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Brady plc (BRY)

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Monday 10 September, 2018

Brady plc

Interim Results

RNS Number : 1978A
Brady plc
10 September 2018
 

10 September 2018

 

 

Brady PLC

("Brady", the "Company" or the "Group")

 

UNAUDITED INTERIM RESULTS

For the six months to 30 June 2018

 

Brady plc, the leading global provider of trading, risk management and settlement solutions to the energy and commodities sectors, is pleased to announce its unaudited interim results for the six months to 30 June 2018.

 

Financial Summary:

 

 

(Unaudited)

(Unaudited, restated)

(Unaudited,

restated)

 

6 months to

30 June 2018 

6 months to

30 June 2017 1 

12 months to 

31 Dec 2017 1 

 

£'000

£'000

£'000

 

 

 

 

Revenue

10,542

10,664

22,275

Recurring revenue

7,800

7,910

15,694

 

 

 

 

EBITDA after exceptional items

(424)

(1,851)

(2,697)

EBITDA before exceptional items

(424)

(1,244)

(256)

 

 

 

 

Operating result after exceptional items

(2,263)

(3,716)

(6,890)

Operating result before exceptional items

(2,263)

(3,109)

(4,449)

Loss for the period from continuing operations

(2,037)

(3,522)

(6,810)

 

 

 

 

Adjusted diluted loss per share (pence) 2

(2.31)

(2.77)

(5.59)

Basic loss per share (pence)

(2.77)

(4.25)

(10.48)

 

 

 

 

Cash and cash equivalents on continuing operations

4,760

5,038

4,089

         

 

1 The Group's 2017 full and half year financial results have been restated following the implementation of IFRS 15 "Revenue from Contracts with Customers" ("IFRS 15"), effective from 1 January 2018. The half year 2017 results have also been restated for discontinued operations, following the disposal of the Group's recycling business in January 2018. A restatement of the full year and half year 2017 financial results can be found in note 14.

 

2 Adjusted loss per share, as calculated by external analysts, are based on the loss after tax adjusted for acquired intangible assets amortisation, share based compensation, exceptional items and normalised tax.

 

Operational and Financial Highlights:

 

·      Four contracts successfully renewed in H1 bringing total bookings value for H1 to £2.8m

·      Two new contracts won in H1 at a £0.5m booking value

·      Gross margin increased to 55% (H1 2017: 52%)

·      Recurring revenues at 74% (H1 2017: 74%)

·      EBITDA loss of £0.424m (H1 2017 loss: £1.851m)

 

Outlook:

 

·      95% visibility of our 2018 revenues

·      Recurring revenue expected to return to medium term target of 70% by year end

·      Improvements in profitability and cash generation expected in remainder of 2018 and beyond

·      FY2018 results expected to be in line with market expectations

 

 

Ian Jenks, Executive Chairman, said: 

"Forward momentum has been our watch word as we have successfully continued the re-organisation of the business. We are doing exactly what we said we would, including an investment in new products, the removal of costs, creating long-term solutions with the customer at the centre and a continual transition away from the Group's legacy contract model.

 

This has put us on a strong footing reflected in the fact that we have also secured new contract wins and retained all business that came up for renewal during the period.

 

As such, we are confident that the business will scale efficiently and deliver significant improvements in profitability and cash generation in the remainder of 2018 and beyond. With 95% visibility of our 2018 revenues and a cost base that is now aligned with our strategic goals, we expect our full year results to be in line with market expectations."

 

 

 

 

 

 

 

 

 

For further information please contact:

 

Brady plc

Ian Jenks, Executive Chairman

Martin Thorneycroft, Chief Financial Officer

 

Telephone: +44 (0)20 3301 1200

 

 

Cenkos Securities                                                              

Mark Connelly

Telephone: +44 (0)20 7397 8900

 

 

Redleaf Communications

 Bob Huxford/ Ian Silvera

Telephone: +44 (0)20 7382 4730

 

 

About Brady

Brady plc (BRY.L) is the largest European-headquartered provider of trading and risk management software to the global commodity and energy markets. Brady combines fully integrated and complete solutions supporting the entire commodity trading operation, from capture of financial and physical trading, through risk management, handling of physical operations, back office financials and treasury settlement, for energy, refined and unrefined metals, soft commodities and agriculturals.

 

Brady has 30 years' expertise in the commodity markets and its clients include many of the world's largest financial institutions, trading companies, miners, refiners and producers, tier one banks and a large number of London Metal Exchange (LME) Category 1 and 2 clearing members and many leading European energy generators, traders and consumers.

 

For further information visit: www.bradyplc.com

Brady plc: Twitter/Facebook/LinkedIn 

 

 

 

 

 

CHAIRMAN'S STATEMENT

The first half of 2018 has built on the foundations that we have been laying since the re-organisation of Brady began in September 2016. We said at the time that this would be a 3 year process, at the end of which your Company would be a scalable, predictable, customer-centric, highly cash generative business and we are on track to deliver on that promise. So far we have re-organised the structure of the business from top to bottom and created a global, functional organisation focussed on recurring revenues and long term client relationships. We have put the customer at the centre of everything that we do and the first half of this year has seen this strategy bearing fruit. We still have work to do, but the scale of the changes are significantly less than in 2017 and the associated costs have been treated as operating expenses rather than exceptional items.

 

We have previously said that the revenue for the full year to December 2018 would be unlikely to grow at more than 3-4% as we change our business model. We are reporting revenue for the 6 months to 30 June 2018 as being broadly flat year on year at £10.54m (£10.85m on a constant currency basis) compared to £10.66m in 1H 2017. We also said that synergies from the integration of the historic acquisitions would lead to a constant improvement in our operating margin. Our gross margin has improved from 52% in 2017 to 55% during the period. As a result, our EBITDA for the period has improved from a loss of £1.851m to a loss of £0.424m. Loss for the period after tax for continuing operations improved to £2.04m from £3.52m in 2017. This is a result of the tremendous efforts put in by the whole business and shows the increasing efficiency of the changing model that we are implementing.

 

Recurring revenues were slightly above our medium-term target of 70% at 74%. However, we expect that this will move back towards the medium-term target for the full year as we expect to recognise a higher level of services and licence revenue in H2. We have successfully tendered and won two new customers during the period, Ustekveikja Energi AS ("UE") and AES with a total contracted value ("bookings value") over the life of the contract of £0.5m. Four contracts came up for renewal in H1 and we are very pleased to say that all four were successfully renewed bringing the total bookings value in H1 to £2.8m.

 

When I last wrote to shareholders I said we were confident that the changes we had made had sufficiently strengthened the Company that we would begin to increase our market presence. In the first half of this year, we have sponsored a number of conferences, seen some well positioned product campaigns and participated in various focussed industry interviews. We are seeing the benefits coming through and our pipeline is building. We need to build on this early promise and convert these opportunities into contracts in the coming months.

 

We are continuing to look at new products and new innovation which will enable us to provide a fuller and more valued service to our client base. In every case we look to build, buy or partner for new products. In the first half of the year we continued to develop our concentrates and tolling functionality and we are delighted to have announced our first partnership with Trailight which offers a compliance product to our customer base.  

 

In summary we are doing exactly what we said we would. We have improved operating efficiency, we are investing in new products, we have ensured that our customers are firmly at the centre of everything we do. We have substantially completed a number of the major project implementations that were ongoing when I started in this role. We have successfully secured £2.8m of bookings in the first half and look forward to securing more through the remainder of the year.

 

Our H1 results reflect the natural consequence of our transition process away from the legacy model. We are beginning to see the results of the business decisions we have made reflected positively in our numbers. The business is positioned to scale efficiently and deliver significant improvements in profitability and cash generation in the remainder of 2018 and beyond.

 

With 95% visibility of our full year revenues and a cost base that is increasingly aligned with our strategic goals, we expect our full year results to be in line with market expectations."

 

 

 

 

 

FINANCIAL RESULTS

 

Group Revenues

 

Revenues by type

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

 

(unaudited)

 

(unaudited, restated)

 

(unaudited, restated)

 

 

 

£'000

%

£'000

%

£'000

%

 

 

 

 

 

 

 

 

Recurring support, maintenance and rentals

 

7,800

74%

7,910

74%

15,694

71%

Services including development

 

1,637

16%

2,170

20%

4,044

18%

Software licences

 

1,105

10%

584

6%

2,537

11%

 

 

10,542

 

10,664

 

22,275

 

 

Recurring revenue for the period was £7.8m compared to £7.9m in the prior period. Recurring revenue represents 74% of total sales in H1 2018 (H1 2017: 74%).  On a constant currency basis, recurring revenues were £8.0m (74%). The £0.1m growth comprising new recurring revenue of £0.4m less lost revenue from cancellations in prior years. 

 

Software licence revenues at £1.1m was £0.5m more than in the same period last year. The growth in licence revenue is mainly driven by £0.5m of annual renewals (H1 2017 - £nil).

 

Service and development fees were £1.6m compared to £2.2m in the same period last year reflecting completion of several energy and commodity implementations in 2017.

 

The impact of the weakening of the main trading currencies (Swiss Franc, US Dollar and Norwegian NOK) against Sterling on revenue was a negative £0.3m (Recurring revenues £0.2m, and Services and development revenues £0.1m).

 

Gross margin

Overall gross margin before exceptional items was 55% (H1 2017: 52%). On a constant currency basis, the gross margin is also 55%. The increase in gross margin year on year is due to the improved efficiency and synergies in the product departments.

 

Operating costs

Operating costs decreased by £1.2m to £8.1m from £9.3m in the same period last year. £0.2m of the decrease is due to weakening of Swiss Franc, US Dollar and Norwegian NOK against Sterling. The remaining decrease is due to a reduction in other operating costs of £0.4m and a decrease in one-off exceptional items of £0.6m.

 

£1.2m of research and development costs were capitalised (H1 17: £1.2m). This is our investment in new product for the future which will keep our software at the leading edge.  The largest projects in H1 2018 were additional functionality for the concentrates module and a tolling module for the Fintrade product.

 

Profitability

Loss before taxation for the first half of 2018 was £2.3m compared to £3.7m for the first half of 2017.

 

Adjusted EBITDA (EBITDA before exceptional items) for the first half of 2018 was a £0.4m loss compared to a loss of £1.2m for the first half of 2017.

 

EBITDA was £1.4m better than 2017 at a loss of £0.4m compared to a loss in 2017 of £1.8m. As the re-organisation was substantially complete in 2017 no items have been classified as exceptional in 2018.

 

Basic earnings per share for the first half of 2018 was (2.77) pence per share compared to an EPS of (4.25) pence per share for the first half of 2017. Adjusted diluted EPS was (2.31) pence per share, up from (2.77) pence in H1 2017.

 

 

 

Balance Sheet

The balance sheet continues to be dominated by goodwill and other intangible assets, largely as a natural consequence of the completion of acquisitions in previous years. As the majority of acquisitions were denominated in foreign currency, there is a movement in carrying value of £0.7m between balance sheet dates due to foreign exchange movements.

 

The Group continues to enjoy a strong balance sheet with net cash balances at 30 June 2018 of £4.8m (H1 2017: £5.0m).

 

Cash Flow

Cash outflow from operations in H1 2018 was £1.0m compared to a cash outflow of £0.9m for the same period in 2017.

 

Net cash increase from investing activities was £1.6m in the first half of 2018 compared to an outflow of £1.4m for the same period last year, and includes the first payment of £2.9m following the disposal of the Group's recycling business in January 2018. Investing activities this year also consisted of capitalised development £1.2m (H1 2017: £1.2m) and property, plant and equipment purchases of £0.1m (H1 2017: £0.2m).

 

 

 

Consolidated interim statement of comprehensive income

For the six months ended 30 June 2018

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

Restated

 

12 months to 31 December 2017

Restated

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

Notes

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Revenue

4

10,542

 

10,664

 

22,275

Cost of revenues

5

(4,749)

 

(5,081)

 

(10,119)

Gross profit

 

5,793

 

5,583

 

12,156

Operating costs

5

(8,056)

 

(9,299)

 

(19,046)

Operating loss

 

(2,263)

 

(3,716)

 

(6,890)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

Gross profit (before exceptionals)

 

5,793

 

5,583

 

12,423

Other operating costs (before exceptionals)

 

(6,217)

 

(6,827)

 

(12,679)

Adjusted EBITDA

 

(424)

 

(1,244)

 

(256)

Exceptionals

9

-

 

(607)

 

(2,441)

Depreciation

 5

(167)

 

(290)

 

(298)

Amortisation of acquired intangibles

 

(635)

 

(775)

 

(1,559)

Amortisation of other intangibles

 

(1,037)

 

(800)

 

(2,336)

Operating loss

 

(2,263)

 

(3,716)

 

(6,890)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance expense

 

(30)

 

-

 

(22)

Loss before tax

 

(2,293)

 

(3,716)

 

(6,912)

Income tax

 

256

 

194

 

102

Loss for the period from continuing operations

 

(2,037)

 

(3,522)

 

(6,810)

Loss from discontinued operations

13

(271)

 

(13)

 

(1,922)

Loss for the period attributable to shareholders of Brady Plc

 

(2,308)

 

(3,535)

 

(8,732)

 

 

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

658

 

(864)

 

(1,419)

Exchange differences relating to discontinued operations

 

-

 

(55)

 

(57)

Movement in actuarial valuation of defined benefit pension schemes

 

603

 

(10)

 

261

Total other comprehensive income/(loss)

 

1,261

 

(929)

 

(1,215)

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

(1,047)

 

(4,464)

 

(9,947)

 

 

 

 

 

 

 

Loss per share (pence)

 

 

 

 

 

 

Basic

8

(2.77)

 

(4.25)

 

(10.48)

Adjusted diluted

 

(2.31)

 

(2.77)

 

(5.59)

 

 

 

Consolidated interim statement of financial position

As at 30 June 2018

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

Restated

 

12 months to 31 December 2017

Restated

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

Notes

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Intangible assets

10,11

26,275

 

34,535

 

26,091

Property, plant and equipment

 

764

 

942

 

487

Deferred tax asset

 

39

 

56

 

-

Total non-current assets

 

27,078

 

35,533

 

26,578

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Trade and other receivables

 

5,480

 

7,000

 

4,787

Cash and cash equivalents

12

4,760

 

5,038

 

4,089

Assets classified as held for sale

 

-

 

-

 

5,848

Total current assets

 

10,240

 

12,038

 

14,724

 

 

 

 

 

 

 

Total assets

 

37,318

 

47,571

 

41,302

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

(12,340)

 

(14,482)

 

(13,133)

Provisions

 

(309)

 

-

 

(350)

Liabilities classified as held for sale

 

-

 

-

 

(1,384)

Total current liabilities

 

(12,649)

 

(14,482)

 

(14,867)

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Deferred income tax liabilities

 

(1,901)

 

(2,830)

 

(2,099)

Pension obligations

 

(1,972)

 

(2,939)

 

(2,494)

Total non-current liabilities

 

(3,873)

 

(5,769)

 

(4,593)

 

 

 

 

 

 

 

Total liabilities

 

(16,522)

 

(20,251)

 

(19,460)

 

 

 

 

 

 

 

Net assets

 

20,796

 

27,320

 

21,842

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital and premium

 

38,120

 

38,120

 

38,120

Treasury shares

7

(3)

 

(3)

 

(3)

Other reserves

 

(3,109)

 

(3,086)

 

(3,714)

Retained earnings

 

(14,212)

 

(7,711)

 

(12,561)

Total equity

 

20,796

 

27,320

 

21,842

 

 

 

 

Consolidated interim statement of changes in equity

For the six months ended 30 June 2018

 

 

Share capital and premium

 

Treasury shares

 

 

Other reserves

 

Retained earnings

 

Total

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2017, as reported

 

37,930

 

(3)

 

(1,888)

 

(2,703)

 

33,336

Impact of change in accounting standards - IFRS 15

 

-

 

-

 

-

 

(1,748)

 

(1,748)

Balance at 1 January 2017, restated

 

37,930

 

(3)

 

(1,888)

 

(4,451)

 

31,588

Loss for the period, restated

 

-

 

-

 

-

 

(3,535)

 

(3,535)

Other comprehensive loss

 

 

 

 

 

(919) 

 

(10)

 

(929)

Total comprehensive loss

 

-

 

-

 

(919)

 

(3,545)

 

(4,464)

Credit for equity-settled share-based payments

 

-

 

-

 

6

 

-

 

6

Transfer for exercised and forfeited share options

 

-

 

-

 

(285)

 

285

 

-

Issue of new share capital

 

190

 

-

 

-

 

-

 

190

Transactions with owners

 

190

 

-

 

(279)

 

285

 

196

Balance at 30 June 2017, restated

 

38,120

 

(3)

 

(3,086)

 

(7,711)

 

27,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2018, as reported

 

38,120

 

(3)

 

(3,714)

 

(10,328)

 

24,075

Impact of change in accounting standards - IFRS 15

 

-

 

-

 

-

 

(2,233)

 

(2,233)

Balance at 1 January 2018, restated

 

38,120

 

(3)

 

(3,714)

 

(12,561)

 

21,842

Loss for the period

 

-

 

-

 

-

 

(2,308)

 

(2,308)

Other comprehensive income

 

-

 

-

 

658

 

603 

 

1,261

Total comprehensive income/(loss)

 

-

 

-

 

658

 

(1,705)

 

(1,047)

Credit for equity-settled share-based payments

 

-

 

-

 

1

 

-

 

1

Transfer for exercised and forfeited share options

 

-

 

-

 

(54)

 

54

 

-

Transactions with owners

 

-

 

-

 

(53)

 

54

 

1

Balance at 30 June 2018

 

38,120

 

(3)

 

(3,109)

 

(14,212)

 

20,796

 

Consolidated interim statement of cashflows

For the six months ended 30 June 2018

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

 

(unaudited)

 

Restated

(unaudited)

 

Restated

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Loss before tax - continuing operations

 

(2,293)

 

(3,716)

 

(6,912)

Loss before tax - discontinued operations

 

(271)

 

(28)

 

(1,844)

Loss before tax

 

(2,564)

 

(3,744)

 

(8,756)

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

Write down of carrying value of net assets for discontinued operations

 

-

 

-

 

1,906

Depreciation

 

167

 

317

 

346

Amortisation of acquired intangibles

 

635

 

826

 

1,643

Amortisation of other intangibles

 

1,037

 

879

 

2,525

Loss from disposal of property, plant and equipment

 

42

 

-

 

5

Share-based payment charge

 

1

 

6

 

11

Non-cash movement of defined benefit pension charge

 

56

 

111

 

134

Net finance expense

 

30

 

-

 

22

Operating cashflows before working capital movement

 

(596)

 

(1,605)

 

(2,164)

Change in receivables

 

1,024

 

421

 

1,436

Change in payables

 

(1,364)

 

244

 

62

Change in provisions

 

(41)

 

-

 

350

Cash used in operations before tax

 

(977)

 

(940)

 

(316)

Net income taxes (received) / paid

 

(50)

 

(9)

 

247

Net cashflows from operating activities

 

(1,027)

 

(949)

 

(69)

 

 

 

 

 

 

 

Cashflows from investing activities

 

 

 

 

 

 

Sale of subsidiary, net of cash disposed and disposal costs

 

2,936

 

-

 

-

Purchase of property, plant & equipment

 

(129)

 

(204)

 

(314)

Proceeds from sale of property, plant & equipment

 

14

 

-

 

-

Expenditure on intangible assets

 

(1,214)

 

(1,234)

 

(2,492)

Net cashflows from investing activities

 

1,607

 

(1,438)

 

(2,806)

 

 

 

 

 

 

 

Cashflows from financing activities

 

 

 

 

 

 

Proceeds from issue of ordinary share capital

 

-

 

190

 

190

Finance lease capital repayments

 

(76)

 

-

 

-

Interest paid

 

(38)

 

-

 

(22)

Net cashflows from financing activities

 

(114)

 

190

 

168

 

 

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

466

 

(2,197)

 

(2,707)

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

 

4,354

 

7,343

 

7,343

Exchange differences on cash and cash equivalents

 

(60)

 

(108)

 

(282)

Cash and cash equivalents at end of period

 

4,760

 

5,038

 

4,354

               

Selected explanatory notes 

 

1.  Nature of operations and general information

Brady plc ('the Company') and its subsidiaries' (together 'the Group') principal activity is the provision of trading and risk management software to the global energy and commodities markets.

The Group provides fully integrated and complete solutions supporting the entire commodity trading operation, from capture of financial and physical trading, through risk management, handling of physical operations, back office financials and treasury settlement, for energy, refined and unrefined, soft commodities and agriculturals.

Brady plc, a public limited liability company, is the Group's ultimate parent company. It is registered, incorporated and domiciled in England and Wales. The address of Brady plc's registered office is Centennium House, 100 Lower Thames Street, London, EC3R 6DL.

These condensed consolidated interim financial statements have been prepared using the recognition and measurement principles of International Financial Reporting Standards ("IFRS") as adopted by the European Union and as issued by the International Accounting Standards Board. They do not include all of the information required for full annual financial statements as defined in Section 434 of the Companies Act 2006 and should be read in conjunction with the Consolidated Financial Statements of the Group as at and for the year ended 31 December 2017. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006. The consolidated financial statements have been filed with the Registrar of Companies and are available on the Group's website, www.bradyplc.com.

The financial information presented for the six month periods ended 30 June 2018 and 30 June 2017 has not been audited. The comparative financial information for the year ended 31 December 2017 does not constitute the full statutory annual report of Brady plc for that year and is not audited due to the adoption of IFRS 15, see notes 2 and 14.

Brady plc's shares are listed on the London Stock Exchange's AIM. Brady plc's consolidated interim financial statements are presented in British pounds (£), which is also the functional currency of the ultimate parent company.

2.  Accounting policies

The accounting policies applied by the Group are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2017, except for the adoption of the new standard relating to revenue, as set out below. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

 

After making enquiries, the Directors have concluded that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these interim condensed consolidated financial statements.

 

New standards adopted by the Group as at 1 January 2018

 

IFRS 15 "Revenue from Contracts with Customers"

 

IFRS 15 "Revenue from Contracts with Customers" and the related "Clarifications to IFRS 15 Revenue from Contracts with Customers" (hereinafter referred to as "IFRS 15") is the new standard for the recognition of revenue and it replaces IAS 18 "Revenue" and IAS 11 "Construction Contracts".

 

IFRS 15 has been applied using the full retrospective method meaning that the cumulative impact of the adoption is recognised in retained earnings as at 1 January 2017 and the comparatives restated. In accordance with IFRS 15 C5, the Group has elected to use the following expedients:

 

·      The Group has not restated contracts that begin and end in the same period or were completed before the transition date of 1 January 2017; and

·      For contracts that were modified before 1 January 2017, the Group has reflected the aggregate effect of the modifications when identifying the performance obligations and determining and allocating the transaction price.

The adoption of IFRS 15 has mainly affected contracts with multiple performance obligations, of which the Group has many. Typically, a contract will include a software licence or rental, installation services, development services and ongoing support. Under IFRS 15, the Group must consider whether each contract element is distinct. It has been determined that installation and certain development services are not distinct from the software licence or rental and therefore are considered one performance obligation.

 

Under the previous standard, IAS 18, each element was considered a separate item and revenue recognised on each item as follows; licence revenue recognised upon contracted acceptance; rental and ongoing support revenues recognised over time; installation services revenue recognised as the work was performed; and development services revenue recognised on a percentage-of-completion method.

 

As a result of implementation of IFRS 15, the timing of revenue recognition has been delayed for the software licence and services elements of contracts with multiple performance obligations as the revenue is recognised at the point the customer has the ability to go-live rather than upon contract signing, as the work is performed or on a percentage-of-completion method.

 

As a result of the delays in revenue recognition under IFRS 15 compared to IAS 18 and the corresponding recognition of contract fulfilment assets, the net assets of the Group have decreased at 1 January 2017 from £33.3m to £31.6m.

 

The cumulative effect of the adoption of the new standard at 1 January 2017 and 1 January 2018 is as follows:

 

 

 

 

 

 

 

 

 

Retained earnings as previously reported

 

(10,328)

 

(2,703)

 

 

 

 

 

Recognition of contract fulfilment assets

 

166

 

-

Recognition of contract liabilities

 

(2,399)

 

(1,748)

Adjustment to retained earnings from adoption of IFRS 15

 

(2,233)

 

(1,748)

 

 

 

 

 

Restated opening retained earnings at 1 January

 

(12,561)

 

(4,451)

 

Details of the impact of adoption of IFRS 15 on the Group and an explanation of the impact on the Group's prior year financial statements are set out in note 14. 

 

3.  Critical accounting judgements and key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimating uncertainty at the reporting date, that have a risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial period are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2017.

 

4.  Segment analysis reporting

 

Operating Segments

 

The Group is organised for reporting purposes into a single, global business unit. This is the basis of the Group's external marketing offering and internal organisation and management structure, The Chief Operating Decision Maker (CODM), which is the Operating Board comprising Executive Directors and certain senior management, receives financial information reported as a single business unit and the Group has determined that it has only one reportable segment as defined by IFRS 8.

 

The internal management accounting information has been prepared on an IFRS basis but has a non-GAAP "adjusted EBITDA" as a profit measure for the overall group and this is reported on the face of the income statement.

 

 

 

Revenue by Geography

 

The Group's revenue from external customer by geography is detailed below.

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

Restated

 

12 months to 31 December 2017

Restated

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

United Kingdom

 

1,932

 

1,442

 

2,806

Other EMEA

 

6,592

 

7,251

 

14,436

Americas

 

1,311

 

1,498

 

2,847

Asia Pacific

 

707

 

473

 

2,186

 

 

10,542

 

10,664

 

22,275

 

Revenues from external customers in the Group's domicile, the UK, as well as its major markets, EMEA, Americas and Asia Pacific, have been identified on the basis of the customer's geographical location.

 

Revenue by Nature

 

The Operating Board consider that the business has three revenue streams with difference characteristics, which are generated from the same asset and cost base.

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

Restated

 

12 months to 31 December 2017

Restated

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Recurring support, maintenance and rentals

 

7,800

 

7,910

 

15,694

Services including development

 

1,637

 

2,170

 

4,044

Software licences

 

1,105

 

584

 

2,537

 

 

10,542

 

10,664

 

22,275

 

5.  Costs

 

Operating costs can be analysed as follows:

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

 

(unaudited)

 

Restated

(unaudited)

 

Restated

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Staff and related costs

 

8,911

 

9,431

 

19,469

Other operating costs

 

3,217

 

3,595

 

5,128

Capitalised development costs

 

(1,162)

 

(1,118)

 

(2,066)

Exceptionals

 

-

 

607

 

2,441

Depreciation

 

167

 

290

 

298

Amortisation

 

1,672

 

1,575

 

3,895

 

 

12,805

 

14,380

 

29,165

 

 

 

The costs are presented within cost of revenues and operating costs as follows:

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

Restated

 

12 months to 31 December 2017

Restated

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Cost of revenues

 

4,749

 

5,081

 

10,119

Operating costs

 

8,056

 

9,299

 

19,046

 

 

12,805

 

14,380

 

29,165

 

6.  Share issues

 

The Company made no allotments of ordinary shares of 1 pence each during the period. In the prior year, the Company allotted 285,000 ordinary shares of 1 pence each following the exercise of various share options for total consideration of £190,000.

 

7.  Share buyback

 

During the period under review, the number of ordinary shares held in treasury has remained at 4,306.

 

 

 

8.  Earnings per share

 

The calculation of the basic earnings per share is based on the loss attributable to the shareholders of Brady plc divided by the weighted average number of shares in issue during the period. The earnings per share calculations relate to the total Group and the earnings per share for the discontinued operation is disclosed below. Separate calculations have been prepared related to the loss before and after exceptional items.

 

 

Loss attributable to shareholders

£'000

 

Weighted average number of shares

 

Basic earnings per share amount in pence

 

 

 

 

 

 

 

6 months ended 30 June 2018

 

(2,308)

 

83,367,887

 

(2.77)

6 months ended 30 June 2018 before exceptional items

 

(2,308)

 

83,367,887

 

(2.77)

 

 

 

 

 

 

 

6 months ended 30 June 2017, as reported

 

(3,299)

 

83,185,942

 

(3.97)

Impact of IFRS 15

 

(236)

 

-

 

(0.28)

6 months ended 30 June 2017, restated

 

(3,535)

 

83,185,942

 

(4.25)

 

 

 

 

 

 

 

6 months ended 30 June 2017 before exceptional items, as reported

 

(2,692)

 

83,185,942

 

(3.24)

Impact of IFRS 15

 

(236)

 

-

 

(0.28)

6 months ended 30 June 2017 before exceptional items, restated

 

(2,928)

 

83,185,942

 

(3.52)

 

 

 

 

 

 

 

Year ended 31 December 2017, as reported

 

(8,247)

 

83,329,613

 

(9.90)

Impact of IFRS 15

 

(485)

 

-

 

(0.58)

Year ended 31 December 2017, restated

 

(8,732)

 

83,329,613

 

(10.48)

 

 

 

 

 

 

 

Year ended 31 December 2017 before exceptional items, as reported

 

(5,806)

 

83,329,613

 

(6.97)

Impact of IFRS 15

 

(485)

 

-

 

(0.58)

Year ended 31 December 2017 before exceptional items, restated

 

(6,291)

 

83,329,613

 

(7.55)

 

 

 

 

 

 

 

 

As there was a loss after tax for the six months ended June 2018, the six months ended June 2017 and the year ended December 2017, there was no dilutive effect.

The basic earnings per share for the discontinued operation was a loss of 0.33 pence per share (H1 2017: 0.02 pence loss per share, FY 2017: 2.31 pence loss per share). There has been no impact on the earnings per share for the discontinued operation for the adoption of IFRS 15.

 

 

The calculation of the adjusted earnings per share, as calculated by external analysts, is based on the loss after tax adjusted for acquired intangible assets amortisation, share based compensation, exceptional items and normalised tax and is calculated as follows:

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

 

(unaudited)

 

Restated

(unaudited)

 

Restated

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Loss for the year

 

(2,308)

 

(3,535)

 

(8,732)

Add back:

 

 

 

 

 

 

Exceptional items

 

-

 

607

 

2,441

Amortisation of acquired intangibles

 

635

 

826

 

1,643

Share-based payments

 

1

 

6

 

11

Tax charge

 

(256)

 

(210)

 

(24)

Adjusted loss

 

(1,928)

 

(2,306)

 

(4,661)

 

 

 

Adjusted loss attributable to shareholders

£'000

 

Weighted average number of shares

 

Basic adjusted earnings per share amount in pence

 

 

 

 

 

 

 

6 months ended 30 June 2018

 

(1,928)

 

83,367,887

 

(2.31)

 

 

 

 

 

 

 

6 months ended 30 June 2017 (restated)

 

(2,306)

 

83,185,942

 

(2.77)

 

 

 

 

 

 

 

Year ended 31 December 2017 (restated)

 

(4,661)

 

83,329,613

 

(5.59)

 

 

 

 

 

 

 

The adjusted diluted earnings per share for the discontinued operation was a loss of 0.33 pence per share (H1 2017: 0.03 pence profit per share, FY 2017: 2.11 pence loss per share).

 

 

 

 

 

9.   Exceptional items

 

The table below shows the exceptional costs incurred during the period.

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Functional transformation costs

 

-

 

607

 

1,818

Contract dispute

-

 

-

 

623

 

 

-

 

607

 

2,441

 

10.  Goodwill

 

The net carrying amount of Group goodwill can be analysed as follows:

 

 

Goodwill on consolidation

 

Purchased goodwill

 

Total

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Gross carrying amount

 

19,889

 

90

 

19,979

Accumulated impairment

 

(3,848)

 

(90)

 

(3,938)

Carrying amount at 30 June 2018

 

16,041

 

-

 

16,041

 

 

 

 

 

 

 

Gross carrying amount

 

19,467

 

90

 

19,557

Accumulated impairment

 

(3,762)

 

(90)

 

(3,852)

Carrying amount at 31 December 2017

 

15,705

 

-

 

15,705

 

 

 

 

 

 

 

Gross carrying amount

 

24,399

 

90

 

24,489

Accumulated impairment

 

(3,816)

 

(90)

 

(3,906)

Carrying amount at 30 June 2017

 

20,583

 

-

 

20,583

                 

There were no changes in the net carrying amount of purchased goodwill in the period. Changes in the net carrying amount of goodwill on consolidation can be summarised as follows:

 

Total

 

£'000

 

 

Carrying amount at 1 January 2018

15,705

Foreign exchange movement on retranslation

336

Carrying amount at 30 June 2018

16,041

 

 

 

11.  Other intangible assets

 

Intangible assets comprise the following:

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Capitalised development

 

5,733

 

6,591

 

5,452

Acquired software products

 

2,842

 

4,982

 

3,229

Acquired customer relationships

 

1,185

 

2,379

 

1,336

Software

 

474

 

-

 

369

 

 

10,234

 

13,952

 

10,386

 

Changes in the net carrying amount of Group intangible assets can be summarised as follows:

 

 

 

Capitalised development costs

 

Acquired software products

 

Acquired customer relationships

 

Software

 

Total

 

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

Carrying amount at 1 January 2018

 

5,452

 

3,229

 

1,336

 

369

 

10,386

Additions in the period

 

1,162

 

-

 

-

 

226

 

1,388

Amortisation in the period

 

(917)

 

(453)

 

(182)

 

(120)

 

(1,672)

Forex movement on retranslation

 

36

 

66

 

31

 

(1)

 

132

Carrying amount at 30 June 2018

 

5,733

 

2,842

 

1,185

 

474

 

10,234

 

 

12.  Cash and cash equivalents

 

Cash and cash equivalents comprise the following:

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

12 months to 31 December 2017

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

£'000

 

£'000

 

£'000

Cash and cash equivalents

 

4,760

 

5,038

 

4,354

 

Cash and cash equivalents at 31 December 2017 included £4,089,000 relating to continuing operations and £265,000 relating to discontinued operations.

 

 

13.  Discontinued operation

In autumn 2017, the Board decided to exit the Recycling market in the USA and initiated an active program to sell its subsidiaries Brady US Holdings, Inc. and Systems Alternatives International LLC. The associated assets and liabilities were consequently presented as held for sale in the 2017 financial statements.

 

The subsidiaries were sold on 25 January 2018 and the carrying amounts of assets and liabilities at this date were:

 

 

£'000

 

 

Intangible assets

4,774

Property, plant and equipment

82

Trade and other receivables

541

Cash and cash equivalents

620

 

6,017

 

 

Trade and other payables

(1,581)

 

 

Net assets

(4,436)

 

The trading performance of the disposal group in 2018 up to the date of sale was as follows:

 

£'000

 

 

Revenue

273

Cost of revenues

(105)

Gross profit

168

Operating costs

(132)

Operating profit

36

 

The cashflow information of the disposal group in 2018 up to the date of sale was as follows:

 

£'000

 

 

Net cash inflow from operating activities

355

Net cash inflow from investing activities

-

Net cash inflow from financing activities

-

Net increase in cash generated by the disposal group

355

 

The loss on disposal was as follows:

 

£'000

 

 

Consideration receivable

 

Cash

3,701

Fair value of deferred consideration

999

Working capital adjustment

(183)

Total consideration receivable

4,517

 

 

Carrying amount of net assets sold

(4,436)

Costs to sell

(145)

 

 

Loss on sale before income tax and reclassification of the foreign currency translation reserve

(64)

Reclassification of foreign currency translation reserve

(243)

Loss on sale

(307)

 

 

 

The total amount recognised in the statement of comprehensive income relating to the discontinued operation is:

 

 

£'000

 

 

Profit for the period

36

Loss on disposal

(307)

Loss from discontinued operations

(271)

 

14.  Adoption of IFRS 15

 

The Group adopted IFRS 15 Revenue from Contracts with Customers ("IFRS 15") on 1 January 2018 using the fully retrospective method. This note details the Group's new accounting policy for revenue and shows the impact of the adoption of IFRS 15 on the Group's primary financial statements.

 

Accounting policy for revenue

Revenue comprises the value of sales (excluding trade discounts and VAT) of goods and services in the normal course of business. The Group has multiple revenue streams and the policy for each is detailed below. The Group acts as the principle in all sales.

 

To determine whether to recognise revenue, the Group follows a 5-step process:

1.     Identifying the contract with a customer

2.     Identifying the performance obligations

3.     Determining the transaction price

4.     Allocating the transaction price to the performance obligations

5.     Recognising revenue when/as the performance obligation(s) are satisfied.

 

Contracts typically contain a number of revenue streams and, depending on the contractual terms, may not be distinct and therefore considered to be one performance obligation. The total contract transaction price is allocated to the various performance obligations based on their relative standalone selling prices.

 

Software and associated installation services

Revenue from rental (subscription) of software is recognised evenly over the period from the date the customer can benefit from using the software, typically the point when the customer has the ability to 'go-live', until the contract end date. Software rental contracts are under a 'right to access' model and the Group retains control of the intellectual property throughout the contract term.

 

Revenue from sale of software term licences is recognised at a point in time when the customer has control of the asset, which is typically at the point when the customer has the ability to 'go-live'. Software term licence contracts are under a 'right to use' model and customer is entitled to the intellectual property as it stands at a point in time.

 

Due to the nature of the Group's software offerings, there is typically a period of installation before the customer can benefit from the asset. Revenue from installation services is recognised on completion of related performance obligations, typically when the customer has the ability to 'go-live'.

 

Consulting and professional service fee revenues

Revenue from consulting and professional service fees is recognised over time as the work is performed as this reflects when control is considered to be transferred. The customer receives and consumes the benefit of the service as it is performed and the Group has an enforceable right to payment for work completed to date on a time and materials basis.

 

The Group performs some bespoke development work on its software products at client request. Revenue from bespoke development work is recognised at a point in time when contractual commitments have been delivered, which is typically when the customer has the ability to 'go-live'.

 

 

Support, maintenance and hosting

Revenue from support, maintenance and hosting is recognised evenly over period to which it relates in line with contractual terms. As the amount of work required under these contract elements does not vary significantly from month-to-month, the straight-line method provides a faithful depiction of the transfer of goods or services.

 

Contract assets and liabilities

The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as 'contract liabilities' in the statement of financial position.

 

The Group recognises the following contract assets in the statement of financial position:

·      Amounts recoverable on contracts, if the Group satisfies a performance obligation before it invoices the customer. The asset is derecognised at the point in time when the Group invoices the customer.

·      Contract fulfilment costs, if the following criteria are met:

The costs directly relate to a contractual performance obligation

The costs relate to satisfaction of a performance obligation in the future

The costs are expected to be recovered.

The asset is amortised over the period in which the revenue from the related performance obligation is recognised.

 

At each reporting date, contract assets are assessed for impairment by comparing the carrying amount of the asset to the remaining consideration that the Group expects to receive under the contract, less future costs to complete.

 

No contract assets are recognised for incremental costs of obtaining customer contracts as assessment of whether such costs are recoverable is not probable.

 

Financing elements

The Group does not expect to have any contracts where the period between revenue recognition and payment by the customer exceeds one year. Consequently, the Group applies the practical expedient in IFRS 15.63 and does not adjust the transaction price for the time value of money.

 

Contract modifications

From time to time, there is a change in scope of the original contract between the Group and a customer. All contract modifications are supported by contractual change orders. Change orders are accounted for as a separate contract when:

·      The change order includes distinct goods or services; and

·      The price changes relative to the standalone prices of the goods or services.

If both criteria are not met, the change order is not accounted for as a separate contract and the Group accounts for the change order as if it were part of the performance obligations in the existing contract. The effect of the change order on contract value and progress to date is assessed at the contract modification date and a cumulative catch-up adjustment to revenue is recognised at this point.

 

 

 

Consolidated income statement restatement under IFRS 15

 

The income statement for H1 2017 and FY 2017 have been restated due to the adoption of IFRS 15. There is also a restatement in H1 2017 for the discontinued operation, which is included in the reconciliation below.

 

Consolidated interim income statement

For the six months ended 30 June 2017

 

 

Reported

 

 

 

 

 

Restated

 

 

6 months to 30 June 2017

 

Discontinued operation

 

Impact of IFRS 15

 

6 months to 30 June 2017

 

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

Revenue

 

13,182

 

(2,232)

 

(286)

 

10,664

Cost of revenues

 

(6,311)

 

1,180

 

50

 

(5,081)

Gross profit

 

6,871

 

(1,052)

 

(236)

 

5,583

Operating costs

 

(10,380)

 

1,081

 

-

 

(9,299)

Operating loss

 

(3,509)

 

29

 

(236)

 

(3,716)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

 

 

Gross profit

 

6,871

 

(1,052)

 

(236)

 

5,583

Other operating costs

 

(7,751)

 

924

 

-

 

(6,827)

Adjusted EBITDA

 

(880)

 

(128)

 

(236)

 

(1,244)

Exceptionals

 

(607)

 

-

 

-

 

(607)

Depreciation

 

(317)

 

27

 

-

 

(290)

Amortisation of acquired intangibles

 

(826)

 

51

 

-

 

(775)

Amortisation of other intangibles

 

(879)

 

79

 

-

 

(800)

Operating loss

 

(3,509)

 

29

 

(236)

 

(3,716)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance expense

 

-

 

-

 

-

 

-

Loss before tax

 

(3,509)

 

29

 

(236)

 

(3,716)

Income tax

 

210

 

(16)

 

-

 

194

Loss for the period from continuing operations

 

(3,299)

 

13

 

(236)

 

(3,522)

Loss from discontinued operations

 

-

 

(13)

 

-

 

(13)

Loss for the period attributable to shareholders of Brady Plc

 

(3,299)

 

-

 

(236)

 

(3,535)

 

 

Consolidated income statement

For the year ended 31 December 2017

 

Before exceptional items

Exceptional items

Total

 

Impact of

IFRS 15

 

Before exceptional items

Exceptional items

Total

 

Reported

Reported

Reported

 

 

 

Restated

Restated

Restated

 

12 months to 31 Dec 2017

12 months to 31 Dec 2017

12 months to 31 Dec 2017

 

12 months to 31 Dec 2017

 

12 months to 31 Dec 2017

12 months to 31 Dec 2017

12 months to 31 Dec 2017

 

£'000

£'000

£'000

 

£'000

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

Revenue

22,926

-

22,926

 

(651)

 

22,275

-

22,275

Cost of revenues

(10,018)

(267)

(10,285)

 

166

 

(9,852)

(267)

(10,119)

Gross profit

12,908

(267)

12,641

 

(485)

 

12,423

(267)

12,156

Operating costs

(16,872)

(2,174)

(19,046)

 

-

 

(16,872)

(2,174)

(19,046)

Operating loss

(3,964)

(2,441)

(6,405)

 

(485)

 

(4,449)

(2,441)

(6,890)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

 

 

 

Gross profit

12,908

(267)

12,641

 

(485)

 

12,423

(267)

12,156

Other operating costs

(12,679)

(2,174)

(14,853)

 

-

 

(12,679)

(2,174)

(14,853)

Adjusted EBITDA

229

(2,441)

(2,212)

 

(485)

 

(256)

(2,441)

(2,697)

 

 

 

 

 

 

 

 

 

 

Depreciation

(298)

-

(298)

 

-

 

(298)

-

(298)

Amortisation of acquired intangibles

(1,559)

-

(1,559)

 

-

 

(1,559)

-

(1,559)

Amortisation of other intangibles

(2,336)

-

(2,336)

 

-

 

(2,336)

-

(2,336)

Operating loss

(3,964)

(2,441)

(6,405)

 

(485)

 

(4,449)

(2,441)

(6,890)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance expense

(22)

-

(22)

 

-

 

(22)

-

(22)

Loss before tax

(3,986)

(2,441)

(6,427)

 

(485)

 

(4,471)

(2,441)

(6,912)

Income tax

102

-

102

 

-

 

102

-

102

Loss for the year from continuing operations

(3,884)

(2,441)

(6,325)

 

(485)

 

(4,369)

(2,441)

(6,810)

Loss from discontinued operations

(1,922)

-

(1,922)

 

-

 

(1,922)

-

(1,922)

Loss for the year attributable to shareholders of Brady Plc

(5,806)

(2,441)

(8,247)

 

(485)

 

(6,291)

(2,441)

(8,732)

 

 

Consolidated statement of financial position restatement under IFRS 15

 

The statement of financial positions as at 1 January 2017, 30 June 2017 and 31 December 2017 have been restated due to the adoption of IFRS 15.

 

 

 

Reported

 

Impact of

 

Restated

 

Reported

 

Impact of

 

Restated

 

Reported

 

Impact of

 

Restated

 

 

1 Jan 17

 

IFRS 15

 

1 Jan 17

 

30 Jun 17

 

IFRS 15

 

30 Jun 17

 

31 Dec 17

 

IFRS 15

 

31 Dec 17

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

37,035

 

-

 

37,035

 

35,533

 

-

 

35,533

 

26,578

 

-

 

26,578

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

7,297

 

-

 

7,297

 

6,949

 

51

 

7,000

 

4,621

 

166

 

4,787

Cash and cash equivalents

 

7,343

 

-

 

7,343

 

5,038

 

-

 

5,038

 

4,089

 

-

 

4,089

Assets classified as held for sale

 

-

 

-

 

-

 

-

 

-

 

-

 

5,848

 

-

 

5,848

 

 

14,640

 

-

 

14,640

 

11,987

 

51

 

12,038

 

14,558

 

166

 

14,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

51,675

 

-

 

51,675

 

47,520

 

51

 

47,571

 

41,136

 

166

 

41,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

(12,669)

 

(1,748)

 

(14,417)

 

(12,447)

 

(2,035)

 

(14,482)

 

(10,734)

 

(2,399)

 

(13,133)

Provisions

 

-

 

-

 

-

 

-

 

-

 

-

 

(350)

 

-

 

(350)

Liabilities classified as held for sale

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,384)

 

-

 

(1,384)

 

 

(12,669)

 

(1,748)

 

(14,417)

 

(12,447)

 

(2,035)

 

(14,482)

 

(12,468)

 

(2,399)

 

(14,867)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

(5,670)

 

-

 

(5,670)

 

(5,769)

 

-

 

(5,769)

 

(4,593)

 

-

 

(4,593)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

(18,339)

 

(1,748)

 

(20,087)

 

(18,216)

 

(2,035)

 

(20,251)

 

(17,061)

 

(2,399)

 

(19,460)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets

 

33,336

 

(1,748)

 

31,588

 

29,304

 

(1,984)

 

27,320

 

24,075

 

(2,233)

 

21,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital and premium

 

37,930

 

-

 

37,930

 

38,120

 

-

 

38,120

 

38,120

 

-

 

38,120

Treasury shares

 

(3)

 

-

 

(3)

 

(3)

 

-

 

(3)

 

(3)

 

-

 

(3)

Other reserves

 

(1,888)

 

-

 

(1,888)

 

(3,086)

 

-

 

(3,086)

 

(3,714)

 

-

 

(3,714)

Retained earnings

 

(2,703)

 

(1,748)

 

(4,451)

 

(5,727)

 

(1,984)

 

(7,711)

 

(10,328)

 

(2,233)

 

(12,561)

Total equity

 

33,336

 

(1,748)

 

31,588

 

29,304

 

(1,984)

 

27,320

 

24,075

 

(2,233)

 

21,842

 

 

 

Consolidated cashflow statement restatement under IFRS 15

 

As a result of adoption of IFRS 15, certain reclassifications are required in relation to the composition of cashflows generated from / (used in) operations, however there is no overall change to the primary headings of the consolidated cashflow statement.

 

15.   Financial statements

 

The financial information for the year ended 31 December 2017 included in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 31 December 2017 have been filed with the Registrar of Companies. This statement can be obtained from the Company's registered office at Centennium House, 100 Lower Thames Street, London, EC3R 6DL and are available on the Company's website www.bradyplc.com.

 

 


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