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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Management Resource Solutions Plc | LSE:MRS | London | Ordinary Share | GB00B8BL4R23 | ORD EUR0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMMRS
RNS Number : 2858H
Management Resource Solutions PLC
30 November 2015
30 November 2015
Management Resource Solutions PLC
("MRS" or the "Company")
Final Results for the year Ended 30 June 2015
MRS, the human capital resource consultancy quoted on AIM, is pleased to announce its results for the year ended 30 June 2015.
Financial Highlights
-- 63% increase in revenue for the period to $17.1 million, up from-$10.5 million in 2014. -- Loss before tax for the period amounted to $1.7 million (2014-profit of $0.25 million), after non-recurring exceptional items and share based payments amounting to, in aggregate, approximately $2.5 million. -- Comparable operating profit, excluding these items, was c$825,000 (2014-profit $255,000)
-- An interim dividend of 0.35p per share was paid on 10 April 2015, further information on which is set out in the notes below. The Directors do not recommend the payment of a final dividend.
Operational Highlights
-- Sustained performance in the human capital business, continued relationships with blue chip client base
-- Project management business continues to progress, with the Pacific Energy Aviation fuel depot contract demonstrating ability to diversify the Company's capabilities away from its traditional marketplace.
-- Company continues to differentiate its offering through innovation, such as the Hydraulic Tank Jacking System used to construct the tanks in PNG.
Post period end update on proposed acquisition
-- Post period end, signed a non-binding heads of terms for the purchase of an earthmoving business in Australia.
-- Audits of the acquisition target, asset valuation, Share Sale Agreement and annexures have been completed.
-- Finalising due diligence on the target and securing formal approval from lenders in regards to a loan facility required for the acquisition.
-- Anticipate publication the AIM admission document in relation to this transaction by no earlier than mid-December 2015, although certain elements of the process are outside of the Company's control and their timing cannot be guaranteed.
-- Upon publication of the AIM admission document it is anticipated that the suspension from trading of the Company's ordinary shares will be lifted.
Paul Morffew, MRS CEO said:
"Our core service offering in the human capital and project management businesses performed well and we are on target with our strategy to become a leading supplier of solutions and products to the engineering market. We successfully listed on the AIM market of the London Stock Exchange and continue to develop our complementary service offering across our products. The new contracts won over the course of the year are a clear sign of this strategy in motion, and as we seek to expand organically and acquisitively the management are confident that the Company will deliver growth.
"Post period end, we are working hard on delivering the acquisition announced and have completed much of the critical pathway to executing this. "
For further information:
Management Resource Solutions PLC c/o FTI +44 (0)20 3727 1000 Paul Morffew, Chief Executive Timothy Jones, Finance Director Northland Capital Partners Limited (Nominated Adviser and Broker) William Vandyk David Hignell +44 (0)20 7382 1100 FTI Consulting Edward Westropp Oliver Winters Adam Cubbage +44 (0)20 3727 1000
Chief Executives's Statement
During the past financial year we had our eyes firmly set on reaching our goals of continued growth and enhanced capabilities in all areas. We made good progress on many important fronts that will affect the long-term future for Management Resource Solutions and the Group's position in the industry. I am eager to report on the major milestones reached during the year and the future opportunities available to us.
Our business generates revenue from two sources: project management and contract personnel.
Our goal remains to become a leading supplier of solutions in risk management services and products from major engineering projects to smaller challenges in the mining, oil & gas and construction industries, expanding the business through a strategy of both organic growth and acquisition.
During the year we have continued to forge ahead in our core business and we have successfully demonstrated an ability to diversify our capabilities away from our traditional marketplace by being awarded the Pacific Energy Aviation (PNG) Limited aviation fuel depot contract. Year on year, group revenue has increased by 63% from $10.5m to $17.1m. Operating and delivering these services in regional and remote locations often offer challenging logistics, which requires high quality innovative solutions from design through to construction and commissioning, uniquely tailored to each project's complexity and size. Due to the nature of the project MRS had to find several unique solutions to restrictions and as a result is using the revolutionary Hydraulic Tank Jacking System to construct the tanks. This method is a first to Papua New Guinea and MRS is excited about spearheading innovative quality construction not only in Papua New Guinea, but to more developing Asia Pacific countries.
Management sees opportunity to acquire, profitable services companies at attractive multiples as our second revenue growth approach. Recent global weakness has produced a buyer's market for well-priced, well run, profitable companies in sectors of interest with acquired companies benefitting from MRS' scale, enhanced marketing and cross-selling opportunities as well as other synergies. For these reasons MRS is progressing toward completing its first acquisition of a plant hire company that will significantly increase the scale of our business. This acquisition will add significantly to the Group's capabilities and will be a major step toward becoming a full cycle service provider.
Corporately, we have achieved a major goal during the period under review, admission to the AIM market operated by the London Stock Exchange in December 2014. AIM is considered to be the most successful growth market in the world and it is a significant achievement for the company to join its ranks.
MRS did have some disappointments during the year, particularly the failed transaction to acquire the D&M group of companies due to an initial failure by our financier to honour his funding commitment and the eventual rejection of our subsequent alternative offer by the owners of the D&M group. The loss after tax for the year was $1,648,000 (2014 - profit of $52,000). The results were adversely affected to a significant extent by non-recurring, abnormal and non-cash costs as the following table demonstrates:
Hot Features
Premium
2015 2014
(Loss)/profit after tax (1,648) 52
Add back:
Non-recurring costs 1,421 -
Share based payment charges 490 -
Non-recurring salary costs incurred in anticipation 562 -
of a merger/acquisition contract (included within wages
and salaries)
_____ ____
Adjusted earnings 825 52
Adjusted earnings reflect certain costs incurred in the year which are not expected to be recurring. These principally relate to transaction costs including the IPO and aborted transactions. The salary costs treated as non-recurring relate to individuals hired and subsequently released in connection with the failed acquisition.
On behalf of the Board, I would like to thank all employees at MRS for their dedication and for the progress the company has made. I would also like to thank our shareholders for their continuing support.
Paul Morffew
CEO
Consolidated Statement of profit and loss and other comprehensive Income
for the year ended 30 June 2015
2015 2014
$'000 $'000
Revenue 17,089 10,490
Cost of sales (14,231) (8,110)
---------- ---------
Gross profit 2,858 2,380
Recurring administrative
expenses (2,634) (2,125)
Non-recurring costs (1,421) -
Share based payment charges (490) -
---------- ---------
Total administrative expenses (4,545) (2,125)
Operating (loss)/profit (1,687) 255
Finance costs - interest - (68)
---------- ---------
(Loss)/profit before tax (1,687) 187
Tax credit/(expense) 39 (135)
---------
(Loss)/profit for the year
attributable to equity
holders of the parent company (1,648) 52
(Loss)/earnings per share
attributable to equity
holders of the parent company
Basic and diluted (5.19)c 0.17 c
There was no other comprehensive income for the year (2014-nil).
Consolidated Balance Sheet
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at 30 June 2015
2015 2014
$'000 $'000
Assets
Non-current assets
Property, plant and equipment 260 154
Deferred Tax 194 164
454 318
Current assets
Trade and other receivables 1,121 2,829
Cash and cash equivalents 920 1,063
2,041 3,892
Total assets 2,495 4,210
Liabilities
Current liabilities
Trade and other payables 1,343 2,898
1,343 2,898
Non-current liabilities
Borrowings 18 46
Deferred Tax 5 15
23 61
Total liabilities 1,366 2,959
Net assets 1,129 1,251
Equity attributable to equity holders
of the parent
Share capital 21 36,623 36,586
Share premium 24 1,221 -
Issue costs reserve 24 (332) (332)
Reorganisation reserve 24 (36,032) (36,032)
Retained earnings 24 (351) 1,029
Total equity attributable to equity
holders of the parent 1,129 1,251
--------- ---------
Consolidated Statement of Changes in Equity
for the year ended 30 June 2015
Share Capital Share Premium Issue costs Reorganisation Retained Total equity
reserve reserve earnings
$'000 $'000 $'000 $'000 $'000 $'000
At 1 July 2013 36,586 - (332) (36,032) 977 1,199
Profit for
the year - - - - 52 52
---------------- ----------------
Total
comprehensive
income - - - - 52 52
---------------- ---------------- -------------- ----------------- ----------- ---------------
At 1 July 2014 36,586 - (332) (36,032) 1,029 1,251
Loss for the
year - - - - (1,648) (1,648)
--------- ------
Total comprehensive
income - - - - (1,648) (1,648)
--------- ------ ------ ------------- ----------------- --------
Other movements
Issue of Shares 37 1,342 - - - 1,379
Expenses of
issue - (121) - (121)
Dividends - - - - (222) (222)
Share based
payments charge - - - - 490 490
--------- ------ ------ ------------- ----------------- --------
Total other
movements 37 1,221 - - 268 1,526
--------- ------ ------ ------------- ----------------- --------
At 30 June
2015 36,623 1,221 (332) (36,032) (351) 1,129
========= ====== ====== ========= ================= ========
Consolidated Statement of Cash Flow
for the year ended 30 June 2015
2015 2014
$'000 $'000
Cash flow from operating activities
Receipts from customers 18,606 13,695
Payments to suppliers and employees (19,592) (12,959)
Interest received 13 -
Finance costs (72) (68)
Tax paid - (287)
Net cash flow from operating activities (1,045) 381
Cash flow from investing activities
Purchase of non-current assets (105) (37)
Net cash flow from investing activities (105) (37)
Cash flow from financing activities
Repayment of borrowings (27) (35)
Dividends paid (222) -
Proceeds from issue of shares net
of costs 1,257 -
Net cash flow from financing activities 1,007 (35)
Net increase in cash held (143) 309
Cash and cash equivalents at 1
July 2014 1,063 754
Cash and cash equivalents at 30
June 2015 920 1063
Notes to the consolidated financial statements for the year ended 30 June 2015
Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to the periods presented, unless otherwise stated.
These financial statements have been prepared on the historical cost basis, on the basis of going concern and in line with International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union and in accordance with applicable UK law.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period or in the period of revision and future periods if the revision affects both current and future periods.
Going concern
The financial statements have been prepared on the going concern basis as, in the opinion of the Directors, at the time of approving the financial statements, there is a reasonable expectation that the Group will continue in operational existence for the foreseeable future.
Basis of consolidation
Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the following elements are present: power over an investee, exposure to variable returns from the investee, and the ability of the investor to use its power of affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair value at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.
The Company was incorporated on 26 April 2012 for the purpose of acquiring the entire issued share capital of Management Resource Solutions Pty Ltd, which was previously the ultimate parent company of the Group. This acquisition took place on 24 August 2012 by the issue of the entire ordinary share capital of the Company to the shareholders of Management Resource Solutions Pty Ltd in exchange for their shareholdings in the Company.
This reconstruction is accounted for as an acquisition under common control. Accordingly the financial statements present the Group results as a continuation of the results of the Group previously headed by Management Resource Solutions Pty Ltd.
Corporate Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside the profit and loss when the tax relates to items that are recognised outside the profit and loss.
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Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale. When an investment property that is depreciable is held by the Company in a business model whose objective is to consume substantially all of the economic benefits embodies in the property through use over time (rather than through sale), the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities, where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Property, Plant and Equipment
Property, plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset.
Depreciation
The depreciable amount of all fixed assets including buildings and
capitalised lease assets is depreciated on a straight line basis over
the asset's useful life to the consolidated group commencing from
the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the
lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Depreciation
Class of Fixed Asset Rate
Leasehold improvements 5 %
Plant and equipment 15 - 37.5 %
Leased plant and equipment 40 %
The assets' residual values and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting period. An asset's carrying
amount is written down immediately to its recoverable amount if the
asset's carrying amount is greater than its estimated recoverable
amount.
Gains and losses on disposals are determined by comparing proceeds
with the carrying amount. These gains or losses are included in the
statement of comprehensive income. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset
are transferred to retained earnings.
Leases
Leases of fixed assets, where substantially all the risks and benefits
incidental to the ownership of the asset - but not the legal ownership
- are transferred to entities in the consolidated group, are classified
as finance leases.
Finance leases are capitalised by recording an asset and a liability
at the lower of the amounts equal to the fair value of the leased
property or the present value of the minimum lease payments, including
any guaranteed residual values. Lease payments are allocated between
the reduction of the lease liability and the lease interest expense
for the period.
Leased assets are depreciated on a straight-line basis over the shorter
of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks
and benefits remain with the lessor, are recognised as expenses on
a straight-line basis over the lease term.
Lease incentives under operating leases are recognised as a liability
and amortised on a straight-line basis over the life of the lease
term.
Financial Instruments
The Group's financial instruments are cash and cash equivalents, trade
and other receivables, trade and other payables and borrowings. The
accounting policies for these are described below.
Impairment
At the end of each reporting period, the Group assesses whether there
is objective evidence that a financial asset has been impaired. Impairment
losses are recognised in profit or loss immediately.
Impairment of non-financial assets
At the end of each reporting period, the Group assesses whether there
is any indication that an asset may be impaired. The assessment will
include considering external sources of information and internal sources
of information. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset's fair value less costs to sell
and value in use to the asset's carrying amount. Any excess of the
asset's carrying amount over its recoverable amount is recognised
immediately in profit or loss
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each group entity is measured using the
currency of the primary economic environment in which that entity
operates. The consolidated financial statements are presented in Australian
dollars which is the parent entity's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency
using the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end exchange
rate. Non-monetary items are translated at the year - end exchange
rate. Non-monetary items measured at historical cost continue to be
carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at
the date when fair values were determined.
Exchange differences arising on the translation of monetary items
are recognised in profit or loss, except where deferred in equity
as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items
are recognised directly in other comprehensive income to the extent
that the underlying gain or loss is directly recognised in other comprehensive
income; otherwise the exchange difference is recognised in profit
or loss.
Employee Benefits
An accrual is made for the Company's liability for employee benefits
in relation to the Company's unpaid contribution to defined contribution
benefit schemes. The Company's obligations in respect of defined contribution
pension schemes are recognised as a cost in the income statement.
Provisions
Provisions are recognised when the Group has a legal or constructive
obligation, as a result of past events, for which it is probable that
an outflow of economic benefits will result and that outflow can be
reliably measured.
Provisions are measured using the best estimate of the amounts required
to settle the obligation at the end of the reporting period.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call
with banks, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within short-term borrowings in current liabilities on the
statement of financial position.
Revenue and Other Income
Revenue recognition relating to the provision of services is determined
with reference to the stage of completion of the transaction at the
end of the reporting period and where outcome of the contract can
be estimated reliably. Stage of completion is determined with reference
to the services performed to date as a percentage of total anticipated
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services to be performed, based on surveys of work performed. Where
the outcome cannot be estimated reliably, revenue is recognised only
to the extent that related expenditure is recoverable.
All revenue is stated net of VAT and similar taxes.
Trade and other receivables
Trade and other receivables include amounts due from customers for
goods sold and services performed in the ordinary course of business.
Receivables expected to be collected within 12 months of the end of
the reporting period are classified as current assets. All other receivables
are classified as non-current assets.
Trade and other receivables are initially recognised at fair value
and subsequently measured at amortised cost using the effective interest
method, less any provision for impairment. Refer to Note 1(h) for
further discussion on the determination of impairment losses.
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services
received by the Group that remain unpaid at the end of the reporting
period.
Borrowing Costs
Borrowing costs are recognised in the statement of consolidated income
for the period in which they are incurred.
Value Added Tax (VAT) and equivalent taxes
Revenues, expenses and assets are recognised net of the amount of
VAT, except where the amount of VAT incurred is not recoverable VAT.
New Standards and Interpretations adopted with no effect on the financial
statements
The following new and revised Standards and Interpretations have also
been adopted in these financial statements. Their adoption has not
had any significant impact on the amounts reported in these financial
statements but may affect the accounting for future transactions or
arrangements:
* IFRS 10: Consolidated Financial Statements.
* IFRS 11: Joint Arrangements.
* IFRS 12: Disclosure of Interests in Other Entities.
* IFRS 13: Fair Value Measurement
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations
are not yet effective for the year commencing 1 July 2014 and have
not been applied in preparing these financial statements:
* IAS 16 (Amendments) Clarification of Acceptable
Methods of Depreciation and
* Amortisation
* IAS 19 (Amendments) Defined Benefit Plans: Employee
Contributions
* IFRS 9 Financial Instruments
* IFRS 11 (Amendments) Accounting for Acquisitions of
Interests in Joint Operations
* IFRS 14 Regulatory Deferral Accounts
* IFRS 15 Revenue from Contracts with Customers
The Directors do not consider that the implementation of any of these
new standards will have a material impact upon reported income or
reported net assets.
Revenue 2015 2014
$'000 $'000
Revenue disclosed in the consolidated income statement is as follows:
Provision of services 17,089 10,490
________ ________
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Board of Directors.
Segmental information is as follows:
2015 Papua New Guinea Australia Corporate Total
$'000 $'000 $'000 $'000
Revenue 9,793 7,296 - 17,089
Cost of sales (8,297) (5,934) - (14,231)
Administration expenses (93) (2,519) (1,933) (4,545)
________ ________ ________ ________
Operating profit/(loss) 1,403 (1,157) (1,933) (1,687)
Segment assets 603 877 1,015 2,495
Segment liabilities (720) (212) (411) (1,343)
2014 Papua New Guinea Australia Corporate Total
$'000 $'000 $'000 $'000
Revenue - 10,490 - 10,490
Cost of sales - (8,110) - (8,110)
Administration expenses - (1,784) (341) (2,125)
________ ________ ________ ________
Operating profit/(loss) - 596 (341) 255
Revenues from transactions with customers exceeding 10% of total revenue were as follows:
2015 2014
$'000 $'000
Customer A 6,845 9,927
Customer B 10,244 -
Others - 563
________ ________
17,089 10,490
________ ________
Non re-occurring costs of $1,421,000 (2014-nil) represent the professional fees and other associated costs incurred in the listing of the Company's share capital on AIM together with fees and other costs incurred in the abortive pursuit of a corporate acquisition.
Details of the share based payments charge are set out in note 23.
Operating profit 2015 2014
$'000 $'000
This is stated after charging the following:
Depreciation and amortisation 95 46
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Lease payments 91 -
Foreign exchange differences 11 -
Employee benefit expenses 601 -
Staff costs and directors' emoluments 2015 2014
$'000 $'000
Staff costs (including directors)
Group
Wages and salaries 5,233 5,269
Pension costs 425 474
Social security costs 314 262
________ ________
5,972 6,005
________ ________
2015 2014
$'000 $'000
Directors' emoluments
Group
Fees and salaries 606 516
Social security costs 38 29
________ ________
644 545
________ ________
Company
Director's remuneration of $92,344 (2014 - $37,716) was paid by the Company
The remuneration, of the highest paid director was $ 391,362 (2014 - $347,657).
The key management personnel of the Group are considered to be the Directors
Staff numbers
The average monthly number of employees (including directors) during the year was as follows:
2015 2014
Group Number Number
Technical 32 20
Administrative 13 22
________ ________
Company
Administrative 1 1
________ ________
Taxation
Group
(a) The tax charge/(credit) comprises:
2015 2014
$'000 $'000
Current tax - 210
Deferred tax (39) (64)
Under provision in respect of prior years - (11)
________ ________
(39) 135
________ ________
(b) Reconciliation of total tax charge:
2015 2014
$'000 $'000
Accounting loss before tax (1,687) 187
- Tax at Australian statutory income tax rate of 30% (2014 - 30%)
(506) 56
Effects of:
- unrelieved losses of the parent company 537 90
- under-provision for income tax in prior years - (11)
- depreciation and amortisation (13) 1
- other non-allowable items - (1)
- profits taxable at lower rates (57) -
________ ________
Tax (credit)/charge (39) 135
________ ________
Dividend Paid
2015 2014
$'000 $'000
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Interim dividend of 0.35p per share paid on 10 April 2015 222 -
________ ________
222 -
________ ________
The Company has recently been advised that, whilst the Group had distributable reserves, the parent Company did not have sufficient distributable reserves to pay the above interim dividend and so it should not have been paid by the Company to its shareholders. At the relevant time, sufficient distributable reserves would have been available in the Company had its principal subsidiary undertakings declared dividends from their own distributable reserves. The Directors consider that it is in the best interests of the Company to take the necessary steps to regularise the position and accordingly it will enter into a deed poll to discharge any current or former shareholders that received a dividend from any obligation to repay any amount to the Company in connection with the dividend.
(Loss)/earnings per share
The calculation of basic (loss)/earnings per ordinary share attributable to equity holders of the parent company is based on a loss of $1,648,000 (2014 - profit of $52,000) and on 31,730,837 (2014-30,400,015) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
There is no difference between basic earnings per share and diluted earnings per share as the Group reported a loss for the year.
Property, plant and equipment
Leasehold Plant Leased plant
improvements & equipment & equipment Total
$'000 $'000 $'000 $'000
Cost
At 1 July 2013 6 212 32 249
Additions - 37 - 37
________ ________ ________ ________
At 30 June 2014 and 1 July 2014 6 249 32 286
Additions - 95 122 217
Disposal - (17) - (17)
Reallocation - (167) 167 -
At 30 June 2015 6 160 321 486
________ ________ ________ ________
Depreciation
At 1 July 2013 6 67 14 86
Charge for the year - 41 4 45
________ ________ ________ ________
At 30 June 2014 and 1 July 2014 6 108 18 131
Change for the year - 76 19 95
Eliminated on disposals - - - -
Reallocation - (108) 108 -
At 30 June 2015 6 76 145 226
Net book value
At 30 June 2015 - 84 176 260
________ ________ ________ ________
At 30 June 2014 - 141 13 154
________ ________ ________ ________
Trade and other receivables (current)
2015 2014
$'000 $'000
Trade debtors 1,034 1,146
Prepayments 11 1,292
Other debtors 76 101
________ ________
1,121 2,829
_________ _________
Included within prepayments at 30 June 2014 were amounts totalling $1,252,134 relating to costs incurred in respect of a contract not yet in place at that date and therefore deferred. There were no such prepayments at 30 June 2015.
Included within Trade debtors were retentions of $431,820 (2014 - $nil).
There have been no provisions made in respect of bad debts.
Trade and other payables (current)
2015 2014
$'000 $'000
Trade creditors and accruals 318 629
Other creditors 336 1,572
Corporate income tax - 144
Borrowings 91 102
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Employee benefits provision 275 128
Owing to a Director 323 323
________ ________
1,343 2,898
____ ____ __ ______
Financial instruments
The Group's financial instruments consist of deposits with banks, money market instruments, short-term investments, accounts receivable and payable, and borrowings.
The totals for each category of financial instrument, measured in accordance with IAS 39 as detailed in the accounting policies to these financial statements, are as follows:
2015 2014
$'000 $'000
Financial assets
Cash and cash equivalents 920 1,063
Receivables 1,110 1,537
______ ______
Total Financial Assets 2,030 2,600
Financial liabilities
Trade and other payables 1,252 2,796
Borrowings 109 148
______ ______
Total Financial Liabilities 1,361 2,944
In the opinion of the Directors, the fair value of the financial assets and financial liabilities is the same as the amount stated above.
Financial Risk Management/Capital Management Policies
The Directors' overall risk management strategy seeks to assist the Company in meeting its financial targets, whilst minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board of Directors on a regular basis. These include the credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk and liquidity risk. There have been no substantive changes in the types of risks the Company is exposed to, how these risks arise, or the Board's objectives, policies and processes for managing or measuring the risks from the previous period.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. The Group is also exposed by virtue of its concentration on a small number of major clients. The Group's maximum exposure to credit risk is its total receivables.
Credit risk is managed through maintaining procedures ensuring, to the extent possible, that customers and counterparties to transactions are of sound credit worthiness and includes the utilisation of systems for the approval, granting and renewal of credit limits, the regular monitoring of exposures against such limits and the monitoring of the financial stability of significant customers and counterparties. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 15 to 30 days from the date of invoice.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the finance committee has otherwise assessed as being financially sound. Where the Group is unable to ascertain a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of sufficient value which can be claimed against in the event of any default.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
3/4 preparing forward-looking cash flow analyses in relation to its operational, investing and financing activities;
3/4 managing credit risk related to financial assets; 3/4 only investing surplus cash with major financial institutions; and
3/4 comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
At the balance sheet date the Group's only borrowings were those set out in note 19 and all cash resources were available on demand.
Share capital
Authorised, issued and fully paid Ordinary Shares Deferred Shares
Number $'000 Number $'000
At 1 July 2014 30,400,015 36,586 - -
4 July 2014 sub-division (36,220) 30,400,015 36,220
11 December 2014 Issue of shares for cash 2,416,667 37
At 30 June 2015 32,816,682 403 30,400,015 36,220
On 24 August 2012, the Company acquired the entire issued share capital of Management Resource Solutions Pty Ltd, the former parent company of the group, in exchange for the issue of the entire ordinary share capital of the Company to the shareholders of Management Resource Solutions Pty Ltd. This transaction was accounted for as an acquisition under common control.
The nominal value of the issued share capital in the Company was greater than the nominal value of the share capital in Management Resource Solutions Pty Ltd which was exchanged for it. In order to leave the Group's equity unchanged by the transaction the difference in nominal value was debited to a reorganisation reserve. Costs of $332,000 relating to the share issue were deducted from equity.
On 4 July 2014, each then existing Ordinary Share of EUR1.00 was subdivided into one Ordinary Share of EUR0.01each and one Deferred Share of EUR0.99 each. The Deferred Shares have no voting rights or rights to receive a dividend and have only a very limited right to any distribution on a return of capital.
On 11 December 2014, the Company's Ordinary Shares were admitted to trading on AIM. On the same date, the Company issued 2,416,667 new Ordinary Shares by way of a placing for cash at 30p per share to raise GBP725,000 (approximately $1.4 million) before expenses.
Warrants
In connection with its admission to listing on AIM, the Company issued 2,566,667 warrants to subscribe for
new Ordinary Shares, at 30p per share, to investors and advisors. The Warrants are exercisable in whole or
in part until the third anniversary of the admission to listing (11 December 2017) and are non-transferable. No warrants were exercised during the year and all remained outstanding at 30 June 2015. The notional value of the warrants at the date of issue has been calculated and is not material. No application has been made or will be made for the Warrants to be admitted to trading on AIM.
Share based payment arrangements
Grant of Options
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