TIDMDRV
RNS Number : 7160W
Driver Group plc
14 December 2023
DRIVER GROUP PLC
Preliminary Results f or the year ended 30 September 2023
Driver Group PLC (AIM: DRV), the global specialist dispute
avoidance and dispute resolution consultancy is pleased to announce
its Preliminary Results for the financial year ended 30 September
2023.
Year ended Year ended
30-Sep-23 30-Sep-22** Change
GBP000 GBP000 GBP000
----------- ------------ --------
Revenue 42,633 45,074 (2,441)
Gross Profit 10,778 9,313 1,465
Gross Profit % 25% 21% 4%
-------------------------------------- ----------- ------------ --------
Profit/(loss) before tax 439 (1,958) 2,397
Add: Non-recurring costs 255 1,000 (745)
Add: Share-based payment charge 370 465 (95)
Net finance (income)/costs (66) 100 (166)
Underlying* operating profit/(loss)
before tax 998 (393) 1,391
-------------------------------------- ----------- ------------ --------
Underlying* operating profit before
tax % 2% (1%) 3%
Underlying* earnings per share
from continuing operations 0.2p (4.6p) 4.8p
Profit/(loss) before tax 439 (1,958) 2,397
Loss on discontinued operations,
net of tax (461) (468) 7
Underlying* loss before tax (22) (2,426) 2,404
-------------------------------------- ----------- ------------ --------
Net cash 5,833 4,931 902
Net cash per share 11.1p 9.4p 1.7p
Dividend per share 0.75p 0.75p 0.0p
Financial Summary
-- Revenue decreased by 4% to GBP42.6m (2022: GBP45.1m) which is
attributable to the restructured Middle East and Asia Pacific
regions
-- Gross profit margin at 25% (2022: 21%), a GBP1.5m increase to GBP10.8m (2022: GBP9.3m)
-- Underlying* operating profit increase year on year of GBP1.4m
to GBP1m (2022: Loss (GBP0.4m)
-- Underlying* operating profit before tax margin of 2% (2022: Loss (1%)
-- Profit before tax from continuing operations of GBP0.4m (2022: Loss (GBP2m)
-- Net cash increase year on year of GBP0.9m to GBP5.8m (2022: GBP4.9m)
-- Cash returned to shareholders during the year of GBP0.8m via dividends, dividend maintained
Operational Highlights
-- Utilisation improved to 72.5% (2022: 67.5%) as increased
collaboration across our global office network continues to deliver
a positive impact
-- Europe & Americas (EuAm) reported an underlying* profit
before tax and central cost recharge of GBP5.3m (2022: GBP5.4m)
with utilisation rates at 74% (2022: 72%)
-- Middle East (ME) reported a small underlying* operating loss
pre central cost recharge of (GBP0.1m) (2022: loss GBP1.3m) with
utilisation rates at 71% (2022: 53%). Loss arose due to timing of
project starts from Q4 FY23 into Q1 FY24
-- Asia Pacific (APAC) reported an underlying* operating loss
pre central cost recharge of (GBP0.2m) (2022: loss GBP0.2m) with
utilisation rates at 63% (2022: 68%). Successfully returned to
profitability after swift action taken
-- A number of significant commissions were secured in Q4 underpinning confidence in outlook
Outlook
-- Utilisation continuing at 2023 levels
-- Q1 revenue improving with an encouraging pipeline of new enquiries
-- Cost reduction programme will be completed by the end of
December 2023, enabling the full positive benefits of a lower and
leaner cost base to flow into 2024
-- Launch of the Group's integrated transformation strategy with
the intention over a four-year timeframe to:
o Rebrand the global business to Diales - to simplify and focus
the brand's positioning around the Group's premium brand and
further strengthen its competitive positioning across key global
markets;
o Implement a hub and spoke model - to concentrate overseas
offices on work winning, the outputs of which will be fed back into
the wider Group, delivering continuous improvements in utilisation
and margin across our global footprint;
o Reset relationships with overseas offices - to identify and
explore opportunities for local management ownership and
partnerships, where appropriate for the Group;
o Expand the business's service offering - to hire key work
winners and halo experts in adjacent sectors including aerospace,
financial forensics, IT and marine.
Mark Wheeler, Chief Executive Officer of Driver Group, said:
' These results represent a very creditable performance by the
business. The hard work of our staff and the support of our clients
around the world has been central to the improvement in results. We
have delivered a return to profitable trading through a significant
year-on-year reduction in our cost-base, the full effect of which
is yet to impact our bottom line. Also, the re-shaping of our
global footprint and sizeable improvements in utilisation levels
have been key to delivery. Our 'one business' approach continues to
deliver tangible and lasting benefits to client servicing and
margin improvement.
The transformation strategy we announce today, harnesses a
unified global footprint under our premium Diales brand, and builds
on efficiency gains achieved over the last financial year. It
promises to accelerate value-creation for our shareholders and
realise further competitive benefits for our clients and
staff.'
Shaun Smith, Non-Executive Chair, said:
"These results reflect the hard work by our global team and
management during the year. This has helped to deliver a
significant improvement in the Group's operational performance,
strong cash generation and a return to profitability. Our results
provide a firm foundation on which to build, as we set out a
strategy that will unlock further efficiency gains and improve our
competitive positioning.'
* Underlying figures are stated before non-recurring costs,
share-based payment costs and finance costs
** Restated to exclude discontinued operations
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR
Results presentation
Driver Group's leadership team will be hosting a presentation
for analysts at 10:00am on 14 December 2023. Analysts have already
been invited to participate in a Q&A during the presentation,
but any eligible person not having received details should contact
the Company's PR advisers, Acuitas Communications, at
driver@acuitascomms.com or on 020 3745 0293.
The Group will also host a presentation for investors on 14
December, at 12:00pm. Questions can be submitted before and during
the online event.
To register for the webinar, please visit this link:
https://www.equitydevelopment.co.uk/news-and-events/drivergroup-investor-presentation-14december2023.
A recording of the presentation will be available shortly
afterwards here:
https://www.equitydevelopment.co.uk/research/tag/driver-group .
S
Enquiries:
Driver Group plc 020 7377 0005
Mark Wheeler (CEO)
Charlotte Parsons (CFO)
Singer Capital Markets (Nomad
& Broker) 020 7496 3000
Sandy Fraser
Jen Boorer
Acuitas Communications 020 3745 0293 / 07799 767676
Simon Nayyar simon.nayyar@acuitascomms.com
Arthur Dingemans arthur.dingemans@acuitascomms.com
Chairman's Statement
Overview
I became Chairman of Driver Group PLC in March 2023, with a
clear understanding that the year ahead would be one of challenges
with decisions to be taken to improve operational performance and
position the Company for sustainable long-term growth in order to
deliver improved returns for our shareholders. I am delighted to
report in this my first statement, that these results provide clear
evidence that the decisions taken at the start of the period have
delivered meaningful and lasting outcomes that have made our cost
base leaner and more efficient, and our business more
competitive.
At the start of the period, Driver Group announced a realignment
of its strategy and servicing across its presence in the Middle
East which was successful in achieving the outcomes required. The
success of this performance-based strategy led to the adoption of a
similar policy of risk-reduction across our international footprint
in order to improve the resilience and competitiveness of our
global business going forward, enabling it to withstand ongoing
economic headwinds such as the conflict in Ukraine, inflationary
pressures which, far from abating, were actually accentuated during
FY23, presenting challenges to our clients and prospects alike.
This, therefore, has made the business' performance in FY23 more
noteworthy, incorporating, as it does, a significant year-on-year
improvement in our performance.
By the end of calendar year 2023, all the planned cost and risk
reductions that were set out in our Trading Update in November
2022, will have been successfully implemented in a timely way.
Equally, as we have previously explained, the benefits of these
changes will only begin to flow through fully to the business
toward the end of H1 FY24. While up-front cost associated with
achieving this has constrained performance in the short-term, the
year-on-year improvement has been pronounced and beneficial, and we
expect to be able to report further progress in due course on the
quantum of efficiency gains that are currently being extracted.
Trading Performance
In the FY22 Preliminary Results the Board reported that it
expected the Company would deliver a return to profitability in
FY23. I am pleased to report that we have delivered on that
commitment to our shareholders, converting an FY22 underlying
operating loss of GBP0.4m into an underlying operating profit of
GBP1m in FY23 on revenue from continuing operations of GBP42.6m
compared to revenue from the same operations of GBP45.1m.
This is a creditable performance and a significant year-on-year
improvement with an improving outlook. Accordingly, I am pleased to
propose a final dividend for the year of 0.75p pence per ordinary
share, which if approved at the forthcoming Annual General Meeting
will make 1.5 pence per share paid as dividends for the period.
It is early days, but it is pleasing that FY24 has got off to a
positive start, leaving the Group well positioned for the year
ahead underpinned by the benefits of the strategic actions which
are expected to be fully felt in H2 FY24.
A key indicator of the progress we have made during this year of
re-adjusting our operational priorities and arrangements - and one
to which I attach great importance - is cash generation. A
consultancy business model such as ours generates cash when trading
profitably, and significant cash when optimal operational
performance is achieved. We are some way off optimal operational
performance, but the path to this is clear and a short term
objective the Board believes can be achieved. We generated GBP0.9m
of cash in the period and ended the year with a significantly
strengthened balance sheet with a cash balance of GBP5.8m (FY22
cash balance of GBP4.9m), the equivalent to 11.1 pence per ordinary
share.
As a Group with global operations in multiple economies and
markets, clients, staff and shareholders should expect us to
maintain a strong balance sheet able to fund both our organic
growth and our ordinary dividend payments. We must also maintain an
efficient balance sheet and not hoard cash that we generate to no
purpose. S hareholders can expect therefore, providing the Group
performs to the Boards expectations and with a reasonable trading
outlook, that the Board will review its balance sheet regularly,
and where possible and appropriate, return surplus capital to
shareholders in a cost efficient manner. We have identified at
least GBP1m of surplus cash, which at the time of publishing this
report is equivalent to c.7.3% of the Driver market capitalisation
(GBP13.76m). This will be returned to shareholders within the
current financial year in a cost efficient manner - most likely an
on market share buyback.
Strategy
We intend to capitalise on the momentum that has been generated
over the last 12 months to push further ahead to strengthen our
competitive positioning in key markets and optimise our operating
performance.
We have an exciting vision for the direction we will take the
Group over the next few years and more fully discussed in the CEO's
report. In summary, we will consolidate the branding of our various
global businesses and unite under our respected Diales brand,
continue to embrace the hub & spoke model and develop the
entrepreneurial spirit and commercial acumen in our local offices.
We are confident this next chapter in our strategy will improve and
optimise operational performance, strengthen our competitive
position in key markets and increase cash generation, all leading
to drive the creation of value for shareholders. We will maintain a
strong balance sheet and deliver returns to shareholders with a
proactive approach to capital allocation.
People
Since my appointment as Chairman I have deepened my
understanding of the Group and met many of the talented and
dedicated people who embody our Group. Their knowledge, experience,
and insights are impressive and in a year of challenges and change,
they have continued to support our clients on intellectually
demanding and sensitive assignments, working collaboratively across
the offices and markets in which we operate, to deliver results. I
would like to take this opportunity to thank all our staff around
the world and record my appreciation to each of them for their hard
work, determination and commitment in delivering the improvement in
our business' performance.
I should also like to thank the Board for the warm welcome they
have given me and for their support. Most of all, I should like to
thank our CEO, Mark Wheeler, and our CFO, Charlotte Parsons, for
their commitment and efforts in delivering for our business, our
clients and, most of all, our shareholders, over the period. The
efficiency gains that I have the privilege of reporting to you now
are, in very large measure, the results of their leadership and
hard work.
The business has successfully passed some important milestones
over the last 12 months. I am encouraged by the progress that we
have made to date, and I believe the strategic plan that we have
unveiled is an important step change in our strategy, and one which
will create value for our shareholders.
CEO's Statement
Introduction
I am pleased to report a significant turnaround in our trading
performance in FY23, moving from an underlying operating loss of
GBP0.4m in FY22 to an underlying operating profit of GBP1.0m in
FY23.
This year has seen us make significant progress toward the aims
we announced to shareholders at the start of FY23. We have focused
on the commercial imperative of putting your Group on to a
stronger, more sustainable, long term growth trajectory. The
changes which have taken place were necessary, and while our
objectives are close to being achieved, we still have more to
do.
I extend my thanks to our staff who have worked tirelessly to
deliver this transformative change across our global business
platform. I should like to thank Shaun Smith, our new Chair, for
his support and counsel and Charlotte Parsons, our Chief Financial
Officer, who joined us last year, and who has demonstrated her
resourcefulness, pragmatism and determination leading our finance
team in the delivery of a new ERP IT system. Although provided to
an extent earlier, this improved Management Information now
provides us with real time data which enables us to serve our
clients better and creates value for shareholders as we optimise
performance across the Group and better identify our opportunities
and take action on efficiencies.
From the initial realignment of our local priorities and
servicing in relation to the Middle East, which we announced in
November 2022, we have expanded the scope of this initiative to
bring the benefits of this process to every part of our global
operations in order to improve servicing of our clients and their
assignments. As we have previously explained, getting the benefits
of early action to flow through to the bottom line has taken time
and some efficiency gains incur an initial or short-term cost. But
I can report that the application of this more systemic and
forensic approach to metrics and operational performance
improvement has already started to flow through to the bottom
line.
As we have previously stated, the first beneficial effects of
this activity will be noticeable toward the end of H1 FY24. Cost
reduction programme will be completed by the end of December 2023,
some additional savings still to be fully unlocked in the current
year; for example existing office costs (including, in particular,
the costs of our Cannon Street London office which we have recently
vacated).
Overall trading environment
Over the last year, there has been no significant abatement in
the global economic headwinds that have continued to affect our
international franchise. These have impeded the ability of our
business to grow as we would wish and have presented a number of
challenges in relation to inflation and pressure on staff costs. At
present, we have not seen any challenges affecting our operations
in the Middle East in consequence of the continuing geopolitical
uncertainty in the region though we remain alert to the risk and
our team continuously monitor the local situation.
The conflict in Ukraine continues without any early prospect of
resolution, but we are well-placed to assist in the challenging
process of reconstruction across that region when the conflict
concludes and more normalised trading conditions return.
The Group continues to see and benefit from significant
investments by our clients in infrastructure projects, in
particular in the Middle East and, more specifically, the Kingdom
of Saudi Arabia. In South America, we are benefiting from an
increasing flow of arbitration work from the region, which
primarily comes from the marketing our office in New York conducts
in the region, but also through the team in Madrid, who offer the
necessary language capabilities.
I have previously noted the recruitment challenges in our
business resulting from the opportunistic recruitment behaviour of
our peers. Recently we have started to see that organisational
turbulence lessen with some staff being released back into the
market. We continue to monitor the recruitment market and will
always look to recruit talent in the long-term interests of our
business, and our clients.
Regional Breakdown: Europe and Americas
Our business in Europe remains a key pillar of our global
platform that consistently delivers not only on its business plans
but, also, contributes meaningfully to its planned strategic
growth. I am delighted to report that across our European offices,
we have seen growth in Spain, the Netherlands and Germany. We have
also been pleased to see our testifying delay expert resources
strengthened by new hires in Paris, adding further resilience and
depth as well as reinforcing the Group's multilingual capabilities
as we continue to focus on global collaboration between colleagues
across our global platform. This allows us to bring the best
possible service to our clients drawing upon expertise from
colleagues around the business.
In the UK, our Project Services business has once more delivered
well and consistently produces excellent work for an impressive and
loyal client base across the North-East and wider. Following an
exceptional record year in FY22, Driver Project Services has seen
its revenues return to more normalised levels and the business
remains a core part of our UK operations. Meanwhile, the UK
consulting team and our Diales experts have continued to secure
business and deliver advisory work around the world, and I am
pleased to report that they have delivered some exceptional results
for our clients who have achieved success both in arbitration
litigation and most importantly through supported negotiation.
Our business in the US has secured a number of significant
commissions over recent months and has expanded the team to ensure
sustainable levels of high quality delivery to our clients in the
region. The business has experienced some of the usual challenges
arising from gaps between commissions but these have been
successfully managed and, as that business continues to develop
critical mass, the business will benefit from the greater levels of
resilience and sustainability that come with organisational
growth.
Asia Pacific
In APAC, during FY23 our team experienced a period of change and
development. Our office in Australia has been consistently
profitable under the careful stewardship of our Regional Director
Mukul Soul, who is now, additionally, responsible for the Group's
Singapore office, where we have restructured our local presence.
This year, we have also established a new office and team in Seoul
which the global business is already benefiting from: business
opportunities secured with clients based in South Korea are
currently engaging members of our team in the Middle East, Europe,
and the UK - providing further proof that the strategy that we
announced at the start of the period is not only working but, in
fact, taking deep root across our business.
Middle East
In the Middle East, having successfully concluded the
restructuring process that we unveiled in our November 22 Trading
Update, we have wound down our local presence in Kuwait and Oman
and I should like to express our gratitude to our staff in that
region for their enormous help in collecting the significant
outstanding balances owed to the Group. In particular, I wish to
put on the record our thanks to Denis D'Souza, originally from our
Oman office, who has been a loyal supporter of the business for a
long time and played an instrumental role in securing the release
of the outstanding balances back to the Group.
In Qatar, our excellent team of technicians have continued to
win work across the region and, in line with our one business
structure, have been sharing their expertise across assignments
with colleagues in other offices in the region in order to place a
wider range of talents and skills at the disposal of our clients
and boost utilisation levels across the Group. This partnering
between offices and teams across our global business continues to
have a positive impact on our utilisation rates, which increased to
71% in the region in FY23 from 53% in FY22. As I write this
statement, I am working on a significant project on behalf of the
Group for a European client which operates in the United Arab
Emirates alongside local resources from our UAE team, a colleague
in Bristol, and a member of our technical engineering team from
London.
In successfully and seamlessly delivering the Middle East
restructuring we announced in November 2022, I can report that our
offices in the United Arab Emirates and the Kingdom of Saudi Arabia
have returned to profit. They continue to deliver excellent work to
our clients, enabling us to reduce further our aged debt in the
region while simultaneously receiving and responding to significant
volumes of new business enquiries and winning important work whose
fulfilment is shared with colleagues across other parts of the
Group. In this, our new Middle East senior management team has
delivered on the belief shown in them, helping us to deliver these
excellent results in such a short period of time.
Current Trading
The Group has delivered a creditable GBP1.4m recovery from an
underlying operating loss of GBP0.4m in FY22 to an underlying
operating profit of GBP1.0m in FY23. I view this improvement in FY
outcome positively against the global economic backdrop and
specific regional factors impeding performance.
As reported in the September 2023 Trading Update, the start to
H2 FY23 was slower than anticipated, but the Group delivered an
improved Q4 for FY23, with a significant number of commissions
secured in this period which benefited the year-end results and
delivered a trading profit of GBP0.2m for H2.
The Group continues to maintain a robust balance sheet and I am
pleased to report a further 18% improvement in our cash position to
GBP5.8m at September 2023 (September 2022: GBP4.9m).
We continue to see good staff retention rates across the
business and further recruitment of staff in key areas. A number of
high profile projects and successes, combined with a marked
increase in enquiries, and a significantly reduced cost-base,
stands the Group in good stead going forward and demonstrates the
delivery of our transformation strategy as we prepare to move up a
gear and set the business up for stronger, more sustainable
growth.
Strategy
Over the course of FY23, and in line with our policy of
de-risking across the entire business, we have kept all our
operations under continuous review. Our intention has been to
assess how best to extract maximum efficiency gains for the
business and our shareholders; build the right strategy to take the
Group forward over the coming years; and improve utilisation and
enhance margins.
We are pleased to announce a number of key decisions which will
begin a significant change in the way we deliver our service to
existing and prospective clients.
Branding
The branding of our global business will migrate to Diales,
currently the branding of our expert witness business, which
already constitutes 40% of our work worldwide. This will further
strengthen our competitive positioning for expert work, claims and
contractual advice services and eliminate existing branding
inconsistencies in the way in which we come to market across the
regions and territories in which we provide service. We will,
additionally, invest in developing the Diales brand further, with
the brand consolidation allowing us to focus our business
development and marketing efforts more efficiently and effectively
across a single branded global platform. In due course we plan to
rename Driver Group Plc to reflect this uniform brand change to
Diales.
Hub and spoke model
We will continue with and fully embed the hub and spoke model
for offices that we announced previously and initiated over the
course of FY23. We have completed a root and branch review of our
Business Development and marketing function and will continue to
monitor this area of the business closely, ensuring the Group
delivers the best possible return on investment.
Overseas offices
We have begun a process of resetting relationships with
operations across our global footprint and it may well be that, in
certain jurisdictions, there will be opportunities for local
management ownership and partnerships where we deem this
appropriate. Consistent with this, and in order to properly support
the global transition to the Diales brand in an orderly way, we are
prioritising and accelerating our initiatives to hire key work
winners and halo experts as we devote further attention and
resource to our premium expert witness service.
Service expansion
As the final component part of this comprehensive and integrated
transformation strategy, we will consider expanding our pool of
talent across our global business, both in the sectors in which we
currently operate as well as in adjacent sectors: we believe there
are significant potential commercial opportunities and synergies in
areas including, but not limited to, aerospace, financial
forensics, IT and marine.
We are confident that this strategy will deliver value accretion
through the identification and unlocking of further efficiency
gains, improved competitive positioning, enhanced client retention,
and pipeline development. In short, we believe these measures will
realise true underlying value that exists within the Group but
which remains under-exploited.
Capital allocation
The consultancy nature of our business model generates cash when
we are trading profitably. Our constant objective is to generate
increased levels of cash year on year. While we must retain a
strong balance sheet, we must also maintain an efficient balance
sheet.
As part of our Transformation Strategy, the Board considered our
approach to Capital Allocation and will allocate its own generated
cash to achieve the best returns for shareholders. This will
include:
-- Organic growth: growth of operations and capabilities, recruitment, infrastructure
-- Strategic acquisitions: services and activities in existing
areas or sectors and in complimentary new areas or sectors which
are earning enhancing with returns above our cost of capital
-- Return of surplus capital to Shareholders : the Group's
priority will be to deliver a progressive dividend policy. In
future, the Board will also consider additional ways to return
capital to include special dividends and tender offers or on market
share buybacks if the Board considers that the market values the
Group at a discount to its intrinsic value and the cancellation of
shares is in the long term interests of Shareholders
The Board has identified at least GBP1.0m of surplus cash. This
will be returned to shareholders within the current financial year
in a cost efficient manner - most likely an on market share
buyback. The Board considers that this is the most cost-efficient
way to achieve this return which also delivers long term benefits
to the Group.
Outlook
We enter the new financial year with a considerable number of
enquiries and improved confidence. This bodes well for the start of
the new year, and when coupled with the benefits now flowing
through from the cost-reduction measures taken and our initiatives
still underway gives us cause for optimism for the year ahead.
The last year has been one of reviewing performance in the
regions and the areas in which our business operates and a
resetting of the course going forward. The significant improvement
in underlying profit to GBP1.0m in FY23, represented a GBP1.4m
turnaround on FY22. While I am pleased with this progress, it does
not represent where we should be or what we are capable of
delivering.
Shareholders, and potential shareholders who are considering
investing in the Group, must always be aware that forward
visibility of revenues can be limited in view of dynamic client
requirements. This is not new to us, it is the nature of our work
and a challenge that we, like many consultancies and professional
services firms live with day in day out. We reduce the scale of the
challenges ahead with a simple formula: retain and recruit the best
and most experienced people who can deliver a high quality service
which encourages our clients to return to us with more work. We
manage our utilisation rates to improve margins and through brand
marketing and new business initiatives we seek to grow client
numbers and our pipeline to achieve our long term strategy.
Chief Financial Officer's Review
2022
2023 GBPm
Income Statement GBPm Restated**
------------------------------------- ------- -----------
REVENUE 42.63 45.07
Cost of sales (31.80) (35.57)
Impairment movement (0.05) (0.19)
------------------------------------- ------- -----------
GROSS PROFIT 10.78 9.31
Administrative expenses (10.45) (11.30)
Other operating income 0.04 0.13
Underlying* operating profit/(loss) 1.00 (0.39)
Non-recurring costs (0.26) (1.00)
Share-based payment charges
and associated costs (0.37) (0.47)
------------------------------------- ------- -----------
OPERATING PROFIT/(LOSS) 0.37 (1.86)
Finance income 0.13 -
Finance costs (0.06) (0.10)
------------------------------------- ------- -----------
PROFIT/(LOSS) BEFORE TAXATION 0.44 (1.96)
Tax expense (0.31) (0.46)
------------------------------------- ------- -----------
PROFIT/(LOSS) FROM CONTINUING
OPERATIONS 0.13 (2.42)
------------------------------------- ------- -----------
Loss on discontinued operations,
net of tax (0.46) (0.47)
------------------------------------- ------- -----------
LOSS FOR THE YEAR (0.33) (2.89)
------------------------------------- ------- -----------
The key financial metrics are as follows:
Key Metrics 2023 2022 2022
Restated
---------------------- ----------- ---------- ----------
Revenue GBP42.63m GBP45.07m GBP46.90m
Gross Margin % 25% 21% 21%
Underlying* operating GBP1m (GBP0.39)m (GBP0.39)m
profit/(loss)
Loss for the year (GBP0.33)m (GBP2.89)m (GBP2.89)m
Utilisation Rates** 72.5% 67.5% 67.5%
Basic (loss)/earnings
per share (0.2)p (4.6)p (4.6)p
---------------------- ----------- ---------- ----------
Revenue from continuing operations decreased by 4% to GBP42.6m
(2022: GBP45.1m); this reduction is attributable to the
restructured Middle East and Asia Pacific regions. Gross profit
margin increased by 4% to 25% (2022: 21%), a GBP1.5m increase to
GBP10.8m (2022: GBP9.3m). This resulted in an increase in
underlying* operating profit year on year of GBP1.4m to GBP1m
(2022: Loss GBP0.4m). There was an increase in net cash year on
year of GBP0.9m to GBP5.8m (2022: GBP4.9m), after funding a
dividend payment of GBP0.8m (2022: GBP0.8m).
Central costs have been allocated on a different basis this
year; the segmental analysis below is therefore stated prior to
that charge for both periods for comparative purposes:
The EuAm region increased revenue by 1.4% to GBP35.6m (2022:
GBP35.1m) with a stable segmental underlying operating profit pre
central cost recharge of GBP5.3m (2022: GBP5.4m). This was driven
by solid revenues in the UK of GBP24.0m (2022: GBP24.9m) an
increase in revenues in mainland Europe of 19% to GBP8.8m (2022:
GBP7.4m) and a stable revenue in North America of GBP2.8m (2022:
GBP2.8m).
The ME region saw revenues decrease during the year by 34.4% to
GBP4.2m (2022: GBP6.4m) as a result of restructure during FY22. The
segmental underlying operating profit pre central cost recharge for
the region was a turnaround of GBP1.4m to a small loss of GBP0.1m
(2022: loss GBP1.3m).
The APAC region saw revenues reduce by 19% to GBP2.9m (2022:
GBP3.6m) as a result of the restructure during FY22. The segmental
underlying operating profit pre central cost recharge for the
region was a loss of GBP0.2m (2022: loss GBP0.2m).
The profit before tax was GBP0.4m (2022: loss GBP2.0m)) after
non-recurring costs of GBP0.2m (2022: GBP1.0m) charge for
share-based payments of GBP0.4m (2022: GBP0.5m) and net finance
income of GBP0.1m (2021: charge GBP0.1m).
There was a loss on discontinued operations relating mainly to
Oman and Kuwait of GBP0.5m (2022: GBP5m).
The utilisation*** rate of chargeable staff across the business
as a whole for the year increased to 72.5% (2022: 67.5%). Across
the regions this was 74% in EuAm, 63% in APAC and 71% in the Middle
East.
NET WORKING CAPITAL
Net cash** increased further, closing the year at GBP5.8m (2022:
GBP4.9m) with an increase in net working capital following a
decrease in outstanding debtors and a decrease in creditors.
TAXATION
The Group incurred a tax charge of GBP0.3m (2022: GBP0.5m). The
tax charge includes the effects of expenses not deductible for tax
purposes and is calculated at the prevailing rates for the
jurisdictions in which the Group operates.
EARNINGS PER SHARE
The basic loss per share was 0.6 pence (2022: loss 5.5 pence).
Underlying* basic profit per share was 1.4 pence (2022: loss 1.8
pence).
CASH FLOW
There was a net cash inflow from operating activities before
changes in working capital of GBP1.0m (2022: GBP1.3m), including
the current year benefit of GBP0.6m (2022: GBP1.0m) from the
amortisation of right of use assets under IFRS16. The movement also
reflects the reported loss for the year of GBP0.3m (2022: GBP2.9m)
after depreciation of GBP0.2m (2022: GBP0.2m). There was a decrease
of GBP6.2m in trade and other receivables (2022: increase of
GBP1.3m) reflecting the lower revenue and continuing strong debt
collection, and a decrease in trade and other payables of GBP4.7m
(2022: decrease GBP4.0m) resulting in a net cash inflow from
operating activities of GBP2.4m (2022: GBP0.9m). Net tax paid in
the year was GBP0.2m (2022: GBP0.5m).
There was a net cash outflow from investing activities of
GBP0.01m (2022: GBP0.6m) which relates to office relocations and IT
spend.
Net cash flow from financing activities was an outflow of
GBP1.5m (2022: GBP2.2m) with the current year reflecting the
dividends paid of GBP0.8m (2022: GBP0.8m) and lease repayments
under IFRS 16 of GBP0.7m (2022: GBP0.8m). The prior year included
the share buyback programme of GBP0.5m.
cash flow GBPm
---------------------------- ------
Net cash** at 30 September
2022 4.9
Operating cash flow
before changes
in working capital 1.0
Decrease in Trade and
other receivables 6.2
Increase in Trade and
other payables (4.7)
Tax paid (0.2)
Net interest received 0.1
Net Capital spend (0.1)
Dividends paid (0.8)
Purchase of Treasury -
shares
Repayment of leases (0.7)
Effects of Foreign Exchange 0.1
Net cash** at 30 September
2023 5.8
---------------------------- ------
LIQUIDITY AND GOING CONCERN
The Group continues to be in a strong financial position. At the
year end the Group had increased net cash balances of GBP5.8m
(2022: GBP4.9m). The net cash position is appropriate for the
Group's operating requirements going forward but management are
exploring new facilities to implement a more flexible working
capital arrangement.
The Directors have completed a review of the Group's financial
forecasts for a period of twelve months from the date of approving
these financial statements. This review included sensitivity
analysis and stress tests which took account of reasonable and
foreseeable scenarios. Under all scenarios modelled the Directors
anticipate that any funding needs required would be sufficiently
covered by the existing cash reserves. As such the Directors have a
reasonable expectation that the Group has sufficient resources to
meet its obligations when they fall due for at least twelve months
from the date of signing this report and hence these financial
statements include information prepared on a going concern
basis.
DIVIDS
The Directors propose a final dividend for 2023 of 0.75p per
share (2022: 0.75p per share) in addition to the interim dividend
paid in October 2023 of 0.75p per share (2022: 0.75p). This will be
paid on 11 April 2024 to shareholders who are on the register of
members at the close of business on 1 March 2024, with an
ex-dividend date of 29 February 2024, subject to approval at the
Group's Annual General Meeting.
* Underlying figures are stated before the share-based payment
costs and non-recurring costs
**Net cash consists of cash and cash equivalents
***Utilisation % is calculated by dividing the total hours
billed by the total working hours available for chargeable
staff-
CONSOLIDATED INCOME STATEMENT
For the year ended 30 September 2023
2022
2023 GBP000
GBP000 Restated**
----------------------------------------------------------- -------- -----------
REVENUE 42,633 45,074
Cost of sales (31,800) (35,573)
Impairment movement (55) (188)
----------------------------------------------------------- -------- -----------
GROSS PROFIT 10,778 9,313
Administrative expenses (10,452) (11,304)
Other operating income 47 133
----------------------------------------------------------- -------- -----------
Underlying* operating profit/(loss) 998 (393)
Non-recurring costs (255) (1,000)
Share-based payment charges and associated costs (370) (465)
----------------------------------------------------------- -------- -----------
OPERATING PROFIT/(LOSS) 373 (1,858)
Finance income 129 -
Finance costs (63) (100)
----------------------------------------------------------- -------- -----------
PROFIT/(LOSS) BEFORE TAXATION 439 (1,958)
Tax expense (314) (460)
----------------------------------------------------------- -------- -----------
PROFIT/(LOSS) FROM CONTINUING OPERATIONS 125 (2,418)
Loss on discontinued operations, net of tax (461) (468)
LOSS FOR THE YEAR (336) (2,886)
----------------------------------------------------------- -------- -----------
Loss attributable to non-controlling interest from - -
continuing operations
Loss attributable to non-controlling interest from
discontinued operations - (2)
Profit/(loss) attributable to equity shareholders
of the Parent from continuing operations 125 (2,418)
Loss attributable to equity shareholders of the
Parent from discontinued operations (461) (466)
----------------------------------------------------------- -------- -----------
LOSS FOR THE YEAR (336) (2,886)
----------------------------------------------------------- -------- -----------
Basic (loss) per share attributable to equity shareholders
of the Parent (pence) (0.6)p (5.5)p
Diluted (loss) per share attributable to equity
shareholders of the Parent (pence) (0.6)p (5.3)p
Basic earning/(loss) per share attributable to
equity shareholders of the Parent (pence) from
continuing operations 0.2p (4.6)p
Diluted earnings/(loss) per share attributable
to equity shareholders of the Parent (pence) from
continuing operations 0.2p (4.5)p
----------------------------------------------------------- -------- -----------
* Underlying figures are stated before the share-based payment
costs and non-recurring costs.
** Presentation of results restated to reflect separate
disclosure of net losses from operations discontinued in the 2023
financial year.
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2023
2023 2022
GBP000 GBP000
------------------------------------------------------- ------- -------
LOSS FOR THE YEAR (336) (2,886)
------------------------------------------------------- ------- -------
Other comprehensive income:
Items that could subsequently be reclassified to
the Income Statement:
Exchange differences on translating foreign operations 431 (970)
------------------------------------------------------- ------- -------
OTHER COMPREHENSIVE PROFIT/(LOSS) FOR THE YEAR
NET OF TAX 431 (970)
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR THE YEAR 95 (3,856)
------------------------------------------------------- ------- -------
Total comprehensive income attributable to:
Owners of the Parent 95 (3,854)
Non-controlling interest - (2)
------------------------------------------------------- ------- -------
95 (3,856)
------------------------------------------------------- ------- -------
Consolidated Statement of Financial Position
As at 30 September 2023
2023 2022
-------------------------------
GBP000 GBP000 GBP000 GBP000
------------------------------- ------- ------- -------- --------
NON-CURRENT ASSETS
Goodwill 2,969 2,969
Property, plant and equipment 351 384
Intangible asset 714 798
Right of use asset 1,140 1,375
Deferred tax asset 247 192
------------------------------- ------- ------- -------- --------
5,421 5,718
------------------------------- ------- ------- -------- --------
CURRENT ASSETS
Trade and other receivables 14,033 20,281
Derivative financial asset - -
Current tax receivable 69 470
Cash and cash equivalents 5,833 4,931
------------------------------- ------- ------- -------- --------
19,935 25,682
------------------------------- ------- ------- -------- --------
TOTAL ASSETS 25,356 31,400
------------------------------- ------- ------- -------- --------
CURRENT LIABILITIES
Lease creditor (539) (754)
Trade and other payables (8,052) (11,296)
Derivative financial liability - (1,938)
Current tax payable - (251)
------------------------------- ------- ------- -------- --------
(8,591) (14,239)
------------------------------- ------- ------- -------- --------
NON-CURRENT LIABILITIES
Lease creditor (618) (634)
Deferred tax liabilities (160) (169)
------------------------------- ------- ------- -------- --------
(778) (803)
TOTAL LIABILITIES (9,369) (15,042)
------------------------------- ------- ------- -------- --------
NET ASSETS 15,987 16,358
------------------------------- ------- ------- -------- --------
SHAREHOLDERS' EQUITY
Share capital 216 216
Share premium 11,496 11,496
Merger reserve 1,055 1,055
Currency reserve (950) (1,381)
Capital redemption reserve 18 18
Treasury shares (1,525) (1,525)
Retained earnings 5,676 6,478
Own shares (3) (3)
------------------------------- ------- ------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 15,983 16,354
NON-CONTROLLING INTEREST 4 4
------------------------------- ------- ------- -------- --------
TOTAL EQUITY 15,987 16,358
------------------------------- ------- ------- -------- --------
CONSOLIDATED CASHFLOW STATEMENT
For the Year Ended 30 September 2023
2023 2022
GBP000 GBP000
------------------------------------------------------------ ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year (336) (2,886)
------------------------------------------------------------ ------- -------
Adjustments for:
Depreciation 162 239
Exchange adjustments (79) (361)
Amortisation of right of use asset 611 917
Amortisation of intangible asset 84 40
Finance expense (66) 100
Tax expense 314 460
Equity settled share-based payment charge 319 229
------------------------------------------------------------ ------- -------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL
AND PROVISIONS 1,009 (1,262)
Decrease/(increase) in trade and other receivables 6,246 (1,330)
Increase/(decrease) in trade and other payables (4,722) 4,000
------------------------------------------------------------ ------- -------
CASH GENERATED IN OPERATIONS 2,533 1,408
------------------------------------------------------------ ------- -------
Tax paid (172) (539)
------------------------------------------------------------ ------- -------
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,361 869
------------------------------------------------------------ ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 129 -
Acquisition of property, plant and equipment (143) (398)
Proceeds from the disposal of property, plant and equipment - 150
Acquisition of intangible assets - (321)
------------------------------------------------------------ ------- -------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (14) (569)
------------------------------------------------------------ ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (63) (100)
Repayment of borrowings - (1,000)
Proceeds of borrowings - 1,000
Repayment of lease liabilities (676) (821)
Purchase of Treasury shares - (500)
Dividends paid to equity shareholders of the Parent (785) (783)
------------------------------------------------------------ ------- -------
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (1,524) (2,204)
------------------------------------------------------------ ------- -------
Net increase/(decrease) in cash and cash equivalents 823 (1,904)
Effect of foreign exchange on cash and cash equivalents 79 361
Cash and cash equivalents at start of period 4,931 6,474
------------------------------------------------------------ ------- -------
CASH AND CASH EQUIVALENTS AT OF PERIOD 5,833 4,931
------------------------------------------------------------ ------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year ended 30 September 2023
Share Merger Own Non- Total
Share Retained controlling
capital premium reserve Other earnings shares(3) Total(1 interest Equity
Treasury
shares reserves(2)
000GBP 000GBP GBP000 000GBP 000GBP 000GBP 000GBP 000GBP 000GBP GBP000
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
OPENING
BALANCE AT 1
OCTOBER 2021 216 11,496 (1,025) 1,055 (393) 9,916 (3) 21,262 6 21,268
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
Loss for the
year - - - - - (2,884) - (2,884) (2) (2,886)
Other
comprehensive
loss
for the year - - - - (970) - - (970) - (970)
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
Total
comprehensive
loss
for the year - - - - (970) (2,884) - (3,854) (2) (3,856)
Dividends - - - - - (783) - (783) - (783)
Share-based
payment(4) - - - - - 229 - 229 - 229
Purchase of
Treasury
shares - - (500) - - - - (500) - (500)
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
CLOSING
BALANCE AT 30
SEPTEMBER
2022 216 11,496 (1,525) 1,055 (1,363) 6,478 (3) 16,354 4 16,358
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
OPENING
BALANCE AT 1
OCTOBER 2022 216 11,496 (1,525) 1,055 (1,363) 6,478 (3) 16,354 4 16,358
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
Loss for the
year - - - - - (336) - (336) - (336)
Other
comprehensive
profit
for the year - - - - 431 - - 431 - 431
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
Total
comprehensive
profit
for the year - - - - 431 (336) - 95 - 95
Dividends - - - - - (785) - (785) - (785)
Share-based
payment(4) - - - - - 319 - 319 - 319
Purchase of - - - - - - - - - -
Treasury
shares
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
CLOSING
BALANCE AT 30
SEPTEMBER
2023 216 11,496 (1,525) 1,055 (932) 5,676 (3) 15,983 4 15,987
-------------- -------- --------- --------- --------- ------------- --------- ----------- -------- ------------- --------
(1) Total equity attributable to the equity holders of the
Parent.
(2) 'Other reserves' combines the currency reserve and capital
redemption reserve. The movement in the current and prior year
relates to the translation of foreign currency equity balances and
foreign currency non-monetary items.
(3) The shortfall in the market value of the shares held by the
EBT and the outstanding loan is transferred from own shares to
retained earnings.
(4) The amount stated reflects only the share-based payment
charge and does not include the associated costs that are included
within the amount stated on the consolidated Income Statement.
BASIS OF PREPARATION
The Financial Statements have been prepared under the historical
cost convention, as modified by the revaluation of certain assets,
and in accordance with Applicable Accounting Standards.
The Financial Statements have been prepared on a going concern
basis. In reaching their assessment, the Directors have considered
a period extending at least twelve months from the date of approval
of this financial report.
The Directors have prepared cash flow forecasts covering a
period of more than 12 months from the date of releasing these
financial statements. This assessment has included consideration of
the forecast performance of the business for the foreseeable
future, the cash and financing facilities available to the Group.
At 30 September 2023 the Group had cash reserves of GBP5.8m. The
strong cash position was after a year of restructure within the
Group.
The Directors have also prepared a stress case scenario that
demonstrates the Group's ability to continue as a going concern
even with a significant drop in revenues and limited mitigating
cost reduction to re-align with the revenue drop.
Based on the cash flow forecasts prepared including appropriate
stress testing, the Directors are confident that any funding needs
for at least 12 months from the date of signing the report required
by the business will be sufficiently covered by the existing cash
reserves. As such these Financial Statements have been prepared on
a going concern basis.
SEGMENTAL ANALYSIS
REPORTABLE SEGMENTS
For management purposes, the Group is organised into three
operating divisions: Europe & Americas (EuAm), Middle East (ME)
and Asia Pacific (APAC). This has remained unchanged from the
previous year. These divisions are the basis on which the Group is
structured and managed, based on its geographic structure. The
following key service provisions are provided across all three
operating divisions: quantity surveying, planning / programming,
quantum and planning experts, dispute avoidance / resolution,
litigation support, contract administration and commercial advice /
management. Segment information about these reportable segments is
presented below.
Prior period restatement due to discontinued operations
The presentation below includes a prior period adjustment in the
form of the re-presentation of the income statement for 2022. This
has been done to ensure clear comparative data for readers of the
accounts following the recognition of discontinued operations in
2023. The impact of this prior year restatement on the results for
the year and shareholders' funds/net assets is GBPnil.
Europe Middle Asia
Year ended 30 September & Americas East Pacific Eliminations Unallocated Continuing Discontinued
2023 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Total external revenue 35,574 4,220 2,927 (88) - 42,633 1,893
Total inter-segment revenue 998 388 473 (1,859) - - -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Total revenue 36,572 4,608 3,400 (1,947) - 42,633 1,893
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Segmental profit/(loss)
pre central cost charge 5,285 (88) (239) - (3,685) 1,273 (325)
Central cost charge (3,057) (288) (204) - 3,685 136 (136)
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Segmental profit/(loss) 2,228 (376) (443) - - 1,409 (461)
Unallocated corporate
expenses(1) - - - - (411) (411) -
Share-based payments
charge and associated
costs - - - - (370) (370) -
Non-recurring costs (76) (179) - - - (255) -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Operating profit/(loss) 2,152 (555) (443) - (781) 373 (461)
Finance income - - - - 129 129 -
Finance expense - - - - (63) (63) -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Profit/(loss) before
taxation 2,152 (555) (443) - (715) 439 (461)
Taxation - - - - (314) (314) -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Profit/(loss) for the
period 2,152 (555) (443) - (1,029) (125) (461)
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
OTHER INFORMATION
Non current assets 3,285 78 16 - 1,888 5,267 155
Reportable segment assets 17,867 3,495 1,715 - 1,305 24,384 1,379
Capital additions(2) 1,173 14 8 - - 1,195 -
Depreciation and amortisation 570 30 8 - - 608 4
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs and expenses
associated with AIM.
(2) Capital additions comprise additions to property, plant and
equipment and intangible assets. No client had revenue exceeding
10% of the Group's revenue in the year to 30 September 2023.
Europe Middle Asia
Year ended 30 September & Americas East Pacific Eliminations Unallocated Continuing Discontinued
2022 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Total external revenue 35,089 6,410 3,575 - - 45,074 1,823
Total inter-segment revenue 1,093 754 439 (2,398) - (113) 113
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Total revenue 36,182 7,164 4,014 (2,398) - 44,961 1,936
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Segmental profit/(loss)
pre central cost charge 5,400 (1,318) (214) - (1,835) 2,033 (353)
Central cost charge (1,477) (131) (227) - 1,835 - (115)
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Segmental profit/(loss) 3,923 (1,449) (441) - - 2,033 (468)
Unallocated corporate
expenses(1) - - - - (2,426) (2,426) -
Share-based payments
charge and associated
costs - - - - (465) (465) -
Non-recurring costs - - - - (1,000) (1,000) -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Operating profit/(loss) 3,923 (1,449) (441) - (3,891) (1,858) (468)
Finance income - - - - - - -
Finance expense - - - - (100) (100) -
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
Profit/(loss) before
taxation 3,923 (1,449) (441) - (3,991) (1,958) (468)
Taxation - - - - (460) (460) -
Profit/(loss) for the
period 3,923 (1,449) (441) - (4,451) (2,418) (468)
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
OTHER INFORMATION
Non current assets 3,241 105 14 - 2,184 5,544 174
Reportable segment assets 17,780 4,888 1,647 - 1,855 26,170 5,230
Capital additions(2) 138 249 3 - 326 716 3
Depreciation and amortisation 566 212 118 - 259 1,155 41
------------------------------ ----------- ------- -------- ------------ ----------- ---------- ------------
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs and expenses
associated with AIM.
(2) Capital additions comprise additions to property, plant and
equipment and intangible assets. No client had revenue exceeding
10% of the Group's revenue in the year to 30 September 2022.
Geographical information
External revenue by location of customers (CONTINUED 2023
AND DISCONTINUED OPERATIONS) GBP000 2022 GBP000
----------------------------------------------------- ------- -----------
United Kingdom 20,975 21,624
Netherlands 4,221 3,241
Germany 2,987 3,154
United Arab Emirates 1,532 2,074
Australia 2,464 2,041
South Korea 124 1,372
Qatar 129 1,357
Oman 1,948 1,327
Singapore 1,321 1,156
Saudi Arabia 1,700 1,150
France 1,509 1,107
Canada 801 1,059
Spain 433 975
United States 1,937 876
Italy 830 707
Hong Kong 67 626
Ireland 7 403
Kuwait 68 341
Peru 70 328
Belgium 284 279
Serbia 87 233
Norway 99 198
Russia - 192
Malaysia 116 170
South Africa 195 149
Philippines - 107
Chile 54 105
Indonesia 31 99
Other countries 537 447
----------------------------------------------------- ------- -----------
44,526 46,897
----------------------------------------------------- ------- -----------
Geographical information of Non current assets
2023 2022
GBP000 GBP000
------------ ------- -------
UK 5,019 5,094
Oman 124 140
UAE 49 63
Singapore 6 121
Qatar 29 42
Malaysia 31 34
Kuwait - -
Hong Kong - -
Netherlands 91 148
France 3 11
Australia 10 9
Canada 3 3
USA 13 8
Spain 7 6
Germany 37 39
------------ ------- -------
5,422 5,718
------------ ------- -------
Analysis of the tax charge
The tax charge on the profit for the year is as follows:
2023 2022
GBP000 GBP000
-------------------------------------------------- ------- -------
Current tax:
UK corporation tax on profit for the year 153 71
Non-UK corporation tax 335 140
Adjustments to the prior period estimates (110) -
-------------------------------------------------- ------- -------
378 211
Deferred tax:
Origination and reversal of temporary differences (64) 249
-------------------------------------------------- ------- -------
Tax charge for the year 314 460
-------------------------------------------------- ------- -------
FACTORS AFFECTING THE TAX CHARGE
The tax assessed for the year varies from the standard rate of
corporation tax in the UK. The difference is explained below:
2023 2022
GBP000 GBP000
------------------------------------------------------- ------- -------
Loss before tax (22) (2,426)
------------------------------------------------------- ------- -------
Expected tax charge based on the standard average rate
of corporation tax in the UK of 22% (2022: 19%) (5) (461)
Effects of:
Expenses not deductible 2,475 237
Deferred tax - other differences (65) 249
Share options exercised 59 (99)
Foreign tax rate differences (1,240) 554
Adjustment to prior period estimates (110) -
Utilisation of losses (281) (32)
Unprovided losses (519) 12
------------------------------------------------------- ------- -------
Tax charge for the year 314 460
------------------------------------------------------- ------- -------
Factors that may affect future tax charges
The Corporation tax rate for the year ended 30 September 2023
was a hybrid rate of 22%. This is following the announcement in the
Budget on 3 March 2021 that the corporation tax rate would be
increased to 25% with effect from 1 April 2023. Legislation that
was substantively enacted in the Finance Bill 2021. To this end the
UK corporation tax rate applied in future years is expected to be
at a higher rate in line with this legislation.
earnings per share
2023 2022
GBP000 GBP000
----------------------------------------------------------- ----------- -----------
Loss for the financial year attributable to equity
shareholders (336) (2,884)
Non-recurring costs 255 1,000
Share-based payment charges and associated costs 370 465
Loss from discontinued operations 461 468
----------------------------------------------------------- ----------- -----------
Underlying profit/(loss) for the year before share-based
payments, non-recurring costs and loss from discontinued
operations 750 (951)
Weighted average number of shares:
Ordinary shares in issue 53,962,868 53,962,868
Shares held by EBT (3,677) (3,677)
Treasury shares (1,520,488) (1,405,839)
----------------------------------------------------------- ----------- -----------
Basic weighted average number of shares 52,438,703 52,553,352
----------------------------------------------------------- ----------- -----------
Effect of Employee share options 1,625,179 2,309,028
----------------------------------------------------------- ----------- -----------
Diluted weighted average number of shares 54,063,882 54,862,380
----------------------------------------------------------- ----------- -----------
Basic loss per share (0.6)p (5.5)p
Diluted loss per share (0.6)p (5.3)p
Underlying basic earnings/(loss) per share before
share-based payments, non-recurring costs and loss
from discontinued operations 1.4p (1.9)p
Basic earnings/(loss) per share attributable to equity
shareholders of the parent (pence) from continuing
operations 0.2p (4.6)p
Diluted earnings/(loss) per share attributable to
equity shareholders of the parent (pence) from continuing
operations 0.2p (4.4)p
----------------------------------------------------------- ----------- -----------
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Some asset and liability amounts reported in the Consolidated
Financial Statements contain a degree of management estimation and
assumptions. There is therefore a risk of significant changes to
the carrying amounts for these assets and liabilities within the
next financial year. The estimates and assumptions are made on the
basis of information and conditions that exist at the time of the
valuation.
The following are considered to be key accounting estimates:
Impairment reviews
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash generating units to which goodwill
has been allocated. The value in use calculation requires an entity
to estimate the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate
present value. An impairment review test has been performed at the
reporting date and no impairment is required.
Receivables impairment provisions
The amounts presented in the Consolidated Statement of Financial
Position are net of allowances for doubtful receivables, estimated
by the Group's management based on the expected credit loss within
IFRS 9. This is calculated using a simplified model of recognising
lifetime expected losses based on the geographical location of the
Group's entities and considers historical default rates, projecting
these forward taking into account any specific debtors and
forecasts relating to local economies. At the Statement of
Financial Position date a GBP2,960,000 (2022: GBP3,159,000)
provision was required. If management's estimates changed in
relation to the recoverability of specific trade receivables the
provision could increase or decrease. Any future increase to the
provision would lead to a corresponding increase in reported losses
and a reduction in reported total assets.
Revenue recognition on fixed fee projects
Where the Group enters into a formal fixed fee arrangement
revenue is recognised by reference to the stage of completion of
the project. The stage of completion will be estimated by the
Group's management based on the Project Manager's assessment of the
contract terms, the time incurred and the performance obligations
achieved and remaining.
POST BALANCE SHEET EVENTS
There have been no significant events requiring disclosure since
30 September 2023.
END
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END
FR FXLLFXLLBFBZ
(END) Dow Jones Newswires
December 14, 2023 02:00 ET (07:00 GMT)
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