Progility PLC Final Results (4714X)

TIDMPGY

RNS Number : 4714X

Progility PLC

24 November 2017

24 November 2017

The information communicated in this announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

Progility plc

("Progility" or "the Company" or "the Group")

Final Results

Progility plc (AIM: PGY) is the holding company of a systems integration and project management services group which has been created to provide a range of project management services including innovative and market leading technology solutions.

Chairman's Statement

I am pleased to present Progility's results for the twelve months to 30 June 2017. Our focus during the year has been to seek further improvement in the efficiency and effectiveness of our operations within our three business sectors; Professional Services, (comprising our training and recruitment businesses), Healthcare (comprising Starkstrom) and Communications (comprising our technology businesses in India and Australia).

Financial Performance

Overall revenue was GBP74.7 million, an increase of 21% from continuing operations, which is broadly in line with our revenue growth in the first half. Of this increase of GBP13.1 million, GBP10.5 million arises in our Communications segment where underlying revenue growth of 17% in India and 6% in Australia translated into sterling growth of 34% and 26% respectively.

Our reported operating profit on continuing activities was GBP3.4 million. This was after crediting GBP1.0 million arising from the release of provisions in our Indian business. Our operating profit before highlighted items was GBP2.45 million as compared to a loss of GBP0.1 million in the prior year. We achieved a reported profit before tax of GBP0.1 million (2016 a loss of GBP1.4 million). Our strategic report contains more commentary on our three business areas.

Management and the Board

During the year we have changed the senior management in our Australian business and have continued to work on improving the operational management throughout the group.

I have remained both Chairman and interim Chief Executive throughout the period and I am now working with a senior experienced consultant to implement the next stage of operational effectiveness and to re-examine the potential for the group's constituent businesses and the strategic direction of the group.

During the year the Board of Directors has remained unchanged.

Prospects

Although the last year has shown substantial progress we have still not yet achieved acceptable financial performance, neither have we raised our operational efficiency and processes to an acceptable level.

The next year will be focussed on embedding greater operational controls and efficiencies and ensuring that this will be reflected in long term consistent financial performance. Progress in the current year may potentially be held back as we implement the necessary changes.

Wayne Bos

Executive Chairman

Strategic Report

Progility Plc - Overview

The Progility Group comprises three business segments: Professional Services, (comprising the training and recruitment businesses), Healthcare (comprising Starkstrom) and Communications (comprising our technology businesses in India and Australia).

The group continues to be run as a portfolio. Mergers, acquisitions and disposals are considered when the opportunity to generate above average returns arises. The current and prior period saw no transactions occur.

Principal activity

The principal activities of the Group during the period, as outlined above, are Professional Services, Healthcare and Communications.

Corporate management and segmental reporting

The Group's global headquarters remain in central London, to suit the diverse needs of the various businesses within the Group and is collocated with our professional services London based operations. Operational management is delegated to the senior management in each segment, with a very small team in corporate headquarters now maintaining oversight of business performance and control over cash management. The annual budget process has become increasingly rigorous and will continue to be improved with greater accountability and transparency being provided to the group.

Our business is managed through three business segments to maximize our ability to communicate and to deliver our full range of products and expertise to our key clients' decision makers across the diverse territories and time zones in which we operate. These three segments reflect the management responsibility and accounting arrangements used to manage and report upon the performance of the business.

Key performance indicators (KPI's) for each business are revenue, gross profit margin and operating profit.

The Group's chief operating decision maker remains the Executive Chairman who reviews and considers these reports at the formal board meetings and in regular dialogue with the senior management in each segment.

Business Review

Professional Services

 
                                As reported          As reported 
                                 Year ended           Year ended 
                              30.6.17   30.6.17    30.6.16   30.6.16 
                               GBP000    GBP000     GBP000    GBP000 
                              Revenue   Segment    Revenue   Segment 
                                         Profit               Profit 
 Professional Services 
  continuing operations        15,310     1,277     15,924     1,087 
 Professional Services 
  discontinued operations         416         1        824     (268) 
 Professional Services 
  total                        15,726     1,278     16,748       819 
 

The founding unit of the Group, the Training business, operates under the ILX brand. ILX is a leading provider of training in best practice for programme, project and IT service management, including strategic programme and project management consulting solutions. ILX also develops bespoke training courses for large-scale IT migration and transformation projects. We deliver ILX services from offices in the UK, Dubai and Australia, with partnerships extending into Europe and the US.

TFPL, Sue Hill and Progility Recruitment are our UK-based recruitment services brands. TFPL became part of the Group in July 2014 with Sue Hill joining in November 2014. Together they form a recruitment division which has access to a pool of quality assured candidates trained in, amongst other skills, project management services and digital information management. Obrar is a consulting-led project management services company, with over 30 years' experience of delivering technology and people solutions in the UK and internationally. Obrar focuses on multimedia-driven contact centres, corporate technology infrastructure and associated operational change management.

Woodspeen Training works with individuals and companies across a range of occupational areas, led by an experienced team of advisers and trainers, operating from four locations across the UK, enhancing young people's skills and helping them into work.

Overall revenue of this segment fell by 6%, while operating profits improved by 56%, a result of better margins in the ILX and Woodspeen training businesses and the elimination of losses from the southern operations of Woodspeen, treated as a discontinued activity as they are being progressively wound down.

During the year the ILX training business achieved revenue ahead of the prior year with improved operating margins. This year has seen a turnaround in the performance of the business with improvements in operational efficiency and marketing effectiveness being translated into an improved financial performance.

The recruitment business, which specialises in both temporary and permanent resources in information management, has had a challenging year with differing performance across the various industry categories of our clients. Net fee income fell across the business, largely due to difficult trading conditions within the financial services sector with uncertainty surrounding Brexit. The core markets of the recruitment business (Knowledge and Information Management) remain favourable and profitable and we are investing in new areas for the future. As part of this diversification of revenue streams, we are delighted to have been awarded a place on a key government contract which we see providing excellent growth opportunities over the next few years. The business remains focussed on building its proposition and developing new markets, especially the areas of Project Management and Data Protection/Privacy.

Woodspeen's vocational training operations have faced a tough year operating in a sector that has seen significant structural changes. This notwithstanding it has completed its restructure and grown its manufacturing business significantly, winning multi-year contracts with large automotive and aerospace manufacturing clients. The business is now profitable, contributing GBP3.3 million to sector revenue and GBP0.2 million to sector profit, a much improved performance over the prior year. The decision to cease providing training in the south of the UK, which was made in the previous financial year, has also seen the elimination of losses in that part of the business. Woodspeen is also now sized and staffed appropriately to harness the opportunities brought by the Government's newly introduced 'Apprenticeship Reforms'.

Healthcare

 
                  As reported         As reported 
                  Year ended          Year ended 
               30.6.17   30.6.17   30.6.16   30.6.16 
                GBP000    GBP000    GBP000    GBP000 
               Revenue   Segment   Revenue   Segment 
                          Profit              Profit 
 Healthcare     14,281     1,433    11,148        62 
 

Healthcare comprises the activities of the Starkstrom Group, the operating theatre and critical care equipment business, which delivers and installs advanced medical equipment and is a leading provider of fully integrated solutions, with over 40 years' experience in the UK.

The year saw a particularly strong performance by Starkstrom where the turnkey strategy gained significant momentum and helped to secure several large design and build projects in excess of GBP1m, along with a variety of state of the art hybrid operating theatres. The year also saw the addition of new product lines where large orders were secured. This was particularly satisfying as one of the new product lines gained traction in an established market with other suppliers who already have a strong reputation and large installed customer base. These sales were also secured at strategically important reference sites such as the University teaching hospitals, Addenbrookes and the John Radcliffe, which will provide a platform for continued growth.

Starkstrom achieved an operating profit of GBP1.7 million with an operating margin of 12% .The year on year improvement was significant, however in 2016 the division had to absorb approximately GBP0.7 million in respect of the closure of its activities in the middle east which needs to be taken into account when considering the underlying improvement.

Particular focus was also given to the regulatory side of the business, in consideration of transitioning quality standards and our need as a manufacturer and supplier to be aligned with these new standards, and also to be ahead of our competition. As such, and after many months work, Starkstrom secured certification against ISO9001 2015 and ISO13485, a major achievement. Investment in this area will continue.

The order book has been maintained at a high level and finished the year at GBP4.8m, leaving the business well placed to continue the strong performance into the next financial year.

Communications

 
                      As reported         As reported 
                      Year ended          Year ended 
                   30.6.17   30.6.17   30.6.16   30.6.16 
                    GBP000    GBP000    GBP000    GBP000 
                   Revenue   Segment   Revenue   Segment 
                              Profit              Profit 
 Communications     45,091       689    34,559       515 
 

Communications comprises the technology businesses in Australia and India. The Communications segment overall has shown strong revenue growth of 30% significantly impacted by the beneficial movement in exchange rates over the period. Underlying local revenue growth of 17% in India and 6% in Australia translated into sterling growth of 34% and 26% respectively. Although operating profit in this segment grew by 34% year on year this is made up of an improvement in the performance in Australia with a return to an albeit small profit but a decline in Indian profitability.

Progility Technologies in Australia operates a communication systems integration business that designs, implements, trains and maintains technology solutions for medium and large enterprises. Its focus is on the transport, utilities, retail and healthcare industries in Australasia and on the mining industry globally. The business is headquartered in Melbourne, Australia, with five regional sales offices.

The client facing brands include:

   --      Communications Australia, focused on communication systems integration; 
   --      CA Bearcom, Australia's largest distributor of two-way radio communications products; 

-- Minerals & Energy Technologies, which designs, implements and manages an array of integrated communications solutions for specific mining, energy and transport projects.

In Australia the year under review saw a continuation of the recovery started in the previous year. Revenue rose by 26% to GBP19.6 million, 6% growth in local currency, and the business returned to operating profitability. The market remains challenging, but the recovery is expected to gain momentum in the upcoming year. During the year the top management in Australia was changed which we believe will help achieve this. The costs of this change have been absorbed in the operating result.

Progility Technologies Pvt. Ltd, formerly known as Unify Enterprise Communications Pvt, provides unified communications and systems integration solutions across India and surrounding countries. The business has significant overlap of product offerings with Communications Australia, whilst adding extensive service and maintenance capabilities, providing level 1, 2 and 3 support to its clients, which include over 200 hospitals under contract in the Indian market.

Revenue contribution from our business in India grew by 34% to GBP25.5 million, 17% growth in local currency. During the year, the business has been stabilised across all our target business segments (voice, video, data, surveillance and services) and we have strengthened the Progility brand across the enterprise market

The key growth areas in India have been video conferencing and audio visual integration. The voice business has seen a steady growth mainly due to better price negotiation with the product suppliers and increased sales of Progility branded voice products to address the fast growing SME market. The services business achieved marginal growth over the prior year. There has been strong customer retention year on year and a large majority of customers entered into a comprehensive maintenance contract after warranty.

Progility Technologies Pvt. Ltd was awarded "Partner of the year Enterprise Segment" and Partner of the year Government segment" by Polycom, it's original equipment supplier. The company also received a special recognition from Polycom for the on-time execution of a single order spread over 160 locations.

Performance Management

Highlights

   --      Overall revenue grew from GBP61.6 million to GBP74.7 million an increase of 21%. 

-- GBP10.5 million of the revenue growth was attributable to our Communications segment making up almost 80% of the growth.

-- Operating profit of GBP2.45 million before highlighted items compared to a loss of GBP0.1million in 2016.

-- Operating profit performance in the Professional services and healthcare segments together contributed GBP1.8 million of the improved operating profit from GBP2.1 million of increased revenue.

Highlighted items

                                                                                                   As reported          As reported 
                                                                                                   Year ended           Year ended 
    30.6.17                  30.6.16 
                                                                                                   GBP000                       GBP000 

Highlighted items 1,000 1,412

In the period under review, the Group was able to release a further GBP1.0 million of its provision made for potential tax liabilities, when Progility Technologies Pvt Limited was acquired at the end of 2014. The provision has been reduced to nil, as there are now no remaining years outstanding for which pre-acquisition related potential tax liabilities may arise.

Central corporate costs

                                                                                                   As reported          As reported 
                                                                                                   Year ended           Year ended 
    30.6.17                  30.6.16 
                                                                                                    GBP000                       GBP000 

Central corporate costs (952) (1,770)

Central costs comprise back office operations including property, legal, finance, IT, communications, HR and board costs in London. Central costs have declined following the rationalisation exercise in the prior year, and a number of non-recurring items incurred in the prior year were not repeated. Central costs have been recharged to subsidiaries where possible and these costs cannot be further allocated to CGUs beyond the allocations already made.

Financial Review

Operating performance

The Group delivered revenues of GBP74.7 million (2016: GBP61.6 million), growth of 21.3%. Gross margins decreased slightly to 32.9% (2016: 36.7%). Operating profit before highlighted items (see note 10) rose to GBP2.4 million (2016: GBP0.1 million loss).

Highlighted items include the release of GBP1.0 million from a provision which arose from the acquisition of Progility Technologies Pvt in India. No impairment charge was made relating to goodwill in the Australian operations (2016: GBP0.6 million).

 
                                        Result                 Underlying 
                                       for the                     result 
                                        period                    for the 
                                         ended   Highlighted       period 
                                     30.6.2017         items        ended 
                                                   30.6.2017    30.6.2017 
                                       GBP'000       GBP'000      GBP'000 
 Revenue - continuing operations        74,682             -       74,682 
 Revenue - discontinued 
  operations                               416             -          416 
 Revenue - total                        75,098             -       75,098 
 
 Operating profit/(loss) 
  - continuing operations                2,446         1,000        3,446 
 Operating profit/(loss) 
  - discontinued operations                  1             -            1 
 Operating profit/(loss) 
  - total                                2,447         1,000        3,447 

                                   ===========  ============  =========== 
 

Finance costs

The Group incurred net finance costs of GBP3.3 million (2016: GBP2.7 million) during the reporting period. The year on year increase reflects the higher levels of debt in the Group, a result of the capitalisation of unpaid interest.

Taxation

The tax expense for the year was GBP0.6 million (2016: GBP1.0 million), lower than the prior year as a result of lower tax in India, Australia and New Zealand.

Profit for the period and earnings per share

The loss attributable to equity shareholders was GBP0.5 million (2016: GBP2.7 million loss) from continuing and discontinued operations. Losses per share were 0.22 pence basic and diluted (2016: 1.22 pence loss per share basic and diluted) from continuing and discontinued operations.

Hive Down

Progility Plc is the AIM listed holding company of the Progility Group. Until 30 June 2015, the United Kingdom operations of the ILX Group training division of the business traded as part of the Progility plc legal entity. A decision was made to hive down the assets, liabilities and trade of the ILX training division to a 100% owned subsidiary company, ILX Group Plc, with effect from 1 July 2015. Details of the assets and liabilities transferred to ILX Group Plc are included in the note 2 to the accounts. It should be noted that this transaction has no impact on the consolidated financial statements as it is intra-group.

Going Concern

The Group has prepared its accounts on a going concern basis based on current forecasts for the period through to December 2018. The Board believes that it can meet its day-to-day working capital requirements from operating cash flows and its existing facilities.

Cash flow, net debt and facilities

Cash flow

Cash generated from operating activities was GBP1.4 million (2016: GBP1.8 million). The Group generates operating cash flow from its product sales, maintenance contracts and from advance payments from customers.

The Group paid GBP0.4 million in income tax during the reporting period (2016: GBP0.6 million paid).

The Group continues to invest in its staff development, its product range and also incurred capital expenditure in the period relating to updates of intellectual property assets, product development and its internal systems and equipment to improve operating efficiency.

Net debt and facilities

At the balance sheet date the Group's debt comprised loans and overdrafts due within one year of GBP1.3 million (2016: GBP1.2 million) and GBP19.3 million (2016: GBP18.5 million) falling due in over one year. Of these amounts a total of GBP19.7 million represents shareholder loans made up of GBP0.4 million of convertible loan notes and GBP19.3 million of other notes.

Net debt at the year end, defined as all bank and third party debt, less cash at bank, excluding shareholder loans was an asset of GBP2.4 million (2016: asset of GBP2.8 million). This comprised: GBP3.3 million in cash balances, less GBP0.9 million in invoice discounting facilities.

Financial Statements

Consolidated Statement of Comprehensive Income for the Year ended 30 June 2017

 
                              Before   Highlighted                        Before   Highlighted 
                         Highlighted         items            Year   Highlighted         items        Year 
                               items          Note           ended         items          Note       ended 
                           30.6.2017            10       30.6.2017     30.6.2016            10   30.6.2016 
 Continuing 
 operations                  GBP'000       GBP'000         GBP'000       GBP'000       GBP'000     GBP'000 
 
 Revenue                      74,682             -          74,682        61,631             -      61,631 
 Cost of sales              (50,141)             -        (50,141)      (39,015)             -    (39,015) 
                    ----------------  ------------  --------------  ------------  ------------  ---------- 
 Gross profit                 24,541             -          24,541        22,616             -      22,616 
 
 Administrative 
  and distribution 
  expenses                  (22,095)             -        (22,095)      (22,722)         (588)    (23,310) 
 Other operating 
  income                           -         1,000           1,000             -         2,000       2,000 
                    ----------------  ------------  --------------  ------------  ------------  ---------- 
 Operating profit              2,446         1,000           3,446         (106)         1,412       1,306 
 
 Financial income                132             -             132           263             -         263 
 Financial 
  expenses                   (3,458)             -         (3,458)       (2,962)             -     (2,962) 
                    ----------------  ------------  --------------  ------------  ------------  ---------- 
 Profit/(Loss) 
  before tax                   (880)         1,000             120       (2,805)         1,412     (1,393) 
 
 Taxation                      (568)             -           (568)       (1,038)             -     (1,038) 
                    ----------------  ------------  --------------  ------------  ------------  ---------- 
 Profit/(Loss) 
  from continuing 
  operations                 (1,448)         1,000           (448)       (3,843)         1,412     (2,431) 
 
 Discontinued 
 operation 
 Profit/(loss) 
  from 
  discontinued 
  operations, net 
  of tax                           1             -               1         (268)             -       (268) 
                    ----------------  ------------  --------------  ------------  ------------  ---------- 
 
   Profit/(Loss) 
   for the year 
   attributable 
   to equity 
   shareholders              (1,447)         1,000           (447)       (4,111)         1,412     (2,699) 
                    ================  ============  ==============  ============  ============  ========== 
 
  Items that are 
  or may be 
  reclassified 
  subsequently to 
  profit or loss 
 
   Foreign 
   currency 
   translation 
   differences 
   - foreign 
   operations                                                  600                                     662 
                                                    --------------                              ---------- 
 
 Other 
  comprehensive 
  income for the 
  year, net of tax                                             600                                     662 
                                                    --------------                              ---------- 
 Total 
  comprehensive 
  Income/(loss) 
  for the year                                                 153                                 (2,037) 
                                                    ==============                              ========== 
 
 Earnings/(loss) 
 per share from 
 continuing 
 operations 
   Basic                                                   (0.22)p                                 (1.22)p 
   Diluted                                                 (0.22)p                                 (1.22)p 
 
 
 

Consolidated statement of Financial Position as at 30 June 2017

 
                                       As at        As at 
                                   30.6.2017    30.6.2016 
 Assets                              GBP'000      GBP'000 
 Non-current assets 
 Plant and equipment                     937        1,029 
 Intangible assets                    19,535       19,501 
 Deferred tax asset                      825          709 
                                 -----------  ----------- 
 Total non-current 
  assets                              21,297       21,239 
                                 -----------  ----------- 
 
 Current assets 
 Inventories                           3,927        3,260 
 Trade and other receivables          17,837       14,931 
 Other current assets                  3,088        2,827 
 Cash and cash equivalents             3,305        3,564 
                                 -----------  ----------- 
 Total current assets                 28,157       24,582 
 
 Total assets                         49,454       45,821 
                                 -----------  ----------- 
 
 Current liabilities 
 Trade and other payables           (23,797)     (20,309) 
 Deferred/contingent 
  consideration                            -        (681) 
 Provisions                          (2,144)      (2,650) 
 Tax liabilities                       (443)        (174) 
 Bank and shareholder 
  loans                              (1,261)      (1,174) 
                                 -----------  ----------- 
 Total current liabilities          (27,645)     (24,988) 
                                 -----------  ----------- 
 
 Non-current liabilities 
 Shareholder loans                  (19,302)     (18,463) 
 Deferred tax liability                (186)        (186) 
 Provisions                            (100)        (131) 
                                 -----------  ----------- 
 Total non-current 
  liabilities                       (19,588)     (18,780) 
                                 -----------  ----------- 
 
 Total liabilities                  (47,233)     (43,768) 
                                 -----------  ----------- 
 
 Net assets                            2,221        2,053 
                                 ===========  =========== 
 
 Equity 
 Issued share capital                 19,967       19,967 
 Share premium                           114          114 
 Other reserve                            75           75 
 Merger reserve                     (14,854)     (14,854) 
 Own shares in trust                     (2)          (2) 
 Share option reserve                     57           42 
 Retained earnings                   (4,067)      (3,620) 
 Foreign currency translation 
  reserve                                931          331 
 Total equity                          2,221        2,053 

                                 ===========  =========== 
 

Consolidated Cash Flow Statement for the Year ended 30 June 2017

 
                                                  Year ended   Year ended 
                                                   30.6.2017    30.6.2016 
                                                     GBP'000      GBP'000 
 Operating profit                                      3,446        1,038 
 Adjustments for: 
 Depreciation and amortisation                           743        1,135 
 Loss on fixed asset disposal                              -           96 
 Impairment of intangibles                                 -          588 
 Share option charge                                      22           31 
 (Increase)/decrease in inventories                    (499)        1,113 
 (Increase)/decrease in trade 
  and other receivables                              (2,077)        2,400 
 Increase/(decrease) trade and 
  other payables                                       (276)      (4,446) 
 Exchange difference on consolidation                     31        (170) 
                                                 -----------  ----------- 
 Cash generated from operations                        1,390        1,785 
 
 Income taxes (paid)/recovered                         (357)        (590) 
                                                 -----------  ----------- 
 Net cash generated from operating 
  activities                                           1,033        1,195 
                                                 -----------  ----------- 
 
 Investing activities 
 Interest received                                       132          263 
 Purchases of property and equipment                   (465)        (388) 
 Capitalised expenditure on product 
  development                                           (80)         (64) 
 Acquisition of subsidiaries, 
  net of cash acquired                                 (681)      (1,361) 
                                                 -----------  ----------- 
 Net cash used by investing activities               (1,094)      (1,550) 
                                                 -----------  ----------- 
 
 Financing activities 
 Proceeds from borrowings                                  -        2,775 
 Repayment of borrowings                               (347)      (2,402) 
 Interest costs paid                                    (28)         (75) 
 Net cash from financing activities                    (375)          298 
                                                 -----------  ----------- 
 
 Net change in cash and cash equivalents               (436)         (57) 
 
 Cash and cash equivalents at 
  start of year                                        3,564        3,350 
 Effect of foreign exchange rate 
  differences                                            177          271 
 Cash and cash equivalents at 
  end of year                                          3,305        3,564 
                                                 ===========  =========== 
 
 Cash and cash equivalents comprise 
 Cash in hand and at bank                              3,305        3,564 
 Bank overdraft                                            -            - 
                                                       3,305        3,564 
                                                 ===========  =========== 
 
 

Statement of Changes in Equity for the year ended 30 June 2017

 
                   Called                                      Own                 Foreign 
                       up     Share                         shares     Share      currency 
                    share   premium     Other     Merger        in    option   translation   Retained 
                  capital   account   reserve    reserve     trust   reserve       reserve   earnings     Total 
 Group            GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000       GBP'000    GBP'000   GBP'000 
 
 
 Balance 
  at 30.6.2015     19,967       114        75   (14,854)       (2)        43         (331)      (953)     4,059 
 Options 
  granted               -         -         -          -         -        31             -          -        31 
 Revaluation 
  of own 
  shares                -         -         -          -         -         -             -          -         - 
 Options 
  lapsed 
  and waived            -         -         -          -         -      (32)             -         32         - 
 Transactions 
  with owners           -         -         -          -         -       (1)             -         32        31 
                 --------  --------  --------  ---------  --------  --------  ------------  ---------  -------- 
 
 Loss for 
  the year              -         -         -          -         -         -             -    (2,699)   (2,699) 
 Other 
 comprehensive 
 income: 
 Foreign 
  currency 
  translation 
  adjustment            -         -         -          -         -         -           662          -       662 
                 --------  --------  --------  ---------  --------  -------- 
 Total 
  comprehensive 
  income 
  for the 
  year                  -         -         -          -         -         -           662    (2,699)   (2,037) 
                 --------  --------  --------  ---------  --------  --------  ------------  ---------  -------- 
 Balance 
  at 30.6.2016     19,967       114        75   (14,854)       (2)        42           331    (3,620)     2,053 
                 ========  ========  ========  =========  ========  ========  ============  =========  ======== 
 
 
 
 Balance 
  at 30.6.2016          19,967   114   75   (14,854)   (2)    42   331   (3,620)   2,053 
 Options 
  granted                    -     -    -          -     -    22     -         -      22 
 Revaluation 
  of own 
  shares                     -     -    -          -     -     -     -         -       - 
 Options 
  lapsed 
  and waived                 -     -    -          -     -   (7)     -         -     (7) 
 Transactions 
  with owners                -     -    -          -     -    15     -         -      15 
                       -------  ----  ---  ---------  ----  ----  ----  --------  ------ 
 
 Profit 
  for the 
  year                       -     -    -          -     -     -     -     (447)   (447) 
 Other comprehensive 
  income: 
 Foreign 
  currency 
  translation 
  adjustment                 -     -    -          -     -     -   600         -     600 
                       -------  ----  ---  ---------  ----  ---- 
 Total comprehensive 
  income 
  for the 
  year                       -     -    -          -     -     -   600     (447)     153 
                       -------  ----  ---  ---------  ----  ----  ----  --------  ------ 
 Balance 
  at 30.6.2017          19,967   114   75   (14,854)   (2)    57   931   (4,067)   2,221 
                       =======  ====  ===  =========  ====  ====  ====  ========  ====== 
 
 

Financial Information

The preliminary financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 but is derived from the audited accounts for the years ended 30 June 2017 and 30 June 2016.

Progility plc (the "Company") is a public limited company incorporated in England and Wales and, together with its subsidiaries, forms the Progility group (the "Group"). These financial statements are presented in pounds sterling which is the Company's functional currency. All amounts have been rounded to the nearest thousand unless otherwise indicated.

The Group financial statements were authorised for issue by the directors on 23 November 2017.

The Group financial statements consolidate those of the Company and its subsidiaries. The Company financial statements present information about the Company as a separate entity and not about its Group.

Both the Group financial statements and the Company financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU"). In publishing the Company financial statements here together with the Group financial statements, the Company has taken advantage of the exemption in Section 408 of the Companies Act 2006 not to present its individual statement of comprehensive income and related notes that form a part of these approved financial statements.

The statutory accounts for the year ended 30 June 2017 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Statutory accounts for the year ended 30 June 2016 have been filed with the Registrar of Companies. The auditor's report on those 2016 accounts was unqualified.

Basis of preparation

The preparation of the Group accounts in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements. The key accounting estimates and assumptions are set out below. Such estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances and constitute management's best judgment of conditions at the date of the financial statements.

In the future, actual experience may deviate from these estimates and assumptions, which could affect the financial statements as the original estimates and assumptions are modified, as appropriate, in the year in which the circumstances change.

The financial statements have been prepared on the historical cost basis as modified by financial assets and financial liabilities (including derivative financial instruments) at fair value.

Highlighted items

The Group incurred costs during the year which we have highlighted. These costs, set out below, were the release of the transfer price provision.

 
                                              Year ended   Year ended 
                                               30.6.2017    30.6.2016 
                                                 GBP'000      GBP'000 
 Non-recurring 
   Impairment of goodwill *                            -          588 
   Release of transfer pricing provision**       (1,000)      (2,000) 
 Total highlighted items                         (1,461)      (1,412) 
                                             ===========  =========== 
 
   *              Relates to the impairment of Goodwill in Progility Pty Ltd - see note 15. 

** Relates to the transfer pricing provision made on the acquisition of Progility India in Dec 2014.

Earnings per share from continuing operations

Earnings per share is calculated by dividing profits/(loss) from continuing operations attributable to shareholders by the weighted average number of shares in issue during the year.

Potential ordinary shares arising under potential conversion of the convertible loan and share options outstanding are considered anti-dilutive for the year ended 30 June 2017 and the period ended 30 June 2016. At 30 June 2017, the 3.95 million outstanding share options were excluded from the dilution calculation as the exercise price of 10 pence was greater than the average price for the period in issue.

 
                                                               Year 
                                           Year ended         ended 
                                            30.6.2017     30.6.2016 
                                              GBP'000       GBP'000 
 Profit/(Loss) for the year from 
  continuing operations attributable 
  to equity shareholders                        (448)       (2,431) 
                                         ============  ============ 
 
 Weighted average shares                  199,666,880   199,666,880 
 
 Weighted average shares for 
  diluted earnings per share              199,666,880   199,666,880 
                                         ============  ============ 
 
 Basic earnings/(loss) 
  per share from continuing 
  operations                                  (0.22)p       (1.22)p 
 Diluted earnings/(loss) 
  per share from continuing 
  operations                                  (0.22)p       (1.22)p 
 

Report and Accounts

The Report and Accounts and Notice of Annual General Meeting will be published and sent to shareholders in the next few days. It will also be made available on the Company's website - www.progility.com, pursuant to AIM Rule 20.

For further information, please contact:

Progility plc

   Wayne Bos, Executive Chairman                                                      020 7371 4444 

www.progility.com

SPARK Advisory Partners Limited (Nominated Adviser)

Mark Brady 020 3368 3551

W H Ireland Limited (Broker)

   Adrian Hadden/Mark Leonard                                                          020 7220 1666 

Note to Editors:

Group Description

Progility plc, the systems integrator and project management services firm has three operating divisions: Professional Services, Healthcare and Communications.

Professional Services

The Professional Services division includes ILX Training, the TFPL, Sue Hill and Progility Recruitment UK-based recruitment services brands, Obrar Consulting and Woodspeen Training.

The founding unit of the Group, ILX Training is a leading provider of training in best practice for programme, project and IT service management, including strategic programme and project management consulting solutions. ILX also develops bespoke training courses for large-scale IT migration and transformation projects. We deliver ILX services from offices in the UK and Dubai and Australia, with partnerships extending into Europe and the US.

TFPL became part of the group in July 2014 with Sue Hill joining in November 2014. Together they form a recruitment division which boasts a pool of quality assured candidates trained in project management services, including digital information management candidates. Progility Recruitment was established in January 2014 to offer specific project management recruitment services. Obrar is a consulting-led project management services company, with over 30 years' experience of delivering technology and people solutions in the UK and internationally. Woodspeen Training works with individuals and companies across a range of occupational areas, led by an experienced team of advisors and trainers, operating from four locations across the UK, enhancing young people's skills and helping them into work.

Communications

The Communications division comprises Progility Technologies in Australia and India.

Progility Technologies operates a communication systems integration business that designs, implements and maintains solutions for medium and large enterprises with a focus on the rail, port, oil and gas, power, water and healthcare industries in Australia, on the healthcare, hospitality, financial services, public sector, manufacturing, education and IT sectors in India and on the mining industry globally.

The Australian business, which merged with the Group in October 2013, is headquartered in Melbourne, Australia, and has offices in Sydney, Brisbane, Perth, Latrobe Valley and Castlemaine. The Indian business which joined the Group in December 2014, is headquartered in Mumbai and operates through a network of 21 offices throughout India.

Healthcare

Healthcare comprises the activities of the Starkstrom Group, the operating theatre and critical care business, which delivers and installs advanced medical equipment and is a leading provider of fully integrated solutions, with over 40 years' experience in the UK sector. Acquired in July 2014, Starkstrom is headquartered in north-west London and with a manufacturing and assembly facility in Leicester.

Progility Finco

Progility Finco is a wholly owned subsidiary of Progility plc which was incorporated as a special purpose vehicle in order to issue loan notes which would be admitted to the Official List of the Channel Island Securities Exchange Authority to help meet the financing requirements of the Group.

This information is provided by RNS

The company news service from the London Stock Exchange

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(END) Dow Jones Newswires

November 24, 2017 10:59 ET (15:59 GMT)