TIDMAQSG
RNS Number : 6024U
Aquila Services Group PLC
26 November 2019
For immediate release
26 November 2019
Aquila Services Group plc
Unaudited Interim Results for the six months ended 30 September
2019
Aquila Services Group plc ("the Company"), is the holding
company for Altair Consultancy & Advisory Services Ltd
("Altair"), Aquila Treasury and Finance Solutions Ltd ("ATFS") and
Oaks Consultancy Ltd ("Oaks") which form the Group ("the
Group").
The Group works in the UK and internationally. Its expertise is
in the provision, financing and management of affordable housing by
housing associations, local authorities, government agencies and
other non-profit organisations, high level business advice to the
property sector and support for organisations including
multi-academy education trusts and sports foundations working in
communities to improve health and well-being opportunities.
Results highlights
6 months to 6 months to Year ended
30 September 30 September 31 March
2019 (unaudited) 2018 (unaudited) 2019 (audited)
GBP000s GBP000s GBP000s
Revenue 3,891 3,592 7,656
Gross Profit 980 773 1,867
Operating Profit 254 222 607
EPS 0.55p 0.47p 1.32p
Declared Dividend per
Share 0.30p 0.29p 0.89p
Cash Balances 1,127 1,029 1,720
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014.
For further information please visit
www.aquilaservicesgroup.plc.co.uk or contact:
Aquila Services Group plc
Claire Banks
Group Finance Director and Company Secretary
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Roland Cornish
Tel: 020 7628 3396
Chair's statement
Dear Shareholder,
I am pleased to present the half-year report and the interim
results for the 6 months to 30 September 2019.
Aquila Services Group plc ('the Company') is the holding company
for Altair Consultancy & Advisory Services Ltd ('Altair') and
Aquila Treasury & Finance Solutions Ltd ('ATFS') and Oaks
Consultancy Ltd ('Oaks') which form the group ('the Group').
The Group is an independent consultancy specialising in the
provision, financing and management of affordable housing by
housing associations, local authorities, government agencies and
other non-profit organisations, high level business advice to the
commercial property sector and support for organisations including
multi-academy education trusts and sports foundations working in
communities to improve health and well being opportunities.
The half-year results for the Group demonstrates the continuing
sustainability of our business model and the benefits of investment
in longer term planned growth, both organic and targeted
acquisitions. The period included the acquisition of our newest
trading subsidiary, Oaks, the continuing expansion of our
development services offering, and our international work.
The six months has seen a continuation of the strategy described
in the annual report for the previous financial year. Our
governance and executive team have been streamlined to concentrate
on our particular specialisms. We have now moved from the
integration of the 'pod' property consultancy business into an
expansion phase. We now have a solid base to grow our international
business and the brand has been renamed Altair International to
reflect our growth beyond Africa. Responding to market forces, we
are reshaping our traditional interim support services to a short
term placement model specialising in support at higher skills
levels, building on the success of this model for our development
expertise.
The results of this balanced strategy are allowing both our
longer term objectives to be matched with the targets of increasing
turnover and higher operating profit which are reflected in the
results for the period. The acquisition of Oaks in June 2019 and
the need to integrate that business into the Group means that there
was only a marginal contribution to both turnover and operating
profit from the new business in the period, but we anticipate
benefits gradually being realised in the second half of the year.
Despite the uncertainty that much of the economy faces and
reflected in our operating environment, our business model enables
us to enter this new period with expectations of continuing
progress and this confidence is reflected in the continuation of
our progressive dividend policy for the half-year.
There are likely to be further acquisition opportunities in the
coming years that could fit our business model. To date we have
utilised new equity and cash generated from retained profits as
consideration and avoided debt, in particular to provide comfort to
those accepting our equity. As opportunities become larger, we will
seek to continue this approach but for the right business fit, we
may need to look at other financing structures.
Trading results
The Group saw an increase in turnover of 8.3% for the 6 months
to 30 September 2019 compared to the 6 months ended 30 September
2018. Gross profit was GBP980k (September 2018: GBP773k; March
2019: GBP1,867k) with operating profits before share option charges
of GBP306k (September 2018: GBP281k; March 2019: GBP724k).
6 months 6 months Year ended
to to 31 March
2019
30 September 30 September (GBP000's)
2019 2018
(GBP000's) (GBP000's)
Turnover 3,891 3,592 7,656
Gross Profit 980 773 1,867
Operating profit (before
share options charge) 306 281 724
Share option charge 52 59 117
Operating profit (after
share option charge) 254 222 607
EPS 0.55p 0.47p 1.32p
The Group has a strong net asset position with over GBP1.1m in
cash held at the 30 September 2019.
Dividend
The Directors propose to declare an interim dividend of 0.30p
(2018: 0.29p) per share, an increase of 3.5% which will be paid on
20 December 2019 to shareholders on the register at 6 December
2019.
Business review
Our business streams and investments
The underlying business of Altair remains robust and we have
seen significant growth in both demand and our client base for most
of our consultancy business, specifically our development, project
management and recruitment services. This reflects the relaxation
of government restraints on local authorities entering into direct
supply of homes, the historically cheap borrowing available to our
clients and the potential surpluses to be made from development of
residential accommodation for market sale or rent which supports
cross-subsidy for affordable housing. With some evidence of a
downturn in residential property values in London and the South
East, it is yet to be seen whether this will make our clients more
cautious and how this impacts on the private investors, mainly
institutions and private equity houses, who are looking for long
term investments in the sector and whom we have been supporting.
Historically, downturns in the property market have been seen as
opportunities by our clients, many of whom tend to act on a
counter-cyclical business model, and we are not expecting this to
have a major impact on the demand for our services.
Our business streams that provide support with governance,
management structures, financial modelling and business planning
have seen steady demand during the period. With government's
attention diverted to other matters, there have been few serious
new initiatives or regulatory change that supports demand for these
specialisms. We continue to grow our client base, now working with
an increasing number of the large-scale investors in social housing
such as L&G and the Man Group. We would expect that with a
period of stable government concentrating on wider domestic issues,
there will be a more dynamic environment for these business streams
to support.
Our specialist treasury management subsidiary (ATFS) has had a
quiet period with cheap debt and both investors and institutions
only too willing to lend to the sector. Most have already satisfied
the forward funding requirements in advance of the possible Brexit
outcome. The focus of client demand has moved to portfolio
management from fundraising. For this business it is a period of
transformation as it concentrates on providing ongoing services and
is now looking to widen its offering to more than debt management.
In particular for both the Finance and Treasury teams the increase
in the cost of borrowing for local authorities, as a result of a 1%
rise in their principle funder mechanism, the Public Works Loan
Board (PWLB) means that local authorities may now look to
non-government borrowing to deliver their programmes. This is seen
as a major opportunity and we are actively looking to support our
local authority clients in remodelling their business plans and
seeking alternative forms of finance.
Traditionally, the Group has included a team of associate
consultants available to cover as locums or interims for gaps in
senior staffing at clients, resulting from staff turnover,
maternity/paternity leave or initial staffing for new initiatives.
The restriction on the expansion of this business was always the
pressure on finding suitable associates, particularly when our
interims were often recruited as permanent staff by our clients.
Over the last 12 months there has been a rapid change as our client
base is increasingly dominated by larger organisations who can fill
gaps from redeploying existing staff. This service was also at a
cost disadvantage because many of our clients cannot recover the
VAT charged and larger clients with a continuing requirement can
and do use social media to recruit directly or in some cases keep a
team within their own establishment. At the same time, demand for
more short term but full time support for specific projects has
increased where high level expertise is needed and the timeframe is
not long enough to provide internal 'climatization' to the
organisation or the sector. This is referred to as the 'placement'
model and uses a mix of associates with higher skill levels and
in-depth familiarisation with the sector, as well as our own
specialist staff. This model has been particularly successful
within our development business stream and we are increasingly
rolling it out to other parts of the business, as a variation of
the interim model.
Altair Africa has now been rebranded as Altair International, as
we work with clients in other parts of the world. The business
continues to grow and during the period significant new contracts
were signed in Rwanda, Nigeria and Kyrgyz Republic, as well as a
contract to review the role of Real Estate Investment Trusts
(REITs) internationally for the Centre For Affordable Housing
Finance (CAHF). We have also been successful in being added to
framework procurement arrangements in a number of countries such as
Kenya and those
operated by pan national organisations. Some contracts are
directly between Altair and the client but most are part of a
consortium covering a wider range of activities. We are now in the
process of looking to formalise arrangements to bid for larger
contracts as part of joint ventures with other major international
operators, such as Sweco, an architectural and engineering
consultancy, and a UK based consultancy that specialises in
economic advice. At the same time, we are building a 'book' of
smaller, local consultancies as many contracts require a minimum
percentage of local content. Our aim is to continue to build this
business stream as part of our client diversification strategy.
In June 2019 we acquired the entire share capital of Oaks
Consultancy Ltd, a sport and education consultancy whose main
client base is the UK community and voluntary sector, local
authorities, membership organisations and socially minded private
sector business. They are growing this client base and recently
achieved some international contracts particularly as part of the
Worldwide Grass Roots Football initiatives. Oaks business focuses
on three core areas: strategy, business planning and income
generation; many strands of which are complementary to our existing
Altair services. Oaks have recently been awarded their first
contract with housing providers, since acquisition. The commission
is to provide income generation support for 14 BME Housing
Associations in support of the Leadership 2025, diverse sector
leadership Foundation programme. We expect that for our UK and
international clients this will enable businesses to deliver a
wider service offering to a broader range of clients.
Oaks are based in offices in Birmingham City Centre employing 18
staff. The financial statements for Oaks at 31 March 2019 showed
turnover for the 12 months of GBP909k with profit before taxation
of GBP251k. This latter needs to be adjusted for senior management
salaries, as like many smaller private companies, managers relied
on dividends for much of their remuneration. The consideration for
the purchase has recently been finalised as it depended on
confirming the values of certain assets and liabilities. The agreed
total, excluding any additional deferred consideration is
GBP1,144,679 of which 35% was paid in cash and 65% in new shares in
the Aquila Group. As the acquisition was only completed part way
through the period, and the weeks following were, in the main, a
period of integration, the benefit of the acquisition will start to
be generated in the second period.
Lastly, we continue to hold our equity stake in 3C Consultancy
and AssetCore, respectively a specialist IT consultancy and a
company building a financial debt management platform for the
affordable housing sector. We hold 25% of the equity of 3C which
continues to see a growing business, and around 8% of the equity of
AssetCore which now has 12 live housing association clients and
continues to develop its platform. AssetCore is currently in the
process of a rights issue to existing shareholders for additional
equity to assist in funding the future product development. Our
Group Chief Executive Steven Douglas CBE continues to act as a
non-executive director of 3C Consultancy and I remain as a
non-executive director of AssetCore. Richard Wollenberg, a
non-executive director of Aquila, and myself hold shares in
AssetCore amounting to approximately a total of 8% each of the
issued equity. Both of us have agreed to contribute to the current
fundraising through a rights issue by the company.
Risks and uncertainties
The Directors do not consider that the Group's principal risks
and uncertainties have changed since the publication of the annual
report for the year ended 31 March 2019, which contains a detailed
explanation of the risks relevant to the Group on Page 9 and is
available at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/AQSG/14126154.html
Outlook
The continuing success of the Group is to be responsive to our
client base whilst at the same time growing the range of services
and further exploiting our technical expertise. As can be seen from
my report, there are always continuing subtle changes in our market
place to which we have to respond. The history of the Group as one
of the major providers of these services is that we are constantly
listening and adjusting our offering. Nowhere is this more
emphasised than in our recognition of the trends in the 'interim'
services and the movement towards the placement model.
The acquisition of Oaks, the widening of our service offering
and the diversification of our client base, particularly in the
international sector, is part of our longer term planning and we
anticipate this will be a recurring theme.
The sectors in which we work are essential elements of developed
and developing economies that wish to make a better and more
socially sustainable world. They reflect basic needs, not fashion
or transient technology, and providing we continue to offer the
relevant high quality support, there will always be a demand for
our services. For the benefit of both our clients and our
shareholders, it is important that we remain a robust, growing and
dynamic organisation. We believe we have the right business model
and that all our stakeholders, particularly our shareholders, will
see progress reflected in our financial results.
Lastly, I cannot end without thanking the staff and my fellow
directors for all their efforts during the period and hope that we
continue to provide them with an exciting and rewarding place to
work.
I look forward to reporting to you further after the year
end.
Derek Joseph - Chair
25 November 2019
Directors' Report
Substantial shareholdings
As at 30 September 2019, the Company was aware of the following
notifiable interests in its voting rights:
Number of Percentage of Nature of
Ordinary shares Voting rights holding
Richard Wollenberg* 3,808,406 10.8% Direct
Chris Wood 3,279,440 9.3% Direct
Susan Kane 3,279,440 9.3% Direct
Fiona Underwood** 3,279,440 9.3% Direct
Steven Douglas 3,144,305 8.9% Direct
Derek Joseph 3,005,538 8.5% Direct
Jeffrey Zitron 2,798,403 7.9% Direct
Matt Carroll 1,307,229 3.7% Direct
Hannah Breitschadel 1,307,229 3.7% Direct
*Includes shares held by immediate family members of Richard
Wollenberg
**Fiona Underwood's shares are held in a nominee account at Old
Mutual plc.
Related party transactions
During the 6 months to 30 September 2019, the non-executive
directors were paid fees of GBP7,000 (6 months to September 2018:
GBP5,054).
During the 6 months to 30 September 2019, the Group charged
GBPNil (6 months to September 2018: GBP5,214) to DMJ Consultancy
Services Limited for office costs and secretarial services, a
company in which Derek Joseph is a director and shareholder.
Remuneration of Directors and key management personnel
The remuneration of the directors, who are the key management
personnel of the Group, is set out below.
6 months to 6 months to Year ended
30 September 30 September 31 March
2019 (unaudited) 2018 (unaudited) 2019
(audited)
GBP GBP GBP
Short-term employee
benefits 295,833 283,592 655,495
Share-based payments 26,973 31,351 64,232
Post-retirement benefits 9,600 10,378 21,900
------------------ ------------------ -----------
332,406 325,321 741,627
================== ================== ===========
Corporate Governance
The UK Corporate Governance Code (the code), as appended to the
listing rules, sets out Principles of Good Corporate Governance and
Code provisions which are applicable to listed companies
incorporated in the United Kingdom. As a standard listed company,
the Company is not subject to the UK Corporate Governance Code, but
the Board recognises the value of applying the principles of the
code where appropriate and proportionate and endeavours to do so
where practicable.
Responsibility Statement
The Directors, whose names and functions are set out at the end
of this report, are responsible for preparing the Unaudited Interim
Condensed Consolidated Financial Statements in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority ('DTR') and with International
Accounting Standard 34 on Interim Financial reporting (IAS34). The
Directors confirm that, to the best of their knowledge, this
Unaudited Interim Condensed Consolidated Report has been prepared
in accordance with IAS34 as adopted by the European Union. The
interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8 namely:
-- an indication of key events occurred during the period and
their impact on the unaudited interim condensed consolidated
financial statements and a description of the principal risks and
uncertainties for the second half of the financial year, and
-- related party transactions that have taken place during the
period and that have materially affected the financial position or
the performance of the business during that period.
Claire Banks - Group Finance Director
25 November 2019
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2019
Six months to 30 September 2019 Six months to 30 September 2018 Year ended
31 March
2019
(unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 3,891,381 3,592,129 7,655,632
Cost of sales (2,910,891) (2,818,980) (5,788,472)
-------------------------------- -------------------------------- ------------
Gross profit 980,490 773,149 1,867,160
Administrative expenses (726,713) (551,460) (1,259,523)
-------------------------------- -------------------------------- ------------
Operating profit 253,777 221,689 607,637
Finance income 175 22 1,860
Profit before taxation 253,952 221,711 609,497
Income tax expense (59,286) (55,640) (143,460)
-------------------------------- -------------------------------- ------------
Profit and total comprehensive
income for the period 194,666 166,071 466,037
================================ ================================ ============
Earnings per share attributable to
owners of the parent
Weighted average number of shares:
* Basic 35,307,776 35,265,461 35,272,301
* Diluted 40,688,624 39,989,368 40,353,113
Basic earnings per share 0.55p 0.47p 1.32p
Diluted earnings per share 0.48p 0.42p 1.15p
Condensed Consolidated Statement of Financial Position
As at 30 September 2019
30 September 2019 30 September 2018 31 March
2019
(unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Goodwill 3,778,748 2,027,688 2,027,688
Property, plant and equipment 94,232 90,458 72,270
Investment in associates 226,620 226,620 226,620
Investments 121,104 121,104 121,104
------------------ ------------------ ------------
4,220,704 2,465,870 2,447,682
Current assets
Trade and other receivables 2,260,888 2,192,146 2,193,927
Cash and bank balances 1,126,850 1,028,951 1,719,068
------------------ ------------------ ------------
3,387,738 3,221,097 3,912,995
Current liabilities
Trade and other payables 2,701,882 1,143,599 1,594,632
Corporation tax 268,306 197,415 162,691
2,970,188 1,341,014 1,757,323
Net current assets 417,550 1,880,083 2,155,672
------------------ ------------------ ------------
Net assets 4,638,254 4,345,953 4,603,354
================== ================== ============
Equity
Share capital 1,765,389 1,763,273 1,765,389
Share premium account 1,487,512 1,487,512 1,487,512
Merger reserve 2,412,861 2,412,861 2,412,861
Share-based payment reserve 719,959 617,136 667,878
Retained losses (1,747,467) (1,934,829) (1,730,286)
------------------ ------------------ ------------
Equity attributable to the owners of the parent 4,638,254 4,345,953 4,603,354
Condensed Consolidated Statement of Changes in Equity
Share capital Share premium Merger relief Share based Retained losses Total equity
account reserve payments
reserve
GBP GBP GBP GBP GBP GBP
As at 1 April
2018 1,763,273 1,487,512 2,412,861 557,653 (1,906,940) 4,314,359
Total
comprehensive
income - - - - 166,071 166,071
Share based
payment - - - 59,483 - 59,483
Dividend - - - - (193,960) (193,960)
-------------- ---------------- ---------------- --------------- ---------------- -------------
As at 30
September 2018 1,763,273 1,487,512 2,412,861 617,136 (1,934,829) 4,345,953
============== ================ ================ =============== ================ =============
Issue of shares 2,116 - - - - 2,116
Transfer of
exercise of
options - - - (6,846) 6,846 -
Total
comprehensive
income - - - - 299,966 299,966
Share based
payment - - - 57,588 - 57,588
Dividend - - - - (102,269) (102,269)
-------------- ---------------- ---------------- --------------- ---------------- -------------
As at 31 March
2019 1,765,389 1,487,512 2,412,861 667,878 (1,730,286) 4,603,354
-------------- ---------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
income - - - - 194,666 194,666
Share based
payment - - - 52,081 - 52,081
Dividend - - - - (211,847) (211,847)
-------------- ---------------- ---------------- --------------- ---------------- -------------
As at 30
September 2019 1,765,389 1,487,512 2,412,861 719,959 (1,747,467) 4,638,254
============== ================ ================ =============== ================ =============
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2019
Six months to 30 September Six months to 30 September Year ended
31 March
2019 2018 2019
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flow from operating activities
Profit for the period 194,666 166,071 466,037
Interest received (175) (22) (1,860)
Income tax expense 59,286 55,640 143,460
Share based payment charge 52,081 59,483 117,071
Depreciation 29,052 25,149 51,692
--------------------------- --------------------------- -----------
Operating cash flows before movement in
working capital 334,910 306,321 776,400
(Increase)/decrease in trade and other
receivables (66,961) (82,468) (84,249)
(Decrease)/increase in trade and other
payables (389,596) 114,679 565,712
--------------------------- --------------------------- -----------
Cash generated by operations (121,647) 338,532 1,257,863
Income taxes paid 46,329 - (122,544)
Net cash inflow/(outflow) from operating
activities (75,318) 338,532 1,135,319
Cash flow from investing activities
Interest received 175 22 1,860
Purchase of property, plant and equipment (51,014) (19,860) (28,215)
Acquisition of Goodwill (254,214) - -
Acquisition of investment in an associate - (65,770) (65,770)
Net cash outflow from investing activities (305,053) (85,608) (92,125)
Cash flows from financing activities
Proceeds of share issue - - 2,116
Dividends paid (211,847) (193,960) (296,229)
Net cash outflow from financing activities (211,847) (193,960) (294,113)
--------------------------- --------------------------- -----------
Net increase/(decrease) in cash and cash
equivalents (592,218) 58,964 749,081
Cash and cash equivalents at beginning of the
period 1,719,068 969,987 969,987
--------------------------- --------------------------- -----------
Cash and cash equivalents at end of the period 1,126,850 1,028,951 1,719,068
=========================== =========================== ===========
Notes to the Condensed set of Financial Statements
for the six months ended 30 September 2019
1. General information
The Company and its subsidiaries (together "the Group") are a
major provider of consultancy services to organisations that
develop, fund or manage affordable housing.
The Company is a public limited company domiciled in the United
Kingdom and incorporated under registered number 08988813 in
England and Wales. The Company's registered office is Tempus Wharf,
29a Bermondsey Wall West, London, SE16 4SA.
2. Basis of preparation
The Unaudited Condensed Consolidated Interim Financial
Statements of the Group have been prepared on the basis of the
accounting policies, presentation, methods of computation and
estimation techniques used in the preparation of the audited
accounts for the period ended 31 March 2019 and expected to be
adopted in the financial information by the Company in preparing
its annual report for the year ending 31 March 2020.
This Interim Consolidated Financial Information for the six
months ended 30 September 2019 has been prepared in accordance with
IAS 34, 'Interim Financial Reporting'. This Interim Consolidated
Financial Information is not the Group's statutory financial
statements and should be read in conjunction with the annual
financial statements for the year ended 31 March 2019, which have
been prepared in accordance with International Financial Reporting
Standard (IFRS) and have been delivered to the Registrar of
Companies. The auditors have reported on those accounts; their
report was unqualified, did not include references to any matters
to which the auditors drew attention by way of emphasis of matter
without qualifying their report and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The Interim Consolidated Financial Information for the six
months ended 30 September 2019 is unaudited. In the opinion of the
Directors, the Interim Consolidated Financial Information presents
fairly the financial position, and results from operations and cash
flows for the period.
The Directors have made an assessment of the Group's ability to
continue as a going concern and are satisfied that the Group has
adequate resources to continue in operational existence for the
foreseeable future. The Group, therefore, continues to adopt the
going concern basis in preparing its consolidated financial
statements.
The financial statements are presented in sterling, which is the
Group's functional currency as the UK is the primary environment in
which it operates.
3. Operating segments
The Group has three reportable segments being: consultancy,
interim management and treasury management services, the results of
which are included within the financial information. In accordance
with IFRS8 'Operating Segments', information on segment assets is
not shown, as this is not provided to the chief operating
decision-maker.
The principal activities of the Group are as follows:
Consultancy - a range of services to support the business needs
of a diverse range of organisations (including housing associations
and local authorities) across the housing sector. Most consultancy
projects run over one to two months and on-going business
development is required to ensure a full pipeline of consultancy
work for the employed team.
Interim Management - individuals are embedded within housing
organisations (normally housing associations, local authorities and
ALMOs) in a substantive role, normally for a specified period.
Interim management provides the Group with a more extended forward
sales pipeline as the average contract is for six months. This
section of the business provides low risk as the interim
consultants are placed on a rolling contractual basis and provides
minimal financial commitment as associates to the business, rather
than using employees for these roles.
Treasury Management - a range of services providing treasury
advice and fund-raising services to non-profit making organisations
working in the affordable housing and education sectors. Within
this segment of the business several client organisations enter
fixed period retainers to ensure immediate call-off of the required
services.
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment, without allocation of central
administration costs, including Directors' salaries, finance costs
and income tax expense. This is the measure reported to the Group's
Chief Executive for the purpose of resource allocation and
assessment of segment performance.
2019 2018
GBP GBP
Revenue from Consultancy 3,320,072 2,532,640
Revenue from Interim Management 398,680 752,578
Revenue from Treasury Management 172,629 306,911
---------- ----------
3,891,381 3,592,129
========== ==========
Within consultancy revenues, approximately 6% (2018: 7%) has
arisen from the segment's largest customer; within interim
management 18% (2018: 13%); within treasury management 34% (2018:
36%).
Geographical information
Revenues from external customers, based on location of the
customer, are shown below:
2019 2018
GBP GBP
UK 3,643,400 3,387,891
Republic of Ireland 180,732 155,322
Rest of World 67,249 48,916
---------- ----------
3,891,381 3,592,129
========== ==========
4. Business Combinations
On 11 June 2019, the Group acquired 100% of the issued share
capital of Oaks Consultancy Ltd, a company incorporated in the UK.
The principal activity of Oaks is that of consultancy within the
sport and education sector.
The transaction has been accounted for by the acquisition method
of accounting. This comprises an initial consideration of
GBP1,144,679 being GBP414,432 in cash and GBP730,247 in ordinary
shares and a maximum deferred contingent consideration of
GBP555,321 to be satisfied 35% cash and 65% shares, which is
payable on the annual recurring revenue (ARR) growth of the
acquired business. Deferred contingent consideration that becomes
due shall be satisfied in the period from March 2020 to March
2022.
Due to the timing of the acquisition, the acquisition accounting
adjustments were not complete as at 30 September 2019, however will
be finalised prior to 31 March 2020.
The Board is continuing its evaluation of to what extent any
additional identifiable assets acquired in relation to Oaks exist
and need to be shown separately from goodwill. The evaluation will
be completed and reported on in the annual report and financial
statements to 31 March 2020.
The provisional carrying amount of each class of Oaks
Consultancy Limited's assets before combination is set out
below:
Book value
GBP
Tangible assets 34,273
Trade and other receivables 315,395
Cash and cash equivalents 181
Trade and other payables (348,707)
-----------
1,142
Goodwill arising on acquisition 1,751,060
-----------
Consideration:
Satisfied by:
Initial cash consideration 202,012
Deferred cash consideration 212,420
Deferred consideration of Ordinary Shares 730,247
Deferred contingent consideration 555,321
1,700,000
===========
Acquisition-related costs capitalised as part of the investment
total GBP52,202.
Included within the Condensed Consolidated Statement of
Comprehensive Income are the following amounts in relation to Oaks
Consultancy Limited.
GBP
Revenue 265,629
Loss (1,474)
5. Share capital
The Company has one class of share in issue being ordinary
shares with a par value of 5p. Allotted, issued and called up
ordinary shares of GBP0.05 each:
Number Amount called up and fully paid
GBP
As at 1 April 2018 35,265,461 1,763,273
Issued during the period - -
----------- --------------------------------
As at 30 September 2018 35,265,461 1,763,273
Issued during the period 42,315 2,116
----------- --------------------------------
As at 31 March 2019 35,307,776 1,765,389
Issued during the period - -
----------- --------------------------------
As at 30 September 2019 35,307,776 1,765,389
=========== ================================
As at 1 April 2019 and 30 September 2019 a total of 5,438,532
options were held by Directors and employees of the Group. The
exercise price of the options outstanding at 30 September 2019
range between GBP0.05 and GBP0.42.
6. Going concern
The Group has sufficient financial resources to enable it to
continue its operational activities for the foreseeable future.
Accordingly, the Directors consider it appropriate to adopt the
going concern basis in preparing these interim accounts.
7. Dividend
An interim dividend of 0.30p will be paid on 20 December 2019 to
shareholders on the register at 6 December 2019 at a cost of
GBP105,923.
8. Related party disclosures
Balances and transactions between the Group and other related
parties are disclosed below:
Dividends totalling GBP98,292 (2018: GBP90,100) were paid in the
period in respect of Ordinary Shares held by the Company's
directors.
During the period to 30 September 2019 the Group charged GBPNil
(2018: GBP5,000) to DMJ Consultancy Services Limited for
administrative services, a company in which Derek Joseph serves as
a director. At 30 September 2019, the balance owed to the Group by
DMJ Consulting Limited was GBPNil (2018: GBP5,000).
At 30 September 2019, the balance owed to Richard Wollenberg for
services as a non-executive director were GBP6,000 (2018:
GBP2,000).
Financial Calendar
Year Date Comments
2019 26 November Interim results 2019 announced
5 December Ex-dividend date
6 December Record date
20 December Payment date for interim dividend
2020 31 March End of accounting year
By 31 July 2020 Annual Financial Report to
be published and announced
July Annual General Meeting
August Final dividend to be paid
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR DELFLKFFZFBE
(END) Dow Jones Newswires
November 26, 2019 02:00 ET (07:00 GMT)
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