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Driver Group plc (DRV)

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Tuesday 30 June, 2020

Driver Group plc

Interim Report

RNS Number : 4420R
Driver Group plc
30 June 2020
 

30 June 2020

 

DRIVER GROUP PLC

 

("Driver" or "the Group")

 

 

Interim Report

For the six months ended 31 March 2020

 

Key Points (for the six months ended 31 March 2020)

 

 

6 months

  ended

31 March 2020

£000

Unaudited

6 months

  ended

31 March 2019

£000

Unaudited

Change

£000

Revenue

28,042

29,711

(1,669)

Gross Profit

7,175

6,695

480

Gross Profit %

26%

23%

3%

 Profit before tax

1,252

1,005

247

 Less: Share-based payment credit

-

(243)

243

 Underlying* profit before tax

1,252

762

490

Underlying* profit before tax %

4%

3%

1%

Underlying* earnings per share

1.8p

1.1p

0.7p

Net cash**

3,301

5,011

(1,710)

 

· Revenue down by 6% to £28.0m (2019: £29.7m) as a result of a slowdown in the Middle East market.

 

· Gross profit at 26% a £0.5m increase to £7.2m (2019: £6.7m) due to the continued focus on higher margin work.

 

· Underlying * profit before tax at £1.3m (2019: £0.8m) resulting in an underlying * profit before tax margin of 4% (2019: 3%).

 

· Profit before tax at £1.3m (2019: £1.0m).

 

· Net cash decrease year on year of £1.7m to £3.3m (2019: £5.0m).

 

· Fee earner headcount decreased by 26 to 329 with decreases in both APAC and Middle East.

 

· Overall utilisation rates of 73.1% (2019: 76.1%).

 

· Europe & Americas (EuAm) reported underlying * profit before tax for the period of £1.7m (2019: £2.0m) with utilisation rates at 71.6% (2019: 70.3%).

 

· Middle East (ME) reported underlying * profit before tax for the period of £0.03m (2019: £0.4m) with utilisation rates at 72.3% (2019: 80.9%).

 

· Asia Pacific (APAC) reported underlying * profit before tax for the period of £0.6m (2019: loss £0.6m) with utilisation rates at 77.1% (2019: 76.1%).

 

 

*  Underlying figures are stated before the share-based payment costs (this is not a GAAP measure).

**  Net cash consists of cash and cash equivalents and bank loans

*** Utilisation % is calculated by dividing the total hours billed by the total working hours available for chargeable staff

 

 

Steve Norris, Chairman of Driver Group, said:

 

"Driver have had a good first half year to 31 March 2020 with only limited impact on performance from Covid-19 related issues. There were strong results in the Europe & Americas (EuAm) and Asia Pacific (APAC) regions offset by a weaker performance in the Middle East (ME) region"

 

 

Results presentation

 

The leadership team will not be hosting a physical results presentation, in line with current guidance on social distancing.  Instead, they will be hosting a live webcast for analysts and investors at 09.30 (GMT), which can be accessed directly here:  https://brrmedia.news/driver

 

Analysts have already been invited to participate in a live Q&A during the presentation, but any eligible person not having received details should contact the Company's PR advisers, Acuitas Communications at  [email protected]   or on +44 (0)20 3687 0868.

 

 

Enquiries:

Driver Group plc  

Mark Wheeler (CEO)

David Kilgour (CFO) 

 

+44 (0) 20 7377 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

[email protected]

 

[email protected]

Impact of covid-19

Driver has continuously monitored the development of the Covid-19 pandemic since January 2020, in view of the Company's global footprint. Driver took early action to protect the business and the employees by implementing a clear business continuity strategy which has enabled its clients across key global regions and offices to be serviced effectively and sustainably, without business interruption. In accordance with the requirements of local government and regulatory authorities in the relevant jurisdictions and in some circumstances in advance, Driver moved quickly to a flexible home working model in every region and office worldwide to protect the health and safety of its staff.

 

Although the impact on Driver of Covid-19 has been limited to date, in the interests of prudence, resilience, and long term strategic competitive positioning the directors acted promptly and implemented the following measures in order to maximise liquidity, preserve cash and enhance operational flexibility:

 

· The Board will not pay an interim dividend in respect of the current financial year and will revisit the  Group's dividend policy only when there is sufficient clarity as to the actual impact of the Covid-19 pandemic on its trading and financial position.

 

· It has indefinitely postponed all non-essential capex and discretionary operational expenditure.

 

· It has drawn down in full its £3.0m revolving credit facility and will hold the resulting funds in order to meet any currently unforeseen contingencies

 

· All Board members' salaries are reduced by 20%, effective from 1 April 2020, for the foreseeable future.

 

· Targeted reductions in pay for under-utilised staff have been implemented.

 

· A small number of personnel have been furloughed.

 

· Where appropriate the Group have taken local government Covid-19 related financial support schemes.

 

· To protect the Group from unforeseen Covid-19 related impact on the business, a package of additional debt facilities in the amount of £4m and a relaxation of bank covenants have been agreed with HSBC.

 

The directors have prepared stress-tested cashflow forecasts covering a period of more than twelve months from the date of releasing these interim financial statements and, based on the package of cash and financing facilities available to Driver, including the agreed relaxation of bank covenants, the directors are confident in preparing the financial statements on a going concern basis.

 

THE BUSINESS

Driver have had a good first half year to 31 March 2020 with only limited impact on performance from Covid-19 related issues. There were strong results in the Europe & Americas (EuAm) and Asia Pacific (APAC) regions offset by a weaker performance in the Middle East (ME) region.

 

On 31st May Gordon Wilkinson left the Group having during his tenure of four years led the business through a challenging period to a consistently profitable and financially stable position today. Mark Wheeler succeeds Gordon as the Group Chief Executive Officer and with an unrivalled wealth of industry knowledge is well placed to lead the group on its next phase of development.  Additionally, John Mullen, a leading quantum expert, has been appointed as a non-executive director providing substantial additional industry expertise to the composition of the board.

 

TRADING PERFORMANCE

Group revenue for the six months to 31 March 2020 was £28.0m a decrease of 5.6% on the same period in 2019 (£29.7m).  Overall, the Group reported a profit before tax of £1.3m (2019 £1.0m).  Revenues in EuAm £15.4m and APAC £4.7m regions increased by 3.5% and 4.0% respectively which was offset by a decrease in ME region of 23% to £8.0m. The EuAm and APAC regions delivered operating profits of £1.7m (2019: £2.0m) and £0.6m (2019: loss of £0.6m) respectively with the ME region producing a disappointing breakeven result (2019: profit of £0.4m). The good performance in EuAm was across the region and in APAC was mainly from increased activity in Singapore. The weak performance in the ME region mainly resulted from a slowdown in the regional economy and steps were taken in January to reduce costs in light of the lower activity levels in the region. The significantly improved result from the APAC region was as a result of improved staff utilisation levels and the closure of the low margin project services business in the region.

 

The Group's effective tax rate is 24% (2019: 17%) reflecting a shift in the geographic split of overall Group profits. Earnings per share was 1.8p (2019: 1.5p).

The Group was in a net cash* position of £3.3m at 31 March 2020 compared to £5.4m at 30 September 2019 and 5.0m at 31 March 2019.

 

Net cash outflow from operations was £0.5m (2019: £0.8m) during the first six months, including a net outflow from an increase in trade and other receivables of £2.1m (2019: £0.5m cash inflow) and a net cash outflow from a decrease in trade and other payables of £0.4m (2019: £2.4m). Tax paid totalled £0.3m (2019: £0.5m) and the acquisition of fixed assets absorbed £0.1m (2019: £0.1m). A further cash outflow during the period was the payment of dividends of £0.7m (2019: £nil).

 

DIVIDEND

The directors announced in the trading update that Driver will not pay an interim dividend in respect of the current financial year and will revisit the Group's dividend policy only when there is sufficient clarity as to the actual impact of the Covid-19 pandemic on its trading and financial position (2019: 0.5p per share).

 

OUTLOOK

Although the first half of 2020 has seen lower activity than expected in the Middle East, we took swift action to re-align the regional cost base and the first half profits of the Group are significantly ahead of the same period last year. The Group continues to maintain strict discipline over the management of its net working capital position and I am pleased to report that the Group's current net cash balance stands at £5.5m.

 

In more normal times, Driver is conditioned to operating with relatively low forward revenue visibility and, as a consequence of the Covid-19 pandemic there is heightened uncertainty over client behaviours and their impact on our business. However, with current trading holding up well and with recently increased debt facilities the directors believe that the Group is well placed to trade through this current uncertain market environment and to take advantage of the opportunities afforded as a consequence of the disruption of Covid-19 in the Group's target market.

 

I would like to pay particular tribute to our CEO Mark Wheeler and CFO David Kilgour for the way they have managed the business through the last difficult months.  I thank my Board colleagues, Peter Collini and Elizabeth Filkin for their unstinting support and most of all, I thank every one of our staff wherever they are in the world for their continued diligence and loyalty. I am grateful for the confidence our shareholders have consistently demonstrated and I assure them that the Group will continue to do its utmost to repay that confidence.

 

 

 

Steven Norris

Non-Executive Chairman

30 June 2020

 

 

 

 

* Net cash consists of cash and cash equivalents and bank loans

Consolidated Income Statement

Interim report for the six months ended 31 March 2020

 

 

6 months

  ended

31 March 2020

£000

Unaudited

6 months

  ended

31 March 2019

£000

Unaudited

Year

Ended

30 September

2019

£000

Audited

REVENUE

28,042

29,711

58,486

Cost of sales

(20,748)

(23,016)

(44,950)

Impairment movement

(119)

-

401

GROSS PROFIT

7,175

6,695

13,937

Administrative expenses

(5,946)

(5,722)

(10,760)

Other operating income

73

82

155

 Underlying* operating profit

1,302

812

3,089

 Share-based payment credit/(charge) and associated costs

-

243

243

OPERATING PROFIT

1,302

1,055

3,332

Finance income

14

20

44

Finance costs

(64)

(70)

(131)

PROFIT BEFORE TAXATION

1,252

1,005

3,245

Tax expense (note 3)

(301)

(170)

(497)

PROFIT FOR THE PERIOD

951

835

2,748

Profit attributable to non-controlling interests

1

3

1

Profit attributable to equity shareholders of the parent

950

832

2,747

 

951

835

2,748

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

1.8p

1.5p

5.2p

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

1.7p

1.5p

4.8p

 

 

 

* Underlying figures are stated before the share-based payment costs (this is not a GAAP measure).

Consolidated Statement of Comprehensive Income

Interim report for the six months ended 31 March 2020

 

 

6 months

  ended

31 March

2020

£000

Unaudited

6 months

  ended

31 March

2019

£000

Unaudited

Year

ended

30 September

2019

£000

Audited

PROFIT FOR THE PERIOD

951

835

2,748

Other comprehensive income:

 

 

 

Items that could subsequently be reclassified to the Income Statement:

 

 

 

Exchange differences on translating foreign operations

73

29

(25)

Other comprehensive income for the year net of tax

73

29

(25)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

1,024

864

2,723

Total comprehensive income attributable to:

 

 

 

Owners of the parent

1,023

861

2,722

Non-controlling interest

1

3

1

 

1,024

864

2,723

   

Consolidated Statement of Financial Position

Interim report for the six months ended 31 March 2020

 

 

6 months

  ended

31 March

2020

£000

Unaudited

6 months

ended

31 March

2019

£000

Unaudited

Year

ended

30 September

2019

£000

Audited

NON-CURRENT ASSETS

 

 

 

Goodwill

2,969

2,969

2,969

Property, plant and equipment

593

636

685

Right of use asset

2,226

-

-

Intangible asset

57

-

-

Deferred tax asset

268

98

268

 

6,113

3,703

3,922

CURRENT ASSETS

 

 

 

Trade and other receivables

21,767

18,956

20,189

Derivative financial asset

275

29

2

Cash and cash equivalents

3,301

7,394

7,526

 

25,343

26,379

27,717

TOTAL ASSETS

31,456

30,082

31,639

CURRENT LIABILITIES

 

 

 

Borrowings

-

(2,382)

(2,125)

Trade and other payables

(8,788)

(9,076)

(9,197)

Derivative financial liability

(64)

(101)

(398)

Lease liabilities

(916)

-

-

Current tax payable

(405)

(116)

(428)

 

(10,173)

(11,675)

(12,148)

NON-CURRENT LIABILITIES

 

 

 

Lease liabilities

(1,184)

-

-

 

(1,184)

-

-

TOTAL LIABILITIES

(11,357)

(11,675)

(12,148)

NET ASSETS

20,099

18,407

19,491

SHAREHOLDERS' EQUITY

 

 

 

Share capital

216

215

216

Share premium

11,496

11,497

11,496

Merger reserve

1,055

1,055

1,055

Currency reserve

(352)

(371)

(425)

Capital redemption reserve

18

18

18

Treasury shares

(1,025)

(486)

(1,000)

Retained earnings

8,686

6,473

8,127

Own shares

(3)

(3)

(3)

TOTAL SHAREHOLDERS' EQUITY

20,091

18,398

19,484

NON-CONTROLLING INTEREST

8

9

7

TOTAL EQUITY

20,099

18,407

19,491

Consolidated Cashflow Statement

Interim report for the six months ended 31 March 2020

 

 

6 months

  ended

31 March

2020

£000

Unaudited

6 months

e nded

31 March

2019

£000

Unaudited

Year

ended

30 September

2019

£000

Audited

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Profit for the year

951

835

2,748

Adjustments for:

 

 

 

Depreciation

162

227

418

Amortisation of right to use assets

514

-

-

Exchange adjustments

(7)

27

(69)

Finance income

(14)

(20)

(44)

Finance expense

64

70

131

Tax expense

301

170

497

Equity settled share-based payment charge

-

(243)

(243)

OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL AND PROVISIONS

1,971

1,066

3,438

(Increase)/decrease in trade and other receivables

(2,051)

549

(658)

Decrease in trade and other payables

(394)

(2,415)

(2,053)

CASH (USED)/GENERATED IN OPERATIONS

(474)

(800)

727

Tax paid

(274)

(450)

(623)

NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES

(748)

(1,250)

104

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Interest received

14

20

44

Acquisition of property, plant and equipment

(70)

(98)

(338)

Acquisition of intangible asset

(57)

-

-

NET CASH OUTflow FROM INVESTING ACTIVITIES

(113)

(78)

(294)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Interest paid

(64)

(70)

(131)

Repayment of borrowings

(2,125)

(724)

(981)

Repayment of lease liabilities

(505)

-

-

Dividends paid to the equity shareholders of the parent

(652)

-

(270)

Proceeds from issue of new shares

-

22

22

Purchase of Treasury shares

(25)

(486)

(1,000)

NET CASH OUTFLOW FROM FINANCING ACTIVITIES

(3,371)

(1,258)

(2,360)

Net decrease in cash and cash equivalents

(4,232)

(2,586)

(2,550)

Effect of foreign exchange on cash and cash equivalents

7

(27)

69

Cash and cash equivalents at start of period

7,526

10,007

10,007

CASH AND CASH EQUIVALENTS AT END OF PERIOD

3,301

7,394

7,526

 

Consolidated Statement of Changes of Equity

Interim Report for the six months ended 31 March 2020

 

For the six months ended 31 March 2020 (Unaudited):

 

 

Share capital

£000

Treasury shares

£000

Other
reserves(2)

£000

Own
shares

£000

Non-
controlling interest

£000

CLOSING BALANCE AT 30 SEPTEMBER 2019

216

11,496

(1,000)

1,055

(407)

8,127

(3)

19,484

7

19,491

Profit for the period

-

-

-

-

-

950

-

950

1

951

Other comprehensive income for the period

-

-

-

-

73

-

-

73

-

73

Total comprehensive income for the period

-

-

-

-

73

950

-

1,023

1

1,024

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

 

 

Dividend

-

-

-

-

-

(391)

-

(391)

-

(391)

Issue of new shares

-

-

-

-

-

-

-

-

-

-

Purchase of Treasury shares

-

-

(25)

-

-

-

-

(25)

-

(25)

Total contributions by and distributions to owners

-

-

(25)

-

-

(391)

-

(416)

-

(416)

CLOSING BALANCE AT 31 MARCH 2020

216

11,496

(1,025)

1,055

(334)

8,686

(3)

20,091

8

20,099

 

 

For the six months ended 31 March 2019 (Unaudited):

 

 

Share capital

£000

Share
premium

£000

Treasury shares

£000

Other
reserves(2)

£000

Own
shares

£000

Non-
controlling interest

£000

CLOSING BALANCE AT 30 SEPTEMBER 2018

215

11,475

-

1,055

(382)

7,107

(3)

19,467

6

19,473

Accounting policy change - IFRS 9

-

-

-

-

-

(953)

-

(953)

-

(953)

OPENING BALANCE AT 1 OCTOBER 2018

215

11,475

-

1,055

(382)

6,154

(3)

18,514

6

18,520

Profit for the period

-

-

-

-

-

832

-

832

3

835

Other comprehensive income for the period

-

-

-

-

29

-

-

29

-

29

Total comprehensive income for the period

-

-

-

-

29

832

-

861

3

864

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

 

 

Dividend

-

-

-

-

-

(270)

-

(270)

-

(270)

Share-based payment credit and associated costs

-

-

-

-

-

(243)

-

(243)

-

(243)

Issue of new shares

-

22

-

-

-

-

-

22

-

22

Purchase of Treasury shares

-

-

(486)

-

-

-

-

(486)

-

(486)

Total contributions by and distributions to owners

-

22

(486)

-

-

(513)

-

(977)

-

(977)

CLOSING BALANCE AT 31 MARCH 2019

215

11,497

(486)

1,055

(353)

6,473

(3)

18,398

9

18,407

 

Consolidated Statement of Changes of Equity (continued)

Interim Report for the six months ended 31 March 2020

 

For the year ended 30 September 2019 (Audited):

 

 

Share capital

£000

Share
premium

£000

Treasury shares

£000

Merger
reserve

£000

Other
reserves(2)

£000

Retained earnings

£000

Own
shares

£000

Total(1)

£000

Non-
controlling interest

£000

Total
Equity

£000

OPENING BALANCE AT 1 OCTOBER 2018

215

11,475

-

1,055

(382)

6,154

(3)

18,514

6

18,520

Profit for the year

-

-

-

-

-

2,747

-

2,747

1

2,748

Other comprehensive income for the year

-

-

-

-

(25)

-

-

(25)

-

(25)

Total comprehensive income for the year

-

-

-

-

(25)

2,747

-

2,722

1

2,723

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

 

 

Dividends

-

-

-

-

-

(531)

-

(531)

-

(531)

Share-based payment charge and associated costs

-

-

-

-

-

(243)

-

(243)

-

(243)

Purchase of Treasury shares

-

-

(1,000)

-

-

-

-

(1,000)

-

(1,000)

Issue of new shares

1

21

-

-

-

-

-

22

-

22

Total contributions by and distributions to owners

-

21

(1,000)

-

-

(774)

-

(1,752)

-

(1,752)

CLOSING BALANCE AT 30 SEPTEMBER  2019

216

11,496

(1,000)

1,055

(407)

8,127

(3)

19,484

7

19,491

 

 

 

 

 

 

 

 

 

 

 

(1   T ota l  equit y attributable to the equity holders of the Parent

(2 )  'Other reserves' combines the currency reserve and capital redemption reserve. The movement in the current and prior year relates to the translation of foreign currency equity balances and foreign currency non-monetary items.

1   BASIS OF PREPARATION

The consolidated interim financial information has been prepared using accounting policies which are consistent with those applied at the prior year end 30 September 2019 and that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2020. The Group has adopted the new IFRS 16 accounting standard from 1 October 2019.

 

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 and are not IAS 34 compliant. 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 2020 and 31 March 2019 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 2019 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2019 have been filed with the Registrar of Companies. The Independent Auditor's Report on that Annual Report and Financial Statements for 2019 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.

The consolidated financial statements have been prepared on a going concern basis.  In reaching their assessment, the directors have considered a period extending at least twelve months from the date of approval of this half yearly financial report.

 

The directors continue to monitor developments across the markets the Group operate in and the potential impact of Covid-19 in the short and medium term and is in particular focussed on the key risks of: delays by clients in contracting for claims advice; projects being suspended or planned projects not proceeding which could potentially result in a reduction in staff utilisation levels; and the impact of the current situation on the financial stability of clients causing delays to payments.

 

As Driver's business is geographically well spread across the World the directors have been managing the impact of Covid-19 since January 2020 when the Singapore and Hong Kong offices started working remotely. As Covid-19 has spread, remote working has been successfully adopted at varying times in the Middle East offices and across Europe including the UK with minimal disruption of service to our clients. The directors have been closely monitoring the impact on the business ensuring the welfare of the staff and the clients. The Group has implemented a number of measures to reduce operating costs and conserve cash, including:

 

· reduction of payroll costs from a small number of personnel being placed on Furlough Leave, targeted reductions in pay for under-utilised staff and a reduction in directors pay

· reduction in near term operating expenditure as a result of remote working and a lack of travel

· deferral of any non-essential operating and capital expenditure

· application of government financial support schemes where appropriate

 

The directors have prepared cash flow forecasts covering a period of more than 12 months from the date of releasing these interim financial statements.  This assessment has included consideration of the forecast performance of the business for the foreseeable future, the cash and financing facilities available to the Group and the mitigating actions undertaken to reduce the impact of Covid-19.  In preparing these forecasts, the directors have considered sensitivities incorporating the potential impact of Covid-19.  The Group at 31 March 2020 had cash reserves of £3.3m and an undrawn revolving credit facility of £3.0m. Subsequent to the half year end the Group agreed terms with their debt providers, HSBC UK Bank plc, for additional facilities of £4.0m by way of an increase to the existing £3.0m revolving credit facility to £5.0m and a further £2.0m through a Coronavirus Large Business Interruption Loan Scheme Facility. In addition the relaxation of financial covenants for the next twelve months were agreed.

 

Based on the cash flow forecasts prepared including appropriate stress testing, the directors are confident that any funding needs required by the business will be sufficiently covered by the existing cash reserves and the undrawn additional credit facility.

 

NEW STANDARDS ADOPTED

  IFRS 16 Leases: is effective for periods beginning on or after 1 January 2019 and the Group transitioned on 1 October 2019. IFRS 16 replaces IAS 17 Leases and provides a single lessee accounting model, requiring lessees to recognise related right of use lease assets and lease liabilities for all applicable leases on the statement of financial position. The presentation and timing of income and expense recognition in the income statement has also changed. On transition, management adopted the modified retrospective approach and as such, comparative figures have not been restated. As a result of the new accounting standard, the statement of financial position has seen an increase in non current assets of £2.2m, a decrease in prepayments of £0.2m and a resulting increase in liabilities of £2.1m, of which, £0.9m is a current liability and £1.2m is a non current liability. Overall profit has not materially changed, however, EBITDA and cashflow from operating activities have both increased by £0.5m due to IFRS 16. Leases of under one year in length and low value assets have not been capitalised.

 

 

30 September 2019

£000

IFRS 16

£000

1 October 2019

£000

ASSETS

 

 

 

Right of use asset

-

2,605

2,605

Trade & other receivables

20,189

(240)

19,949

lIABILITIES

 

 

 

Trade & other payables

(9,197)

74

(9,123)

Lease liabilities

-

(2,439)

(2,439)

 

 

1 October 2019

£000

Minimum operating lease commitment at 30 September 2019

3,224

Less: short-term and low value leases not recognised under IFRS 16

(455)

Less: amounts transferred from prepayments

(240)

Add: accrued rent due

19

Undiscounted lease payments

2,548

Effect of discounting

(109)

Lease liability at 1 October 2019

2,439

 

3   TAXATION

The tax charge on the profit for the half-year ended 31 March 2020 is based on the estimated tax rates in the jurisdictions in which the Group operates, for the year ending 30 September 2020.

 

4  DIVIDEND

In view of the current trading position and the Covid-19 outbreak, the Board does not intend to pay an interim dividend for 2020 (2019: 0.5 pence per share).

5   SUMMARY SEGMENTAL ANALYSIS

 

REPORTABLE SEGMENTS

For management purposes, the Group is organised into three operating divisions: Europe & Americas (EuAm), Middle East (ME) and Asia Pacific (APAC).  These divisions are 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 2020 (Unaudited)

Europe & Americas
£000

Middle East
£000

Asia Pacific
£000

Eliminations
£000

Unallocated
£000

Consolidated
£000

Total external revenue

15,371

7,951

4,720

-

-

28,042

Total inter-segment revenue

61

256

7

(324)

-

-

Total revenue

15,432

8,207

4,727

(324)

-

28,042

Segmental profit

1,715

30

633

-

-

2,378

Unallocated corporate expenses(1)

-

-

-

-

(1,076)

(1,076)

Operating profit/(loss)

1,715

30

633

-

(1,076)

1,302

Finance income

-

-

-

-

14

14

Finance expense

-

-

-

-

(64)

(64)

Profit/(loss) before taxation

1,715

30

633

-

(1,126)

1,252

Taxation

-

-

-

-

(301)

(301)

Profit/(loss) for the period

1,715

30

633

-

(1,427)

951

 

 

Six months ended 31 March 2019 (Unaudited)

Europe & Americas
£000

Middle East
£000

Asia Pacific
£000

Eliminations
£000

Unallocated
£000

Consolidated
£000

Total external revenue

14,851

10,321

4,539

-

-

29,711

Total inter-segment revenue

11

2

15

(28)

-

-

Total revenue

14,862

10,323

4,554

(28)

-

29,711

Segmental profit/(loss)

1,984

363

(576)

-

-

1,771

Unallocated corporate expenses(1)

-

-

-

-

(959)

(959)

Share-based payment charge

-

-

-

-

243

243

Operating profit/(loss)

1,984

363

(576)

-

(716)

1,055

Finance income

-

-

-

-

20

20

Finance expense

-

-

-

-

(70)

(70)

Profit/(loss) before taxation

1,984

363

(576)

-

(766)

1,005

Taxation

-

-

-

-

(170)

(170)

Profit/(loss) for the period

1,984

363

(576)

-

(936)

835

 

 

Year ended 30 September 2019 (Audited)

Europe & Americas
£000

Middle East
£000

Asia Pacific
£000

Eliminations
£000

Unallocated
£000

Consolidated
£000

Total external revenue

29,771

19,645

9,070

-

-

58,486

Total inter-segment revenue

47

121

20

(188)

-

-

Total revenue

29,818

19,766

9,090

(188)

-

58,486

Segmental profit/(loss)

3,908

1,446

(363)

-

-

4,991

Unallocated corporate expenses(1)

-

-

-

-

(1,902)

(1,902)

Share-based payment charge

-

-

-

-

243

243

Operating profit/(loss)

3,908

1,446

(363)

-

(1,659)

3,332

Finance income

-

-

-

-

44

44

Finance expense

-

-

-

-

(131)

(131)

Profit/(loss) before taxation

3,908

1,446

(363)

-

(1,746)

3,245

Taxation

-

-

-

-

(497)

(497)

Profit/(loss) for the period

3,908

1,446

(363)

-

(2,243)

2,748

 

(1 )   Unallocate d costs represent Directors' remuneration, administration staff,  corporat e head office costs and expenses associated with AIM.

6  EARNINGS PER SHARE

 

 

6 months ended

31 March

2020

£000

Unaudited

6 months ended

31 March 2019

£000

Unaudited

Year

ended

30 September

2019

£000

Audited

Profit for the financial period attributable to equity shareholders

950

832

2,747

Share-based payments cost and associated costs

-

(243)

(243)

Underlying* profit for the financial period

950

589

2,504

Weighted average number of shares:

 

 

 

-  Ordinary shares in issue

53,962,868

53,921,201

53,942,035

-  Shares held by EBT

(3,677)

(3,677)

(3,677)

-  Treasury shares

(1,786,062)

-

(619,223)

Basic weighted average number of shares

52,173,129

53,917,524

53,319,135

Effect of employee share options

2,759,618

3,297,421

3,462,087

Diluted weighted average number of shares

54,932,747

57,214,945

56,781,222

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

1.8p

1.5p

5.2p

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

1.7p

1.5p

4.8p

Underlying* basic earnings per share

1.8p

1.1p

4.7p

 

 

 

7  POST BALANCE SHEET EVENT

 

Subsequent to the half year end the Group agreed terms with their debt providers, HSBC UK Bank plc, for additional facilities of £4.0m by way of an increase to the existing £3.0m revolving credit facility to £5.0m and a further £2.0m through a Coronavirus Large Business Interruption Loan Scheme Facility. In addition the relaxation of financial covenants for the next twelve months were agreed.

 

 

 

 


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