28 June 2024
Aukett Swanke Group
Plc
("Aukett
Swanke", the "Company", or, together with its subsidiaries, the
"Group")
Interim results
For the six months ended 31 March 2024
Aukett Swanke (AIM: AUK), the Architecture and
Smart Buildings Group, announces its interim results for the
six-month period ended 31 March 2024.
Highlights
· Revenue from continuing operations increases to £9.45m (2023:
£4.56m)
· Trading loss for the period increases to £0.81m (2023 loss:
£0.29m)
· Property disposal related non-cash provision of
£0.59m
· Post
tax loss of £1.32m (2023 post tax loss: £0.48m)
· Ranked
40th largest firm by number of UK architects (2023:
48th) in the AJ100
· Acquisition of ecoDriver to bring proprietary software and
exposure to energy efficiency markets
· Acquisition of Vanti just before period end expands Smart
Buildings strategy and brings further software assets and a well
regarded Master Systems Integration brand.
Post period
· Stronger second half underway
· First
commercial order received for licence of enterprise version of
Smart Core, Vanti's building operating system software
· Annual
cost reductions in excess of £1m being implemented
· Terms
agreed for disposal of freehold property to broadly eliminate net
debt.
Commenting,
Chief Executive Nick Clark said,
"While the first half results are disappointing, reflecting
moderately slower trading in all areas, we expect a better
performance in the second half, although expect to report a full
year loss.
"Steps are underway to remove in excess of £1 million from the
annual cost base, with the agreed sale of the freehold building
significantly reducing our interest costs from September 2024
following repayment of the associated mortgage.
"Ultimately though, we need to continue our move to a more
scalable and more predictable revenue model. I am confident that in
time the acquisition of Vanti, which occurred towards the end of
the period under review, will come to be seen as a being of
particular importance in the creation of long-term value for
Shareholders."
Contacts
Aukett Swanke
Group
Plc
+44 (0) 20 7843 3000
Clive
Carver, Chairman
Nick Clark, Chief Executive
Strand Hanson Limited, Financial
and Nominated Adviser
+44 (0) 20 7409 3494 Richard Johnson, James Bellman
Zeus Capital Limited,
Broker
+44 (0) 20 3829 5000 Simon Johnson, Louisa Waddell
Investor/Media
+ 44 (0) 7979 604 687
Chris Steele
An electronic version of the Interim Report
will be available shortly on the Group's website
(www.aukettswankeplc.com).
Chairman's Statement
Introduction
These interim results demonstrate the need to
accelerate the Group's move towards becoming a leading player in
the provision of Smart Buildings services, and the pitfalls of the
traditional architecture and system integration models with their
high fixed costs and unpredictable project-based income
streams.
The loss recorded for the six months ended 31
March 2024 is largely the result of delays to the start dates for a
number of confirmed architecture projects, the seasonality of the
TFG Stage Technology business and the limited contribution in the
period under review from the completed Smart Building acquisitions.
Each are covered in more detail in the Chief Executive's
report.
Business
model
The financial impact of the delays to a number
of our architecture projects and the reliance on continually
replacing completed projects in other parts of the Group
demonstrates the need to move away from a high fixed cost business
model based with little or no recurring income and towards a model
with higher margins and without the need to continually increase
our cost base to grow.
We believe the Smart Buildings strategy set out
in previous reports is the way forward, combining the strengths of
the Group's architecture heritage with moving more to a software
based revenue model, generating income over the lifetime of a
building as well as during its construction.
That said, it is not all doom and gloom in our
more established businesses. Our executive architecture business
Veretec has grown sharply in recent months, with turnover and
staffing at record levels. At our architectural design business,
Aukett Swanke Limited, despite a poor start to the financial year,
a significant recent contract win and a reduction of the cost base
will help get them back on track. Other of our established
businesses are seasonal with the summer months accounting for a
large portion of the year's revenue.
Smart
Buildings acquisitions
To date we have completed four Smart Buildings
acquisitions, TFG, ecoDriver, Anders + Kern and Vanti. It is the
last of these, Vanti, which completed in March 2024, that has added
the greatest substance to our Smart Buildings capabilities.
Although only a few months has passed since its acquisition all the
indications are that it should be a major step forward in moving to
the business model we need.
Funding
Inevitably, the first half loss has increased
the pressure on the Group's funding at a period where we are
looking to continue to expand. In that regard we are fortunate to
have untapped value in the Group's freehold building. The agreed
sale before the financial year end of the freehold building and new
debt facilities will assist with the transition to a more
predictable and scalable revenue model.
Employee
ownership
We are pleased that approximately 40% of the
Group's employees have purchased the Company's shares under the
recently introduced share schemes.
Outlook
We expect a better second half of the financial
year, though it is too early to predict how much of the first half
loss will be reversed. The cost reductions being implemented and
the recent contract wins give us confidence that the following
financial year will be more rewarding on all fronts.
Clive Carver
Non-executive Chairman
27 June 2024
Chief Executive's report
Introduction
While we have made good progress in
our ambition to become a leading provider of Smart Buildings
services, these are undoubtedly a disappointing set of results. Our
established businesses all performed at levels lower than expected.
Additionally, while the sale of the freehold building is a positive
outcome, it requires a non-cash provision to the Profit & Loss
account of £0.59 million against its previous accounting
valuation.
Trading
UK
Architecture
In our UK Architecture segment in
the period under review our two businesses had differing
fortunes.
Veretec's growth has been the key
driver behind our group's rise to 40th place in the
AJ100 list of the largest architectural practices in the UK. We are
confident the Veretec model has an important role to play in the
industry and should produce attractive returns over the longer
term. ASL is reducing headcount to get its cost base right, and has
achieved some key contract wins in the past month or so, which
include smart building consultancy work for architecture clients,
starting to show the potential of the new model.
While Veretec, our executive
architecture business, was a little below budget in the first half,
it is now accelerating away with a strong second half performance
though is constrained by capacity issues. Aukett Swanke Ltd (ASL)
our architecture design led business on the other hand had a poor
first half, which has continued to date in the second half-year,
seeing some crucial projects delayed or having funding challenges,
leading to painful gaps in its income.
European
architecture
The Group holds a 25% interest in a
leading Berlin architecture practice and a 50% interest in a
Frankfurt architecture practice, which are accounted for as
associates rather than consolidated as with the Group's other
operations and therefore not included in revenue or cost of
sales.
The Berlin and Frankfurt practices
were weaker in the period under review, with the overall result
from our German investments being broadly break even after
management charges. Nevertheless, these investments whilst arguably
not fully reflected in the financial assessment of the Group, have
a long history of delivering value, which we expect to continue for
the foreseeable future.
Additionally, we suffered an £83,000
one-off loss disposing of our Turkish business to its local
management.
TFG Intelligent Environments
- now including Vanti
The Intelligent Environments
business which includes commercial AV system integration is
rebranding as Vanti to reflect stronger brand presence in master
system integration work.
It spent much of the period focused
on the acquisition of Vanti, which came in the final month of the
first half, adding transaction and integration costs but no
immediate revenue. Since the period end however, approximately £2
million of new orders have been secured from the Vanti pipeline for
delivery commencing in the final quarter of the current financial
year and throughout next year.
TFG Stage
Technology
The Stage Technology business
(TFGST) is highly seasonal with many of its customers being
educational institutions or indoor performance venues where major
upgrades typically take place during the summer months when they
are less busy.
Although TFGST was significantly
loss making in the period under review it has a strong summer ahead
and we expect the company will make up the first half loss.
Furthermore, it is expecting a positive outcome on some large
contracts for next year.
Anders +
Kern
Anders + Kern (A+K) reported a
significant and unexpected loss in the period under
review.
The principal issue was the impact
of new ownership at its largest supplier, which opened up other
routes to market for them, which impacted a large proportion of
A+K's sales. To counter this, we hired a new sales team to broaden
the range of products the company sells and thus increasing costs,
although the lost revenues were not replaced.
A+K has accordingly now returned to
a lower overhead model to eliminate the possibility of future
similar losses. In due course it has an important role to play in
taking smart buildings technologies to the AV channel which is
better placed to deliver them than other building services
sectors.
EcoDriver
ecoDriver provides a software
platform and related services to identify and eliminate waste
energy in non-residential buildings. It has a particular base in
hospitals and schools, and primarily targets the retrofit
market.
It has yet to realise its potential
but is showing encouraging signs of progress, including its
acceptance on an Imperial College growth accelerator programme for
companies in the climate sector.
Artificial Intelligence
Our Innovate UK-funded Responsible
AI collaboration project continues, with Vanti people adding
additional value.
Corporate activity
During the period under review, we
completed two Smart Buildings acquisitions and one
disposal.
On 17 October 2023 we acquired TR
Control Solutions Limited (now renamed ecoDriver) for a mix of cash
and shares. Deferred consideration of £44,500 is due this coming
October.
On 27 December 2023 we disposed of
the share capital of our Istanbul-based studio, Aukett Swanke
Mimarlik AS, to local management. This was in return for a nominal
sum, and a name licence agreement, which ensures we will no longer
incur losses from Turkey and will instead receive a modest income
stream based on its future revenues, with no associated
costs.
On 21 March 2024 we acquired the
Vanti assets. We have employed a number of their staff and taken on
their central Birmingham premises. Deferred consideration of
between £25,000 and £50,000 is payable in the coming
months.
Financial review
Revenue
UK
architecture
On revenue up 14% this reporting
segment made a loss of £39k after management charges, compared to a
£140k loss in the same period of the previous year.
Continental
architecture
The German investments broadly broke
even after management charges, although we suffered a one off
charge of £83k in exiting our Turkish investment. This was a fall
from profits of £180k in the same period last year. As part of
tidying up our European interests, after the period end we received
£4k from the sale of our residual 0.6% stake in our former Milan
joint venture that was sold in 2004.
TFG / Vanti
TFG was purchased in March 2023 so
the prior period only consolidated it for around ten days. This
means its revenue of £3.83m in the period under review compares to
just £0.21m in the prior period. The segmental loss of £0.91m
includes the provision for the loss on the building, seasonal
losses in TFG Stage Technology, and costs for the 20 March 2024
acquisition of Vanti and some Vanti staff wages, with no Vanti
revenues.
ecoDriver
Revenue of £216k was broadly as
expected, with a £62k loss including Group management fees, the
hiring of additional staff, and migration of the business to the
Group's ERP systems.
Anders+Kern
As noted above revenue of £581k was
lower than expected. As with ecoDriver, Group management fees, the
hiring of additional staff, and migration of the business to the
Group's ERP systems contributed to a loss of £154k.
Costs
Payroll
A high proportion of the Group's
costs are payroll costs, which in the period under review increased
by 55% compared to the corresponding period. A major drawback
under the established professional services business model is both
the need to maintain a high fixed salary cost base to conduct and
seek new work but also the inability to pass on the costs of highly
qualified but underused staff when project start dates slip with
little or no notice.
Other
The costs of maintaining an AIM
listing have also significantly increased, in particular our audit
costs. We also incurred costs in establishing and operating three
employee share schemes. These though have seen significant take up
from employees at all levels in the Group, with everyone from our
apprentices to senior management who have been here for decades
taking meaningful ownership stakes. This has helped drive demand
for our shares as investors see that management's confidence in the
direction of travel for the Group is shared by the
workforce.
Property Disposal
Post-period, on 24 June 2024 we were
pleased to announce the planned sale of the Group's freehold
property, the former headquarters site for Torpedo Factory Group,
with completion expected in September 2024. While the £2.50 million
sale price is a discount on the £3.08 million July 2023 valuation
at which it is in our books, the sale will repay our £1.38 million
mortgage that was due to expire in February 2025, and the balance
should broadly eliminate our net debt and significant mortgage
interest payments.
Although not due to complete until
September 2024, the agreed property sale has triggered the
requirement for a £0.59 million provision in these interim
statements. The provision is not a cash expense and as noted above
the overall cash impact of the building sale is
positive.
Funding
During the period the Group retained
four debt facilities: the £250,000 Coutts overdraft, the Natwest
mortgage on the TFG freehold, and two pandemic-era CBILS-backed
loans, one from Coutts and one from Natwest. As noted above the
mortgage will be repaid by the sale of the property. The overdraft
facility has been renewed to the end of September 2024, beyond the
date when the sale completes. The ASG CBILS loan was repaid in
accordance with its terms, with the final repayment occurring in
May 2024. The TFG CBILS is at a fixed rate of 3.66%pa and continues
to be paid down over the period to July 2026.
While bad debts have historically
been rare, at times customers can be slow to pay, tying up funds in
working capital. Since the period end, in recent weeks, we have
been approved for an invoice discounting facility, allowing us, if
required, to borrow funds secured against amounts due from
customers. This facility offers more flexibility than a
conventional loan or overdraft, as it can grow or shrink in line
with the scale of the business, and thereby mitigates the challenge
of an ever increasing working capital requirement as we grow. The
initial maximum net advance under the facility is
£540,000.
Going concern
The position with respect to the
going concern assessment was set out in the financial statements
for the year ended 30 September 2023, which were published on 28
March 2024, and remain valid. In considering the position again for
these interim results the board believes that the conditional sale
of the Group's freehold property announced on 24 June 2024 together
with the additional funding facilities noted above significantly
assist in assessing the Group's going concern status. The board has
considered projections for a period of at least 12 months from the
date of signing these financial statements which indicate that the
Group is a going concern. The interim statement has not been
audited.
Outlook
Full year
expectations
The second half will be stronger
than the first half, but it remains hard to predict, and unlike
last year I suspect it may not be strong enough to make up for the
first half losses.
Cost base
The board have identified in excess
of £1 million of cost reductions to be removed from the Group's UK
businesses to improve performance. These changes are largely being
actioned in the second half of the current year, in order to ensure
acceptable future performance. The savings include Group costs,
lower property and finance costs following the sale of the TFG
building, and some redundancies in underperforming parts of the
business.
Closing remarks
I would like to thank all our staff
for their efforts in the period under review. It is particularly
frustrating when such efforts do not translate to profit and we
look forward to changing that in the future.
I should particularly like to pay
tribute to Keith Morgan, who retired as chairman of Veretec in
December 2023 after a long career with the Group, starting at
Aukett Associates in the 1980s shortly before the Group's
IPO.
Additionally, I want to thank the
large proportion of our UK workforce who are participating in the
share ownership plan, showing their confidence in our new strategy
by spending money each month buying our shares. I do believe we
have a tremendous opportunity and look forward to delivering better
results for us all.
Nick Clark
Chief Executive
27 June 2024
Consolidated income statement
For the six months ended 31 March
2024
|
|
Note
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
9,453
|
4,562
|
14,335
|
|
|
|
|
|
|
|
Sub consultant costs
|
|
(47)
|
(164)
|
(232)
|
|
Revenue less sub consultant
costs
|
|
9,406
|
4,398
|
14,103
|
|
|
|
|
|
|
|
Cost of sales
|
|
(2,525)
|
-
|
(2,627)
|
|
Gross profit
|
|
6,881
|
4,398
|
11,476
|
|
|
|
|
|
|
|
Personnel related costs
|
|
(5,863)
|
(3,781)
|
(9,031)
|
|
Property related costs
|
|
(789)
|
(573)
|
(1,322)
|
|
Other operating expenses
|
|
(911)
|
(610)
|
(1,375)
|
|
Distribution costs
|
|
(132)
|
-
|
(141)
|
|
Other operating income
|
5
|
166
|
129
|
326
|
|
Operating loss
|
|
(648)
|
(437)
|
(67)
|
|
|
|
|
|
|
|
Finance income
|
|
3
|
-
|
9
|
|
Finance costs
|
|
(163)
|
(55)
|
(255)
|
|
Loss after finance costs
|
|
(808)
|
(492)
|
(313)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associate and
joint ventures
|
|
(1)
|
205
|
341
|
|
Trading (loss)/profit from
continuing operations
|
|
(809)
|
(287)
|
28
|
|
|
|
|
|
|
|
Acquisition costs
|
|
(27)
|
(258)
|
(379)
|
|
Revaluation of freehold
property
|
11
|
(585)
|
-
|
-
|
|
Loss on disposal of
subsidiary
|
|
(83)
|
-
|
-
|
|
Loss before tax from continuing
operations
|
4
|
(1,504)
|
(545)
|
(351)
|
|
|
|
|
|
|
|
Tax credit
|
|
195
|
54
|
433
|
|
(Loss)/profit from continuing
operations
|
|
(1,309)
|
(491)
|
82
|
|
|
|
|
|
|
|
(Loss)/profit from discontinued
operations
|
6
|
(8)
|
7
|
10
|
|
(Loss)/profit for the
period
|
|
(1,317)
|
(484)
|
92
|
|
|
|
|
|
|
|
(Loss)/profit attributable
to:
|
|
|
|
|
|
Owners of Aukett
Swanke Group Plc
|
|
(1,317)
|
(484)
|
92
|
|
Non-controlling
interests
|
|
-
|
-
|
-
|
|
(Loss)/profit for the
period
|
|
(1,317)
|
(484)
|
92
|
|
|
|
|
|
|
|
Basic and diluted earnings per share
for (loss)/profit attributable to the ordinary equity holders of
the Company:
|
|
|
|
|
|
From continuing
operations
|
|
(0.45p)
|
(0.29p)
|
0.04p
|
|
From discontinued
operations
|
|
0.00p
|
0.00p
|
0.00p
|
|
Total (loss)/profit per
share
|
7
|
(0.45p)
|
(0.29p)
|
0.04p
|
|
|
|
|
|
|
Consolidated statement of comprehensive
income
For the six months ended 31 March
2024
|
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
(Loss)/profit for the
period
|
|
(1,317)
|
(484)
|
92
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
Revaluation of freehold
property
|
|
(60)
|
-
|
60
|
|
Deferred tax movement on
revaluation
|
|
15
|
-
|
(15)
|
|
Goodwill impairment on fair value
adjustment of share options
|
|
-
|
(222)
|
(222)
|
|
Currency translation differences of
foreign operations
|
|
(2)
|
(1)
|
26
|
|
Currency translation differences on
disposal recycled to gain on disposal of discontinued
operation
|
|
-
|
-
|
-
|
|
Currency translation differences on
translation of discontinued operations
|
|
-
|
34
|
-
|
|
Other comprehensive loss for the
period
|
|
(47)
|
(189)
|
(151)
|
|
|
|
|
|
|
|
Total comprehensive loss for the
period
|
|
(1,364)
|
(673)
|
(59)
|
|
|
|
|
|
|
|
Total comprehensive loss is
attributable to:
|
|
|
|
|
|
Owners of Aukett
Swanke Group Plc
|
|
(1,364)
|
(673)
|
(59)
|
|
Non-controlling
interests
|
|
-
|
-
|
-
|
|
Total comprehensive loss for the
period
|
|
(1,364)
|
(673)
|
(59)
|
|
|
|
|
|
|
|
Total comprehensive (loss)/profit
attributable to the owners of Aukett Swanke Group Plc arises
from:
|
|
|
|
|
|
Continuing
operations
|
|
(1,356)
|
(714)
|
(69)
|
|
Discontinued
operations
|
|
(8)
|
41
|
10
|
|
|
|
(1,364)
|
(673)
|
(59)
|
Consolidated statement of cash flows
For the six months ended 31 March
2024
|
|
Note
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Cash flows from operating
activities
|
|
|
|
|
|
Cash generated from
operations
|
8
|
221
|
328
|
1,013
|
|
Income tax credits
received
|
|
-
|
-
|
196
|
|
Net cash inflow from operating
activities
|
|
221
|
328
|
1,209
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(62)
|
(73)
|
(154)
|
|
Net cash (paid)/received on
acquisition of subsidiaries
|
|
(52)
|
790
|
367
|
|
Sale of subsidiaries
|
|
(50)
|
-
|
33
|
|
Dividends received
|
|
108
|
131
|
262
|
|
Net cash (paid)/received from
investing activities
|
|
(56)
|
848
|
508
|
|
|
|
|
|
|
|
Net cash inflow before financing
activities
|
|
165
|
1,176
|
1,717
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Issue of shares
|
|
275
|
-
|
-
|
|
Principal paid on lease
liabilities
|
|
(248)
|
(241)
|
(496)
|
|
Interest paid on lease
liabilities
|
|
(33)
|
(33)
|
(72)
|
|
Repayment of bank loans
|
|
(290)
|
(125)
|
(459)
|
|
Interest paid
|
|
(106)
|
(22)
|
(93)
|
|
Net cash outflow from financing
activities
|
|
(402)
|
(421)
|
(1,120)
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents
|
|
(237)
|
755
|
597
|
|
|
|
|
|
|
|
Cash and cash equivalents at start
of period
|
|
430
|
(204)
|
(204)
|
|
Currency translation
differences
|
|
(28)
|
41
|
37
|
|
Cash and cash equivalents at end of
period
|
10
|
165
|
592
|
430
|
|
Cash and cash equivalents are comprised of:
|
|
|
|
|
Cash at bank and in hand
|
279
|
805
|
522
|
|
Net cash included in assets held for
sale
|
-
|
-
|
30
|
|
Secured bank overdrafts
|
(114)
|
(213)
|
(122)
|
|
Cash and cash equivalents at end of
year
|
165
|
592
|
430
|
Consolidated statement of changes in equity
For the six months ended 31 March
2024
|
|
Share
capital
£'000
|
Foreign
currency
translation
reserve
£'000
|
Retained
earnings
£'000
|
Other
distributable
reserve
£'000
|
Merger
reserve
£'000
|
Revaluation reserve
£'000
|
Total
equity
£'000
|
|
At 1 October 2023
|
2,754
|
(531)
|
(3,272)
|
1,494
|
2,883
|
45
|
3,373
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
(1,317)
|
-
|
-
|
-
|
(1,317)
|
|
Other comprehensive
income
|
-
|
(2)
|
-
|
-
|
-
|
(45)
|
(47)
|
|
Total comprehensive loss
|
-
|
(2)
|
(1,317)
|
-
|
-
|
(45)
|
(1,364)
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares in relation
to business combination
|
178
|
-
|
-
|
-
|
93
|
-
|
271
|
|
|
|
|
|
|
|
|
|
|
Share subscription
|
275
|
-
|
-
|
-
|
-
|
-
|
275
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2024
|
3,207
|
(533)
|
(4,589)
|
1,494
|
2,976
|
-
|
2,555
|
For the six months ended 31 March
2023
|
|
Share
capital
£'000
|
Foreign
currency
translation
reserve
£'000
|
Retained
earnings
£'000
|
Other
distributable
reserve
£'000
|
Merger
reserve
£'000
|
Revaluation reserve
£'000
|
Total
equity
£'000
|
|
At 1 October 2022
|
1,652
|
(557)
|
(3,364)
|
1,494
|
1,176
|
-
|
401
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
(484)
|
-
|
-
|
-
|
(484)
|
|
Other comprehensive
income
|
-
|
33
|
-
|
-
|
(222)
|
-
|
(189)
|
|
Total comprehensive
profit/(loss)
|
-
|
33
|
(484)
|
-
|
(222)
|
-
|
(673)
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares in relation
to business combination
|
1,102
|
-
|
-
|
-
|
1,707
|
-
|
2,809
|
|
|
|
|
|
|
|
|
|
|
Employee share schemes - Value
issued in relation to business combination
|
-
|
-
|
-
|
-
|
222
|
-
|
222
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2023
|
2,754
|
(524)
|
(3,848)
|
1,494
|
2,883
|
-
|
2,759
|
Consolidated statement of changes in equity -
continued
For the year ended 30 September
2023
|
|
Share
capital
£'000
|
Foreign
currency
translation
reserve
£'000
|
Retained
earnings
£'000
|
Other
distributable
reserve
£'000
|
Merger
reserve
£'000
|
Revaluation reserve
£'000
|
Total
equity
£'000
|
|
At 1 October 2022
|
1,652
|
(557)
|
(3,364)
|
1,494
|
1,176
|
-
|
401
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
92
|
-
|
-
|
-
|
92
|
|
Other comprehensive
income
|
-
|
26
|
-
|
-
|
(222)
|
45
|
(151)
|
|
Total comprehensive
profit/(loss)
|
-
|
26
|
92
|
-
|
(222)
|
45
|
(59)
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares in relation
to business combination
|
1,102
|
-
|
-
|
-
|
1,707
|
-
|
2,809
|
|
|
|
|
|
|
|
|
|
|
Employee share schemes - Value
issued in relation to business combination
|
-
|
-
|
-
|
-
|
222
|
-
|
222
|
|
|
|
|
|
|
|
|
|
|
At 30 September 2023
|
2,754
|
(531)
|
(3,272)
|
1,494
|
2,883
|
45
|
3,373
|
Notes to the Interim Report
1 Basis
of preparation
The financial information presented
in this Interim Report has been prepared in accordance with the
recognition and measurement principles of international accounting
standards in conformity with the requirements of the Companies Act
2006 that are expected to be applicable to the financial statements
for the year ending 30 September 2024 and on the basis of the
accounting policies expected to be used in those financial
statements.
2 New
accounting standards, amendments and interpretations
applied
A number of new or amended standards
and interpretations to existing standards became applicable for the
current reporting period. The Group did not have to change its
accounting policies or make retrospective adjustments as a result
of adopting these standards.
3
Business combinations
Acquisition of
ecoDriver
On 17 October 2023 the Group
acquired 100% of the voting equity instruments in TR Control
Solutions Limited ("TRCS"), a developer of energy management
software and provider of energy efficiency services. Shortly after
completing the acquisition Management changed the name of the
company to ecoDriver Ltd ("ecoDriver").
The acquisition is a further step in
the Group's strategy to become a leading provider of Smart Building
technology.
The operating results and assets and
liabilities of the acquired company have been consolidated from 17
October 2023.
|
|
|
Provisional
17
Oct-23
£'000
|
|
Goodwill
|
|
527
|
|
Trade and other
receivables
|
|
52
|
|
Assets
|
|
579
|
|
|
|
|
|
Trade and other payables
|
|
149
|
|
Contract liabilities
|
|
24
|
|
Net overdraft
|
|
7
|
|
Interest bearing loans and
borrowings
|
|
39
|
|
Liabilities
|
|
219
|
|
|
|
|
|
Total net assets
|
|
360
|
The fair values of the identifiable
assets and liabilities acquired have only been provisionally
determined and are subject to adjustment during the measurement
period.
Fair value of consideration paid
Consideration for the acquisition
comprises:
i)
17,800,000 Ordinary Shares in Aukett Swanke Group Plc at an issue
price of 1.525p based on the closing price of Aukett Swanke Group
Plc shares on 17 October 2023.
ii)
£89,000 in cash. Half the cash consideration was payable on
completion, with the remaining £44,500 payable on the first
anniversary of completion.
|
|
|
£'000
|
|
Shares in Aukett Swanke Group
Plc
|
|
271
|
|
Cash
|
|
89
|
|
Total acquisition cost
|
|
360
|
Whilst fair value adjustments will
result in recognised goodwill of less than £527k, it is expected
that some goodwill will be recognised. The goodwill represents
items, such as the assembled workforce, which do not qualify as
assets.
Acquisition related costs of £27k
are disclosed as acquisition costs in the consolidated income
statement.
Acquisition of RTS Technology
Solutions Limited
On 20 March 2024 Torpedo Factory
Ltd, a wholly owned subsidiary of the Group, acquired certain
assets from the liquidator of RTS Technology Solutions Limited
which formerly traded as Vanti ("RTS"). RTS was a master systems
integrator, and a developer of building operating system software
and Kahu workplace technology software and hardware.
The acquisition is an important step
in the Group's strategy to become a leading provider of Smart
Building technology, and in particular to develop Torpedo Factory
Group as a Master Systems Integrator, and for the Group to expand
its range of smart building software.
The financial effects of this
transaction affecting the assets, liabilities, and financial
performance of Torpedo Factory Ltd have been consolidated from 20
March 2024.
|
|
|
Provisional
20
Mar-24
£'000
|
|
Property, plant and
equipment
|
|
20
|
|
Goodwill
|
|
55
|
|
Other intangible assets
|
|
11
|
|
Inventories
|
|
1
|
|
Assets
|
|
87
|
|
|
|
|
|
Total net assets
|
|
87
|
The fair values of the identifiable
assets and liabilities acquired have only been provisionally
determined and are subject to adjustment during the measurement
period.
Fair value of consideration paid
Consideration for the acquisition
comprises £37,003 in cash which was payable on completion, and
contingent deferred consideration of up to £50,000 in cash payable
over a period of up to 18 months.
|
|
|
£'000
|
|
Cash
|
|
37
|
|
Deferred consideration
|
|
50
|
|
Total expected acquisition
cost
|
|
87
|
Whilst fair value assessments have
not been completed, it is not expected that any goodwill will be
recognised.
4
Operating segments
The Group historically comprised a
single business segment with separately reportable geographical
segments (together with a Group costs segment). Geographical
segments being based on the location of the operation undertaking
each project.
The Group's operating geographical
segments consist of the United Kingdom, the Middle East and
Continental Europe. Turkey is included within Continental Europe
together with Germany.
The Board concluded the sale of the
Turkey subsidiary Aukett Swanke Mimarlik AS on 27 December 2023,
and in the comparative period to 30 September 2023 classified the
assets and liabilities of that subsidiary as assets held for sale.
The Group identifies geographical areas of operation aligned to its
geographical segments. The Group retains its significant
investments in its joint venture and associate in Germany and
considers the subsidiary sold to have represented a small
proportion of the geographical segment. Accordingly, Aukett Swanke
Mimarlik AS has not been re-presented as a discontinued
operation.
The Middle East segment has been
re-presented as a discontinued operation and is set out in note
6.
With the acquisition of ecoDriver in
the period (Torpedo Factory Group and Anders + Kern during the
prior period), ecoDriver, Torpedo Factory Group and Anders + Kern
operations have been disclosed as additional separate business
segments.
|
Segment revenue
|
|
Unaudited
six months to 31 March 2024
£'000
|
Unaudited
six months to 31 March 2023
£'000
|
Audited
year to 30 September 2023
£'000
|
|
United Kingdom
|
|
4,780
|
4,191
|
8,858
|
|
Torpedo Factory Group
|
|
3,834
|
212
|
4,816
|
|
Anders + Kern
|
|
581
|
-
|
467
|
|
ecoDriver
|
|
216
|
-
|
-
|
|
Continental Europe
|
|
42
|
159
|
194
|
|
Revenue from continuing
operations
|
|
9,453
|
4,562
|
14,335
|
|
Discontinued operations
|
|
-
|
-
|
2
|
|
Revenue
|
|
9,453
|
4,562
|
14,337
|
|
|
|
|
|
|
|
Segment revenue less sub consultant costs
|
|
Unaudited
six months to 31 March 2024
£'000
|
Unaudited
six months to 31 March 2023
£'000
|
Audited
year to 30 September 2023
£'000
|
|
United Kingdom
|
|
4,733
|
4,094
|
8,692
|
|
Torpedo Factory Group
|
|
3,834
|
212
|
4,816
|
|
Anders + Kern
|
|
581
|
-
|
467
|
|
ecoDriver
|
|
216
|
-
|
-
|
|
Continental Europe
|
|
42
|
92
|
128
|
|
Revenue less sub consultant costs
from continuing operations
|
|
9,406
|
4.398
|
14,103
|
|
Discontinued operations
|
|
-
|
-
|
-
|
|
Revenue less sub consultant
costs
|
|
9,406
|
4,398
|
14,103
|
|
Segment result before tax
|
|
Unaudited
six months to 31 March 2024
£'000
|
Unaudited
six months to 31 March 2023
£'000
|
Audited
year to 30 September 2023
£'000
|
|
|
|
|
|
|
|
United Kingdom
|
|
(39)
|
(140)
|
(94)
|
|
Continental Europe
A
|
|
(80)
|
183
|
277
|
|
Torpedo Factory Group
B E F
|
|
(905)
|
(166)
|
401
|
|
Anders + Kern
|
|
(154)
|
-
|
62
|
|
ecoDriver
|
|
(62)
|
-
|
-
|
|
Group costs C D E
|
|
(264)
|
(422)
|
(997)
|
|
Loss before tax from continuing
operations
|
|
(1,504)
|
(545)
|
(351)
|
|
(Loss)/profit from discontinued
operations
|
|
(8)
|
7
|
10
|
|
Total loss before tax
|
|
(1,512)
|
(538)
|
(341)
|
|
Segment result before tax
(before reallocation of group management
charges)
|
|
Unaudited
six months to 31 March 2024
£'000
|
Unaudited
six months to 31 March 2023
£'000
|
Audited
year to 30 September 2023
£'000
|
|
|
|
|
|
|
|
United Kingdom
|
|
186
|
130
|
202
|
|
Continental Europe
A
|
|
(14)
|
257
|
423
|
|
Torpedo Factory Group
B E F
|
|
(779)
|
(166)
|
467
|
|
Anders + Kern
|
|
(128)
|
-
|
62
|
|
ecoDriver
|
|
(41)
|
-
|
-
|
|
Group costs C D E
|
|
(728)
|
(766)
|
(1,505)
|
|
Loss before tax from continuing
operations
|
|
(1,504)
|
(545)
|
(351)
|
|
(Loss)/profit from discontinued
operations
|
|
(8)
|
7
|
10
|
|
Total loss before tax
|
|
(1,512)
|
(538)
|
(341)
|
A Mar-24 segmental results before tax
includes the £83k loss on disposal of the Turkish subsidiary Aukett
Swanke Mimarlik AS.
B Mar 24 segmental results before tax includes the £585k loss on
revaluation of The Old Torpedo Factory freehold property asset held
for sale allocated within Torpedo Factory Group.
C Mar 24 segmental results before tax includes £27k of
exceptional costs being transactional costs for the acquisition
of TRCS (ecoDriver) allocated within Group costs.
D Sep 23 segmental results before tax includes £25k of
exceptional costs being transactional costs for the acquisition of
Anders + Kern allocated within Group costs.
E Sep-23 segmental results before tax include £260k of
exceptional costs being transactional costs for the acquisitions of
Torpedo Factory Group and Anders + Kern allocated as £210k within
Group costs, and £50k within Torpedo Factory Group.
F Sep 23 TFG segmental result before tax includes
£94k of one-off costs relating to the settlement
of TFG employees' company share option costs and the loss on assets
disposed of as part of the Live Events disposal.
5 Other
operating income
|
Continuing operations
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Property rental income
|
|
79
|
44
|
163
|
|
Management charges to associate and
joint ventures
|
|
66
|
68
|
134
|
|
Other sundry income
|
|
21
|
17
|
29
|
|
Total other operating
income
|
|
166
|
129
|
326
|
6
Discontinued operations
6
(a) Description
In April 2022, the Group sold
assets, as part of the Group's disposal of JRHP constituting its
John R Harris & Partners Limited (Cyprus) subsidiary and John R
Harris & Partners (Dubai) entity, for a cash consideration of
AED 5,000,000, comprising AED 4,250,000 cash upfront and a further
AED 750,000 deferred consideration paid over a 5 year period. This
marked the sale of the main trading operations in the Group's
Middle East segment. With closure costs incurred in the period
relating to the planned termination of a number of trading licenses
in the Middle East operations, the Middle East segment is presented
as a discontinued operation in the current period, and the
comparative period represented accordingly.
6
(b) Financial performance and cash flow
information
Result of discontinued operations
|
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Revenue
|
|
-
|
-
|
2
|
|
|
|
|
|
|
|
Sub consultant costs
|
|
-
|
-
|
(2)
|
|
Revenue less sub consultant
costs
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Expenses
|
|
(8)
|
7
|
10
|
|
(Loss)/profit before tax
|
|
(8)
|
7
|
10
|
|
|
|
|
|
|
|
Tax charge
|
|
-
|
-
|
-
|
|
(Loss)/profit from discontinued
operations
|
|
(8)
|
7
|
10
|
|
|
|
|
|
|
|
Exchange differences on translation
of discontinued operation
|
|
-
|
34
|
-
|
|
Other comprehensive (loss)/gain from
discontinued operations
|
|
(8)
|
41
|
10
|
Earnings per share from discontinued
operations
|
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Basic and diluted (loss)/gain per
share
|
|
(0.00p)
|
0.00p
|
0.00p
|
Statement of cash flows
The statement of cash flows includes
the following amounts relating to discontinued
operations:
|
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
|
|
|
|
|
|
Net cash inflow from operating
activities
|
|
-
|
-
|
-
|
|
Net cash inflow from investing
activities
|
|
-
|
-
|
-
|
|
Foreign exchange
movements
|
|
-
|
-
|
-
|
|
Net cash inflow from discontinued
operations
|
|
-
|
-
|
-
|
7
Earnings per share
The calculations of basic and
diluted earnings per share are based on the following
data:
|
Earnings
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
Continuing operations
|
|
(1,309)
|
(491)
|
82
|
|
Discontinued operations
|
|
(8)
|
7
|
10
|
|
(Loss)/profit for the
period
|
|
(1,317)
|
(484)
|
92
|
|
Number of shares
|
|
Unaudited
six
months
to
31 March
2024
'000
|
Unaudited
six
months
to
31 March
2023
'000
|
Audited
year
to
30
September
2023
'000
|
|
Weighted average number of
shares
|
|
293,253
|
171,907
|
223,916
|
|
Effect of dilutive
options
|
|
-
|
221
|
-
|
|
Diluted weighted average number of
shares
|
|
293,253
|
172,128
|
223,916
|
8
Reconciliation of profit before tax to net cash from
operations
|
|
|
Unaudited
six
months
to
31 March
2024
£'000
|
Unaudited
six
months
to
31 March
2023
£'000
|
Audited
year
to
30
September
2023
£'000
|
|
(Loss)/profit for the
period
|
|
(1,317)
|
(484)
|
92
|
|
Tax credit
|
|
(195)
|
(54)
|
(433)
|
|
Finance income
|
|
(3)
|
-
|
(9)
|
|
Finance costs
|
|
163
|
55
|
255
|
|
Share of results of associate and
joint ventures
|
|
1
|
(205)
|
(341)
|
|
Intangible amortisation
|
|
17
|
6
|
31
|
|
Depreciation
|
|
61
|
24
|
92
|
|
Amortisation of right-of-use
assets
|
|
240
|
193
|
435
|
|
Loss on revaluation of freehold
property
|
|
585
|
-
|
-
|
|
Loss on disposal of property, plant
& equipment
|
|
-
|
-
|
52
|
|
Decrease in trade and other
receivables
|
|
124
|
161
|
1,405
|
|
(Increase)/decrease in
inventories
|
|
(99)
|
-
|
61
|
|
Increase / (decrease) in trade and
other payables
|
|
644
|
625
|
(617)
|
|
Change in provisions
|
|
-
|
7
|
(10)
|
|
Net cash generated from
operations
|
|
221
|
328
|
1,013
|
9
Borrowings
|
|
|
Unaudited
at 31 March
2024
£'000
|
Unaudited
at 31 March
2023
£'000
|
Audited
at
30
September
2023
£'000
|
|
Secured bank overdrafts
|
|
(114)
|
(213)
|
(122)
|
|
Mortgage
|
|
(1,399)
|
(1,445)
|
(1,411)
|
|
Secured bank loan
(Lloyds)
|
|
(31)
|
-
|
-
|
|
Secured bank loan
(NatWest)
|
|
(846)
|
(1,166)
|
(992)
|
|
Secured bank loan
(Coutts)
|
|
(42)
|
(292)
|
(167)
|
|
Total borrowings
|
|
(2,432)
|
(3,116)
|
(2,692)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due for settlement within 12
months
|
|
(1,949)
|
(2,258)
|
(2,050)
|
|
Current liability
|
|
(1,949)
|
(2,258)
|
(2,050)
|
|
|
|
|
|
|
|
Amounts due for settlement between
one and two years
|
|
(364)
|
(392)
|
(350)
|
|
Amounts due for settlement between
two and five years
|
|
(119)
|
(466)
|
(292)
|
|
Non current liability
|
|
(483)
|
(858)
|
(642)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total borrowings
|
|
(2,432)
|
(3,116)
|
(2,692)
|
The bank loan (Coutts) and overdraft
are secured by debentures over all the assets of the Company and
certain of its United Kingdom subsidiaries. The bank loan and
overdraft carry interest at 4.05% (loan) and 3% (overdraft) above
the Coutts Base rate for the relevant currency.
TRCS (renamed ecoDriver) was
acquired in Oct-23 with a Lloyds Banking Group loan facility
guaranteed by the Bounce Back Loan Scheme (BBLS). The loan included
a 6 month capital repayment holiday from Oct-23 to Mar-24, followed
by 26 monthly instalments to May-26. The loan carries interest
fixed at 2.5%pa for the term of the loan which is paid
monthly.
The mortgage and the bank loan
(NatWest) are secured by way of a first legal charge over freehold
property, a debenture and cross guarantee from Torpedo Factory
Group Limited, Torpedo Factory Ltd and TFG Stage Technology Ltd.
The bank loan initially drawn at £1.75m is being repaid at £29k per
month. The loan is at a fixed rate of interest of
3.66%pa.
The mortgage initially drawn in 2018
at £1.73m with a duration of 5 years was previously extended for a
year. In February 2024 the mortgage expired and was extended for a
further 12 month period to February 2025 with a variable rate of
interest of base rate + 5.00%pa. The mortgage is therefore wholly
shown as due for settlement within 12 months.
10 Analysis of
net deficit
|
|
|
Unaudited
at 31 March
2024
£'000
|
Unaudited
at 31 March
2023
£'000
|
Audited
at
30
September
2023
£'000
|
|
Cash at bank and in hand
|
|
279
|
805
|
522
|
|
Cash held within assets classified
as held for sale
|
|
-
|
-
|
30
|
|
Secured bank overdrafts
|
|
(114)
|
(213)
|
(122)
|
|
Cash and cash equivalents
|
|
165
|
592
|
430
|
|
|
|
|
|
|
|
Mortgage
|
|
(1,399)
|
(1,445)
|
(1,411)
|
|
Secured bank loans
|
|
(919)
|
(1,458)
|
(1,159)
|
|
Net debt
|
|
(2,153)
|
(2,311)
|
(2,140)
|
11 Assets and
liabilities classified as held for sale
|
|
|
Unaudited
at 31 March
2024
£'000
|
Unaudited
at 31 March
2023
£'000
|
Audited
at
30
September
2023
£'000
|
|
Non-current assets held for sale
(i)
|
|
2,435
|
-
|
3,080
|
|
Current assets held for sale
(ii)
|
|
-
|
-
|
128
|
|
Liabilities held for sale
(ii)
|
|
-
|
-
|
(148)
|
|
Total assets held for
sale
|
|
2,435
|
-
|
3,060
|
(i) Freehold Property
In June 2024 the Group's subsidiary
Torpedo Factory Group Limited ("TFG") exchanged contracts,
conditional upon a satisfactory valuation, for the sale of The Old
Torpedo Factory at a price of £2.5m, with the buyer having paid a
10% refundable deposit. Exchange is expected to become
unconditional by 5 July 2024. Under the terms of the contract
completion is due to occur in September 2024.
The property was previously valued
in July 2023 by a third party firm of surveyors at
£3.08m.
Assuming agents and legal fee costs
to sell of £65k, the fair value of the freehold property has been
adjusted to £2,435k as at 31 March 2024.
The loss on revaluation and deferred
tax movement have been recognised as:
- Other
comprehensive income: Loss of £45k comprising:
i) £60k loss on
revaluation of freehold property.
ii) Less £15k tax
credit due to reduction of deferred tax liability.
- Income
statement: Loss of £439k comprising:
i) £585k loss on
revaluation of freehold property.
ii) less £146k tax
credit due to reduction of deferred tax liability.
(ii) Aukett Swanke Mimarlik AS
(formerly Swanke Hayden Connell Mimarlik AS)
The sale of Aukett Swanke Mimarlik
AS to local management was concluded on 27 December 2023 for a
nominal sum, resulting in a loss on disposal of £83k.
12 Share
capital
|
|
|
Unaudited
at 31 March
2024
£'000
|
Unaudited
at 31 March
2023
£'000
|
Audited
at
30
September
2023
£'000
|
|
Allocated, called up and fully paid
320,655,938
(31-Mar-2023 & 30-Sep-2023:
275,355,938)
ordinary shares of 1p
each
|
|
3,207
|
2,754
|
2,754
|
|
|
Number
|
|
At 1 October 2022
|
165,213,652
|
|
Issue for acquisition of
subsidiary
|
110,142,286
|
|
At 31 March 2023 and 30 September
2023
|
275,355,938
|
|
Issue for acquisition of
subsidiary
|
17,800,000
|
|
Share subscription
|
27,500,000
|
|
At 31 March 2024
|
320,655,938
|
The Company's issued ordinary share
capital comprises a single class of ordinary share. Each share
carries the right to one vote at general meetings of the
Company.
In October 2023, the acquisition of
TR Control Solutions Limited resulted in an increase in the share
capital of 17,800,000 new ordinary shares of 1p, as disclosed in
note 3.
In March 2024, the Group announced a
share subscription raising an aggregate up to £425,000 through the
issue and allotment of a total of up to 42,500,000 new ordinary
shares of 1p. £275,000 was raised by way of direct subscriptions of
27,500,000 new ordinary by certain existing and institutional
investors (the "Investors").
In addition, certain directors and
managers of the Group indicated their intention to subscribe for up
to 15,000,000 new ordinary shares of 1p, raising £150,000 on the
same terms as the Investors (the "Subscription"). This
subscription was completed after the period end in April
2024.
In aggregate the Subscription
resulted in the issue and allotment of a total of up to 42,500,000
new ordinary shares of 1 penny each in the Company (the
"Subscription Shares") at an issue price of 1 penny. Subscribers
received warrants, exercisable for 3 years, to be issued (subject
to certain conditions) on the basis of one warrant for every one
Subscription Share with an exercise price of 1 penny. The
Subscription Shares were issued under the Company's existing share
authorities; the warrants required a specific authority to be
sought which was approved at the annual general meeting in April
2024.
13 Employee
Share Plans and Share Options
The Company has implemented two
share plans and one share option plan over its Ordinary Shares to
Group employees as follows:
All
Employee Share Option Plan
In November 2023 the Company
implemented an All Employee Share Option Plan ("AESOP"). The AESOP
is a Share Incentive Plan which entitles all eligible employees to
invest between £10 and £150 per month in purchasing shares in the
Group from their pre-tax salary. The Group matches this
contribution pound-for-pound on the first £50 per month by
purchasing matching shares for the relevant employee as a staff
retention tool. These are ordinarily forfeit if the relevant
employee leaves within 3 years.
Management Share Ownership Plan
In December 2023 the Company created
a Management Share Ownership Plan ("MSOP"). The Company recognises
that the management of the Group's businesses wish to build an
ownership stake in excess of the limits the Government imposes on
the AESOP scheme. Therefore, 34 members of the senior management of
the Company and UK subsidiaries were invited to commit to
purchasing shares. 32 of the 34 agreed and made a contractual
commitment to spend an amount equivalent to between 2.5% and 10% of
their gross annual salary on the purchase of Company shares, until
such time as each of them own a minimum of either 0.25% or 0.5% of
the Company's issued share capital - though they are free to
acquire larger stakes if they wish. The shares are generally
purchased on the open market. Three further members of staff have
subsequently been invited to join the MSOP and accordingly there
are now 35 members.
All who have expressed an intent
have indicated they will be purchasing their shares within their
pension plans, as their investments are intended to build long term
stakes in the business.
Company Share Option Plan and surrender of existing EMI
options
In December 2023 the Company created
a Company Share Option Plan ("CSOP"). Pursuant to the CSOP, an
aggregate 25,591,666 options were granted to members of the senior
management team of the company and UK subsidiaries who made
commitments under the MSOP. The CSOP options are exercisable at
1.0p, being the nominal value of each share and a 17.6% premium to
the closing mid-market price on 22 December 2023 (save for
1,000,000 CSOP replacement options granted to Antony Barkwith,
Director, as detailed below). A further 4,125,000 options were
granted to additional joiners of the MSOP scheme in April 2024 with
an exercise at 1.25p, being the closing mid-market price on the day
prior to the date of grant.
Additionally, the Company agreed
with option holders in the Company's pre-existing EMI option scheme
for the surrender of their options, comprising in aggregate 10.4m
EMI options. The replacement options are included within the CSOP
grants detailed above.
A total of 8.4m CSOP options were
granted at an exercise price of 1.0p per share to Freddie Jenner
(Group COO) and Jason Brameld (Group CTO, a non-board PDMR) to
replace 8.4m EMI options that were issued on the purchase of
Torpedo Factory Group Limited ("TFG"). The EMI options surrendered
had an exercise price of 1.0p.
Antony Barkwith (Group Finance
Director) surrendered 1,000,000 EMI options with an exercise price
of 1.6p which were replaced with 1,000,000 CSOP options with an
exercise price of 1.6p. He also surrendered 1,000,000 EMI options
with an exercise price of 3.6p which were not replaced.
Freddie Jenner, Jason Brameld and
Antony Barkwith also each received CSOP options in their capacity
as parties who made the MSOP commitment.
CSOP Options granted to
Directors/PDMRs were as follows:
Name
Number of
Exercise Price Notes
CSOP options
Nick
Clark
2,000,000
1.0p
Freddie Jenner
4,700,000
1.0p
Of which 3.7m replace EMI
Jason Brameld (PDMR) 5,700,000
1.0p
Of which 4.7m replace EMI
Antony Barkwith
1,000,000
1.0p
1,000,000
1.6p
Replacing EMI
All CSOP options vest between the
third and tenth anniversary of grant. The total 29,716,666 CSOP
options now outstanding represent 8.84% of the shares currently in
issue. There are no EMI options outstanding and the company's EMI
scheme will be closed.
14 Post
balance sheet events
Freehold property
In June 2024 the Group's subsidiary
Torpedo Factory Group Limited ("TFG") exchanged contracts,
conditional upon a satisfactory valuation, for the sale of The Old
Torpedo Factory at a price of £2.5m, with the buyer having paid a
10% refundable deposit. Exchange is expected to become
unconditional by 5 July 2024. Under the terms of the contract
completion is due to occur in September 2024.
The revaluation of the freehold
property has been treated as an adjusting post balance sheet event
in the reporting period and is disclosed in note 11.
Invoice discounting facility
Since the period end, subsidiaries
Torpedo Factory Ltd and TFG Stage Technology Ltd have been accepted
for an invoice discounting facility, enabling the Group to borrow
funds secured against amounts due from customers thereby releasing
working capital. The facility is backed by a cross guarantee and
indemnity from Aukett Swanke Group Plc and Torpedo Factory Group
Limited, £60,000 of cash cover to be deposited to a nominated bank
account is also required to trigger the facility. The initial
maximum advance under the facility is £600,000.
15 Status of
Interim Report
The Interim Report covers the six
months ended 31 March 2024 and was approved by the Board of
Directors on 27 June 2024. The Interim Report is
unaudited.
The interim condensed set of
consolidated financial statements in the Interim Report are not
statutory accounts as defined by Section 434 of the Companies Act
2006.
Comparative figures for the year
ended 30 September 2023 have been extracted from the statutory
accounts of the Group for that period.
The statutory accounts for the year
ended 30 September 2023 have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The audit
report thereon was unqualified, did not include references to
matters to which the auditors drew attention by way of emphasis
without qualifying the report, and did not contain a statement
under Section 498 of the Companies Act 2006. The audit report did
draw attention to the Directors' assessment of going
concern, indicating that a material
uncertainty exists that may cast significant doubt on the Group's
and parent company's ability to continue as a going concern. The
audit report was not modified in respect of this matter.
16 Further
information
An electronic version of the Interim
Report will be available on the Group's website
(www.aukettswankeplc.com).