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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% | 33.50 | 33.00 | 34.00 | 33.50 | 33.50 | 33.50 | 394 | 08:00:13 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Engineering Services | 148.73M | 4.68M | 0.0438 | 7.65 | 35.76M |
From Apr 2019 to Apr 2024
TIDMVANL
RNS Number : 1971N
Van Elle Holdings PLC
16 January 2019
Van Elle Holdings plc
16 January 2019
Interim results for the six months ended 31 October 2018
Van Elle Holdings plc ("Van Elle", the "Company" or the "Group"), the leading geotechnical engineering company 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 2018.
Highlights
Hot Features
Premium
6 months ended 6 months ended Growth
31 Oct 2018 31 Oct 2017 %
--------------------------------- --------------- --------------- -------
Revenue (GBPm) 42.9 52.6 (18.4)
Underlying* EBITDA (GBPm) 5.2 8.4 (38.1)
Reported EBITDA (GBPm) 4.8 8.3 (42.2)
Underlying* operating profit
(GBPm) 3.0 5.7 (47.4)
Reported operating profit
(GBPm) 2.6 5.6 (53.6)
Underlying* profit before
taxation (GBPm) 2.8 5.4 (48.1)
Reported profit before taxation
(GBPm) 2.4 5.3 (54.7)
Underlying* earnings per
share (p) 2.8 5.4 (48.2)
Reported earnings per share
(p) 2.4 5.3 (54.7)
Dividend per share (p) 1.0 1.4
Operating cash conversion
**(%) 100.3% 86.9%
Return on capital employed***
(%) 6.4% 25.8%
--------------------------------- --------------- --------------- -------
* before share-based payments and exceptional costs
** defined as cash generated from operations divided by EBITDA less profit on sale of fixed assets
*** Return on capital employed calculated as underlying operating profit over net assets less cash and excluding loans and borrowings
Summary highlights
-- Trading in H1 was in line with revised expectations at GBP42.9m (H1 2018: GBP52.6m) and reflected the quiet first quarter
-- Underlying operating profit reduced 47.4% to GBP3.0m (H1 2018: GBP5.7m), largely reflecting lower overhead recovery despite gross margins improving slightly to 32.8% (H1 2018: 31.7%)
-- The new CEO, Mark Cutler, joined in August 2018 and has implemented a full review of the business as part of a three-phase transformation programme. Steps already taken include:
o simplification of the divisional structure and associated overhead improvements
o strategic customer engagement
o initial improvements to operational project delivery and work winning performance
o initial strengthening of the leadership team with two key senior appointments, being John Foster as Commercial Director and Peter Handley as Business Improvement Director
-- Good cash performance with net debt of GBP5.6m (H1 2018: GBP4.6m) reduced from the year end position, (FY 2018: GBP5.9m)
-- An interim dividend of 1.0 pence per share (H1 2018: 1.4 pence per share), reflecting first half performance and outlook for the Group
Current trading and outlook
-- Contract margin performance in the General Piling division during the third quarter has been weaker than anticipated:
o The causes have been identified and action taken to resolve the issues, including a change of divisional management
o Poor profitability in Q3 but expected to return to normal margin levels by the start of Q4
-- The Company saw strong demand for its Specialist Services division over the Christmas period, particularly in the rail sector, however several contracts across the Group have had contract start dates delayed in December and January
o The Orderbook at the start of January 2019 is at similar levels to last year and, based on current enquiry levels and order conversion rates, the Board continues to expect Q4 activity to be strong;
o In light of the delays to contract start dates experienced in Q3, the Board has re-assessed workload forecasts for H2 and believes it is prudent to reduce its revenue expectation for the current year
-- Despite these setbacks in Q3, the Board continues to expect the Group to deliver a stronger performance in H2 than H1 albeit for the reasons set out above, this will still result in a full year performance significantly below its previous expectations
-- Longer term the board remains positive regarding sustainable, profitable growth.
Mark Cutler, Chief Executive, commented:
"First half results were in line with our revised expectations and reflected the improved performance in the second quarter after a quiet start to the year.
"This is a transitional year for the business and since my arrival in August 2018, I have been undertaking a full review of the business. As part of this process I have been taking action to refine the Group's commercial approach, streamline operations, strengthen the leadership team and re-focus on our key customers. This is already creating a strong platform from which to pursue our growth strategy.
"The third quarter has been more challenging than we anticipated, with a disappointing performance in General Piling and several project delays. As a result and despite good momentum being carried in from the first half, we don't believe we will be able to deliver the significant step up in performance during the second half that we anticipated at the time of our trading statement in December 2018.
"These challenges have been frustrating, but it is pleasing to see outlook for the final quarter remaining robust and with a strong pipeline of target projects providing good forward visibility.
"Whilst we are mindful of the wider market environment, we are confident that the initiatives we are taking will develop a strong platform for future strong, profitable growth."
For further information please contact:
Instinctif Partners (Financial Public Tel: 020 7457 2020 Relations) Mark Garraway James Gray Rosie Driscoll Peel Hunt LLP (Nominated Adviser and Tel: 020 7418 8900 corporate broker) Charles Batten Mike Bell Justin Jones
This announcement contains inside information that qualified, or may have qualified, as inside information for the purposes of Article 17 of the Market Abuse Regulation (EU) 596/2014 (MAR). For the purposes of MAR and Article 2 of commission Implementing Regulation (EU) 2016/1055, this announcement is made by Paul Pearson, Chief Financial Officer, for Van Elle Holdings plc.
Van Elle Holdings plc - Interim Report to 31 October 2018
Strategic overview
This is a transitional year for the business, in which we expect to increase resilience to external market factors affecting the wider sector, while transforming business performance and setting the platform for future growth under a new CEO and strengthened leadership team.
The Group remains a leader in the UK geotechnical engineering services market and our strategy is continues to be focused on:
1. Enhancing the performance and profitability of the business through a range of business improvement activities; and
2. Accelerating growth by increasing our market share in our targeted sectors, maximising our integrated solutions offering, broadening our range of products and services and extending our geographical footprint into high growth markets across the UK.
Since joining the Group, Mark has reviewed the business in detail and identified opportunities to enhance performance both in terms of operational performance and commercial development. A transformation plan has been initiated and, whilst this is in its early stages, a range of immediate actions have already been undertaken, supported by key senior management appointments to help deliver these improvements. The initial actions undertaken include:
-- Streamlining of the divisional structure; -- Strategic customer engagement; -- Re-focused work winning approach and replacement business development team; and -- Operational performance review and introduction of strengthened commercial processes.
These actions are aimed at improving the Group's commercial effectiveness by bringing it closer to key customers and enabling it to target more actively and selectively, new opportunities. This is already beginning to generate opportunities and the Group has a strong pipeline of target opportunities, particularly larger projects with an increasingly strategic customer base which integrate several of its specialist capabilities and enable early involvement. Alongside this, the Group has strengthened senior leadership team with the appointment of John Foster as Commercial Director and Peter Handley as Business Improvement Director.
Strengthened commercial processes should support consistent contract margin delivery and the streamlined divisional structure is expected reduce unnecessary complexity in the Group as well as reducing overhead costs. A charge of GBP0.3m in respect of these actions has been incurred in the first half. Further efficiency and cost reduction initiatives will be rolled out over the second half, including consolidation of the Group's two largest operations into a single site. The early signs from the transformation plan have been encouraging and the Board believes more significant performance benefits should begin to be realised for FY 2020, including annualised cost savings of over GBP1.0m.
The first half also saw a planned slowdown in rig fleet expansion with capital expenditure of GBP0.6m (H1 2018: GBP2.7m). Investment in fixed assets over the last three and a half years now stands at over GBP38m and we continue to believe that this has positioned Van Elle with the broadest and most modern range of specialist piling rigs in the UK market. After five rig disposals, our fleet now consists of 119 rigs.
Whilst there remains significant scope to improve performance, we will continue to consider niche, bolt-on acquisition opportunities where appropriate, balanced with a clearer view of selective future plant investment to support organic growth in key markets. We believe that our strong financial position will enable us to act swiftly where we feel an opportunity will bring value to the Group.
Trading review in the period
As set out in our trading update of 10 December 2018, the first quarter of the current year was relatively quiet as a result of subdued UK market conditions following a challenging period for the UK construction markets in early 2018. Market conditions were more supportive in the second quarter and the Group saw a progressive improvement in performance during the latter part of the first half. As a result, for the six months ended 31 October 2018, revenue decreased by 18.4% to GBP42.9m (H1 2018: GBP52.6m), against a strong comparative period in the previous. In terms of end market performance, sales to the housebuilding sector continue to make up the majority of Group revenues at 50.8% (H1 2018: 50.0%) but decreased in the period by 17.1% to GBP21.8m (H1 2018: GBP26.3m). Infrastructure sector sales also decreased, by 22.8%, to GBP12.2m (H1 2018: GBP15.8m) with sales to the Commercial & Industrial sector increasing slightly to GBP8.3m (H1 2018: GBP8.2m).
Despite the subdued market conditions, the gross margin increased in the period to 32.8% (H1 2018:31.7%). This improvement reflected several strong contract completions in the Specialist Piling division during the first half as compared to the adverse impact of poor commercial parameters on two electrification contracts undertaken in the comparative period. Additionally, gross margin has also been enhanced this year following a review and revision to asset lives and residual values for plant and machinery depreciation rates which is reported in cost of sales.
As a result of the reduced activity, particularly the resulting impact on utilisation of larger rigs in the General and Specialist Piling divisions, underlying operating profit decreased by 47.4% to GBP3.0m (H1 2018: GBP5.7m), representing an underlying operating margin of 7.1%. Underlying profit before tax was GBP2.8m, a decrease of 48.1% on the same period last year (H1 2018: GBP5.4m) and underlying earnings per share were 2.8p, a decrease of 48.1% on the prior year (H1 2018: 5.4p).
The first half of this year generated operating cash flows of GBP4.8m (H1 2018: GBP7.1m) representing an operating cash conversion* of 100.3% (H1 2018: 86.9%). Net assets have increased by 5.6% to GBP41.5m (31 October 2017: GBP39.2m). The good cash performance has contributed to a reduction in net debt in the first half to GBP5.6m at 31 October 2018, compared to GBP5.9m at 30 April 2018,
* defined as cash generated from operations divided by EBITDA less profit on sale of fixed assets
Operating performance in the period
General Piling
The General Piling division has suffered the most from the challenging market conditions, with new housing sector revenues down 23% and infrastructure down 42% on prior year. The subdued markets have resulted in low utilisation of our large diameter piling rigs that not only supressed revenue, but also impacted on gross margin performance as these techniques command higher gross margins. As a result, divisional revenues have fallen GBP5.5m (24%) against the comparative period last year, resulting in operating profit of GBP0.4m (H1 2018: GBP3.5m).
Specialist Piling
Specialist Piling generated revenue of GBP12.8m (H1 2018: GBP14.1m) a decrease of 9% compared to the same period last year. Rail turnover was marginally up on prior year, with low rig utilisation in the Specialist Piling operating unit accountable for the decrease as a result of a quiet first quarter in infrastructure work. Operating margin has however increased to 16.7%, (H1 2018: 7.7%), primarily from several strong contract completions in the Rail operating unit in H1 2019, and conversely, an erosion in margins in the prior year, resulting from poor commercial performance on two electrification contracts.
Ground Engineering Services
In Ground Engineering Services, revenues are down 28% to GBP6.3m (H1 2018: GBP8.7m). Following the streamlining of the operational structure, ground stabilisation work will now be performed by the Specialist Piling division and contract bidding is done on a much more selective basis to minimise potential risk inherent in lump sum contracts. In H1, revenues are down in ground stabilisation work and Geotechnical has had a slow first half of the year with Scotland faring better with revenues relatively flat on the comparative period. Consequently, operating margin for H1 2019 was down to 1.5% (H1 2018 4.5%).
Ground Engineering Products
In Ground Engineering Products, demand for the Group's proprietary Smartfoot(c) foundation system continues, albeit revenues of GBP6.5m this half year are down 5.8% (H1 2018 GBP6.9m) reflecting the quiet Q1 seen in housebuilding, with operating margins at 6.6% (H1 2018 9.8%). The in-house manufacturing facilities have marginally increased production levels on a like for like basis, with some pre-cast pile products having been sold to the external market.
Board news
This year is an important one of transition for the Group, with our new CEO Mark Cutler, having joined the Board in August 2018 following the retirement of Jon Fenton in May 2018 (and the intervening period with Steve Prendergast as interim CEO).
Dividend
Being cognisant of the first half performance, greater second half weighting of profits and with confidence in the long-term prospects of the Group, the Board is declaring an interim dividend of 1.0 pence per share (H1 2018: 1.4 pence per share). The interim dividend will be paid on 6 March 2019 to shareholders on the register on 15 February 2019. The shares will trade ex-dividend on 14 February 2019.
Current trading and outlook
Whilst enquiry and order conversion rates have remained encouraging, performance in Q3 to date has been below the Board's expectations.
Performance in the General Piling division in Q3 has been below anticipated profit levels. A detailed review of this division has identified operational and commercial shortcomings which have resulted in the Group undertaking several contracts which are expected to deliver poor margins. Decisive action has been taken including the appointment of new divisional leadership, and the underperforming contracts are now largely complete. The issues in Q3 are expected to have an adverse profit impact on the Group, but margin performance in the division is expected to return to forecast levels by the start of Q4.
In addition, whilst Van Elle saw strong demand in its Specialist Services division over the Christmas period, particularly in the rail sector, a number of contracts across the Group have had start dates delayed in December and early January. As a result the Board has re-assessed workload forecast for H2 and considers that it would be prudent to reduce its full year revenue expectations.
As a result of the above, although the Board expects the Group to deliver a stronger performance in H2 than H1, it also expects the full year performance to be significantly below previous expectations.
Whilst these setbacks in Q3 have been disappointing, the orderbook at the beginning of January 2019 (which is at a similar level to January 2018), current enquiry levels and order conversion rates are encouraging. The Board continues to monitor market conditions closely, but is optimistic about the Group's prospects for Q4. The Board continues to believe that the long-term opportunities for profitable growth for the Group remain significant.
Consolidated statement of comprehensive income
For the 6 months ended 31 October 2018
Note 6 months 6 months 12 months
to 31 Oct to 31 Oct to 30 Apr
2018 (unaudited) 2017 (unaudited) 2018
(audited)
GBP'000 GBP'000 GBP'000
------------------------------------- ----- ------------------ ------------------ -----------
Revenue 2 42,921 52,642 103,872
Cost of sales (28,841) (35,965) (69,480)
------------------------------------- ----- ------------------ ------------------ -----------
Gross profit 14,080 16,677 34,392
Administrative expenses (11,042) (11,013) (23,295)
Operating profit before exceptional
costs and share-based payment
expense 3,038 5,664 11,097
Share-based payment expense 3 (80) (80) (148)
Carillion bad debt write-off 3 - - (956)
Exceptional costs 3 (331) - (283)
------------------------------------- ----- ------------------ ------------------ -----------
Operating profit 2,627 5,584 9,710
Finance expense (297) (268) (561) Finance income 25 9 25 ------------------------------------- ----- ------------------ ------------------ ----------- Profit before tax 2,355 5,325 9,174 Income tax expense (471) (1,081) (1,835) ------------------------------------- ----- ------------------ ------------------ ----------- Total comprehensive income for the year 1,884 4,244 7,339 Earnings per share (pence) Basic 4 2.4 5.3 9.2 Diluted 4 2.4 5.3 9.2 Underlying earnings per share (pence) Basic 4 2.8 5.4 10.6 Diluted 4 2.8 5.4 10.6 ------------------------------------- ----- ------------------ ------------------ -----------
All amounts relate to continuing operations. There was no other comprehensive income in either the current or preceding period/ year.
Consolidated statement of financial position
As at 31 October 2018
31 Oct 2018 31 Oct 2017 30 Apr 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------- ------------- ------------
Non-current assets
Property, plant and equipment 39,038 37,369 39,502
Intangible assets 2,303 2,318 2,324
-------------------------------- ------------- ------------- ------------
41,341 39,687 41,826
------------------------------- ------------- ------------- ------------
Current assets
Inventories 2,372 2,450 2,565
Trade and other receivables 19,946 21,049 22,225
Cash and cash equivalents 9,384 12,042 10,880
-------------------------------- ------------- ------------- ------------
31,702 35,541 35,670
------------------------------- ------------- ------------- ------------
Total assets 73,043 75,228 77,496
-------------------------------- ------------- ------------- ------------
Current liabilities
Trade and other payables 14,830 17,248 17,353
Loans and borrowings 5,071 5,422 5,580
Corporation tax payable 438 1,067 753
-------------------------------- ------------- ------------- ------------
20,339 23,737 23,686
------------------------------- ------------- ------------- ------------
Non-current liabilities
Loans and borrowings 9,945 11,206 11,205
Provisions 253 342 270
Deferred tax 1,016 778 969
-------------------------------- ------------- ------------- ------------
11,214 12,326 12,444
------------------------------- ------------- ------------- ------------
Total liabilities 31,553 36,063 36,130
-------------------------------- ------------- ------------- ------------
Net assets 41,490 39,165 41,366
-------------------------------- ------------- ------------- ------------
Equity
Share capital 1,600 1,600 1,600
Share premium 8,633 8,633 8,633
Retained earnings 31,239 28,914 31,115
Non-controlling interest 18 18 18
-------------------------------- ------------- ------------- ------------
Total equity 41,490 39,165 41,366
-------------------------------- ------------- ------------- ------------
The unaudited interim consolidated statement was approved by the Board of Directors on 15 January 2019.
Consolidated statement of cash flows
For the 6 months ended 31 October 2018
Note 6 months 6 months 12 months
to 31 Oct to 31 Oct to 30 Apr
2018 (unaudited) 2017 (unaudited) 2018 (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----- ------------------ ------------------ ----------------
Cash flows from operating activities
Cash generated from operations 5 4,786 7,111 13,244
Interest received 25 9 25
Interest paid (297) (268) (561)
Income tax paid (740) (892) (1,768)
-------------------------------------- ----- ------------------ ------------------ ----------------
Net cash generated from operating
activities 3,774 5,960 10,940
-------------------------------------- ----- ------------------ ------------------ ----------------
Cash flows from investing activities
Purchases of property, plant
and equipment (735) (2,967) (5,053)
Disposal of property, plant
and equipment 323 230 321
Net cash absorbed in investing
activities (412) (2,737) (4,732)
-------------------------------------- ----- ------------------ ------------------ ----------------
Cash flows from financing activities
Repayment of bank borrowings (75) (75) (150)
Repayments of Invest to Grow
loan (47) (48) (95)
Payments to finance lease creditors (2,896) (2,516) (5,421)
Dividends paid (1,840) (1,400) (2,520)
-------------------------------------- ----- ------------------ ------------------ ----------------
Net cash absorbed in financing
activities (4,858) (4,039) (8,186)
-------------------------------------- ----- ------------------ ------------------ ----------------
Net decrease in cash and cash
equivalents (1,496) (816) (1,978)
Cash and cash equivalents at
beginning of period 10,880 12,858 12,858
-------------------------------------- ----- ------------------ ------------------ ----------------
Cash and cash equivalents at
end of period 6 9,384 12,042 10,880
-------------------------------------- ----- ------------------ ------------------ ----------------
Consolidated statement of changes in equity
For the 6 months ended 31 October 2018
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 2017
(audited) 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
(unaudited) 1,600 8,633 18 28,914 39,165
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
Total
comprehensive
income - - - 3,096 3,096
Share-based
payment
expense - - - 225 225
Dividend
payment - - - (1,120) (1,120)
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
- - - 2,201 2,201
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
Balance at 30
April 2018
(audited) 1,600 8,633 18 31,115 41,366
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
Total
comprehensive
income - - - 1,884 1,884
Share-based
payment
expense - - - 80 80
Dividend
payment - - - (1,840) (1,840)
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
- - - 124 124
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
Balance at 31
October 2018
(unaudited) 1,600 8,633 18 31,239 41,490
------------------------- ------------------- ------------------- -------------------------- -------------------- ------------------
Notes to the interim results
For the 6 months ended 31 October 2018
1. Basis of preparation
The unaudited interim consolidated statement of Van Elle Holdings plc is for the six months ended 31 October 2018 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. The unaudited interim consolidated statement has 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 2019.
The comparative figures for the year ended 30 April 2018 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 not a reference to any matters which the auditor drew attention by way of emphasis of matter without qualifying their report.
IFRS 9 Financial Instruments
The Group has initially adopted IFRS 9 Financial Instruments from 1 May 2018. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement and specifies how an entity should classify and measure financial assets, financial liabilities, and some contracts to buy or sell non-financial items.
The most significant area of change which could potentially impact the Group's reported results is the introduction of an "expected loss" model for impairment provisioning, which now also includes contract assets recognised under the adoption of IFRS 15 Revenue from Contracts with Customers.
Based on an assessment of historic credit losses and the likelihood of the occurrence of future credit losses on existing financial assets, the Directors consider that there are no further material impairment losses to be recognised against the Group's financial assets as a result of the transition to IFRS 9.
In line with the below amended accounting policy, the financial assets and liabilities held by the Group at 31 October 2018 are classified at amortised cost under IFRS 9 which is in line with treatment under IAS 39. As the basis of measurement has not changed there have been no changes to the carrying amount of the financial instruments as a result of the transition from IAS 39 to IFRS 9. In addition, there have been no modifications to loans that have to be reconsidered as a result of adopting IFRS 9.
The details of the new significant accounting policies and the nature of the changes to previous accounting policies in relation to the Group's adoption of IFRS 9 Financial Instruments are set out below.
FY18 Accounting Policy Amended accounting policy Nature of change in
accounting policy
------------------------------------- -------------------------------------- ------------------------------
Financial assets On initial recognition, IFRS 9 removes the
a financial asset is classified previous IAS 39 categories
The Group classifies its as measured at amortised for financial assets
financial assets into one cost, Fair Value through of held to maturity
of the categories discussed Other Comprehensive Income and loans and receivables
below, depending on the ("FVOCI") or Fair Value and available for
purpose for which the asset Through Profit or Loss sale. These are replaced
was acquired. The Group ("FVTPL"). Financial liabilities by the categories
has not classified any are measured at amortised noted in the amended
of its financial assets cost or FVTPL. accounting policy
as held to maturity. The classification of for financial instruments.
The Group's accounting financial assets is based IFRS 9 retains the
policy for each category on the way a financial existing requirements
is as follows: asset is managed and its in IAS 39 for the
Fair value through profit contractual cash flow classification and
or loss characteristics. measurement of financial
The Group does not have Financial assets are measured liabilities.
any assets held for trading at amortised cost if both
nor does it voluntarily of the following conditions
classify any financial are met and the financial
assets as being at fair asset or liability is
value through profit or not designated as at FVTPL:
loss. - the financial asset
Loans and receivables is held with the objective
These arise principally of collecting or remitting
through the provision of contractual cash flows;
goods and services to customers and
(e.g. trade receivables), - its contractual terms
but also incorporate other give rise on specified
types of contractual monetary dates to cash flows that
asset. They are initially are solely payments of
recognised at fair value principal and interest
plus transaction costs on the principal amount
that are directly attributable outstanding.
to their acquisition or A financial asset is measured
issue, and are subsequently at FVOCI if it meets both
carried at amortised cost of the following conditions
using the effective interest and is not designated
rate method, less provision as at FVTPL:
for impairment. - the financial asset
Impairment provisions are is held with the objectives
recognised when there is of collecting contractual
objective evidence (such cash flows and selling
as significant financial the financial asset; and
difficulties on the part - its contractual terms
of the customer or default give rise on specified
or significant delay in dates to cash flows that
payment) that the Group are solely payments of
will be unable to collect principal and interest
all of the amounts due on the principal amount
under the terms receivable outstanding.
and for trade receivables, All financial assets not
which are reported net, classified as measured Cash and cash equivalents,
such provisions are recorded at amortised cost or FVOCI trade receivables,
in a separate allowance as described above are and retentions held
account with the loss being measured at FVTPL. by customers for contract
recognised within administrative The Group's principal work were previously
expenses in the consolidated financial instruments classified as loans
statement of comprehensive comprise cash and cash and receivables under
income. On confirmation equivalents, trade receivables, IAS 39 and were measured
that the trade receivable trade payables and interest-bearing at amortised cost.
will not be collectable, borrowings. Based on the Trade payables and
the gross carrying value way these financial instruments interest-bearing borrowings
of the asset is written are managed and their were previously classified
off against the associated contractual cash flow as "other financial
provision. characteristics, all the liabilities" under
The Group's loans and receivables Group's financial instruments IAS 39 and were measured
comprise trade and other are measured at amortised at amortised cost.
receivables and cash and cost using the effective These financial instruments
cash equivalents in the interest method. are now classified
consolidated statement The amortised cost of as financial assets
of financial position. financial assets is reduced and liabilities at
Cash and cash equivalents by impairment losses as amortised cost under
include cash in hand, deposits described below. Interest IFRS 9.
held at call with banks, income, foreign exchange The adoption of IFRS
and, for the statement gains and losses, impairments 9 has therefore not
of cash flows, bank overdrafts. and gains or losses on had any impact on
Bank overdrafts are shown derecognition are recognised the measurement of
within loans and borrowings through the Statement the Group's financial
in current liabilities of Comprehensive Income assets and liabilities.
on the consolidated statement Trade receivables, and
of financial position. trade payables are held IFRS 9 replaces the
Financial liabilities at their original invoiced incurred loss model
The Group classifies its value, as the interest in IAS 39 with the
financial liabilities into that would be recognised expected credit loss
one of two categories, from discounting future model, which requires
depending on the purpose cash flows over the short that future events
for which the liability credit period is not considered are considered when
was acquired. to be material. calculating impairments
The Group's accounting Cash equivalents comprise to financial assets.
policy for each category short-term highly liquid Based on an assessment
is as follows: investments that are readily of historic credit
Fair value through profit convertible into known losses on the Group's
or loss amounts of cash and which financial assets and
The Group does not have are subject to an insignificant the likelihood of
any liabilities held for risk of changes in value. the occurrence of
trading nor has it designated An investment with a maturity future credit losses
any financial liabilities of three months or less on existing financial
as being at fair value is normally classified assets, the Directors
through profit or loss. as being short term. Cash consider that any
Other financial liabilities and cash equivalents do increase in impairment
Other financial liabilities not include other financial provision to be recognised
include the following items: assets. against the Group's
Bank borrowings are initially financial assets on
recognised at fair value Impairment losses against transition to IFRS
net of any transaction financial assets carried 9 is immaterial.
costs directly attributable at amortised cost are
to the issue of the instrument. recognised by reference
Such interest-bearing liabilities to any expected credit
are subsequently measured losses against those assets.
at amortised cost using The simplified approach
the effective interest for calculating impairment
rate method, which ensures of financial assets has
that any interest expense been used. Lifetime expected
over the period to repayment credit losses are calculated
is at a constant rate on by considering, on a discounted
the balance of the liability basis, the cash shortfalls
carried in the consolidated that would be incurred
statement of financial in various default scenarios
position. For the purposes over the remaining lives
of each financial liability, of the assets and multiplying
interest expense includes the shortfalls by the
initial transaction costs probability of each scenario
and any premium payable occurring. The allowance
on redemption, as well is the sum of these probability
as any interest or coupon weighted outcomes.
payable while the liability
is outstanding.
Trade payables and other
short-term monetary liabilities,
which are initially recognised
at fair value and subsequently
carried at amortised cost
using the effective interest
method.
------------------------------------- -------------------------------------- ------------------------------
IFRS 15 Revenue from Contracts with Customers
The Group has initially adopted IFRS 15 Revenue from Contracts with Customers from 1 May 2018 and this has not been applied retrospectively. The cumulative effect method has been used to calculate any required adjustment as at 1 May 2018. The Group has elected to apply IFRS 15 retrospectively only to contracts that are not completed contracts at the date of initial application.
For all contract modifications that occur before the date of initial application, the Group has applied the following expedient:
-- for contracts that were modified before the beginning of the earliest period presented, an entity need not retrospectively restate the contract for those contract modifications in accordance with IFRS 15 paragraphs 20-21. Instead, an entity shall reflect the aggregate effect of all of the modifications that occur before the beginning of the earliest period presented.
-- for all reporting periods presented before the date of initial application, the Group has not disclosed the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the entity expects to recognise that amount as revenue
o identifying the satisfied and unsatisfied performance obligations;
o determining the transaction price; and
o allocating the transaction price to the satisfied and unsatisfied performance obligations.
The only significant change, which could result in a transitional adjustment, in adopting IFRS 15 is that revenue relating to mobilisation of rig equipment to the customer site is now recognised over time. Under the previous accounting policy this revenue was recognised at the time of mobilisation. Costs relating to mobilisation under IFRS 15 are now capitalised and amortised over time at the same rate as revenue is recognised. Management has performed a detailed review of relevant contracts and calculated the required adjustments and concluded that no material transitional adjustment is required.
IFRS 15 provides a single, principles-based five-step model to be applied to all sales contracts, based on the transfer of control of goods and services to customers. It replaces the separate models for goods, services and construction contracts previously included in IAS 11 Construction Contracts.
The following details the amended accounting policy.
FY2018 Revenue Accounting Policy Amended Revenue Accounting Policy Nature of Change in Accounting
Policy
Turnover represents the total Revenue represents the total amounts
amounts receivable by the Group receivable by the Group for goods
for goods supplied and services supplied
provided, excluding value added and services provided, excluding
tax value
and trade discounts. The Group's added tax and trade discounts. The
turnover arises in the UK. Group's
turnover arises in the UK. The amended accounting
policy complies with the
In line with IFRS 15 Revenue from 'five-step' model required
Contracts by IFRS 15.
with Customers the Group recognises
revenue based on the application of
a principle-based 'five-step' model.
In the case of contracts, when Only when the five steps are
the outcome can be assessed reliably, satisfied The Group's contracts
contract revenue is recognised is revenue recognised. with customers as defined
by reference to the stage of under IFRS 15 correspond
completion of the contract activity General and Specialist Piling in almost all circumstances
at the statement of financial to construction contracts
position date. The performance obligations and as previously defined
transaction under IAS 11 Construction
The stage of completion of the price are defined within signed Contracts.
contract at the statement of contracts
financial position date is assessed between the customer and the Group. The transaction price
regarding the costs incurred under the amended accounting
to date as a Each performance obligation policy corresponds to
percentage of the total expected represents the value of contract
costs. a series of distinct goods that are revenue as measured under
substantially the same and that have the previous accounting
the same pattern of transfer to the policy.
customer. This is classified as a The previous accounting
series policy used a percentage
as each distinct good in the series completion method, based
meets the definition of a performance on cost. The new accounting
obligation satisfied over time and policy looks at the performance
the obligations within each
same method would be used to measure contract type.
the entity's progress towards
complete Under the previous accounting
satisfaction of the performance policy revenue relating
obligation to mobilisation was recognised
as to transfer each good to the at the time of mobilisation.
customer. Under IFRS 15 this is
not a separate performance
Mobilisation (moving the piling rig obligation. This revenue
equipment to the customer site) does is now split between the
Industry practice is to assess not represent a separate performance different performance
the estimated outcome of each obligation. Mobilisation revenue is obligations and recognised
contract and recognise the revenue included within the transaction price over time. This change
and margin based upon the stage of the related performance obligation has not resulted in any
of completion of the contract and recognised over time. transitional adjustments.
at the statement of financial
position date. The assessment The revenue for each performance Under the previous accounting
of the outcome of each contract obligation policy, where the outcome
is determined by regular review is recognised over time because each of a construction contract
of the revenues and costs to pile enhances an asset that the could be estimated reliably,
complete that contract. Consistent customer revenue and costs were
contract review procedures are controls. recognised by reference
in place in respect of contract to the stage of completion
forecasting. Revenue is recognised Revenue is recognised as progress of activity at the balance
up to the level of the costs towards sheet date. This was normally
which are deemed to be recoverable complete satisfaction of that measured by reference
under the contract. performance to the proportion of contract
obligation over time occurs using the costs incurred for work
output method. Progress is determined performed to date to the
by completed pile logs. estimated total contract
costs (the "cost to cost"
Ground Engineering Services input method).
The performance obligations and Where the outcome of a
transaction construction contract
price are defined within signed could not be estimated
contracts reliably, contract revenue
between the customer and the Group. was recognised to the
Each individual service is not extent of contract costs
considered incurred that it is probable
a separate performance obligation. would be recoverable.
For performance obligations where the Due to the nature of the
customer does not simultaneously Group's contracts there
receive is a direct correlation
and consume the benefits (e.g. between costs being incurred
interpretive and a series of performance
reports and testing) the work obligations being satisfied.
performed There is no financial
by the Group does not create or impact associated with
enhance adopting the output method
an asset that the customer controls. to calculate progress
Revenue for these performance under IFRS 15.
obligations
is recognised at a point in time
(e.g.
on delivery of report). Costs
relating
to these performance obligations are
capitalised and fully amortised at
the
point in time when the performance
obligation
The gross amount receivable from is fully satisfied.
customers for contract work is
presented as an asset for all Contracts may also contain a series
contracts in progress for which of distinct goods or services that
costs incurred, plus recognised are
profits (or less recognised losses), substantially the same and that have
exceed progress billings. the same pattern of transfer to the
customer (e.g. bore hole drilling).
This is classified as a series as an
asset is enhanced that the customer
controls, each distinct good in the
The gross amount repayable to series meets the definition of a
or paid in advance by customers performance
for obligation satisfied over time and
contract work is presented as the
a liability for all contracts same method would be used to measure
in progress for which progress the entity's progress towards
billings exceed costs incurred complete
plus recognised profits (less satisfaction of the performance
recognised losses). Full provision obligation
is made for losses on all contracts as to transfer each good to the
in the year in which the loss customer.
is first foreseen.
The revenue for each performance
Margin associated with contract obligation
variations is only recognised is recognised over time because each
when the outcome of the contract good enhances an asset that the
negotiations can be reliably customer
estimated. controls.
Costs relating to contract variations Revenue is recognised as progress
are recognised as incurred. towards
complete satisfaction of that
performance
obligation over time using the output
method. Progress is determined by
completed
logs.
Ground Engineering Products
Each performance obligation
represents
a series of distinct goods that are
substantially the same and that have
the same pattern of transfer to the Under IAS 37 variable
customer. consideration was recognised
when probable. Under IFRS
Mobilisation (moving the piling rig 15 the requirement is
equipment to the customer site) does for revenue to be highly
not represent a separate performance probable. For the Group
obligation. Mobilisation revenue is the move from probable
included within the transaction price to highly probable does
of the related performance obligation not create a material
and recognised over time. change in the timing of
revenue recognition.
The revenue for each performance
obligations
is recognised over time because each
pile enhances an asset that the
customer
controls.
Revenue is recognised as progress
towards
complete satisfaction of that
performance
obligation over time using the output
method. Progress is determined by
completed
pile logs.
Variable Consideration
The following types of income are
variable
consideration and are only recognised The amended accounting
when management determines them to be policy reflects the requirement
highly probable: under IFRS 15 to recognise
all contract balances
Liquidated Damages (LADs) as contract assets or
contract liabilities,
These are included in the contract other than any unconditional
for rights to consideration
both parties. which are presented as
receivables. Consequently,
The customer can reduce the amount this has led to the creation
paid of a new category of asset
to the Group if it is deemed the ("contract assets") within
Group trade and other receivables
has caused unnecessary delays or and a new category of
additional liability ("contract liabilities")
work. The Group is also able to claim within trade and other
LADs where it can be proved that the payables, which includes
Customer has caused unnecessary amounts previously held
delays as trade receivables or
or disruption. The method for payables. Both new categories
claiming include amounts previously
this revenue is to include it within held as trade receivables
the application to the customer, or or payables on the balance
for the Customer to include or sheet.
exclude
in the application certificate
returned
to the Group.
At the point of making an application
for LADs the additional revenue or
the
reduction in revenue is only
recognised
when it is highly probable that it
will
occur.
Standing time
Within the contracts a penalty charge
can be made where work is delayed,
and
the Group assets must stand idle.
These
charges can be disputed by the
Customer
where blame may not be clear. The
revenue
for these charges is not recognised
until it is highly probable that it
will be received.
Adjustments to invoiced variable
consideration
Where revenue relating to variable
consideration
is invoiced to the customer, revenue
is adjusted to remove revenue that is
not highly probable. This is
subsequently
recognised only once it becomes
highly
probable.
Trade receivables
Trade receivables includes
applications
to the extent that there is an
unconditional
right to payment and the amount has
been certified by the customer.
Contract assets
The recoverable amount of
applications
that have not been certified and
other
amounts that have not been applied
for
but represent the recoverable value
of work carried out at the balance
sheet
date are recognised as contract
assets
within trade and other receivables on
the balance sheet.
Contract liabilities
Any payments received in advance of
completing the work are recognised
within
contract liabilities.
-------------------------------------- -------------------------------------
IFRS 16 Leases
IFRS 16, as adopted by the European Union, becomes effective for accounting periods beginning on or after 1 January 2019.
Adoption of IFRS 16 Leases will result in the Group recognising right of use assets and lease liabilities for all contracts that are, or contain, a lease. For leases currently classified as operating leases, under current accounting requirements the Group does not recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis over the lease term, disclosing in its annual financial statements the total commitment.
The Directors are performing a detailed analysis of the impact of adopting IFRS 16, as well as considering whether to adopt a full retrospective or a modified retrospective approach. This will be concluded prior to the end of FY2019 and the impact, both on the primary financial statements and on key performance indicators, will be disclosed in the financial statements for the year ended 30 April 2019.
Functional currency
The unaudited interim consolidated statements are presented in Sterling, which is also the Group's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.
Accounting for fixed assets
The Group has made changes to the useful economic lives and residual values, effective from 1 May 2018, together with an associated refinement to the allocation of subsequent expenditure between repairs and capital enhancements.
Depreciation rates and residual values- change in accounting estimate
The Group has made the following changes to the depreciation rates, effective from 1 May 2018. Depreciation is calculated for plant and machinery, using the straight-line method, to write off their carrying value, less residual values, over the expected useful economic lives of 12 years, 8 years or 3-5 years respectively. Under the old accounting policy, a residual value was not applied to the carrying value and deprecation was calculated over an expected useful life of 10 years. The change has been applied prospectively and there has been no restatement of prior periods.
This change in estimates has reduced the depreciation charge reported for H1 FY 2019 and forecast for FY2019 as follows:
H1 FY 2019 FY2019
(forecast)
-----------------------
Using old depreciation GBP2,685k GBP5,369k
rates
----------- ------------
As reported GBP2,131k GBP4,262k
----------- ------------
Variation GBP(554) GBP(1,107)
----------- ------------
Expenditure on subsequent repairs and refurbishments
Also effective 1 May 2018, and consistent with the evidence considered in support of the revised useful lives and residual values of plant and machinery, the Group has reviewed the previous approach to allocating subsequent expenditure between repairs and enhancements to the existing assets. This review has identified that certain refurbishment costs which were historically added to the cost of the assets and depreciated over a 10 year period will, in future, be recognised as an expenses in the Income Statement as incurred, taking into account the revised assessment of useful economic lives and residual values, this expenditure does not enhance the value or extend the lives of the related assets. This change has been applied prospectively. In H1 FY2019 this change resulted in a charge of GBP48,000 to the Income Statement that would have previously been capitalised.
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. 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 2018
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 19,009 12,752 6,902 7,892 - 46,555
Inter-segment
revenue (1,646) - (613) (1,375) - (3,634)
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Revenue 17,363 12,752 6,289 6,517 42,921
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Operating
profit
Underlying
operating
profit 391 2,125 95 427 - 3,038
Share-based
payments - - - - (80) (80)
Exceptional
item - - - - (331) (331)
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Operating
profit 391 2,125 95 427 (411) 2,627
Finance
expense - - - - (297) (297)
Finance income - - - - 25 25
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Profit before
tax 391 2,125 95 427 (683) 2,355
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Assets
Property,
plant
& equipment 12,442 12,458 3,073 1,850 9,215 39,038
Inventories 415 415 116 1,426 - 2,372
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Reportable
segment
assets 12,857 12,873 3,189 3,276 9,215 41,410
Intangible
assets - - - - 2,303 2,303
Trade and
other
receivables - - - - 19,946 19,946
Cash and cash
equivalents - - - - 9,384 9,384
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Total assets 12,857 12,873 3,189 3,276 40,848 73,043
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Liabilities
Loans and
borrowings - - - - 15,016 15,016
Trade and
other
payables - - - - 15,268 15,268
Provisions - - - - 253 253
Deferred tax - - - - 1,016 1,016
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Total
liabilities - - - - 31,553 31,553
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Other
information
Capital
expenditure 113 367 85 1,062 359 1,986
Depreciation /
amortisation 974 757 226 198 - 2,155
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
There are no individual customers accounting for more than 10% of Group revenue in either the current or preceding period/ year.
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/ year.
Operating segments - 12 months to 30 April 2018
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 46,066 30,299 18,677 16,384 - 111,426
Inter-segment
revenue (2,942) (412) (1,175) (3,025) - (7,554)
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Revenue 43,124 29,887 17,502 13,359 - 103,872
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Operating
profit
Underlying
operating
profit 5,693 4,073 306 1,025 - 11,097
Share-based
payments - - - - (148) (148)
Exceptional
item - (956) - - (283) (1,239)
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Operating
profit 5,693 3,117 306 1,025 (431) 9,710
Finance
expense - - - - (561) (561)
Finance income - - - - 25 25
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Profit before
tax 5,693 3,117 306 1,025 (967) 9,174
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Assets
Property,
plant
& equipment 13,513 10,218 4,163 2,913 8,695 39,502
Inventories 297 420 156 1,693 - 2,566
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Reportable
segment
assets 13,810 10,638 4,319 4,606 8,695 42,068
Intangible
assets - - - - 2,324 2,324
Trade and
other
receivables - - - - 22,225 22,225
Cash and cash
equivalents - - - - 10,880 10,880
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Total assets 13,810 10,638 4,319 4,606 44,124 77,497
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Liabilities
Loans and
borrowings - - - - 16,785 16,785
Trade and
other
payables - - - - 18,106 18,106
Provisions - - - - 270 270
Deferred tax - - - - 969 969
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Total
liabilities - - - - 36,130 36,130
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
Other
information
Capital
expenditure 5,059 2,636 2,070 1,782 1,603 13,150
Depreciation /
amortisation 2,002 2,114 685 242 662 5,705
------------------------- ------------------- ---------------------- ---------------------- ---------------------- ------------------ ------------------
There are no individual customers accounting for more than 10% of Group revenue in either the current or preceding period/ year.
3. Exceptional costs
6 months 6 months 12 months
to 31 Oct to 31 Oct to 30 Apr
2018 (unaudited) 2017 (unaudited) 2018 (audited)
GBP'000 GBP'000 GBP'000
------------------- ------------------ ------------------ ----------------
Exceptional costs 331 - 1,239
------------------- ------------------ ------------------ ----------------
Exceptional costs for the 6 months to 31 October 2018 are for restructuring costs as a result of consolidating the divisional structure.
The prior year other exceptional items relate to costs associated with an EGM held on 1 December 2017, due diligence fees for an aborted acquisition and a GBP956,000 Carillion bad debt write off.
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 Oct to 31 Oct to 30 Apr
2018 (unaudited) 2017 (unaudited) 2018 (audited)
'000 '000 '000
------------------------------------ ------------------ ------------------ ------------------
Basic weighted average number
of shares 80,000 80,000 80,000
Dilutive potential ordinary shares - - -
from share options
------------------------------------ ------------------ ------------------ ----------------
Diluted weighted average number
of shares 80,000 80,000 80,000
------------------------------------ ------------------ ------------------ ----------------
GBP'000 GBP'000 GBP'000
------------------------------------ ------------------ ------------------ ----------------
Profit for the period/year 1,884 4,244 7,339
------------------------------------ ------------------ ------------------ ----------------
Add back / (deduct):
Share-based payments 80 80 148
Exceptional costs 331 - 1,239
Tax effect of the above (63) - (210)
------------------------------------ ------------------ ------------------ ----------------
Underlying profit for the year 2,232 4,324 8,516
------------------------------------ ------------------ ------------------ ----------------
Pence Pence Pence
------------------------------------ ------------------ ------------------ ----------------
Earnings per share
Basic 2.4 5.3 9.2
Diluted 2.4 5.3 9.2
Basic - excluding exceptional
costs and share-based payments 2.8 5.4 10.6
Diluted - excluding exceptional
costs and share-based payments 2.8 5.4 10.6
------------------------------------ ------------------ ------------------ ----------------
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 2017: 80,000,000 and 12 months ended 30 Apr 2018: 80,000,000) being the weighted average number of ordinary shares.
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 Oct to 31 Oct to 30 Apr
2018 (unaudited) 2017 (unaudited) 2018 (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ------------------ ------------------ ----------------
Operating profit 2,627 5,584 9,710
Adjustments for:
Depreciation of property, plant
and equipment 2,131 2,716 5,705
Amortisation of intangible assets 24 24 44
Profit on disposal of property,
plant and equipment (8) (221) (267)
Share-based payment expense 80 80 225
-------------------------------------- ------------------ ------------------ ----------------
Operating cash flows before movement
in working capital 4,854 8,183 15,417
Decrease/(Increase) in inventories 193 (27) (142)
Decrease/(Increase) in trade and
other receivables 2,279 (2,332) (3,429)
(Decrease)/Increase in trade and
other payables (2,523) 1,287 1,470
Decrease in provisions (17) - (72)
-------------------------------------- ------------------ ------------------ ----------------
Cash generated from operations 4,786 7,111 13,244
-------------------------------------- ------------------ ------------------ ----------------
6. Analysis of cash and cash equivalents and reconciliation to net debt
31 Oct 2018 31 Oct 2017 30 Apr 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- ------------
Cash at bank 9,340 11,992 10,832
Cash in hand 44 50 48
--------------------------- ------------- ------------- ------------
Cash and cash equivalents 9,384 12,042 10,880
Bank loans secured (1,050) (1,200) (1,125)
Other loans secured (62) (157) (110)
Finance leases (13,902) (15,271) (15,550)
--------------------------- ------------- ------------- ------------
Net debt (5,630) (4,586) (5,905)
--------------------------- ------------- ------------- ------------
INDEPENDENT REVIEW REPORT TO VAN ELLE HOLDINGS PLC
Introduction
We have been engaged by the company to review the unaudited interim consolidated statement in the half-yearly financial report for the six months ended 31 October 2018 which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the unaudited interim consolidated statement.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the unaudited interim consolidated statement in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the unaudited interim consolidated statement in the half-yearly financial report for the six months ended 31 October 2018 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants
Nottingham
15 January 2019
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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