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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Van Elle Holdings Plc | LSE:VANL | London | Ordinary Share | GB00BYX4TP46 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 34.60 | 32.00 | 34.00 | 33.00 | 33.00 | 33.00 | 30,787 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Engineering Services | 148.73M | 4.68M | 0.0438 | 7.53 | 35.22M |
TIDMVANL
RNS Number : 8578C
Van Elle Holdings PLC
25 January 2018
Van Elle Holdings plc
For Immediate Release 25 January 2018
Interim Results for the six months ended 31 October 2017
Van Elle Holdings plc ("Van Elle", the "Company" or the "Group"), the AIM quoted geotechnical engineering contractor offering a wide range of ground engineering techniques and services to customers in a variety of UK construction end markets, announces its interim results for the six months ended 31 October 2017.
Highlights
Hot Features
Premium
6 months ended 6 months Growth
31 Oct 2017 ended 31 %
Oct 2016
--------------------------- --------------- ---------- -------
Revenue (GBPm) 52.6 43.1 22.1
Underlying* EBITDA
(GBPm) 8.4 7.1 18.7
Reported EBITDA (GBPm) 8.3 5.6 47.8
Underlying* operating
profit (GBPm) 5.7 4.9 15.6
Reported operating
profit (GBPm) 5.6 3.4 62.0
Underlying* profit
before taxation (GBPm) 5.4 4.7 15.4
Reported profit before
taxation (GBPm) 5.3 3.2 64.8
Underlying* earnings
per share (p) 5.4 5.2 3.8
Reported earnings
per share (p) 5.3 3.2 65.6
Dividend per share
(p) 1.4 0.85
Operating cash conversion
(%) 86.9% 46.9%
Return on capital
employed (%) 25.8% 27.2%
--------------------------- --------------- ---------- -------
* before share-based payments and exceptional costs
Summary highlights
-- Trading in the first half of the year has been positive reflecting the increased service offering with new techniques, rigs and geographical presence.
-- Group revenue increased by 22.1% to GBP52.6m (H1 2016: GBP43.1m), with revenue growth in all four Divisions.
-- Underlying EBITDA increased by 18.7% to GBP8.4m (H1 2016: GBP7.1m) and underlying operating profit increased by 15.6% to GBP5.7m (H1 2016: GBP4.9m).
-- Gross margin of 31.7% (H1 2016: 36.2%) reflecting specific contract issues, now resolved.
-- Further investment of GBP8.0m in new rigs to continue the growth strategy (H1 2016: GBP2.1m).
-- Strong balance sheet with net debt at 31 October 2017 of GBP4.6m (H1 2016: GBP4.1m).
-- Interim dividend of 1.4 pence per share, reflecting the Board's confidence in the Group's prospects.
Jon Fenton, Chief Executive, commented:
"This good performance is a direct consequence of our growth strategy.
"As anticipated, we entered the second half in a strong position with activity levels remaining high and trading during November, December and the start of January satisfactory across the Group as a whole.
"Unfortunately, the recent collapse of Carillion will have an impact on the business. Van Elle carried out regular work for Carillion as a specialist lead sub-contractor, principally in respect of rail improvement and maintenance work and, as previously confirmed, our outstanding debt and work-in-progress exposure with Carillion is approximately GBP1.6m. We also identified approximately GBP2.5m of anticipated revenue for the second half of the current year which related to work with Carillion.
"Whilst the Group is continuing to engage with the Official Receiver in respect of this outstanding balance, it is now expected that we may recognise an exceptional bad debt charge of approximately GBP1.6m in its full year results. All of this debt arose after 31 October 2017. We have also had constructive dialogue with both the Official Receiver and Network Rail in respect of the GBP2.5m of anticipated revenue and whilst it is possible that some of the anticipated contracts may be delivered in the current year, the status and timing of specific programmes remains uncertain. Van Elle would typically expect to achieve good margins on rail-related work and therefore these anticipated contracts are material in the context of the Group's financial results. The Board believes it is prudent at this stage to recognise that the disruption to the expected order book due to the situation at Carillion will impact the Group's ability to achieve its previous expectations for the year as a whole.
"Meanwhile, enquiry levels across the Group in general remain encouraging and beyond the specific risks associated with the Carillion situation, the current order book as at January 2018 remains substantial. However, the Group's second half expectation included a small number of important contracts which we had originally expected to commence in the fourth quarter but now believe will slip into the first quarter of next financial year.
"Van Elle continues to deliver strategic progress and, with the support of a strong balance sheet, the long term opportunities for further profitable growth for the Group are significant. Taking all these factors into account, the Board remains confident about the Group's prospects and, reflecting this confidence, has declared an interim dividend of 1.4p per share."
For further information please contact:
Instinctif Partners (Financial Tel: 020 7457 2020 Public Relations) Mark Garraway James Gray Rosie Driscoll Peel Hunt LLP (Nominated Tel: 020 7418 8900 Adviser and corporate broker) Charles Batten Mike Bell Justin Jones
Van Elle Holdings plc - Interim Report to 31 October 2017
Strategic overview
Since being admitted to trading on AIM on 26 October 2016, Van Elle has actively pursued its growth strategy and the Board is pleased to report further positive results in the first half of this financial year. For the six months ended 31 October 2017, revenues increased by 22.1% over the comparative period to GBP52.6m (H1 2017: GBP43.1m), underlying EBITDA increased by 18.7% to GBP8.4m (H1 2017: GBP7.1m) and underlying operating profit increased by 15.6% to GBP5.7m (H1 2017: GBP4.9m). Underlying profit before tax was GBP5.4m, an increase of 15.4% on the same period last year (H1 2017: GBP4.7m).
Our strategy continues to focus on growing the business by broadening our range of products, techniques and services and extending our geographical footprint into high growth markets across the UK. This will be achieved both organically and also selectively through bolt-on acquisitions.
Capital investment continues to be a key driver of growth with a further GBP8.0m spent in the first half of the year (H1 2017: GBP2.1m), bringing the total investment over the last three and a half years to over GBP40.0m. Nine rigs were purchased in the period and our fleet now stands at 118 rigs and we continue to believe that Van Elle has the broadest and most modern range of specialist piling rigs in the UK market.
Our new state-of-the-art, purpose-built training facility was opened in November and has undertaken several training programmes both internally for staff and externally for clients. We believe that this facility allows us to deliver an unequalled standard of training to all industry professionals and companies, and is a key driver to staff retention and succession planning.
Investment in our operational facility in Scotland, to serve the local market, has delivered significant growth in the period. This has established Van Elle as the dominant ground engineering company in the central belt of Scotland and demonstrates our ability to penetrate new markets with our leading service offering.
In the new year we opened an office in London as a base for a newly appointed business development manager to cover London and the South of England.
We continue to pursue acquisition opportunities and discussions have been held with several interested parties. We have discounted certain targets due to unrealistic price expectations and lack of strategic fit, however, there remains a pipeline of good opportunities. Our strong financial position will enable us to act swiftly where we feel an opportunity will bring value to the Group.
Cash performance in the half has been good, with strong operating cash flows of GBP7.1m (H1 2017: GBP2.6m) representing an operating cash conversion* of 86.9% (H1 2017: 46.9%). The Group has continued to invest, acquiring nine new rigs which will enhance its service offering. As a result of the strong cash performance and the Group's strategic investment programme, net assets have increased by 22.8% to GBP39.2m (31 October 2016: GBP31.9m).
* defined as cash generated from operations divided by EBITDA less profit on sale of fixed assets
Trading review
I am pleased to report that the Company grew revenues by 22.1% in the first half of the year to GBP52.6m (H1 2017: GBP43.1m) at a time when UK construction output grew by 7.3% for the same period, continuing our track record of outperforming the market and growing our market share.
In terms of our performance in our end markets, sales to the Housebuilding sector were up 22.7% to GBP26.3m (H1 2017: GBP21.4m), Infrastructure sector sales were up 37.3% to GBP15.8m (H1 2017: GBP11.5m) and sales to the Commercial & Industrial sector were flat at GBP8.2m (H1 2017: GBP8.2m). The ability to redirect resources to reflect short-term trends in our markets remains a key strength of the business, mitigating the impact of a slowdown in any one sector.
A key driver of our revenue growth has been our recent investments in larger and more specialist rigs with significant sales increases in our core techniques: CFA piling (+GBP1.2m); rotary bored piling (+GBP3.4m); rotary drilling (+GBP1.4m); and on-track rail piling (+GBP3.1m). In addition, our modular beam foundation system, Smartfoot(R), continues to gain traction with housebuilders across the UK with sales up over 20% in the first half.
Our sales growth was achieved, most notably, on larger contracts (defined as over GBP500k), which collectively made up c.29% of total sales by value in the period (H1 2017:15% by value), increasing the average contract value to GBP112k (H1 2017: GBP92k).
Gross margin has reduced to 31.7% in the period (H1 2017:36.2%) reflecting, as previously announced, the changed commercial parameters on two specific rail tenders and the impact of remedial works carried out on a contract in the Ground Stabilisation operating unit. These contract issues were identified and resolved in the period and the gross margin is forecast to return to [improve] in the second half. Excluding the three specific contracts, the gross margin in the first half would have been approximately 33.5%. Notwithstanding these isolated contract issues impacting on gross margin in the period, we have continued to benefit from operational gearing, which has allowed us to maintain underlying EBITDA margins at 16.0% which, is close to the corresponding period last year (H1 2017: 16.4%).
In light of the Carillion announcement the Group made on 16(th) January 2018, it should be noted that all work in progress and debt due from Carillion at the end of the interim period had been paid.
Operating performance
General Piling
The General Piling segment has performed strongly in the period with revenues up 7.8% to GBP22.9m (H1 2017: GBP21.2m), with growth primarily from the infrastructure (roads) sector. The segment continues to benefit from our large range of rigs and techniques and operating margins have increased to 15.3% (H1 2017:12.5%), as a result of higher utilisation through production efficiencies from delivering higher valued contracts.
Specialist Piling
Revenue growth was once again strong in Specialist Piling, up 23.5% to GBP14.1m (H1 2017: GBP11.5m) with all growth generated from infrastructure work, enabled by our strategic investment in specialist rigs and equipment in previous periods to service this sector. Restricted Access revenues grew 4.2% with the operating unit marginally improving both gross and operating margins. Operating conditions in the Group's rail business continue to be challenging, as previously reported. Whilst rail revenue growth has been pleasing, the commercial parameters in two specific electrification contracts resulted in a dilution to gross margin in the first quarter. As a result, overall divisional operating margins reduced to 7.7% in the period (H1 2017:12.5%). However, performance in the second quarter was much better, with margins on an improving trend as the Group exited the first half. It has been expected that the divisional operating margin would recover to c.13% in the second half although the results for the remainder of the year will reflect the impact of the collapse of Carillion which has yet to be fully determined.
Ground Engineering Services
Ground Engineering Services has significantly increased revenue, up 79.7% to GBP8.7m (H1 2017: GBP4.9m). This has been driven by strong growth from the burgeoning Scottish operation, which has enabled the Group to increase its activity in this region significantly. Operating margins are, however, below the prior year at 4.5% (H1 2017:6.8%) reflecting an isolated contract issue in our Ground Stabilisation operating unit which has now been resolved. Adjusting for this contract, the margin would have been approximately 8%. Since the period end, the severe weather during December and January has resulted in some contract delays in the Scottish business, which the Group will work to try and deliver as ground conditions improve.
Ground Engineering Products
Revenue growth was also healthy in Ground Engineering Products, up 22.9% to GBP6.9m (H1 2017: GBP5.6m). The Group's proprietary Smartfoot(R) foundation system continues to gain share in the market and the operating performance reflects the benefits of the expanded manufacturing capacity. Operating margins increased to 9.8% in the period (H1 2017: 8.8%) reflecting the benefits of operational gearing and volume driven production efficiencies.
Board news
On 1 November 2017 David Stuart Hurcomb was appointed as an Independent Non-Executive Director to the Board.
Also, as announced on 22 November 2017, Jon Fenton, Chief Executive Officer, will be stepping down, once a suitable replacement is identified. The Board is conducting a comprehensive and objective search process for Jon's replacement to identify a new CEO that will bring the relevant commercial, operational and strategic experience to the Group. A selection process commenced in December 2017 and a high quality initial shortlist of candidates has been identified. The Board will look to progress the process as quickly as possible and looks forward to updating the market with news of Jon's successor in due course.
In December 2017, Van Elle's shareholders comprehensively rejected resolutions to change the Board proposed by the former Chairman, Michael Ellis. The Board believed firmly that contesting these proposals vigorously was in the best interests of all stakeholders and would allow the Group to focus on running the business and delivering our long-term strategy. As a result of contesting the resolutions the Group will recognise an exceptional charge in the second half of approximately GBP150,000 arising from costs directly associated with the general meeting.
Dividend
In line with its progressive dividend policy and reflecting the good first half performance, as well as its confidence in the long-term prospects of the Group, the Board is declaring an interim dividend of 1.4 pence per share. The interim dividend will be paid on 7 March 2018 to shareholders on the register on 9 February 2018. The shares will trade ex-dividend on 8 February 2018.
Current trading and outlook
As anticipated, Van Elle entered the second half in a strong position with activity levels remaining high and trading during November, December and the start of January satisfactory across the Group as a whole.
The recent collapse of Carillion and the impact on the UK construction sector that this may have has been hugely disappointing. As set out in the announcement of 16 January 2018, Van Elle carries out regular work for Carillion as a specialist lead sub-contractor, principally in respect of rail improvement and maintenance work, and our outstanding debt and work-in-progress exposure with Carillion was approximately GBP1.6m. Whilst the Group is continuing to engage with the Official Receiver in respect of this outstanding balance, it is now expected that Van Elle may recognise an exceptional bad debt charge of approximately GBP1.6m in its full year results.
In the announcement of 16 January 2018, Van Elle also identified approximately GBP2.5m of anticipated revenue for the second half of the current year which related to work with Carillion. Management have had constructive dialogue with both the Official Receiver and Network Rail and whilst it is possible that some of the anticipated contracts may be delivered in the current year, the status and timing of specific programmes remains uncertain. Van Elle would typically expect to achieve good margins on rail-related work and therefore these anticipated contracts are material in the context of the Group's financial results.
Enquiry levels across the Group in general remain encouraging and beyond the specific risks associated with the Carillion situation, the current order book as at January 2018 remains substantial. However, the Group's second half expectation included a small number of important contracts which the Board had originally expected to commence in the fourth quarter but now believe will slip into the first quarter of next financial year.
Van Elle continues to deliver strategic progress and, with the support of a strong balance sheet, the long term opportunities for further profitable growth for the Group are significant. In respect of the current year, the Board continues to monitor market conditions closely, particularly with regard to evolving situation in respect of Carillion. In doing so, it should be recognised that the disruption to the expected order book due to the situation at Carillion will impact the Group's ability to achieve its previous expectations for the year as a whole.
Consolidated statement of comprehensive income
For the 6 months ended 31 October 2017
Note 6 months 6 months 12 months
to 31 Oct to 31 to 30
2017 (unaudited) Oct 2016 Apr 2017
(unaudited)
(audited)
GBP'000 GBP'000 GBP'000
---------------------------- ----- ------------------ ------------- -----------
Revenue 2 52,642 43,126 94,093
Cost of sales (35,965) (27,512) (60,712)
---------------------------- ----- ------------------ ------------- -----------
Gross profit 16,677 15,614 33,381
Administrative expenses (11,013) (10,917) (22,018)
Other operating income - 200 200
---------------------------- ----- ------------------ ------------- -----------
Operating profit before
exceptional costs and
share-based payment
expense 5,664 4,897 11,563 Share-based payment expense (80) - (77) Exceptional costs 3 - (1,452) (1,781) ---------------------------- ----- ------------------ ------------- ----------- Operating profit 5,584 3,445 9,705 Finance expense (268) (219) (436) Finance income 9 5 14 ---------------------------- ----- ------------------ ------------- ----------- Profit before tax 5,325 3,231 9,283 Income tax expense (1,081) (995) (1,930) ---------------------------- ----- ------------------ ------------- ----------- Total comprehensive income for the year 4,244 2,236 7,353 Earnings per share (pence) Basic 4 5.3 3.2 9.8 Diluted 4 5.3 3.2 9.8 Underlying earnings per share (pence) Basic 4 5.4 5.2 12.1 Diluted 4 5.4 5.2 12.1 ---------------------------- ----- ------------------ ------------- -----------
All amounts relate to continuing operations. There was no other comprehensive income in either the current or preceding period.
Consolidated statement of financial position
As at 31 October 2017
31 Oct 31 Oct 30 Apr
2017 (unaudited) 2016 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
----------------------------- ------------------ ------------------ ----------------
Non-current assets
Property, plant and
equipment 37,369 28,830 32,110
Intangible assets 2,318 2,291 2,330
------------------------------ ------------------ ------------------ ----------------
39,687 31,121 34,440
----------------------------- ------------------ ------------------ ----------------
Current assets
Inventories 2,450 1,704 2,423
Trade and other receivables 21,049 20,353 18,796
Cash and cash equivalents 12,042 8,806 12,858
------------------------------ ------------------ ------------------ ----------------
35,541 30,863 34,077
----------------------------- ------------------ ------------------ ----------------
Total assets 75,228 61,984 68,517
------------------------------ ------------------ ------------------ ----------------
Current liabilities
Trade and other payables 17,248 15,084 15,882
Loans and borrowings 5,422 3,621 4,461
Corporation tax payable 1,067 1,111 878
------------------------------ ------------------ ------------------ ----------------
23,737 19,816 21,221
----------------------------- ------------------ ------------------ ----------------
Non-current liabilities
Loans and borrowings 11,206 9,245 9,855
Provisions 342 327 342
Deferred tax 778 712 778
------------------------------ ------------------ ------------------ ----------------
12,326 10,284 10,975
----------------------------- ------------------ ------------------ ----------------
Total liabilities 36,063 30,100 32,196
------------------------------ ------------------ ------------------ ----------------
Net assets 39,165 31,884 36,321
------------------------------ ------------------ ------------------ ----------------
Equity
Share capital 1,600 1,600 1,600
Share premium 8,633 8,633 8,633
Retained earnings 28,914 21,633 26,070
Non-controlling interest 18 18 18
------------------------------ ------------------ ------------------ ----------------
Total equity 39,165 31,884 36,321
------------------------------ ------------------ ------------------ ----------------
Consolidated statement of cash flows
For the 6 months ended 31 October 2017
Note 6 months 6 months 12 months
to 31 to 31 to 30
Oct 2017 Oct 2016 Apr 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ----- ------------- ------------- -----------
Cash flows from operating
activities
Cash generated from
operations 5 7,111 2,621 13,129
Interest received 9 5 14
Interest paid (268) (219) (436)
Income tax paid (892) (1,108) (2,281)
------------------------------- ----- ------------- ------------- -----------
Net cash generated from
operating activities 5,960 1,299 10,426
------------------------------- ----- ------------- ------------- -----------
Cash flows from investing
activities
Purchases of property,
plant and equipment (2,967) (3,349) (5,562)
Disposal of property,
plant and equipment 230 - 138
Purchases of intangibles - - (71)
------------------------------- ----- ------------- ------------- -----------
Net cash absorbed in
investing activities (2,737) (3,349) (5,495)
------------------------------- ----- ------------- ------------- -----------
Cash flows from financing
activities
Repayment of bank borrowings (75) (75) (150)
Proceeds from Invest
to Grow loan - 260 260
Repayments of Invest
to Grow loan (48) (8) (55)
Issue of shares (net
of issue costs) - 8,833 8,833
Payments to finance
lease creditors (2,516) (1,755) (3,882)
Dividends paid (1,400) - (680)
------------------------------- ----- ------------- ------------- -----------
Net cash (absorbed)/generated
in financing activities (4,039) 7,255 4,326
------------------------------- ----- ------------- ------------- -----------
Net increase in cash
and cash equivalents (816) 5,205 9,257
Cash and cash equivalents
at beginning of period 12,858 3,601 3,601
------------------------------- ----- ------------- ------------- -----------
Cash and cash equivalents
at end of period 6 12,042 8,806 12,858
------------------------------- ----- ------------- ------------- -----------
Consolidated statement of changes in equity
For the 6 months ended 31 October 2017
Non-controlling
Share Share interest Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------- ---------------- ----------- ---------
Balance at 1 May 2016 1,006 - 18 19,728 20,752
-------------------------- ---------- ---------- ---------------- ----------- ---------
Total comprehensive
income - - - 2,236 2,236
Share re-designation 63 - - - 63
Issue of bonus shares 331 - - (331) -
Issue of ordinary shares
on IPO 200 9,800 - - 10,000
Share issue costs - (1,167) - - (1,167)
594 8,633 - 1,905 11,132
-------------------------- ---------- ---------- ---------------- ----------- ---------
Balance at 31 October
2016 1,600 8,633 18 21,633 31,884
-------------------------- ---------- ---------- ---------------- ----------- ---------
Total comprehensive
income - - - 5,117 5,117
Dividend payment - - - (680) (680)
-------------------------- ---------- ---------- ---------------- ----------- ---------
- - - 4,437 4,437
-------------------------- ---------- ---------- ---------------- ----------- ---------
Balance at 30 April
2017 1,600 8,633 18 26,070 36,321
-------------------------- ---------- ---------- ---------------- ----------- ---------
Total comprehensive
income - - - 4,244 4,244
Dividend payment - - - (1,400) (1,400)
-------------------------- ---------- ---------- ---------------- ----------- ---------
- - - 2,844 2,844
-------------------------- ---------- ---------- ---------------- ----------- ---------
Balance at 31 October
2017 1,600 8,633 18 28,914 39,165
-------------------------- ---------- ---------- ---------------- ----------- ---------
Notes to the interim results
For the 6 months ended 31 October 2017
1. Basis of preparation
The unaudited interim consolidated statement of Van Elle Holdings plc is for the six months ended 31 October 2017 and do not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006. These consolidated financial statements have been prepared in compliance with the recognition and measurement requirement of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) as adopted by the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the group's annual report. These consolidated financial statements have been prepared in accordance with the accounting policies that are expected to be applied in the report and accounts for the year ending 30 April 2018.
IFRS 15, 'Revenue from contracts with customers' has been adopted by the EU with an effective date of 1 January 2018. The Group is continuing to assess the impact of the standard but based on the progress to date, does not expect the standard to have a significant impact on the Group's results. It is likely that the Group will adopt a prospective transition approach to the standard and further details are contained in the report and accounts for the year ending 30 April 2017.
The Group is also considering the impact on the consolidated financial statements of adopting other standards, amendments or interpretations in issue but not yet effective, including IFRS 9, 'Financial instruments' and IFRS 16, 'Leases'. The Group's approach to both of these standards are contained in the report and accounts for the year ending 30 April 2017.
The consolidated financial statements are presented in Sterling, which is also the Group's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.
The comparative figures for the year ended 30 April 2017 do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006 nor a reference to any matters which the auditor drew attention by way of emphasis of matter without qualifying their report.
The Accounting policies adopted are consistent with those described in the annual financial statements for the year ended 30 April 2017 and that will be adopted for the year ended 30 April 2018. There have been no significant changes in the basis upon which estimates have been determined, compared to those applied at 30 April 2017 and no change in estimate has had a material effect on the current period.
2. Segment information
The Group evaluates segmental performance based on profit or loss from operations calculated in accordance with IFRS but excluding non-recurring losses, such as goodwill impairment, and the effects of share-based payments. Traditionally the second half of the year is stronger in turnover and operating performance than the first half of the year with work undertaken by the Specialist Piling division during the statutory holiday periods of Christmas and Easter. However, the impact of Carillion and other matters will make this year an exception to this usual seasonality. Inter-segment sales are priced along the same lines as sales to external customers, with an appropriate discount being applied to encourage use of group resources at a rate acceptable to local tax authorities. Loans and borrowings, insurances and head office central services' costs are allocated to the segments based on levels of turnover. All turnover and operations are based in the UK.
Operating segments - 6 months to 31 October 2017
Ground Ground
General Specialist Engineering Engineering Head Total
Piling Piling Services Products Office
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue
Total revenue 24,426 14,237 9,313 8,417 - 56,393
Inter-segment
revenue (1,562) (93) (568) (1,528) - (3,751)
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue 22,864 14,144 8,745 6,889 - 52,642
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit
Underlying operating
profit 3,495 1,096 396 677 - 5,664
Share-based
payments - - - - (80) (80)
Exceptional - - - - - -
item
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit 3,495 1,096 396 677 (80) 5,584
Finance expense - - - - (268) (268)
Finance income - - - - 9 9
---------------------- ---------- ------------- ------------- ------------- --------- --------
Profit before
tax 3,495 1,096 396 677 (339) 5,325
---------------------- ---------- ------------- ------------- ------------- --------- --------
Assets
Property, plant
& equipment 13,383 10,499 3,953 1,299 8,235 37,369
Inventories 347 403 222 1,478 - 2,450
---------------------- ---------- ------------- ------------- ------------- --------- --------
Reportable segment
assets 13,730 10,902 4,175 2,777 8,235 39,819
Intangible assets - - - - 2,318 2,318
Trade and other
receivables - - - - 21,049 21,049
Cash and cash
equivalents - - - - 12,042 12,042
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total assets 13,730 10,902 4,175 2,777 43,644 75,228
---------------------- ---------- ------------- ------------- ------------- --------- --------
Liabilities
Loans and borrowings - - - - 16,628 16,628
Trade and other
payables - - - - 18,315 18,315
Provisions - - - - 342 342
Deferred tax - - - - 778 778
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total liabilities - - - - 36,063 36,063
---------------------- ---------- ------------- ------------- ------------- --------- --------
Other information
Capital expenditure 3,854 1,807 1,425 104 198 7,388
Depreciation
/ amortisation 1,087 1,088 384 181 - 2,740
---------------------- ---------- ------------- ------------- ------------- --------- --------
There are no individual customers accounting for more than 10% of Group revenue in either the current or preceding period.
Operating segments - 6 months to 31 October 2016
Ground Ground
General Specialist Engineering Engineering Head
Piling Piling Services Products Office Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue
Total revenue 22,349 11,451 4,866 6,922 - 45,588
Inter-segment
revenue (1,144) - - (1,318) - (2,462)
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue 21,205 11,451 4,866 5,604 - 43,126
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit
Underlying
operating profit 2,643 1,426 330 498 - 4,897
Share-based - - - - - -
payments
Exceptional
item - - - - (1,452) (1,452)
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit 2,643 1,426 330 498 (1,452) 3,445
Finance expense - - - - (219) (219)
Finance income - - - - 5 5
---------------------- ---------- ------------- ------------- ------------- --------- --------
Profit before
tax 2,643 1,426 330 498 (1,666) 3,231
---------------------- ---------- ------------- ------------- ------------- --------- --------
Assets
Property, plant
& equipment 8,559 9,584 2,119 1,263 7,305 28,830
Inventories 284 198 57 1,165 - 1,704
---------------------- ---------- ------------- ------------- ------------- --------- --------
Reportable
segment assets 8,843 9,782 2,176 2,428 7,305 30,534
Intangible
assets - - - - 2,291 2,291
Trade and other
receivables - - - - 20,353 20,353
Cash and cash
equivalents - - - - 8,806 8,806
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total assets 8,843 9,782 2,176 2,428 38,755 61,984
---------------------- ---------- ------------- ------------- ------------- --------- --------
Liabilities
Loans and borrowings - - - - 12,866 12,866
Trade and other
payables - - - - 16,195 16,195
Provisions - - - - 327 327
Deferred tax - - - - 712 712
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total liabilities - - - - 30,100 30,100
---------------------- ---------- ------------- ------------- ------------- --------- --------
Other information
Capital expenditure 1,442 2,005 925 409 1,117 5,898
Depreciation
/ amortisation 891 853 270 127 - 2,141
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating segments - 12 months to 30 April 2017
Ground Ground
General Specialist Engineering Engineering Head Total
Piling Piling Services Products Office
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue
Total revenue 45,008 30,126 10,621 13,714 - 99,469
Inter-segment
revenue (2,103) - - (3,273) - (5,376)
---------------------- ---------- ------------- ------------- ------------- --------- --------
Revenue 42,905 30,126 10,621 10,441 - 94,093
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit
Underlying operating
profit 4,685 5,355 772 751 - 11,563
Share-based
payments - - - - (77) (77)
Exceptional
item - - - - (1,781) (1,781)
---------------------- ---------- ------------- ------------- ------------- --------- --------
Operating profit 4,685 5,355 772 751 (1,858) 9,705
Finance expense - - - - (436) (436)
Finance income - - - - 14 14
---------------------- ---------- ------------- ------------- ------------- --------- --------
Profit before
tax 4,685 5,355 772 751 (2,280) 9,283
---------------------- ---------- ------------- ------------- ------------- --------- --------
Assets
Property, plant
& equipment 10,456 9,696 2,778 1,373 7,807 32,110
Inventories 414 370 179 1,460 - 2,423
---------------------- ---------- ------------- ------------- ------------- --------- --------
Reportable segment
assets 10,870 10,066 2,957 2,833 7,807 34,533
Intangible assets - - - - 2,330 2,330
Trade and other
receivables - - - - 18,796 18,796
Cash and cash
equivalents - - - - 12,858 12,858
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total assets 10,870 10,066 2,957 2,833 41,791 68,517
---------------------- ---------- ------------- ------------- ------------- --------- --------
Liabilities
Loans and borrowings - - - - 14,316 14,316
Trade and other
payables - - - - 16,760 16,760
Provisions - - - - 342 342
Deferred tax - - - - 778 778
---------------------- ---------- ------------- ------------- ------------- --------- --------
Total liabilities - - - - 32,196 32,196
---------------------- ---------- ------------- ------------- ------------- --------- --------
Other information
Capital expenditure 4,267 2,948 1,841 668 2,041 11,765
Depreciation
/ amortisation 1,918 1,848 622 299 - 4,687
---------------------- ---------- ------------- ------------- ------------- --------- --------
There are no individual customers accounting for more than 10% of Group revenue in either the current or preceding year.
3. Exceptional costs
6 months 6 months 12 months
to 31 to 31 to 30 Apr
Oct 2017 Oct 2016 2017 (audited)
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
------------------------- -------------- ------------- ----------------
Initial Public Offering
("IPO") - 1,452 1,452
Other exceptional costs - - 329
------------------------- -------------- ------------- ----------------
- 1,452 1,781
---------------------------------------- ------------- ----------------
Initial Public Offering ("IPO")
The charge in the prior period represents fees and other costs arising because of the IPO which have not been treated as deductions against the share premium account. Of the exceptional charge of GBP1,452,000, approximately GBP104,000 is treated as tax deductible and the balance of GBP1,348,000 is treated as disallowed tax expenses in the tax computation.
Other exceptional items
The other exceptional item relates to severance costs arising from the Board changes following the IPO and other legal matters arising as a consequence of the IPO. These are treated as fully tax deductible within the tax computation.
4. Earnings per share
The calculation of basic and diluted earnings per share is based on the following data:
6 months 6 months 12 months
to 31 to 31 to 30
Oct 2017 Oct 2016 Apr 2017
(unaudited) (unaudited) (audited)
'000 '000 '000
--------------------------------- ------------- ------------- -------------
Basic weighted average
number of shares 80,000 70,373 75,123
Dilutive potential ordinary - - -
shares from share options
--------------------------------- ------------- ------------- -----------
Diluted weighted average
number of shares 80,000 70,373 75,123
--------------------------------- ------------- ------------- -----------
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- -----------
Profit for the year 4,244 2,236 7,353
--------------------------------- ------------- ------------- -----------
Add back / (deduct):
Share-based payments 80 - 77
Exceptional costs - 1,452 1,781
Tax effect of the above - (21) (86)
--------------------------------- ------------- ------------- -----------
Underlying profit for the
year 4,324 3,667 9,125
--------------------------------- ------------- ------------- -----------
Pence Pence Pence
--------------------------------- ------------- ------------- -----------
Earnings per share
Basic 5.3 3.2 9.8
Diluted 5.3 3.2 9.8
Basic - excluding exceptional
costs and share-based payments 5.4 5.2 12.1
Diluted - excluding exceptional
costs and share-based payments 5.4 5.2 12.1
--------------------------------- ------------- ------------- -----------
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders and on 80,000,000 ordinary shares (6 months ended 31 Oct 2016: 70,372,665 and 12 months ended 30 Apr 2017: 75,123,288) being the weighted average number of ordinary shares. In accordance with IAS 33 the weighted average number of shares in issue during the prior period has been retrospectively adjusted for the proportionate change in the number of the shares outstanding because of the bonus issue and share splits that occurred on admission to AIM.
The underlying earnings per share is based on profit adjusted for exceptional operating costs and share-based payment charges, net of tax, and on the same weighted average number of shares used in the basic earnings per share calculation above. The Directors consider that this measure provides an additional indicator of the underlying performance of the Group.
There is no dilutive effect of the share options as performance conditions remain unsatisfied and the share price was below the exercise price.
5. Cash generated from operations
6 months 6 months 12 months
to 31 to 31 to 30
Oct 2017 Oct 2016 Apr 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- -----------
Operating profit 5,584 3,445 9,705
Adjustments for:
Depreciation of property,
plant and equipment 2,740 2,141 4,687
Profit on disposal of property,
plant and equipment (221) - (89)
Share-based payment expense 80 - 77
--------------------------------- ------------- ------------- -----------
Operating cash flows before
movement in working capital 8,183 5,586 14,380
Increase in inventories (27) (93) (812)
Increase in trade and other
receivables (2,332) (3,657) (1,950)
Increase in trade and other
payables 1,287 833 1,544
Decrease in provisions - (48) (33)
--------------------------------- ------------- ------------- -----------
Cash generated from operations 7,111 2,621 13,129
--------------------------------- ------------- ------------- -----------
6. Analysis of cash and cash equivalents and reconciliation to net debt
31 Oct 31 Oct 30 Apr
2017 (unaudited) 2016 (unaudited) 2017 (audited)
GBP'000 GBP'000 GBP'000
--------------------------- ------------------ ------------------ ----------------
Cash at bank 11,992 8,752 12,810
Cash in hand 50 54 48
--------------------------- ------------------ ------------------ ----------------
Cash and cash equivalents 12,042 8,806 12,858
Bank loans secured (1,200) (1,350) (1,275)
Other loans secured (157) (252) (205)
Finance leases (15,271) (11,264) (12,836)
--------------------------- ------------------ ------------------ ----------------
Net debt (4,586) (4,060) (1,458)
--------------------------- ------------------ ------------------ ----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DGGDBUGDBGIS
(END) Dow Jones Newswires
January 25, 2018 02:00 ET (07:00 GMT)
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