TIDMFDM
RNS Number : 0022U
FDM Group (Holdings) plc
28 July 2022
FDM Group (Holdings) plc
Interim Results
FDM Group (Holdings) plc ("the Company") and its subsidiaries
(together "the Group" or "FDM"), today announces its Interim
Results for the for the six months ended 30 June 2022.
30 June 30 June 2021 % change
2022
Revenue GBP152.8m GBP131.3m +16%
---------- ------------- ---------
Adjusted operating profit(1) GBP25.1m GBP22.3m +13%
---------- ------------- ---------
Profit before tax GBP22.2m GBP20.5m +8%
---------- ------------- ---------
Adjusted profit before tax(1) GBP25.0m GBP22.0m +14%
---------- ------------- ---------
Basic earnings per share 15.6p 14.3p +9%
---------- ------------- ---------
Adjusted basic earnings per share(1) 17.6p 15.6p +13%
---------- ------------- ---------
Cash flows generated from operations GBP16.8m GBP19.4m -13%
---------- ------------- ---------
Cash conversion(2) 75.3% 93.3% -19%
---------- ------------- ---------
Adjusted cash conversion(1) 66.9% 86.9% -23%
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Interim dividend per share 17.0p 15.0p +13%
---------- ------------- ---------
Cash position at period end GBP40.0m GBP44.7m -11%
---------- ------------- ---------
-- Good operational and financial progress delivered in the
first half, with momentum continuing to date.
-- Consistently high levels of demand for our Consultants across
all our regions, resulting in record levels of activity for the
Group.
-- North America, in both USA and Canada, performing increasingly strongly.
-- APAC operations approaching 1,000 Consultants assigned to
clients, notwithstanding complex conditions in Hong Kong and
mainland China.
-- UK and EMEA both performing well.
-- Growth in Returners and Ex-Forces Consultant streams during the first half.
-- Group Consultants assigned to clients at week 26(3) were up
22% from a year previous at 4,703 (30 June 2021: 3,841) and up 17%
since the 2021 year-end (31 December: 4,033).
-- Consultant utilisation rate(4) for the six months to 30 June 2022 was 97.6% (2021: 96.9%).
-- Training completions in the first half were up 55% to 1,584 (2021: 1,025) .
-- The Group had 911 in training at 30 June 2022 ( 30 June 2021: 569 ).
-- 30 new clients secured globally during the first six months
of 2022 (2021: 37) of which 20 were outside the financial services
sector; progress in the government, pharmaceutical, healthcare,
life sciences and telecommunications sectors.
-- Nascent business streams with Apprentices and Services gaining momentum.
-- Strong balance sheet, with GBP40.0 million cash at 30 June 2022 (2021: GBP44.7 million).
-- Cash conversion of 75.3% during the first six months of 2022
(2021: 93.3%), adjusted cash conversion(1) of 66.9% (2021: 86.9%)
reflecting increasing levels of activity and revenue during the
final months of the half year. Debtor days remain within our target
parameters.
-- On 27 July 2022, the Board declared an interim dividend of
17.0 pence per ordinary share (2021: 15.0 pence), which will be
payable on 30 September 2022 to shareholders on the register on 26
August 2022.
-- The Group is well placed to achieve the Board's expectations
for the full year and to deliver long-term growth.
(1) The adjusted operating profit and adjusted profit before tax
are calculated before Performance Share Plan expense (including
social security costs) of GBP2.8 million (2021: GBP1.5 million ).
The adjusted basic earnings per share is calculated before the
impact of Performance Share Plan expense (including social security
costs and associated deferred tax). The adjusted cash conversion is
calculated by dividing cash flow generated from operations by
adjusted operating profit.
(2) Cash conversion is calculated by dividing cash flows
generated from operations by operating profit.
(3) Week 26 in 2022 commenced on 27 June 2022 (2021: week 26
commenced on 28 June 2021).
(4) Utilisation rate is calculated as the ratio of cost of
utilised Consultants to the total Consultant payroll cost.
Rod Flavell, Chief Executive Officer, said:
"The Group delivered a good performance during the first half of
2022, with strong trading in all of our operating regions and high
levels of client demand, resulting in record levels of activity.
First half training completions were a record high and recruitment
continues to be strong. The performance delivered from both our
Canadian and USA businesses was pleasing and I am hopeful that we
can build from this stronger base.
Given the high levels of demand, we continue with our plan of
accelerating and enhancing investment in recruitment of both
Consultants and internal staff, and in our other complementary
development programmes. Our Group-wide spend on paid training this
year will exceed GBP20 million (year ending 31 December 2021:
GBP12.5 million) and this investment will help to underpin our
ambitious targets for the remainder of this year and into the
following years.
While mindful of wider macro-economic uncertainties, the Board
is confident that the Group is well placed to achieve its
expectations for the full year and to deliver long-term,
sustainable growth."
Enquiries
For further information:
FDM Rod Flavell - CEO 0203 056 8240
Mike McLaren - CFO 0203 056 8240
Nick Oborne
(financial public relations) 07850 127526
Forward-looking statements
This Interim Report contains statements which constitute
"forward-looking statements". Although the Group believes that the
expectations reflected in these forward-looking statements are
reasonable at the time they are made, it can give no assurance that
these expectations will prove to be correct. Because these
statements involve risks and uncertainties, actual results may
differ materially from those expressed or implied by these
forward-looking statements. Subject to any requirement under the
Disclosure Guidance and Transparency Rules or other applicable
legislation, regulation or rules, the Group does not undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Shareholders and/ or prospective shareholders should not place
undue reliance on forward-looking statements, which speak only as
of the date of this Interim Report.
We are FDM
FDM Group (Holdings) plc ("the Company") and its subsidiaries
(together "the Group" or "FDM") form a global professional services
provider with a focus on IT. Our mission is to bring people and
technology together, creating and inspiring exciting careers that
shape our digital future.
The Group's principal business activities involve recruiting,
training and deploying its own permanent IT and business
consultants ("Consultants") to clients, either on site or remotely.
FDM specialises in a range of technical and business disciplines
including Development, Testing, IT Service Management, Project
Management Office, Data Engineering, Cloud Computing, Risk,
Regulation and Compliance, Business Analysis, Business
Intelligence, Cyber Security, AI (Artificial Intelligence), Machine
Learning and Robotic Process Automation.
The FDM Careers Programme bridges the gap for graduates,
ex-Forces, returners to work, apprentices and others, providing the
training and experience required to make a success of launching or
relaunching their careers. We have FDM centres located in London,
Leeds, Glasgow, New York NY, Arlington VA, Charlotte NC, Austin TX,
Toronto, Frankfurt, Singapore, Hong Kong, Shanghai, Sydney and
Krakow. We also operate in Ireland, Luxembourg, the Netherlands,
Switzerland, Austria, Spain, South Africa and New Zealand.
FDM is a collective of many thousands of people from a multitude
of different backgrounds, life experiences and cultures. We are a
strong advocate of diversity and inclusion in the workplace and the
strength of our brand arises from the talent within.
Interim Management Review
Overview
FDM delivered a pleasing performance during the first half of
2022, experiencing strong levels of client demand across all our
operating regions.
During the first half of 2022 we consistently delivered high
average weekly deal volumes, resulting in Consultant headcount
growing to record numbers. The number of Consultants placed with
clients at week 26 was 4,703, up 22% against the first half of 2021
and up 17% since the 2021 year end. Revenue for the six-month
period ending 30 June 2022 was 16% higher (14% higher on a constant
currency basis) at GBP152.8 million (2021: GBP131.3 million). We
delivered a profit before tax for the first half of 2022 of GBP22.2
million, up 8% on the equivalent period in 2021.
At 30 June 2022, 59% of our Consultants were in their first
twelve months with the Group (2021: 40%), 27% in their second
twelve months with us (2021: 37%) and 14% post-24 months (2021:
23%).
We maintain our strong focus on cash management and cash
collection, ending the six-month period with GBP40.0 million of
cash and no debt (30 June 2021: GBP44.7 million of cash and no
debt).
We have continued to focus on developing and enhancing our
business model to ensure we attract the best candidates to our
business. We delivered 1,584 training completions in the first half
of the year (2021: 1,025), the highest number of training
completions for a six-month reporting period, and recruitment
activity is strong.
Strategy
FDM's strategy remains to deliver customer-led, sustainable,
profitable growth on a consistent basis through our
well-established business model. This model has enabled us to
deliver a positive performance in the half year and to continue to
deliver on our four key strategic objectives:
(i) Attract, train and develop high-calibre Consultants
Recruitment has continued to be a key area of focus during the
first half of 2022 in response to high levels of client demand
across all our regions.
We experienced a significant increase in the number of
applications across all our operating locations, most notably in
the UK. Our new global applicant tracking system was rolled out in
the first quarter of 2022; it has enabled us to process
applications more efficiently, whilst feedback confirms that it
also offers an improved user experience for applicants.
We are currently on track to deliver a record full year of
training completions. In total, there were 1,584 training
completions in the first half of the year, up 55% against the
equivalent period in 2021 (2021: 1,025).
As part of our investment in the growth of the business we
increased salary packages for Consultants across the Group, at an
increased cost of GBP2.4 million in the first half of 2022 over the
comparative period last year. Thus far, clients have proven
receptive to increased rates, given that the benefit flows to the
Consultants directly.
(ii) Invest in leading-edge training capabilities
Our Academy Transformation Programme, which we launched in June
2021 and which we detailed in our 2021 Annual Report, has continued
to make good progress during the first half of 2022. Working with
our accreditation partner, TechSkills, we achieved accreditation
for our TechOps course in the period, meeting our target of eight
accredited training programmes.
We are continuing with trials of our hybrid training model in
the UK as we work towards identifying the best training delivery
solution for the post-pandemic world of work. Whilst hybrid-remote
training is now firmly established as our preferred method of
delivery, our permanent Academies, of which we still have nine,
remain a key part of our training model as we continue to trial and
assess the benefits of bringing trainees into physical classrooms
for some elements of their training and collaboration days.
(iii) Grow and diversify our client base
We continued to deliver the highest level of service to our
clients and have worked closely with our clients to meet their
requirements as demand for Consultants reached record levels in the
first half of 2022.
We secured 30 new clients in the first half of 2022 (2021: 37 ),
of which 20 were from outside of the financial services sector; new
clients do not include a number of clients, which post-pandemic,
came back on stream to varying degrees, during the first half of
the year. We made progress in the government, pharmaceutical,
healthcare, life sciences and telecommunications sectors.
(iv) Expand and consolidate our geographic presence
The expansion and consolidation of our geographic presence is a
key growth driver for the Group. We delivered significant levels of
growth in the number of Consultants assigned to clients across all
of our operating regions compared with 30 June 2021, with the
exception of EMEA which saw a small decrease due to the anticipated
completion of a major Risk, Regulation and Compliance project for a
client in Luxembourg in the second half of 2021. The largest
absolute increase in the twelve months to 30 June 2022 came in the
UK, which saw Consultant headcount increase by 364, followed by
North America which increased Consultant headcount by 328. APAC
Consultant headcount increased by 207. Consultant numbers in all
our operating regions, including EMEA, have shown good growth since
31 December 2021.
An overview of the financial performance and development in each
of our markets is set out below.
Our Markets
UK(1)
Revenue for the six-month period to 30 June 2022 increased by
15% to GBP68.8 million (2021: GBP59.8 million). Consultants
deployed at week 26 were 2,045, an increase of 22% from 1,681 at
week 26 2021. Adjusted operating profit increased by 4% to GBP15.5
million (2021: GBP14.9 million). In July 2021 we standardised paid
training in the UK, bringing it into line with our operations
elsewhere in the world. The six-month period to 30 June 2022
includes GBP2.3 million of cost relating to this change, which was
not incurred in the comparative period in 2021.
Strong demand for our Consultants continued in the six months to
30 June 2022. To facilitate the demand, we trained a record 526
Consultants in the period (2021: 424). We have opened 21 new
clients in the period (2021: 14).
North America
Revenue for the six-month period to 30 June 2022 increased by
26% to GBP50.2 million (2021: GBP39.8 million). Consultants
deployed at week 26 were 1,405, an increase of 30% from 1,077 at
week 26 2021. Adjusted operating profit increased by 35 % to GBP6.6
million (2021: GBP4.9 million).
North America delivered strong Consultant growth in both Canada
and the US, with the initiatives we introduced to help us meet
growing demand proving successful. In the six months we trained 646
people (2021: 264), with record numbers in training at the period
end.
EMEA (Europe, Middle East and Africa, excluding UK)(1)
Revenue for the six-month period to 30 June 2022 decreased by
34% to GBP9.3 million (2021: GBP14.1 million). Consultants deployed
at week 26 were 295, a decrease of 11% from 332 at week 26 2021 and
an increase of 17% from 252 at week 52 2021. Adjusted operating
profit decreased by 43% to GBP1.2 million (2021: GBP2.1
million).
The decrease in Consultant headcount against week 26 2021
reflected the anticipated completion of a major Risk, Regulation
and Compliance project for a client in Luxembourg in the second
half of 2021; this was partially offset by growth in Poland, our
newest location in the region, where headcount is 88, achieved
within the first twelve months of operation.
APAC (Asia Pacific)
Revenue for the six-month period to 30 June 2022 increased by
39% to GBP24.5 million (2021: GBP17.6 million). Consultants
deployed at week 26 were 958, an increase of 28% from 751 at week
26 2021. Adjusted operating profit increased by 350 % to GBP1.8
million (2021: GBP0.4 million).
APAC headcount continues to grow at a rapid pace fuelled by
Australia, which in July surpassed 400 Consultants deployed.
Headcount in both Hong Kong and China remains broadly flat, despite
the territories being placed under strict lockdown measures. Our
newest location, New Zealand, is proving to be a useful source of
talent with Consultants being placed across the APAC region.
(1) Reflecting internal management and reporting, performance
and headcount results for Ireland, previously included within the
"UK and Ireland" region, are included within EMEA. The results to
June 2021 have been updated to reflect this change.
Financial Review
Summary income statement
Six months Six months % change
to to
30 June 30 June
2022 2021
Revenue GBP152.8m GBP131.3m +16%
Adjusted operating
profit (1) GBP25.1m GBP22.3m +13%
Operating profit GBP22.3m GBP20.8m +7%
Adjusted profit before
tax (1) GBP25.0m GBP22.0m +14%
Profit before tax GBP22.2m GBP20.5m +8%
Adjusted basic EPS(1) 17.6p 15.6p +13%
Basic EPS 15.6p 14.3p +9%
Overview
The Group delivered a solid first-half performance, with revenue
16 % higher at GBP152.8 million (2021: GBP131.3 million) (14%
higher on a constant currency basis), adjusted operating profit
increased by 13% to GBP25.1 million (2021: GBP22.3 million) and
with adjusted basic EPS up 13% to 17.6 pence (2021: 15.6
pence).
Consultants assigned to clients at week 26 2022 totalled 4,703,
an increase of 22% from 3,841 at week 26 2021 and an increase of
17% from 4,033 at week 52 2021. At week 26 our Ex-Forces Programme
accounted for 210 Consultants deployed worldwide (week 26 2021:
213; week 52 2021: 196). Our Returners Programme had 198 deployed
at week 26 2022 (week 26 2021: 146; week 52 2021: 156). The
Consultant utilisation rate increased to 97.6% (2021: 96.9%).
An analysis of revenue and Consultant headcount by region is set
out in the table below:
Six months Six months Year to 2022 2021 2021
to 30 June to 30 June 31 December Consultants Consultants Consultants
2022 2021 2021 assigned assigned assigned
Revenue Revenue Revenue to to to
GBPm GBPm GBPm clients clients clients
at week at week at week
26(2) 26(2) 52(2)
UK(3) 68.8 59.8 121.8 2,045 1,681 1,806
North America 50.2 39.8 81.4 1,405 1,077 1,095
EMEA(3) 9.3 14.1 25.0 295 332 252
APAC 24.5 17.6 39.2 958 751 880
------------ ------------ ------------- ------------- ------------- -------------
152.8 131.3 267.4 4,703 3,841 4,033
------------ ------------ ------------- ------------- ------------- -------------
Adjusted Group operating margin (1) has decreased to 16.5%
(2021: 17.0%), with overheads increasing to GBP51.3 million (2021:
GBP40.8 million). The decrease in adjusted operating margin results
from a range of items including our investment in people, systems
and the costs associated with record levels of paid training in the
period.
(1) The adjusted operating profit, adjusted group operating
margin and adjusted profit before tax are calculated before
Performance Share Plan expenses (including social security costs).
The adjusted basic earnings per share is calculated before the
impact of Performance Share Plan expenses (including social
security costs and associated deferred tax).
(2) Week 26 in 2022 commenced on 27 June 2022 (2021: week 26
commenced on 28 June 2021 and week 52 commenced on 20 December
2021).
(3) Reflecting internal management and reporting, performance
and headcount results for Ireland, previously included within the
"UK and Ireland" region, are included within EMEA. The results to
June 2021 have been updated to reflect this change.
Adjusting items
The Group presents adjusted results, in addition to the
statutory results, as the Directors consider that they provide a
useful indication of underlying trading performance and cash
generation. The adjusted results are stated before Performance
Share Plan expenses including associated taxes and social security
costs. An expense of GBP2.8 million was recognised in the six
months to 30 June 2022 relating to Performance Share Plan expenses
including social security costs (2021: GBP1.5 million). The
increase in the charge reflects the rapid recovery of the business
post-pandemic, which has moved the expectations on the achievement
of the necessary targets that trigger award of the Performance
Share Plan. Details of the Performance Share Plan are set out in
note 13 to the Condensed Consolidated Interim Financial
Statements.
Net finance costs
Finance costs include lease liability interest of GBP0.2 million
(2021: GBP0.3 million). The Group continues to have no
borrowings.
Taxation
The Group's total tax charge for the half year was GBP5.2
million, equivalent to an effective tax rate of 23.2%, on profit
before tax of GBP22.2 million (2021: effective rate of 23.5% based
on a tax charge of GBP4.8 million and a profit before tax of
GBP20.5 million). The effective rate is higher than the underlying
UK tax rate of 19% primarily due to Group profits earned in higher
tax jurisdictions. The effective rate reflects the Group's
geographical mix of profits and the impact of items considered to
be non-deductible for tax purposes.
Earnings per share
Basic earnings per share increased in the period to 15.6 pence
(2021: 14.3 pence), whilst adjusted basic earnings per share was
17.6 pence (2021: 15.6 pence). Diluted earnings per share was 15.3
pence (2021: 14.3 pence).
Dividend
The Group continues with its dividend policy of retaining
sufficient capital to fund ongoing operating requirements and
maintaining an appropriate level of free cash, dividend cover and
sufficient funds to invest in the Group's longer-term growth. On 27
July 2022, the Directors declared an interim dividend of 17.0 pence
per ordinary share (2021: 15.0 pence) which will be payable on 30
September 2022 to shareholders on the register on 26 August
2022.
Cash flow and Statement of Financial Position
The Group's cash balance decreased to GBP40.0 million as at 30
June 2022 (2021: GBP44.7 million) reflecting increasing revenues
throughout the period creating greater working capital
requirements. Debtor days at period end were 45 days (2021: 47
).
Dividends paid in the half year totalled GBP19.6 million (2021:
GBP30.5 million, including the 2020 final dividend which was
temporarily delayed as the impact of COVID-19 was unfolding). Net
capital expenditure was GBP0.5 million (2021: GBP0.1 million) and
tax paid was GBP7.7 million (2021: GBP5.3 million).
Cash conversion for the period was 75.3% (2021: 93.3%) and
adjusted cash conversion was 66.9% (2021: 86.9%), the decrease
occurring as a result of increased levels of activity and revenue
in the final months of the half year, which is included in the
receivables balance and therefore not converted to cash as at 30
June 2022.
Related party transactions
Details of related party transactions are included in note 15 of
the Condensed Interim Financial Statements.
Principal risks facing the business
The Group faces a number of risks and uncertainties which could
have a material impact upon its long-term performance. The
principal risks and uncertainties faced by the Group are set out in
the Annual Report and Accounts for the year ended 31 December 2021
on pages 32 to 39.
Changes in the macro-economic and global geopolitical
environment
Macro-economic uncertainty, arising largely from the current
instabilities in the global geopolitical environment, remains the
Group's principal risk. The Russian invasion of Ukraine has
contributed to global inflationary and supply-chain pressures,
which coincide with wage inflation and increased national interest
rates. There is a risk of recession occurring in some territories
over the next twelve months.
The Board recognises that these conditions may affect the
spending decisions of some clients. Whilst certain scenarios are
outside the Group's control, we believe that FDM's business model
is flexible, and the agile resource represented by our Consultants
can be attractive to clients during times of economic, political
and social uncertainty. There is therefore the potential for an
increase in demand for our services during such times. Whilst the
Board will continue to review the measures which it has in place to
identify and react to changes in macro-economic conditions, these
factors, together with FDM's strong cash and financial position,
give the Board confidence that FDM can continue to respond
appropriately to ameliorate the effect of any adverse economic
conditions which may arise.
In February 2022, the UK Government and the UK's National Cyber
Security Centre warned of a heightened cyber security threat to the
UK's infrastructure and UK companies, arising from the increased
geopolitical tensions in Eastern Europe. We consider that this risk
remains high, and we continue to strengthen our cyber security and
information safeguarding capabilities.
Climate change and other Environmental, Social and Governance
("ESG") risks
The Board considers that the risk of the direct physical effects
of climate change impairing the Group's ability to continue its
business activities is relatively low. The Group's operating model
is agile and adaptable, and measures which we have put in place
over the past year in response to the COVID-19 pandemic and the
challenges of remote working and training give the Board confidence
that the Group is able to recruit, train and deploy Consultants
efficiently from any of our locations. We are conscious that some
of our current office locations are in cities which could be
vulnerable to the longer-term risk of rising sea levels and extreme
weather. The Board's policy is to consider these factors in the
round as our portfolio of physical premises changes with the needs
of the Group's business, which are evolving in line with our
Academy transformation strategy and beyond. For some years we have
been committed to considering the carbon footprint of premises when
opening new locations (for example, we opened our most recent major
Academy location in 2019, in the cutting-edge sustainable
development at Barangaroo in Sydney, Australia).
We are committed to reducing our carbon footprint in all areas
and building carbon efficiencies into our ways of working. We have
committed to:
-- reduce our absolute Scope 1 and 2 greenhouse emissions by 50%
by 2030 from a 2020 base year; and
-- reduce Scope 3 greenhouse emissions by 62% per full time
employee within the same timeframe.
In June 2022, the Science Based Targets initiative ("SBTi")
validated that these targets are in conformance with the SBTi
Criteria and Recommendations (version 4.2). The SBTi's Target
Validation Team has determined that our targets are in line with
helping to keep a rise in global temperature to below 1.5(o) C.
We are developing our reporting in line with the recommendations
from the Task Force on Climate-Related Financial Disclosures
("TCFD") and we will report on these efforts in more detail in our
annual report for 2022.
We are aware that our clients in some sectors could be adversely
affected by future climate change and there is a risk that this
affects our own business indirectly as clients' spending decisions
are constrained by challenges associated with climate change. We
look to mitigate this risk by diversifying the sectors and
geographies in which we operate. We believe that there is
opportunity for the Group as we train and deploy Consultants with
the skills to help our clients find and apply the optimal technical
and business solutions to the challenges which climate change
brings. For example, some of our clients in the energy sector are
deploying Consultants on projects to help them move towards
sourcing energy from renewable sources.
The ESG credentials of global businesses like FDM are
increasingly under scrutiny from investors, customers and employees
and those businesses that do not stand up to that scrutiny are at
risk of losing their share of the market. FDM is a leader in the
field of corporate social responsibility and good governance; our
competitive edge lies in the fact that diversity, inclusion and
social mobility are the DNA of our business model. Further
information about our work in this area is on pages 40 to 47 of our
Annual Report and Accounts for the year ended 31 December 2021.
The Board
There have been no changes to the composition of the Board or
its Committees during the period.
Summary and outlook
FDM has performed well in the first half of 2022, continuing to
deliver a strong operational and financial performance while
further accelerating and enhancing investment to support
anticipated levels of growth.
While mindful of wider macro-economic uncertainties, the Board
is confident that the Group is well placed to achieve its
expectations for the full year and to deliver sustainable,
long-term growth.
By order of the Board
Rod Flavell Mike McLaren
Chief Executive Officer Chief Financial Officer
27 July 2022
Condensed Consolidated Income Statement
for the six months ended 30 June 2022
Six months Six months Year ended
to 30 June to 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
Revenue 152,805 131,289 267,356
Cost of sales (79,148) (69,708) (140,641)
Gross profit 73,657 61,581 126,715
( 84,700
Administrative expenses (51,320) (40,809) )
Operating profit 22,337 20,772 42,015
Finance income 148 43 58
Finance costs (287) (343) ( 650 )
Net finance costs (139) ( 300) (592)
Profit before income tax 22,198 20,472 41,423
Taxation 7 (5,150) (4,810) (9,594)
Profit for the period 17,048 15,662 31,829
E arnings per ordinary share
pence pence pence
Basic 9 15.6 14.3 29.1
Diluted 9 15.3 14.3 28.8
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2022
Six months Six months Year ended
to 30 June to 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Profit for the period 17,048 15,662 31,829
Other comprehensive income/ (expense)
Items that may be subsequently reclassified
to profit or loss
Exchange differences on retranslation
of foreign operations
(net of tax) 1,478 (315) (47)
Total other comprehensive income/
(expense) 1,478 (315) (47)
Total comprehensive income for the
period 18,526 15,347 31,782
Condensed Consolidated Statement of Financial Position
as at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
Non-current assets
Right-of-use assets 10,107 12,608 11,631
Property, plant and equipment 3,944 4,669 4,069
Intangible assets 19,629 19,673 19,597
Deferred income tax assets 2,437 1,334 2,484
36,117 38,284 37,781
Current assets
Trade and other receivables 10 50,306 43,871 35,841
Cash and cash equivalents 11 39,978 44,707 53,120
90,284 88,578 88,961
Total assets 126,401 126,862 126,742
Current liabilities
Trade and other payables 12 32,048 34,649 31,235
Lease liabilities 5,114 5,046 5,413
Current income tax liabilities 1,422 1,756 2,147
38,584 41,451 38,795
Non-current liabilities
Lease liabilities 8,306 11,657 9,817
Total liabilities 46,890 53,108 48,612
Net assets 79,511 73,754 78,130
Equity attributable to owners
of the parent
Share capital 1,092 1,092 1,092
Share premium 9,705 9,705 9,705
Capital redemption reserve 52 52 52
Own shares reserve (1,859) (2,727) ( 2,355)
Translation reserve 1,721 (25) 243
Other reserves 9,170 3,291 7,186
Retained earnings 59,630 62,366 62,207
Total equity 79,511 73,754 78,130
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 2022
Six months Six months Year ended
to 30 to 30 31 December
June June 2021 2021
2022
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
Cash flows from operating activities
Profit before income tax for
the period 22,198 20,472 41,423
Adjustments for:
Depreciation and amortisation 3,372 3,066 6,160
Loss on disposal of non-current
assets 6 3 2
Finance income (148) (43) (58)
Finance costs 287 343 650
Share-based payment charge (including
associated social security costs) 2,805 1,535 5,622
Increase in trade and other
receivables (12,837) (13,567) (5,123)
Increase in trade and other
payables 1,142 7,575 3,471
Cash flows generated from operations 16,825 19,384 52,147
Interest received 148 43 58
Income tax paid (7,723) (5,339) (10,606)
Net cash flow from operating
activities 9,250 14,088 41,599
Cash flows from investing activities
Acquisition of property, plant
and equipment (542) (107) (368)
Net cash used in investing
activities (542) (107) (368)
Cash flows from financing activities
Proceeds from sale of shares
from EBT 264 190 450
Principal elements of lease
payments (2,739) (2,624) (5,294)
Interest elements of lease payments (232) (301) (564)
Proceeds from sale of own shares 20 51 50
Finance costs paid (55) (43) (85)
Dividends paid 8 (19,620) (30,482) (46,820)
Net cash used in financing
activities (22,362) (33,209) (52,263)
Exchange gains/ (losses) on
cash and cash equivalents 512 (790) (573)
Net decrease in cash and cash
equivalents (13,142) (20,018) (11,605)
Cash and cash equivalents at
beginning of period 53,120 64,725 64,725
Cash and cash equivalents at
end of period 11 39,978 44,707 53,120
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2022
Capital Own
Share Share redemption shares Translation Other Retained Total
capital premium reserve reserve reserve reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2022 1,092 9,705 52 (2,355) 243 7,186 62,207 78,130
(Audited)
Profit for the
period - - - - - - 17,048 17,048
Other comprehensive
income for the
period - - - - 1,478 - - 1,478
Total comprehensive
income for the
period - - - - 1,478 - 17,048 18,526
Share-based payments
(note 13 ) - - - - - 2,354 - 2,354
Transfer to retained
earnings - - - - - (370) 370 -
Own shares sold
(note 14 ) - - - 496 - - (213) 283
Recharge of net
settled share
options - - - - - - (162) (162)
Dividends (note
8 ) - - - - - - (19,620) (19,620)
Total transactions
with owners,
recognised
directly in equity - - - 496 - 1,984 (19,625) (17,145)
Balance at 30
June 2022
(Unaudited) 1,092 9,705 52 (1,859) 1,721 9,170 59,630 79,511
Condensed Consolidated Statement of Changes in Equity
(continued)
for the six months ended 30 June 2021
Capital Own
Share Share redemption shares Translation Other Retained Total
capital premium reserve reserve reserve reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2021 1,092 9,705 52 (3,795) 290 3,396 77,224 87,964
(Audited)
Profit for the period - - - - - - 15,662 15,662
Other comprehensive
expense for the
period - - - - (315) - - (315)
Total comprehensive
(expense)/ income
for the period - - - - (315) - 15,662 15,347
Share-based payments
(note 13 ) - - - - - 1,330 (645) 685
Transfer to retained
earnings - - - - - (1,435) 1,435 -
Own shares sold (note
14 ) - - - 1,068 - - (828) 240
Dividends (note 8
) - - - - - - (30,482) (30,482)
Total transactions
with owners,
recognised
directly in equity - - - 1,068 - (105) (30,520) (29,557)
Balance at 30 June
2021 1,092 9,705 52 (2,727) (25) 3,291 62,366 73,754
(Unaudited)
Condensed Consolidated Statement of Changes in Equity
(continued)
for the year ended 31 December 2021
Capital Own
Share Share redemption shares Translation Other Retained Total
capital premium reserve reserve reserve reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2021 1,092 9,705 52 (3,795) 290 3,396 77,224 87,964
(Audited)
Profit for the year - - - - - - 31,829 31,829
Other comprehensive
expense for the
year - - - - (47) - - (47)
Total comprehensive
(expense)/ income
for the year - - - - (47) - 31,829 31,782
Share-based payments
(note 13 ) - - - - - 5,320 - 5,320
Transfer to retained
earnings - - - - - (1,530) 1,530 -
Own shares sold - - - 1,440 - - (938) 502
Recharge of net
settled share options - - - - - - (618) (618)
Dividends (note
8 ) - - - - - - (46,820) (46,820)
Total transactions
with owners, recognised
directly in equity - - - 1,440 - 3,790 (46,846) (41,616)
Balance at 31 December
2021 1,092 9,705 52 (2,355) 243 7,186 62,207 78,130
(Audited)
Notes to the Condensed Consolidated Interim Financial
Statements
1 General information
The Group is an international professional services provider
focussing principally on IT, specialising in the recruitment,
training and deployment of its own permanent IT and business
Consultants.
The Company is a public limited company incorporated and
domiciled in the UK and registered as a public limited company in
England and Wales with a Premium Listing on the London Stock
Exchange. The Company's registered office is 3rd Floor, Cottons
Centre, Cottons Lane, London SE1 2QG and its registered number is
07078823.
These Condensed Interim Financial Statements were approved for
issue by the Board of Directors of the Group on 27 July 2022. They
have not been audited, but have been subject to an independent
review by PricewaterhouseCoopers LLP, whose independent report is
included on pages 28 and 29 .
These Condensed Interim Financial Statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The Annual Report and Accounts for the year
ended 31 December 2021 was approved by the Board of Directors of
the Group on 16 March 2022 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under section 498 of the Companies
Act 2006.
2 Basis of preparation
This Condensed Consolidated Interim Financial Report for the
half-year reporting period ended 30 June 2022 has been prepared in
accordance with the UK-adopted International Accounting Standard
34, "Interim Financial Reporting" and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period,
except for the estimation of income tax, which is determined in the
Interim Financial Statements using the estimated average annual
effective income tax rate applied to the pre-tax income of the
interim period.
The following amendments to accounting standards, that became
applicable for annual reporting periods commencing on or after 1
January 2022, have been considered and did not have a material
impact on the Group:
(a) Property, Plant and Equipment: Proceeds before Intended Use
- Amendments to IAS 16
(b) Onerous Contracts - Cost of Fulfilling a Contract -
Amendments to IAS 37
(c) Annual Improvements to IFRS Standards 2018-2020
(d) Reference to the Conceptual Framework - Amendments to IFRS
3
Going concern basis
The Group's continued and forecast global growth, positive
operating cash flow and liquidity position, together with its
distinctive business model and training facilities, have enabled it
to manage its business risks. The Group's forecasts and projections
show that it will continue to operate with adequate cash resources
and within the current working capital facilities.
Having reassessed the principal risks, the Directors consider it
appropriate to adopt the going concern basis of accounting in
preparing the interim financial information.
3 Significant accounting policies
These Condensed Interim Financial Statements have been prepared
in accordance with the accounting policies, methods of computation
and presentation adopted in the financial statements for the year
ended 31 December 2021.
4 Significant accounting estimate
The preparation of the Group's Condensed Interim Financial
Statements requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities, at the
end of the reporting period. Uncertainty about these assumptions
and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset and liability
affected in future periods. The following is considered to be the
Group's significant estimate:
Share-based payment charge
A share-based payment charge is recognised in respect of share
awards based on the Directors' best estimate of the number of
shares that will vest based on the performance conditions of the
awards, which comprise adjusted earnings per share growth and the
number of employees that will leave before vesting. The charge is
calculated based on the fair value on the grant date using the
Black-Scholes model and is expensed over the vesting period.
The estimates and assumptions applied in the Condensed Interim
Financial Statements, including the key sources of estimation
uncertainty, were the same as those applied in the Group's Annual
Report for the year ended 31 December 2021, with the exception of
changes in estimates that are required in determining the provision
for income taxes.
No individual judgements have been made that have a significant
impact on the financial statements.
5 Seasonality
The Group is not significantly impacted by seasonality trends. A
lower number of working days in the first half of the year is
approximately offset by increased annual leave in the second half
of the year, our lowest number of billable days occurs in December
each year.
6 Segmental reporting
Management has determined the operating segments based on the
operating reports reviewed by the Board of Directors that are used
to assess both performance and strategic decisions. Management has
identified that the Executive Directors are the chief operating
decision maker in accordance with the requirements of IFRS 8
'Operating segments'.
At 30 June 2022, the Board of Directors consider that the Group
is organised into four core geographical operating segments:
(1) UK;
(2) North America;
(3) Europe, Middle East and Africa, excluding UK ("EMEA"); and
(4) Asia Pacific ("APAC").
Each geographical segment is engaged in providing services
within a particular economic environment and is subject to risks
and returns that are different from those of segments operating in
other economic environments.
All segment revenue, profit before income tax, assets and
liabilities are attributable to the Group's sole revenue-generating
stream, being a global professional services provider with a focus
on IT.
6 Segmental reporting (continued)
Segmental reporting for the six months ended 30 June 2022
(Unaudited)
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 68,787 50,246 9,297 24,475 152,805
Depreciation and amortisation 1,413 927 137 895 3,372
Segment operating profit 13,413 6,108 1,155 1,661 22,337
Finance income(2) 197 75 1 2 275
Finance costs(2) (89) (20) (54) (251) (414)
Profit before income tax 13,521 6,163 1,102 1,412 22,198
Total assets 72,488 23,103 11,994 18,816 126,401
Total liabilities (10,346) (9,584) (5,161) (21,799) (46,890)
(1) Reflecting internal management and reporting changes, the
results for FDM Astra Ireland Limited ("Ireland") are now included
within the EMEA segment. The results for the period ending 30 June
2021 were included within the segment "UK & Ireland" which is
now presented as "UK".
(2) Finance income and finance costs include intercompany
interest which is eliminated upon consolidation.
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
30 June 2022 23,925 1,806 1,118 6,831 33,680
Segmental reporting for the six months ended 30 June 2021
(Unaudited)
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 59,846 39,750 14,113 17,580 131,289
Depreciation and amortisation (1,248) (841) (118) (859) (3,066)
Segment operating profit 13,897 4,613 2,045 217 20,772
Finance income(2) 95 86 - - 181
Finance costs(2) (126) (32) (42) (281) (481)
Profit / (loss) before
income tax 13,866 4,667 2,003 (64) 20,472
Total assets 73,865 21,799 11,985 19,213 126,862
Total liabilities (16,171) (7,356) (6,027) (23,554) (53,108)
6 Segmental reporting (continued)
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
30 June 2021 26,063 2,042 698 8,147 36,950
Segmental reporting for the year ended 31 December 2021
(Audited)
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 121,846 81,387 24,963 39,160 267,356
Depreciation and amortisation (2,489) (1,714) (241) (1,716) (6,160)
Segment operating profit 24,570 12,215 3,237 1,993 42,015
Finance income(2) 159 174 - 4 337
Finance costs (231) (60) (88) (550) (929)
Profit before income tax 24,498 12,329 3,149 1,447 41,423
Total assets 75,995 21,038 11,937 17,772 126,742
Total liabilities (13,053) (8,669) (6,193) (20,697) (48,612)
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
31 December 2021 24,839 2,144 1,030 7,284 35,297
7 Taxation
Income tax expense is recognised based on management's estimate
of the weighted average annual income tax rate expected for the
full financial year. The estimated average annual tax rate used for
the six months ended 30 June 2022 is 23.2 % (the estimated tax rate
for the six months ended 30 June 2021 was 23.5 %).
8 Dividends
2022
An interim dividend of 17.0 pence per ordinary share was
declared by the Directors on 27 July 2022 and will be paid on 30
September 2022 to holders of record on 26 August 2022, the amount
payable will be GBP18.5 million.
A final dividend of 18.0 pence per share in respect of the year
to 31 December 2021 was approved by shareholders at the AGM on 24
May 2022 and paid on 10 June 2022 to shareholders of record on 20
May 2022, the total amount paid was GBP19.6 million.
2021
An interim dividend of 15.0 pence per ordinary share was
declared by the Directors on 27 July 2021 and was paid on 3
September 2021 to holders of record on 6 August 2021, the amount
paid was GBP16.3 million.
8 Dividends (continued)
2020
On 27 January 2021, the Board declared a second interim dividend
of 13.0 pence per ordinary share, which was paid to shareholders on
26 February 2021, the total amount payable was GBP14.2 million. The
Board proposed a final dividend of 15.0 pence per ordinary share,
approved by shareholders at the AGM held on 28 April 2021, which
was paid on 4 June 2021, the amount paid was GBP16.3 million.
9 Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
attributable to ordinary equity holders of the parent company by
the weighted average number of ordinary shares in issue during the
period.
Six months Six months Year ended
to 30 June to 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Profit for the period GBP000 17,048 15,662 31,829
Average number of ordinary shares
in issue (thousands) Number 109,192 109,192 109,192
Basic earnings per share Pence 15.6 14.3 29.1
Adjusted basic earnings per share is calculated by dividing the
profit attributable to ordinary equity holders of the parent
company, excluding Performance Share Plan expense (including social
security costs and associated deferred tax), by the weighted
average number of ordinary shares in issue during the period.
Six months Six months Year ended
to to 30 June 31 December
30 June 2021 2021
2022
(Unaudited) (Unaudited) (Audited)
Profit for the period (basic
earnings) GBP000 17,048 15,662 31,829
Share-based payment expense
(including social security
costs) (see note 13 ) GBP000 2,810 1,536 5,261
Tax effect of share-based
payment expense GBP000 (599) (162) (837)
Adjusted profit for the
period GBP000 19,259 17,036 36,253
Average number of ordinary shares
in issue (thousands) Number 109,192 109,192 109,192
Adjusted basic earnings per
share Pence 17.6 15.6 33.2
9 Earnings per ordinary share (continued)
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has one type of dilutive potential ordinary shares in the form of
share options; the number of shares in issue has been adjusted to
include the number of shares that would have been issued assuming
the exercise of the share options.
Six months Six months Year ended
to 30 June to 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Profit for the period (basic
earnings) GBP000 17,048 15,662 31,829
Average number of ordinary
shares in issue (thousands) Number 109,192 109,192 109,192
Adjustment for share options
(thousands) Number 2,083 56 1,386
Diluted number of ordinary
shares in issue (thousands) Number 111,275 109,248 110,578
Diluted earnings per share Pence 15.3 14.3 28.8
10 Trade and other receivables
30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Trade receivables 37,206 35,362 26,727
Other receivables 4,648 2,478 3,464
Prepayments and accrued income 8,452 6,031 5,650
50,306 43,871 35,841
Trade receivables and accrued income have increased as at 30
June due to high levels of activity in the last two months of the
period. Debtor days at period end were 45 days (June 2021: 47).
Included within prepayments and accrued income is GBP4,756,000
of accrued income (June 2021: GBP2,516,000; December 2021:
GBP2,883,000). The value of accrued income varies with the day of
the week that closes the period.
11 Cash and cash equivalents
30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Cash and cash equivalents 39,978 44,707 53,120
12 Trade and other payables
30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Trade payables 1,369 2,095 1,113
Other payables 1,198 1,994 1,725
Other taxes and social security 8,699 8,462 8,444
Accruals and deferred income 20,782 22,098 19,953
32,048 34,649 31,235
13 Share-based payments
During the six-month period ended 30 June 2022, the Group
recognised a share-based payment expense of GBP2,797,000 (2021:
GBP1,392,000) and associated social security costs of GBP13,000
(2021: GBP144,000). The social security costs for the period to 30
June 2022 are lower than the comparative period for 2021 due to
movements in the Company's share price.
14 Investment in own shares
During 2018 the FDM Group Employee Benefit Trust was established
to purchase shares sold by option holders upon exercise of options
under the FDM Performance Share Plan. The Group accounts for its
own shares held by the Trustee of the FDM Group Employee Benefit
Trust as a deduction from shareholders' funds. During the period
own shares held were used to satisfy the requirements of the
Group's share plans.
15 Related party transactions
A number of the Directors' family members are employed by the
Group. The employment relationships are at market rate and are
carried out on an arm's length basis.
16 Key management personnel
The key management personnel comprise the Directors of the
Group. The compensation of key management is set out below:
Six months Six months Year ended
to to 31 December
30 June 30 June 2021
2022 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Short-term employee benefits 1,827 1,688 3,475
Post-employment benefits 46 17 47
Share-based payments expense 468 218 711
2,341 1,923 4,233
17 Financial instruments
There are no material differences between the fair value of the
financial assets and liabilities included within the following
categories in the Condensed Consolidated Statement of Financial
Position and their carrying value:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
Statement of Directors' Responsibilities
The Directors confirm that these Condensed Interim Financial
Statements have been prepared in accordance with UK adopted
International Accounting Standard 34 "Interim Financial Reporting"
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and that the
interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R, namely:
-- An indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- Material related party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
Directors who held office during the period:
Rod Flavell Chief Executive Officer
Sheila Flavell Chief Operating Officer
Mike McLaren Chief Financial Officer
Andy Brown Chief Commercial Officer
David Lister Non-Executive Chairman
Alan Kinnear Non-Executive Director
Jacqueline de Rojas Non-Executive Director
Michelle Senecal de Fonseca Non-Executive Director
Peter Whiting Non-Executive Director
The Executive Directors of FDM were listed in the Annual Report
and Accounts of the Company for the year ended 31 December 2021 and
remained the same in the six months to 30 June 2022.
By order of the Board
Rod Flavell Mike McLaren
Chief Executive Officer Chief Financial Officer
27 July 2022
Independent review report to FDM Group (Holdings) plc
Report on the Condensed Consolidated Interim Financial
Statements
Our conclusion
We have reviewed FDM Group (Holdings) plc's Condensed
Consolidated Interim Financial Statements (the "interim financial
statements") in the Interim Report of FDM Group (Holdings) plc for
the six month period ended 30 June 2022 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the Condensed Consolidated Statement of Financial Position as at 30 June 2022;
-- the Condensed Consolidated Income Statement for the period then ended;
-- the Condensed Consolidated Statement of Comprehensive Income for the period then ended;
-- the Condensed Consolidated Statement of Cash Flows for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report
of FDM Group (Holdings) plc have been prepared in accordance with
UK adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
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' issued by the Financial Reporting Council 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.
We have read the other information contained in the Interim
Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
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 the directors have inappropriately
adopted the going concern basis of accounting or that the directors
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 this ISRE.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Interim Report, including the interim financial statements,
is the responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the Interim Report in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In
preparing the Interim Report, including the interim financial
statements, the directors are responsible for assessing the group'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 to cease operations, or have no realistic alternative but
to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Interim Report based on our review. Our
conclusion, including our Conclusions relating to going concern, is
based on procedures that are less extensive than audit procedures,
as described in the Basis for conclusion paragraph of this report.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27 July 2022
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