TIDMAUK
RNS Number : 9625D
Aukett Swanke Group PLC
27 June 2023
Aukett Swanke Group Plc
("Aukett Swanke", the "Company", or, together with its
subsidiaries, the "Group")
Interim results
For the six months ended 31 March 2023
Aukett Swanke (AIM: AUK), the group providing Smart Buildings,
Architectural and Design Services, is pleased to announce its
interim results for the six-month period ended 31 March 2023.
Highlights
- Revenue from continuing operations increases to GBP4.56m (2022: GBP4.53m)
- Revenue less sub consultant costs increases to GBP4.40m (2022: GBP3.38m)
- United Kingdom increases profit before group costs to GBP130k (2022: GBP40k)
- Continental Europe increases profit before group costs to GBP257k (2022: GBP123k)
- Loss for the period GBP0.48m, impacted by one-off Torpedo
Factory Group ("TFG") acquisition costs
- Improving markets & strengthening order book
- Ranked 48(th) largest firm by number of UK architects (up from 70(th) ) in the AJ100
- Acquisition of TFG just before period end to expand Smart
Buildings strategy and broaden asset base and revenue streams
- Appointment, today, of Freddie Jenner to the board as Chief Operating Officer
Commenting, Chief Executive Nick Clark said, "I am thrilled to
have been appointed as Chief Executive, and excited by our mission
creating a UK-listed Smart Buildings group. Against a backdrop of
improving trading performance, I look forward to reporting on our
progress in the coming months."
Contacts
Aukett Swanke Group Plc
+44 (0) 20 7843 3000
Clive Carver, Chairman
Nick Clark, Chief Executive
Strand Hanson Limited, Financial and Nominated Adviser +44 (0)
20 7409 3494
Richard Johnson, James Bellman
Zeus Capital Limited, Broker +44 (0) 20 3829 5000
Simon Johnson, Louisa Waddell
Investor/Media + 44 (0) 7979 604 687
Chris Steele
An electronic version of the Interim Report will be available on
the Group's website (www.aukettswankeplc.com).
Chairman's Statement
Introduction
I am pleased to present the interim results for the six months
ended 31 March 2023.
At the end of the reporting period, we acquired Torpedo Factory
Group ("TFG"), and welcomed Nick Clark as Chief Executive. Further
below he introduces the TFG businesses and describes in more detail
the concept of Smart Buildings, and how this is being incorporated
into the Group's strategy.
The evolution of architecture
We acquired TFG in March 2023, principally as a means of
embracing the increasing use of technology in the design,
construction and management of buildings. We believe we are one of
the first in our profession to make such a move and look forward to
developing a leading presence in the Smart Buildings space, while
continuing to develop our long established architecture
businesses.
The TFG acquisition also gave us access to further funding and
has allowed us to transition key senior management positions to the
next generation, bringing the Board more into line with our staff
and clients generally.
Restructuring the architecture business completed
Restructuring work to improve the core profitability of our
traditional architecture businesses is now complete. The UAE
business has been sold and the international offices, other than
those in Germany, have either been closed or are moving onto a
licence basis with local management being responsible for
profitability.
Our core architecture businesses now comprise our design and
executive architecture businesses in the UK and our direct
investments in the Berlin and Frankfurt practices.
As set out in greater detail in the report from the Chief
Executive, we have experienced growth in each of the core
architecture markets necessitating the recruitment of 13 full time
equivalent additional architects in our UK operations since the
beginning of the financial year, which places the Group 48(th)
largest by number of UK employed architects, based on AJ100
compiled by Architects' Journal. This is a rise from 70(th) place
last year.
Smart Buildings
The Group's approach to Smart Buildings is set out in detail in
the accompanying Chief Executive's report.
Board update
During the period under review and subsequently we have welcomed
a number of new members to the Board to help deliver the growth we
seek in both the traditional architecture and the new Smart
Buildings businesses.
Nick Clark - Chief Executive
Nick, who was the founder and Chief Executive of TFG, became
Group Chief Executive on completion of the deal in April 2023. At
the same time, Robert Fry, who had acted as interim chief executive
from December 2022 to April 2023, became Deputy Chairman on a part
time basis, with principal responsibility for the Group's
international offices and the expansion of the architecture
businesses.
Freddie Jenner - Chief Operating Officer
Freddie has today been appointed to the Board as Chief Operating
Officer. Freddie was previously Chief Financial Officer at TFG,
which he joined in 2007. Further details on his appointment are
being separately announced today.
Tandeep Minhas - Non-executive director
Tandeep Minhas, a leading corporate lawyer and head of the
London corporate finance department at international lawyers Taylor
Wessing LLP, joined the Board as a non-executive director on 24
April 2023.
Further details of your full Board can be found at
https://aukettswankeplc.com/people/ .
Long term incentives
To attract and retain the team required to deliver success we
plan to introduce a new long term incentive package. This will seek
to better align the interests of shareholders generally and those
individuals on whose efforts the Group's future depends. A further
announcement in this regard will be made in due course.
Outlook
With the team in place and the strategy honed we look forward to
reporting continued progress in both our existing and acquired
businesses.
Clive Carver
Chairman
26 June 2023
Chief Executive's report
Introduction
I am delighted to have been appointed as your new Chief
Executive, and excited about the opportunities ahead of us.
Following the acquisition of TFG, our mission is to develop our
award-winning architecture businesses and become a leading force in
the provision of Smart building systems, which we firmly believe to
be a major growth area using technology to enhance the experience
of buildings owners and users.
Architects are the trusted advisors who are best placed to
convince an inherently conservative property industry that change
is not only desirable, but essential. Our Group is therefore
well-positioned to exploit the opportunities in this transformative
industry.
Architecture
Through architecture, we forge a profound connection between
people and their surroundings. It evokes a sense of place and
fosters a sense of belonging. It pushes boundaries, challenging us
to envision a better future and to explore new possibilities for a
more sustainable way of living.
Architecture also brings change with a spirit of optimism and
renewal, which is at the heart of what the Group needs to
deliver.
Aukett Swanke Limited - UK architecture and interior design
Employed an average 35 full time equivalent ("FTE") technical
staff in the 6 month period, with revenue of GBP1.89 million
(GBP1.81 million, net of sub consultant costs).
Aukett Swanke Limited is the Group's award-winning full design
service architecture business, which can trace its roots back over
a century, and offers leading design services across a wide range
of sectors.
I am pleased to report progress with new contract wins during
the period for a major masterplanning project with Network Rail and
a residential project for Ardmore at 8 Eaton Lane in London.
Completions in the period include the St. Andrew's House
apartments for Anglo American De Beers, and new starts include the
refurbishment of The Underwriting Room in the iconic Lloyd's of
London building .
Veretec - UK executive architecture
Employed an average 44 FTE technical staff in the 6 month
period, with revenue of GBP2.30 million (GBP2.28 million, net of
sub consultant costs).
Veretec is our executive architecture business, which uses the
division's technical and delivery skills to translate the designs
of others into high quality buildings.
This business also made strong progress in the period under
review completing several projects and winning others requiring a
significant increase in staffing.
Following the period end, continued recruitment required to
service new and existing contracts increased FTE technical staff to
57 in May 2023.
New projects commenced in the period include the Town Hall and
extension of the West King Street Renewal project master planned by
Rogers Stirk & Harbour and the Nine Elms School with the IBI
Group for Morgan Sindall.
Completions have included the n2Nova commercial office building
designed by Patrick Lynch Architects for Landsec and executed by
Mace.
German investments
The Group owns a 25% investment in the Berlin practice Aukett +
Heese GmbH, employing an average 106 FTE technical staff in the 6
month period, with revenue of GBP8.62 million (GBP5.5 million, net
of sub consultant costs). The studio offers a full range of
architectural design services and holds a leading position in the
regional market it serves.
The Group also owns a 50% investment in the Frankfurt practice
Aukett + Heese Frankfurt GmbH employing an average 10 FTE technical
staff in the 6 month period, with revenue of GBP0.77 million
(GBP0.46 million, net of sub consultant costs). The studio is
renowned for its architecture and interior design expertise in the
financial, corporate and high-rise building sectors in the local
market.
The revenues of these investments are not consolidated in the
Group's revenues as we do not own a majority of either
business.
Completions in Berlin included the opening of the Deutsche Bahn
restaurant in the Sony Center, renamed the Potsdamer Platz Center,
and the commencement ceremony to break ground for the 42,000 sqm
Siemensstadt Square project comprising two buildings, one
high-rise, and 20,000 sqm of open space with public amenities.
Torpedo Factory Group
As set out in more detail in the financial commentary below, the
results from the TFG audio visual businesses are only included in
these financial statements for the final 10 trading days in March
2023. However, to give shareholders a better understanding of the
what the Group now enlarged by the TFG acquisition offers we
include the following information, which is based on a full 6 month
period to 31 March 2023.
Meeting Environments
Employed an average 29 FTE staff in the 6 month period, with
revenue of GBP1.93 million.
TFG's Meeting Environments business has been renamed Intelligent
Environments to reflect our broader work beyond meeting spaces as
we reposition the business as a Master Systems Integrator looking
at workplace technologies more broadly.
Stage Technology
Employed an average 23 FTE staff in the 6 month period, with
revenue of GBP1.38 million.
The Stage Technology business has an extensive client base in
the UK's leading theatres, universities, and schools in the private
and state sectors. The current year is dominated by the delivery of
a major project, a landmark new venue in Manchester, which is due
to complete by the end of June.
Live Events
Employed an average 10 FTE staff in the 6 month period, with
revenue of GBP0.55 million.
The Live Events business did not form part of the Group's Smart
Buildings plans and was sold with effect from 31 March 2023.
Smart Buildings
Why Smart Buildings
Smart Buildings enhance efficiency, sustainability, and occupant
experience.
Smart Buildings integrate advanced technologies, data analytics,
and automation to create vibrant ecosystems. They optimise energy
consumption, streamline operations, and personalise experiences for
occupants. By leveraging the Internet of Things (IoT) and
artificial intelligence (AI), Smart Buildings offer real-time
monitoring, energy savings, improved comfort, proactive
maintenance, and cost reduction.
In contrast to a traditional architecture business, which has
high fixed costs and where once the project is completed there is
no further income, under a Smart Buildings business model, revenues
are generated monthly throughout the lifetime of a building.
Technology is used to its utmost; rapid growth is achievable
without the often time consuming and expensive recruitment of
additional staff; and short term fluctuations in economic activity
do not dictate customer buying decisions.
Market drivers
Regulation is likely to be a key driver in the growth of Smart
Buildings.
For example, since April 2023, almost all commercial buildings
in the UK are required to have an Energy Performance Certificate
(EPC) rating of E or better. Without such a rating they cannot be
rented to tenants. From 2027, this requirement rises to C, and by
2030, a rating of B or better will be needed. Knight Frank recently
estimated that 70% of the UK's commercial building stock fails to
comply with EPC B and landlords of such properties will need to
invest in upgrading their buildings.
Our Smart Buildings strategy
Our plan is to become a leading provider of Smart Building
services. Breaking this down we need to become:
-- Smart Building Systems Designers
-- Smart Building Systems Integrators
-- Smart Building Systems Operators
We intend to grow at pace; only a buy and build strategy can
deliver the speed of change that we intend to deliver.
Smart Building Systems Designers
I am pleased to report we have already made our first
appointment in this new division and expect to make further
progress before the end of the current financial year.
Smart Building Systems Operators & Smart Building Systems
Integrators
We are actively considering specific acquisition opportunities
in the sector and we look forward to updating shareholders on these
and other potential acquisitions in due course.
Group Financial results
Basis of preparation
These interim statements, which cover the six months ended 31
March 2023, are unaudited and include the full six months trading
of the Aukett Swanke Group architecture businesses and the final 10
trading days of the period from TFG.
The balance sheet as at 31 March 2023 includes both the Aukett
Swanke Group architecture businesses and the TFG businesses.
Overall assessment
While the performance across the architecture businesses as set
out below is improving as the result of new contract wins and the
restructuring of the Group in previous periods, we are still a long
way from the level of profitability required to justify a
meaningful Group valuation.
This demonstrates why the previous Aukett Swanke Group board
recognised that a new approach is needed.
Revenue
We consider revenue after subconsultant costs to be the most
relevant performance indicator in assessing the progress of the
Group's architecture businesses.
In the six months under review, revenue after subconsultants
costs grew by approximately 30% to approximately GBP4.40 million,
reflecting a general increase in activity.
Operating costs
To be able to service this increased activity and in preparation
for work won but yet to start, personnel costs increased by
approximately 29% to approximately GBP3.78 million, with the
addition of 13 FTE fee earning technical staff in the UK operations
during the 6 month period, and the average FTE technical staff 14
higher than the comparable 6 month period in the period year.
Property related costs increased by 8% to approximately GBP0.57
million while other operating costs more than doubled to
approximately GBP0.61 million reflecting the greater level of
activity.
Included in these costs are approximately GBP0.56 million group
costs, excluding those relating to the TFG acquisition.
Associates and joint ventures
The share of associates included in these interim financial
statements grew from approximately GBP0.07 million to approximately
GBP0.21 million, reflecting their increased profitability.
Trading loss
The additional contribution from associates and joint ventures
offset the additional personnel and group costs to leave the
trading loss at approximately GBP0.29m. This is slightly higher
than in the corresponding period last year, but also includes
GBP0.09m of one-off costs relating to the settlement of TFG
employees company share option costs and the loss on assets
disposed of as part of the Live Events disposal.
Acquisition costs
The costs associated with acquiring TFG were approximately
GBP0.26 million and increased the loss before tax to approximately
GBP0.55 million.
Balance sheet
While the trading impact of the TFG acquisition in these interim
financial statements was minimal, its impact on the closing balance
sheet was more significant.
Plant, property and equipment increased from approximately
GBP0.07 million to approximately GBP3.22 million, almost all of
which related to TFG assets, principally the main operating TFG
site, a freehold building valued at GBP3.02 million.
Similarly, trade and other receivables and stock increased from
approximately GBP2.61 million to approximately GBP4.84 million,
again with most of the increase due to TFG.
Cash at bank at 31 March 2023 was approximately GBP0.81 million
compared to just GBP0.04m at the end of the corresponding prior
period.
Borrowings increased from GBP0.58 million in the prior period to
GBP3.12 million consolidating the TFG CBILS loan of GBP1.17 million
and GBP1.45 million mortgage on the freehold property.
TFG trading
Although largely excluded from these interim financial
statements, we set out below a brief assessment of TFG's trading in
that period.
TFG's revenue for October 2022 to March 2023 was GBP3.86
million, 9.6% higher than in the corresponding period in 2022. The
underlying performance of the TFG businesses was just below
breakeven at EBITDA level, due in part to delays in a large project
with more of the work on it delivered in the current (April to
June) quarter.
Live Events disposal
On 4 April 2023, two weeks after the purchase of TFG, the Group
announced the disposal of TFG's Live Events business. It was the
part of the business most dramatically damaged by the Government's
pandemic restrictions. While it has been recovering well, it was
non-core to the Smart Buildings plan, and its need for investment
will be better met outside of our Group. It was personally painful
to part ways with several colleagues I had worked with for many
years, but it is undoubtedly the right way forward for all
concerned and I wish them well.
Current Trading & Outlook
Architecture
With a good stock of committed work and a growing team of
chargeable staff across both principal business areas, we expect
the second half of the year to show an improvement on the first
half.
Torpedo Factory Group
Similarly, with strong project delivery, we expect the second
half to be better than the first half. The mortgage on TFG's
freehold is due to be repaid in February 2024 and we are carefully
reviewing our options to refinance this facility.
Smart Buildings
As we are already almost 9 months into the current financial
year, it is expected that it will be into the 2023 / 24 financial
year before we see material contributions from our Smart Buildings
businesses.
Our team
I am hugely appreciative to all our staff who have coped
admirably with a period of significant change.
We are committed to shaping a sustainable, exciting, and
rewarding future for our clients and our shareholders, and our
staff and I look forward to sharing news our progress with you.
Nick Clark
Chief Executive
26 June 2023
Consolidated income statement
For the six months ended 31 March 2023
Note Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 4 4,562 4,529 8,645
Sub consultant costs (164) (1,152) (1,518)
---------------------------------- ----- ------------- ------------- --------------
Revenue less sub consultant
costs 4,398 3,377 7,127
Personnel related costs (3,781) (2,921) (6,237)
Property related costs (573) (531) (1,037)
Other operating expenses (610) (240) (483)
Other operating income 5 129 144 326
---------------------------------- ----- ------------- ------------- --------------
Operating loss (437) (171) (304)
Finance costs (55) (46) (95)
---------------------------------- ----- ------------- ------------- --------------
Loss after finance costs (492) (217) (399)
Share of results of associate
and joint ventures 205 65 327
---------------------------------- ----- ------------- ------------- --------------
Trading loss from continuing
operations (287) (152) (72)
Acquisition costs (258) - -
Goodwill impairment - - (1,752)
---------------------------------- ----- ------------- ------------- --------------
Loss before tax from continuing
operations 4 (545) (152) (1,824)
Tax credit 54 26 45
---------------------------------- ----- ------------- ------------- --------------
Loss from continuing operations (491) (126) (1,779)
Profit/(loss) from discontinued
operations 6 7 (261) (503)
---------------------------------- ----- ------------- ------------- --------------
Loss for the period (484) (387) (2,282)
---------------------------------- ----- ------------- ------------- --------------
Loss attributable to:
Owners of Aukett Swanke Group
Plc (484) (387) (2,282)
Non-controlling interests - - -
---------------------------------- ----- ------------- ------------- --------------
Loss for the period (484) (387) (2,282)
---------------------------------- ----- ------------- ------------- --------------
Basic and diluted earnings
per share for (loss)/profit
attributable to the ordinary
equity holders of the Company:
From continuing operations (0.29p) (0.07p) (1.08p)
From discontinued operations 0.00p (0.16p) (0.30p)
---------------------------------- ----- ------------- ------------- --------------
Total loss per share 7 (0.29p) (0.23p) (1.38p)
---------------------------------- ----- ------------- ------------- --------------
Consolidated statement of comprehensive income
For the six months ended 31 March 2023
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Loss for the period (484) (387) (2,282)
Other comprehensive income:
Currency translation differences
of foreign operations (1) (42) (7)
Currency translation differences
on disposal recycled to gain
on disposal of discontinued
operation - - (209)
Currency translation differences
on translation of discontinued
operations 34 (7) (168)
------------------------------------ -------------
Other comprehensive gain/(loss)
for the period 33 (49) (384)
Total comprehensive loss for
the period (451) (436) (2,666)
------------------------------------ ------------- ------------- --------------
Total comprehensive loss is
attributable to:
Owners of Aukett Swanke Group
Plc (451) (436) (2,666)
Non-controlling interests - - -
----------------------------------- ------------- ------------- --------------
Total comprehensive loss for
the period (451) (436) (2,666)
Total comprehensive profit/(loss)
attributable to the owners of
Aukett Swanke Group Plc arises
from:
Continuing operations (492) (168) (1,786)
Discontinued operations 41 (268) (880)
------------------------------------ ------------- ------------- --------------
(451) (436) (2,666)
----------------------------------- ------------- ------------- --------------
Consolidated statement of financial position
At 31 March 2023
Note Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Non current assets
Goodwill 3 1,381 1,753 -
Other intangible assets 273 217 210
Property, plant and equipment 3,218 74 69
Right-of-use assets 2,335 2,354 2,184
Investment in associate and
joint ventures 1,081 802 1,007
Loans and other financial 162 -
assets -
Deferred tax 332 265 281
--------------------------------- ----- ---------- ---------- -----------
Total non current assets 8,782 5,465 3,751
Current assets
Trade and other receivables 4,843 2,605 3,293
Inventories 336 - -
Contract assets 744 599 1,119
Cash at bank and in hand 10 805 38 28
--------------------------------- ----- ---------- ---------- -----------
6,728 3,242 4,440
Assets in disposal groups - 1,868
classified as held for sale -
Total current assets 6,728 5,110 4,440
Total assets 15,510 10,575 8,191
Current liabilities
Trade and other payables (4,978) (2,497) (3,169)
Contract liabilities (1,720) (802) (1,227)
9,
Borrowings 10 (2,258) (289) (482)
Lease liabilities (537) (539) (457)
(9,493) (4,127) (5,335)
Liabilities directly associated - (1,006)
with assets in disposal groups
classified as held for sale -
Total current liabilities (9,493) (5,133) (5,335)
Non current liabilities
Trade and other payables - - (44)
9,
Borrowings 10 (858) (292) (167)
Lease liabilities (1,961) (2,118) (1,962)
Deferred tax (183) (37) (33)
Provisions (256) (364) (249)
Total non current liabilities (3,258) (2,811) (2,455)
Total liabilities (12,751) (7,944) (7,790)
Net assets 2,759 2,631 401
--------------------------------- ----- ---------- ---------- -----------
Capital and reserves
Share capital 2,753 1,652 1,652
Merger reserve 2,884 1,176 1,176
Foreign currency translation
reserve (524) (222) (557)
Retained earnings (3,848) (1,469) (3,364)
Other distributable reserve 1,494 1,494 1,494
--------------------------------- ----- ---------- ---------- -----------
Total equity attributable
to
equity holders of the Company 2,759 2,631 401
--------------------------------- ----- ---------- ---------- -----------
Non-controlling interests - - -
--------------------------------- ----- ----------
Total equity 2,759 2,631 401
--------------------------------- ----- ---------- ---------- -----------
Consolidated statement of cash flows
For the six months ended 31 March 2023
Note Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from / (expended)
by operations 8 328 (303) (1,104)
Income tax credits received - 99 99
------------------------------------- ----- ------------- ------------- --------------
Net cash inflow/(outflow)
from operating activities 328 (204) (1,005)
Cash flows from investing
activities
Purchase of property, plant
and equipment (73) (13) (48)
Acquisition of subsidiary,
net cash acquired 790 - -
Sale of investments - - 927
Dividends received 131 46 140
------------------------------------- ----- ------------- ------------- --------------
Net cash received from investing
activities 848 33 1,019
Net cash inflow/(outflow)
before financing activities 1,176 (171) 14
Cash flows from financing
activities
Principal paid on lease liabilities (241) (232) (470)
Interest paid on lease liabilities (33) (40) (76)
Repayment of bank loans (125) - (83)
Interest paid (22) (6) (19)
Net cash outflow from financing
activities (421) (278) (648)
Net change in cash and cash
equivalents 755 (449) (634)
Cash and cash equivalents
at start of period (204) 515 515
Currency translation differences 41 (81) (85)
------------------------------------- ----- ------------- ------------- --------------
Cash and cash equivalents
at end of period 10 592 (15) (204)
------------------------------------- ----- ------------- ------------- --------------
Cash and cash equivalents are
comprised of:
Cash at bank and in hand 805 38 28
Cash held within assets classified
as held for sale - 28 -
Secured bank overdrafts (213) (81) (232)
Cash and cash equivalents at end
of year 592 (15) (204)
------------------------------------ ------ ----- ------
Consolidated statement of changes in equity
For the six months ended 31 March 2023
Share Foreign Retained Other Merger Total Non Total
capital currency earnings distributable reserve controlling equity
translation reserve interests
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
At 1 October
2022 1,652 (557) (3,364) 1,494 1,176 401 - 401
Loss for the
period - - (484) - - (484) - (484)
Other
comprehensive
income - 33 - - - 33 - 33
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
Total
comprehensive
profit/(loss) - 33 (484) - - (451) - (451)
Issue of
ordinary
shares in
relation
to business
combination 1,101 - - - 1,708 2,809 - 2,809
At 31 March
2023 2,753 (524) (3,848) 1,494 2,884 2,759 - 2,759
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
For the six months ended 31 March 2022
Share Foreign Retained Other Merger Total Non Total
capital currency earnings distributable reserve controlling equity
translation reserve interests
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
At 1 October
2021 1,652 (173) (1,082) 1,494 1,176 3,067 - 3,067
Loss for the
period - - (387) - - (387) - (387)
Other
comprehensive
income - (49) - - - (49) - (49)
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
Total
comprehensive
loss - (49) (387) - - (436) - (436)
At 31 March
2022 1,652 (222) (1,469) 1,494 1,176 2,631 - 2,631
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
For the year ended 30 September 2022
Share Foreign Retained Other Merger Total Non Total
capital currency earnings distributable reserve controlling equity
translation reserve interests
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
At 1 October
2021 1,652 (173) (1,082) 1,494 1,176 3,067 - 3,067
Loss for the
period - - (2,282) - - (2,282) - (2,282)
Other
comprehensive
income - (384) - - - (384) - (384)
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
Total
comprehensive
loss - (384) (2,282) - - (2,666) - (2,666)
At 30
September
2022 1,652 (557) (3,364) 1,494 1,176 401 - 401
--------------- --------- ------------- ---------- -------------- --------- --------- -------------- ---------
Notes to the Interim Report
1 Basis of preparation
The financial information presented in this Interim Report has
been prepared in accordance with the recognition and measurement
principles of international accounting standards in conformity with
the requirements of the Companies Act 2006 that are expected to be
applicable to the financial statements for the year ending 30
September 2023 and on the basis of the accounting policies expected
to be used in those financial statements.
2 New accounting standards, amendments and interpretations applied
A number of new or amended standards and interpretations to
existing standards became applicable for the current reporting
period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these
standards.
3 Business combination
On the 20 March 2023 the Group acquired 100% of the voting
equity instruments in Torpedo Factory Group Limited, an audio
visual and stage technology provider to organisations in the UK and
Europe.
Consideration for the acquisition comprised:
i) 110,142,286 Ordinary Shares in Aukett Swanke Group Plc at an
issue price of 2.55p based on the closing price of Aukett Swanke
Group Plc shares on 1 March 2023.
ii) Up to 3,631,124 additional consideration shares proposed to
be issued to participating TFG Option Holders, at an issue price of
2.55p.
iii) 8,400,000 share options in Aukett Swanke Group Plc
exercisable at 1p. Fair value calculated at 1.55p per share based
on the closing price of Aukett Swanke Group Plc shares on 1 March
2023.
GBP'000
-------------------------------------------- --------
Shares in Aukett Swanke Group Plc 2,809
Maximum number of additional consideration
shares to be issued to the participating
option holders 92
Share options in Aukett Swanke Group
Plc 130
--------------------------------------------- --------
Total acquisition cost 3,031
--------------------------------------------- --------
The fair values of the identifiable assets and liabilities
acquired have only been provisionally determined and are subject to
adjustment during the measurement period.
Provisional
20 Mar-23
GBP'000
--------------------------------------- ------------
Goodwill 1,381
Property, plant and equipment 3,122
Right-of-use assets 324
Other intangible assets 75
Loans and other financial assets 162
Inventories 336
Contract assets 10
Trade and other receivables 1,526
Net cash 790
------------
Assets 7,726
------------
Trade and other payables 1,180
Contract liabilities 654
Interest bearing loans and borrowings 2,611
Lease liabilities 320
Deferred tax liability 152
------------
Liabilities 4,917
------------
Total net assets 2,809
---------------------------------------- ------------
Property, Plant and Equipment includes GBP3,020k net book value
of freehold property, being the Old Torpedo Factory building in
London, last revalued in July 2021.
Acquisition related costs of GBP258k are disclosed as
acquisition costs in the consolidated income statement.
4 Operating segments
The Group historically comprised a single business segment with
separately reportable geographical segments (together with a Group
costs segment). Geographical segments being based on the location
of the operation undertaking each project.
The Group's operating geographical segments consist of the
United Kingdom, the Middle East and Continental Europe. Turkey is
included within Continental Europe together with Germany. The
Middle East segment has been re-presented as a discontinued
operation and is set out in note 5 .
With the acquisition of Torpedo Factory Group during the period,
Torpedo Factory Group operations have been disclosed as an
additional separate business segment.
Segment revenue Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
United Kingdom 4,191 4,435 8,465
Torpedo Factory Group 212 - -
Continental Europe 159 94 180
------------------------------------- ------------- ------------- --------------
Revenue from continuing operations 4,562 4,529 8,645
Discontinued operations - 1,249 1,543
------------------------------------- ------------- ------------- --------------
Revenue 4,562 5,778 10,188
------------------------------------- ------------- ------------- --------------
Segment revenue less sub consultant Unaudited Unaudited Audited
costs six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
United Kingdom 4,094 3,305 6,975
Torpedo Factory Group 212 - -
Continental Europe 92 72 152
-------------------------------------- -------------
Revenue less sub consultant
costs from continuing operations 4.398 3,377 7,127
Discontinued operations - 1,060 1,256
-------------------------------------- ------------- ------------- --------------
Revenue less sub consultant
costs 4,398 4,437 8,383
-------------------------------------- ------------- ------------- --------------
Segment result before tax Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
United Kingdom (140) (230) (329)
Continental Europe 183 49 275
Torpedo Factory Group*^ (166) - -
Group costs* (422) 29 (18)
Goodwill impairment - - (1,752)
---------------------------------- ------------- ------------- --------------
Loss before tax from continuing
operations (545) (152) (1,824)
Profit/(loss) from discontinued
operations 7 (261) (503)
---------------------------------- ------------- ------------- --------------
Total loss (538) (413) (2,327)
---------------------------------- ------------- ------------- --------------
Segment result before tax Unaudited Unaudited Audited
(before reallocation of group six months six months year to
management charges) to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
United Kingdom 130 40 211
Continental Europe 257 123 422
Torpedo Factory Group*^ (166) - -
Group costs* (766) (419) (809)
Goodwill impairment - - (1,752)
-------------------------------------- ------------- ------------- --------------
Subtotal (545) (256) (1,928)
Group management charges charged
to the
Middle East discontinued operation - 104 104
-------------------------------------- ------------- ------------- --------------
Loss before tax from continuing
operations (545) (152) (1,824)
Profit/(loss) from discontinued
operations 7 (261) (503)
-------------------------------------- ------------- ------------- --------------
Total (loss) (538) (413) (2,327)
-------------------------------------- ------------- ------------- --------------
* Segmental results before tax include GBP258k of exceptional
costs being transactional costs for the acquisition of Torpedo
Factory Group allocated as GBP208k within Group costs, and GBP50k
within Torpedo Factory Group.
^ TFG segmental result before tax includes GBP0.09m of one-off
costs relating to the settlement of TFG employees company share
option costs and the loss on assets disposed of as part of the Live
Events disposal.
5 Other operating income
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
Continuing operations GBP'000 GBP'000 GBP'000
Property rental income 44 74 147
Management charges to associate
and joint ventures 68 63 131
Licence fee income - 7 -
Other sundry income 17 - 48
Total other operating income 129 144 326
---------------------------------- ------------- ------------- --------------
6 Discontinued operations
6 (a) Description
In April 2022, the Group sold assets, as part of the Group's
disposal of JRHP constituting its John R Harris & Partners
Limited (Cyprus) subsidiary and John R Harris & Partners
(Dubai) entity, for a cash consideration of AED 5,000,000,
comprising AED 4,250,000 cash upfront and a further AED 750,000
deferred consideration paid over a 5 year period. This marked the
sale of the main trading operations in the Group's Middle East
segment. With closure costs incurred in the period relating to the
planned termination of a number of trading licenses in the Middle
East operations, the Middle East segment is presented as a
discontinued operation in the current period, and the comparative
period represented accordingly.
6 (b) Financial performance and cash flow information
Result of discontinued operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Revenue - 1,249 1,543
Sub consultant costs - (189) (287)
-------------------------------------- ------------- ------------- --------------
Revenue less sub consultant
costs - 1,060 1,256
Expenses 7 (1,217) (2,012)
Group management charges - (104) (104)
Gain on disposal of subsidiary - - 357
Profit/(loss) before tax 7 (261) (503)
Tax credit / (charge) - - -
------------------------------------- ------------- ------------- --------------
Profit/(loss) from discontinued
operations 7 (261) (503)
Exchange differences on disposal
recycled to gain on disposal
of subsidiary - - (209)
Exchange differences on translation
of discontinued operation 34 (7) (168)
-------------------------------------- ------------- ------------- --------------
Other comprehensive gain/(loss)
from discontinued operations 41 (268) (880)
-------------------------------------- ------------- ------------- --------------
Earnings per share from discontinued operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Basic and diluted gain/(loss)
per share 0.00p (0.16p) (0.30p)
Statement of cash flows
The statement of cash flows includes the following amounts
relating to discontinued operations:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Net cash outflow from operating
activities - (174) (53)
Net cash inflow from investing
activities - - 35
Foreign exchange movements - 2 (204)
------------------------------------- ------------- ------------- --------------
Net cash outflow from discontinued
operations - (172) (222)
------------------------------------- ------------- ------------- --------------
7 Earnings per share
The calculations of basic and diluted earnings per share are
based on the following data:
Earnings Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Continuing operations (491) (126) (1,779)
Discontinued operations 7 (261) (503)
-------------------------- ------------- ------------- --------------
Loss for the period (484) (387) (2,282)
-------------------------- ------------- ------------- --------------
Number of shares Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
'000 '000 '000
Weighted average number of shares 171,907 165,214 165,214
Effect of dilutive options 221 - -
----------------------------------- ------------- ------------- --------------
Diluted weighted average number
of shares 171,128 165,214 165,214
------------------------------------ ------------- ------------- --------------
8 Reconciliation of profit before tax to net cash from operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2023 2022 2022
GBP'000 GBP'000 GBP'000
Loss for the period (484) (387) (2,282)
Tax credit (54) (26) (45)
Finance costs 55 46 95
Share of results of associate
and joint ventures (205) (65) (327)
Intangible amortisation 6 19 28
Depreciation 24 56 97
Goodwill impairment - - 1,752
Amortisation of right-of-use
assets 193 192 385
Decrease in trade and other
receivables 161 565 594
Increase / (decrease) in trade
and other payables 625 (635) (815)
Change in provisions 7 (68) (586)
Net cash generated from / (expended)
by operations 328 (303) (1,104)
--------------------------------------- ------------- ------------- --------------
9 Borrowings
Unaudited Unaudited Audited
at 31 March at 31 March at
2023 2022 30 September
GBP'000 GBP'000 2022
GBP'000
Secured bank overdrafts (213) (81) (232)
Mortgage (1,445) - -
Secured bank loan (NatWest) (1,166) - -
Secured bank loan (Coutts) (292) (500) (417)
------------------------------------- ------------- ------------- --------------
Total borrowings (3,116) (581) (649)
Amounts due for settlement within
12 months (2,258) (289) (482)
------------------------------------- ------------- ------------- --------------
Current liability (2,258) (289) (482)
Amounts due for settlement between
one and two years (392) (250) (167)
Amounts due for settlement between
two and five years (466) (42) -
------------------------------------- ------------- ------------- --------------
Non current liability (858) (292) (167)
Total borrowings (3,116) (581) (649)
------------------------------------- ------------- ------------- --------------
The bank loan (Coutts) and overdrafts are secured by debentures
over all the assets of the Company and certain of its United
Kingdom subsidiaries. The bank loan and overdrafts carry interest
at 4.05% (loan) and 3% (overdrafts) above the Coutts Base rate for
the relevant currency.
The mortgage and the bank loan (NatWest) are secured by way of a
first legal charge over freehold property, a debenture and cross
guarantee from Torpedo Factory Group Limited, Torpedo Factory
Limited and TFG Stage Technology Limited. The bank loan (NatWest)
initially drawn at GBP1.75m is being repaid at GBP29k per month.
The loan is at a fixed rate of interest of 3.66%.
The mortgage initially drawn in 2018 at GBP1.73m with a duration
of 5 years has been extended for a year and is due to expire in
February 2024, and is therefore wholly shown due for settlement
within 12 months. The mortgage carries interest at base rate +
1.93%.
10 Analysis of net funds
Unaudited Unaudited Audited
at 31 March at 31 March at
2023 2022 30 September
GBP'000 GBP'000 2022
GBP'000
Cash at bank and in hand 805 38 28
Cash held within assets classified
as held for sale - 28 -
Secured bank overdrafts (213) (81) (232)
------------------------------------- ------------- ------------- --------------
Cash and cash equivalents 592 (15) (204)
Mortgage (1,445) - -
Secured bank loans (1.458) (500) (417)
------------------------------------- -------------
Net debt (2,311) (515) (621)
------------------------------------- ------------- ------------- --------------
11 Status of Interim Report
The Interim Report covers the six months ended 31 March 2023 and
was approved by the Board of Directors on 26 June 2023. The Interim
Report is unaudited.
The interim condensed set of consolidated financial statements
in the Interim Report are not statutory accounts as defined by
Section 434 of the Companies Act 2006.
Comparative figures for the year ended 30 September 2022 have
been extracted from the statutory accounts of the Group for that
period.
The statutory accounts for the year ended 30 September 2022 have
been reported on by the Group's auditors and delivered to the
Registrar of Companies. The audit report thereon was unqualified,
did not include references to matters to which the auditors drew
attention by way of emphasis without qualifying the report, and did
not contain a statement under Section 498 of the Companies Act
2006. The audit report did draw attention to the Directors'
assessment of going concern, indicating that a material uncertainty
exists that may cast significant doubt on the Group's and parent
company's ability to continue as a going concern. The audit report
was not modified in respect of this matter.
12 Further information
An electronic version of the Interim Report will be available on
the Group's website (www.aukettswankeplc.com).
This information is provided by RNS, the news service of the
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END
IR FLFVDRTIRFIV
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June 27, 2023 02:00 ET (06:00 GMT)
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