TIDMRTC
RNS Number : 8107H
RTC Group PLC
05 August 2019
5 August 2019
RTC Group Plc
("RTC", "the Company" or "the Group")
Interim Results for the Six Months Ended 30 June 2019
RTC Group Plc (AIM: RTC.L), the engineering and technical
recruitment Group, is pleased to announce its unaudited results for
the six months ended 30 June 2019.
Summary:
-- Group revenue from continuing operations increased to GBP46m (2018: GBP41m)
-- Profit before tax reduced marginally to GBP0.71m (2018: GBP0.77m)
-- Basic earnings per share fell to 3.86p (2018: 4.38p)
The final dividend in respect of the year ended 31 December 2018
of 2.55p per share (2018: 2.3p) was approved at the AGM on 24 April
2019 and paid to shareholders on 7 June 2019.
In line with the Group's progressive dividend policy, the
Directors propose an interim dividend of 1.4p per share (2018:
1.3p). The interim dividend will be paid on 29 November 2019 to
shareholders on the register on 8 November 2019.
Commenting on the results, Bill Douie, Chairman, said:
"Ganymede continues to perform well with enhanced volumes on its
Network Rail contract and GSS has increased its presence
internationally. ATA has encountered headwinds due to uncertainties
over our future relationship with the European Union. However,
although the fog has not lifted in the political arena and,
therefore, by extension in industry and commerce, we remain
confident of continuing our satisfactory performance in the second
half of 2019 and as such are maintaining our progressive dividend
policy."
The interim report is available on the Company's website
www.rtcgroupplc.co.uk.
S
Enquiries:
RTC Group Plc Tel: 0133 286 1835
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
SPARK Advisory Partners Limited (Nominated Tel: 0203 368 3550
Adviser)
Matt Davis / Mark Brady
www.Sparkadvisorypartners.com
Whitman Howard Limited (Broker) Tel: 020 7659 1234
Nick Lovering / Christopher Furness
www.Whitman-howard.com
About RTC
RTC has three principal trading subsidiaries engaged in
recruitment services:
-- ATA supplies white and blue-collar engineering and technical
staff to a broad range of clients;
-- Ganymede supplies blue collar contingent labour into safety critical markets; and
-- GSS provides recruitment services for international deployment.
www.rtcgroupplc.co.uk
Chairman's statement
Six months ended 30 June 2019
The general economic environment has, during the first six
months of 2019, become less stable globally and, in particular, in
the United Kingdom (UK) as political events have created a rising
level of confusion and uncertainty. This has not been helpful in
our manufacturing and engineering UK recruitment business but
despite that factor the Group has continued to grow overall
revenues and we have enjoyed strong performances in our Rail and
International activities.
Ganymede continues to perform well with enhanced volumes on its
Network Rail contract although continuing delays in take-up of
smart meters in the domestic market has constrained volumes of
installations.
ATA started the year well but has encountered headwinds as
uncertainties over our future relationship with the European Union
accelerated in the first quarter and have remained for the rest of
the period.
GSS continues to increase its presence in Afghanistan and
pursuing exciting opportunities both there and in the Middle
East.
The Derby Conference Centre continues to trade satisfactorily
under it's new, energetic Managing Director.
In line with the Group's progressive dividend policy, the
Directors propose an interim dividend of 1.4p per share (2018:
1.3p). The interim dividend will be paid on 29 November 2019 to
shareholders on the register on 8 November 2019.
Although the fog has not lifted in the political arena and,
therefore, by extension in industry and commerce, we remain
confident of continuing our satisfactory performance in the second
half of 2019.
W J C Douie 5 August 2019
Chairman
Finance Director's statement
Six months ended 30 June 2019
Highlights
In the period ended 30 June 2019, Group revenue increased by 12%
to GBP46.0m (2018: GBP41.1m).
Profit from operations was maintained at similar levels to 2018
at GBP0.8m.
Trading
Ganymede increased revenues by 34% to GBP21.1m (2018: GBP15.7m)
on the same period last year largely as a result of higher levels
of demand from Network Rail and this was converted to profit from
operations of GBP1.1m (2018: 0.7m), an increase of 57%.
GSS grew revenues by 17% to GBP8.1m (2018: GBP6.9m) reflecting a
steady increase in the number of workers supplied to KBR, its
longstanding international partner. Profit from operations was
maintained at GBP0.5m (2018: GBP0.5m).
Market conditions, reflecting uncertainties around Brexit
negotiations, resulted in a slow-down in both permanent and
contract recruitment for ATA. As a result, revenues were 11% lower
than the same period last year at GBP15.9m (2018: GBP17.7m) and
there was a corresponding reduction in profit from operations of
GBP0.4m to GBP0.5m (2018: GBP0.9m).
Within Central Services revenue from the Derby site continued to
grow steadily in line with expectations.
Taxation
The total tax charge for the period is estimated at GBP158,000
(2018: GBP148,000). This is higher than would be expected if the
standard tax rate was applied to the profits for the period, as
explained in note 3.
Earnings per share
The basic earnings per share figure is 3.86p (2018: 4.38p). The
diluted earnings per share 3.48p (2018: 4.10p).
Adoption of new accounting standards
During the period IFRS 16 Leases (effective 1 January 2019) was
adopted which has resulted in the Group recognising right of use
assets and lease liabilities for all qualifying contracts that are,
or contain, a lease on the statement of financial position. The
Group has applied the modified retrospective transition method and
as such comparatives have not been restated. The impact on profit
before tax for the Group for the six months ended 30 June 2019 was
not material and there was no impact on opening equity at 1 January
2019 (refer note 7 for details).
Statement of financial position
The Group statement of financial position has strengthened
compared to the same point last year with net working capital
increasing to GBP3.3m (2018: GBP2.4m). The ratio of current assets
to current liabilities has increased to 1.3 (2018: 1.2) and the
gearing ratio (excluding liabilities under IFRS16) decreased to 0.7
times (2018: 1.4 times). Interest cover was 17.4 times (2018: 13.6
times) on a like for like basis excluding interest relating to
lease liabilities under IFRS16.
Cash flow
The positive cash flow from operations of GBP1.1m (2018: outflow
GBP1.3m) for the six-month period reflects solid credit control
with the temporary payment delays experienced at 30 June 2018
resolved.
Following consideration of the further guidance published in
2018, cash and cash equivalents have been represented to show the
invoice discounting liabilities as financing. The movement on
invoice discounting is a negative GBP0.6m (2018: positive GBP1.3m)
which represents a reduction in the amount of invoice finance in
use. In 2018 more finance was required due to customer payment
delays.
Financing
The Group's current bank facilities comprise an overdraft of
GBP50,000 and a confidential invoice discounting facility of up to
GBP9.0m with HSBC at a discount margin of 1.5% above base. An
increase in facility up to GBP11m has also been approved by HSBC
but not yet invoked as the Group is operating within its current
facility cap. The Board closely monitors the level of facility
utilisation and availability to ensure there is enough headroom to
manage current operations and support the growth of the business.
The Group continues to be focussed on cash generation and building
a robust statement of financial position to support the growth of
the business.
Own shares held
The cost of the Group's own shares purchased through the
Employee Benefit Trust is shown as a deduction from equity. 40,000
options were exercised during the period and shares held in the EBT
were used to satisfy this demand. The balance of GBP263,919 on the
own shares held reserve within equity reflects 377,027 (2018:
417,027) shares remaining in the EBT that will be used to satisfy
future exercises.
S L Dye 5 August 2019
Group Finance Director
Consolidated statement of comprehensive income
Six-month Six-month Year ended
period ended period ended 31 December
30 June 30 June 2018
2019 2018
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ------- --------------- --------------- --------------
Revenue 2 45,983 41,125 87,806
Cost of sales 2 (38,985) (34,460) (73,908)
------------------------------------- ------- --------------- --------------- --------------
Gross profit 2 6,998 6,665 13,898
Administrative expenses (6,196) (5,834) (11,918)
------------------------------------- ------- --------------- --------------- --------------
Profit from operations 802 831 1,980
Financing expense 2 (94) (61) (121)
------------------------------------- ------- --------------- --------------- --------------
Profit before tax 708 770 1,859
Tax expense 3 (158) (148) (419)
------------------------------------- ------- --------------- --------------- --------------
Net profit and total comprehensive
income for the period 550 622 1,440
------------------------------------- ------- --------------- --------------- --------------
Earnings per ordinary share 4
Basic 3.86p 4.38p 10.20p
------------------------------------- ------- --------------- --------------- --------------
Diluted 3.48p 4.10p 9.36p
------------------------------------- ------- --------------- --------------- --------------
Consolidated statement of changes in equity for the six months
ended 30 June 2019:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
31 December
2018 (Audited) 146 120 (292) 50 379 4,833 5,236
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Profit and
total comprehensive
income for
the period - - - - - 550 550
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Dividends - - - - - (363) (363)
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Share options
exercised - - 28 - (16) (10) 2
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Share based
payment reserve - - - - 108 - 108
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2019 (Unaudited) 146 120 (264) 50 471 5,010 5,533
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the six months
ended 30 June 2018:
Share Share Own Capital Share Profit Total
capital premium shares redemption based and equity
held reserve payment loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 January 2018 146 120 (473) 50 215 3,993 4,051
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Profit and
total comprehensive
income for
the period - - - - - 622 622
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Dividends - - - - - (327) (327)
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Share options
exercised - - 174 - (76) (83) 15
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Share based
payment reserve - - - - 70 - 70
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
At 30 June
2018 (Unaudited) 146 120 (299) 50 209 4,205 4,431
----------------------- ---------- ---------- --------- ------------- ---------- --------- ---------
Consolidated statement of changes in equity for the year ended
31 December 2018:
Share Share Own Capital Share Retained Total
capital premium shares redemption based earnings equity
held reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- ----------- ---------
Balance at
1 January
2018 146 120 (473) 50 215 3,993 4,051
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
income for
the year - - - - - 1,440 1,440
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Dividends - - - - - (512) (512)
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Share options
exercised - - 181 - (76) (88) 17
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Share based
payment charge - - - - 240 - 240
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2018 (Audited) 146 120 (292) 50 379 4,833 5,236
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Consolidated statement of financial position
As at As at As at
30 June 30 June 31 December
2019 2018 2018
Unaudited Audited
Unaudited
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ --------------
Assets
Non-current
Goodwill 132 132 132
Other intangible assets 240 382 306
Property, plant and equipment 1,620 1,494 1,648
Right-of-use assets 3,216 - -
Deferred tax asset 66 82 66
--------------------------------- ------------ ------------ --------------
5,274 2,090 2,152
Current
Cash and cash equivalents - - 92
Inventories 12 8 8
Trade and other receivables 14,299 14,900 15,811
--------------------------------- ------------ ------------ --------------
Total current assets 14,311 14,908 15,911
Total assets 19,585 16,998 18,063
--------------------------------- ------------ ------------ --------------
Liabilities
Current
Trade and other payables (6,276) (6,151) (7,863)
Lease liabilities (286) - -
Corporation tax (425) (324) (261)
Current borrowings (4,048) (6,026) (4,639)
--------------------------------- ------------ ------------ --------------
Total current liabilities (11,035) (12,501) (12,763)
Non-current liabilities
Lease liabilities (2,959) - -
Deferred tax liabilities (58) (66) (64)
--------------------------------- ------------ ------------ --------------
Net assets 5,533 4,431 5,236
--------------------------------- ------------ ------------ --------------
Equity
Share capital 146 146 146
Share premium 120 120 120
Capital redemption reserve 50 50 50
Own shares held (264) (299) (292)
Share based payment reserve 471 209 379
Profit and loss account 5,010 4,205 4,833
Total equity 5,533 4,431 5,236
--------------------------------- ------------ ------------ --------------
Consolidated statement of cash flows
Six-month Six-month Year ended
period period 31 December
ended 30 ended 30 2018
June 2019 June 2018 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 708 770 1,859
Adjustments for:
Depreciation and amortisation 397 204 412
Employee equity settled share options
charge 108 70 240
Change in inventories (4) (2) (2)
Change in trade and other receivables 1,512 (1,848) (2,739)
Change in trade and other payables (1,587) (486) 1,553
-------------------------------------------- ------------ ------------ --------------
Cash inflow/(outflow) from operations 1,134 (1,292) 1,323
Income tax paid - - (320)
Net cash inflow/(outflow) from
operating activities 1,134 (1,292) 1,003
-------------------------------------------- ------------ ------------ --------------
Cash flows from investing activities
Purchases of property, plant and
equipment (136) (198) (504)
Net cash used in investing activities (136) (198) (504)
Cash flows from financing activities
Movement on invoice discounting
facility (591) 1,314 (73)
Dividends paid (363) - (512)
Payments of lease obligations (138) - -
Proceeds from exercise of share
options 2 15 17
Net cash (outflow)/inflow from
financing activities (1,090) 1,329 (568)
-------------------------------------------- ------------ ------------ --------------
Net decrease in cash and cash equivalents (92) (161) (69)
-------------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at start
of period 92 161 161
-------------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at end
of period - - 92
-------------------------------------------- ------------ ------------ --------------
Following consideration of the further guidance published in
2018, cash and cash equivalents have been represented to show the
invoice discounting as financing.
Notes to the interim statement for the six months ended 30 June
2019:
1. Accounting policies
a) General information
RTC Group Plc is incorporated and domiciled in England and its
shares are publicly traded on AIM. The registered office address is
The Derby Conference Centre, London Road, Derby, DE24 8UX. The
company's registered number is 02558971. The principal activities
of the Group are described in note 2.
The Board consider the principal risks and uncertainties
relating to the Group for the next six months to be the same as
detailed in our last Annual Report and Accounts to 31 December
2018. The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the year ended 31 December 2018.
b) Basis of preparation
The unaudited interim Group financial information of RTC Group
Plc is for the six months ended 30 June 2019 and does not comprise
statutory accounts within the meaning of S.435 of the Companies Act
2006. The unaudited interim Group financial statements have been
prepared in accordance with the AIM rules and have not been
reviewed by the Group's auditors. This report should be read in
conjunction with the Group's Annual Report and Accounts for the
year ended 31 December 2018, which have been prepared in accordance
with IFRS's as adopted by the European Union.
These unaudited interim Group financial statements were approved
for issue on 5 August 2019. No significant events, other than those
disclosed in this document, have occurred between 30 June 2019 and
this date.
c) Comparatives
The comparative figures for the year ended 31 December 2018 do
not constitute statutory accounts within the meaning of S.435 of
the Companies Act 2006, but they have been derived from the audited
financial statements for that year, which have been filed with the
Registrar of Companies. The report of the auditor was unqualified
and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006 nor a reference to any matters which the auditor
drew attention by way of emphasis of matter without qualifying
their report.
Comparatives are presented under IAS17 Leases whereas the
interim numbers reflect the adoption of IFRS16 Leases (refer note
7).
d) Accounting policies
In preparing these interim financial statements, the Board have
considered the impact of new standards which will be applied in the
2019 Annual Report and Accounts. Other than the adoption of IFRS 16
Leases, which is effective for accounting periods starting on or
after 1 January 2019, there are not expected to be any changes in
the accounting policies compared to those applied at 31 December
2018.
A full description of accounting policies is contained with our
2018 Annual Report and Accounts which is available on our
website.
This interim announcement has been prepared in accordance with
the recognition and measurement requirements of International
Financial Reporting Standards issued by the International
Accounting Standards Board, as adopted by the European Union as
effective for periods beginning on or after 1 January 2019.
New accounting standards
The Group has adopted IFRS16 (effective 1 January 2019) in these
interim financial statements (refer note 7 for details).
2. Segment analysis
The Group is a provider of recruitment services that has its
headquarters at the Derby Conference Centre which is contained
within the Central Services segment. The recruitment business
comprises three distinct business units - ATA predominantly
servicing the UK engineering market; GSS servicing the
international market and Ganymede supplying labour into safety
critical environments.
Segment information is provided below in respect of ATA,
Ganymede, GSS and the Central Services which, as well as being the
head office and providing all central services for the Group,
generates income from excess space at the Derby site including
rental and conferencing facilities.
The Group manages the trading performance of each segment by
monitoring operating contribution and centrally manages working
capital, borrowings and equity.
Revenues are generated from permanent and temporary recruitment
and contracts for labour supply in the recruitment division.
Revenue is analysed by origin of customer/point of invoicing.
All revenues have been invoiced to external customers. During
the first half of 2019, one customer in ATA contributed 10% or more
of that segment's revenues being GBP3.6m (2018: GBP4.3m), one
customer in GSS contributed 10% or more of that segment's revenues
being GBP8.0m (2018: GBP6.5m) and one customer in Ganymede also
contributed 10% or more of that segment's revenues being GBP14.2m
(2018: GBP9.4m).
Segment information for the six months ended 30 June 2019:
Recruitment Central Total
Unaudited ATA GSS Ganymede Services Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------ ----------- ------------ ---------- ----------
External sales revenue 15,890 8,073 21,128 892 45,983
Cost of sales (13,148) (7,192) (18,158) (487) (38,985)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Gross profit 2,742 881 2,970 405 6,998
Administrative expenses* (2,144) (370) (1,775) (1,519) (5,808)
Amortisation of intangibles* (27) - (66) - (93)
Amortisation of right-of-use
asset* (35) - (30) (103) (168)
Depreciation* (11) (2) (16) (98) (127)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Profit / (loss) from operations 525 509 1,083 (1,315) 802
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Finance expense:
Interest on lease liabilities (50)
Interest on invoice discounting
facility (44)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Profit before tax 708
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Tax expense (158)
----------------------------------------- ---------------- ---------- ----------------- ----------
*combine to represent administrative expenses of GBP6,196,000 in
the consolidated statement of comprehensive income.
Segment information for the six months ended 30 June 2018:
Recruitment Central Total
Unaudited ATA GSS Ganymede Services Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------ ----------- ------------ ---------- ----------
External sales revenue 17,717 6,886 15,691 831 41,125
Cost of sales (14,649) (5,987) (13,443) (381) (34,460)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Gross profit 3,068 899 2,248 450 6,665
Administrative expenses* (2,121) (355) (1,484) (1,670) (5,630)
Amortisation of intangibles* (25) - (65) - (90)
Depreciation* (9) (2) (17) (86) (114)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Profit / (loss) from
operations 913 542 682 (1,306) 831
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Finance expense:
Interest on invoice discounting
facility (61)
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Profit before tax 770
----------------------------------------- ------------ ----------- ------------ ---------- ----------
Tax expense (148)
----------------------------------------- ---- -------------- ----------- ---------------- ----------
*combine to represent administrative expenses of GBP5,834,000 in
the consolidated statement of comprehensive income.
Segment information for the year ended 31 December 2018:
Recruitment Central Total
Audited ATA GSS Ganymede Services Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------- ---------- ----------- ----------- ------------
External sales
revenue 35,259 14,805 36,046 1,696 87,806
Cost of sales (29,224) (12,976) (30,884) (824) (73,908)
---------------------------- ------------- ---------- ----------- ----------- ------------
Gross profit 6,035 1,829 5,162 872 13,898
Administrative
expenses* (4,291) (917) (3,077) (3,222) (11,507)
Amortisation of
intangibles* (52) - (130) - (182)
Depreciation* (44) (4) (35) (146) (229)
---------------------------- ------------- ---------- ----------- ----------- ------------
Profit from operations 1,648 908 1,920 (2,496) 1,980
---------------------------- ------------- ---------- ----------- ----------- ------------
Finance expense:
Interest on invoice
discounting facility (121)
---------------------------- ------------- ---------- ----------- ----------- ------------
Profit before tax 1,859
---------------------------- ------------- ---------- ----------- ----------- ------------
Tax expense (419)
---------------------------- ------------- ---------- ----------- ----------- ------------
*combine to represent administrative expenses of GBP11,918,000
in the consolidated statement of comprehensive income.
All assets and liabilities are held in the United Kingdom.
3. Income tax
Six-month Six-month Year ended
period ended period 31 December
30 June ended 30 2018
2019 Unaudited June 2018
Continuing operations Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ----------------- ------------ --------------
Analysis of tax:
Current tax
UK corporation tax 164 148 367
Adjustment in respect of previous
period - - 38
---------------------------------------- ----------------- ------------ --------------
164 148 405
Deferred tax
Origination and reversal of temporary
differences (6) - 14
Tax 158 148 419
---------------------------------------- ----------------- ------------ --------------
Factors affecting the tax expense
The tax assessed for the six-month period ended 30 June 2019 is
higher than (2018: higher than) would be expected by multiplying
profit by the standard rate of corporation tax in the UK of 19%
(2018: 19%). The differences are explained below:
Six-month Six-month Year ended
period ended period ended 31 December
30 June 2019 30 June 2018
Unaudited 2018 Unaudited Audited
Factors affecting tax expense GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ----------------- --------------
Result for the period before
tax 708 770 1,859
------------------------------------ --------------- ----------------- --------------
Profit multiplied by standard
rate of tax of 19% (2018: 19%) 135 146 353
Non-deductible expenses 55 27 87
Tax credit on exercise of options (4) (25) (25)
Other differences (28) - (34)
Adjustment in respect of previous
period - - 38
------------------------------------ --------------- ----------------- --------------
Tax charge for the period 158 148 419
------------------------------------ --------------- ----------------- --------------
5. Earnings per share
The calculation of basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the
basic earnings per share adjusted to allow for all dilutive
potential ordinary shares.
Basic Diluted
Six-month Six-month Six-month Six-month
period ended period ended period ended period ended
30 June 2019 30 June 2018 30 June 2019 30 June
2018
Unaudited Unaudited Unaudited Unaudited
Earnings GBP'000 550 622 550 622
-------------------- --------------- --------------- --------------- ---------------
Basic weighted
average number
of shares 14,234,392 14,216,680 14,234,392 14,216,680
-------------------- --------------- --------------- --------------- ---------------
Dilutive effect
of share options - - 1,552,981 969,723
-------------------- --------------- --------------- --------------- ---------------
Fully diluted
weighted average
number of shares - - 15,787,373 15,186,403
-------------------- --------------- --------------- --------------- ---------------
Earnings per
share (pence) 3.86p 4.38p 3.48p 4.10p
-------------------- --------------- --------------- --------------- ---------------
6. Borrowings
Included in current borrowings are bank overdrafts and an
invoice discounting facility which is secured by a cross guarantee
and debenture over all Group companies. There have been no defaults
or breaches of the terms of the facility during the current or
prior period.
7. Effects of changes in accounting policies
IFRS 16 Leases (effective 1 January 2019) sets out the
principles for recognition, measurement and presentation of leases
and replaces IAS 17 Leases. Adoption of IFRS 16 has resulted in the
Group recognising right of use assets and lease liabilities for all
qualifying contracts that are, or contain, a lease. Instead of
recognising an operating expense for its operating lease payments,
the Group has recognised interest on its lease liabilities and
amortisation on its right-of-use assets, impacting profit from
operations and the finance expense. The standard contains several
options and exemptions which are available at initial adoption. The
Group has applied the modified retrospective transition method and
adopted certain practical expedients, such that the right of use
asset recognised at the 1 January 2019 was GBP3.3m, together with a
corresponding lease obligation of GBP3.3m. The impact on profit
before tax for the Group for the six months ended 30 June 2019 was
not material. It is not expected that the impact for the financial
year ended 31 December 2019 will be material and there was no
impact on opening equity at 1 January 2019.
The following tables summarise the impact of adopting IFRS16 on
the Group's Interim Consolidated Statement of Comprehensive Income
and Consolidated Statement of Cash Flows for the six-month period
ended 30 June 2019 and its Consolidated Statement of Financial
Position as at 30 June 2019.
Impact on the Consolidated Interim Statement of Comprehensive
Income:
Six-month period ended As reported IFRS16 Amounts without
30 June 2019 adjustments adoption
(Unaudited) of IFRS16
GBP'000
Revenue 45,983 - 45,983
Cost of sales (38,985) - (38,958)
----------------------------- --------------- -------------- -----------------
Gross profit 6,998 - 6,998
Administrative expenses (6,196) (37) (6,233)
---------------------------------- ---------- -------------- -----------------
Profit from operations 802 (37) 765
Finance expense (94) 50 (44)
---------------------------------- ---------- -------------- -----------------
Profit before tax 708 13 721
Tax expense (158) (2) (160)
---------------------------------- ---------- -------------- -----------------
Total comprehensive income
for the year 550 11 561
---------------------------------- ---------- -------------- -----------------
Earnings per ordinary share:
---------------------------------- ---------- -------------- -----------------
Basic 3.86p - 3.94p
---------------------------------- ---------- -------------- -----------------
Diluted 3.48p - 3.55p
---------------------------------- ---------- -------------- -----------------
Impact on the Consolidated Interim Statement of Financial
Position:
As reported IFRS16 Amounts
without
adoption
As at 30 June 2019 of IFRS16
(Unaudited) adjustments
GBP'000
Assets
Non-current
Goodwill 132 - 132
Other intangible assets 240 - 240
Property, plant and equipment 1,620 - 1,620
Right-of-use assets 3,216 (3,216) -
Deferred tax asset 66 - 66
--------------------------------------- ------------- -------------- ------------
5,274 (3,216) 2,058
Current
Inventories 12 - 12
Trade and other receivables 14,299 - 14,299
--------------------------------------- ------------- -------------- ------------
Total current assets 14,311 - 14,311
Total assets 19,585 (3,216) 16,369
--------------------------------------- ------------- -------------- ------------
Liabilities
Current
Trade and other payables (6,276) (16) (6,292)
Lease liabilities (286) 286 -
Corporation tax (425) (2) (427)
Current borrowings (4,048) - (4,048)
--------------------------------------- ------------- -------------- ------------
Total current liabilities (11,035) 268 (10,767)
Non-current liabilities
Lease liabilities (2,959) 2,959 -
Deferred tax liabilities (58) - (58)
--------------------------------------- ------------- -------------- ------------
Net assets 5,533 11 5,544
--------------------------------------- ------------- -------------- ------------
Equity
Share capital 146 - 146
Share premium 120 - 120
Capital redemption reserve 50 - 50
Own shares held (264) - (264)
Share based payment reserve 471 - 471
Profit and loss account 5,010 11 5,021
Total equity 5,533 11 5,544
--------------------------------------- ------------- -------------- ------------
Impact on the Consolidated Interim Statement of Cash Flows:
Six-month period ended 30 June As reported IFRS16 Amounts
2019 adjustments without
Unaudited adoption
GBP'000 of IFRS16
GBP'000
Cash flows from operating activities
Profit before tax 708 13 721
Adjustments for:
Depreciation and amortisation 397 (168) 229
Employee equity settled share options
charge 108 - 108
Change in inventories (4) - (4)
Change in trade and other receivables 1,512 - 1,512
Change in trade and other payables (1,587) 17 (1,570)
-------------------------------------------- ------------- -------------- ------------
Cash inflow/(outflow) from operations 1,134 (138) 996
Income tax paid - - -
Net cash inflow/(outflow) from
operating activities 1,134 (138) 996
-------------------------------------------- ------------- -------------- ------------
Cash flows from investing activities
Purchases of property, plant and
equipment (136) - (136)
Net cash used in investing activities (136) - (136)
Cash flows from financing activities
Movement on invoice discounting
facility (591) - (591)
Dividends paid (363) - (363)
Payments of lease obligations (138) 138 -
Proceeds from exercise of share
options 2 - 2
Net cash (outflow)/inflow from
financing activities (1,090) 138 (952)
-------------------------------------------- ------------- -------------- ------------
Net decrease in cash and cash equivalents (92) - (92)
-------------------------------------------- ------------- -------------- ------------
Cash and cash equivalents at start
of period 92 - 92
-------------------------------------------- ------------- -------------- ------------
Cash and cash equivalents at end
of period - - -
-------------------------------------------- ------------- -------------- ------------
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
IR UGUBURUPBGQP
(END) Dow Jones Newswires
August 05, 2019 02:00 ET (06:00 GMT)
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