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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Utilitywise | LSE:UTW | London | Ordinary Share | GB00B6WVD707 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.903 | 1.806 | 2.00 | 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
TIDMUTW
RNS Number : 4166V
Utilitywise plc
28 October 2014
28 October 2014
Utilitywise plc
("Utilitywise" or the "Group")
Final Results
Utilitywise PLC (AIM: UTW), a leading independent utility cost management consultancy, is pleased to announce its audited full year results for the year ended 31 July 2014.
Financial Highlights:
Hot Features
Premium
2014 2013 % change
(GBP000's) (GBP000's)
Revenue 48,641 25,256 +93
Gross profit 22,056 12,137 +82
EBITDA* 14,161 7,817 +81
Profit before tax** 13,059 7,411 +76
Diluted earnings per
share(#) 13.4p 8.5p +58
Total dividend for
the year 4.0p 2.6p +54
*Excluding exceptional items relating to acquisition costs of GBP0.1m, (2013: GBP0.8m), share based payment expenses of GBP0.7m (2013: GBP0.2m), restructuring and reorganisation costs of GBP1.9m (2013: GBPnil) and exceptional credit of GBP2m (2013: GBPnil) relating to the release of contingent consideration.
** As above, but excluding amortisation relating to acquired intangibles of GBP0.9m (2013: GBP0.2m).
(#) As above, but including the tax impact of the above adjustments.
Highlights:
-- 62% increase in like for like revenue growth, largely driven by increased energy consultant headcount to 363 (2013: 281)
-- Secured revenue pipeline increased 70% on 2013 to GBP28.2 million, representing visible revenue streams secured by the Group but not yet recognised in the financial statements
-- New additions to the Partner Channel including the British Chamber of Commerce
-- Acquisition and integration of Icon Communication Centres, providing a platform into continental Europe
-- Creation of an Operational board and changes to PLC Board to provide optimum support for further growth
Geoff Thompson, Chief Executive of Utilitywise, commented: "I am very pleased to report on another year of significant growth for the Group, demonstrating the momentum we have established as a result of both organic growth and the successful integration of our recent acquisitions. Utilitywise procures, monitors, reduces and manages the three essential utilities of power, gas and water for SME's through to multi-national corporate organisations and our new divisional structure ensures the optimal support for each client. Our continued strong performance is evidence of the strength of our proposition, the hard work of our people and most importantly the value we add to our customers. We enter the new financial year with a very healthy level of contracted revenue as well as a strong pipeline and, as a result, the Board remains confident in the Group's continued success."
For further information:
Utilitywise PLC 0870 626 0559
Geoff Thompson (CEO)
Andrew Richardson (Deputy CEO)
Jon Kempster (CFO)
finnCap (NOMAD and broker) 020 7220 0500
Matt Goode / Charlotte Stranner (Corporate
Finance)
Simon Johnson (Corporate Broking)
Newgate Threadneedle 020 7653 9850
Josh Royston / John Coles / Hilary Buchanan
About Utilitywise
Utilitywise is a leading independent utility cost management consultancy based in North Tyneside. The Group has established trading relationships with a number of major UK energy suppliers and provides services to its customers designed to assist them in achieving better value out of their energy contracts, reduced energy consumption and lower carbon footprint.
Businesses large and small rely on Utilitywise for their energy management needs. Clients range in size from single site SME's to multinationals with thousands of sites and cover the whole of the UK. In total, Utilitywise has over 20,000 customers and manages an overall energy consumption of approaching 20 terra watt hours per annum.
Utilitywise is a UK company quoted on the AIM market of the London Stock Exchange. For more information, please visit www.utilitywise.com.
Strategic Report
Chairman's Statement
I am delighted to report another year of strong performance and excellent operational progress. Revenue increased by 93% in the year to GBP48.6 million, delivering EBITDA of GBP14.2 million and Adjusted Profit Before Tax of GBP13.1 million, increases of 82% and 76% respectively. As a result of the acquisitions made over the past two years and the increasing scope of the Group's business, Utilitywise has been re-organised into two divisions, Enterprise and Corporate. The former concentrates on the provision of our energy procurement services to the SME market, whilst the latter's focus is on the larger, industrial and commercial ("I&C") segment as well as the provision of utility management services. I am pleased that both have performed well throughout the year. Icon Communication Centres s.r.o was also acquired in April in order to facilitate international expansion and in particular into certain European markets.
During the year the Company welcomed both Jeremy Middleton and Jon Kempster to the Board of Directors, with Jon having now taken on an executive role following his initial appointment as a Non-Executive Director.
As a result of the new divisional structure and to provide the support necessary for further growth, the Company is taking the opportunity to restructure the PLC Board and to create an Operational Board to handle the day to day operations of the Company.
As a result of these changes Andrew Richardson has taken on an enhanced role as Deputy Chief Executive and Jon Kempster has become Chief Financial Officer, a role he previously held at Wincanton Plc. Adam Thompson and Michael Dent will both step down from the PLC Board but assume roles as Managing Director of Utilitywise Enterprise and Sales Director respectively on the newly formed Operational Board and will be joined by Claire Waterson, Group Director of People and HR; Nigel Hudson, Marketing Director and Ashley Guise, Managing Director of Utilitywise Corporate. The Operational Board will be chaired by Geoff Thompson, Chief Executive.
As well as providing the best balance for the business, these changes will ensure the Company is committed to maintaining a high standard of corporate governance, a duty the Board continues to take very seriously.
Utilitywise will shortly be moving into its new head office at Cobalt Business Park, North Tyneside, which will enable us to grow Group headcount to 1,400 in the next two years to drive further organic growth.
Given the dynamic and ever changing environment in which we operate, I believe that the increasing diversity of our offering and the strategic decisions taken to further broaden our products and services auger well for the future. We are well placed to take advantage of opportunities as well as face any challenges which may present themselves as we continue to grow.
With the continued strong performance the Board is pleased to recommend a final dividend payment of 2.7p per share, making a total of 4.0p for the year, and continues to view the future with confidence.
I would like to thank all of the staff for their continued hard work. It is as a result of their strenuous efforts that Utilitywise continues to thrive and prosper.
Richard Feigen
Our Strategy
Utilitywise was established to assist the SME market to procure their gas and electricity. It was a poorly served market with traditional consultants and brokers focusing on large customers. It became apparent that the SME market was very conducive to assistance and we have continued to expand our ability to service this market with increases in personnel and capabilities.
As we developed the business we started to build further capabilities that allowed our customers to monitor their usage and provided a reporting platform in order to aid better consumption management.
The strategy of the Group has been reinforced via acquisitions which brought in more capabilities and expertise including the procurement of utilities for I&C customers, the ability to monitor water consumption via our O box product and an audit and compliance capability. These acquisitions typically targeted the larger customer but we have used these skills to enhance our offering in to our core historic SME customer.
Our strategy is to provide a comprehensive utility solution to all sizes of customer. We can procure their energy, we can monitor and report their usage, identify efficiency savings and project manage the solutions in order to realise identified savings.
Business Model
Utilitywise continues to specialise in energy procurement and energy management services for businesses. The Company negotiates rates with energy suppliers on behalf of business customers, provides an account care service and offers a range of products and services designed to assist customers in managing their energy consumption. Customers are based throughout the UK, the Republic of Ireland and most recently certain European markets, across a variety of industry sectors and the public sector, and range in size from small single site customers to large multi-site customers.
The Company has further developed its routes to market as follows:
-- The Company continues to employ energy consultants who contact prospective customers identified by the Company's bespoke IT search system to offer a potentially reduced energy tariff and various energy management products and services designed to assist in identifying ways to reduce that customer's overall energy consumption.
-- Secondly, the Company operates a "partner channel" where organisations refer customers to Utilitywise and commissions generated from those customers are shared between Utilitywise and the referring organisation. We are pleased to have secured the British Chamber of Commerce as an important addition to this channel.
-- The company also employs 'field based' energy consultants who target organisations that cannot be effectively reached via the core telemarketing channel.
-- Additionally, the company has now grown its business development team who target larger I&C prospective customers. For these prospective customers the process is more consultative and bespoke and whilst it may lead with an energy procurement discussion, it often includes a range of the broader service elements.
The Group has continued to develop in all of these areas and has re-organised to ensure the Group's products and services are presented to target customers in the most efficient way. As a result the Group is now organised into two divisions, Enterprise and Corporate.
The Enterprise Division services SME and mid-market customers.
Following integration of all three newly acquired businesses namely Clouds Environmental Consultancy Limited, Aqua Veritas Consulting Limited and Energy Information Centre Limited (EIC), the Corporate Division has been created to service the larger I&C customers.
These structural changes reflect the Directors' comments at the end of 2013 when we stated "there will be more focus on providing both energy procurement and energy management services to the full customer portfolio in the future and the Directors expect to provide further analysis of the activities in the next reporting period as the reporting systems are updated and the Group develops."
The Directors continue to believe that the UK market fragmentation, the low penetration of third party intermediaries (TPIs) in the UK commercial market and the Company's current share of the total potential market, means that there is an opportunity to increase the Company's market share through organic growth and acquisitions.
In addition to the Company's aim to grow its market share of both SME and I&C customers, the Directors believe that there is an opportunity to capitalise on the Company's established relationships with energy suppliers who continue to show an interest in some of the Company's energy management products and services for sale into the supplier's customer base.
Consequently the Group's strategy remains focused on three key areas:
(1) Organic growth
The scaling and investment in the UK procurement and services business model will continue and the number of energy consultants is now planned to increase to over 700 by 2016.
(2) Acquisition
The Group continues to evaluate acquisitions which will add to the overall proposition, including acquisitions in the controls and demand management sectors;
(3) European expansion
Recent trials have proven successful. A clear market opportunity exists and the acquisition of Icon Communication Centres s.r.o was announced at our half year results marking the start of the Group's expansion of its model into other geographies.
Business Review
The Group has developed in all areas of its operations and delivered a 62% increase in like for like revenue growth (adjusted for acquired businesses), largely driven by increased headcount in line with our stated
strategy.
Financial Highlights
2014 2013 % change
(GBP000's) (GBP000's)
Revenue 48,641 25,256 +93
Gross profit 22,056 12,137 +82
EBITDA* 14,161 7,817 +81
Profit before tax** 13,059 7,411 +76
Diluted earnings per
share(#) 13.4p 8.5p +58
Dividend 4.0p 2.6p +54
*Excluding share based payment expenses of GBP0.7m (2013: GBP0.2m), exceptional items relating to acquisition costs of GBP0.1m, (2013: GBP0.8m), , restructuring and reorganisation costs of GBP1.9m (2013: GBPnil) and exceptional credit of GBP2m (2013: GBPnil) relating to the release of contingent consideration.
** As above, but excluding amortisation relating to acquired intangibles of GBP0.9m (2013: GBP0.2m).
(#) As above, but including the tax impact of the above adjustments.
Adjusted EBITDA is defined as profit from operations plus depreciation, amortisation, share based payment expenses and exceptional items. Exceptional items relate to costs associated with the acquisition of Icon Communication Centres s.r.o, restructure and reorganisation costs and the release of contingent consideration where the earn out criteria was not met.
Key Performance Indicators
Some of the key performance indicators used by the Directors are as follows:
KPI 2014 2013 % change
Energy consultants at
31 July 363 281 +29
Contracts secured 37,824 27,794 +36
Future secured revenue* GBP28.2 million GBP16.6 million +70
*where future secured revenue is contracts which have been won but are not currently live, and therefore have not contributed to these financial statements.
The Group has performed well against its key performance objectives with the continued investment in new energy consultants throughout this and prior periods driving a 36% increase in contracts secured for 2014 at 37,824. This increase in secured contracts in turn has driven up the secured revenue pipeline to GBP28.2 million, an increase of 70% on 2013. This is a very positive metric as it represents visible revenue streams secured by the group but not yet recognised in the financial statements.
These results demonstrate the momentum we have established, as we continue to grow headcount to support organic growth and successfully integrate our recent acquisitions, but more fundamentally continue to show the strength of our proposition, the hard work of our people and most importantly the value we add to our customers.
Revenue generated in 2014 at GBP48.6 million represents an increase of 93% on the year ended 2013 and a like for like comparison, adjusting for acquired businesses, results in an increase of 62%. The value of contracts going live in the period, a core driver of revenue, at GBP42.6 million is 65% higher than 2013. Energy consultant head count in the Enterprise Division continues to increase through the year to a total of 363 (an increase of 82 or 29%), a statistic that underpins the GBP40.1 million revenue generated by the Enterprise Division in 2014 (an increase of 68% on 2013). The Corporate Division servicing larger customers on a more consultative basis continues to perform well and represents 18% of Group revenue.
Gross margin has stabilised at 45.3% for the year against 48.1% for 2013 reflecting a first half margin of 43.1% where a majority of the energy consultancy recruitment took place and a second half margin of 47.5% reflecting the maturity of these recruits.
Customer Growth
Our core energy intermediary offering to commercial customers has continued to scale throughout this reporting period as evidenced by the volume of new customers we contracted in 2014. As at our IPO in June 2012 we had over 10,000 contracted customers and this grew to over 15,333 customers and over 44,361 meters by July 2013, incorporating EIC customers and meters. On a like for like basis this now stands at 20,826 customers and 63,451 meters as at the year end.
This has been principally driven by the increased energy consultant headcount to 363 at 31 July 2014, up from 281 at the previous year end. Given the sophistication of our leading software based analysis tools, headcount remains the greatest driver of our core offering in order to convert the vast number of opportunities identified. As such, we will continue to add further to our staffing levels over the course of the current year. The success of this approach can be further seen through the level of contracts waiting to go live, one of our key forward looking metrics, which was GBP28.2 million at 31 July 2014, compared with GBP16.6 million at the prior year end.
Proprietary Systems and Solutions
Investment has continued in the Group's IT systems and processes to support further growth and this has included the development of Quantum, our core CRM solution. In addition the Group has developed the system to support our presence in the French and German markets.
Our acquisitions have allowed us to invest further in Energy Services with improvements to our Edd:e sub-metering solution that is now fully integrated to our multi-utility reporting platform - Utility Insight.
During the year under review Utilitywise added Icon Communication Centres s.r.o to the Group which supports our stated strategy to develop our business model in certain European markets.
Acquisitions
The Directors are pleased to report that each of the previously acquired businesses is integrating well, as part of the newly formed Corporate Division, with revenues of GBP8.6m, 860 customers and 19,258 meters. The division's strength lies within the large enterprise, industrial and commercial market, complementing Utilitywise's leading position in the SME market. As a result, Utilitywise has a much broader offering and expertise in providing the right products for any company's wider energy needs, be they large or small. We have also increased our geographical reach, with locations in Portsmouth, Redditch and Bury St Edmunds as well as our Head Office in North Tyneside, enabling us to service clients in any part of the UK more easily.
The Group remains alert to further opportunities in this highly fragmented market which could bring additional products, services or expertise to our existing capability. In particular the Group continues to seek opportunities in the controls and demand management space.
The Board of Directors has a strong expertise in M&A activity and our Chairman in particular will continue to work closely with the Executive team to assess the viability of potential targets and the benefits that they could bring to the Group.
Principal risks and uncertainties
The principle risks and uncertainties faced by the group are as follows:
Exposure to energy suppliers
A significant proportion of the Group's revenues are derived from commissions paid by a small number of energy suppliers. Should these energy suppliers decide in future not to engage with the Group or with TPIs generally and, instead, engage directly with customers, the Group would suffer a loss in revenues related to the commission payable by such energy suppliers. The Group ensures that it is in constant dialogue and has trading with all of the major energy suppliers to help mitigate this risk.
Exposure to underlying customers
The Group's customers pay the energy supplier directly for the energy consumed, with the Group receiving its commissions from the energy supplier. The Group is, however, at risk should the customer cease trading or fail to pay the energy supplier. Should this occur, the Group would suffer a loss in future revenues related to the commissions associated with the future energy consumption by that customer. It should be noted, however, that the energy supplier usually undertakes credit checks on customers prior to entering into a contract to supply energy and there is limited individual customer concentration in revenue terms.
Competition
The Group has a number of competitors. These competitors may announce new services, or enhancements to existing services, that better meet the needs of customers or changing industry standards. Management continue to develop and offer a full range of energy services products to help mitigate customer risk.
Legislation
Legislation may change in a manner that may require more strict or additional standards of compliance than those currently in effect thereby creating additional costs. In addition, the Government may implement legislation requiring changes to current fee structures for TPIs. Should such legislation be passed, there may be a material adverse effect on its financial condition and operating results of the Group.
Regulatory
Currently, energy procurement is an unregulated market. Should regulation be introduced to cover the Group's activities, the increased regulatory burden could impact on the profits of the Group. However, it should be noted that the Board believe that the Group operates in line with best market practice, including the provisions of the OFGEM retail market review, and in their view any such regulation would initially impact on the smaller energy consultancy and brokering businesses.
Dividend
The Board is proposing a final dividend of 2.7p per share subject to the approval of the shareholders at the Annual General Meeting. The dividend per share will be paid on 18 December 2014 to shareholders on the register at close of business on 14 November 2014. The associated ex-dividend date is 13 November 2014.
Outlook
The new financial year has started well, in line with management expectations. The increasing diversity of our offering and commitment to further broaden our products and services auger well for the future. Our plans remain to continue to grow headcount to support organic growth; we have successfully integrated our recent acquisitions and we continue to show the strength of our proposition with the value we add to our customers.
We are well placed to take advantage of opportunities as we continue to grow.
Approved by the Board of Directors and signed on behalf of the Board on 28 October 2014.
Andrew Richardson
Company secretary
Consolidated statement of total comprehensive income
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Revenue 48,641,855 25,256,142
Cost of sales 26,585,832 13,119,386
Gross profit 22,056,023 12,136,756
Other operating income 327,647 142,739
Exceptional contingent consideration
release 2,000,000 -
-------------------- --------------------
Total operating income 2,327,647 142,739
Other administrative expenses 10,621,221 5,194,916
Exceptional administrative
expenses 2,021,790 826,935
-------------------- --------------------
Total administrative expenses 12,643,011 6,021,851
Profit from operations before
exceptional items 11,762,449 7,084,579
Exceptional items (21,790) (826,935)
------------------------------------------ -------------------- --------------------
Profit from operations 11,740,659 6,257,644
Finance income 103,697 41,296
Finance expense 476,393 83,521
Profit before tax 11,367,963 6,215,419
Tax expense 2,101,925 1,457,213
Profit for the year attributable
to equity holders of the parent
company 9,266,038 4,758,206
Other comprehensive income
/ (expense) (net of tax) (77,308) -
-------------------- --------------------
Total comprehensive income
attributable to equity holders
of the parent company 9,188,730 4,758,206
Earnings per share for profit
attributable to the owners
of the parent during the year
Basic 0.127 0.075
Diluted 0.121 0.071
Consolidated statement of financial position
As at As at
31 July 2014 31 July 2013
Restated
GBP GBP
----------------- -----------------
Non-current assets
Property, plant and
equipment 4,837,532 4,795,670
Goodwill 14,851,149 14,281,743
Intangible assets 7,075,202 6,943,854
Accrued revenue 13,068,221 7,269,680
Total non-current
assets 39,832,104 33,290,947
----------------- -----------------
Current assets
Inventories 97,983 80,825
Trade and other receivables 14,717,485 8,554,629
Cash and cash equivalents 15,823,137 9,014,680
Total current assets 30,638,605 17,650,134
----------------- -----------------
Total assets 70,470,709 50,941,081
----------------- -----------------
Current liabilities
Trade and other payables 17,564,007 12,644,484
Loans and borrowings - 1,252
Corporation tax liability 303,200 1,357,362
Current provisions 750,639 -
----------------- -----------------
Total current liabilities 18,617,846 14,003,098
----------------- -----------------
Non-current liabilities
Trade and other payables 7,918,457 4,669,308
Loans and other borrowings 6,000,000 5,000,000
Deferred tax liability 1,132,642 1,958,117
Non-current provision 443,256 -
----------------- -----------------
Total non-current
liabilities 15,494,355 11,627,425
----------------- -----------------
Total liabilities 34,112,201 25,630,523
Net assets 36,358,508 25,310,558
----------------- -----------------
Equity attributable
to equity holders
of the company
Called up share capital 74,514 71,858
Share premium 12,477,889 10,864,765
Merger reserve 5,783,427 5,684,693
Share option reserve 1,231,434 228,916
Foreign currency (77,308) -
reserve
Retained earnings 16,868,552 8,460,326
Total equity 36,358,508 25,310,558
--------------- ---------------
Consolidated statement of changes in equity
Share Foreign
Share Share option Merger Retained currency
capital premium reserve reserve earnings reserve Total
GBP GBP GBP GBP GBP GBP GBP
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
At 1 August
2012 61,426 6,187,598 20,952 - 4,814,894 - 11,084,870
Profit for
the period - - - - 4,758,206 - 4,758,206
Other
comprehensive
income - - - - - - -
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Total
comprehensive
income for
the year - - - - 4,758,206 - 4,758,206
Dividends
paid - - - - (1,112,770) - (1,112,770)
Share option
expense - - 207,964 - - - 207,964
Issue of
shares 10,432 4,995,000 - 5,684,693 - - 10,690,125
Share issue
costs - (317,833) - - - - (317,833)
Equity as
at 31 July
2013 71,858 10,864,765 228,916 5,684,693 8,460,326 - 25,310,558
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Profit for
the period - - - - 9,266,038 - 9,266,038
Other
comprehensive
income - - - - - (77,308) (77,308)
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Total
comprehensive
income for
the year - - - - 9,266,038 (77,308) 9,188,730
Dividends
paid - - - - (2,158,341) - (2,158,341)
Share option
expense - - 737,117 - - - 737,117
Deferred
tax on share
options - - 617,249 - - - 617,249
Tax on equity
items - - - - 948,681 - 948,681
Issue of
shares 2,656 1,613,124 - 98,734 - - 1,714,514
Reserve
transfer
relating
to share
based
payments - - (351,848) - 351,848 - -
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Equity as
at 31 July
2014 74,514 12,477,889 1,231,434 5,783,427 16,868,552 (77,308) 36,358,508
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Consolidated cash flow statement
12 months 12 months
ended ended
31 July 2014 31 July 2013
GBP GBP
----------------- -----------------
Operating activities
Profit before tax 11,367,963 6,215,419
Finance income (103,697) (41,296)
Finance expense 476,393 83,521
Depreciation of property, plant and
equipment 715,256 332,911
Share option expense 737,117 207,964
Grant income (36,000) (36,000)
Amortisation of intangible fixed assets 946,391 191,406
----------------- -----------------
14,103,423 6,953,925
(Increase)/Decrease in trade and other
receivables (11,961,397) (11,209,146)
(Increase)/Decrease in inventories (17,158) 17,796
Increase/(Decrease) in trade and other
payables 8,296,666 7,142,642
Increase/(Decrease) in provisions 1,193,895 -
----------------- -----------------
(2,487,994) (4,048,708)
Cash generated from operations 11,615,429 2,905,217
----------------- -----------------
Income taxes paid (1,910,373) (1,206,853)
Net cash flows from operating activities 9,705,056 1,698,364
----------------- -----------------
Investing activities
Purchase of property, plant and equipment (630,583) (467,063)
Purchase of intangibles (42,313) (57,557)
Consideration paid (192,500) -
Finance income 12,603 41,296
Acquisition of subsidiary, net of cash
acquired (599,688) (8,997,012)
----------------- -----------------
Net cash used in investing activities (1,452,481) (9,480,336)
----------------- -----------------
Financing activities
Issue of shares 200,000 5,000,000
Share issue costs - (317,833)
Loans repaid (1,252) (24)
Loans received 1,000,000 5,000,000
Finance expense (476,393) (220)
Dividends paid (2,158,341) (1,112,770)
-----------------
Net cash raised from financing activities (1,435,986) 8,569,153
----------------- -----------------
Net increase in cash and cash equivalents 6,816,589 787,181
Exchange losses on cash and cash equivalents (8,132) -
Cash and cash equivalents at beginning
of period 9,014,680 8,227,499
----------------- -----------------
Cash and cash equivalents at end of
period 15,823,137 9,014,680
----------------- -----------------
Notes to financial statements
1. The financial information set out herein does not constitute the Group's statutory accounts for the year ended 31 July 2014 or the year ended 31 July 2013 within the meaning of section 435 of the Companies Act 2006, but is derived from those accounts. The information has been derived from the audited statutory accounts for each of those years upon which an unqualified audit opinion was expressed and which did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The audited accounts will be posted to all shareholders in due course and will be available upon request by contacting the Company Secretary at the Company's registered office.
2. Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the European Union (EU).
Utilitywise Plc is incorporated and domiciled in the United Kingdom.
Prior period adjustment
During the preparation of the current year financial statements management has considered the loss of the Initial Recognition Exemption on the property acquired as part of the acquisition of Energy Information Centre Limited. This has resulted in the tax base of this property reducing to GBPnil. A deferred tax liability of GBP584,651 should have been recognised, with a corresponding increase in goodwill. Management consider it appropriate to reflect this as a prior period adjustment to the financial position and results of 2013. There is no impact on actual cash flows or net assets. Further narrative has been provided in note 14 of the financial statements.
The principal accounting policies have been applied consistently to all years and are detailed in the Group's statutory accounts.
3. 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 management team including the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. The Group reports to the Board under both UK GAAP and IFRS. Underlying accounting information is prepared under UK GAAP and the adjustments noted within this report taking results to IFRS are made for the purpose of reporting to the Board and external reporting.
During the current year the Group serviced both corporate and enterprise businesses. The Board considers that the services were offered from two distinct segments in the current year, and as such have taken the decision to report separately on these operating segments. These distinct operating segments have arisen from a restructure in the current year of previously acquired businesses. Given the reorganisation in the year the Board have undertaken to restate the corresponding items of the segment information, see note 4.
Operating segments are determined based on the internal reporting information and management structure within the Group. Information regarding the results of the reportable segments is included within this report. Performance is based on segment operating profit or loss before share-based payment charges, depreciation, amortisation and acquisition costs, as reported in the internal management reports that are reviewed by the CODM. The segment operating profit or loss is used to measure performance. Revenues represent revenues to external customers.
The Enterprise Division derives its revenues from energy procurement by negotiating rates with energy suppliers for small and medium sized business customers throughout the UK, Republic of Ireland and certain European markets. The Corporate Division derives its revenues from energy procurement of larger industrial and commercial customers, providing an account care service and offering a variety of utility management products and services designed to assist customers manage their energy consumption.
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Revenue
Enterprise (local GAAP) 40,064,832 23,902,261
Corporate (local GAAP) 9,859,510 2,783,173
Intersegment revenue (1,252,367) (1,181,096)
Accrued revenue 390,627 -
Discounting of cash flows (420,747) (248,196)
-------------------- --------------------
Total Group revenue 48,641,855 25,256,142
==================== ====================
Enterprise Corporate
GBP GBP
Segment profit 7,094,711 2,146,573
Finance income 9,738 2,865
Finance expense (476,214) (179)
Depreciation (312,740) (402,516)
Amortisation (8,876) (6,300)
Profit before tax (local GAAP) 6,306,619 1,740,443
==================== ====================
12 months ended 12 months ended
31 July 2014 31 July 2013
Profit before tax GBP GBP
Enterprise (local GAAP) 6,306,619 5,784,521
Corporate (local GAAP) 1,740,443 1,503,431
Accrued revenue 390,627 -
Grant release 36,000 36,000
Discounting of cash flows net of
unwinding (69,117) (749,573)
Amortisation 999,891 160,538
Investment costs (36,500) (519,498)
Exceptional release of contingent 2,000,000 -
consideration
-------------------- --------------------
Total Group profit before tax 11,367,963 6,215,419
==================== ====================
12 months ended 12 months ended
31 July 2014 31 July 2013
Net assets GBP GBP
Enterprise (UK GAAP) 29,808,399 24,393,737
Corporate (UK GAAP) 2,469,364 1,164,500
Accrued revenue and tax impact 312,502 -
Grant release and tax impact (24,638) (66,790)
Discounting of cash flows and tax
impact (394,342) (339,053)
Share options 617,249 -
Amortisation 2,113,728 677,662
Investment costs (555,998) (519,498)
Exceptional release of contingent 2,000,000 -
consideration
Business combinations 12,244 -
-------------------- --------------------
Group net assets 36,358,508 25,310,558
==================== ====================
4. Exceptional Items
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Exceptional release
-------------------- ----------------------
Contingent consideration 2,000,000 -
-------------------- ----------------------
Exceptional costs
Restructuring and reorganisation 782,795 -
Provisions 1,193,895 -
Acquisition costs and aborted
acquisition costs 45,100 826,935
2,021,790 826,935
-------------------- ----------------------
21,790 826,935
==================== ======================
Exceptional items in the year ended 31 July 2014 relate to the costs incurred in the acquisition of Icon Communication Centres s.r.o and other aborted acquisition costs. Also included are restructuring and reorganisation costs such as settlement payments of GBP456k, costs of GBP167k incurred in the set up of a new Head Office which will be occupied in the next financial year, as well as a dilapidations provision and an onerous lease provision for the current premises of GBP422k and GBP772k respectively.
There is also a credit of GBP2m offsetting these costs which has arisen from the release of deferred consideration where earn out criteria were not met. Exceptional items are included in administrative expenses and other operating income in the income statement.
Exceptional items in the year ended 31 July 2013 related to the costs incurred in the acquisitions of Clouds Environmental Consultancy Limited, Aqua Veritas Consulting Limited and Energy Information Centre Limited and other aborted acquisitions. Costs associated with share issues were taken to the share premium account. Please see the Consolidated Statement of Changes in Equity.
5. Tax expense
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Current tax expense
Current tax on profits
for the period 2,569,906 1,617,704
Adjustments in respect
of previous periods (67,920) -
------------------------------- --------------------
2,501,986 1,617,704
=============================== ====================
Deferred tax expense
Origination and reversal
of temporary differences (349,793) (61,274)
Adjustment in respect of
previous periods (50,268) (108,905)
Effects of change on tax
rates - 9,688
------------------------------- --------------------
(400,061) (160,491)
=============================== ====================
Total tax expense 2,101,925 1,457,213
=============================== ====================
Equity items
Origination and reversal
of temporary differences (948,677) (160,491)
Adjustment in respect of
previous periods (617,249) -
------------------------- --------------
(1,565,926) (160,491)
========================= ==============
5. Tax expense (continued)
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profit for the year as follows:
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Profit for the period 11,367,963 6,215,419
Expected tax charge based
on corporation tax rate
of 22.33% in 2014 (23.67%
in 2013) 2,538,638 1,471,190
Expenses not deductible
for tax purposes 82,073 75,306
Income not taxable for (446,630) -
tax purposes
Current tax rate difference (534) (414)
Impact of change in tax
rate in period 40,429 9,688
Adjustment to tax charge (67,920) -
in respect of previous
periods - current tax
Adjustment to tax charge
in respect of previous
periods - deferred tax (50,268) (108,905)
Deferred tax not recognized 6,137 10,348
-------------------- --------------------
Total tax expense 2,101,925 1,457,213
==================== ====================
6. Earnings per Share
Basic profit per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.
Diluted profit per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume the conversion of all potentially dilutive ordinary shares.
12 months 12 months
ended ended
31 July 2014 31 July 2013
GBP GBP
Profit
Profit used in calculating
basic and diluted profit 9,188,730 4,758,206
Number of shares
Weighted average number of
shares for the purpose of
basic earnings per share 72,464,331 63,220,550
Effects of:
Employee share options and
warrants 2,593,870 3,109,573
Contingent shares to be issued 1,096,414 315,315
Weighted average number of
shares for the purpose of
diluted earnings per share 76,154,615 66,645,438
7. Acquisition
Utilitywise Plc acquired the entire share capital of Icon Communication Centres s.r.o on 28 April 2014 for GBP1,981,294 in order to enhance the service offering provided by the Group.
Consideration consisted of both cash payments and the issue of shares, an element of which is contingent on the performance of Icon Communication Centres s.r.o to 31 December 2014. Contingent consideration has been included as a best estimate of amounts payable.
Goodwill on consolidation has been calculated as follows:
GBP
Amount of consideration 1,981,294
Fair value of net assets acquired:
Property, plant
and equipment 23,348
Customer related
intangible assets 1,161,000
Other intangibles 5,381
Receivables 517,905
Cash 297,457
Payables (372,613)
Deferred tax liability (220,590)
---------------
Net assets 1,411,888
---------------
Goodwill (note
14) 569,406
---------------
Consideration:
Cash paid 897,145
Shares issued 98,765
Contingent consideration 985,384
Total consideration 1,981,294
--------------
The goodwill reflects expected synergies from combining the two businesses and is not tax deductible.
The total value of the contingent consideration is based on a multiple of expected EBITDA capped at GBP985,384. This is split between cash and shares. All of the contingent consideration is included in trade and other payables as it meets the definition of a financial liability. The share consideration is deemed a financial liability as it represents the settlement of a specific cash amount rather than a specific number of shares.
Since the date of acquisition Icon Communication Centres s.r.o has generated revenue of GBP866,825 and a loss before tax of GBP65,140 which is included in the consolidated statement of comprehensive income.
Assuming Icon Communication Centres s.r.o was acquired at the beginning of the annual reporting period, group revenue would be GBP52,200,249 and profit before tax GBP10,885,967.
Included within receivables above are gross contractual amounts receivable of GBP436,589. These are expected to be collected in full.
8. Share Capital
2014 2013
Share capital issued and
fully paid No. GBP No. GBP
Ordinary shares of GBP0.001
each
At 1 August 71,858,078 71,858 61,425,842 61,426
Warrants exercised 333,332 333 - -
Deferred consideration 253,290 253 - -
Consideration 30,701 31 5,432,236 5,432
Shares issued for cash - - 5,000,000 5,000
LTIPS exercised 2,038,750 2,039 - -
--------------- ----------- --------------- -----------
At 31 July 74,514,151 74,514 71,858,078 71,858
=============== =========== =============== ===========
Ordinary shares carry the right to one vote per share at general meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up.
On 15 August 2013 a further 166,666 shares were issued pursuant to the exercise of warrants over such shares, leading to additions of GBP167 to share capital and GBP99,833 to share premium.
On 15 November 2013 a further 253,290 shares were issued in part settlement of deferred consideration due on the acquisition of Clouds Environmental Consultancy Limited, as announced on 1 October 2013, leading to additions to share capital of GBP253 and additions to share premium of GBP192,247.
On 26 November 2013 a further 166,666 shares were issued pursuant to the exercise of warrants over such shares, leading to additions of GBP167 to share capital and GBP99,833 to share premium.
On 28 April 2014 a further 30,701 shares were issued at 321.7p per share for consideration in the investment in Icon Communication Centres s.r.o. The investment has been recognized at fair value in the consolidated financial statements which resulted in additions to merger reserve of GBP98,734 and additions to share capital of GBP31.
On 20 June 2014 a further 2,038,750 shares were issued pursuant to the exercise of options over such shares, leading to additions to share capital of GBP2,039 and additions to share premium of GBP1,221,211.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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