TIDMPVG
RNS Number : 5749X
Premier Veterinary Group PLC
09 May 2016
PREMIER VETERINARY GROUP PLC
("PVG" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHSED 31 MARCH 2016
RAPID GROWTH IN CUSTOMER BASE WITH CONTINUING STRONG
MOMENTUM
London, UK, 9 May 2016 - Premier Veterinary Group plc ("PVG" or
the "Company") today announces its unaudited interim results for
the six months ended 31 March 2016.
Dominic Tonner, CEO of PVG commented:
"The Company continues to grow rapidly in the preventative
healthcare market. Over the twelve months since 31 March 2015, the
Company's proprietary Pet Care Plan has more than doubled the
number of pets on plan. PVG is continuing to invest in the global
expansion of its Pet Care Plan business with the objective of
achieving significant and sustained growth for the foreseeable
future."
HIGHLIGHTS
-- Total number of pets on fee-generating pet care plans
provided by third party veterinary clinics under PVG's preventative
healthcare program for pets branded "Pet Care Plan" more than
doubled to 117,000 (31 March 2015: 57,100)
-- Sale in December 2015 of the Company's veterinary clinics for
GBP6.5m to leave the Company debt free and focused on its Pet Care
Plan and veterinary pharmaceutical Buying Group businesses
-- 100(th) veterinary clinic signed up to Pet Care Plan in The
Netherlands, currently PVG's most mature overseas market
-- PVG's total continuing revenues increased by 31% to GBP1.4m
for the six months to 31 March 2016 (31 March 2015: GBP1.1m)
-- Loss after tax from continuing operations to 31 March 2016
was GBP1.1m (31 March 2015: GBP0.57m)
-- Cash (excluding money held in escrow) and short term deposits
of GBP1.6m as at 31 March 2016 (at 31 March 2015: GBP1.0m).
Post period events
-- On 26 April 2016 Juliet Thompson appointed as Non-Executive
Director and Chairman of the Board
-- On 5 May 2016 announced commencement of a controlled
expansion into the US for Pet Care Plan.
RESPONSIBILITY STATEMENT
For the six months ended 31 March 2016
We confirm to the best of our knowledge that:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the entity during that period;
and any changes in the related party transactions described in the
last Annual Report that have done so).
For and on behalf of the Board:
Dominic Tonner Daniel Smith
Chief Executive Officer Chief Financial Officer
6 May 2016 6 May 2016
INTERIM MANAGEMENT REPORT
To the members of Premier Veterinary Group plc
Cautionary statement
This Interim Management Report ("IMR") has been prepared solely
to provide additional information to shareholders to assess the
Group's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
The IMR contains certain forward-looking statements. These
statements are made by the Directors in good faith based on the
information available to them up to the time of their approval of
this report, but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying such forward-looking information.
This interim management report has been prepared for the Group
as a whole and, therefore, gives greater emphasis to those matters
which are significant to Premier Veterinary Group plc and its
subsidiary undertakings when viewed as a whole.
Introduction
Premier Veterinary Group plc, through its wholly-owned
subsidiary, Premier Vet Alliance Limited ("PVA"), is a leading
provider of services to third party veterinary practices, including
the administration of a structured, preventative healthcare program
for cats, dogs and rabbits, branded "Pet Care Plan". The program is
seen as a way of providing gold standard care for pets at an
affordable price for the client by way of fixed monthly
payments.
Pet Care Plan uses a clinical approach to prevention as this is
the most effective method of ensuring illnesses are diagnosed more
quickly and not given a chance to advance. PVA works alongside
practices to create a tailor-made, cost-effective service for
clients, one that delivers excellent care to their patients and
significantly improves practice performance.
PVA also operates a buying group (the "PVA Buying Group") which
offers enhanced discounts to member practices. The specially
negotiated discounts on both small and large animal products enable
independent practices to compete with larger groups. The PVA Buying
Group is now the UK's largest veterinary buying group without group
interests in veterinary practices or veterinary wholesalers.
Overview and strategic update
As announced on 21 December 2015, following a strategic review
of the Company's portfolio of assets, their potential and
alternative strategies to optimise shareholder value, the Company
completed the sale of its remaining veterinary practices Zetland
Limited, Thanet One Limited and The Veterinary Clinic (Bearwood)
Limited ("the Veterinary Business") to Independent Vetcare Limited
for cash consideration of GBP4.1m (the "Disposal"). In addition,
intercompany loan balances of GBP2.4m due from the Veterinary
Business to other group companies were repaid on completion. As
explained previously, an adjustment to reflect the sale on a zero
net current asset basis was to be agreed. This was completed in
April 2016 and, as a result, the consideration increased by
GBP40,000.
The consideration received from the Disposal and repayment of
intercompany loans amounting in aggregate to GBP6.5m has allowed
the Company to repay all of its debt and, after allowing for
transaction costs and acceleration of fees relating to the debt
repayment, has increased net assets by GBP4.0m. An amount of GBP1m
has been placed into escrow to cover potential liabilities under
warranty and indemnity provisions in the sale and purchase
agreement. The Directors expect this GBP1m to be released 12 months
after completion (December 2016) and have therefore recognised it
in full with other receivables.
Prior to the Disposal in December 2015, the Veterinary Business
generated revenues of GBP1.25m and incurred a pre-tax profit of
0.16m.
The PVA business has been identified as PVG's key long-term
value driver and the additional resources resulting from the
Disposal will enable the Company to expand the PVA business and to
accelerate the roll-out of Pet Care Plan in multiple overseas
territories, leading to enhancement of shareholder value. The
Disposal also re-enforces PVA's independence in terms of the
provision of services to third party clinics.
As stated in the Annual Report and Accounts for the year ended
30 September 2015 (the "2015 Annual Report"), the Company's
objectives are to:
-- leverage the success of PVA;
-- identify new markets for Pet Care Plan to be introduced in to; and
-- develop other new opportunities for growth.
The report also outlined the key elements to the Company's
strategy to achieve its objectives.
PVA, through Pet Care Plan, is now a leading provider of
preventative animal healthcare programs to the independent
veterinary sector in the UK, Republic of Ireland, Denmark and the
Netherlands. Integral to the Company's strategy is to grow Pet Care
Plan more aggressively in overseas territories. The Netherlands was
among the first countries targeted for overseas expansion for Pet
Care Plan, and the Company's business there has shown rapid growth
to date. Consequently, on 23 March 2016, the Company announced that
it had entered into contractual arrangements for Pet Care Plan with
over 100 veterinary clinic customers in the Netherlands. Pet Care
Plan now covers 9,000 pets in the Netherlands where the plan is
sold under the name of Huisdieren ZorgPlan ("HZP"). There are
approximately 1,000 domestic animal veterinary practices in the
Netherlands and this market has similar compliance rates on
vaccination and flea, worm and tick control to the UK. The Dutch
customer practices have embraced HZP to improve client loyalty,
increase revenue, improve cash flow and differentiate themselves in
a very competitive market.
Also on 23 March 2016, the Company reported on the progress made
during the second quarter in the growth in the number of
fee-generating pet care plans provided by third party veterinary
clinics under Pet Care Plan. In March 2016, the total number of
pets on plan in the UK was 107,000 and 10,000 in the Rest of the
World, (57,000 and 100 respectively in March 2015). The number of
pets on plan continues to increase with growth of 4% during April
2016.
The number of PVA's Buying Group members has decreased by 5% to
307 as at 31 March 2016 (323 as at 31 March 2015).
Further progress against strategy will be reported in the 2016
Annual Report for the year ended 30 September 2016.
Financial and non-financial key performance indicators
As set out in the 2015 Annual Report, the Company monitors its
performance in implementing the Company's strategy with reference
to six key performance indicators ("KPIs"). The KPIs are applied on
a Group-wide basis. Performance against those KPIs in the six
months ended 31 March 2016 was as follows:
Sales volume and revenue growth
A key element underpinning the Group's strategy is to deliver
sales volume growth and revenue growth in the Pet Care Plan and PVA
Buying Group business areas. Sales volume growth is measured by the
number of direct debits processed under Pet Care Plan and the
number of PVA Buying Group members.
Pet Care Plan fees are generated from the collection and
management of direct debits on behalf of veterinary practices
external to the Group and are recognised on a receipts basis. A
flat fee is received for every direct debit collected. PVA Buying
Group Management fees are earned when a member practice purchases
goods and becomes entitled to negotiated rebates and discounts.
These are recognised once there is a legal entitlement to receive.
In general, this is during the month in which the PVA Buying Group
members' spend occurs.
PVA's revenues for the six months ended 31 March 2016 increased
by 31% to GBP1.4m (GBP1.07m six months ended 31 March 2015). The
number of pets covered by PVA's Pet Care Plan on behalf of third
party practices has increased by 105% to 117,000 as at March 2016
(57,100 as at March 2015). The total cash value of direct debit
collections in the UK increased to GBP8.6m in the six months to 31
March 2016 (31 March 2015: GBP4.8m). In addition the total cash
value of Euro direct debit collections increased to EUR580,000 in
the six months to 31 March 2016 (31 March 2015: EUR3,000).
PVA Buying Group fee income decreased by 9% to GBP0.55m in the
six months ended 31 March 2016 (31 March 2015: GBP0.59m) as a
result of increased competition within the buying group market and
corporate activity. Accordingly, investment has been made in new
software to improve the clinic experience and provide greater
clarity on PVA's charging structures, and the introduction of new
initiatives to market the PVA Buying Group to potential
members.
Number of member clinics
Management recognises the value of its relationships with
clinics and monitors the number of member clinics as a KPI. This is
tracked and reviewed in each territory on a monthly basis.
Management has concluded that shareholder value will be derived
from this KPI. Management recognises the need to achieve growth in
this KPI within a cost base suited to the business's balance sheet
following the Disposal. The number of member clinics as at 31 March
2016 was as follows:
PVA Membership As at 31 March 2016
Summary (by
clinic)
GB ROI/NI NL DK Total
Total membership 761 97 116 15 989
PVA Buying
Group 427 87 - - 514
Pet Care Plan 446 39 116 15 616
Pets on Plan
Whilst clinic relationships indicate the future growth potential
for the Group, it is also important to monitor the number of pets
on plan as this is the key revenue driver. This KPI enables
Management to ensure member clinics are achieving the levels of
penetration that are expected and to focus attention on clinics
that are underperforming.
The number of pets on active plans as at March 2015 and 2016 was
as follows:
As at As at
March 2016 March 2015
Rest of World 10,000 100
United Kingdom 107,000 57,000
Total no of pets
on plan 117,000 57,100
Cash processed through the platform
Member clinic numbers and pets on plan are internal points of
reference for the Group. By monitoring cash (inclusive of sales
tax) processed through the platform Management is able to monitor
the benefit to partners of the Group's member clinics operating Pet
Care Plans. The total cash value of direct debit collections in the
UK increased to GBP8.6m in the six months to 31 March 2016 (31
March 2015: GBP4.8m). In addition the total cash value of Euro
direct debit collections increased to EUR580,000 in the six months
to 31 March 2016 (31 March 2015: EUR3,000).
Countries in which PVA is active
As Management pursues a strategy to deliver preventative
healthcare programs to new clinics overseas, a KPI is the number of
countries in which PVA is active. By 31 March 2016, PVA was
delivering services in 4 territories (31 March 2015: 3
territories), namely the United Kingdom, Netherlands, the Republic
of Ireland and Denmark. This KPI is an indicator of how many
territories will be contributing recurring revenue to the Group as
PVA applies its processes to deliver a mature business model in
each territory in the medium term.
Debt
Following repayment of the debt the Company will no longer
monitor this ratio.
Results for the six months ended 31 March 2016
The Group's total continuing revenues increased by 31% to
GBP1.4m for the six months ended 31 March 2016 (GBP1.1m six months
ended 31 March 2015). The operating loss for the six months ended
31 March 2016 was GBP0.86m (31 March 2015: 0.13m). The number of
pets covered by PVA's Pet Care Plan on behalf of third party
practices has increased by 105% to 117,000 as at March 2016 (57,100
as at March 2015). The total cash value of direct debit collections
in the UK increased to GBP8.6m in the six months to 31 March 2016
(31 March 2015: GBP4.8m). In addition the total cash value of Euro
direct debit collections increased to EUR580,000 (31 March 2015:
EUR3,000).
The continuing Group's loss after tax for the six months ended
31 March 2016 was GBP1.1m (six months ended 31 March 2015: a loss
after tax of GBP0.57m).
As previously announced, the Group continues to invest in
overseas markets and strengthening its position in the UK and an
additional GBP0.6m was incurred in these areas. At 31 March 2016
the staff headcount was 40 (31 March 2015: 26).
The Directors received a one-off 50% of salary bonus in
recognition of the completion of the Disposal.
The share-based compensation charge for the period was GBP0.012m
(six months ended 31 March 2015: GBP0.002m).
Following the settlement of the outstanding debt in the Group,
it is anticipated that finance expense will be negligible in the
second half of the financial year.
Dividend and dividend policy
It is, at present, intended that no dividends will be paid by
the Company. The position will be reviewed if future operations
lead to significant levels of distributable profits, taking into
account any earnings, of which there can be no assurance, to be
reinvested in the Group's business.
Financial position
Net assets were GBP2.9m at 31 March 2016 (at 31 March 2015:
GBP0.35m). The consideration received from the Disposal and
repayment of intercompany loans amounting in aggregate to GBP6.5m
has allowed the Company to repay all of its debt and, after
allowing for transaction costs and acceleration of fees relating to
the debt repayment, has increased net assets by GBP4.0m. An amount
of GBP1m has been placed into escrow to cover potential liabilities
under warranty and indemnity provisions in the sale and purchase
agreement. The Directors expect this GBP1m to be released 12 months
after completion (December 2016).
Cash and short-term deposits were GBP1.6m as at 31 March 2016
(at 31 March 2015: GBP1.0m).
Cash flow
Net cash outflow from operating activities for the six months
ended 31 March 2016 of GBP1.3m (six months ended 31 March 2015:
GBP0.1m).
Post-retirement benefits
The PVG Group operates a defined contribution pension scheme and
the pension charge represents the amounts payable by the PVG Group
to the fund and into personal arrangements in respect of the
period.
Events after balance sheet date
There have been no events after the balance sheet date which
require adjustment or disclosure in these interim financial
statements.
Related party transactions
Related party transactions are disclosed in note 9 to the
condensed set of financial statements.
There have been no material changes in the related party
transactions set out in the 2015 Annual Report.
Risk and uncertainties
The principal risks and uncertainties affecting the business
activities of the Group were identified under the heading "Risk
management and principal risks" in the Strategic Report on pages 10
and 11 of the 2015 Annual Report, a copy of which is available on
the Company's website www.premiervetgroup.co.uk.
These comprise:
-- A decline in consumer spending or a change in consumer preference
-- Increased corporate veterinary activity
-- Competition with existing and potential future competitors
-- Reputation
-- Potential complaints and litigation
-- Failure to expand the pet healthcare services or launch new initiatives
-- The viability of the PVA Buying Group as a result of factors outside the Group's control
-- PVA's status as a Direct Debit originator being revoked
-- Attraction and retention of key employees
-- Continuity of operations
-- Effective management of growth and expansion
-- International expansion risk
-- Ability of majority shareholder to exercise substantial influence over the Group's business
In the view of the Board, the key risks and uncertainties for
the remaining six months of the financial year continue to be those
set out in the 2015 Annual Report.
Going concern
As stated in note 2 to the condensed financial statements, the
Directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not
less than 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing the
condensed financial statements.
Post period events
Board and Management
As announced on 26 April 2016, Juliet Thompson was appointed as
a Director and as the independent Non-Executive Chairman of the
Company with effect from 25 April 2016. Juliet succeeded as
Chairman Iain Ross who oversaw the successful reverse takeover of
the Company into Ark Therapeutics early last year. Iain Ross
remains on the Board as a Non-Executive Director.
Juliet Thompson, a chartered accountant, is currently also a
non-executive director of Nexstim, a medical technology company
quoted on Nasdaq in Finland and Sweden, and was Vice President of
Corporate Finance of Precision Ocular, a company focused on retinal
diseases, for which she recently led a successful fundraising.
Juliet has built a strong track record advising healthcare
corporates on strategy and the capital markets. She formerly headed
up the healthcare team at Stifel and was a founder of Code
Securities, a healthcare investment banking boutique, which became
Nomura Code Securities where she was Head of Corporate Finance.
As previously indicated, the Company had been looking to
strengthen its Board with the appointment of an additional
independent Director. Having been able to attract someone of
Juliet's calibre, the Board felt it was appropriate that she joined
the Company as its independent Non-Executive Chairman. She brings
extensive City and corporate experience which will be invaluable as
the Company seeks to grow the business aggressively.
Also on 26 April 2016, the Company announced that Daniel Smith,
the Chief Financial Officer, will be leaving the Company in
September this year to move to another part of the UK. The Board
has commenced a comprehensive recruitment process to identify
Daniel's replacement and a further announcement will be made in due
course.
Revised strategy for Pet Care Plan in the Nordic region
On 26 April 2016, the Company announced that, following a
strategic review of its Nordic business, PVA had decided to
relaunch Pet Care Plan with its own dedicated team in Denmark
during May 2016.
Consequently, PVA has agreed with its partner in the Nordic
region to dissolve arrangements entered into in 2014. Under the
terms of the dissolution agreement both parties are free to pursue
their own strategies with respect to the launch of preventative
healthcare programs in the Nordic region. PVA will continue to
support the existing client base in Denmark.
The revised arrangements now give PVA the freedom to make
available to the full Danish veterinary market the winning formula
for its Pet Care Plan, which has already proved successful in the
UK and other countries. Thereafter, the Company will look towards
expansion into other countries in the Nordic region.
Commencement of controlled expansion of Pet Care Plan in the
US
The Company had been evaluating the US as a target market for
Pet Care Plan for almost two years and felt that the time was now
right for entry. Accordingly, on 5 May 2016 the Company announced
that it had commenced a controlled expansion into the US for Pet
Care Plan with the appointment of two Regional Sales Directors,
based out of Atlanta, Georgia and Charlotte, North Carolina, plus
two launching/training staff, to its US subsidiary, Premier Vet
Alliance LLC.
The new Regional Sales Directors, Craig Fraser and Jennifer
Scarberry, have joined the Company from DVM Resources/Animal
Healthcare International and Antech Diagnostics respectively where
they were Regional Managers. Both executives have significant
experience in veterinary product sales and, following a recently
completed training and induction period, they have already secured
seven new hospital contracts for Pet Care Plan in Georgia,
Mississippi, North Carolina and South Carolina.
The available market for preventative healthcare programs for
pets across the US is estimated at 70 million dogs and 74 million
cats (U.S. Pet Ownership & Demographics Sourcebook 2012). The
largest operator in this segment in the US is reported to have one
million pets on such programs.
Following our first steps in the south east region of the
country, a methodical build-up of the Company's presence is
planned, with the appointment of additional sales and training
personnel to support the product within hospitals.
Outlook
The Company continues to grow rapidly in the preventative
healthcare market. Over the twelve months since 31 March 2015, the
Company's proprietary Pet Care Plan has more than doubled the
number of pets on plan. PVG is continuing to invest in the global
expansion of its Pet Care Plan business with the objective of
achieving significant and sustained growth for the foreseeable
future.
By order of the Board
Dominic Tonner Daniel Smith
Chief Executive Officer Chief Financial Officer
6 May 2016 6 May 2016
Registered office Registered number
New Bond House 04313987
Bond Street
Bristol
BS2 9AG
Condensed consolidated statement of comprehensive income
For the six months ended 31 March 2016 (unaudited)
6 months 6 months
ended ended
31 March 31 March
Note 2016 2015
GBP'000 GBP'000
Continuing operations Total Total
Revenue 1,409 1,074
Cost of sales (36) (17)
Gross Profit 1,373 1,057
Share-based compensation 7 (12) (2)
Other administrative expenses (2,225) (1,184)
Profit/(loss) from operations (864) (129)
Finance expense (204) (441)
Loss before income tax (1,068) (570)
Income tax - -
Loss for the period from
continuing operations (1,068) (570)
Gain on disposal 10 4,091 -
--------------------------------- ----- ----------------------- --------------------------
Profit for the period from
discontinued operations 163 197
--------------------------------- ----- ----------------------- --------------------------
Profit/(loss) and total
comprehensive profit/(loss)
for the period attributable
to equity holders of the
parent company 3,186 (373)
--------------------------------- ----- ----------------------- --------------------------
Loss per share for loss
from continuing operations
attributable to the owners
of the parent during the
period 3
Basic (pence) (7.7) (18.9)
Diluted (pence) (7.7) (18.9)
Profit/(loss) per share
for profit/(loss) attributable
to the owners of the parent
during the period 3
Basic (pence) 22.8 (12.3)
Diluted (pence) 20.3 (12.3)
Condensed consolidated statement of financial position
As at 31 March 2016 (unaudited)
As at As at As at
31 March 31 March 30 September
Note 2016 2015 2015
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant
and equipment 261 586 325
Goodwill 5 - 1,454 -
Other tangible
assets 3 42 5
Total non-current
assets 264 2,082 330
Current assets
Inventories - 107 -
Trade and other
receivables 1,679 1,270 578
Cash and cash
equivalents 1,566 975 421
---------- ------------------ ---------------------------
3,245 2,352 999
Assets in disposal
groups classified
as held for sale - - 2,982
---------- ------------------ ---------------------------
Total current
assets 3,245 2,352 3,981
Total assets 3,509 4,434 4,311
========== ================== ===========================
Equity attributable to equity holders
of the Company
Called up share
capital 6 3,279 3,279 3,279
Share premium 118,947 118,947 118,947
Share based payments
reserve 20 - 20
Reverse acquisition
reserves (117,159) (117,119) (117,159)
Retained earnings (2,198) (4,760) (5,384)
---------- ------------------ ---------------------------
Total equity 2,889 347 (297)
Current liabilities
Trade and other
payables 610 1,453 896
Loans and borrowings - 50 291
---------- ------------------ ---------------------------
610 1,503 1,187
Liabilities in
disposal group
classified as
held for sale - 832
---------- ------------------ ---------------------------
Total current
liabilities 610 1,503 2,019
Non-current liabilities
Loans and borrowings - 2,574 2,579
Deferred tax provision 10 10 10
---------- ------------------ ---------------------------
Total non-current
liabilities 10 2,584 2,589
Total liabilities 620 4,087 4,608
Total equity and
liabilities 3,509 4,434 4,311
========== ================== ===========================
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2016 (unaudited)
Share
Called based Reverse
up share Share payments acquisition Retained
Note capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as
at 01 October
2015 3,279 118,947 20 (117,159) (5,384) (297)
Profit and
total
comprehensive
income for
the period: 3,186 3,186
Balance as
at 31 March
2016 3,279 118,947 20 (117,159) (2,198) 2,889
Balance as
at 01 October
2014 2,092 118,937 - (117,298) (4,387) (656)
------------------- ----- -------------- -------------- ---------- ---------------- -------------- ------------
Arising on
reverse
acquisition 3 179 - 179
Loss and total
comprehensive
income for
the period: - - (373) (373)
Transactions
with owners
Shares issued 7 1,187 10 - - 1,197
Balance as
at 31 March
2015 3,279 118,947 - (117,119) (4,760) 347
Condensed consolidated statement of cash flows
For the six months ended 31 March 2016 (unaudited)
6 months 6 months
ended ended
31 March 31 March
2016 2015
GBP '000 GBP '000
Cash flows from:
Operating activities
Loss before income tax (1,068) (570)
Finance expense 204 441
Depreciation of property, plant
and equipment 37 40
Amortisation of intangible 1
assets -
(Increase)/decrease in trade
and other receivables (101) (83)
(Increase)/decrease in inventories - -
Increase/(decrease) in trade
and other payables (286) 67
---------------- -------------------
Cash (used in)/generated from
continuing operations (1,213) (105)
Discontinued operations (125) (5)
---------------- -------------------
Cash (used in)/generated from
operations (1,338) (110)
Income taxes - -
---------------- -------------------
Net cash (outflow)/inflow from
operating activities (1,338) (110)
Investing activities
Purchase of Property, Plant
and Equipment (22) (26)
Disposal of Property, Plant 49
and Equipment -
Disposal of subsidiaries 5,500 -
Purchase of business combinations
(net of cash acquired) - 17
---------------- -------------------
Net cash used in investing
activities 5,527 (9)
Financing activities
Issue of new shares (net of
costs) - 1,197
Repayment of loan notes (2,574) -
Repayment of loan redemption (400)
fee -
Repayment of bank loans - (91)
Payment of finance leases - (29)
Interest paid (70) (441)
---------------- -------------------
Net cash generated from financing
activities (3,044) 636
Net increase in cash and cash
equivalents 1,145 517
Cash and cash equivalents at
beginning of period 421 458
Cash and cash equivalents at
end of period 1,566 975
================ ===================
Shown as:
Cash and cash equivalents 1,566 975
1,566 975
================ ===================
Notes to the financial information
1 General information
This interim financial information was authorised for issue on 6
May 2016. The information for the period ended 31 March 2016 does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. They have been prepared in accordance with IAS
34 Interim Financial Reporting. They do not include all of the
information required in annual financial statements in accordance
with IFRS.
2 Significant accounting policies
The financial statements have been prepared in accordance with
the recognition and measurement principles of International
Financial Reporting Standards (IFRS) as adopted by the European
Union.
The nancial statements have been prepared on the historical cost
basis. The principal accounting policies adopted are set out
below.
Basis of preparation
The half-year condensed consolidated financial statements for
the six months ended 31 March 2016 have been prepared in accordance
with the Disclosure and Transparency Rules (DTR) of the Financial
Services Authority and with IAS 34 'Interim Financial Reporting'.
The half-year condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's annual financial statements as at 30 September 2015, which
have been prepared in accordance with IFRS as adopted by the
European Union.
This half-year condensed consolidated financial information does
not comprise statutory accounts within the meaning of Section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
September 2015 were approved by the Board of Directors on 29
January 2016. These accounts, which contained an unqualified audit
report under Section 495 of the Companies Act 2006 and which did
not make any statements under Section 498 of the Companies Act
2006, have been delivered to the Registrar of Companies in
accordance with Section 441 of the Companies Act 2006.
There have been no significant changes to estimates of amounts
reported in prior financial years.
The accounting policies adopted in the preparation of the
half-year condensed consolidated financial statements are
consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 30 September
2015.
Going concern
As announced on 21 December 2015, following a strategic review,
the Company completed the sale of its remaining veterinary
practices Zetland Limited, Thanet One Limited and The Veterinary
Clinic (Bearwood) Limited ("the Veterinary Business") to
Independent Vetcare Limited for cash consideration of GBP4.1m (the
"Disposal"). In addition, intercompany loan balances of GBP2.4m due
from the Veterinary Business to other Group companies were repaid
on completion. The effect on the Group balance sheet was presented
in the pro-forma summary balance sheet contained on page 7 of the
Annual Report and Accounts for the year ended 30 September 2015. As
explained previously, an adjustment to reflect the sale on a zero
net current asset basis was to be agreed. This was completed in
April 2016 and, as a result, the consideration increased by
GBP40,000.
The Directors consider that following the disposal of the
veterinary businesses, the cash held within the Group enables them
to meet all current liabilities as they fall due. After
consideration of market conditions, the Group's financial position,
its profile of cash generation and after making enquiries, the
Directors have a reasonable expectation, as indicated by the
financial forecasts of the Group (which take into account the risks
facing the Group), that at the time of approving the financial
statements both the Company and the Group have adequate resources
available to continue operating in the foreseeable future. For this
reason, the going concern basis continues to be adopted in
preparing the financial statements.
Basis of consolidation
The condensed consolidated financial statements consolidate
those of the parent company and all of its subsidiaries as of 31
March 2016.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Amounts reported in the
financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies
adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
Revenue
Revenue for the Group is measured at the fair value of the
consideration received or receivable. The Group recognises revenue
for services provided when the amount of revenue can be reliably
measured and it is probable that future economic benefits will flow
to the entity. All intercompany revenues are eliminated on
consolidation.
The Group has the following two income streams:
-- Pet Care Plan: Fees received for the collection and
management of direct debits and related services are recognised on
a receipts basis. A flat fee is received for every direct debit
collected.
-- PVA Buying Group: Management fees are earned when a member
practice purchases goods and becomes entitled to negotiated rebates
and discounts. These are recognised once there is a legal
entitlement to receive. In general, this is during the month in
which the PVA Buying Group members' spend occurs.
Expenditure
Expenditure is recognised in respect of goods and services
received when supplied in accordance with contractual terms.
Provision is made when an obligation exists for a future liability
relating to a past event and where the amount of the obligation can
be reliably estimated.
Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the consolidated
statement of financial position differs from its tax base, except
for differences arising on:
-- the initial recognition of goodwill;
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
statement of financial position date and are expected to apply when
the deferred tax liabilities or assets are settled or recovered.
Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable Group company; or
-- different company entities which intend either to settle
current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax assets
and liabilities are expected to be settled or recovered.
Goodwill
Goodwill represents the excess of the fair value of
consideration for a business combination over the total acquisition
date fair values of the identifiable assets, liabilities and
contingent liabilities acquired. Goodwill is capitalised as an
intangible asset and is tested for impairment annually or when an
indication of impairment exists. Any impairment in carrying value
(calculated by reference to the difference between carrying value
and recoverable amount) is charged to the consolidated statement of
comprehensive income within "Administrative expenses".
Externally acquired intangible assets
Externally acquired intangible assets acquired as part of a
business combination are initially recognised at fair value and
subsequently amortised on a straight line basis over their useful
economic lives. The significant intangibles recognised by the Group
and their useful economic lives acquired in a business combination
are as follows:
Customer lists - between 3 - 6 years straight line
The amortisation expense is recognised within 'Administrative
expenses' in the consolidated statement of comprehensive
income.
Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of the cost and net realisable value. Costs are
assigned using the 'first in - first out' cost formula. Cost
comprises all costs of purchase, costs of conversion and other
costs incurred in bringing the inventories to their present
location and condition.
Employee Benefit Trust
The Company operates an employee benefit trust (the Ark
Therapeutics Family Benefit Trust ("FBT")) as part of its incentive
plans for employees. All assets and liabilities within the Trust
are recorded in the statement of financial position as assets and
liabilities of Premier Veterinary Group plc (formerly Ark
Therapeutics Group plc) until such time as the assets are awarded
to the beneficiaries. All income and expenditure of the Trust is
similarly brought into the results of the Company.
Financial assets
The Group classifies its financial assets into the categories,
discussed below, due to the purpose for which the asset was
acquired.
Loans and receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of services to customers
(eg trade receivables), but also incorporate other types of
contractual monetary asset. They are initially recognised at fair
value plus transactions costs that are directly attributable to
their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less
provision for impairment.
The Group's loans and receivables comprise of trade and other
receivables included within the consolidated statement of financial
position.
Cash and cash equivalents include cash held at bank and bank
deposits available on demand.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For trade receivables, which are reported net, such
provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the income
statement. On confirmation that the trade receivables will not be
collectable, the gross carrying value of the asset is written off
against the associated provision.
Financial liabilities
The Group classifies its financial liabilities as other
financial liabilities which include the following:
-- Bank overdrafts which are initially recognised at fair value
and subsequently carried at amortised cost using the effective
interest method.
-- Bank loans which are initially recognised at fair value net
any of transaction costs directly attributable to the issue of the
instrument. Such interest bearing liabilities are subsequently
measured at amortised cost ensuring the interest element of the
borrowing is expensed over the repayment period at a constant
rate.
-- Loans which are initially recognised at fair value net any of
transaction costs directly attributable to the issue of the
instrument. Where the terms of a loan facility are re-arranged,
associated fees are expensed up front when the re-arrangement is a
substantial modification. Such interest bearing liabilities are
subsequently measured at amortised cost ensuring the interest
element of the borrowing is expensed over the repayment period at a
constant rate.
-- Trade payables, other borrowings and other short-term
monetary liabilities, which are initially recognised at fair value
and subsequently carried at amortised cost using the effective
interest method.
-- Finance charges, including premiums payable on settlement or
redemption, are accounted for on an accruals basis and are
calculated using the effective interest method and are added to the
carrying amount of the liability to the extent that they are not
settled in the period in which they arise.
-- Where a financial instrument contains an embedded derivative
within a non-derivative host contract and the embedded derivative
is not closely related to the host contract the derivative
component is accounted for separately as a fair value through
profit and loss financial instrument. The fair value of the
instrument is recognised on the statement of financial position
with gains and losses through the income statement. No hedge
accounting is applied.
Fair value hierarchy
Certain of the disclosures about fair value of nancial
instruments include the classification of fair values within a
three-level hierarchy. The three levels are defined based on the
observably of signi cant inputs into the measurements as
follows:
-- Level 1: Quoted prices, in active markets
-- Level 2: Level 1 quoted prices are not available but fair
value is based on observable market data
-- Level 3: Inputs that are not based on observable market data.
Share capital
Financial instruments issued by the Group are treated as equity
only to the extent that they do not meet the definition of a
financial liability. The Group's ordinary and deferred shares are
classified as equity instruments.
The share premium reserve represents the surplus of
consideration paid for shares above their nominal value.
The reverse acquisition reserve represents the historic trading
losses of Ark Therapeutics Group plc prior to the reverse
acquisition in February 2015.
Share-based payments
The cost of equity-se-ttled transactions is measured by
reference to the fair value at the date at which they are granted
and is recognised as an expense over the vesting period which ends
on the date on which the relevant party become fully entitled to
the award. Fair value is determined by using the Black-Scholes
pricing model. No account is taken of any vesting conditions other
than conditions linked to the price of shares of the Company in
measuring fair value.
At each period end date before vesting, the cumulative expense
is calculated; representing the extent to which the vesting period
has expired and Management's best estimate of the achievement or
otherwise of non-market conditions and of the number of equity
instruments that will ultimately vest. The movement in cumulative
expenses since the previous period end date is recognised in the
income statement with a corresponding entry in the statement of
financial position.
Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team (excluding Non-Executive Directors) including the
Chief Executive Officer.
Management review revenue and gross profit of three continuing
separate operating segments against budget. The remaining costs,
including administrative costs and finance expenses, are reviewed
in total. Assets and liabilities of the Group are not allocated to
an operating segment.
Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held
for sale when:
-- they are available for immediate sale;
-- management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable
price in relation to its fair value; and
-- a sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for
sale are measured at the lower of:
-- their carrying amount immediately prior to being classified
as held for sale in accordance with the group's accounting policy;
and
-- fair value less costs of disposal.
Following their classification as held for sale, non-current
assets (including those in a disposal group) are not
depreciated.
The results of operations disposed during the year are included
in the consolidated statement of comprehensive income up to the
date of disposal.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either
has been disposed of, or is classified as held for sale. Profit or
loss from discontinued operations comprises the post-tax profit or
loss of discontinued operations and the post-tax gain or loss
resulting from the measurement and disposal of assets classified as
held for sale
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including the expectations
of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Property, plant, equipment and software development
Property, plant equipment and software development is
depreciated over the useful lives of the assets. Useful lives are
based on the management's estimates of the period that the assets
will generate revenue, which are reviewed annually for continued
appropriateness. The carrying values are tested for impairment when
there is an indication that the value of the assets might be
impaired. When carrying out impairment tests these would be based
upon future cash flow forecasts and these forecasts would be based
upon management judgement. Future events could cause the
assumptions to change, therefore this could have an adverse effect
on the future results of the Group.
VAT debtor
Following a change in accounting policy in December 2013 a VAT
debtor arose in relation to the buying group business. This balance
remains outstanding from HMRC, however, management have concluded
that the full amount of GBP0.13m is recoverable.
3 Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. Under reverse
accounting, the weighted average number of shares in issue during
the period to 31 March 2015 reflects PVG 2007 Limited's weighted
average pre-combination ordinary shares multiplied by the exchange
ratio established in the acquisition, and the weighted average
total actual shares of the legal parent in issue after the date of
acquisition. For the comparative the weighted average number of
shares in issue during the period is PVG 2007 Limited's weighted
average pre-combination ordinary shares multiplied by the exchange
ratio established in the acquisition.
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is
based on the following data:
6 months 6 months
ended 31 ended 31
March 2016 March 2015
GBP'000 GBP'000
Loss per share for loss from
continuing operations attributable
to the owners of the parent
during the period
Loss for the period from continuing
operations (1,068) (570)
--------------------------------------- ----------------- ----------------
Profit/(loss) per share attributable
to the owners of the parent
during the period
Profit/(loss) and total comprehensive
loss for the period attributable
to equity holders of the parent
company 3,186 (373)
31 March 31 March
2016 2015
Number of shares
Weighted average number of
ordinary shares of the purposes
of basic earnings per share 13,951,773 3,022,885
Effect of dilutive potential
ordinary shares from share
options 1,674,212 1,674,212
--------------------------------------- ----------------- ----------------
Weighted average number of
ordinary shares for the purposes
of diluted earnings per share 15,625,985 4,697,097
--------------------------------------- ----------------- ----------------
4 Segmental reporting
As defined under International Financial Reporting Standard 8
(IFRS 8) management have defined that the Group's Management
currently identifies the Group's three divisions as operating
segments (three continuing and one discontinued) as this is the
basis on which results are considered by the Chief Executive
Officer. Administrative expenses (including amortisation,
impairment and depreciation), finance costs and income tax expenses
are monitored centrally and are not allocated to operating
segments. Further to this, assets and liabilities are not allocated
to operating segments as they are shared by the Group. These
operating segments are monitored and strategic decisions are made
on the basis of adjusted segment operating results. The three
divisions are categorised as follows:
Veterinary Business: Day to day running of veterinary practices
up to the Disposal in December 2015
Pet Care Plan: Fees received for the collection and management
of direct debits and related services are recognised on a receipts
basis.. A flat fee is received for every direct debit collected.
This division is divided into UK and overseas.
PVA Buying Group: Management fees are earned when a member
practices purchases goods and becomes entitled to negotiated
rebates and discounts. These are recognised once there is a legal
entitlement to receive. In general, this is during the month in
which the PVA Buying Group members' spend occurs.
All revenue is derived from external customers.
Veterinary PVA Pet Pet Total
Business Buying Care Care
Group Plan Plan
overseas
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended
31 March 2016
Revenue 1,251 545 752 112 2,660
Discontinued operations (1,251) - - - (1,251)
----------- -------- -------- ---------- --------
Group's revenue
per consolidated
statement of comprehensive
income - 545 752 112 1,409
=========== ======== ======== ========== ========
Gross profit 718 545 731 97 2,091
Discontinued operations (718) - - - (718)
----------- -------- -------- ---------- --------
Group's gross
profit/(loss)
per consolidated
statement of comprehensive
income - 545 731 97 1,373
Administrative
expenses (2,237)
Finance expense (204)
Loss before income
tax and discontinued
operations (1,068)
========
6 months ended
31 March 2015
Revenue 2,807 598 444 32 3,881
Discontinued operations (2,807) (2,807)
----------- -------- -------- ---------- --------
Group's revenue
per consolidated
statement of comprehensive
income - 598 444 32 1,074
=========== ======== ======== ========== ========
Gross profit 1,834 598 428 31 2,891
Discontinued operations (1,834) - - - (1,834)
----------- -------- -------- ---------- --------
Group's gross
profit/(loss)
per consolidated
statement of comprehensive
income - 598 428 31 1,057
Administrative
expenses (1,186)
Finance expense (441)
Loss before income
tax and discontinued
operations (570)
========
5 Goodwill
Movements in the carrying amount of goodwill are as follows
6 months 6 months 12 months
to 31
March to 31 March to 30 September
2016 2015 2015
GBP'000 GBP'000 GBP'000
Gross carrying amount
Balance, beginning
of the period - 1,650 1,650
Reclassified to non-current
assets held for sales - - (1,650)
Acquired through business -
combination - -
----------------------------- ---------- ------------ ----------------
Balance, end of the -
period 1,650 -
Accumulated impairment
Balance, beginning
of the period - 196 196
Reclassified to non-current
assets held for sales - - (196)
Impairment loss recognised - - -
----------------------------- ---------- ------------ ----------------
Balance, end of the -
period 196 -
Carrying amount at
the end of the period - 1,454 -
All goodwill relates to the Veterinary Business operating
segment; this was entirely disposed of on the 18 December 2015 for
a value in excess of the carrying value.
6 Share capital
On the 11 December 2014 the Company's share capital was
reorganised by a special resolution to create ordinary shares with
a nominal value of 10 pence each and a deferred share of 90
pence.
On the 27 February 2015 11,859,007 new shares were issued for
cash corresponding to 85.0% of total shares in issue. Each ordinary
share has the same right to receive dividends and the repayment of
capital and represents one vote at the shareholder meetings of
Premier Veterinary Group plc.
Deferred
Ordinary shares shares Total
No GBP'000 No GBP'000 GBP'000
Shares at 01 October
2014 (1 pence) 209,276,676 2,092 - - 2,092
Reorganisation
of share capital (207,183,910) (1,883) 2,092,766 1,883 -
2,092,766 209 2,092,766 1,883 2,092
Issued 27 February
2015 (10 pence) 11,859,007 1,187 - - 1,187
Shares 31 March
2015 (Ordinary
10 pence, Deferred
90 pence) 13,951,773 1,396 2,092,766 1,883 3,279
--------------- -------- ------------ -------- --------
Shares 30 September
2015 (Ordinary
10 pence, Deferred
90 pence) 13,951,773 1,396 2,092,766 1,883 3,279
--------------- -------- ------------ -------- --------
Shares 31 March
2016 (Ordinary
10 pence, Deferred
90 pence) 13,951,773 1,396 2,092,766 1,883 3,279
=============== ======== ============ ======== ========
7 Share-based payments - equity-settled share option schemes, LTIPs
Options over ordinary shares were granted on 27 February 2015
under the 2014 Ark Therapeutics Group plc Enterprise Management
Incentive Share Option Plan.
Grants under share options exercisable one year from the date of
grant.
Options under the share option scheme were granted at the
subscription price of 10.1 pence.
All existing options which had been granted prior to the start
of the period were waived on 26 January 2015.
Options Outstanding
6 months 6 months 12 months
to to to
31 March 31 March 30 September
2016 2015 2015
No No No
At beginning
of period 1,674,212 2,099,999 2,099,999
---------------------- ------------------------- ---------------------------------- --------------
Reduction as
a result of
share consolidation
and subdivision - (1,980,000) (1,980,000)
---------------------- ------------------------- ---------------------------------- --------------
Granted during
period - 1,674,212 1,674,212
Expired during
the period - (119,999) (119,999)
------------------------- ---------------------------------- --------------
At end of period 1,674,212 1,674,212 1,674,212
Options exercisable
Number Weighted Latest exercise
of options average date
exercise
price
At 31/03/2016 1,674,212 10.1p 27/02/2025
--------------- ---------------------- ---------- ----------------
At 31/03/2015 1,674,212 10.1p 27/02/2025
--------------- ---------------------- ---------- ----------------
At 30/09/2015 1,674,212 10.1p 27/02/2025
--------------- ---------------------- ---------- ----------------
The fair value of share options expense recognised in the period
is determined using the Black-Scholes model which takes into
account the terms and conditions upon which the shares were
awarded. The Company recognised a charge GBP12,000 (2015: GBP2,400)
in relation to share based payment.
8 Fair value measurement of financial instruments
Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000
------------------------ --------------------------- -------------------------- -------------------------
Financial liabilities:
loans
------------------------ --------------------------- -------------------------- -------------------------
31 March 2016 - - -
31 March 2015 - - -
30 September
2015 - 2,605 -
Financial liabilities:
loan repayment
option
30 September
2015 - - 265
------------------------ --------------------------- -------------------------- -------------------------
Charge in the
period - - 135
Repaid in the
period - - (400)
------------------------ --------------------------- -------------------------- -------------------------
31 March 2016 - - -
30 September
2014 - - -
------------------------ --------------------------- -------------------------- -------------------------
Charge in the
period - - -
Repaid in the
period - - -
------------------------ --------------------------- -------------------------- -------------------------
31 March 2015 - - -
The fair values of the loan and loan note are estimated using a
discounted cash flow approach which discounts the contractual cash
flows using discount rates derived from contracted interest rates.
The interest rate used for this calculation was 12%.
The loan repayment option is considered to be an embedded
derivative and is held at fair value. The host contract is the
Revised BFSL Loan Arrangement.
9 Related party transactions
The Group provided loans to the Ark Therapeutics Group plc
Family Benefit Trust ("FBT") for the purchase of shares in the
Company. No interest was charged on these loans. Details of
interest income for the year and outstanding balances at year end
are shown below:
Amounts due from
subsidiaries
(before doubtful
debts provision)
2016 2015
GBP'000 GBP'000
FBT 982 1,041
---------- --------- ---------
As at 31 March 2016, by virtue of his shareholding Rajan Uppal
is considered to be the controlling party.
Bybrook Financial Solutions Limited ("BFSL") and Bybrook 2014
Limited ("BY2014") are considered to be a related party due to
being under common control.
PVG 2007 Limited was a tenant in a property owned by BY2014.
BFSL have provided loan note finance to the Group and received
interest payments as follows:
6 months 6 months
ended ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Amounts due to BFSL - 2,574
Interest and arrangement
fee charge by BFSL 204 441
Rent charged by BY2014 - 11
-------------------------- ------------------------ -----------------------
204 452
10 Disposals
12 months
to 30 September 2015
GBP'000
Property, plant and equipment 598
Goodwill 1,454
Other intangibles 31
Inventories 112
Deferred tax 256
Trade and other receivables 290
Cash and cash equivalents 241
Assets held for sale 2,982
---------------------
Trade and other payables 829
Loans and borrowings 3
Liabilities held for sale 832
---------------------
As announced on 21 December 2015, following a strategic review,
the Company completed the sale of its remaining veterinary
practices Zetland Limited, Thanet One Limited and The Veterinary
Clinic (Bearwood) Limited ("the Veterinary Business") to
Independent Vetcare Limited for cash consideration of GBP4.1m (the
"Disposal"). In addition, intercompany loan balances of GBP2.4m due
from the Veterinary Business to other PVG group companies were
repaid on completion. GBP1m of the consideration is held in escrow
and is expected to be released 12 months after completion in
December 2016. An adjustment to reflect the sale on a zero net
current asset basis was completed in April 2016 and, as a result,
the consideration increased by GBP40,000.
On Disposal
GBP'000
Consideration 6,540
Net assets (2,449)
Gain on disposal 4,091
On receipt of the consideration the Company repaid its
outstanding loan of GBP2.57m due to Bybrook Financial Solutions
Limited ("BFSL"). A redemption fee of GBP0.4m was paid to BFSL at
the time of settlement as required under the revised loan
arrangements outlined in Note 8.
INDEPENT REVIEW REPORT TO PREMIER VETERINARY GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report of
Premier Veterinary Group plc for the six months ended 31 March 2016
which comprises the Condensed consolidated statement of
comprehensive income, the Condensed consolidated statement of
financial position, Condensed consolidated statement of changes in
equity, Condensed consolidated statement of cash flows and the
related notes. We have read the other information contained in the
half-yearly financial report which comprises only the interim
management report and the responsibility statement and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company, in accordance with
International Standard on Review Engagements (UK and Ireland) 2410,
'Review of Interim Financial Information performed by the
Independent Auditor of the Entity' issued by the Auditing Practices
Board. Our review work has been undertaken so that we might state
to the Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed
set of financial statements in the half-yearly financial report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board 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 Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
March 2016 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Grant Thornton UK LLP
Chartered Accountants
BRISTOL
6 May 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVDELIRIIR
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