
Number of shares
Weighted average number of shares used
for basic and adjusted earnings per share 33,491,503 32,608,110
Dilutive effect of share plans* 2,338,521 3,211,955
Diluted weighted average number
of shares used to calculate
diluted and adjusted diluted
earnings per share 35,830,024 35,820,065
Basic profit per share (pence) 4.00p 7.83p
Diluted profit per share (pence) 3.74p 7.13p
Adjusted basic profit earnings
per share (pence) 6.61p 7.83p
Adjusted diluted profit earnings
per share (pence) 6.18p 7.13p
*The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares that would have an antidilutive effect on earnings or loss per share. (An antidilution is a reduction in the loss per share or an increase in the earnings per share). No shares have been identified to have an antidilutive effect.
20 Notes to the cash flow statement
a. Reconciliation of profit before tax to net cash inflow from operating activities
2019 2018
As restated
GBP'000 GBP'000
Profit before taxation 1,688 3,029
Less profit from associate (66) (70)
Add back exceptional items 875 1
Adjusted profit 2,497 2,960
Adjusted for:
Depreciation and amortisation 1,466 1,470
(Decrease)/increase in non-exceptional
provisions (58) 11
Interest paid on lease liabilities (71) (92)
FX unrealised losses 26 67
Share-based payments 120 75
FX realised losses 49 34
Operating cash flows before movements in
working capital 4,029 4,525
Increase in receivables 2,433 4,094
Decrease in payables (2,435) (942)
Net cash outflow from operating activities
before exceptional items 4,027 7,677
Cash flows arising from exceptional costs (404) 131
Net cash outflow from operating activities 3,623 7,808
b. Reconciliation of net cash and borrowings:
2019 2018
GBP'000 GBP'000
Cash and cash equivalents at the
end of the year 4,620 5,227
Borrowings at the start of the
year (293) (3,132)
Decrease in borrowings 139 2,045
Borrowings at the end of the year (154) (293)
Net cash at the end of the year 4,466 4,934
c. Reconciliation of financing
cashflows
At 1 January Financing Other non-cash 31 December
2018 cash flows changes 2018
Borrowings (3,132) 2,839 - (293)
Redemption liability (1,020) 142 (1,377) (2,255)
Lease liabilities (4,520) 1,392 (162) (3,290)
(8,672) 4,373 (1,539) (5,838)
At 1 January Financing Other non-cash 31 December
2019 cash flows changes 2019
Borrowings (293) 139 - (154)
Redemption liability (2,255) 506 1,513 (236)
Lease liabilities (3,290) 1,418 (692) (2,564)
(5,838) 2,063 821 (2,954)
21 Acquisition of Argyll Scott Holdings
On 2 June 2017, Hydrogen Group plc acquired the entire issued share capital of Argyll Scott Holdings for GBP3.2m, satisfied by the issuance of 9,034,110 ordinary shares in Hydrogen Group Plc. Net assets acquired totalled GBP1.2m with goodwill arising of GBP2.1m.
As part of the acquisition for Argyll Scott, Hydrogen Group plc has entered into an agreement to buy back the remaining shareholding in the relevant subsidiaries so that all entities are 100% owned by the Group based on a multiple of profit after tax. As a result, a forward purchase reserve has been created which represents the unconditional amounts due to the non-controlling interests together with, where relevant, the best estimate of amounts due on the satisfaction of employment conditions for certain non-controlling interests with a redemption liability included on the face of the Statement of Financial Position.
The conditions on the buy-back are as follows:
Entity Shareholding Repayment Consideration Dividend
buy-back dates payable
Argyll Scott International 10% 30 April P/E Ratio Subject
Ltd 2021 (75% of Group to permissible
PE with a laws and
floor of 5 sufficient
and a cap distributable
of 7.5) multiplied reserves,
by average a dividend
PAT of 2019 of no less
and 2020 audited than 50%
accounts. of the
statutory
PAT in
the relevant
year will
be paid.
Argyll Scott Technology 7.5% 30 April P/E Ratio
Ltd 2018 (75% of Group
Argyll Scott International 7.5% PE with a
(Hong Kong) Ltd 30 April floor of 5
Argyll Scott Hong Kong 7.5% 2019 and a cap
Ltd of 7.5) multiplied
Argyll Scott International 7.5% 30 April by PAT of
(Singapore) Ltd 2020 previous years
Argyll Scott Singapore audited accounts.
Ltd 30 April
Argyll Scott Recruitment 2021
(Thailand) Ltd
Argyll Scott Malaysia
Sdn Bhd
During the year, Hydrogen Group plc, bought back 7.5% of the relevant entities noted on the above schedule. A total of GBP0.4m was paid out for the shares in Argyll Scott International (Hong Kong) Ltd, Argyll Scott Hong Kong Ltd, Argyll Scott International (Singapore) Ltd, Argyll Scott Singapore Ltd, Argyll Scott Recruitment (Thailand) Ltd and Argyll Scott Malaysia Sdn Bhd. Additionally, GBP0.1m was paid on an accelerated basis for the remaining 22.5% of Argyll Scott Technology.
Redemption Liability
A financial liability is recognised in respect of the forward purchase at fair value. Movements in the year are as follows:
2019 2018
GBP'000 GBP'000
As at 1 January 2,255 1,020
NCI pay-out (506) (142)
Fair value adjustment (1,513) 1,377
As at 31 December 236 2,255
Current - 615
Non-current 236 1,640
The redemption liability relates to future consideration due in respect of the acquisition of Argyll Scott. The fair value adjustment reflects an upward revision of the Board's best estimate of Argyll Scott's further trading prospects.
22 Right of use Asset
Total
The following amounts where the Group was a lessee GBP'000
under finance leases for office buildings
Cost
Restated as at 1 January 2018 6,224
Additions 70
Restated as at 31 December
2018 6,294
Additions 621
Disposals (790)
At 31 December 2019 6,125
Accumulated depreciation and
impairment
Restated as at 1 January 2018 (2,461)
Charge for the year (1,080)
Impairment (455)
Restated as at 31 December
2018 (3,996)
Charge for the year (1,004)
Disposals 790
At 31 December 2019 (4,210)
Net book value at 31 December
2019 1,915
Net book value at 31 December
2018 2,298
23 Lease Liabilities
Lease liabilities are presented in the statement of financial position as follows:
2019 2018
GBP'000 GBP'000
Current 512 649
Non-current 2,052 2,641
All lease liabilities relate to office properties in the Group. Leases are negotiated with an average term of 4.9 years. The lease payments are discounted using the weighted average lessee's incremental borrowing rate of 2.3%. Interest payable in the year was attributable to GBP0.1m (2018: GBP0.1m).
24 Adjustments recognised on adoption of IFRS 16
The Group has adopted IFRS 16 with respect to the recognition and measurement of leases on a fully retrospective basis.
The impact of this change in accounting policy on the comparative figures previously reported is illustrated below on each line item of the Group financial statements that has been affected:
Adjustments Restated under
As reported under the new accounting
previous policy policy
Y/E 2018 Y/E 2017 Y/E 2018 Y/E 2017 Y/E 2018 Y/E 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Consolidated Statement of Comprehensive Income
Gross profit 30,526 - 30,526
Other administrative
expenses (28,237) 312 (27,925)
Finance costs (100) (92) (192)
Profit before
tax 2,809 220 3,029
Tax (358) 40 (318)
Profit after
tax 2,451 260 2,711
Consolidated Statement of Financial Position
Right of use
asset - - 2,298 3,763 2,298 3,763
Deferred tax
asset 112 181 170 130 282 311
Total Assets 39,343 41,253 2,468 3,893 41,811 45,146
Lease Liability - - (3,290) (4,520) (3,290) (4,520)
Trade and other
payables (14,705) (15,647) (96) (96) (14,801) (15,743)
Accruals (10,200) (10,346) 1,053 1,053 (9,147) (9,293) Provisions (839) (1,105) 455 - (384) (1,105) Total Liabilities (18,211) (21,040) (1,878) (3,563) (20,089) (24,603) Total Equity 21,132 20,213 590 330 21,722 20,543 25 Non adjusting post balance sheet event considerations
As a result of recent developments with COVID-19, the Board has identified the following items that may have a material impact on the Net Assets of the Group:
Investment in Associate - note 8
Current market conditions make it difficult to assess the likely short-term trading performance of Tempting Ventures Limited. Although the Board is mindful that Tempting Ventures Limited may well be able to access government loans and other support, the potential impact on the Group's financial statements would be to impair this investment, which at 31 December 2019 was GBP0.2m.
Redemption liability - note 21
Current market conditions make it difficult to assess the likely trading performance on Argyll Scott in APAC, which will in turn will impact the earn out consideration that becomes payable. At 31 December 2019 the consideration that will be due to acquire the remaining 7.5% of Argyll Scott business in APAC is provided for at GBP0.2m. As trading remains uncertain and currently behind budget, it is possible that this liability will be reduced to nil.
No other items have been identified as at the date of approval of these financial statements.
26 Statutory report classification
The financial information for the year ended 31 December 2019 and the year ended 31 December 2018 does not constitute the company's statutory accounts for those years.
Statutory accounts for the year ended 31 December 2018 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 December 2019 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
The auditors' reports on the accounts for 31 December 2019 and 31 December 2018 were unqualified.
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 FLFEDSAIRIII
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