TIDMTLY
RNS Number : 4909G
Totally PLC
23 July 2019
Totally plc
("Totally", "the Company" or "the Group")
Results for the 12-month period ended 31 March 2019
The Board of Totally (AIM: TLY), the provider of a range of
out-of-hospital services to the healthcare sector in the UK, is
pleased to announce its audited results for the 12-month period
ended 31 March 2019.
Operational highlights
-- Successful year which saw the Company deliver upon on a number of agreed operational targets
-- Secured new and renewed contracts across a number of regions
nationwide, with a value in excess of GBP35m
-- Major improvements to Vocare service provision, evidenced by
Care Quality Commission ratings with 18/20 of its registered
services rated "Good"
-- In an almost unprecedented move, the CQC upgraded Vocare's
Royal Stoke Urgent Care Centre service by two ratings within six
months, from 'Inadequate' to 'Good'
-- Post-period end completed GBP9.7m fundraise and highly
complementary acquisition of Greenbrook Healthcare
Financial highlights
-- Revenue up 83.5% to GBP78.0m (15 months to 31 March 2018: GBP42.5m)
-- Gross profit up 73% to GBP12.1m (15 months to 31 March 2018: GBP7.0m)
-- EBITDA* up 450% to GBP1.1m (15 months to 31 March 2018: GBP0.2m)
-- Cash of GBP7.5m as at 31 March 2019 (2018: GBP10.2m)
*Earnings before interest, tax, depreciation and amortisation,
before exceptional items of GBP0.1 million
Chairman's statement
I am pleased to report an excellent set of results for the 12
months ending 31 March 2019, with a turnover of GBP78.0m (2018:
GBP42.5m) and pre-exceptional EBITDA of GBP1.1m (2018:
GBP0.2m).
Cash was again well managed, with cash at year end of GBP7.5m.
There are no further earn out payments due on any of the operating
subsidiaries.
The Vocare acquisition in October 2017 brought its challenges
but I am delighted to confirm that the business is performing in
line with the expectations we had when the business was
acquired.
When we acquired Vocare the operational performance was less
than Totally would find acceptable, I am therefore delighted that
as at the year end 18 out of 20 registered services reviewed by the
Care Quality Commission (CQC) were rated as Good.
About Health, our dermatology business, has progressed well and
was successful in both growing the contract base and the range of
services provided. The remaining businesses have continued their
work with the NHS and other public sector bodies including
expanding services across prison services in England.
All stakeholders will be aware of the buy and build strategy
that the Group adopted some years ago. Since the year end the Group
announced the acquisition of Greenbrook Healthcare, a leading
provider of NHS urgent care centres in London.
I commend the employees led by Wendy Lawrence in driving the
growth in both revenues and service provision.
Bob Holt
Chairman
24 July 2019
CEO's statement
2018/19 was another busy year for Totally, during which we set
ourselves a range of operational targets across the business, which
were delivered on all fronts.
Work has continued across all of our businesses to ensure that
we provide the highest quality of service to the patients we see.
During the year we have seen our quality ratings from the Care
Quality Commission (CQC) improve significantly, resulting in 18 of
Vocare's 20 registered services rated as Good. This is testament to
the work undertaken by everyone to ensure systems and processes are
robust and support front line clinical staff to deliver safe,
effective, high quality care.
During the year we have been able to announce over GBP35m in new
and renewed business across our portfolio of companies which,
again, is testament to our staff and the relationships they build
with the commissioners of our services. We continue to do our
utmost to ensure that we are seen as a partner of choice for the
NHS and other healthcare commissioners.
Since the year end we were thrilled to announce the completion
of our acquisition of Greenbrook Healthcare, who are themselves a
high-quality provider of urgent care centres across Greater London.
Greenbrook's services are complementary to those of Vocare. We plan
to expand our urgent care businesses utilising the national
footprint and existing platforms already in Totally. Roles within
Totally have been agreed with some senior people previously working
in Greenbrook to ensure we are positioned to grow the business and
respond to new opportunities. One of these is Michael Steel, CEO at
Greenbrook Healthcare, who has joined the board of Totally plc.
Our dermatology business, About Health, had a number of
successes in retaining existing contracts and growing both the
contract base and range of services provided. We were further
pleased with the performance of our physiotherapy businesses with
the retention of contracts and the continued expansion of services
across prison and occupational health, working in partnership with
Care UK amongst others.
Outlook
Demand for planned and urgent care services continues to rise
and therefore the demands we face for our services are always
increasing. January 2019 saw the publication of the NHS Long Term
Plan, which reconfirmed the importance of, and reliance placed
upon, partners of the NHS, as demand for services continues to
increase. Urgent Care is one of the key priorities within that plan
which, again, emphasises the need for a smooth transition to seeing
more Integrated Urgent Care Services across the country. This is
also in line with the Integrated Urgent Care service specification
published by the NHS during August 2017. Following the acquisitions
of Vocare and more recently, Greenbrook, Totally is extremely well
placed to benefit from this trend.
The pipeline of new opportunities continues to be strong across
the Group, as do the opportunities to look at new business streams
across the UK. Given the completion of the recent acquisition of
Greenbrook Healthcare, the year ahead will see us focus on organic
growth as well as integrating our subsidiaries and bringing
together business streams, whilst at the same time further
developing the culture of Totally to ensure we can attract and
retain the very best staff.
I must thank everyone at Totally for their dedication and
commitment to the business and to our investors for their continued
support
Wendy Lawrence
CEO
24 July 2019
Financial Review
After a year of integration, improving performance and
operational restructure, the Group ended the financial year with a
stable monthly run rate. Solid focus on clinical operations during
the year has stabilised the business and secured the foundation for
our growth plans.
Implementing a more focused operational and financial structure
coupled with clear accountability has delivered a more effective
and sustainable platform for national scale. Whilst some investment
was required to restructure and stabilise the Vocare business, the
majority of cash consumption during the year to 31 March 2019 was
driven by the rectification action plans required to improve many
of the Vocare clinical services.
Since the year end Totally plc has completed the acquisition of
Greenbrook Healthcare for a total consideration of GBP11.5 million.
This acquisition occurred following a successful placing and open
offer to raise GBP9.7m (before expenses) at 10p in June 2019. The
acquisition completed on 20 June 2019.
The Group posted an EBITDA of GBP1.1m excluding exceptional
costs.
12 months ended 15 months ended
31 Mar 2019 31 Mar 2018
============ =============== ===============
Revenue GBP78.0m GBP42.5m
============ =============== ===============
Gross profit GBP12.1m GBP7.0m
============ =============== ===============
EBITDA GBP1.1m GBP0.2m
============ =============== ===============
Depreciation (GBP0.6m) (GBP0.3m)
============ =============== ===============
Amortisation (GBP2.2m) (GBP1.5m)
============ =============== ===============
(LBT)/PBT (GBP1.8m) GBP2.1m
============ =============== ===============
Net assets GBP25.9m GBP27.3m
============ =============== ===============
Cash GBP7.5m GBP10.2m
============ =============== ===============
The loss before tax of GBP1.8m is stated after an amortisation
charge of GBP1.7m relating to the intangible value of contracts
acquired.
The growth in revenue primarily reflects the full year effect of
the Vocare acquisition which completed on 24 October 2017. Several
contract extensions and retentions were announced during the 12
months to 31 March 2019 as were new contract wins in Vocare,
Premier Physical Healthcare and About Health. The 'Other' business
segment has organically grown revenues by GBP1.9m (27%) year on
year. The Group's physiotherapy businesses showed 12.5% growth year
on year while About Health generated 45% growth compared to the
previous financial year. Vocare has maintained its revenues despite
the mutual termination of Somerset GP OOH and 111 contracts during
the year reflecting organic growth in the existing contract base
and other new contract wins.
Exceptional items
GBP'000
================================================== =======
Acquisition related costs (465)
================================================== =======
Gain on remeasurement of contingent consideration 2,668
================================================== =======
Impairment of goodwill (2,000)
================================================== =======
Other exceptional costs (77)
================================================== =======
126
================================================== =======
Acquisition costs
The acquisition costs comprise legal, professional and other
related expenditure and amounted to GBP0.5m (2018: GBP1.2m).
Contingent consideration
The final earnout period for previous acquisitions expired at 31
March 2019. No performance-related earnout payments were made
during the year and no further payments are due.
The remaining balance of contingent consideration is payable in
respect of the Vocare acquisition and relates to monies advanced to
employees during the first month of employment. The balance is
payable quarterly and reflects advances recovered from
employees.
As the earnout period has expired the balance of contingent
consideration has been revalued to zero.
Premier
Physical About
Healthcare Health Vocare Total 2019
GBP000 GBP000 GBP000 GBP000
============================== =========== ======= ====== ==========
At 1 April 2018 968 1,587 452 3,007
Paid in the period - - (130) (130)
Revaluation of contingent
consideration (1,011) (1,657) - (2,668)
Discount unwind in the period 43 70 - 113
At 31 March 2019 - - 322 322
=============================== =========== ======= ====== ==========
31 March 31 March
2019 2018
GBP000 GBP000
========================= === ======== ========
Contingent consideration
- current 322 452
Contingent consideration
- non-current - 2,555
322 3,007
=== ======== ========
Impairment
As at 31 March 2019 the Directors agreed to impair the carrying
value of goodwill relating to acquisitions made during the year to
31 December 2016. The impairment loss of GBP2,000,000 has been
recognised as an exceptional expense in the consolidated statement
of comprehensive income.
Acquisition of Greenbrook Healthcare
On 20 June 2019, the Company completed the acquisition of the
entire share capital of Greenbrook Healthcare (Hounslow) Limited
and the convertible loan note in Greenbrook Healthcare (Earl's
Court) Limited for a consideration of GBP11.5m on a cash free and
debt free basis with a normalised level of working capital. The
table below sets out the adjustments to the purchase price to
reflect a normalised level of working capital which has resulted in
an additional consideration payable of GBP4.8m.
Greenbrook is one of the leading providers of urgent care
centres in London. The company was acquired as part of the Group's
stated 'buy and build strategy' and to bring new and complementary
routes to the existing healthcare services offered by the Group.
Greenbrook's urgent care services provide synergies with Totally's
existing subsidiary businesses, in particular Vocare, and
complements its business model of providing preventative and
responsive healthcare in out-of-hospital settings in order to
improve people's health, reduce NHS healthcare reliance,
re-admissions and emergency admissions to hospital.
The provisional assets and liabilities as at 20 June 2019
arising from the acquisition were as follows:
Carrying Fair value Fair
amount adjustment value
GBP000 GBP000 GBP000
==================================== ======== =========== ========
Property, plant and equipment 296 - 296
Trade receivables and other debtors 4,695 - 4,695
Cash in hand 2,007 - 2,007
Trade and other payables (7,759) (1,341) (9,100)
Deferred tax (34) - (34)
Convertible loan notes (50) - (50)
Net (liabilities) acquired (845) (1,341) (2,186)
Goodwill 11,521
Value of contracts 6,975
-------------------------------------- -------- ----------- --------
Total consideration 16,310
-------------------------------------- -------- ----------- --------
Satisfied by:
Cash 13,810
Ordinary shares issued 2,500
-------------------------------------- -------- ----------- --------
16,310
------------------------------------ -------- ----------- --------
The goodwill is attributable to the knowledge and expertise of
the workforce, the expectation of future contracts and the
operating synergies that arise from the Group's strengthened market
position. Any impairment charges will not be deductible for tax
purposes.
Included in the fair value of Greenbrook, are provisions for
additional costs or potential costs that existed at the time of
acquisition.
Lisa Barter
Finance Director
24 July 2019
For further information please contact:
Totally plc 020 3866 3335
Wendy Lawrence, Chief Executive
Bob Holt, Chairman
Allenby Capital Limited (Nominated Adviser
& Joint Corporate Broker) 020 3328 5656
Nick Athanas
Liz Kirchner
Canaccord Genuity Limited (Joint Corporate
Broker) 020 7523 8000
Bobbie Hilliam
Alex Aylen
Yellow Jersey PR 020 3004 9512
Georgia Colkin
Joe Burgess
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year ended 31 March 2019
12 months 15 months
to to
31 March 31 March
2019 2018
GBP000 GBP000
Revenue 78,007 42,535
Cost of sales (65,939) (35,510)
=============================================== ===================== ===========================
Gross profit 12,068 7,025
Administrative expenses (10,962) (6,842)
=============================================== ===================== ===========================
Profit before exceptional items 1,106 183
Exceptional items 126 4,508
=============================================== ===================== ===========================
Profit before interest, tax and depreciation 1,232 4,691
Depreciation and amortisation (2,822) (1,863)
=============================================== ===================== ===========================
Operating (loss)/profit (1,590) 2,828
Finance income 3 - (719)
Finance costs (228)
=============================================== ===================== ===========================
(Loss)/profit before taxation (1,815) 2,109
Income tax credit/(charge) 313 (312)
=============================================== ===================== ===========================
(Loss)/profit for the year/period attributable
to the equity
shareholders of the parent company (1,502) 1,797
=============================================== ===================== ===========================
Other comprehensive income - -
=============================================== ===================== ===========================
Total comprehensive (loss)/profit for the
year/period net of tax attributable to the
equity shareholders of the parent company (1,502) 1,797
=============================================== ===================== ===========================
12 months 15 months
to to
31 March 31 March
2019 2018
(Loss)/earnings per share GBP000 GBP000
From continuing operations:
Basic (2.51) 3.64
Diluted (2.51) 3.60
============================= ========= ===========
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
Share capital Share premium account Retained earnings Equity shareholders' funds
--------------------------- ------------- --------------------- ----------------- --------------------------
At 1 January 2017 2,002 9 3,112 5,123
Total comprehensive profit
for the period - - 1,797 1,797
Issue of share capital 3,977 16,399 - 20,376
Credit on issue of warrants
and options - - 42 42
----------------------------- ------------- --------------------- ----------------- --------------------------
At 31 March 2018 5,979 16,408 4,951 27,338
Total comprehensive loss for
the year - - (1,502) (1,502)
Credit on issue of warrants
and options - - 43 43
============================= ============= ===================== ================= ==========================
At 31 March 2019 5,979 16,408 3,492 25,879
============================ ============= ===================== ================= ==========================
Consolidated Statement of Financial Position
As at 31 March 2019
31 March 31 March
2019 2018
GBP000 GBP000
--------------------------------- ------------ -----------
Non-current assets
Intangible assets 28,824 31,262
Property, plant and
equipment 599 980
Investments in subsidiaries - -
Deferred tax 158 646
================================== ============ ===========
29,581 32,888
================================== ============ ===========
Current assets
Inventories 68 78
Trade and other receivables 8,606 9,706
Cash and cash equivalents 7,520 10,224
================================== ============ ===========
16,194 20,008
================================== ============ ===========
Total assets 45,775 52,896
================================== ============ ===========
Current liabilities
Trade and other payables (18,784) (21,450)
Deferred acquisition
consideration (322) (452)
Borrowings (5) (6)
---------------------------------- ------------ -----------
(19,111) (21,908)
---------------------------------- ------------ -----------
Non-current liabilities
Trade and other payables (768) (1,087)
Deferred acquisition
consideration - (2,555)
Borrowings (3) (8)
Deferred tax (14) -
================================== =========================
(785) (3,650)
================================== ============ ===========
Total liabilities (19,896) (25,558)
================================== ============ ===========
Net current (liabilities)/assets (2,917) (1,900)
================================== ============ ===========
Net assets 25,879 27,338
================================== ============ ===========
Shareholders' equity
Called up share capital 5,979 5,979
Share premium account 16,408 16,408
Retained earnings 3,492 4,951
================================== ============ ===========
Equity shareholders' funds 25,879 27,338
================================== ============ ===========
Consolidated Cash Flow Statement
For the year ended 31 March 2019
12 months 15 months
ended ended
31 March 31 March
2019 2018
GBP000 GBP000
-------------------------------------------- --------- ---------
Cash flows from operating activities
(Loss)/profit for the year/period (1,502) 1,797
Adjustments for:
- Options and warrants charge 43 42
- Depreciation and amortisation 2,822 1,863
- Impairment of goodwill 2,000
- Impairment of development costs - 739
- Tax (income)/expense recognised
in profit or loss (313) 312
- Finance income - -
- Finance costs 112 718
- Revaluation of contingent consideration (2,668) (6,466)
Movements in working capital:
- Inventories 10 22
- Movement in trade and other receivables 1,100 1,092
- Movement in trade and other payables (3,457) (3,321)
============================================= ========= =========
Cash used for operations (1,853) (3,202)
- Income tax received/(paid) 39 (277)
============================================= ========= =========
Net cash flows from operating activities (1,814) (3,479)
============================================= ========= =========
Cash flow from investing activities
Purchase of property, plant and
equipment (265) (193)
Additions of intangible assets (491) (427)
Acquisition of subsidiaries, net
of cash acquired - (860)
Earn-out payment to subsidiaries (130) (2,378)
Accrued preference shares interest
paid - (18)
============================================= ========= =========
Net cash flows from investing activities (886) (3,876)
============================================= ========= =========
Cash outflow before financing (2,700) (7,355)
Cash flow from financing activities
Issue of share capital, net - 16,646
Borrowings/invoice discounting - (56)
Finance lease rental repayments (4) (9)
============================================= ========= =========
Net cash flows from financing activities (4) 16,581
============================================= ========= =========
Net increase in cash and cash equivalents (2,704) 9,226
Cash and cash equivalents at beginning of
period 10,224 998
============================================= ========= =========
Cash and cash equivalents at the end of the
period/year 7,520 10,224
============================================= ========= =========
Notes to the Financial Information
For the Year ended 31 March 2019
1. General information
Totally plc is a public limited company ("Company") incorporated
in the United Kingdom under the Companies act 2006 (registration
number 3870101). The Company is domiciled in the United Kingdom and
its registered address is Cardinal Square West, 10 Nottingham Road,
Derby, DE1 3QT. The Company's Ordinary Shares are traded on the AlM
market of the London Stock Exchange ("AIM").
The Group's principal activities are the provision of innovative
and consolidatory solutions to the healthcare sector, which are
provided by the Group's wholly owned subsidiaries.
The Company's principal activity is to provide management
services to subsidiaries.
2. Basis of preparation
The financial information set out in this announcement does not
constitute statutory accounts as defined by section 435 of the
Companies Act 2006. It has been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards (IFRS) adopted for use in the European Union,
including IFRIC interpretations issued by the International
Accounting Standards Board, and in accordance with the AIM rules
and is not therefore in full compliance with IFRS. The principal
accounting policies applied in the preparation of the financial
information are detailed in note 3.
The financial statements for the year ended 31 March 2019 are
not authorised for issue however it is anticipated that audit
reports will not be modified and will not draw attention to any
matters by way of emphasis or contain a statement under 498(2) or
498(3) of the Companies Act 2006.
The financial information has been prepared on the historical
cost basis and are presented in Sterling and all values are rounded
to the nearest thousand pounds (GBP000) except when otherwise
indicated.
The Group carefully manages financial resources, closely
monitoring the working capital cycle. The Group has long term
contracts with a number of customers and suppliers across different
geographic areas within the United Kingdom and industries. As a
consequence, the Directors believe that the Group is well placed to
manage its business risks successfully despite the current
uncertain economic outlook. The Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
The financial information is prepared on a going concern basis
which the Directors believe to be appropriate for the above
reasons.
3. Summary of significant accounting policies
Basis of consolidation
The Group's financial information includes the results of the
Company and its subsidiaries, all of which are prepared up to the
same date as the parent company.
Subsidiaries
Subsidiaries are all entities over which the Company has the
ability to exercise control and are accounted for as subsidiaries.
The trading results of subsidiaries acquired or disposed of during
the period end are included in the 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 expenditure
are eliminated on consolidation.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Company. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
initially measured at fair value at the acquisition date
irrespective of the extent of any non-controlling interest. The
excess of cost of acquisition over the fair values of the Group's
share of identifiable net assets acquired is recognised as
goodwill. Any deficiency of
the cost of acquisition below the fair value of identifiable net
assets acquired (i.e. discount on acquisition) is recognised
directly in the income statement. All acquisition expenses have
been reported within the income statement immediately.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or as a change to other
comprehensive income.
Where necessary, adjustments are made to the financial
information of subsidiaries to bring the accounting policies used
in line with those used by other members of the Group.
Revenue recognition
Revenue is generated by providing clinical health coaching,
supporting shared decision-making services and software solutions
to the healthcare sector, physiotherapy, dermatology and urgent
care services. Services are provided through short term and
long-term contracts.
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured as the fair value of the
consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes.
Clinical health coaching, supporting shared decision-making
services and software solutions to the healthcare sector
Revenue is recognised as services are provided. Revenue is
recognised in the month when the service is provided, as this is
the point when revenue activity can be reliably measured.
Physiotherapy and dermatology services
Revenue represents invoiced sales of services to regional Care
Commissioning Groups of the National Health Service. Revenue is
recognised in the month when the service is provided, as this is
the point when revenue activity can be reliably measured. Revenue
can be subject to clawback adjustments based on performance against
criteria as detailed in the individual contracts.
Urgent care services
Revenue is recognised as services are provided. Revenue is
recognised in the month when the service is provided, as this is
the point when revenue activity can be reliably measured. Revenue
can be subject to clawback adjustments based on performance against
criteria as detailed in the individual contracts.
All revenue originates in the United Kingdom.
Finance income
Finance income comprises of income related to the fair value
adjustment of the contingent consideration. This fair value
adjustment relates to the net present value of the contingent
consideration discounted at 10%.
Finance costs
Finance costs comprise the unwinding of the fair value
adjustment of the contingent consideration. It also includes
interest payable on bank overdrafts and bank charges and these are
recognised on an accruals basis.
Property, plant and equipment
Property, plant and equipment is carried at cost less
accumulated depreciation and any recognised impairment in value.
Cost comprises the aggregate amount paid to acquire assets and
includes costs directly attributable to making the asset capable of
operating as intended.
Depreciation is calculated to write down the cost of the assets
to their residual values by equal instalments over the estimated
useful economic lives as follows:
Motor vehicles - 3 and 5 years
Computer equipment - 2 and 5 years
Fixtures and fittings - 2 to 10 years
Freehold property improvements - 3 to 10 years
The assets' residual values, useful lives and methods of
depreciation are reviewed, and adjusted if appropriate on an annual
basis.
An asset is de-recognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain
or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement in the
period that the asset is derecognised.
Inventories
Inventories are valued at the lower of cost and net realisable
value. In general cost is determined on a first in first out basis
and includes all direct expenditure based on a normal level of
activity. Net realisable value is the price at which the stocks can
be sold in the normal course of business after allowing for the
costs of realisation and where appropriate for the costs of
conversion from its existing state to a finished condition.
Goodwill
Goodwill represents the excess of the fair value of the
consideration of an acquisition over the fair value of the Group's
share of the net identifiable assets of the acquired subsidiary at
the date of acquisition. Goodwill is considered to have an
indefinite useful life. Goodwill is tested for impairment annually
and again whenever indicators of impairment are detected and is
carried at cost less any provision for impairment.
Impairment of non-current assets
For the purposes of impairment testing, goodwill and other
non-current assets are allocated to each of the Group's
cash-generating units (CGUs) or groups of CGUs that is expected to
benefit from the synergies of the combination. These comprise
urgent care and other segments and at 31 March 2019 the goodwill
allocated to each amounted to GBP16,824,000 and GBP9,336,000
respectively.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss recognised for goodwill is not
reversed in subsequent periods.
The value of the goodwill was tested for impairment during the
current financial year by means of comparing the recoverable amount
of each CGU or group of CGUs with the carrying value of its
goodwill.
The calculation of the CGUs value in use is calculated on the
cash flows expected to be generated using the latest budget and
forecast data. Estimates of sales and costs are based on past
experience and expectations of future changes in the market.
Board approved cash flow projections for five years are used and
then extrapolated out assuming flat cash flows and discounted at a
pre-tax rate of 10% (2018: 12% or 3.5%) over a five-year period and
then into perpetuity.
Based on the operating performance of the CGUs, an impairment of
goodwill of GBP2.0m was identified in the current financial year
(2018: GBPnil).
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
Trade and other receivables
Trade receivables, which are generally received by the end of
month following terms, are recognised and carried at the lower of
their original invoiced value less provision for expected credit
losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term
deposits with an original maturity of three months or less.
Trade and other payables
Trade payables are obligations to pay for goods and services
that have been acquired in the ordinary course of business from
suppliers. Trade and other payables are recognised at original
cost.
Borrowings
Borrowings are initially recognised at fair value, being
proceeds received less directly attributable transaction costs
incurred. Borrowings are subsequently measured at amortised cost
with any transaction costs amortised to the income statement over
the period of the borrowings using the effective interest
method.
Foreign currencies transactions
Transactions denominated in foreign currencies are translated at
the exchange rate at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the period end
are translated at the exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
income statement.
Leased assets
Leases are classified as finance leases when the terms of the
lease transfer substantially all the risks and rewards of ownership
to the Group. All other leases are classified as operating
leases.
The Company has a short lease on its premises. This is accounted
for as an 'operating lease' and the rental charges are charged to
the income statement on a straight-line basis over the life of the
lease. Other operating leases are treated in the same manner.
Exceptional items
Exceptional items are those items that, in the Directors' view,
are required to be separately disclosed by virtue of their size or
incidence to enable a full understanding of the Group's financial
performance.
Income taxes
Current income tax assets and liabilities are measured at the
amount expected to be recovered or paid to the taxation authorities
based on tax rates and laws that are enacted or substantively
enacted by the period end date. Deferred income tax is recognised
using the balance sheet liability method, providing for temporary
differences between the tax bases and the accounting bases of
assets and liabilities. Deferred income tax is calculated on an
undiscounted basis at the tax rates that are expected to apply in
the period when the liability is settled and the asset is realised,
based on tax rates and laws enacted or substantively enacted at the
period end date.
Deferred income tax liabilities are recognised for all temporary
differences, except for an asset or liability in a transaction that
is not a business combination and at the time of the transaction,
affects neither the accounting profit nor taxable profit or
loss.
Deferred income tax is charged or credited to the income
statement, except when it relates to items charged or credited to
equity, in which case the deferred tax is also dealt with in
equity. Deferred income tax assets and liabilities are offset
against each other only when the Company has a legally enforceable
right to do so.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profits will be available against
which the deductible temporary differences can be utilised.
Retirement benefits
The Group operates a defined contribution plan. A defined
contribution plan is a pension plan under which the employer pays
fixed contribution into a separate entity. Contributions payable to
the plan are charged to the income statement in the period to which
they relate. The Group has no legal or constructive obligations to
pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee
service in the current and prior periods.
Standards adopted in the year
During the year, the Group adopted IFRS 9 - Financial
Instruments and IFRS 15 - Revenue from contracts with customers
which were effective for accounting periods commencing on 1 January
2018.
IFRS 15 is a prescriptive standard which requires a business to
identify the performance obligations which are contracted with its
customer base. The Directors have reviewed the requirements of IFRS
15 and updated the accounting policies as appropriate. The changes
are narrative only and there has been no impact on reported results
for the prior period or the current period.
IFRS 9 relates to Financial Instruments which contains the
requirement for a) the classification and measurement of financial
assets and financial liabilities, b) impairment methodology and c)
general hedge accounting. Given the nature of the Group's financial
assets and liabilities and the limited bad debt history, the
adoption of IFRS 9 has had no material impact on the financial
information above.
There have been no other standards adopted that have had a
material impact on the financial information above and no standards
adopted in advance of their implementation date.
Standards, amendments and interpretations not yet effective
IFRS 16 supersedes IAS 17 Leases and introduces a new single
lessee accounting model which eliminates the current distinction
between operating and finance leases for lessees. IFRS 16 will
primarily affect the accounting for the group's operating leases
and is effective for the next accounting period. As at the
reporting date, the Group has non-cancellable operating lease
commitments of GBP5,295,000. Under IFRS 16, the obligations to pay
the future leases rentals over the expected lease term will be
recognised as a lease liability (current and non-current)
discounted at the incremental borrowing rate with a corresponding
right of use asset also being recognised in the statement of
financial position. Whilst there will be a material change in gross
assets and liabilities, as a result of recognising the leases as
right-of-use assets and liabilities, for the change in accounting
policy, it is not anticipated that there will be a material impact
on net assets. Additionally, whilst the depreciation on the right
of use asset and the interest on the finance liability would be
different to the present operating lease charge, it is not expected
to have a material impact on the reported result in the
statement.
There are no other standards issued not yet effective that will
have a material effect on the financial information above.
4. (Loss)/Earnings per share
12 months to 31 March 15 months to 31 March
2019 2018
========================== ========================================= =========================================
Earnings Basic Diluted Earnings Basic Diluted
GBP000 earnings earnings GBP000 earnings earnings
per share per share per share per
share
========================== =========== ============== ============ ============ ============== ===========
Loss before exceptional
items (1,224) (2.05)p (2.05)p (2,711) (5.49)p (5.43)p
Effect of exceptional
items (278) (0.46)p (0.46)p 4,508 9.13p 9.03p
========================== =========== ============== ============ ============ ============== ===========
Profit attributable to
owners of the parent (1,502) (2.51)p (2.51)p 1,797 3.64p 3.60p
========================== =========== ============== ============ ============ ============== ===========
20 19 2018
GBP000 GBP000
========================== =========== ============== ============ ============ ============== ===========
Weighted average number
of ordinary shares 59,795 49,356
Dilutive effect of shares
from share options - 592
========================== =========== ============== ============ ============ ============== ===========
Fully diluted weighted average
number of ordinary shares 59,795 49,948
======================================= ============== ============ ============ ============== ===========
Basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period/year. For diluted earnings per share the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares. Dilutive potential
ordinary shares are those share options granted to employees where
the exercise price is less than the average market price of the
Company's ordinary shares during the period. There were no dilutive
potential ordinary shares at 31 March 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LFFFLDIIVFIA
(END) Dow Jones Newswires
July 24, 2019 02:00 ET (06:00 GMT)
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