TIDMCHRT
RNS Number : 6100J
Cohort PLC
14 December 2022
COHORT PLC
HALF YEAR RESULTS
FOR THE SIX MONTHSED 31 OCTOBER 2022
Cohort plc, the independent technology group, today announces
its half year results for the six months ended 31 October 2022.
A much stronger first half for the Group with a record closing
order book. The increase in the interim dividend reflects the
Board's confidence in the Group's growth prospects and commitment
to a progressive dividend policy
Financial highlights
-- Revenue up 29% to GBP77.5m (2021: GBP60.0m).
-- Adjusted* operating profit up significantly to GBP5.0m (2021: GBP1.7m)
-- Strong adjusted* earnings per share of 10.12 pence (2021: 3.04 pence).
-- Order intake GBP88.6m (2021: GBP105.3m), 1.1x the period's revenue.
-- Record closing order book of GBP304.2m (30 April 2022: GBP291.0m).
-- Interim dividend increased by 10% to 4.25 pence per share (2021: 3.85 pence per share).
-- Net debt of GBP0.6m at 31 October 2022 (31 October 2021:
GBP6.1m net funds). As at 9 December 2022 net funds were
GBP7.6m.
* Adjusted figures exclude the effects of marking forward
exchange contracts to market value, amortisation of other
intangible assets (GBP1.8m; 2021: GBP3.4m) and exceptional items
(GBPnil; 2021: GBP0.3m income).
Operational highlights
-- Increased revenue was driven by higher UK MOD sales,
particularly at MCL and export revenue at Chess.
-- Adjusted* operating profit improved significantly on last
year, due to higher revenue at Chess and MCL. MASS and SEA also
performed slightly better. ELAC Sonar (ELAC) was weaker due to mix
and delayed orders. Slower deliveries at EID resulted in an
operating loss.
-- Order intake was over 1.1x the period revenue with strong
performances at Chess, MCL and SEA, the latter including a large
support contract for the UK's Royal Navy
Looking forward
-- Record high order book of GBP304.2m with over GBP80m of
revenue deliverable in the second half. Taking into account revenue
recognised in the first half, this covers over 95% (2021: 89%) of
consensus forecast revenue for the full financial year. Revenue
deliverable in future years from committed orders continues to
grow.
-- The current year outlook for the Group is therefore unchanged.
-- We continue to see a positive outlook for organic growth in the medium term.
Commenting on the results, Nick Prest CBE, Chairman of Cohort,
said:
"The first half has seen a welcome return to growth by the
Group, with our order book underpinning most of the second half of
this financial year. In line with previous experience we anticipate
a stronger Group performance in the second half and thus remain on
track to achieve our expectations for the full year.
"The Group's order book has steadily increased over the last few
years to what is now a record high. Its longevity has also
increased with revenue now deliverable out to 2032. The pipeline of
order opportunities for the remainder of the year also looks
strong. Demand for our solutions and services continues to be
driven by the UK's increased spending on defence and security and
by international tensions in the Asia-Pacific region and Europe.
Overall, we continue to see a positive outlook for organic growth
in the years ahead."
Analyst and investor presentation
A presentation for analysts is being hosted today 14 December
2022 at 09:30am online as follows:
Please join the event 5-10 minutes prior to scheduled start
time. When prompted, provide the confirmation code or event
title.
WEBCAST:
https://stream.brrmedia.co.uk/broadcast/6384e50773df8630dd6e49cb
Dial-in number:
UK-Wide: +44 (0) 33 0551 0200
UK Toll Free: 0808 109 0700
Password: Quote Cohort when prompted by the operator
Title: Cohort plc - Half Year Results
Time Zone: Dublin, Edinburgh, Lisbon, London
Start Time/Date: 09:30am, 14 December 2022
For further information, please contact:
Cohort plc 0118 909 0390
Andy Thomis, Chief Executive
Simon Walther, Finance Director
Raquel McGrath, Company Secretary
Investec Bank Plc 020 7597 5970
Daniel Adams / Christopher Baird
MHP Communications 020 3128 8276
Reg Hoare / Ollie Hoare / Hugo cohort@mhpc.com
Harris
NOTES TO EDITORS
Cohort plc ( www.cohortplc.com ) is the parent company of six
innovative, agile and responsive businesses based in the UK,
Germany and Portugal, providing a wide range of services and
products for domestic and export customers in defence and related
markets.
Chess Technologies, through its operating businesses Chess
Dynamics and Vision4ce, offers surveillance, tracking and
fire-control systems to the defence and security markets. Chess has
been part of the Group since December 2018.
www.chess-dynamics.com
EID designs and manufactures advanced communications systems for
naval and military customers. Cohort acquired a
majority stake in June 2016. www.eid.pt
ELAC SONAR supplies advanced sonar systems and underwater
communications to global customers in the naval
marketplace. Acquired by Cohort in December 2020. www.elac-sonar.de
MASS is a specialist data technology company serving the defence
and security markets, focused on electronic warfare, digital
services and training support. Acquired by Cohort in August 2006.
www.mass.co.uk
MCL designs, sources and supports advanced electronic and
surveillance technology for UK end users including the MOD and
other government agencies. MCL has been part of the Group since
July 2014. www.marlboroughcomms.com
SEA delivers and supports technology-based products for the
defence and transport markets alongside specialist research and
training services. Acquired by Cohort in October 2007.
www.sea.co.uk
Cohort (AIM: CHRT) was admitted to London's Alternative
Investment Market in March 2006. It has headquarters in Reading,
Berkshire and employs in total over 1,000 core staff there and at
its other operating company sites across the UK, Germany and
Portugal.
Chairman's statement
Compared to the same period last year Cohort delivered a much
stronger performance for the six months ended 31 October 2022 with
growth in both revenue and trading profit.
Overall, the Group's adjusted operating profit was significantly
higher than the same period last year at GBP5.0m (2021: GBP1.7m) on
revenue of GBP77.5m (2021: GBP60.0m).
Events in Europe have seen a significant re-prioritisation of
spending by customers in the region. The increase in Group revenue
was a result of increased UK MOD spend, most marked at MCL and
export sales at Chess. Conversely, some parts of the Group have
seen delays to deliveries and revenue because of customer focus on
current events. This is particularly impacting MASS, despite which
it reported an improved adjusted operating profit. Nevertheless, in
the medium term we expect the current security issues to feed
through to a longer-term investment in preparation for future
threats, including training and information security, which will
benefit MASS.
Challenges in material supplies and recruitment have continued
but are showing some signs of improvement. EID in particular has
suffered from supply chain delays, which have prevented it from
delivering revenue to expectations. The recruitment of certain
specialist professionals with high-level security clearances
remains the most challenging aspect of people resourcing, and
particularly applies at MASS.
The Group's adjusted operating profit was much stronger than
last year driven by improvements in the Group's UK businesses. This
was partly offset by a weaker revenue mix at ELAC and delays to
orders and deliveries at EID.
The closing order book of GBP304.2m was a record high for the
Group and stretches out to 2032. The Group's order intake was
slightly lower than last year's very strong performance for the
same period at GBP88.6m (2021: GBP105.3m). We saw particularly
strong order intake at SEA (GBP37.5m) and MCL (GBP16.1m). We
continue to see good order prospects for the Group in the second
half and beyond. These include naval systems for the Royal Navy,
the Portuguese Navy, and export customers in Southeast Asia and
Australasia, as well as communications and surveillance systems for
customers in the UK and Europe.
The strong operational performance in the first half resulted in
a significant working capital build across the Group, especially at
Chess and MCL. EID and ELAC also saw stock builds for second half
deliveries. As this unwinds, we expect a stronger operating cash
performance in the second half and as at 9 December 2022, the
Group's net funds were GBP7.6m.
Governance
As previously announced on 28 July 2022, Stanley Carter formally
stepped down from the Board at our Annual General Meeting on 27
September 2022. Stanley remains a major and supportive shareholder
of the Group and has entered into a shareholder agreement with the
Group. We look forward to continuing our long-standing relationship
with him.
Following the AGM, the Board hosted a presentation of the
Group's maritime capabilities for investors and analysts, which
also gave the audience an opportunity to talk face to face with the
managing directors of SEA, ELAC and EID.
The Board regularly evaluates and reviews the Group's
environmental, social and governance (ESG) activity and is
committed to maintaining appropriate standards. We continue to make
good progress with a wide range of initiatives at subsidiary level
with MCL, MASS and Chess working towards ISO 14001 accreditation,
and each subsidiary has now published its net zero carbon plans.
The Group's brand values, customer engagement principles and
governance policies are all outlined on Cohort's website and in the
Annual Report and Accounts.
Key financials
For the six months ended 31 October 2022 the Group's revenue was
GBP77.5m (2021: GBP60.0m), including GBP19.1m from Chess, GBP17.2m
from MASS, GBP13.8m from MCL, GBP16.4m from SEA, GBP8.9m from ELAC
and GBP2.0m from EID.
The Group's adjusted operating profit in the period was GBP5.0m
(2021: GBP1.7m). Central costs were GBP2.6m (2021: GBP2.1m).
Cohort made an operating profit of GBP1.6m after recognising
amortisation of intangible assets (GBP1.8m) and marking forward
exchange contracts to market value (charge of GBP1.6m) (2021:
operating loss of GBP1.3m, after amortisation of intangible assets
of GBP3.4m, income on marking forward exchange contracts to market
value of GBP0.1m and exceptional income of GBP0.3m).
Adjusted earnings per share for the six months ended 31 October
2022 increased to 10.12 pence (2021: 3.04 pence). The tax rate in
respect of the adjusted operating profit was 17.0% (2021: 14.0%).
Basic earnings per share were 2.73 pence (2021: loss per share of
1.74 pence).
The cash outflow from operations of GBP4.9m (2021: inflow of
GBP9.1m) is due to higher receivables, particularly at MCL
following a strong first half and the timing of supplier payments.
The Group made payments in respect of dividends (GBP3.4m) and
capital expenditure (GBP2.6m) resulting in net debt at 31 October
2022 of GBP0.6m (30 April 2022: net funds of GBP11.0m). The capital
expenditure included an initial spend of GBP1.5m on a new facility
for ELAC. The total spend for this project is expected to be GBP15m
over the three years from 2022 to 2025.
The Group completed the acquisition of the non-controlling
interest of Chess for GBP1.0m in cash on 30 November 2022.
Chess
Chess's first half performance was much stronger than last year.
It reported an adjusted operating profit of GBP0.3m (2021: loss of
GBP2.7m) on revenue of GBP19.1m (2021: GBP5.9m). As expected, the
management, organisational and people changes we made in 2021/22
have delivered significant financial improvements in 2022/23. The
operating cash performance at Chess has greatly improved with a
positive cash flow in the first half, and we expect that to
continue in the second half.
Notwithstanding this improvement, Chess's net margin of just
under 2% for the first half is much lower than we expect to see for
the full year. This reflects a weaker mix of revenue, including
delivery of a small number of older problem projects at low margin.
Completion of the latter did, nevertheless, contribute to the
improved cash performance at Chess.
The Group owned 81.84% of Chess throughout the first half of the
year (2021: 81.84%). We completed the acquisition of the remaining
shares in Chess on 30 November 2022 for GBP1.0m in line with the
terms set out in the acquisition announcement in December 2018.
Chess's order intake of GBP14.3m (2021: GBP6.1m) in the first
half was much improved on last year and accounts for a proportion
of the revenue improvement. Its closing order book of GBP35.9m
(2021: GBP42.6m) underpins over GBP12m of the revenue expected to
be delivered in the second half. We expect Chess to have a stronger
second half, driving the business to an improved profit for the
full year.
Chess's medium-term prospects for naval and land systems remain
strong, with an attractive pipeline of opportunities including the
Type 26 frigates in the UK and Australia.
EID
EID had a disappointing first half. On lower revenue, it
delivered an adjusted operating loss of GBP0.9m (2021: loss of
GBP0.5m). This was a result of continued order delays, which also
resulted in its order intake being lower than last year at GBP1.9m
(2021: GBP9.3m). These delayed orders included important orders for
EID from the Portuguese Navy, and we now expect these during the
first half of the 2023 calendar year. EID also saw the greatest
challenge across the Group in respect of supply delays, with some
of its expected deliveries slipping into the second half and some
expected in 2023/24.
The Group owned 80% of EID throughout the first half of the year
(2021: 80%).
EID's order book of GBP23.7m at 31 October 2022 (2021: GBP25.8m)
underpins over GBP8m of second half revenue and gives us confidence
that it will deliver a stronger performance in the second half.
Nevertheless, EID's full year performance will be weaker than that
achieved in 2021/22.
As previously stated, we expect EID to recover in 2023/24.
ELAC Sonar (ELAC)
ELAC had a weaker first half than last year with lower trading
profit of GBP0.9m (2021: GBP1.5m). This reflected a weaker mix due
to the Italian sonar programme, which is at lower margin than
export sales of legacy products and spares. Revenue was slightly
down due to some delays in German Government export approval. We
believe this is primarily the result of greater scrutiny and
resource limitations in the German Government pending new export
control legislation which is expected in 2023. We expect this delay
to begin to ease during the course of the next year.
This reporting period has seen the conclusion to the adjustment
mechanism from the former owner of ELAC, Wärtsilä Corporation, with
GBP0.4m of the trading profit arising from this source.
ELAC's order book of GBP58.7m (2021: GBP55.9m) underpins over
GBP13m of revenue to be delivered in the second half. We expect
ELAC to deliver a stronger second half, though its overall
performance for the year will be behind that achieved in
2021/22.
MASS
MASS achieved an adjusted operating profit of GBP4.0m (2021:
GBP3.7m), an improvement compared to last year, despite lower
revenue. This was a result of a stronger revenue mix with some
lower margin non-defence work ceasing last year.
MASS has seen a prolonged impact on its business from COVID-19
manifested in both delivery constraints, with some export work
still facing challenges to deliver, and also in winning new
business. The hiatus in business development for the last two years
prevented MASS from converting and growing its pipeline of
opportunities in export markets, but it has begun to rebuild this
in the last six months.
The current geo-political situation has caused some of MASS's
domestic customers' budgets to be redeployed in other areas,
pushing scheduled training exercises back.
In the medium term, we believe the wider geo-political
situation, especially the situation in Ukraine and the continuing
Asia-Pacific tensions, will lead MASS's customers to increase
spending on countering threats, including electronic warfare and
security of communications and systems.
MASS's first half net margin was higher than last year at 23%
(2021: 19%) due to improved mix of work. We expect the net margin
for the full year to be slightly lower.
MASS's closing order book of GBP64.8m (2021: GBP81.1m) underpins
over GBP14m of second half revenue. We expect a stronger second
half from MASS, with an overall performance in line with last year.
This is dependent on some return to normality in MASS's training
provision, especially in the UK.
MCL
MCL delivered a very strong first half performance with adjusted
operating profit of GBP2.2m (2021: GBP0.5m) on increased revenue of
GBP13.8m (2021: GBP7.9m). This was a result of greater activity in
supplying equipment to the UK MOD, notably including armoured
fighting vehicle hearing protection.
MCL's order book of GBP24.8m (2021: GBP13.0m), a good pipeline
of opportunities and the current geo-political tensions, give us
confidence that MCL's second half will remain as strong as its
first half. Overall, we expect MCL's full year performance to be
significantly higher than that achieved in 2021/22.
MCL's current level of activity with the UK MOD is expected to
continue into the first half of 2023/24. In the longer term, MCL is
working on securing significant delivery and support contracts from
the Royal Navy. We expect the probability and timing of winning
these contracts to become clearer in the year ahead.
SEA
SEA's adjusted operating profit of GBP1.2m (2021: GBP1.2m) was
on slightly higher revenue of GBP16.4m (2021: GBP13.9m).
SEA's order intake in the first half was again very strong at
GBP37.6 m (2021: GBP12.0m), including a key five-year order from
the Royal Navy for systems and equipment upgrade of anti-submarine
warfare and missile countermeasures systems. Its pipeline of
opportunities, particularly in naval systems for the UK and export
markets, remains robust.
SEA's revenue is well underpinned, with a strong closing order
book of GBP96.3m (2021: GBP67.5m) including over GBP16m of revenue
to be delivered in the second half of this financial year. Overall,
we expect a stronger second half from SEA, delivering a full year
performance ahead of last year's.
Dividend
The Board has declared an interim dividend of 4.25 pence per
share (2021: 3.85 pence per share), 10% higher than last year. This
increase reflects the Board's confidence in the outlook for Cohort
and its commitment to a progressive dividend policy. The interim
dividend is payable on 14 February 2023 to shareholders on the
register as of 6 January 2023.
Outlook
The first half of 2022/23 has seen a welcome return to growth by
the Group.
At 31 October 2022, our order book was a record GBP304.2m (30
April 2022: GBP290.0m), underpinning most of the second half of
this financial year. In line with previous experience we anticipate
a stronger Group performance in the second half and thus remain on
track to achieve our expectations for the full year.
The Group's order book has steadily increased over the last few
years to what is now a record high. Its longevity has also
increased with revenue now deliverable out to 2032. The pipeline of
order opportunities for the remainder of the year also looks
strong. Demand for our solutions and services continues to be
driven by the UK's increased spending on defence and security and
by international tensions in the Asia-Pacific region and Europe.
Overall, we continue to see a positive outlook for organic growth
in the years ahead.
Nick Prest CBE
Chairman
14 December 2022
Consolidated income statement
for the six months ended 31 October 2022
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------------------- ----- ----------- ----------- --------------
Revenue 2 77,467 60,038 137,765
Cost of sales (53,184) (38,914) (81,160)
---------------------------------------------- ----- ----------- ----------- --------------
Gross profit 24,283 21,124 56,605
Administrative expenses (22,675) (22,442) (45,515)
---------------------------------------------- ----- ----------- ----------- --------------
Operating profit/(loss) 2 1,608 (1,318) 11,090
---------------------------------------------- ----- ----------- ----------- --------------
Operating profit/(loss) comprises:
Adjusted operating profit 2 5,011 1,718 15,525
(Charge)/credit on marking forward
exchange contracts to market value
at the period end (included in cost
of sales) (1,567) 80 716
Amortisation of other intangible assets
(included in administrative expenses) (1,836) (3,389) (6,865)
Research and development expenditure
credits (RDEC) (included in cost of
sales) - - 1,004
Exceptional items (included in administrative
expenses):
Profit on acquisition of JSK - 273 272
Adjustment to earn-out on acquisition
of Chess 7 - - 438
---------------------------------------------- ----- ----------- ----------- --------------
Operating profit/(loss) 1,608 (1,318) 11,090
Finance income 29 5 6
Finance costs (552) (394) (868)
---------------------------------------------- ----- ----------- ----------- --------------
Profit/(loss) before tax 1,085 (1,707) 10,228
Income tax (expense)/credit 3 (184) 287 (1,541)
---------------------------------------------- ----- ----------- ----------- --------------
Profit/(loss) for the period 901 (1,420) 8,687
---------------------------------------------- ----- ----------- ----------- --------------
Attributable to:
Equity shareholders of the parent 1,109 (710) 9,202
Non-controlling interests (208) (710) (515)
---------------------------------------------- ----- ----------- ----------- --------------
901 (1,420) 8,687
---------------------------------------------- ----- ----------- ----------- --------------
Earnings per share Pence Pence Pence
------------------- ----- ------ -----
Basic 4 2.73 (1.74) 22.55
Diluted 4 2.72 (1.74) 22.42
------------------- ----- ------ -----
All profit for the period is derived from continuing
operations.
Consolidated statement of comprehensive income
for the six months ended 31 October 2022
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- ----------
Profit/(loss) for the period 901 (1,420) 8,687
------------------------------------- ----------- ----------- ----------
Foreign currency translation
differences on net assets
of overseas subsidiaries,
net of loans used to acquire
overseas subsidiaries 995 (37) (422)
------------------------------------- ----------- ----------- ----------
Changes in retirement benefit
obligations (690) - 1,002
------------------------------------- ----------- ----------- ----------
Other comprehensive income/(expense)
for the period, net of tax 305 (37) 580
------------------------------------- ----------- ----------- ----------
Total comprehensive income/(expense)
for the period 1,206 (1,457) 9,267
------------------------------------- ----------- ----------- ----------
Attributable to:
Equity shareholders of the
parent 1,414 (647) 9,785
Non-controlling interests (208) (810) (518)
------------------------------------- ----------- ----------- ----------
1,206 (1,457) 9,267
------------------------------------- ----------- ----------- ----------
Consolidated statement of changes in equity
for the six months ended 31 October 2022
Attributable to the equity shareholders of the parent
----------------------------------------------------------------------------------------------
Share Share Non-
Share premium Own option Other Retained controlling Total
capital account shares reserve reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 1 May 2021 4,104 29,956 (1,068) 923 (2,362) 47,760 79,313 5,738 85,051
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Loss for the period - - - - - (710) (710) (710) (1,420)
Other comprehensive
(expense)/income for
the period - - - (6) - 69 63 (100) (37)
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Total comprehensive
expense for the
period - - - (6) - (641) (647) (810) (1,457)
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Transactions with
owners of the Group
and non-
controlling interests
recognised directly
in equity:
Issue of new shares 10 300 - - - - 310 - 310
Equity dividend - - - - - (3,106) (3,106) - (3,106)
Vesting of Restricted
Shares - - - - - 279 279 - 279
Own shares purchased - - (551) - - - (551) - (551)
Own shares sold - - 140 - - - 140 - 140
Net loss on selling
own shares - - 337 - - (337) - - -
Share-based payments
(including deferred
tax and foreign
exchange) - - - 276 - - 276 - 276
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 31 October 2021 4,114 30,256 (1,142) 1,193 (2,362) 43,955 76,014 4,928 80,942
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 1 May 2021 4,104 29,956 (1,068) 923 (2,362) 47,760 79,313 5,738 85,051
Profit/(loss) for
the year - - - - - 9,202 9,202 (515) 8,687
Other comprehensive
income/(expense) for
the year - - - - - 583 583 (3) 580
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income/(expense) for
the year - - - - - 9,785 9,785 (518) 9,267
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Transactions with
owners of Group and
non-
controlling interests,
recognised directly
in equity:
Issue of new shares 17 571 - - - - 588 - 588
Equity dividends - - - - - (4,684) (4,684) - (4,684)
Vesting of Restricted
Shares - - - - - 279 279 - 279
Own shares purchased - - (2,923) - - - (2,923) - (2,923)
Own shares sold - - 282 - - - 282 - 282
Net loss on selling
own shares - - 363 - - (363) - - -
Share-based payments - - - 572 - - 572 - 572
Deferred tax
adjustment
in respect of
share-based
payments - - - (204) - - (204) - (204)
Transfer of share
option reserve on
vesting of options - - - (291) - 291 - - -
Change in option for
acquiring
non-controlling
interest in Chess - - - - 962 - 962 - 962
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 30 April 2022 4,121 30,527 (3,346) 1,000 (1,400) 53,068 83,970 5,220 89,190
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 1 May 2022 4,121 30,527 (3,346) 1,000 (1,400) 53,068 83,970 5,220 89,190
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Profit/(loss) for
the period - - - - - 1,109 1,109 (208) 901
Other comprehensive
income for the period - - - - - 305 305 - 305
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income/(expense) for
the period - - - - - 1,414 1,414 (208) 1,206
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Transactions with
owners of the Group
and non-
controlling interests
recognised directly
in equity:
Issue of new shares 16 622 - - - - 638 - 638
Equity dividend - - - - - (3,393) (3,393) - (3,393)
Vesting of Restricted
Shares - - - - - 189 189 - 189
Own shares purchased - - - - - - - - -
Own shares sold - - 111 - - - 111 - 111
Net loss on selling
own shares - - 198 - - (198) - - -
Share-based payments
(including deferred
tax and foreign
exchange) - - - 312 - - 312 - 312
Change in option for
acquiring
non-controlling
interest in Chess - - - - 384 - 384 - 384
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
At 31 October 2022 4,137 31,149 (3,037) 1,312 (1,016) 51,080 83,625 5,012 88,637
---------------------- -------- -------- -------- -------- --------- --------- -------- ------------ --------
Consolidated statement of financial position
as at 31 October 2022
31 October 31 October
2022 2021 30 April 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------- ---------- ---------- -------------
Assets
Non-current assets
Goodwill 50,145 50,368 50,145
Other intangible assets 7,806 13,117 9,641
Right of use asset 8,804 7,727 9,615
Property, plant, and equipment 13,829 11,993 12,310
Deferred tax asset 1,364 3,843 1,361
---------------------------------- ---------- ---------- -------------
81,948 87,048 83,072
--------------------------------- ---------- ---------- -------------
Current assets
Inventories 22,755 16,212 22,777
Trade and other receivables 59,711 54,221 56,161
Derivative financial instruments 128 40 793
Cash and cash equivalents 29,030 35,537 40,367
---------------------------------- ---------- ---------- -------------
111,624 106,010 120,098
--------------------------------- ---------- ---------- -------------
Total assets 193,572 193,058 203,170
---------------------------------- ---------- ---------- -------------
Liabilities
Current liabilities
Trade and other payables (45,002) (48,461) (53,985)
Derivative financial instruments (1,711) (679) (861)
Lease liabilities (1,264) (1,653) (1,515)
Bank borrowings (19) (32) (29,362)
Provisions (8,835) (9,625) (8,878)
Other current liabilities (1,016) (2,800) (1,400)
---------------------------------- ---------- ---------- -------------
(57,847) (63,250) (96,001)
--------------------------------- ---------- ---------- -------------
Non-current liabilities
Deferred tax liability (985) (3,776) (1,353)
Lease liabilities (8,131) (6,549) (8,631)
Bank borrowings (29,612) (29,427) (8)
Provisions (1,294) (1,331) (1,139)
Retirement benefit obligations (7,066) (7,783) (6,848)
---------------------------------- ---------- ---------- -------------
(47,088) (48,866) (17,979)
--------------------------------- ---------- ---------- -------------
Total liabilities (104,935) (112,116) (113,980)
---------------------------------- ---------- ---------- -------------
Net assets 88,637 80,942 89,190
---------------------------------- ---------- ---------- -------------
Equity
Share capital 4,137 4,114 4,121
Share premium account 31,149 30,256 30,527
Own shares (3,037) (1,142) (3,346)
Share option reserve 1,312 1,193 1,000
Other reserves (1,016) (2,362) (1,400)
Retained earnings 51,080 43,955 53,068
---------------------------------- ---------- ---------- -------------
Total equity attributable to
the equity shareholders of the
parent 83,625 76,014 83,970
Non-controlling interests 5,012 4,928 5,220
---------------------------------- ---------- ---------- -------------
Total equity 88,637 80,942 89,190
---------------------------------- ---------- ---------- -------------
Consolidated cash flow statement
for the six months ended 31 October 2022
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------- ----- ----------- ----------- --------------
Net cash (used by)/generated
from operating activities 6 (5,846) 8,847 19,525
-------------------------------------- ----- ----------- ----------- --------------
Cash flow from investing activities
Interest received 29 5 6
Purchases of property, plant,
and equipment (2,612) (642) (2,005)
Acquisition of JSK (net of cash
acquired) - (372) (372)
-------------------------------------- ----- ----------- ----------- --------------
Net cash used in investing activities (2,583) (1,009) (2,371)
-------------------------------------- ----- ----------- ----------- --------------
Cash flow from financing activities
Issue of new shares 638 310 588
Dividends paid (3,393) (3,106) (4,684)
Purchase of own shares - (551) (2,923)
Sale of own shares 111 140 282
Repayment of borrowings (17) (34) (50)
Repayment of lease liabilities (941) (942) (1,916)
-------------------------------------- ----- ----------- ----------- --------------
Net cash used in financing activities (3,602) (4,183) (8,703)
-------------------------------------- ----- ----------- ----------- --------------
Net (decrease)/increase in cash
and cash equivalents (12,031) 3,655 8,451
Represented by:
Cash and cash equivalents brought
forward 40,367 32,294 32,294
Net (decrease)/increase in cash
and cash equivalents (12,031) 3,655 8,451
Exchange gains/(losses) 694 (412) (378)
-------------------------------------- ----- ----------- ----------- --------------
Cash and cash equivalents carried
forward 29,030 35,537 40,367
-------------------------------------- ----- ----------- ----------- --------------
Net funds/(debt) reconciliation
Effect
of foreign
exchange At 31
At 1 May rate October
2022 changes Cash flow 2022
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- ----------- --------- --------
Cash and cash equivalents 40,367 694 (12,031) 29,030
-------------------------- -------- ----------- --------- --------
Loan (29,332) (278) - (29,610)
Finance leases (38) - 17 (21)
-------------------------- -------- ----------- --------- --------
Bank borrowings (29,370) (278) 17 (29,631)
-------------------------- -------- ----------- --------- --------
Net funds/(debt) 10,997 416 (12,014) (601)
-------------------------- -------- ----------- --------- --------
Notes to the interim report
for the six months ended 31 October 2022
1. Basis of preparation
The financial information contained within this Interim Report
has been prepared applying the recognition and measurement
requirements of International Financial Reporting Standards (IFRS)
in conformity with UK-adopted International Accounting Standards
and expected to apply at 30 April 2023. As permitted, this Interim
Report has been prepared in accordance with the AIM Rules for
Companies and is not required to comply with IAS 34 'Interim
Financial Reporting' to maintain compliance with IFRS. This Interim
Report is presented in Sterling and all values are rounded to the
nearest thousand pounds (GBP'000) except where otherwise
indicated.
For management and reporting purposes, the Group, for the period
just ended, operated through its six trading businesses: Chess,
EID, ELAC, MASS, MCL and SEA. These businesses are the basis on
which the Company, Cohort plc, currently reports its primary
segmental information.
The Group's first half trading is in line with historical trends
for the Group where typically we see a first half of a third or
less of the full year in respect of earnings.
Going concern
The Group meets its day-to-day working capital requirements
through a facility which was renewed in July 2022 and runs until
July 2025 with options to extend by a further two years until July
2027. The new facility is for a GBP35m revolving credit facility
with an accordion (option) to draw another GBP15m. Both the current
domestic economic conditions and continuing UK Government budget
pressures create uncertainty, particularly over the level of demand
for the Group's products and services, specifically in respect of
UK defence spending (UK MOD represents 47% of the Group's 2022/23
first half revenue). The current heightened international security
situation, especially the on-going conflict in Ukraine, has
increased the focus of governments, particularly in NATO, on
defence capability and how this should be enhanced, including
increased investment. The Group's forecasts and projections, taking
account of reasonably possible changes in trading performance for a
period of at least 12 months from the date of signing this Interim
Report show that the Group should be able to operate within the
level of its current facility.
The Directors have a reasonable expectation that the Company and
Group have adequate resources to continue in operational existence
for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing this Interim Report.
(A) Statutory accounts
The financial information set out above does not constitute the
Group's statutory accounts for the year ended 30 April 2022. RSM UK
Audit LLP has reported on these accounts; its report was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis, or material
uncertainty, without qualifying its report and (iii) did not
contain a statement under Sections 498(2) or (3) of the Companies
Act 2006. In accordance with Section 434 of the Companies Act 2006,
the unaudited results do not constitute statutory financial
statements of the Company. The six months results for both years
are unaudited.
(B) Statement of compliance
The accounting policies applied by the Group in this Interim
Report are consistent with its consolidated financial statements
for the year ended 30 April 2022 and are in accordance with
UK-adopted International Accounting Standards. The accounting
policies have been applied consistently to all periods presented in
the consolidated financial statements of this Interim Report.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of certain assets and
liabilities. The Directors have identified the following critical
judgements and estimates in applying the Group's accounting
policies that have the most significant impact on the amounts
recognised in this Interim Report.
Goodwill
The carrying value of goodwill is not subject to amortisation
but is tested for impairment at each reporting date. This is a
judgement based upon the future cash flows of its cash-generating
units (trading subsidiaries), growth rates and the weighted average
cost of capital applied to those future cash flows. This impairment
test as at 31 October 2022 showed no impairment of the Group's
goodwill.
Other payables
On the acquisition of 81.84% of Chess (12 December 2018), the
sale and purchase agreement provided for additional consideration
to be paid to the shareholders of Chess in respect of an earn-out
and to acquire the non-controlling interest. This figure is
estimated at GBP1.0m as at 31 October 2022 (30 April 2022: GBP1.4m;
31 October 2021: GBP2.8m) based upon the performance of Chess for
the three years ended 30 April 2021. The acquisition of the
non-controlling interest in Chess was completed on 30 November
2022.
Other estimates and adjustments including revenue recognition,
recoverability of trade and other receivables, provisions and
taxation have not materially changed since the year end.
The Interim Report was approved by the Board on 8 December 2022
and authorised for issue on 14 December 2022.
2. Segmental analysis of revenue and adjusted operating
profit
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- ----------
Revenue
Chess 19,134 5,925 16,905
EID 2,029 2,630 8,227
ELAC 8,943 10,692 21,518
MASS 17,324 19,064 38,511
MCL 13,823 7,913 21,745
SEA 16,387 13,859 30,973
Inter-segment revenue (173) (45) (114)
------------------------------------- ----------- ----------- ----------
77,467 60,038 137,765
------------------------------------- ----------- ----------- ----------
Operating profit comprises:
Trading profit/(loss) of:
Chess 329 (2,663) 314
EID (952) (489) 860
ELAC 888 1,515 3,770
MASS 3,983 3,724 9,138
MCL 2,158 547 2,255
SEA 1,234 1,228 3,385
Central costs (2,629) (2,144) (4,197)
------------------------------------- ----------- ----------- ----------
Adjusted operating profit 5,011 1,718 15,525
(Charge)/credit on marking
forward exchange contracts
to market value at the period
end (1,567) 80 716
Amortisation of intangible
assets (1,836) (3,389) (6,865)
Exceptional items - 273 710
Research and development expenditure
credits (RDEC) - - 1,004
------------------------------------- ----------- ----------- ----------
Operating profit/(loss) 1,608 (1,318) 11,090
------------------------------------- ----------- ----------- ----------
All revenue and adjusted operating profits are in respect of
continuing operations.
The operating profit/(loss) as reported under IFRS is reconciled
to the adjusted operating profit as reported above by the exclusion
of marking forward exchange contracts to market value at the period
end, exceptional items and the amortisation of other intangible
assets.
The adjusted operating profit is presented in addition to the
operating profit to provide the trading performance of the Group as
derived from its constituent elements on a comparable basis from
period to period.
The Group's adjusted operating profit includes the cost of share
options of GBP310,000 for the six months ended 31 October 2022 (six
months ended 31 October 2021: GBP276,000; year ended 30 April 2022:
GBP572,000).
The chief operating decision maker as defined by IFRS 8 has been
identified as the Board.
Revenue analysis by sector and type of deliverable
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
------------- ------------- ----------------
GBPm % GBPm % GBPm %
----------------------------- ------- ---- ------- ---- --------- -----
By sector
UK MOD 36.8 47 28.7 48 64.9 47
Portuguese MOD 0.4 1 0.4 1 3.9 3
German MOD 0.8 1 - - 4.0 3
Export defence 29.7 38 21.6 35 47.1 34
Security 4.8 6 4.1 7 6.7 5
----------------------------- ------- ---- ------- ---- --------- -----
Defence and security revenue 72.5 93 54.8 91 126.6 92
----------------------------- ------- ---- ------- ---- --------- -----
Transport 3.7 3.5 6.8
Other commercial 1.3 1.7 4.4
----------------------------- ------- ---- ------- ---- --------- -----
Non-defence revenue 5.0 7 5.2 9 11.2 8
----------------------------- ------- ---- ------- ---- --------- -----
Total revenue 77.5 100 60.0 100 137.8 100
----------------------------- ------- ---- ------- ---- --------- -----
The defence and security revenue is further analysed into the
following:
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
------------- ------------- ----------------
GBPm % GBPm % GBPm %
----------------------------------- -------- --- -------- --- ---------- ----
By market segment
Combat systems 8.0 10 7.8 13 19.0 14
C4ISTAR 52.4 68 30.7 51 75.0 54
Digital services 4.9 6 7.5 13 14.0 10
Training and simulation 4.8 6 5.0 8 9.6 7
Research, advice and support 0.8 1 3.0 5 7.5 6
Other 1.6 2 0.8 1 1.5 1
----------------------------------- -------- --- -------- --- ---------- ----
Total defence and security revenue 72.5 93 54.8 91 126.6 92
----------------------------------- -------- --- -------- --- ---------- ----
The Group's total revenue in terms of type of deliverable is
analysed as follows:
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
------------- ------------- ----------------
GBPm % GBPm % GBPm %
-------------- ------- ---- ------- ---- --------- -----
Product 57.4 74 35.1 59 82.7 60
Services 20.1 26 24.9 41 55.1 40
-------------- ------- ---- ------- ---- --------- -----
Total revenue 77.5 100 60.0 100 137.8 100
-------------- ------- ---- ------- ---- --------- -----
3. Income tax expense/(credit)
The income tax expense/(credit) comprises:
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ----------- --------------
UK corporation tax: in respect of this
period 556 776 3,112
UK corporation tax: in respect of prior
periods - - (373)
German corporation tax: in respect of this
period 2 370 (40)
German corporation tax: in respect of prior
periods - - 82
Portugal corporation tax: in respect of
this period (6) (613) (491)
Portugal corporation tax: in respect of
prior periods - - (9)
Other foreign corporation tax: in respect
of this period - - (4)
--------------------------------------------- ----------- ----------- --------------
552 533 2,277
--------------------------------------------- ----------- ----------- --------------
Deferred taxation: in respect of this period (368) (820) (733)
Deferred taxation: in respect of prior
periods - - (3)
--------------------------------------------- ----------- ----------- --------------
(368) (820) (736)
--------------------------------------------- ----------- ----------- --------------
184 (287) 1,541
--------------------------------------------- ----------- ----------- --------------
The income tax charge for the six months ended 31 October 2022
is based upon the anticipated charge for the full year ending 30
April 2023. As it is an estimate, the impact of research and
development expenditure credits (RDEC) is not shown separately.
4. Earnings per share
The earnings per share are calculated as follows:
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- ----------
Earnings
Basic and diluted earnings/(loss)
attributable to owners 1,109 (710) 9,202
Charge/(credit) on marking
forward exchange contracts
to market at the period end
(net of income tax) 1,660 (80) (580)
Exceptional items (net of
income tax) - (273) (710)
Group's share of amortisation
of intangible assets (net
of income tax) 1,342 2,304 4,772
---------------------------------- ----------- ----------- ----------
Adjusted basic and diluted
earnings 4,111 1,241 12,684
---------------------------------- ----------- ----------- ----------
Number Number Number
---------------------------- ---------- ---------- ----------
Weighted average number of
shares
For the purposes of basic
earnings per share 40,616,350 40,894,983 40,813,569
Share options 130,673 345,522 230,101
---------------------------- ---------- ---------- ----------
For the purposes of diluted
earnings per share 40,747,023 41,240,505 41,043,670
---------------------------- ---------- ---------- ----------
The weighted average number of ordinary shares for the six
months ended 31 October 2022 excludes 602,590 ordinary shares held
by the Cohort plc Employee Benefit Trust (which does not receive a
dividend) for the purposes of calculating earnings per share (six
months ended 31 October 2021: 172,669; year ended 30 April 2022:
663,845).
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
Pence Pence Pence
---------------------------- ----------- ----------- ----------
Earnings/(loss) per share
Basic 2.73 (1.74) 22.55
Diluted 2.72 (1.74) 22.42
---------------------------- ----------- ----------- ----------
Adjusted earnings per share
Basic 10.12 3.04 31.08
Diluted 10.09 3.01 30.90
---------------------------- ----------- ----------- ----------
5. Dividends
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
Pence Pence Pence
----------------------------- ----------- ----------- ----------
Dividends per share proposed
in respect of the period
Interim 4.25 3.85 3.85
Final - - 8.35
----------------------------- ----------- ----------- ----------
The interim dividend for the six months ended 31 October 2022 is
4.25 pence (six months ended 31 October 2021: 3.85 pence) per
ordinary share. This dividend will be payable on 14 February 2023
to shareholders on the register at 6 January 2023.
The final dividend paid during the year ended 30 April 2022 was
11.45 pence per ordinary share, comprising 3.85 pence of interim
dividend for the six months ended 31 October 2021 and 7.60 pence of
final dividend for the year ended 30 April 2021.
6. Net cash (used by)/generated from operating activities
Six months Six months
ended ended
31 October 31 October Year ended
2022 2021 30 April 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------------- ----------- ----------- --------------
Profit/(loss) for the period 901 (1,420) 8,687
Adjustments for:
Tax expense/(credit) 184 (287) 1,541
Depreciation of property, plant and equipment 1,171 1,095 2,209
Depreciation of right of use assets 898 807 1,684
Amortisation of intangible assets 1,836 3,389 6,865
Net finance expense 523 389 862
Share-based payment 310 276 572
Derivative financial instruments and other
non-trading exchange movements 1,567 (80) (716)
Increase in provisions 278 698 102
---------------------------------------------- ----------- ----------- --------------
Operating cash flow before movements in
working capital 7,668 4,867 21,806
---------------------------------------------- ----------- ----------- --------------
Decrease/(increase) in inventories 223 (3,320) (9,885)
(Increase)/decrease in receivables (4,090) 13,206 10,530
(Decrease)/increase in payables (8,726) (5,605) 22
---------------------------------------------- ----------- ----------- --------------
(12,593) 4,281 667
---------------------------------------------- ----------- ----------- --------------
Cash (used by)/generated from operations (4,925) 9,148 22,473
Income taxes (paid)/received (500) 93 (2,081)
Interest paid (421) (394) (867)
---------------------------------------------- ----------- ----------- --------------
Net cash (used by)/generated from operating
activities (5,846) 8,847 19,525
---------------------------------------------- ----------- ----------- --------------
7. Acquisition of Chess Technologies Limited (Chess)
As announced on 12 December 2018, Cohort plc acquired 81.84% of
Chess for an initial cash consideration of just over GBP20.0m. The
Group has recognised 100% of Chess's results and net assets from
that date as it has effective control.
Under the sale and purchase agreement, up to a further GBP12.7m
is payable to the shareholders of Chess as an earn-out based upon
its trading performance over the three years ended 30 April 2021.
Based upon the actual performance to 30 April 2021 this earn-out
estimate is GBPnil as at 31 October 2022 (30 April 2022: GBPnil; 31
October 2021: GBP438,000).
The sale and purchase agreement for the acquisition of Chess
includes a put and call option for the purchase of the remaining
shares (18.16%) in Chess, the non-controlling interest.
This option is capped at GBP9.1m. The amount payable is
dependent upon the performance of the Chess business for the three
years ended 30 April 2021.
The non-controlling interest was entitled to participate in any
dividends payable by Chess in the period to 30 April 2021.
In accordance with IFRS 3, the Group has ascribed a value to the
option to acquire the non-controlling interest of Chess. At 31
October 2022, this value is GBP1,016,000 (30 April 2022:
GBP1,400,000; 31 October 2021: GBP2,362,000) and the option is
shown as a current liability and, as the non-controlling interest
has a right to dividends, in the other reserves as "option for
acquiring non-controlling interest in Chess".
The Group has applied the present-access method to the
acquisition of Chess and thus the non-controlling interest is
deemed not to be part of the acquisition transaction and the
liability arising from the option is not included in the
consideration transferred but is accounted for separately.
The option for the purchase of the minority shares in Chess was
completed on 30 November 2022.
Independent review report to Cohort plc
Conclusion
We have been engaged by Cohort plc ('the Company') to review the
condensed set of financial statements of the Company and its
subsidiaries (the 'Group') in the interim financial report for the
six months ended 31 October 2022 which comprises the Consolidated
Income Statement, Consolidated Statement of Comprehensive Income,
Consolidated Statement of Changes in Equity, Consolidated Statement
of Financial Position, Consolidated Cash Flow Statement and
accompanying notes. We have read the other information contained in
the interim financial report and considered whether it contains any
apparent material misstatements of fact or material inconsistencies
with the information in the condensed set of financial
statements.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the interim financial report for the six months ended 31 October
2022 is not prepared, in all material respects, in accordance with
the presentation, recognition and measurement criteria of
UK-adopted International Accounting Standards and the AIM Rules for
Companies.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" ('ISRE (UK) 2410') issued for use in the United Kingdom. A
review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with UK-adopted International
Accounting Standards. The condensed set of financial statements
included in this interim financial report has been prepared in
accordance with the presentation, recognition and measurement
criteria of UK-adopted International Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that management have inappropriately adopted
the going concern basis of accounting or that management have
identified material uncertainties relating to going concern that
are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410, however future events or conditions
may cause the Group and the Company to cease to continue as a going
concern.
Responsibilities of Directors
The interim financial report is the responsibility of, and has
been approved by the directors. The directors are responsible for
preparing the interim financial report in accordance with the
presentation, recognition and measurement criteria of UK-adopted
International Accounting Standards and the AIM Rules for
Companies.
In preparing the interim financial report, the directors are
responsible for assessing the Group's and the Company's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Review of the Financial
Information
In reviewing the interim financial report, we are responsible
for expressing to the Company a conclusion on the condensed set of
financial statements in the interim financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK) 2410 "'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity". Our review work has been undertaken so that we
might state to the Company those matters we are required to state
to them in an independent review report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
MK9 1BP
14 December 2022
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IR FZMMZGFRGZZZ
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