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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nexus Infrastructure Plc | LSE:NEXS | London | Ordinary Share | GB00BZ77SW60 | ORD GBP0.02 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 72.50 | 65.00 | 80.00 | 72.50 | 72.50 | 72.50 | 9,631 | 07:38:41 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Management Services | 88.69M | 58.8M | 1.4546 | 0.50 | 29.31M |
From Apr 2019 to Apr 2024
TIDMNEXS
RNS Number : 2867B
Nexus Infrastructure PLC
09 January 2018
9 January 2018
Nexus Infrastructure plc ("Nexus" or the "Group")
Preliminary results for the year ended 30 September 2017
Landmark year, robust results, positioned for growth
Mike Morris, Chief Executive of Nexus, the leading provider of essential infrastructure services to the UK housebuilding and commercial sectors, comments:
"It has been a landmark year for Nexus with the successful listing of the business on AIM in July, a robust performance and continued growth in our order book which gives us good visibility of future earnings. All of which pays tribute to the hard work and commitment of our employees."
We have strong market positions along with well-defined strategic objectives in place to continue to deliver growth and future value for all stakeholders."
Highlights:
Resilient performance in FY2017 despite impact of EU Referendum
-- Revenue of GBP135.0m, in line with expectations (2016: GBP135.7m)
-- Operating profit of GBP9.3m, ahead of expectations (2016: GBP10.4m)
-- Order Book, up 25% at year end to GBP202.7m
-- Sustained momentum with current order book of GBP213m as at the end of December 2017
Strong cash generative business model
-- Cash and cash equivalents of GBP27.1m at year end
-- Proposed final dividend of 4.2 pence per share, taking the full year dividend to 6.3 pence per share, ahead of expectations and in line with progressive dividend policy
Established growth strategy within attractive and expanding addressable markets
-- Organic growth driven by large multi-phase contracts, geographic expansion, cross selling and combined delivery of Tamdown and TriConnex services
-- Inorganic growth plans focused on disciplined approach to bolt-on acquisitions
Proven track record of delivering consistent growth, profits and cash generation
Confident outlook for the year ahead
Enquiries:
Nexus Infrastructure Tel: 01376 320856 plc Michael Morris, Chief Executive Officer Alan Martin, Chief Financial Officer Numis Securities Limited Tel: 0207 260 1200 (Nominated Adviser & Broker) Oliver Hardy (Nomad) Heraclis Economides Ben Stoop Financial Public Relations Tel: 0203 757 4992 Camarco Ginny Pulbrook Tom Huddart
Notes to Editors:
Nexus is a leading provider of essential infrastructure services to the UK housebuilding and commercial sectors. The Group comprises two separately managed and operated businesses: Tamdown, a provider of specialised infrastructure services; and TriConnex which designs, installs and connects utility networks to properties on new residential and commercial developments.
Tamdown has a well-established market position having been in operation for over 40 years and currently counts amongst its customers nine of the top ten largest UK housebuilders. TriConnex was established in 2011 to take advantage of deregulation in the utilities market with the goal of being recognised as the UK's leading independent provider of utility connections to new developments.
CHAIRMAN'S STATEMENT
I am pleased to report a robust set of results for the year ended 30 September 2017. This is our maiden set of results as a public company, following the Company's successful Initial Public Offering ("IPO") on the London Stock Exchange's Alternative Investment Market ("AIM") in July 2017. I would like to take this opportunity of welcoming all our new shareholders.
Overview of the year
The Nexus business model, with Tamdown's well established market position as a leading provider of essential infrastructure services to the UK's largest housebuilders, coupled with TriConnex's growing utilities connection services, was resilient during a challenging year. As previously reported, the EU Referendum caused a slowdown in tendering activity and delays to customers awarding new contracts during the second half of 2016 with a corresponding delay to work commencing on site. In spite of this market backdrop, the Group is reporting revenue for the year of GBP135.0m (2016: GBP135.7m), and an operating profit of GBP9.3m (2016: GBP10.4m). As at 30 September 2017, the order book was at a record level of GBP202.7m up 25% from GBP161.7m in 2016, providing good earnings visibility for the year ahead.
Strategy
The Group's mission is to be recognised as the leading provider of essential infrastructure services in the UK. The Group's strategy is to deliver outstanding performance through a focus on innovation and customer service which will lead to growth, building on existing market positions by developing new markets and services whilst extending geography, both organically and through complementary earnings enhancing acquisitions.
The Group's organic growth strategy is focused on four key drivers: increasing market share within current geographies, expanding into new geographies, diversification into new growth sectors and leveraging customer relationships to enhance cross selling within the Group. In addition to organic growth, further growth will come from the successful sourcing, execution and integration of chosen acquisitions.
The Group is taking a disciplined approach to acquisitions, seeking to enhance shareholder value with acquisitions that are linked or closely associated with TriConnex, such as businesses within existing residential utility or non-residential utilities markets or new markets, such as continuing to develop our fibre and Electric Vehicle charging services.
Returns to shareholders
As a listed company, one of our primary objectives is to deliver increased shareholder value over time. The Board has adopted a progressive dividend policy and has already paid an interim dividend of 2.1 pence per share. For the year ended 30 September 2017, the Board is proposing a final dividend of 4.2 pence per share, which, if approved at the AGM, will take the dividend for the year to 6.3 pence per share. The total dividend for the year of GBP2.4m is based on a dividend cover of 3.0 times the Group's profit after tax, adjusted for exceptional items, which is in line with our guidance on dividend cover stated at the time of the IPO. The dividend will be paid on 9 March 2018 to shareholders on the register at close of business on 9 February 2018. The shares will go ex-dividend on 8 February 2018.
Looking forward, whilst continuing to invest in the growth plans of the business, our adopted progressive dividend policy will enable shareholders to benefit as the Group delivers on its performance targets.
Board and Governance
The Board has been established now for over a year, with Richard Kilner appointed as Non-Executive Director and myself, appointed as Non-Executive Chairman, in January 2016. Alex Wiseman was appointed as Non-Executive Director in June 2016. The Board consists of five members in total including executive board directors Mike Morris (CEO) and Alan Martin (CFO).
Since the Board was expanded in early 2016, roles and responsibilities have been defined and the Board has spent time setting out the vital discipline, processes and authorities of governance. Changes have included the creation of Board sub-committees in 2016 for Audit, Remuneration and Nominations, all of which were in place throughout the year under review.
People
A primary driver to the Group's success is the team of highly skilled, driven and loyal employees across the businesses. Nexus places great importance on engaging with and developing its employees and providing a platform for personnel growth and successful career development. On behalf of the Board, I would like to congratulate and thank them for their continued hard work and dedication.
Outlook
We are in a strong position to deliver growth. The fundamental market drivers for our business look positive in the short and medium terms. The order book has grown significantly over the past year and is now at a record level. Against this background, the Board is optimistic on the outlook for the business and is confident the Group will deliver on its growth strategy.
Geoff French
Chairman
8 January 2018
EXECUTIVE REVIEW
Group operating results
As anticipated and as highlighted earlier in the year, the outcome for the Group's full year revenues of GBP135.0m (2016: GBP135.7m) were relatively flat reflecting the impact of the EU Referendum. Revenues for Tamdown were GBP105.6m (2016: GBP112.4m) and were broadly offset by the 26.3% increase in TriConnex's revenues to GBP29.5m (2016: GBP23.3m).
Gross profit for the year increased to GBP27.2m (2016: GBP26.3m), with the overall gross margin improving by 78 basis points to 20.2% (2016: 19.4%).
Administrative expenses for the Group increased by GBP2.0m to GBP17.9m (2016: GBP15.9m). The 12.4% increase was primarily due to investment for growth within TriConnex, where the planned office headcount has increased by 27, along with salary increases.
Group operating profit, which has been recorded before the deduction of exceptional costs, for the year was GBP9.3m (2016: GBP10.4m). Group operating margin decreased to 6.9% (2016: 7.6%), with the gross margin improvement offset by the significant investment in administrative expenses to support future growth.
Exceptional items totalling GBP1.7m (2016: nil) were recorded in the year to reflect the costs related to the IPO.
Profit for the year attributable to equity holders of the parent company was GBP5.8m (2016: GBP8.4m).
Basic earnings per share were 15.4 pence, after the impact of the exceptional item (2016: 22.3 pence). The underlying basic earnings per share, adjusting for the exceptional item, were 19.1 pence (2016: 22.3 pence).
The Group's balance sheet remains strong, with net assets growing by 27.2% to GBP17.0m (2016: GBP13.4m). The Group's net cash remains high at GBP18.7m (2016: GBP23.6m) with cash and cash equivalents at GBP27.1m (2016: GBP34.0m) and bank borrowings of GBP8.4m (2016: GBP10.4m). The Group holds a high net cash position in order to support growth and the Group's acquisition strategy.
Tamdown
Financial & Operating performance
The revenue for Tamdown decreased by 6.1% to GBP105.6m, (2016: GBP112.4m). This was anticipated earlier in the year and highlighted at the time of the IPO, as the business saw the impact of the June 2016 EU Referendum on the housebuilding market and customers in general.
From the end of 2016 onwards, orders for new phases and new sites returned to normal levels. This is reflected in the 24.9% improvement in the order book from GBP86.7m at 30 September 2016 to GBP108.3m at 30 September 2017.
The gross margin for the year at 16.4% (2016: 16.5%) maintained the significant improvement in margin of recent years.
Our investment for growth with increased headcount, staff and salary costs resulted in a 10.9% increase in administrative expenses to GBP10.1m (2016: GBP9.1m). The operating profit for the year at GBP7.2m (2016: GBP9.5m), achieved an operating margin of 6.8% (2016: 8.4%). The Board believes that this investment can support Tamdown's growth over a number of years.
Our markets
The customers of Tamdown are UK housebuilders or affordable housing developers, including housing associations and, as such, the UK housebuilding market is key to the Company. The housing market has been in a long-term position of structural undersupply as the number of new houses built has failed to keep pace with the rate of household formation. Current estimates from the DCLG are for annual household formation in excess of 250,000 over the short to medium term, which compares to the CPA estimates of UK housing starts in 2016 of approximately 148,000 (178,000 including public and private homes) and is projected to increase to 158,000 in 2019 (192,000 including public and private homes). As a result, there is the expectation that the housing deficit will remain over the long term. The prevalence of this deficit has attracted a significant amount of government stimulus to the sector.
Tamdown operates within the more economically resilient areas of the South East of England and London where the undersupply of housing appears to be more acute compared to the rest of the UK. Tamdown works with the majority of the quoted housebuilders, who account for approximately 50% of total private new build volumes (compared to approximately 32% in 2005) with this dominance expected to continue as they work through their land bank and develop larger schemes.
The housing White Paper released in February 2017 announced new plans by the UK Government to tackle the undersupply of houses by reducing the obstacles to housebuilding and help local authorities, developers and small to medium sized housebuilders meet housing needs. This included greater support for small housebuilders, through the Home Building Fund, to build up to 225,000 homes in the long term. This is alongside a commitment to build more affordable homes, including Rent to Buy and shared ownership, with an extra GBP1.4 billion for the Affordable Homes Programme, to build around 225,000 affordable homes.
The Government announced in the November 2017 Budget a further package of investments, loans and guarantees, which when added to previous initiatives totalled GBP44bn, to increase the annual number of new homes from 217,000 in 2016/17 to 300,000 by 2025.
Outlook
Tamdown has an established market position, providing quality services to 9 of the top 10 UK housebuilders. The backdrop of Government stimulus to counter the housing supply deficit provides us with confidence that our customers will continue to demand our services.
Our strategic objectives are to grow the business organically, expand into new geographic markets and develop diversification opportunities into sectors such as affordable residential and build to rent. These plans, alongside working with TriConnex to ensure that the early customer intelligence that TriConnex becomes aware of is utilised in the most effective manner, give us confidence that we have an established route to continue to grow the Tamdown business.
TriConnex
Financial & Operating performance
Revenue for TriConnex increased by 26.3% to GBP29.5m (2016: GBP23.3m). This strong growth is due to a combination of an expansion of our customer base, increased market share from current customers and the take up by customers of TriConnex's self-lay water and fibre services. The EU referendum had a limited negative impact on the order book of TriConnex mainly due to the longer lead times in designing and implementing utility networks. The order book grew by 25.9% over the year to GBP94.4m (2016: GBP75.0m).
TriConnex is a high gross margin business, principally due to the more technical, office based, added value nature of the services it provides, resulting in a higher proportion of overhead cost. The high gross margin was maintained during the year, with the margin improving by 40 basis points to 33.8% (2016: 33.4%).
As TriConnex provides a turnkey service from concept to connection with a significant amount of desktop planning and research, the majority of TriConnex's staff are office based and in order for TriConnex to continue to grow it has needed to invest in an increased number of staff within business development, technical and operations departments, with the total headcount increasing by 57 (44%) over the year. Accordingly, overheads have increased in the year to GBP6.5m (2016: GBP5.0m), broadly in proportion to turnover growth.
Operating profit increased by 23.8% to GBP3.5m (2016: GBP2.8m) with an operating margin of 11.8% (2016: 12.1%).
Our markets
The utility connections market consists of three regulated utilities; electricity, gas and water, and one unregulated utility, fibre. TriConnex initially offered electricity and gas connections, expanding to offer water connections in 2014 and fibre connections in 2016. The market has arisen from the deregulation of the utility sector and TriConnex entered the market in 2011 as a result of this deregulation.
Since 2000 the regulator of electricity and gas utilities, Ofgem, has been focused on improving competition within the distribution side of the industry. In 2010, licence obligations were imposed on electricity and gas distribution companies to promote competition and tighten up performance standards when working with independents. Today approximately 60% of gas and approximately 30% of electricity connections in the UK are undertaken by independent connection providers and these percentages are expected to continue to grow.
The priority for the regulator for Water, Ofwat, has, until recently, been to encourage the investment in an inadequate infrastructure rather than the promotion of competition meaning that the selling, distribution and the connection of water to new developments had remained with the regional monopoly water companies. However, the concept of Self-Lay was introduced in 2013 which permitted developers to arrange for the installation of the water mains and services by an independent third party, so called Self-Lay Organisations (SLOs) such as TriConnex.
The fibre connections market is not a regulated activity and independents have always been able to provide them. Thus, there has been less opportunity for TriConnex to benefit from deregulation but in 2016, Ofcom mandated more open access to Openreach's fibre network throughout the UK and the dynamics remain similar to the electricity, gas and water connections market as the availability of high speed fibre is an increasingly important factor for home buyers, and therefore for housebuilders and developers. There has been significant government support to roll out super-fast fibre across the country, including new residential and commercial developments.
TriConnex has approximately 20% share of the independent utilities connection market in the South East of England. This has been built through having a deep understanding of its customers' needs, drawing on the Group's expertise in residential developments, being more service focused and user-friendly than competitors, as well as by providing fast and reliable delivery. The market share for the South West of England is approximately 3% but TriConnex has only been operating in the region since 2015 and has identified significant growth opportunities.
Outlook
The proportion of regulated utility connections to be made by independents is expected to continue to increase. TriConnex has already built a reputation of a high level of customer services alongside cost effective, efficient connections.
Our strategic objectives are to exploit the opportunities to increase the customer base in a sector which is predicted to grow due to undersupply. In addition, as the utilities services sector is highly fragmented, the TriConnex team will explore acquisition opportunities, with the aim of increasing geographic penetration and service offering, as well as being earnings enhancing for the Group.
Other financial information
Exceptional item
In 2017, the Group incurred a number of exceptional costs in relation to the IPO totalling GBP1.7m and comprised GBP0.6m in relation to transaction costs and GBP1.1m in relation to settling share based management incentive arrangements (non-cash) that were triggered on completion of the IPO.
Net finance costs
The net finance charge for the year totalled GBP0.2m (2016: GBP0.2m). Interest received on bank deposits totalled GBP0.1m (2016: GBP0.1m), with interest payable on bank borrowing of GBP0.26m (2016: GBP0.30m) and interest on finance lease and hire purchase facilities totalling GBP0.04m (2016: GBP0.06m).
Tax
The tax charge for the year was GBP1.6m, representing an effective tax rate of 21.0%. This is higher than the statutory rate of corporation tax due to some exceptional costs related to the IPO not being deductible for tax.
Earnings per share
Basic earnings per share were 15.4 pence, after the impact of the exceptional item (2016: 22.3 pence). The underlying basic earnings per share, which has been adjusted for the impact of the exceptional item were 19.1 pence (2016: 22.3 pence). The diluted earnings per share were 15.0 pence (2016: 22.2 pence) and the adjusted diluted earnings per share, excluding the impact of the exceptional item were 18.6 pence (2016: 22.2 pence).
Dividends
As discussed in the Chairman's Statement, the Board has recommended a final dividend of 4.2 pence per share, giving a total dividend for the year of 6.3 pence per share. This is in line with our guidance at the time of the IPO. The total cost of the dividend, including the interim dividend, will be GBP2.4m.
Statement of financial position
During the year to 30 September 2017, shareholders' funds increased by GBP3.6m to GBP17.0m (2016: GBP13.4m), the movement included the payment of a dividends totalling GBP3.5m, which was mitigated by the strong trading performance of the Group companies.
Non-current assets increased over the year by GBP3.0m to GBP10.2m (2016: GBP7.2m), with the increase including the acquisition of land in Braintree where the Group's new head office buildings will be built once the design and planning processes have completed, which is anticipated to be midway through 2018. Current assets decreased by GBP2.0m to GBP65.8m (2016: GBP67.8m) with inventories increasing by GBP0.5m, trade and other receivables increasing by GBP4.4m and cash balances decreasing by GBP6.9m to GBP27.1m.
Total liabilities decreased by GBP2.6m to GBP59.0m (2016: GBP61.6m), with borrowings decreasing by GBP2.0m with the repayment of the term loan.
Cash flow
The Group utilised GBP6.9m (2016: generated GBP6.3m) of cash in the year, resulting in a cash and cash equivalent balance at 30 September 2017 of GBP27.1m (2016: GBP34.0m).
Operating cash flows before working capital movements, generated GBP10.3m (2016: GBP11.7m). Investment in working capital totalled GBP5.0m (2016: GBP0.2m), with the main increase in debtors, resulting in cash generated from operating activities of GBP5.3m (2016: GBP11.5m). Tax and interest payments amounted to GBP2.7m (2016: GBP2.4m). Cash utilised in investing activities totalled GBP3.4m (2016: GBP0.2m), with GBP4.0m used to acquire fixed assets of which GBP3.0m was for land for the Group's new head office. Net cash out-flows from financing activities totalled GBP6.2m (2016: GBP2.5m), including GBP3.5m (2016: GBP11.0m) on dividend payments.
Treasury risk management
The Group's cash balances are centrally pooled and invested, ensuring the best available returns are achieved consistent with retaining liquidity for the Group's operations. The Group deposits funds only with financial institutions which have a minimum credit rating of A. As the Group operates wholly within the UK, there is no requirement for currency risk management
Current trading and outlook
Trading in the first few months of the new financial year has been in line with the Board's expectations. Demand from customers is robust, and the Group's order book continuing to increase with the balance as at 31 December 2017 of GBP213m, which provides the Board with confidence for the year ahead.
Mike Morris Alan Martin Chief Executive Officer Chief Financial Officer
8 January 2018
Consolidated statement of total comprehensive income
For the year ended 30 September 2017
Hot Features
Premium
Note 2017 2016
GBP'000 GBP'000
-------------------------------------- ----- ---------- ----------
Revenue 135,034 135,720
Cost of sales (107,793) (109,399)
Gross profit 27,241 26,321
---------- ----------
Administrative expenses (17,910) (15,941)
Operating profit 9,331 10,380
---------- ----------
Exceptional items 3 (1,714) -
Other income 4 - 380
Finance income 5 70 107
Finance expense 5 (304) (352)
Profit before tax 7,383 10,515
Taxation 6 (1,554) (2,104)
Profit 5,829 8,411
Other comprehensive income
Items that will or may be classified
to profit or loss:
Available for sale investments - (379)
Total comprehensive income for
the year attributable to equity
holders of the parent 5,829 8,032
Earnings per share (pence per
share)
Basic 8 15.40 22.28
Diluted 8 15.01 22.22
Consolidated statement of financial position
At 30 September 2017
2017 2016
GBP'000 GBP'000
------------------------------------------- -------- --------
Non-current assets
Property, plant and equipment 7,795 4,774
Goodwill 2,361 2,361
Other investments 55 60
-------- --------
Total non-current assets 10,211 7,195
Current assets
Inventories 924 427
Trade and other receivables 37,841 33,412
Cash and cash equivalents 27,066 33,992
-------- --------
Total current assets 65,831 67,831
-------- --------
Total assets 76,044 75,026
-------- --------
Current liabilities
Borrowings 2,000 2,000
Trade and other payables 49,909 49,908
Corporation tax 39 807
-------- --------
Total current liabilities 51,948 52,715
Non-current liabilities
Borrowings 6,400 8,400
Net obligations under finance leases/hire
purchase agreements 619 433
Deferred tax liabilities 62 102
-------- --------
Total non-current liabilities 7,081 8,935
-------- --------
Total liabilities 59,029 61,650
-------- --------
Net assets 17,013 13,376
-------- --------
Equity attributable to equity holders
of the company
Share capital 762 755
Retained earnings 16,251 12,621
Total equity 17,013 13,376
-------- --------
Consolidated statement of changes in equity
For the year ended 30 September 2017
Capital
Share redemption Retained
capital reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- ------------ ---------- ---------
Equity as at 1 October
2015 755 4,734 10,821 16,310
Transactions with owners
Dividend paid - - (11,000) (11,000)
Share-based payment
charge - - 34 34
Transfer from capital
redemption reserve to
retained earnings - (4,734) 4,734 -
--------- ------------ ---------- ---------
- (4,734) (6,232) (10,966)
Total comprehensive
income
Profit for the year - - 8,411 8,411
Other comprehensive
income - - (379) (379)
--------- ------------ ---------- ---------
- - 8,032 8,032
Equity as at 30 September
2016 755 - 12,621 13,376
--------- ------------ ---------- ---------
Transactions with owners
Dividend paid - - (3,476) (3,476)
Share-based payment
charge - - 1,277 1,277
Issue of share capital 7 - - 7
--------- ------------ ---------- ---------
7 - (2,199) (2,192)
Total comprehensive
income
Profit for the year - - 5,829 5,829
--------- ------------ ---------- ---------
- - 5,651 5,651
Equity as at 30 September
2017 762 - 16,251 17,013
--------- ------------ ---------- ---------
Consolidated statement of cash flows
For the year ended 30 September 2017
Note 2017 2016
GBP'000 GBP'000
----------------------------------------- ----- -------- ---------
Cash flow from operating activities
Profit before tax 7,383 10,515
Adjusted by:
Loss on disposal of plant and
equipment 20 3
Share-based payment charge 1,277 34
Loss/(Profit) on disposal of
investments 5 (372)
Finance expense (net) 234 245
Depreciation of property, plant
and equipment 1,400 1,261
-------- ---------
Operating profit before working
capital changes 10,319 11,686
Working capital adjustments:
(Increase)/Decrease in trade
and other receivables (4,428) (11,273)
(Increase)/Decrease in inventories (497) 312
Increase/(Decrease) in trade
and other payables (63) 10,753
-------- ---------
Cash generated from operating
activities 5,331 11,478
Interest paid (304) (355)
Taxation paid (2,363) (2,076)
Net cash flows from operating
activities 2,664 9,047
-------- ---------
Investing activities
Purchase of property, plant and
equipment (4,061) (1,050)
Sale of property and equipment 629 244
Sale of available for sale investments - 456
Interest received 70 107
-------- ---------
Net cash used in investing activities (3,362) (243)
-------- ---------
Financing activities
Dividend payment 7 (3,476) (11,000)
Draw down of term loan - 12,000)
Repayment of loans (2,000) (2,600)
Repayment of finance leases/hire
purchase agreements (759) (936)
Issue of share capital 7 -
-------- ---------
Net cash used in financing activities (6,228) (2,536)
Net change in cash and cash equivalents (6,926) 6,268
-------- ---------
Cash and cash equivalents at
the beginning of the year 33,992 27,724
Cash and cash equivalents at
the end of the year 27,066 33,992
-------- ---------
Notes to the preliminary results
For the year ended 30 September 2017
1. Accounting policies
The Group financial statements have been prepared and approved by the Directors in compliance with international financial reporting standards (IFRSs) and IFRS interpretations committee (IFRIC) as adopted by the European Union.
The financial information included within this preliminary report does not constitute the Group's statutory accounts, but is derived from those accounts on which an unqualified audit opinion has been issued. Statutory accounts for 2016 have been delivered to the Registrar of Companies, and those for 2017 will be delivered in due course.
The accounting policies adopted in preparation of these accounts are consistent with those of the previous financial year. Of the new standards and interpretations that are in issue for the financial year ended 30 September 2017, there is no financial impact on these preliminary results.
Notes to the preliminary results (continued)
For the year ended 30 September 2017
2. Segmental analysis
The Group is organised into the following two operating divisions under the control of the Executive Board, which is identified as the Chief Operating Decision Maker as defined under IFRS8 'Operating Segments':
-- Tamdown Group Limited -- TriConnex Limited
All of the Group's operations are carried out entirely within the United Kingdom.
Segment information about the Group's operations is presented below:
2017 2016
GBP'000 GBP'000
-------------------------------- -------- --------
Revenue
Tamdown Group Limited 105,565 112,390
TriConnex Limited 29,469 23,330
-------- --------
Total revenue 135,034 135,720
Gross profit
Tamdown Group Limited 17,282 18,536
TriConnex Limited 9,959 7,785
-------- --------
Total gross profit 27,241 26,321
Operating profit
Tamdown Group Limited 7,210 9,451
TriConnex Limited 3,490 2,819
Group overhead (1,369) (1,889)
-------- --------
Total operating profit 9,331 10,381
Exceptional items (1,714) -
Other income - 380
Net finance cost (234) (246)
-------- --------
Profit before tax 7,383 10,515
Taxation (1,554) (2,104)
Total comprehensive income for
the period 5,829 8,411
-------- --------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
3. Exceptional items
2017 2016
GBP'000 GBP'000
---------------------------------- -------- --------
IPO transaction costs 611 -
IFRS2 costs of shares transferred 1,103 -
on IPO
-------- --------
1,714 -
The transaction costs relate to the admission of the company to the Alternative Investment Market of the London Stock Exchange on 11 July 2017. The admission to AIM triggered the settlement of management incentive arrangements, with shares being transferred to members of management. The amount relates to the fair value of shares transferred.
4. Other income
2017 2016
GBP'000 GBP'000
---------------------------------------- --------- --------
Sale of available for sale investments - 380
--------- --------
5. Finance income and expense
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
Finance income
Interest on bank deposits 70 107
-------- --------
Finance expense
Interest on bank loan (260) (296)
Interest on hire purchase agreements (44) (56)
-------- --------
(304) (352)
Finance expense (net) (234) (245)
-------- --------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
6. Taxation
2017 2016
GBP'000 GBP'000
----------------------------------------- -------- --------
Current Tax:
UK corporation tax on profits for
the year 1,606 2,248
Adjustments in respect of prior periods - (81)
-------- --------
Total current tax 1,606 2,167
Deferred Tax:
Origination and reversal of timing
differences (52) (37)
Prior period adjustment - (1)
Effect of tax rate change on opening
balance - (25)
-------- --------
Taxation 1,554 2,104
-------- --------
The tax assessed for the year is different from the standard rate of corporation tax as applied in the UK. The differences are explained below:
Profit before tax 7,383 10,515
Profit before tax multiplied by the
respective standard rate of corporation
tax applicable in the UK (19.5%)
(2016: 20.0%) 1,421 2,027
Effects of:
Non-deductible expenses 425 176
Prior period adjustment - (81)
Deduction in respect of share options (311) -
exercised
Deferred tax 19 (18)
------ -------
Taxation 1,554 2,104
------ -------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
7. Dividends
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
Amounts recognised as distributions
to equity holders in the year:
Interim dividend for the year ended
30 September 2017 of 2.1p (2016:
GBP14.56) 799 11,000
Final dividend for the year ended 2,677 -
30 September 2016 of 3.5p per share
3,476 11,000
-------- --------
The proposed final dividend for the year ended 30 September 2017 of 4.2p per share (2016:3.5p) makes a total dividend for the year of 6.3p (2016: 18.06p). The proposed final dividend is subject to approval by shareholders at the AGM and has not been included as a liability in these financial statements. The total estimated dividend to be paid is GBP1,600,000.
8. Earnings per share
2017 2016
GBP'000 GBP'000
-------------------------------------- ----------- -----------
Profit for the year attributable
to equity shareholders 5,829 8,411
----------- -----------
Weighted average number of shares
in issue for the year 37,844,645 37,757,850
Effect of dilutive potential
ordinary shares:
Share options 985,099 1,784
Weighted average number of shares
for the purpose of diluted earnings
per share 38,829,744 37,847,067
Basic earnings (pence per share) 15.40 22.28
Diluted earnings (pence per share) 15.01 22.22
On 5 July 2017, the Group passed resolutions, conditional upon Admission and to take effect immediately prior to Admission, to restructure the company's capital to reclassify all shares as ordinary voting shares and to subdivide and redesignate the shares as ordinary shares of GBP0.02 each.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAEFPEEAPEAF
(END) Dow Jones Newswires
January 09, 2018 02:00 ET (07:00 GMT)
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