TIDMVLE
RNS Number : 4754Z
Volvere PLC
27 May 2016
Press Release 27 May 2016
Volvere plc
("Volvere" or the "Group")
Preliminary results for the year ended 31 December 2015
Volvere plc (AIM: VLE), the growth and turnaround investment
company, announces its preliminary results for the year ended 31
December 2015.
Highlights
As at
As at 31 As at 31 30 June
2015
GBP million except where December December (unaudited)
stated 2015 2014
Consolidated net assets
per share GBP5.69 GBP4.31 GBP4.32
(excluding non-controlling
interests)(1)
Group net assets 24.3 19.0 18.9
Cash and marketable securities 16.3 13.1 11.7
Year ended Six months
ended
31 December 31 December 30 June
2015 2014 2015
(re-presented) (re-presented)
(2) (2)
Group revenue from continuing
businesses 27.9 12.4 10.5
Group profit before tax
from continuing operations 1.34 1.20 0.46
Group profit before tax
from continuing operations
before one-off exceptional
credit(3) 1.34 0.35 0.46
Note
1 Based on the net assets attributable to owners of the parent
company and the respective period end shares in issue of 4,085,958,
4,145,958 and 4,085,958.
2 The results for the year ended 31 December 2014 and the six
months ended 30 June 2015 have been re-presented to reflect the
results of discontinued operations.
3 In 2014 there was a one-off exceptional credit in Shire Foods
amounting to GBP0.85 million.
-- Shire Foods delivered record performance with profit before
tax and intra-group management and interest charges of GBP1.59
million on revenue of GBP15.48 million.
-- Impetus Automotive, acquired in March 2015, achieved revenue
and profit before tax and intra-group management and interest
charges of GBP12.1 million and GBP0.58 million respectively.
-- Group disposed of its 76% share in JMP Consultants in
December 2015 for GBP6.48 million (acquired in May 2013 for GBP0.42
million).
-- Balance sheet continues to remain strong with high liquidity.
For further information:
Volvere plc
Jonathan Lander, CEO Tel: +44 (0) 20 7634 9707
www.volvere.co.uk
N+1 Singer
Aubrey Powell/Liz Yong Tel: + 44 (0) 20 7496 3000
Chairman's statement
I am pleased to report on the results for the year ended 31
December 2015.
In 2015 we saw a number of changes in the Group, notably the
acquisition in March of Impetus Automotive and the disposal in
December of JMP Consultants. Both Impetus and JMP, along with Shire
Foods, performed well in the period.
The sale of JMP for well in excess of book value significantly
boosted our net assets per share and added 1% per annum to the
annual growth rate that we have achieved to date. At the year-end,
our net assets per share had risen to GBP5.69 from GBP4.31,
increasing the compound growth rate from 14% to 15% per annum since
the company's inception in 2002.
We are looking forward to continued progress in 2016.
David Buchler
Chairman
26 May 2016
*Net assets attributable to owners of the parent company divided
by total number of ordinary shares outstanding at the reporting
date (less those held in treasury), see note 20
Chief Executive's statement
Introduction
2015 was an excellent year for the Group with good underlying
profits generated by our ongoing businesses and a successful
disposal.
Our transport planning and engineering consultancy, JMP
Consultants Limited, was sold in December for total cash
consideration of GBP8.5 million (of which the Group's share was
GBP6.48 million before related costs). We are delighted to have
restored JMP to growth and secured the future for the company and
staff as part of a larger group. The sale also achieved an
excellent financial outcome for our shareholders.
We were also very pleased to complete the acquisition in March
of Impetus Automotive Limited which we believe is an excellent
addition to the Group.
Principal activities
The Company is a holding company that identifies and invests in
undervalued and/or distressed businesses and securities as well as
businesses that are complementary to existing Group companies. The
Company provides management services to those businesses.
The trading subsidiaries' activities during the year were food
manufacturing, security solutions and automotive consulting, and
each of these is reported as a separate segment. The transport
planning & engineering segment activities ceased during the
year following the disposal of JMP.
Operating review
The financial performance of each segment is summarised below
and in the financial review and further detailed in note 5 to this
announcement.
Food manufacturing
Shire Foods Limited ("Shire"), in which the Group has an 80%
stake, was acquired in 2011 and manufactures frozen pies, pasties
and other pastry products for retailers and food service customers.
This year was Shire's fourth full year of trading within the Group.
Its performance was exceptionally good, producing the highest
underlying yearly profit of any company that we have owned to
date.
Shire's revenue for the year increased to GBP15.48 million
(2014: GBP12.13 million) and it achieved a profit before tax and
intra-group management and interest charges of GBP1.59 million
(2014: GBP1.65 million). Underlying profits improved significantly
as 2014's result was flattered by an exceptional, non-recurring,
credit of GBP0.85 million relating to the conclusion of the company
voluntary arrangement entered into in 2012.
Shire has continued to develop the relationships it has within
the UK retail market and has seen growth arise from both wider
ranges and from key customers' market share growth. Although the
business is performing well, since the end of the year, one
customer (whose volumes have been on a declining trend in recent
years) has brought some of its manufacturing in-house, which will
result in lower revenue for that customer and is likely to reduce
profitability as a whole for 2016. This reduction was expected by
us for some time and we have been and are actively seeking
additional opportunities to utilise our available capacity and are
positive about being able to do so.
Further information about Shire can be found at
www.shirefoods.com.
Automotive consulting
On 25 March 2015, we announced the acquisition of Impetus
Automotive Limited ("Impetus"). Impetus's principal activity is the
provision of consulting services to the automotive sector,
including vehicle manufacturers, dealerships and national sales
companies. The company, which has UK offices in Warwick and
Cranfield, employs approximately 200 people serving clients in the
UK and a number of other international markets. Further information
on Impetus's activities can be found at
www.impetusautomotive.com.
The Group paid a total, including costs, of GBP1.25 million for
Impetus and related intellectual property assets. During the period
from acquisition to the end of the year (just over nine months)
Impetus had revenue of GBP12.1m and profit before tax and
intra-group management and interest charges of GBP0.58 million.
We have spent time with both customers and staff to stabilise
the business and prepare it for growth. We are part way through a
programme to decentralise decision-making and the winning of work,
improve our core back-office systems and processes whilst ensuring
that the success of our client programmes remain the absolute focus
of everyone at all levels in the business. Geographically, we are
now operating in the UK, Australia, China, Japan and a number of
European countries for a range of different clients.
The automotive sector undoubtedly faces many challenges, but
there remains the need for manufacturers and their distribution
networks to develop sustainable profit from long-term relationships
with customers, whether-they are trade or end-user. The improvement
of vehicle parts and accessories sales and distribution,
after-sales service, and vehicle sales and profit margins, are all
areas where Impetus's people have wide knowledge and expertise. As
a result, we are optimistic about Impetus's prospects and look
forward to its contribution to the Group.
Security solutions
Sira Defence & Security Limited ("Sira"), the Group's
digital CCTV viewing software business, continued its progress with
revenue increasing to GBP0.31 million (2014: GBP0.25 million) and
achieving a profit of GBP0.12 million (2014: GBP0.08 million).
Sira remains focused on being the universal interface for
accessing multiple format CCTV footage in the law enforcement
sector.
Further information about Sira can be found at
www.siraview.com.
Transport planning & engineering - discontinued
The Group sold JMP Consultants Limited ("JMP"), its transport
planning & engineering business, in December 2015. JMP is a
consultancy that supports the transport planning aspects of
property and land development, as well as providing a range of
design, engineering and travel behaviour services. The Group owned
approximately 76% of JMP.
JMP's turnover grew from GBP11.76 million in 2014 (full year) to
GBP12.82 million for the 11 1/2 month period to sale, and generated
profits before tax and intra-group management and interest charges
of GBP1.1 million in the period to disposal compared to GBP0.45
million in the previous full year.
The Group's share of the disposal proceeds of GBP8.5 million
amounted to GBP6.48 million. We were pleased with the outcome given
that JMP had been acquired for GBP0.42m in 2013, had already repaid
all working capital loans provided by the Group, and paid us a
dividend of GBP0.45 million as well.
Future strategy
The Group's success to date reflects our consistent approach to
value creation by sourcing businesses where we believe we can make
operational and financial improvements. We are optimistic that our
approach will give continued positive returns to shareholders.
Jonathan Lander
Chief Executive
26 May 2016
Financial review
Financial performance
Detailed information about the Group's segments is set out in
note 5 to the preliminary announcement which should be read in
conjunction with this financial review and the Chairman's and Chief
Executive's statements.
Overview
In 2015 our Group revenue including the discontinued operations
of JMP Consultants Limited ("JMP"), reached a record level of more
than GBP40 million, with peak staff numbers in excess of 500
people. Total revenue from continuing operations increased from
GBP12.4 million to GBP27.9 million, largely due to the acquisition
of Impetus Automotive Limited ("Impetus"), but also reflecting
strong growth in Shire Foods Limited ("Shire").
The total profit for the year was GBP6.68 million (2014: GBP1.47
million), stated after the profit arising (GBP5.67 million) on the
sale of JMP. Profit before tax from continuing operations rose from
GBP1.2m in 2014 to GBP1.34m despite 2014's figures being flattered
by an exceptional credit in Shire of GBP0.85 million.
Continuing businesses
The trading performance of each of our businesses is outlined in
the Chief Executive's statement and set out further in note 5.
Food manufacturing
This segment reflects the trading of Shire Foods, owned since
July 2011.
Shire's revenue for the year increased by 28% to GBP15.48
million (2014: GBP12.13 million). Profit before tax and intra-group
management and interest charges was GBP1.59 million (2014: GBP1.65
million). The 2014 result included an exceptional credit of GBP0.85
million relating to the conclusion of the company voluntary
arrangement entered into in 2012.
The 5-year financial performance of Shire is summarised in the
table below:
Year ended 31 Year ended 31 Year ended 31 Year ended 31 29 July - 31
December December December December December
2015 2014 2013 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 15,476 12,134 8,531 6,166 3,322
Profit/(loss)
before tax,
intra-group
management and
interest charges 1,588 1,651 117 (441) (668)
Exceptional - (852) - - -
credit
Underlying
profit/(loss)
before tax,
intra-group
management and
interest charges 1,588 799 117 (441) (668)
Automotive consulting
This segment reflects the trading of Impetus, which was acquired
in March 2015. For the 9 month period to 31 December Impetus's
revenue was GBP12.1m and profit before tax and intra-group
management and interest charges was GBP0.58 million.
The overall purchase consideration for Impetus and related
intellectual property assets was approximately GBP1.25 million, of
which GBP1.08 million was to repay bank debt at acquisition. The
internal funding of this was principally by way of loan.
Additionally, the Group supported Impetus with working capital
loans throughout the period. During the period Impetus was charged
interest by the Group on outstanding loans amounting to GBP0.1
million and the Group received management charges of GBP0.2
million.
The combination of trading profits and the working capital cycle
following the year end has meant that the outstanding loan balance
at the date of this report is GBP1.1 million. At the end of the
period, Impetus had net assets before deducting Group loans (and
excluding goodwill arising on consolidation) of GBP2.1 million.
Discontinued operations - Transport planning &
engineering
As outlined in the Chief Executive's statement, the Group sold
JMP in December 2015 for GBP8.5 million, of which the Group
received GBP6.48 million. The total profit from discontinued
activities was GBP5.67 million. This represents the Group's share
of JMP's profit after tax for 2015 to the date of disposal, plus
the Group's share of the sale consideration less the Group's share
of the net assets sold. Further details are set out in note 6.
Investment revenues, other gains and losses and finance income
and expense
Whilst continuing to review and assess further investments in
trading activities, the Group had significant cash on hand and has
continued with active treasury management in response to prevailing
low interest rates. This strategy achieved investment revenues and
other gains and losses totalling GBP0.59 million (2014: GBP0.21
million).
The Group's net finance expense was GBP0.12 million (2014:
GBP0.11 million). In spite of the Group's significant cash
balances, individual Group trading companies utilise leverage where
possible, and without recourse to the remaining Group.
Statement of financial position
Cash
Cash at the year end totalled GBP11.97 million (2014: GBP12.22
million). As noted below, the Group made purchases during the year
of its own shares for treasury for a total consideration of GBP0.18
million (2014: GBP0.31 million).
Available for sale investments
At the year end the Group held available for sale investments
with a market value of GBP4.31 million (2014: GBP0.92 million). The
value of these investments was below their cost, resulting in an
unrealised loss on valuation of GBP0.61 million.
Overall position
The Group balance sheet has strengthened substantially in the
year as a result of the profits achieved not only from the sale of
JMP, but also because of the underlying performance of the Group's
continuing businesses. Total net assets increased from GBP19.0
million to GBP24.3 million at the end of 2015.
Dividends
In accordance with the policy set out at the time of admission
to AIM, the Board does not currently intend to recommend payment of
a dividend and prefers to retain profits as they arise for
investment in future opportunities, or to purchase own shares for
treasury where that is considered to be in the best interests of
shareholders.
Purchase of own shares
The Group purchased for treasury a total of 60,000 shares (2014:
114,000 shares) for total consideration of GBP0.18 million (2014:
GBP0.31 million) representing an average price of GBP3 per share
(2014: GBP2.69 per share). As of 31 December 2015, the Group's
share repurchases total GBP5.94 million.
Earnings per share
Basic and diluted earnings per ordinary share were 158.8p
compared to 25.6p in the previous year.
Key performance indicators (KPIs)
The Group uses key performance indicators suitable for the
nature and size of the Group's businesses.
The key financial performance indicators are revenue and profit
before tax. The performance of the Group and the individual trading
businesses against these KPIs is outlined above, in the Chief
Executive's statement and disclosed in note 5.
Internally, management uses a variety of non-financial KPIs as
follows: in respect of the food manufacturing sector order intake,
manufacturing output and sales are monitored weekly and reported
monthly; in the automotive consulting segment staff utilisation,
amounts billed to clients and cash collected are closely monitored;
order intake is monitored monthly in respect of the security
solutions segment.
Risk factors
The Company and Group face a number of specific business risks
that could affect the Company's or Group's success. The Company and
Group invests in distressed businesses and securities, which by
their nature often carry a higher degree of risk than those that
are not distressed. The Group's businesses are principally engaged
in the provision of services that are dependent on the continued
employment of the Group's employees and availability of suitable,
profitable workload. Also, in the automotive consulting and food
manufacturing segments, there is a dependency on a small number of
customers and a reduction in the volume or range of products or
services supplied to those customers or the loss of any one of them
could impact the Group materially.
These risks are managed by the Board in conjunction with the
management of the Group's businesses.
More information on the Group's financial risks is disclosed in
note 17.
Directors' interests
The Directors' interests in the share capital of the Company at
31 December are disclosed below:
Number Number
of % of Total of % of Total
Ordinary Voting Ordinary Voting
Shares Rights Shares Rights
31 December 31 December 31 December 31 December
2015 2015 2014 2014
David Buchler 129,893 3.18% 129,893 3.13%
Jonathan Lander 1,023,677 25.05% 1,023,677 24.69%
Nick Lander 548,277 13.42% 548,277 13.22%
No director held any share options at 31 December 2015 or
2014.
No changes in directors' shareholdings (or options) occurred
between 31 December and the date of this announcement.
Nick Lander
Chief Financial & Operating Officer
26 May 2016
Consolidated income statement
Note 2015 2014
GBP'000 GBP'000
(re-presented)
Continuing operations
Revenue 5 27,864 12,387
Cost of sales (21,540) (10,031)
Gross profit 6,324 2,356
Distribution costs (893) (713)
----------------------------- ----- ---------- ----------------
Administrative expenses:
- Before amortisation and
share based payments (4,469) (1,398)
- Amortisation 11 (89) -
- Share based payments 24 - -
Administrative expenses (4,558) (1,398)
Operating profit 2 873 245
Investment revenues 7 163 65
Other gains and losses 7 429 142
Finance expense 7 (172) (156)
Finance income 7 50 50
Exceptional items 16 - 852
Profit before tax 1,343 1,198
Income tax expense 8 (335) -
Profit for the year from
continuing operations 1,008 1,198
Discontinued operations
Profit for the year from
discontinued operations
after tax 6 5,667 273
Profit for the year 6,675 1,471
Attributable to:
- Equity holders of the
parent 6,499 1,069
- Non-controlling interests 176 402
6,675 1,471
Earnings per share 9
Continuing operations
- Basic 20.3p 19.1p
- Diluted 20.3p 19.1p
Discontinued operations
- Basic 138.5p 6.5p
- Diluted 138.5p 6.5p
Total
- Basic 158.8p 25.6p
- Diluted 158.8p 25.6p
Consolidated statement of comprehensive income
2015 2014
GBP'000 GBP'000
Profit for the year 6,675 1,471
Other comprehensive income (items
that will be reclassified to
profit or loss)
Fair value gains and losses on
available for sale financial
assets
- current period gains/(losses) (611) 89
- reclassified to profit and
loss (318) (34)
Other comprehensive income (929) 55
Total comprehensive income for
the year 5,746 1,526
Attributable to:
- Equity holders of the parent 5,570 1,124
- Non-controlling interests 176 402
5,746 1,526
Consolidated statement of changes in equity
Share Share Revaluation Retained Non-controlling
capital premium reserve earnings Total interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2014
Other comprehensive
income - - 89 - 89 - 89
Transfer to
profit and loss
on disposal - - (34) - (34) - (34)
Profit for the
year - - - 1,069 1,069 402 1,471
Total comprehensive
income for the
year - - 55 1,069 1,124 402 1,526
Balance at 1
January 50 3,640 257 13,094 17,041 542 17,583
Transactions
with owners:
Increase in
non-controlling
interest - - - - - 197 197
Purchase of
own shares - - - (307) (307) - (307)
Total transactions
with owners - - - (307) (307) 197 (110)
Balance at 31
December 50 3,640 312 13,856 17,858 1,141 18,999
2015
Other comprehensive
income - - (611) - (611) - (611)
Transfer to
profit and loss
on disposal - - (318) - (318) - (318)
Profit for the
year - - - 6,499 6,499 176 6,675
Total comprehensive
income for the
year - - (929) 6,499 5,570 176 5,746
Balance at 1
January 50 3,640 312 13,856 17,858 1,141 18,999
Transactions
with owners:
Decrease in
non-controlling
interest - - - - - (271) (271)
Purchase of
own shares - - - (180) (180) - (180)
Total transactions
with owners - - - (180) (180) (271) (451)
Balance at 31
December 50 3,640 (617) 20,175 23,248 1,046 24,294
Consolidated statement of financial position
2015 2014
Note GBP'000 GBP'000
Assets
Non-current assets
Goodwill 11 380 -
Other intangible assets 11 71 -
Property, plant and equipment 12 5,773 5,361
Deferred tax asset 19 - -
Total non-current assets 6,224 5,361
Current assets
Inventories 13 1,106 937
Trade and other receivables 15 8,073 6,610
Cash and cash equivalents 11,967 12,215
Available for sale investments 14 4,313 921
Total current assets 25,459 20,683
Total assets 31,683 26,044
Liabilities
Current liabilities
Loans and other borrowings 18 (787) (1,999)
Finance leases 18 (104) (159)
Trade and other payables 16 (4,058) (4,066)
Total current liabilities (4,949) (6,224)
Non-current liabilities
Loans and other borrowings 18 (1,541) (821)
Finance leases 18 (450) -
Trade and other payables 16 - -
Total non-current liabilities (1,991) (821)
Total liabilities (6,940) (7,045)
Provisions - deferred tax 19 (335) -
Provisions - lease incentive (114) -
Net assets 24,294 18,999
Equity
Share capital 20 50 50
Share premium account 21 3,640 3,640
Revaluation reserve 21 (617) 312
Retained earnings 20,175 13,856
Capital and reserves attributable
to equity holders of the
Company 23,248 17,858
Non-controlling interests 27 1,046 1,141
Total equity 24,294 18,999
Consolidated statement of cash flows
2015 2015 2014 2014
Note GBP'000 GBP'000 GBP'000 GBP'000
Profit for the year from
continuing operations 1,008 1,198
Adjustments for:
Investment revenues 7 (163) (65)
Other gains and losses 7 (429) (142)
Finance expense 7 172 156
Finance income 7 (50) (50)
Depreciation 12 370 334
Amortisation of intangible
assets 11 89 -
Foreign exchange differences 14 -
Loss on disposal of property,
plant and equipment 12 -
Income tax expense 335 -
350 233
Operating cash flows before
movements in working capital 1,358 1,431
Increase in trade and
other receivables (1,015) (1,128)
Increase/(decrease) in
trade and other payables 166 (608)
Increase in inventories (169) (249)
Cash generated from continuing
operations 340 (554)
Net cash generated from
discontinued operations 652 880
Net cash generated from
operations 992 326
Investing activities
Proceeds from sale of
discontinued operations
net of cash sold 6 4,860 -
Acquisition of business 22 (1,013) -
Purchase of available
for sale investments (8,733) (3,732)
Income from available
for sale investments 163 65
Disposal of available
for sale investments 4,840 3,997
Purchase of property,
plant and equipment 12 (955) (245)
Disposal of property,
plant and equipment 4 -
Interest received 7 50 50
Net cash (used by)/generated
from investing activities (784) 135
Financing activities
Interest paid (172) (156)
Purchase of own shares
(treasury shares) 20 (180) (307)
Net (repayment of)/increase
in borrowings (104) 937
Net cash (used by)/generated
from financing activities (456) 474
Net (decrease)/increase
in cash (248) 935
Cash at beginning of year 12,215 11,280
Cash at end of year 11,967 12,215
Notes forming part of the preliminary announcement
The financial information set out above, which was approved by
the Board on 26 May 2016, is derived from the full Group accounts
for the year ended 31 December 2015 and does not constitute the
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The Group accounts on which the auditors have
given an unqualified report, which does not contain a statement
under section 498(2) or (3) of the Companies Act 2006 in respect of
the accounts for 2015, will be delivered to the Registrar of
Companies in due course.
Copies of the Company's Annual Report and Financial Statements
are expected to be sent to shareholders on 1 June 2016 and will be
available from the Company's registered office, Warnford Court, 29
Throgmorton Street, London, EC2N 2AT and website at
www.volvere.co.uk.
1 Accounting policies
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS and IFRIC
interpretations) as adopted by the European Union ("adopted IFRS")
and with those parts of the Companies Act 2006 applicable to
companies preparing their accounts under adopted IFRS.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic Report. In addition, note 17 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging
activities; and its exposures to credit risk and liquidity
risk.
The Group has considerable financial resources and operates in a
number of different market sectors. As a consequence, the directors
believe that the Group is well placed to manage the business risks
inherent in its activities despite the current uncertain economic
outlook.
The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the annual financial
statements.
The following principal accounting policies have been applied
consistently, in all material respects, in the preparation of these
financial statements:
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefits from its activities. All subsidiaries have a reporting
date of 31 December.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
Non-controlling interests, presented as part of equity,
represent the portion of a subsidiary's profit or loss and net
assets that is not held by the Group. The Group attributes total
comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their
respective ownership interests.
Business combinations
The Group applies the acquisition method of accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred and equity interests issued by the Group, which includes
the fair value of any asset or liability arising from a contingent
consideration arrangement. Acquisition costs are expensed as
incurred.
The Group recognises identifiable assets acquired and
liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree's financial
statements prior to the acquisition. Assets acquired and
liabilities assumed are measured at their acquisition-date fair
values.
Goodwill is stated after separate recognition of identifiable
intangible assets. It is calculated as the excess of the sum of the
fair value of consideration transferred, the recognised amount of
any non-controlling interest in the acquiree and the
acquisition-date fair value of any existing equity interest in the
acquiree, over the acquisition-date fair values of identifiable net
assets. If the fair values of identifiable net assets exceed the
sum calculated above, the excess amount (ie gain on a bargain
purchase) is recognised in profit or loss immediately.
The purchase of a non-controlling interest is not a business
combination within the scope of IFRS 3, since the acquiree is
already controlled by its parent. Such transactions are accounted
for as equity transactions, as they are transactions with equity
holders acting in their capacity as such. No change in goodwill is
recognised and no gain or loss is recognised in profit or loss.
Goodwill
Goodwill represents the future economic benefits arising from a
business combination that are not individually identified and
separately recognised. See above for information on how goodwill is
initially determined. Goodwill is carried at cost less accumulated
impairment losses and is reviewed annually for impairment.
Other intangible assets
All other intangible assets are accounted for using the cost
model whereby capitalised costs are amortised on a straight-line
basis as set out below over their estimated useful lives, which are
considered finite. Registered design rights are amortised over the
life of the registration. Residual values and useful lives are
reviewed at each reporting date and they are subject to impairment
testing where indicators of impairment are present.
Intellectual property rights - 10% straight line
Software - 33% straight line
When an intangible asset is disposed of, the gain or loss on
disposal is determined as the difference between the proceeds and
the carrying amount of the asset, and is recognised in profit or
loss within other income or other expenses.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable for goods and services provided in the
normal course of business, net of discounts, VAT and other
sales-related taxes.
Sale of goods is recognised when the Group has transferred to
the buyer the significant risks and rewards of ownership, generally
when the customer has taken undisputed delivery of the goods. There
are no service obligations attached to the sale of goods.
Revenue earned on time and materials contracts is recognised as
costs are incurred. Income from fixed price contracts is recognised
in proportion to the stage of completion, determined on the basis
of work done, of the relevant contract.
Revenue from consulting services is recognised when the services
are provided by reference to the contract's stage of completion at
the reporting date. When the outcome can be assessed reliably,
contract revenue and associated costs are recognised by reference
to the stage of completion of the contract activity at the
reporting date. When the outcome of a contract cannot be estimated
reliably, revenue is recognised only to the extent of contract
costs that have been incurred and are recoverable. Contract costs
are recognised in the period in which they are incurred.
If it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised immediately in
profit or loss.
The gross amount due from customers for contract work is
presented within trade and other receivables for all contracts in
progress for which costs incurred plus recognised profits (less
recognised losses) exceeds progress billings. The gross amount due
to customers for contract work is presented within other
liabilities for all contracts in progress for which progress
billings exceed costs incurred plus recognised profits (less
recognised losses).
Discontinued operations
Discontinued operations represent cash generating units or
groups of cash generating units that have either been disposed of
or classified as held for sale, and represent a separate major line
of business or are part of a single co-ordinated plan to dispose of
a separate major line of business. Cash generating units forming
part of a single co-ordinated plan to dispose of a separate major
line of business are classified within continuing operations until
they meet the criteria to be held for sale. The post-tax profit or
loss of the discontinued operation is presented as a single line on
the face of the consolidated income statement, together with any
post-tax gain or loss recognised on the re-measurement to fair
value less costs to sell or on the disposal of the assets or
disposal group constituting the discontinued operation. On changes
to the composition of groups of units comprising discontinued
operations, the presentation of discontinued operations within
prior periods is restated to reflect consistent classification of
discontinued operations across all periods presented.
Operating segments
IFRS 8 "Operating Segments" requires the disclosure of segmental
information for the Group on the basis of information reported
internally to the chief operating decision-maker for
decision-making purposes. The Group considers that the role of
chief operating decision-maker is performed collectively by the
Board of Directors.
Volvere plc is a holding company that identifies and invests
principally in undervalued and distressed businesses and securities
as well as businesses that are complementary to existing Group
companies. Its customers are based primarily in the UK, Europe and
the USA.
Financial information (including revenue and operating profits)
is reported to the board on a segmental basis. Segment revenue
comprises sales to external customers and excludes gains arising on
the disposal of assets and finance income. Segment profit reported
to the board represents the profit earned by each segment before
tax. For the purposes of assessing segment performance and for
determining the allocation of resources between segments, the board
reviews the non-current assets attributable to each segment as well
as the financial resources available. All assets are allocated to
reportable segments. Assets that are used jointly by segments are
allocated to the individual segments on a basis of revenues
earned.
All liabilities are allocated to individual segments.
Information is reported to the board of directors on a segmental
basis as management believes that each segment exposes the Group to
differing levels of risk and rewards due to their varying business
life cycles. The segment profit or loss, segment assets and segment
liabilities are measured on the same basis as amounts recognised in
the financial statements. Each segment is managed separately.
Leasing
Assets held under finance leases are recognised as assets of the
Group at their fair value or, if lower, at the present value of the
minimum lease payments, each determined at the inception of the
lease. The corresponding liability to the lessor is included in the
statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance charges and the
reduction of lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges
are charged directly against income.
Rentals payable under operating leases are charged to income on
a straight-line basis over the term of the relevant lease.
Foreign currencies
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing on the dates of the
transactions. At each reporting date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting date. Gains
and losses arising on retranslation are included in net profit or
loss for the period.
Retirement benefit costs
The Group's subsidiary undertakings operate defined contribution
retirement benefit schemes. Payments to these schemes are charged
as an expense in the period to which they relate. The assets of the
schemes are held separately from those of the relevant company and
Group in independently administered funds.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax. The tax currently payable is based on taxable
profit for the year. Taxable profit differs from net profit as
reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on
temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted
for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is measured on an undiscounted basis using the tax
rates that are expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax is charged or
credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss.
Freehold property is revalued on a periodic basis. Depreciation is
charged so as to write off the cost or valuation of assets, less
their residual values, over their estimated useful lives, using the
straight line method, on the following bases:
Freehold property - 1.5% per annum
Improvements to short-term leasehold property - Over the life of
the lease
Plant and machinery - 4%-33% per annum
Investments
Investments are recognised and derecognised on a trade date
where a purchase or sale of an investment is under a contract whose
terms require delivery of the investment within the timeframe
established by the market concerned, and are initially measured at
fair value, including transaction costs. Available for sale current
asset investments are carried at fair value with adjustments
recognised in other comprehensive income.
Investment income
Income from investments is included in the income statement at
the point the Group becomes legally entitled to it. Interest income
and expenses are reported on an accruals basis using the effective
interest method.
Impairment of property, plant and equipment and intangible
assets (including goodwill)
At each reporting date the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment
loss (if any).
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and any risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised as income immediately, unless
the relevant asset is carried at a revalued amount, in which case
the reversal of the impairment loss is treated as a revaluation
increase.
Share-based payments
The Group issues equity-settled share-based payments to certain
directors and employees. Equity-settled share-based payments are
measured at fair value at the date of grant. The fair value
determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting
period, based on the Group's estimate of options that will
ultimately vest.
Fair value is measured by use of a Black-Scholes pricing model.
The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
In determining the Group's share-based payment charge in 2014
arising in respect of the shares issued to non-controlling
interests (as set out in note 24), the Group evaluated the
enterprise value of JMP (in 2015 treated as a discontinued
business). This evaluation considered the range of possible
earnings multiples that could apply on an exit to a business such
as JMP, the rights attaching to the shares issued, the proportion
of the resulting equity participation and the existence of a single
large shareholder with significant influence.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Raw materials are valued at purchase price and the costs of
ordinarily interchangeable items are assigned using a weighted
average cost formula. The cost of finished goods comprises raw
materials directly attributable to manufacturing processes based on
product specification and packaging cost. Net realisable value is
the estimated selling price in the ordinary course of business less
any applicable selling expenses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, overnight
deposits and treasury deposits. The Group considers all highly
liquid investments with original maturity dates of three months or
less to be cash equivalents.
Financial assets
The Group classifies its financial assets into one of the
following categories, depending on the purpose for which the asset
was acquired. The Group's accounting policy for each category is as
follows:
Fair value through profit or loss (FVTPL): This category
comprises only in-the-money derivatives. They are carried in the
statement of financial position at fair value with changes in fair
value recognised in the income statement. The Group does not have
any assets held for trading nor does it voluntarily classify any
financial assets as being at fair value through profit or loss.
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
goods and services to customers (trade receivables), but also
incorporate other types of contractual monetary asset. They are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method less any
provision for impairment. Receivables are considered for impairment
when there is a risk of counterparty default.
Available-for-sale: Non-derivative financial assets not included
in the above categories are classified as available-for-sale and
comprise the Group's investments in entities not qualifying as
subsidiaries, associates or jointly controlled entities. They are
carried at fair value with changes in fair value recognised
directly in equity (other comprehensive income). Fair value is
determined by reference to independent valuation statements
provided by the investment manager or broker (as the case may be)
through whom such investments are made. Where the underlying
investments are exchange-traded, the mid-price of the investment is
used.
Impairment: All financial assets except those at FVTPL are
reviewed for impairment at each reporting date to identify whether
there is any objective evidence that a financial asset or group of
assets is impaired. Different methods are used to determine
impairment as described above.
Financial liabilities
The Group classifies its financial liabilities into one of two
categories, depending on the purpose for which the liability was
acquired. The Group's accounting policy for each category is as
follows:
FVTPL: This category comprises only out-of-the-money
derivatives. They are carried in the statement of financial
position at fair value with changes in fair value recognised in the
income statement.
Other financial liabilities: Other financial liabilities include
trade payables and other short-term monetary liabilities, which are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method.
Bank and other borrowings are initially recognised at the fair
value of the amount advanced net of any transaction costs directly
attributable to the issue of the instrument. Such interest bearing
liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense in this context
includes initial transaction costs and premia payable on
redemption, as well as any interest or coupon payable while the
liability is outstanding.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities.
Invoice discounting
The Group uses an invoice discounting facility and retains all
significant benefits and risks relating to the relevant trade
receivables. The gross amounts of the receivables are included
within assets and a corresponding liability in respect of proceeds
received from the facility is included within liabilities. The
interest and charges are recognised as they accrue and are included
in the income statement with other interest charges.
Significant management judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and reported
amounts of assets and liabilities, income and expenses. The nature
of the Group's business is such that there can be unpredictable
variation and uncertainty regarding its business. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
Significant management judgements
The judgements that have a significant impact on the carrying
value of assets and liabilities are discussed below:
Deferred tax asset
The Group recognises a deferred tax asset in respect of
temporary differences relating to capital allowances, revenue
losses and other short term temporary differences when it considers
there is sufficient evidence that the asset will be recovered
against future taxable profits.
Current asset investments
Declines in the fair value of current asset investments are
considered for indicators of impairment. Where the decline in value
is significant or prolonged the asset may be considered to be
impaired with the resulting impairment losses recognised in the
income statement. Short term and insignificant declines in fair
value that are considered to be temporary are reflected in other
comprehensive income.
Significant estimates
Information about estimates and assumptions that have the most
significant effect on recognition and measurement of assets,
liabilities, income and expenses is provided below. Actual results
may be substantially different.
Revenue recognition
Due to the nature of some services provided by certain of the
Group's businesses the recoverability of receivables can be subject
to management estimates. Whilst the Group has a thorough process
for reviewing the requirement for receivables and credit note
provisions, this area is inherently subjective.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of
depreciable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to
technical obsolescence that may change the utility of certain
equipment used in the production of food.
Inventories
Management estimates the net realisable values of inventories,
taking into account the most reliable evidence available at each
reporting date. The future realisation of these inventories may be
affected by market-driven changes that may reduce future selling
prices.
Consolidation
Management have concluded that is not appropriate to utilise the
exemption from consolidation available to investment entities under
IFRS10. Accordingly the consolidation includes all entities which
the Company controls.
Business combinations
Management uses valuation techniques in determining the fair
values of the various elements of a business combination (see note
22).
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments (where active market quotes are not
available) and non-financial assets. This involves developing
estimates and assumptions consistent with how market participants
would price the instrument. Management bases its assumptions on
observable data as far as possible but this is not always
available. In that case management uses the best information
available. Estimated fair values may vary from the actual prices
that would be achieved in an arm's length transaction at the
reporting date.
New standards and interpretations - in issue but not yet
effective
At the date of authorisation of these financial statements,
certain new standards, and amendments to existing standards have
been published by the IASB that are not yet effective, and have not
been adopted early by the Group. Information on those expected to
be relevant to the Group's financial statements is provided
below.
Management anticipates that all relevant pronouncements will be
adopted in the Group's accounting policies for the first period
beginning after the effective date of the pronouncement. New
standards, interpretations and amendments not either adopted or
listed below are not expected to have a material impact on the
Group's financial statements.
IFRS 9 'Financial Instruments' (2015)
The IASB recently released IFRS 9 'Financial Instruments'
(2015), representing the completion of its project to replace IAS
39 'Financial Instruments: Recognition and Measurement'. The new
standard introduces extensive changes to IAS 39's guidance on the
classification and measurement of financial assets and introduces a
new 'expected credit loss' model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of
hedge accounting.
IFRS 9 is effective for reporting periods beginning on or after
1 January 2018. The Group's management have not yet assessed the
impact of IFRS 9 on the consolidated financial statements.
IFRS 15 'Revenue from Contracts with Customers'
IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 'Revenue', IAS 11 'Construction
Contracts', and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs, including how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities.
IFRS 15 is effective for reporting periods beginning on or after
1 January 2017. The Group's management have not yet assessed the
impact of IFRS 15 on the consolidated financial statements.
2 Operating profit
Operating profit is stated after charging/(crediting):
2015 2014
GBP'000 GBP'000
(re-presented)
Staff costs 10,321 2,106
Depreciation of property, plant and
equipment:
- owned assets 370 334
Amortisation of intangible assets 89 -
Operating lease expense 207 7
Audit fees 65 38
The analysis of audit fees is as follows:
- for the audit of the Company's annual
accounts 19 15
- for the audit of the Company's subsidiaries'
accounts 46 23
65 38
3 Staff costs
Staff costs comprise:
2015 2014
GBP'000 GBP'000
(re-presented)
Wages and salaries 9,036 1,919
Employer's National Insurance contributions 905 151
Defined contribution pension cost 380 36
10,321 2,106
The average number of employees (including Directors) in the
Group was as follows:
2015 2014
Number Number
(re-presented)
Engineering and production 266 76
Sales and marketing 11 8
Administration and management 40 18
317 102
4 Directors' remuneration
The remuneration of the directors was as follows:
Salaries Other
& fees benefits Total
2015 2015 2015
GBP'000 GBP'000 GBP'000
David Buchler 58 - 58
Jonathan Lander 11 - 11
Nick Lander 11 1 12
80 1 81
Salaries Other
& fees benefits Total
2014 2014 2014
GBP'000 GBP'000 GBP'000
David Buchler 30 - 30
Jonathan Lander 11 - 11
Nick Lander 11 1 12
52 1 53
The services of Jonathan Lander and Nick Lander are provided
under the terms of a Service Agreement with D2L Partners LLP. The
amount due under these agreements, which is in addition to the
amounts disclosed above, for the year amounted to GBP1,128,000
(2014: GBP551,000). The amount paid to David Buchler in the year
was paid to a third party on an invoice basis. The increase in
directors' remuneration reflects the performance of the Group for
the year. None of the directors were members of the Group's defined
contribution pension plan in the year (2014: none).
5 Operating segments
Analysis by business segment:
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2015 2015 services 2015 2015 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Revenue 12,077 311 - 15,476 27,864 12,823 40,687
Profit/(loss) before
tax(1) 583 118 (946) 1,588 1,343 5,667(2) 7,010
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2014 2014 services 2014 2014 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Revenue - 253 - 12,134 12,387 11,761 24,148
Profit/(loss) before
tax(1) - 81 (534) 1,651(3) 1,198 273 1,471
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2015 2015 services 2015 2015 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Assets 5,095 148 16,277 10,163 31,683 - 31,683
Liabilities/provisions (2,600) (163) (339) (4,287) (7,389) - (7,389)
Net assets(4) 2,495 (15) 15,938 5,876 24,294 - 24,294
Investing
Automotive Security and Food Total
consulting solutions management manufacturing continuing Discontinued Total
2014 2014 services 2014 2014 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
Assets - 33 11,932 9,553 21,518 4,526 26,044
Liabilities/provisions - (166) (256) (3,806) (4,228) (2,817) (7,045)
Net assets(4) - (133) 11,676 5,747 17,290 1,709 18,999
(1) stated before intra-group management and interest charges
(2) discontinued segment result stated after tax
(3) stated after an exceptional credit of GBP852,000
(4) assets and liabilities stated excluding intra-group
balances
Investing
Automotive Security and Food Total continuing
consulting solutions management manufacturing 2015 Discontinued Total
2015 2015 services 2015 GBP'000 2015 2015
GBP'000 GBP'000 2015 GBP'000 GBP'000 GBP'000
GBP'000
Capital spend 25 1 1 821 848 108 956
Depreciation 26 - 1 343 370 91 461
Amortisation/
impairment 89 - - - 89 - 89
Interest
income
(non-Group) - - 50 - 50 - 50
Interest
expense
(non-Group) 38 - - 134 172 - 172
Tax expense 58 - - 277 335 250(5) 585
Investing
Automotive Security and Food Total continuing
consulting solutions management manufacturing 2014 Discontinued Total
2014 2014 services 2014 GBP'000 2014 2014
GBP'000 GBP'000 2014 GBP'000 GBP'000 GBP'000
GBP'000
Capital spend - - - 82 82 163 245
Depreciation - 1 7 326 334 82 416
Amortisation/
impairment - - - - - - -
Interest
income
(non-Group) - - 50 - 50 - 50
Interest
expense
(non-Group) - - - 156 156 - 156
Tax expense - - - - - - -
(5) included in profit from discontinued operations after
tax
Geographical analysis:
External revenue Non-current assets
by by
location of customers location of assets
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
(re-presented)
UK 25,039 11,937 6,224 5,361
Rest of Europe 1,761 446 - -
Other 1,064 4 - -
27,864 12,387 6,224 5,361
The Group had 2 (2014: 3) customers that individually
accounted for in excess of 10% of the Group's continuing
revenues as follows:
2015 2014
GBP'000 GBP'000
First customer 5,501 3,210
Second customer 3,672 2,775
Third customer - 2,659
6 Discontinued operations
The Group's stake in JMP Consultants Limited ("JMP"), which
formed the Group's transport planning and engineering segment, was
sold on 18 December 2015 for cash consideration of GBP8,506,000, of
which the Group's share was GBP6,477,000.
In accordance with IFRS 5 the total profits relating to
discontinued activities for the year are presented on a single line
on the income statement, and are analysed below:
2015 2014
GBP'000 GBP'000
Revenue 12,823 11,761
Cost of sales (6,817) (6,387)
Administrative expenses (4,898) (4,924)
Interest (11) -
Income tax expense (250) -
Profits for the period to disposal/year 847 450
Non-controlling interests' share of (190) -
losses in period to disposal
Group share of profits 657 450
Profit on disposal (see below) 5,010 -
Profit on discontinued operations - JMP
Consultants Limited 5,667 450
Loss on discontinued operations - Interactive
Prospect Management Limited(1) - (177)
Total profit on discontinued operations 5,667 273
Note 1:additional costs recognised in
2014 in respect of disposal in 2013.
The net assets disposed, and resulting
profit on sale is analysed below:
========= =========
2015
GBP'000
Property, plant and equipment 248
Work in progress 1,698
Receivables 2,404
Cash and cash equivalents 833
Income tax expense (3,256)
Net assets at date of disposal 1,927
Non-controlling interests' share of
net assets at date of disposal (460)
Group share of net assets at date of
disposal 1,467
Profit on disposal 5,010
Consideration 6,477
The consideration receivable is analysed
as follows:
=========
Received on date of disposal 5,693
Receivable following determination of
net assets at disposal (included in other
receivables at year-end) 385
Receivable one year after disposal (included
in other receivables at year-end) 399
Total consideration receivable 6,477
The cash flows associated with the disposal
are as follows:
=========
Cash received on date of disposal 5,693
Cash disposed (833)
Net cash flows on disposal 4,860
7 Investment revenues, other gains and losses and finance income and expense
2015 2014
GBP'000 GBP'000
Investment revenues 163 65
Other gains and losses 429 142
Finance income
Bank interest receivable 50 50
Finance expense
Bank interest (86) (64)
Finance lease interest 7 (15)
Other interest and finance charges (93) (77)
(172) (156)
Investment revenues and other gains and losses represent
respectively interest and dividends receivable from, and the gains
arising upon disposal of, investments made pursuant to the Group's
investing and treasury management policies.
8 Income tax
2015 2014
GBP'000 GBP'000
Current tax expense - -
Deferred tax expense recognised 335 -
in income statement
Total tax expense recognised 335 -
in income statement
Tax recognised directly - -
in equity
Total tax recognised (continuing 335 -
operations)
The reasons for the difference between the actual tax expense
for the year and the standard rate of corporation tax in the UK
applied to profits for the year are as follows:
2015 2014
GBP'000 GBP'000
(re-presented)
Profit before tax 1,343 1,471
Expected tax charge based on the prevailing
rate of corporation tax in the UK of
20.25% (2014: 21.5%) 272 316
Effects of:
Expenses not deductible for tax purposes 49 75
Income/gains not subject to tax (33) (197)
Depreciation for period (less than)/in
excess of capital allowances - (16)
Short term timing differences - 12
Unrecognised deferred tax assets 33 4
Utilisation of previously unrecognised
losses - (194)
Effect of changes in rate of tax (33) -
Adjustments in respect of prior years 47 -
Total tax recognised (continuing operations) 335 -
9 Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings for the purposes of earnings 2015 2014
per share: GBP'000 GBP'000
From continuing operations 832 796
From discontinued operations 5,667 273
Total 6,499 1,069
EEa
Weighted average number of shares for 2015 2014
the purposes of earnings per share: No. No.
Weighted average number of ordinary shares
in issue 4,091,547 4,175,676
Dilutive effect of potential ordinary - -
shares
Weighted average number of ordinary shares
for diluted EPS 4,091,547 4,175,676
There were no share options (or other dilutive instruments) in
issue during the year or the previous year.
10 Subsidiaries
The principal subsidiaries of Volvere plc, all of which have
been included in these consolidated financial statements, are as
follows:
Proportion
Country Principal of ownership
Name of Activity interest
Incorporation in ordinary
shares
Volvere Central Services England Group support
Limited and Wales services 100%
NMT Group Limited Scotland Investment 98.6%
Sira Defence & Security England Software
Limited and Wales publishing 100%
England
Shire Foods Limited and Wales Food manufacturing 80%
Impetus Automotive England Automotive 100%*
Limited and Wales consulting 100%
Impetus Automotive England Investment
Solutions Limited and Wales
*as a subsidiary of Impetus Automotive Solutions Limited
11 Goodwill and other intangible assets
Other
intangible
Goodwill assets Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 and at 1 January
2015 - 441 441
Acquisitions 380 95 475
Additions - 65 65
At 31 December 2015 380 601 981
Amortisation and impairment charges
At 1 January 2014 and at 1 January
2015 - 441 441
Amortisation and impairment charge
for the year - 89 89
At 31 December 2015 - 530 530
Net book value
At 31 December 2015 380 71 451
At 31 December 2014 - - -
Goodwill is that arising on the acquisition of Impetus
Automotive Limited as outlined in note 22.
As required by IAS 38 goodwill is not amortised and is instead
tested annually for impairment in the year following
acquisition.
Other intangible assets comprise a mix of intellectual property
rights and software. The net book value of internally-generated
intangible assets was GBP71,000 (2014: nil).
12 Property, plant and equipment
Short
Leasehold Freehold Plant
Property Property & Machinery Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 85 2,430 3,646 6,161
Additions 54 - 191 245
Disposals (9) - (8) (17)
At 31 December 2014 and
1 January 2015 130 2,430 3,829 6,389
Acquisitions 180 - 188 368
Additions 92 - 863 955
Disposals - - (24) (24)
Disposals - discontinued
operations (222) - (216) (438)
At 31 December 2015 180 2,430 4,640 7,250
Accumulated depreciation
At 1 January 2014 11 53 566 630
Disposals (9) - (9) (18)
Charge for the year 24 22 370 416
At 31 December 2014 and
1 January 2015 26 75 927 1,028
Acquisitions 54 - 131 185
Disposals - - (8) (8)
Disposals - discontinued
operations (52) - (138) (190)
Charge for the year -
including discontinued
operations 35 20 407 462
At 31 December 2015 63 95 1,319 1,477
Net book value
At 31 December 2015 117 2,335 3,321 5,773
At 31 December 2014 104 2,355 2,902 5,361
The net book value of property, plant and equipment held on
finance leases was GBP695,000 (2014: GBP501,000). Freehold property
was subjected to an independent valuation on 15 April 2014. The
valuation was GBP2,450,000. The net book value of the revalued
property is GBP2,335,000 (2014: GBP2,355,000) and its historical
cost was GBP1,964,200.
13 Inventories
2015 2014
GBP'000 GBP'000
Raw materials 360 378
Finished products 746 559
1,106 937
14 Financial assets (current)
2015 2014
GBP'000 GBP'000
Available-for-sale investments 4,313 921
During the year the Group invested in equity funds pursuant to
its treasury management policies. At the year end the cost of these
investments was GBP4,930,000 (2014: GBP603,000).
15 Trade and other receivables
2015 2014
GBP'000 GBP'000
Trade receivables 6,400 5,151
Less: provision for impairment of trade
receivables (1) (75)
Net trade receivables 6,399 5,076
Other receivables 1,166 119
Amounts recoverable on contracts 260 1,078
Prepayments and accrued income 248 337
8,073 6,610
The fair value of trade receivables approximates to carrying
value at 31 December 2015 and 2014.
The Group is exposed to credit risk with respect to trade
receivables due from its customers, primarily in the automotive
consulting and food manufacturing segments. Both segments have a
relatively large number of customers, however there is a
significant dependency on a small number of large customers who can
and do place significant contracts. Provisions for bad and doubtful
debts are made based on management's assessment of the risk taking
into account the ageing profile, experience and circumstances.
There were no significant amounts due from individual customers
where the credit risk was considered by the Directors to be
significantly higher than the total population.
There is no significant currency risk associated with trade
receivables as the vast majority are denominated in Sterling.
The ageing analysis of trade receivables is disclosed below:
2015 2014
GBP'000 GBP'000
Up to 3 months 6,206 5,057
3 to 6 months 190 64
6 to 12 months 4 27
Over 12 months - 3
6,400 5,151
16 Trade and other payables
2015 2014
GBP'000 GBP'000
Current:
Trade payables 1,200 997
Other tax and social security 729 755
Other payables 84 655
Accruals 1,479 1,169
Deferred income 566 490
4,058 4,066
One of the Group's subsidiaries, Shire Foods Limited ("Shire"),
entered into a company voluntary arrangement ("CVA") in January
2012. Under the terms of the CVA Shire were to pay GBP350,000 over
a maximum 3 year period in satisfaction of unsecured liabilities of
approximately GBP1,200,000.
During 2014 Shire made the final payments due under the CVA and,
in so doing, was released from all remaining liabilities that were
subject to the CVA. The balances released totalled GBP852,000 and
the associated credit is shown separately in the income statement,
under the caption "exceptional items".
The fair value of all other trade and other payables
approximates to book value at 31 December 2015 and at 31 December
2014.
17 Financial instruments - risk management
The Group's principal financial instruments are:
-- Trade receivables
-- Cash at bank
-- Current asset investments
-- Loans and finance leases
-- Trade and other payables
The Group is exposed through its operations to one or more of
the following financial risks:
-- Cash flow interest rate risk
-- Foreign currency risk
-- Liquidity risk
-- Credit risk
-- Other market price risk
Policy for managing these risks is set by the Board following
recommendations from the Chief Financial & Operating Officer.
Certain risks are managed centrally, while others are managed
locally following guidelines communicated from the centre. The
policy for each of the above risks is described in more detail
below.
Interest rate risk
Due to the relatively low level of borrowings, the Directors do
not have an explicit policy for managing cash flow interest rate
risk. All current and recent borrowing has been on variable terms,
with interest rates of between 3% and 4% above base rate, and the
Group has cash reserves sufficient to repay all borrowings promptly
in the event of a significant increase in market interest rates.
All cash is managed centrally and subsidiary operations are not
permitted to arrange borrowing independently.
The Group's investments may attract interest at fixed or
variable rates, or none at all. The market price of such
investments may be impacted positively or negatively by changes in
underlying interest rates. It is not considered relevant to provide
a sensitivity analysis on the effect of changing interest rates
since, at the year end, the Group's investments had the following
interest profiles which contained no variable rates:
2015 2014
GBP'000 GBP'000
No interest 4,313 -
Fixed interest - 921
4,313 921
Foreign currency risk
Foreign exchange risk arises when individual Group operations
enter into transactions denominated in a currency other than their
functional currency (sterling). The Directors monitor and review
their foreign currency exposure on a regular basis; they are of the
opinion that as the Group's trading exposure is limited to
transactions with a small number of customers and suppliers it is
not appropriate to actively hedge that element of its foreign
currency exposure, nor is its exposure to foreign currency risk
considered to be significant.
Liquidity risk
The Group maintains significant cash reserves and therefore does
not require facilities with financial institutions to provide
working capital. Surplus cash is managed centrally to maximise the
returns on deposits.
Credit risk
The Group is mainly exposed to credit risk from credit sales.
The Group's policy for managing and exposure to credit risk is
disclosed in note 15.
Other market price risk
The Group has generated a significant amount of cash and this
has been held partly as cash deposits and partly invested pursuant
to the Group's investing strategy. Investments have been made in
2015 in equity funds, which reflect the Group's need to access
capital. Market price movements of these investments could
materially affect the value of the Group's assets. The directors
believe that the exposure to market price risk from this activity
is acceptable in the Group's circumstances.
Capital management
The Group's main objective when managing capital is to protect
returns to shareholders by ensuring the Group will continue to
trade profitably in the foreseeable future. The Group also aims to
maximise its capital structure of debt and equity so as to minimise
its cost of capital.
The Group manages its capital with regard to the risks inherent
in the business and the sector within which it operates by
monitoring its gearing ratio on a regular basis.
The Group considers its capital to include share capital, share
premium, revaluation reserve and retained earnings. Net debt
includes short and long-term borrowings (including lease
obligations) and shares classed as financial liabilities, net of
cash and cash equivalents. The Group has not made any changes to
its capital management during the year. The Group is not subject to
any externally imposed capital requirements.
An analysis of what the Group manages as capital is outlined
below:
2015 2014
GBP'000 GBP'000
Total debt 2,882 2,979
Less cash and cash equivalents (11,967) (12,215)
Net debt/(funds) (9,085) (9,236)
Total equity (capital) 24,294 18,999
Net debt/(funds) to capital ratio (37.4)% (48.6)%
18 Financial assets and liabilities - numerical disclosures
Analysis of financial assets by category:
2015 2014
GBP'000 GBP'000
Available for sale investments 4,313 921
Loans and receivables 7,825 6,273
Cash and cash equivalents 11,967 12,215
Total financial assets 24,105 19,409
Fair values
The Directors consider the carrying values of all financial
assets and liabilities to be a reasonable approximation of their
fair values. Investments held at fair value are all listed on a
recognised market and hence their valuation is not subject to
significant judgement or uncertainty. Such investments are
therefore considered to fall under Level 1 in the IFRS 7 fair value
hierarchy.
Maturity of financial assets
The maturities and denominations of financial assets at the year
end, other than cash and cash equivalents, and loans and
receivables (note 15 above) are as follows:
2015 2014
GBP'000 GBP'000
Sterling
No fixed maturity 4,313 921
Maturity of financial liabilities
The maturity of borrowings (including finance leases) carried at
amortised cost is as follows:
2015 2014
GBP'000 GBP'000
Less than six months 770 2,072
Six months to one year 121 85
One to two years 198 103
Two to five years 641 164
More than five years 1,152 555
2,882 2,979
The above borrowings are analysed on the balance sheet as
follows:
2015 2014
GBP'000 GBP'000
Loans and other borrowings (current) 787 1,999
Finance leases (current) 104 159
Loans and other borrowings (non-current) 1,541 821
Finance leases (non-current) 450 -
2,882 2,979
Borrowings are secured on certain assets of the Group, and
interest was charged at rates of between 2.5% and 3.2% during the
year.
The maturity of other financial liabilities, excluding loans and
borrowings, carried at amortised cost is as follows:
2015 2014
GBP'000 GBP'000
Less than six months 2,013 2,407
19 Deferred tax
Movements in deferred tax provisions are outlined below:
Accelerated Other
tax depreciation timing
differences Losses Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2015 (373) 22 351 -
Recognised during the year (59) (58) (218) (335)
At 31 December 2015 (432) (36) 133 (335)
In addition, there are unrecognised net deferred tax assets as
follows:
2015 2014
GBP'000 GBP'000
Tax losses carried forward 619 600
Excess of depreciation over capital allowances 5 7
Short term temporary differences 9 11
Net unrecognised deferred tax asset 633 618
Deferred tax assets and liabilities have been calculated using
the rate of corporation tax expected to apply when the relevant
temporary differences reverse. Deferred tax assets and liabilities
are only offset where there is a legally enforceable right of
offset and there is an intention to settle the balances net.
The unrecognised elements of the deferred tax assets have not
been recognised because there is insufficient evidence that they
will be recovered.
20 Share capital
Authorised
2015 2015 2014 2014
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.0000001
each 100,100,000 - 100,100,000 -
A shares of GBP0.49999995
each 50,000 25 50,000 25
B shares of GBP0.49999995
each 50,000 25 50,000 25
Deferred shares of GBP0.00000001
each 4,999,999,500,000 50 4,999,999,500,000 50
100 100
Issued and fully paid
2015 2015 2014 2014
Number GBP'000 Number GBP'000
Ordinary shares of GBP0.0000001
each 6,207,074 - 6,207,074 -
Deferred shares of GBP0.00000001
each 4,999,994,534,696 50 4,999,994,534,696 50
50 50
Treasury shares
During the year the Company acquired 60,000 (2014: 114,000) of
its own Ordinary shares for total consideration of GBP180,000
(2014: GBP307,000). This brings the total number of Ordinary shares
held in treasury to 2,121,116 (2014: 2,061,116) with an aggregate
nominal value of less than GBP1.
Rights attaching to deferred shares
The Deferred shares carry no rights to participate in the
profits or assets of the Company and carry no voting rights.
21 Reserves
All movements on reserves are disclosed in the consolidated
statement of changes in equity.
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Nature and purpose
Share premium Amount subscribed for share capital
in excess of nominal value
Revaluation reserve Cumulative net unrealised gains
and short-term losses arising on
the revaluation of the Group's
available for sale investments
Retained earnings Cumulative net gains and losses
recognised in the consolidated
income statement
22 Business combinations
The Group acquired Impetus Automotive Limited (an automotive
consultancy business) on 26 March 2015 for total consideration of
GBP1.18 million comprising cash and the settlement of certain
liabilities of IAL's parent company.
The provisional fair values of assets and liabilities acquired
and resulting goodwill are summarised below:
Fair Fair
Book value values
value adjustments GBP'000
GBP'000 GBP'000
Intangible assets 95 - 95
Property, plant and equipment 185 - 185
Cash and cash equivalents 234 - 234
Trade and other receivables 3,042 - 3,042
Trade and other payables (note
(a)) (2,754) - (2,754)
Net assets acquired 802 - 802
Goodwill recognised 380
Consideration (settled in cash) 1,182
Note (a): the creditors of IAL noted above include the debt
obligations held in another former Impetus group company, which
Volvere settled as part of the acquisition. The consideration of
GBP1.18 million includes a debt settlement of GBP1.08 million.
Costs of undertaking the transaction amounting to GBP0.07 million
have been charged to the income statement as administrative
expenses. It is not practicable, because of the changes in IAL's
former group structure and management, to disclose the revenue and
profit or loss for the Group as if IAL had been acquired on 1
January 2015.
The cash flows associated with the acquisition are as
follows:
Book
value
GBP'000
Consideration (settled in cash) 1,182
Purchase of intellectual property 65
Cash acquired (234)
Net cash outflow 1,013
Goodwill arose on the acquisition because of value inherent in
the acquired business' staff and reputation, neither of which are
considered to be separately identifiable intangible assets under
IFRS 3 (Revised).
The acquired business' revenue and profit for the period from
acquisition to the balance sheet date are disclosed in note 5 as
the acquired business forms the entire Automotive Consulting
segment.
23 Leases
Operating leases - lessee
The Group leases certain of its properties. The terms of
property leases vary, although they all tend to be tenant repairing
with rent reviews every 2 to 5 years; some have break clauses. The
total future values of minimum lease payments are due as
follows:
Land Land
and buildings Other and buildings Other
2015 2015 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
Not later than one year 170 108 127 -
Later than one year and
not later than five years 658 51 670 -
Later than five years 543 - 14 -
1,371 159 811 -
24 Share-based payments
The Company has operated two share-based payment schemes, an
approved EMI equity-settled share-based remuneration scheme for
certain employees and an unapproved equity-settled share scheme for
certain management. Under the EMI scheme, the options vested on
achievement of employee-specific targets subject to a compulsory
2.5 or 3 year vesting period and can be exercised for a further 7.5
or 7 years after vesting. All options issued have now either lapsed
or been exercised, such that there are no options in issue as at 31
December 2015 (2014: nil).
Options in issue during the year are summarised below:
Weighted Weighted
average average
exercise Number exercise Number
price 2015 price 2014
2015 2014
Outstanding at beginning
of the year - - 187.5p 31,000
Granted during the year - - - -
Exercised during the year - - - -
Lapsed during the year - - (187.5)p (31,000)
Outstanding at the end N/A - N/A -
of the year
All options in issue were fully vested prior to 1 January 2014,
hence there is no share based payment charge in 2015 or 2014, in
respect of share options.
A share based payment charge of GBP158,000 was included in the
income statement for 2014 (discontinued activities) in respect of
shares issued in JMP Consultants Limited to certain management of
that business. In determining the Group's share-based payment
charge arising in respect of the shares issued to non-controlling
interests (as set out in note 27), the Group evaluated the
enterprise value of JMP. This evaluation considered the range of
possible earnings multiples that could apply on an exit to a
business such as JMP, the rights attaching to the shares issued,
the proportion of the resulting equity participation and the
existence of a single large shareholder with significant
influence.
25 Related party transactions
Details of amounts payable to Directors are disclosed in note 4.
There were no other transactions with key members of management,
and no other material transactions with related parties.
26 Contingent liabilities
The Group had no material contingent liabilities as at the date
of these financial statements.
27 Non-controlling interests
The non-controlling interests of GBP1,046,000 (2014:
GBP1,141,000 ) relate to the net assets attributable to the shares
not held by the Group at 31 December 2015 in the following
subsidiary undertakings:
2015 2014
Name of subsidiary undertaking GBP'000 GBP'000
NMT Group Limited 74 75
JMP Consultants Limited - 271
Shire Foods Limited 972 795
1,046 1,141
Summarised financial information (before intra-group
eliminations) in respect of those subsidiaries with material
non-controlling interests is presented below.
JMP Consultants Shire Foods
Limited Limited
2014 2015 2014
GBP'000 GBP'000 GBP'000
Property, plant and equipment 231 5,591 5,129
Current assets 4,295 4,569 4,424
Non-current liabilities - (1,988) (822)
Current liabilities (3,444) (3,023) (4,748)
Provisions - (277) -
Net assets (equity) 1,082 4,872 3,983
Attributable to:
Group 811 3,901 3,188
Non-controlling interests 271 971 795
1,082 4,872 3,983
Revenue 11,761 15,476 12,133
Profit for the year (stated
after intra-group management
and interest charges) 293 888 1,651
Profit for the year attributable
to non-controlling interests 73 177 330
28 Post balance sheet events
Following the end of the year, Impetus Automotive Limited
("IAL") issued shares to certain of its management, which are
subject to vesting conditions. Upon full vesting, the Group's share
of IAL is expected to reduce to approximately 79%. The financial
effect will be to reduce the Group's participation in the results
of IAL and its net assets.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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