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Driver Group plc (DRV)

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Tuesday 05 June, 2018

Driver Group plc

Interim Report

RNS Number : 2632Q
Driver Group plc
05 June 2018
 

 

5 June 2018

 

DRIVER GROUP PLC

("Driver" or "the Group")

 

Interim Report

For the six months ended 31 March 2018

 

 

Key Points (for the six months ended 31 March 2018)

 

6 months ended 31 March 2018

6 months ended 31 March 2017

Change

 

£000

£000

£000

Revenue

31,694

30,861

833

Gross Profit

8,887

7,491

1,396

Gross Profit %

28%

24%

4%

 

 

 

 

Profit before tax from continuing operations

1,726

436

1,290

Add: Share-based payment costs

379

117

262

Add: Exceptional items

-

481

(481)

Underlying* profit before tax

2,105

1,034

1,071

Underlying* profit before tax %

7%

3%

4%

 

 

 

 

Underlying* earnings per share

3.4p

3.0p

0.4p

Net cash/(borrowings)**

838

(3,501)

4,339

 

 

·      Revenue up by 3% to £31.7m (2017: £30.9m), rising to 5% when removing the impact of the South African business disposed of in the year ended 30 September 2017

 

·      Gross profit up to 28% resulting in £1.4m increase to £8.9m (2017: £7.5m)

 

·      Underlying* PBT up 104% to £2.1m (2017: £1.03m) resulting in an underlying* PBT margin of 7% (2017: 3%)

 

·      Net cash at 31 March 2018 of £0.8m (2017: net borrowings** £3.5m)

 

·      Fee earner headcount increased by 23 to 387 on continuing business mainly as a result of growth in APAC region.  Overall utilisation rates up 7.4% points to 81.6%

 

·      Asia Pacific (APAC) reported underlying* PBT for the period £0.6m compared with a loss £0.1m with utilisation rates at 91.6%

 

·      Middle East (ME) reported underlying* PBT for the period of £1.3m up 19% with utilisation rates at 83.5%

 

·      Europe & Americas (EuAm) reported underlying* PBT for the period of £1.4m up 4% with utilisation rates at 73.6%

 

·      Head office property sale and leaseback completed on 20 April 2018

 

 

*    Underlying figures are stated before the share-based payment costs and exceptional items (note 6).

**  Net (borrowings) / cash consists of cash and cash equivalents, bank loans and finance leases.        

 

 

 

 

Steve Norris, Chairman of Driver Group, said:

 

"Driver has built on the turnaround of the Group's performance in the year ended 30 September 2017, the Group has continued to deliver on the strategy laid out at the time of the refinancing last year, by producing profit growth and debt reduction.  Along with the remedial actions taken last year to restore the business to profit and bring stability to the balance sheet, the Group has concluded on the sale and leaseback of the head office property in April 2018 as promised at the time of the refinancing last year.  Whilst the financial improvement is very pleasing we are of course far from complacent and we remain focused on delivering further profit growth and cash generation over the coming months and years."

 

 

Enquiries

 

 

Driver Group plc

 

Gordon Wilkinson, Group Chief Executive

 

David Kilgour, CFO

 

 

+44 (0)20 377 0005

N+1 Singer (Nominated Adviser)

                                                                       

Sandy Fraser

 

 

+44 (0)20 7496 3000

Acuitas Communications (Financial PR)

 

Simon Nayyar

                                                                                                            

Fraser Schurer-Lewis

+44 (0)20 3687 0868

 

 

 

INTRODUCTION

Building on the turnaround of the Group's performance in the year ended 30 September 2017, the Group has continued to deliver on the strategy laid out at the time of the refinancing last year, by producing profit growth and debt reduction.  Along with the remedial actions taken last year to restore the business to profit and bring stability to the balance sheet, the Group has concluded on the sale and leaseback of the head office property in April 2018 as promised at the time of the refinancing last year.  Whilst the financial improvement is very pleasing we are of course far from complacent and we remain focused on delivering further profit growth and cash generation over the coming months and years.  I am confident that the Group is well-placed to deliver consistently in its core business.

 

The Group's core business is in claims and dispute management and expert witness work.  We are fortunate to count many industry-leading proponents among our firm's complement which gives us strong client relationships and a competitive edge whilst having a reputation for delivering a world class service.  The Group is structured into three regions covering much of the developed world.  In Europe & Americas (EuAm), where we have a relatively mature and well-recognised business, the profitability achieved during the last six months, with a segmental profit margin of just under £1.4m on £14.3m of total revenue, has borne testament to the sense of this strategy.  In the Middle East (ME) and Asia Pacific (APAC) regions the local management teams have delivered excellent results where ME produced revenue of £12.0m and profit of £1.3m and APAC produced revenue of £5.4m and profit of £0.6m. 

 

FINANCIAL RESULTS

Revenue for the first half of the financial year was £31.7m, an increase of 3% on the first half of 2017 (£30.9m).  The 7.9% revenue growth in EuAm to £14.3m, and the 57.5% revenue growth in APAC to £5.4m were offset by the reduction in revenues in the ME business by 11.8% to £12.0m as a consequence of a major commission coming to an end.  Gross profit grew by £1.4m to £8.9m when compared to the first half of 2017 (£7.5m).  Administrative expenses increased by £0.1m to £7.1m when compared to the first half of 2017 (£7.0m).

 

The Group reported an underlying* profit before tax of £2.1m (2017: £1.0m).  The operating profit amounted to £1.8m (2017: £0.6m) and the pre-tax profit for the period was £1.7m (2017: £0.4m).

 

The Group's effective tax rate from continuing operations is 17% reflecting the geographic make-up of the Group, with UK profits utilising brought forward losses from prior years and with profits in the current period in overseas operations at local tax rates and no brought forward tax losses.  Underlying* profit per share was 3.4p (2017: 3.0p).  After share-based payment costs and exceptional items the profit per share was 2.7p (2017: 0.7p). 

 

The Group has improved from a net borrowings** position of £3.5 million at 31 March 2017 and net borrowings** of £0.2m at the end of September 2017 to a net cash** position of £0.8m as at 31 March 2018.

 

Net cash inflow from operations was £1.3m (2017: £1.4m cash outflow) during the first six months, including a net outflow from an increase in trade and other receivables of £2.1m (2017: £2.1m) and a net cash inflow from a decrease in trade and other payables of £0.9m (2017: £0.2m outflow).  The acquisition of fixed assets absorbed £0.2m (2017: £0.1m). 

 

DIVIDEND

The Board does not recommend the payment of an interim dividend (2017: £nil).  The Board continues to keep dividend policy under review and is committed to restoring dividend payments when appropriate in the future.

 

TRADING PERFORMANCE

During the six-month period to 31 March 2018 the headcount rose by 6.6% to 467 after adjusting for the effect of the business disposals during 2017. This mainly reflected a 6.3% increase in fee-earners of which more than half were sub-contractors in the UK and APAC regions. Overall staff utilisation levels rose during the period to 81.6% (2017: 74.2%) thanks largely to excellent performances in the APAC and ME regions.

 

Across the Group, the half year saw a 104% increase in the underlying* profit, from the equivalent period last year, to £2.1m (2017: £1.0m).  This £1.1m improvement was achieved through a combination of a small revenue increase with gross profit margins improving to 28%, and staff utilisation rates increasing from 74.2% to 81.6%.

 

In APAC region revenues increased by £2.0m to £5.4m reflecting the benefit of restructuring and focussed business development in the region. As a result the region delivered a profit of £0.6m (2017: loss £0.1m) largely as a result of the Singapore business.

 

In the ME region revenue decreased by £1.6m to £12.0m as a result of a major commission reaching completion, however, profit increased by 19% to £1.3m as a result of good cost management. Within the region particularly good results were achieved by Qatar and Kuwait which delivered revenue increases of 82% and 114%. 

 

The EuAm region delivered revenue growth of 7.9% to £14.3m and profit growth of 4.4% to £1.4m. Within this the Driver Trett UK business delivered an increase in revenue of 22.3% to £7.3m and profit of 22.5% to £1.6m whilst mainland Europe revenues fell by £0.5m to £2.9m resulting in a fall in profit to £0.1m. The UK Driver Project Services business delivered an increase in revenue of 11.5% to £3.4m which resulted in a 72.2% profit increase to £0.3m.

 

Additionally, it continues, as always, to be important to convert the profit growth into operational cash inflows and we continue to closely monitor our performance and gradually collect the older Middle East debt.

 

OUTLOOK

It is the inherent nature of our business that forecasting with any accuracy much beyond twelve weeks ahead is notoriously difficult.  That said, the profit booked in the first half leaves the Group increasingly well placed to record good progress in the current financial year.  Staff utilisation rates are steady overall at levels in excess of 80%, costs are much better controlled and progress is being made in the collection of aged debt.

 

Ours is very much a people business and on behalf of our senior leadership team of Gordon Wilkinson, Mark Wheeler and David Kilgour, I would particularly like to thank every one of our staff, wherever they are in the world, for their hard work and support in what has been a tough but invigorating turnaround in our fortunes.  I should also like to thank all our shareholders, established and new, for their continuing support.  The Group will continue to do its utmost to repay the confidence you have shown in the business.

 

Steven Norris

Non-Executive Chairman

4 June 2018

Consolidated Income Statement

Interim report for the six months ended 31 March 2018

 

 

6 months

 ended

31 March 2018

£000

Unaudited

6 months ended

31 March 2017

£000

Unaudited

Restated**

Year

ended

30 September 2017

£000

Audited

REVENUE

31,694

30,861

60,227

Cost of sales

   (22,807)

(23,370)

(45,391)

 

GROSS PROFIT

 

8,887

 

7,491

 

14,836

Administrative expenses

(7,146)

(6,973)

(13,485)

Other operating income

69

74

143

 

 

 

 

Underlying* operating profit

2,189

1,190

2,747

Share-based payment charge and associated costs

(379)

(117)

(170)

-

(481)

(1,083)

OPERATING PROFIT

 

1,810

592

1,494

Finance income

2

1

1

Finance costs

         (86)

(157)

(262)

 

 

 

 

 

PROFIT BEFORE TAXATION

 

1,726

 

436

 

1,233

Tax (expense)/credit (note 2)

(297)

(39)

 38

 

PROFIT FROM CONTINUING OPERATIONS

 

1,429

 

397

 

1,271

Loss on discontinued operation, net of tax

-

(148)

(976)

 

PROFIT FOR THE PERIOD

 

1,429

 

249

 

295

 

Profit attributable to non-controlling interests from continuing operations

 

 

-

 

 

1

 

 

4

Loss attributable to non-controlling interests from discontinued operations

 

-

 

-

 

-

Profit attributable to equity shareholders of the parent from continuing operations

 

1,429

 

396

 

1,267

Loss attributable to equity shareholders of the parent from discontinued operations

 

-

 

(148)

 

(976)

 

1,429

249

295

 

Basic earnings per share attributable to equity shareholders of the Parent (pence)

 

 

2.7p

 

 

0.7p

 

 

0.7p

Diluted earnings per share attributable to equity shareholders of the Parent (pence)

 

2.6p

 

0.7p

                  0.6p

Basic earnings per share attributable to equity shareholders of the Parent (pence) from continuing operations

 

2.7p

 

1.2p

 

2.9p

Diluted earnings per share attributable to equity shareholders of the Parent (pence) from continuing operations

 

2.6p

 

1.1p

 

2.8p

 

 

 

 

 

*Underlying figures are stated before the share-based payment costs and exceptional items (note 6).

 

**Restated to reflect discontinued operations 

Consolidated Statement of Comprehensive Income

Interim report for the six months ended 31 March 2018

 

 

6 months ended

31 March

2018

£000

Unaudited

6 months ended

31 March

2017

£000

Unaudited

Year

ended

30 September

2017

£000

Audited

PROFIT FOR THE PERIOD

1,429

249

295

Other comprehensive income:

 

 

 

Items that could subsequently be reclassified to the Income Statement:

 

 

 

Exchange differences on translating foreign operations

12

(85)

(18)

Other comprehensive income for the year net of tax

12

(85)

(18)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

1,441

164

277

Total comprehensive income attributable to:

 

 

 

Owners of the parent

1,441

163

273

Non-controlling interest

-

1

4

 

1,441

164

277

 

 

 

 

Consolidated Statement of Financial Position

At 31 March 2018

 

 

31 March

2018

£000

Unaudited

31 March

2017

£000

Unaudited

30 September

2017

£000

Audited

 

NON-CURRENT ASSETS

 

 

 

Goodwill

2,969

3,456

2,969

Intangible assets

-

523

-

Property, plant and equipment

810

2,764

950

Deferred tax asset

64

22

58

 

3,843

6,765

3,977

 

CURRENT ASSETS

 

 

 

Trade and other receivables

20,976

22,747

18,859

Derivative financial asset

390

165

531

Cash and cash equivalents

5,814

3,081

4,932

Asset held for sale - note 7

1,614

-

1,614

 

28,794

25,993

25,936

 

 

 

 

TOTAL ASSETS

32,637

32,758

29,913

 

CURRENT LIABILITIES

 

 

 

Borrowings

(662)

(128)

(527)

Trade and other payables

(9,223)

(8,685)

(8,352)

Derivative financial liability

-

(1,220)

(12)

Current tax payable

(354)

(109)

(175)

 

(10,239)

(10,142)

(9,066)

 

NON-CURRENT LIABILITIES

 

 

 

Borrowings

(4,314)

(6,454)

(4,583)

Deferred tax liabilities

(127)

(256)

(127)

 

(4,441)

(6,710)

(4,710)

 

 

 

 

TOTAL LIABILITIES

(14,680)

(16,852)

(13,776)

 

 

 

 

NET ASSETS

17,957

15,906

16,137

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

Share capital

215

213

215

Share premium

11,475

11,412

11,475

Merger reserve

1,055

1,702

1,055

Currency reserve

(447)

(526)

(459)

Capital redemption reserve

18

18

18

Retained earnings

5,745

3,194

3,937

Own shares

(107)

(107)

(107)

 

TOTAL SHAREHOLDERS' EQUITY

 

17,954

 

15,906

 

16,134

 

 

 

 

NON-CONTROLLING INTEREST

3

-

3

 

 

 

 

TOTAL EQUITY

17,957

15,906

16,137

 

Consolidated Cashflow Statement

Interim report for the six months ended 31 March 2018

 

 

6 months ended

31 March

2018

£000

Unaudited

6 months ended

31 March

2017

£000

Unaudited

Year

ended

30 September

2017

£000

Audited

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Profit after taxation

1,429

249

295

 

Adjustments for:

 

 

 

Depreciation

296

295

601

Amortisation

-

98

621

Exchange adjustments

33

(34)

51

Loss on disposal of subsidiary

-

-

796

Finance income

(2)

(1)

(1)

Finance expense

86

157

262

Tax expense/(credit)

297

20

(38)

Equity settled share-based payment cost

379

117

170

 

 

 

 

OPERATING CASH FLOW BEFORE CHANGES IN WORKING

CAPITAL AND PROVISIONS

 

2,518

 

901

 

2,757

(Increase)/decrease in trade and other receivables

(2,051)

(2,110)

833

Increase/(decrease) in trade and other payables

862

(171)

(1,378)

 

CASH GENERATED/(USED) BY OPERATIONS

 

1,329

 

(1,380)

 

2,212

Tax paid

(115)

(5)

(29)

 

NET CASH INFLOW/(OUTFLOW)

FROM OPERATING ACTIVITIES

 

 

1,214

 

 

(1,385)

 

 

2,183

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Interest received

2

1

1

Acquisition of property, plant and equipment

(156)

(132)

(264)

Disposal of subsidiary net of cash acquired

75

-

12

NET CASH OUTFLOW FROM INVESTING ACTIVITIES

(79)

(131)

(251)

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Interest paid

(86)

(157)

(262)

Repayment of borrowings

(134)

(7,051)

(7,123)

Proceeds of borrowings

-

6,400

5,000

Proceeds from issue of new shares

-

8,495

8,560

Costs directly attributable to the issue of new shares

-

(450)

(450)

NET CASH (OUTFLOW)/INFLOW

FROM FINANCING ACTIVITIES

 

(220)

 

7,237

 

5,725

Net increase in cash and cash equivalents

915

5,721

7,657

Effect of foreign exchange on cash and cash equivalents

(33)

34

(51)

Cash and cash equivalents at start of period

4,932

(2,674)

(2,674)

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

5,814

 

3,081

 

4,932

 

 

 

 

 

Consolidated Statement of Changes in Equity

Interim Report for the six months ended 31March 2018

 

For the six months ended 31 March 2018 (Unaudited):

 

 

 

Share

capital

£000

 

Share

premium

£000

 

Merger

reserve

£000

 

Other reserves(2)

£000

 

Retained earnings

£000

 

Own shares

£000

 

 

Total(1)

£000

Non-controlling interest

£000

 

Total

Equity

£000

 

At 1 October 2017

 

215

 

11,475

 

1,055

 

(441)

 

3,937

 

(107)

 

16,134

 

3

 

16,137

Profit for the period

 

-

 

-

 

-

 

-

 

1,429

 

-

 

1,429

 

-

 

1,429

Other comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12

 

 

 

-

 

 

 

-

 

 

 

12

 

 

 

-

 

 

 

12

Total comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12

 

 

 

1,429

 

 

 

-

 

 

 

1,441

 

 

 

-

 

 

 

1,441

Contributions by and distributions

to owners

 

 

 

 

 

 

 

 

 

Share-based payment charge and associated costs

 

 

 

-

 

 

 

-

 

 

 

-

 

              

 

-

 

 

 

379

 

 

 

-

 

 

 

379

 

 

 

-

 

 

 

379

Total contributions by and

distributions to owners

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

12

 

 

 

 

1,808

 

 

 

 

-

 

 

 

 

1,820

 

 

 

 

-

 

 

 

 

1,820

AT 31 MARCH 2018

 

215

 

11,475

 

1,055

 

(429)

 

5,745

 

(107)

 

17,954

 

3

 

17,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended 31 March 2017 (Unaudited):

 

 

 

 

 

 

 

Share

capital

£000

 

Share

premium

£000

 

Merger

reserve

£000

 

Other reserves(2)

£000

 

Retained earnings

£000

 

Own shares

£000

 

 

Total(1)

£000

Non-controlling interest

£000

 

Total

Equity

£000

 

At 1 October 2016

 

127

 

3,453

 

1,702

 

(423)

 

2,829

 

(107)

 

7,581

 

(1)

 

7,580

Profit for the period

 

-

 

-

 

-

 

-

 

248

 

-

 

248

 

1

 

249

Other comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(85)

 

 

 

-

 

 

 

-

 

 

 

(85)

 

 

 

-

 

 

 

(85)

Total comprehensive income for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(85)

 

 

 

248

 

 

 

-

 

 

 

163

 

 

 

1

 

 

 

164

Contributions by and distributions

to owners

 

 

 

 

 

 

 

 

 

Issue of new shares

 

86

 

8,409

 

-

 

-

 

-

 

-

 

8,495

 

-

 

8,495

Costs directly attributable to the issue of new shares

 

 

 

-

 

 

 

(450)

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(450)

 

 

 

-

 

 

 

(450)

Share-based payment charge and associated costs

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

117

 

 

 

-

 

 

 

117

 

 

 

-

 

 

 

117

Total contributions by and

distributions to owners

 

 

 

 

86

 

 

 

 

7,959

 

 

 

 

-

 

 

 

 

-

 

 

 

 

117

 

 

 

 

-

 

 

 

 

8,162

 

 

 

 

-

 

 

 

 

8,162

AT 31 MARCH 2017

 

213

 

11,412

 

1,702

 

(508)

 

3,194

 

(107)

 

15,906

 

-

 

15,906

 

 

 

Consolidated Statement of Changes in Equity (continued)

Interim report for the six months ended 31 March 2018

 

For the year ended 30 September 2017 (Audited):

 

 

 

Share

capital

£000

 

Share

premium

£000

 

Merger

reserve

£000

 

Other reserves(2)

£000

 

Retained earnings

£000

 

Own shares

£000

 

 

Total(1)

£000

Non-controlling interest

£000

 

Total

Equity

£000

 

At 1 October 2016

 

127

 

3,453

 

1,702

 

(423)

 

2,829

 

(107)

 

7,581

 

(1)

 

7,580

Profit for the year

-

-

-

-

291

-

291

4

295

Other comprehensive income for the year

 

 

-

 

 

-

 

 

-

 

 

(18)

 

 

-

 

 

-

 

 

(18)

 

 

-

 

 

(18)

Total comprehensive income for the year

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(18)

 

 

 

291

 

 

 

-

 

 

 

273

 

 

 

4

 

 

 

277

Contributions by and distributions

to owners

 

 

 

 

 

 

 

 

 

Share-based payment charge and associated costs

 

 

-

 

 

-

 

 

-

 

 

-

 

 

170

 

 

-

 

 

170

 

 

-

 

 

170

Transfer on disposal of Initiate

 

-

 

-

 

(647)

 

-

 

647

 

-

 

-

 

-

 

-

Issue of share capital

 

88

 

8,472

 

-

 

-

 

-

 

-

 

8,560

 

-

 

8,560

Costs directly attributable to the issue of new shares

 

 

-

 

 

(450)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(450)

 

 

-

 

 

(450)

Total contributions by and

distributions to owners

 

 

 

 

88

 

 

 

 

8,022

 

 

 

 

(647)

 

 

 

 

-

 

 

 

 

817

 

 

 

 

-

 

 

 

 

8,280

 

 

 

 

-

 

 

 

 

8,280

AT 30 SEPTEMBER 2017

 

215

 

11,475

 

1,055

 

(441)

 

3,937

 

(107)

 

16,134

 

3

 

16,137

(1)     Total equity attributable to the equity shareholders of the parent

(2)     'Other reserves' combines the currency reserve and capital redemption reserve.

 

1    BASIS OF PREPARATION

 

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2018 which are not expected to be significantly different to those set out in note 1 of the Group's audited financial statements for the year ended 30 September 2017.  The financial information in this interim report is in compliance with the recognition and measurement principles of IFRS as adopted by the European Union (EU) but does not include all disclosures that would be required under IFRSs.  The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.  The financial information for the half years ended 31 March 2018 and 31 March 2017 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited but has been reviewed by our auditors.

 

The comparative financial information for the year ended 30 September 2017 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditor's Report on that Annual Report and Financial Statements for 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim consolidated financial statements.

 

2    TAXATION

 

      The tax charge on the profit for the half-year ended 31 March 2018 is based on the estimated tax rates in the jurisdictions in which the Group operates, for the year ending 30 September 2018.

 

3    DIVIDEND

 

      In view of the current trading position, the directors do not propose an interim dividend for the half-year ended 31 March 2018 (2017: nil pence per share).

4   SUMMARY SEGMENTAL ANALYSIS

 

REPORTABLE SEGMENTS

For management purposes, the Group is now organised into three operating divisions: Europe & Americas (EuAm), Middle East (ME) and Asia Pacific (APAC).  This has changed from the previous operating divisions of Europe & Americas (EuAm) and Africa, Middle East and Asia Pacific (AMEA), due to the disposal of the African subsidiary in May 2017 and the dismantling of the AMEA central management team in late 2016. These divisions are now the basis on which the Group is structured and managed, based on its geographic structure.  The following key service provisions are provided across all three operating divisions: quantity surveying, planning / programming, quantum and planning experts, dispute avoidance / resolution, litigation support, contract administration and commercial advice / management.

 

                        Segment information about these reportable segments is presented below.

 

Six months ended 31 March 2018 (Unaudited)

 

 

 

 

 

 

 

 

 

 

Europe & Americas

£000

 

Middle

East

£000

 

Asia

Pacific

£000

 

 

Africa

£000

 

 

Eliminations

£000

 

 

Unallocated(1)

£000

 

 

Consolidated

£000

 

Discontinued

Initiate

£000

Total external revenue

 

14,258

 

11,994

 

5,442

 

-

 

-

 

-

 

31,694

 

-

Total inter-segment revenue

 

53

 

26

 

2

 

-

 

(81)

 

-

 

-

 

-

Total revenue

14,311

12,020

5,444

-

(81)

-

31,694

-

Segmental profit

1,370

1,289

635

-

-

3,294

-

Unallocated corporate

expenses(1)

 

 

-

 

 

-

 

 

 

 

-

 

 

-

 

 

(1,105)

 

 

(1,105)

 

 

-

Share-based payment cost

 

-

 

-

 

 

-

 

-

 

(379)

 

(379)

 

-

Operating profit/(loss)

 

1,370

 

1,289

 

635

 

-

 

-

 

(1,484)

 

1,810

 

-

Finance income

-

-

-

-

-

2

2

-

Finance expense

-

-

-

-

-

(86)

(86)

-

Profit/(loss) before tax

 

1,370

 

1,289

 

635

 

-

 

-

 

(1,568)

 

1,726

 

-

Taxation

-

-

-

-

-

(297)

(297)

-

Profit/(loss) for the period

 

1,370

 

1,289

 

635

 

-

 

-

 

(1,865)

 

1,429

 

-

 

Six months ended 31 March 2017 (Unaudited)                                                                                             

 

 

 

 

 

 

 

Restated**

 

 

Europe & Americas

£000

 

Middle

East

£000

 

Asia

Pacific

£000

 

 

Africa

£000

 

 

Eliminations

£000

 

 

Unallocated(1)

£000

 

 

Consolidated

£000

 

Discontinued

Initiate

£000

Total external revenue

 

13,214

 

13,596

 

3,455

 

596

 

-

 

-

 

30,861

 

1,979

Total inter-segment revenue

 

433

 

-

 

112

 

194

 

(744)

 

-

 

(5)

 

5

Total revenue

13,647

13,596

3,567

790

(744)

-

30,856

1,984

Segmental profit/(loss)

 

1,312

 

1,084

 

(124)

 

(205)

 

-

 

-

 

2,067

 

(6) 

Unallocated corporate

expenses(1)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(877)

 

 

(877)

 

 

-

Share-based payment cost

 

-

 

-

 

-

 

-

 

-

 

(117)

 

(117)

 

-

Exceptional items (note 6)

 

-

 

-

 

-

 

-

 

-

 

(481)

 

(481)

 

(63)

Amortisation of intangible assets

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(98)

Operating profit/(loss)

 

1,312

 

1,084

 

(124)

 

(205)

 

-

 

(1,475)

 

592

 

(167)

Finance income

-

-

-

-

-

1

1

-

Finance expense

-

-

-

-

-

(157)

(157)

-

 

Profit/(loss) before tax

 

 

1,312

 

 

1,084

 

 

(124)

 

 

(205)

 

 

-

 

 

(1,631)

 

 

436

 

 

(167)

Taxation

-

-

-

-

-

(39)

(39)

19

Profit/(loss) for the period

 

1,312

 

1,084

 

(124)

 

(205)

 

-

 

(1,670)

 

397

 

(148)

 

**Restated to reflect discontinued operations and a change to operating segments

 

Year ended 30 September 2017 (Audited)

 

 

 

 

 

 

 

Restated**

 

 

Europe & Americas

£000

 

Middle

East

£000

 

Asia

Pacific

£000

 

 

Africa

£000

 

 

Eliminations

£000

 

 

Unallocated(1)

£000

 

 

Consolidated

£000

 

Discontinued

Initiate

£000

Total external revenue

 

26,049

 

25,190

 

8,289

 

699

 

-

 

-

 

60,227

 

3,229

Total inter-segment revenue

 

601

 

4

 

125

 

200

 

(961)

 

-

 

(31)

 

31

Total revenue

26,650

25,194

8,414

899

(961)

-

60,196

3,260

Segmental profit/(loss)

 

2,331

 

1,931

 

529

 

(299)

 

 

 

4,492

 

2

Unallocated corporate

expenses(1)

 

 

-

 

 

-

 

 

 

 

-

 

 

-

 

 

(1,745)

 

 

(1,745)

 

 

-

Share-based payment cost

 

-

 

-

 

 

-

 

-

 

(170)

 

(170)

 

-

Exceptional items (note 6)

 

-

 

(132)

 

-

 

(317)

 

-

 

(634)

 

(1,083)

 

(475)

Amortisation of intangible assets

 

-

 

-

 

 

-

 

-

 

-

 

-

 

(621)

Operating profit/(loss)

 

2,331

 

1,799

 

529

 

(616)

 

-

 

(2,549)

 

1,494

 

(1,094)

Finance income

-

-

-

-

-

1

1

-

Finance expense

-

-

-

-

-

(262)

(262)

-

Profit/(loss) before tax

 

2,331

 

1,799

 

529

 

(616)

 

-

 

(2,810)

 

1,233

 

(1,094)

Taxation

-

-

-

-

-

38

38

118

Profit/(loss) for the period

 

2,331

 

1,799

 

529

 

(616)

 

-

 

(2,772)

 

1,271

 

(976)

 

(1)         Unallocated costs represent Directors' remuneration, administrative staff, corporate head office costs and expenses associated with AIM.

 

**Restated to reflect a change in operating segments 

5   EARNINGS PER SHARE

 

 

Unaudited

6 months

ended

31 March

2018

£000

Unaudited

6 months

ended

31 March

2017

£000

Restated**

Audited

Year

ended

30 September

2017

£000

Profit for the financial period attributable to equity shareholders

 

1,429

 

248

 

291

Share-based payments cost and associated costs

379

117

170

Exceptional items (note 6)

-

481

1,083

Loss from discontinued operations

-

148

976

Adjusted profit from continuing operations for the financial period before share-based payments costs and exceptional items

 

 

1,808

 

 

994

 

 

2,520

Weighted average number of shares:

 

 

 

-     Ordinary shares in issue

53,862,868

33,896,845

43,775,690

-     Shares held by EBT

(155,552)

(576,844)

(267,760)

Basic weighted average number of shares

53,707,316

33,320,001

43,507,930

Effect of employee share options

2,104,818

2,204,656

1,972,870

Diluted weighted average number of shares

55,812,134

35,524,657

45,480,800

Basic earnings per share attributable to equity shareholders of the Parent (pence)

 

2.7p

 

0.7p

 

0.7p

Diluted earnings per share attributable to equity shareholders of the Parent (pence)

 

2.6p

 

0.7p

 

                 0.6p

Basic earnings per share attributable to equity shareholders of the Parent (pence) from continuing operations            

 

2.7p

 

1.2p

 

2.9p

Diluted earnings per share attributable to equity shareholders of the Parent (pence) from continuing operations                         

 

2.6p

 

1.1p

 

2.8p

Adjusted basic earnings per share before share-based payment cost and exceptional items from continuing operations

 

3.4p

 

3.0p

 

5.8p

 

 

6   EXCEPTIONAL ITEMS

 

Exceptional items are operating costs that are not expected to be incurred every year and due to their nature and amount are disclosed separately.

 

 

Unaudited

6 months

ended

31 March

2018

£000

Unaudited

6 months

ended

31 March

2017

£000

Restated**

Audited

Year

ended

30 September

2017

£000

Restructuring costs(1)

-

481

634

Disposal of subsidiary(2)

-

-

449

 

-

481

1,083

 

(1)     Restructuring costs include bank charges and legal and professional fees in relation to the requirement of the revised banking facility.

(2)     Disposal of subsidiary includes the loss on the disposal of Driver Trett South Africa (pty) Ltd and the associated legal and professional fees for the disposal.

 

**Restated to reflect discontinued operations 

7   POST BALANCE SHEET EVENT

 

Following the period end, the Group has entered into an agreement with Jetglobal Limited for the sale of the freehold property interest in the Group's central administration offices located in Haslingden, UK and the immediate leaseback of these premises.

 

The cash consideration at completion on 20 April 2018 was £1.65 million.  The sale will give rise to a small profit on disposal for the Group, before transaction costs. The property is classed as a held for sale asset at the period end and no gain has been recognised in these financials statements with respect to the sale.

The new lease is for an initial term up to 2 January 2026 at a fixed annual rent of £210,000 with a current annual cash cost to Driver of approximately £105,000 after adjusting for rental income receivable from a sub-tenant. The proceeds of the sale have been used to repay some of the Group's borrowings.


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