Interim Results

RNS Number : 5420Q
Aukett Swanke Group PLC
29 June 2022
 

Aukett Swanke Group Plc

Interim results

For the six months ended 31 March 2022

 

 

Aukett Swanke Group Plc ("the Group"), a company that principally provides architectural and interior design services, is pleased to announce its interim results for the six-month period ended 31 March 2022.

Highlights

 

Total revenue* increases to £5.78m (2021: £5.28m)

 

Revenue from continuing operations increases to £4.53m (2021: £3.70m)

 

United Kingdom returns to profit before group costs of £40k (2021: loss £567K)

 

Group costs reduced by 30% to £419k (2021: £598k)

 

Post period disposal of interest in Middle East operation for AED 5.0m (£1.1m)

 

Improving order book

 

 

*Continuing and discontinued operation revenue combined

 

 

Commenting on the interim results, CEO Nicholas Thompson said:

 

" The period under review highlights a return to growth, particularly in the UK and a significant reduction in the running costs of the Group as we progress our recovery strategy."

For further information please contact: 

Aukett Swanke Group Plc


Nicholas Thompson, Antony Barkwith

+44 (0) 20 7843 3000

 

Strand Hanson Limited (Financial and Nominated Adviser)


James Spinney, James Bellman

+44 (0) 20 7409 3494



Arden Partners plc (Broker)


John Llewellyn-Lloyd, Louisa Waddell, Benjamin Onyeama-Christie

+44 (0) 20 7614 5900



Investor/Media 


Chris Steele  

  +44 (0) 7979 604 687

 

 

 

 

Interim statement

 

Overview

In the half year under review and subsequently there has been a marked improvement in the Group's trading and financial position.

 

The result for the six months ended 31 March 2022, shows revenues (from continuing and discontinued operations combined) increasing by £500k to £5.78m (2021: £5.28m) and with this our losses before tax substantially reduced to £413k (2021: £1,017k).

 

Continuing operations' revenues increased by 22% to £4.53m (2021: £3.70m) and the loss before tax fell significantly to £152k (2021: £737k) evidencing the progress being made in restoring the group's underlying profitability. Revenues from discontinued operations fell by 21% to £1.25m (2021: £1.58m) and the loss before tax showed a small reduction at £261k (2021: £280k).

 

The post-period disposal of John R Harris & Partners Limited ("John R Harris") to the local management team has also significantly improved the Group's cash position.

 

Group Results

Within the overall result, the United Kingdom increased revenues to £4.43m (2021: £3.44m) and net of consultants, revenues rose by £714k to £3.31m (2021: £2.59m). As a result, the prior year loss before management charges of £567k moved into a profit of £40k for the reporting six months. In effect 85% of the growth dropped straight to the bottom line.

Continental European revenues were down 64% (locally 42%) as the Turkish lira depreciated by c.80% such that revenues were only £94k (2021: £258k). Profits before management charges for Continental Europe, as a whole, also reduced to £123k (2021: £227k). Both German operations continue to perform well in a post covid market.

Elsewhere the operating results were not so favourable. The Middle East continued to lose revenues with a fall of 21% to £1.25m (2021: £1.58m), resulting in an increased loss of £157k (2021: £79k) before management charges. This was further impacted by the closure costs related to the numerous licences that were previously required in the region. However, since the period end, we have disposed of our interest in the main operation, John R Harris, and we continue to downsize our residual operations.

A pleasing upturn in new business wins (see below) in both the United Kingdom and Continental Europe, leads us to expect further improvement in the second half.

Having commented on the disproportionate cost of the Group compared to the operations we are pleased to report a reduction in Group costs in the period of 30% to £419k (2021: £598k). This was mainly due to a reduction in executive salary costs as part of retirement planning processes.

 

Projects

Across the Group there have been significant new wins and project completions. In the UK preliminary stages on a range of Hybrid mixed use projects have begun for Related Argent, Segro, LaSalle, Freshwater, Regal London, Joseph Homes, Royal London Asset Management and Network Rail. The Eastside Locks project for Birmingham City University was completed earlier in the year with the fit-out now under way. Planning consent has been secured for the 30,000 sqm St. George's House East project in Wimbledon.

Executive Architecture project wins include Project Apple, the 19ha redevelopment in Surrey for biopharmaceutical giant UCB Celltech with the Heatherwick Studio and No's 74 & 84 Moorgate for the City of London and Osborne with Ben Adam Architects. Completions in London include the 21,000 sqm Featherstone building for Derwent with architect Morris + Company and the topping out of the 15,000 sqm n2 Nova Evolved workplace building for Landsec with Lynch Architects. 

In Germany completions include the IHK Business Welcome Center and the refurbishment of the central areas of KaDeWe department store in Berlin, and new wins include the fit-out planning of 14,000 sqm in the Am Tacheles building for tenant Autodoc. In Frankfurt further refurbished floors of the iconic MesseTurm have been completed for landlord Blackstone together with fit-outs for international banking, legal and IT sector clients. In Turkey new concept designs were won and completed for the 10,000 sqm Mercedes Benz Office HQ, the 25,000 sqm Cengiz Altunizade Campus in Istanbul and their 4,000 sqm Ankara HQ building.

 

Disposal

Shortly after the half year the Group concluded the disposal of its interest in John R Harris to the local management team operating out of the Middle East.

The disposal provided an initial inflow of cash consideration along with a deferred consideration sum payable over 5 years, for a total £1.1m. The Group has also entered into a Marketing Agreement, covering the use of the Group's project portfolio and associated materials, over the deferred consideration period for an additional sum in order to maintain the Group's interest in this important market. The Group continues to operate in the Middle East but on a much-reduced basis.

 

Prospects

The Group continues to focus on enhancing shareholder value. This, inter alia, includes opportunities for further disposals and funding to support our new growth strategy; consideration of a share consolidation to improve the share register and allow many small investors to realise their investment on an economic basis whilst significantly reducing the cost to the Group of servicing a register with many hundreds of very small shareholdings; and, following my retirement, the appointment of a successor CEO to lead the business in the next phase of its operations.  

Overall, we see the performance of the Group improving in the second half. 

 

 

Nicholas Thompson

Chief Executive Officer

28 June 2022

 

 

 

Consolidated income statement

 

For the six months ended 31 March 2022

 


Note

Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Continuing Operations










Revenue

3

4,529

3,699

9,192






Sub consultant costs


(1,152)

(912)

(2,887)

Revenue less sub consultant costs


3,377

2,787

6,305






Personnel related costs


(2,921)

(2,798)

(5,594)

Property related costs


(531)

(534)

(1,041)

Other operating expenses


(240)

(402)

(695)

Other operating income

4

144

188

358

Operating loss


(171)

(759)

(667)






Finance costs


(46)

(49)

(94)

Loss after finance costs


(217)

(808)

(761)






Impairment of intangibles


-

-

-

Share of results of associate and joint ventures


65

71

166

Loss before tax

3

(152)

(737)

(595)






Tax credit


26

409

395

Loss from continuing operations


(126)

(328)

(200)






Loss from discontinued operations

5

(261)

(280)

(936)

Loss for the period


(387)

(608)

(1,136)






Loss attributable to:





  Owners of Aukett Swanke Group Plc


(387)

(603)

(1,123)

  Non-controlling interests


-

(5)

(13)

Loss for the period


(387)

(608)

(1,136)






Basic and diluted earnings per share for loss attributable to the ordinary equity holders of the Company:





  From continuing operations


(0.07p)

(0.20p)

(0.12p)

  From discontinued operations


(0.16p)

(0.16p)

(0.57p)

Total loss per share

6

(0.23p)

(0.36p)

(0.69p)






 

 

Consolidated statement of comprehensive income

 

For the six months ended 31 March 2022

 



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Loss for the period


(387)

(608)

(1,136)






Other comprehensive income:





Currency translation differences of foreign operations


(42)

(108)

(107)

Currency translation differences on translation of discontinued operations


(7)

(55)

(50)

 

 

Other comprehensive loss for the period


(49)

(163)

(157)






Total comprehensive loss for the period


(436)

(771)

(1,293)






Total comprehensive loss is attributable to:





  Owners of Aukett Swanke Group Plc


(436)

(762)

(1,280)

  Non-controlling interests


-

(9)

(13)

Total comprehensive loss for the period


(436)

(771)

(1,293)






Total comprehensive loss attributable to the owners of Aukett Swanke Group Plc arises from:





  Continuing operations


(168)

(436)

(307)

  Discontinued operations


(268)

(326)

(973)



(436)

(762)

(1,280)

 

 

 

Consolidated statement of financial position

 

At 31 March 2022

 


Note

Unaudited

at 31

March

 2022

£'000

 

Unaudited

at 31

March

 2021

£'000

 

Audited

at 30

September

2021

£'000

Non current assets





Goodwill


1,753

2,349

2,370

Other intangible assets


217

593

324

Property, plant and equipment


74

205

155

Right-of-use assets


2,354

2,737

2,546

Investment in associate and joint ventures


802

779

796

Deferred tax


265

259

241

Total non current assets


5,465

6,922

6,432






Current assets





Trade and other receivables


2,605

4,303

3,876

Contract assets


599

911

982

Current tax


-

362

99

Cash at bank and in hand

8

38

591

515



3,242

6,167

5,472

Assets in disposal groups classified as held for sale


1,868

-

-

 

Total current assets


5,110

6,167

5,472






Total assets


10,575

13,089

11,904






Current liabilities





Trade and other payables


(2,497)

(4,249)

(3,747)

Contract liabilities


(802)

(797)

(829)

Borrowings

8

(289)

(390)

(83)

Lease liabilities


(539)

(539)

(539)



(4,127)

(5,975)

(5,198)

Liabilities directly associated with assets in disposal groups classified as held for sale


(1,006)

-

-

 

Total current liabilities


(5,133)

(5,975)

(5,198)






Non current liabilities





Borrowings

8

(292)

-

(417)

Lease liabilities


(2,118)

(2,578)

(2,350)

Deferred tax 


(37)

(44)

(40)

Provisions


(364)

(889)

(832)

Total non current liabilities


(2,811)

(3,511)

(3,639)






Total liabilities


(7,944)

(9,486)

(8,837)






Net assets


2,631

3,603

3,067











Capital and reserves





Share capital


1,652

1,652

1,652

Merger reserve


1,176

1,176

1,176

Foreign currency translation reserve


(222)

(175)

(173)

Retained earnings


(1,469)

(562)

(1.082)

Other distributable reserve


1,494

1,494

1,494

Total equity attributable to

equity holders of the Company


2,631

3,585

3,067






Non-controlling interests


-

18

-

Total equity


2,631

3,603

3,067

 

 

 

Consolidated statement of cash flows

 

For the six months ended 31 March 2022

 


Note

Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Cash flows from operating activities





Cash expended by operations

7

(303)

(659)

(896)

Interest paid


-

-

-

Income tax credits received / (paid)


99

(1)

262

Net cash outflow from operating activities


(204)

(660)

(634)






Cash flows from investing activities





Purchase of property, plant and equipment


(13)

(2)

(33)

Sale of property, plant and equipment


-

-

16

Purchase of investments


-

(100)

(123)

Dividends received


46

472

528

Net cash received in investing activities


33

370

388






Net cash outflow before financing activities


(171)

(290)

(246)






Cash flows from financing activities





Principal paid on lease liabilities


(232)

(226)

(455)

Interest paid on lease liabilities


(40)

(48)

(91)

Proceeds from bank loans


-

-

500

Repayment of bank loans


-

(97)

(155)

Interest paid


(6)

(1)

(3)

Net cash outflow from financing activities


(278)

(372)

(204)






Net change in cash and cash equivalents


(449)

(662)

(450)






Cash and cash equivalents at start of period


515

992

992

Currency translation differences


(81)

(71)

(27)

Cash and cash equivalents at end of period

8

(15)

259

515











Cash and cash equivalents are comprised of:




Cash at bank and in hand

38

591

515

Cash held within assets classified as held for sale

28

-

-

Secured bank overdrafts

(81)

(332)

-

Cash and cash equivalents at end of year

(15)

259

515

 

 

 

Consolidated statement of changes in equity

 

 

For the six months ended 31 March 2022

 

 

 

Share capital

 

 

£'000

Foreign

currency

translation

reserve

£'000

Retained

 earnings

 

 

£'000

Other

distributable

reserve

 

£'000

Merger reserve

 

 

£'000

Total

 

 

 

£'000

Non controlling

interests

 

£'000

Total

equity

 

 

£'000

 









At 1 October 2021

1,652

(173)

(1,082)

1,494

1,176

3,067

-

3,067










Loss for the period

-

-

(387)

-

-

(387)

-

(387)

Other comprehensive income

-

(49)

-

-

-

(49)

-

(49)

Total comprehensive loss

-

(49)

(387)

-

-

(436)

-

(436)










At 31 March 2022

1,652

(222)

(1,469)

1,494

1,176

2,631

-

2,631

 

 

For the six months ended 31 March 2021

 

 

Share capital

 

 

£'000

Foreign

currency

translation

reserve

£'000

Retained

 earnings

 

 

£'000

Other

distributable

reserve

 

£'000

Merger reserve

 

 

£'000

Total

 

 

 

£'000

Non controlling

interests

 

£'000

Total

equity

 

 

£'000

At 1 October 2020

1,652

(16)

41

1,494

1,176

4,347

27

4,374










Loss for the period

-

-

(603)

-

-

(603)

(5)

(608)

Other comprehensive income

-

(159)

-

-

-

(159)

(4)

(163)

Total comprehensive loss

-

(159)

(603)

-

-

(762)

(9)

(771)










At 31 March 2021

1,652

(175)

(562)

1,494

1,176

3,585

18

3,603

 

 

 

Consolidated statement of changes in equity (continued)

 

For the year ended 30 September 2021

 

 

 

Share capital

 

 

£'000

Foreign

currency

translation

reserve

£'000

Retained

 earnings

 

 

£'000

Other

distributable

reserve

 

£'000

Merger reserve

 

 

£'000

Total

 

 

 

£'000

Non controlling

interests

 

£'000

Total

equity

 

 

£'000

At 1 October 2020

1,652

(16)

41

1,494

1,176

4,347

27

4,374










Loss for the period

-

-

(1,123)

-

-

(1,123)

(13)

(1,136)

Acquisition of minority interest

-

-

-

-

-

-

(14)

(14)

Other comprehensive income

-

(157)

-

-

-

(157)

-

(157)

Total comprehensive loss

-

(157)

(1,123)

-

-

(1,280)

(27)

(1,307)










At 30 September 2021

1,652

(173)

(1,082)

1,494

1,176

3,067

-

3,067

 

 

 

 

 

Notes to the Interim Report

 

 

1  Basis of preparation

 

The financial information presented in this Interim Report has been prepared in accordance with the recognition and measurement principles of international accounting standards in conformity with the requirements of the Companies Act 2006 that are expected to be applicable to the financial statements for the year ending 30 September 2022 and on the basis of the accounting policies expected to be used in those financial statements.

 

 

2  New accounting standards, amendments and interpretations applied

 

A number of new or amended standards and interpretations to existing standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

 

 

3  Operating segments

 

The Group comprises a single business segment and separately reportable geographical segments (together with a Group costs segment). Geographical segments are based on the location of the operation undertaking each project. Turkey is included within Continental Europe together with Germany and the Czech Republic (in the comparative periods). The Middle East segment has been re-presented as a discontinued operation in note 5, and accordingly is no longer included in this operating segments note.

 

 

Segment revenue

 

 

 


Unaudited six months to 31 March 2022

£'000

 

Unaudited six months to 31 March 2021

£'000

 

Audited year to 30 September 2021

£'000

United Kingdom


4,435

3,441

8,871

Continental Europe


94

258

321

Total


4,529

3,699

9,192






 

Segment revenue less sub consultant costs


Unaudited six months to 31 March 2022

£'000

 

Unaudited six months to 31 March 2021

£'000

 

Audited year to 30 September 2021

£'000

United Kingdom


3,305

2,591

6,063

Continental Europe


72

196

242

Total


3,377

2,787

6,305

 

 

Segment result before tax


Unaudited six months to 31 March 2022

£'000

Unaudited six months to 31 March 2021

£'000

Audited year to 30 September 2021

£'000






United Kingdom


(230)

(837)

(848)

Continental Europe


49

121

149

Group costs


29

(21)

104

Total (loss)/profit


(152)

(737)

(595)






 

Segment result before tax

(before reallocation of group management charges)

 


Unaudited six months to 31 March 2022

£'000

Unaudited six months to 31 March 2021

£'000

Audited year to 30 September 2021

£'000






United Kingdom


40

(567)

(308)

Continental Europe


123

227

330

Group costs


(419)

(598)

(1,015)

Total (loss)/profit


(256)

(938)

(993)






Group management charges charged to the

Middle East discontinued operation


104

201

398

Total (loss)/profit


(152)

737

(595)

 

 

4  Other operating income



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Property rental income


74

79

153

Management charges to associate and joint ventures


63

65

132

Government grants (UK furlough scheme)


-

42

59

Licence   fee income


7

2

-

Other sundry income


-

-

14

Total other operating income


144

188

358

 

 

5  Discontinued operations

 

5 (a)   Description

 

In April 2022, the Group sold assets, as part of the Group's disposal of its John R Harris & Partners Limited (Cyprus) subsidiary and John R Harris & Partners (Dubai) entity. This marked the sale of the main trading operations in the Group's Middle East segment. With closure costs incurred in the period relating to the planned termination of a number of trading licenses in the Middle East operations, the Middle East segment is presented as a discontinued operation in the current period, and the comparative periods represented accordingly.

 

5 (b)   Financial performance and cash flow information

 

Result of discontinued operations



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Revenue


1,249

1,581

2,822






Sub consultant costs


(189)

(229)

(305)

Revenue less sub consultant costs


1,060

1,352

2,517






Expenses


(1,217)

(1,431)

(2,806)

Group management charges


(104)

(201)

(398)

Impairment of intangibles


-

-

(249)

Loss before tax


(261)

(280)

(936)






Tax credit / (charge)


-

-

-

Loss from discontinued operations


(261)

(280)

(936)






Exchange differences on translation of discontinued operation


(7)

(55)

(50)

 

Other comprehensive loss from discontinued operations


(268)

(335)

(986)

 

 

Earnings per share from discontinued operations



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Basic and diluted loss per share


(0.16p)

(0.16p)

(0.57p)

 

Statement of cash flows

The statement of cash flows includes the following amounts relating to discontinued operations:



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000






Net cash outflow from operating activities


(174)

(241)

(485)

Net cash outflow from investing activities


-

(3)

(2)

Foreign exchange movements


2

(43)

(39)

Net cash from discontinued operations


(172)

(287)

(526)

 

6  Earnings per share

 

The calculations of basic and diluted earnings per share are based on the following data:

 

Earnings


Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Continuing operations


(126)

(328)

(200)

Discontinued operations


(261)

(275)

(923)

Loss for the period


(387)

(603)

(1,123)

 

Number of shares


Unaudited

six months

 to 31 March

2022

'000

 

Unaudited

six months

 to 31 March

2021

'000

 

Audited

year to

30 September

2021

'000

Weighted average number of shares


165,214

165,214

165,214

Effect of dilutive options


-

-

-

Diluted weighted average number of shares


165,214

165,214

165,214

 

7  Reconciliation of profit before tax to net cash from operations

 

 



Unaudited

six months

 to 31 March

2022

£'000

 

Unaudited

six months

 to 31 March

2021

£'000

 

Audited

year to

30 September

2021

£'000

Loss for the period


(387)

(608)

(1,136)

Tax credit


(26)

(409)

(395)

Finance costs


46

49

94

Share of results of associate and joint ventures


(65)

(71)

(166)

Intangible amortisation


19

32

59

Intangible impairment


-

-

249

Depreciation


56

63

129

Amortisation of right-of-use assets


192

192

383

Profit on disposal of property, plant and equipment


-

(1)

(2)

Decrease / (increase) in trade and other receivables


565

(976)

(843)

(Decrease) / increase in trade and other payables


(635)

1,207

892

Change in provisions


(68)

(52)

(160)

Unrealised foreign exchange differences


-

(85)

-

Net cash expended by operations


(303)

(659)

(896)

 

8  Analysis of net funds

 



Unaudited at 31 March

 2022

£'000

 

Unaudited at 31 March

 2021

£'000

 

Audited at

30 September

2021

£'000

Cash at bank and in hand


38

591

515

Cash held within assets classified as held for sale


28

-

-

Secured bank overdrafts


(81)

(332)

-

Cash and cash equivalents


(15)

259

515






Secured bank loan


(500)

(58)

(500)

Net (debt)/funds


(515)

201

15

 

9   Events occurring after the reporting period

On 28 April 2022 Aukett Swanke Group Plc disposed of its 100% interest in the share capital of John R Harris & Partners Limited (registered in Cyprus), the beneficial owner of John R Harris & Partners (Dubai) for a cash consideration of AED 5,000,000, comprising AED 4,250,000 cash upfront and a further AED 750,000 deferred consideration paid over a 5 year period.

 

The assets and liabilities directly associated with both John R Harris & Partners Limited and John R Harris & Partners (Dubai) have been classified as held for sale for the reporting period ended 31 March 2022

 

The operating results of these entities have been included within discontinued operations for the 6 month period to 31 March 2022, and re-presented accordingly for comparative periods.

 

10  Status of Interim Report

The Interim Report covers the six months ended 31 March 2022 and was approved by the Board of Directors on 28 June 2022. The Interim Report is unaudited.

 

The interim condensed set of consolidated financial statements in the Interim Report are not statutory accounts as defined by Section 434 of the Companies Act 2006.

 

Comparative figures for the year ended 30 September 2021 have been extracted from the statutory accounts of the Group for that period .

 

The statutory accounts for the year ended 30 September 2021 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Section 498 of the Companies Act 2006. The audit report did draw attention to the Directors' assessment of going concern, indicating that a material uncertainty exists that may cast significant doubt on the Group's and parent company's ability to continue as a going concern. The audit report was not modified in respect of this matter.

 

11  Further information

An electronic version of the Interim Report will be available on the Group's website (www.aukettswankeplc.com).

 

 

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