TIDMAQSG
RNS Number : 9080C
Aquila Services Group PLC
24 June 2021
For immediate release 24 June 2021
Aquila Services Group plc
("Aquila", the "Company" or the "Group")
Annual report and financial statements
for the year ended 31 March 2021
and
Notice of AGM
Annual report
Aquila is pleased to announce its audited annual report and
financial statements for the year ended 31 March 2021, extracts
from which are set out below.
The Company's annual report and financial statements for the
year ended 31 March 2021 are being posted to
shareholders today and will shortly be made available from the Company's website at: http://www.aquilaservicesgroup.co.uk/ .
In addition, the document will be uploaded to the National
Storage Mechanism and will be available for viewing shortly at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Financial Highlights
For the year ended 31 March 2021
Revenue Gross profit Gross profit margin
GBP7,642k GBP1,640k 21%
(2020: GBP7,963k) (2020: GBP1,752k) (2020: 22%)
Underlying operating Statutory profit Statutory earnings per
profit* after tax share
GBP614k GBP187k 0.48p
(2020: GBP468k) (2020: GBP126k) (2020: 0.35p)
------------------- -----------------------
Cash generated by operations Cash balances Total dividend payable
GBP930k GBP2,127k 0.55p per share
(2020: GBP230k) (2020: GBP828k) (2020: 0.30p)
------------------- -----------------------
*Underlying operating profit is calculated by adjusting the
reported pre-tax profit for profit/(loss) on disposals,
restructuring costs related to COVID-19, share-based payment
charges, acquisition costs, share of profits from associate
companies and impairments of investments.
Dividend
The Directors propose a final dividend of 0.4p per share (2020:
Nil). This will be paid on 2 August 2021 to shareholders on the
register at 16 July 2021.
Notice of Annual General Meeting ("AGM")
The Company's AGM will be held at Tempus Wharf 29A, Bermondsey
Wall West, London, SE16 4SA on 28 July 2021 at 3:00 pm.
This year the AGM will continue with the special measures
adopted for the AGM in 2020 to protect the health and safety of
Shareholders and others in attendance at the AGM. The AGM will be
run as a closed meeting with the minimum number of shareholders
present (or via video conferencing in accordance with the Company's
articles of association) to ensure that the meeting is quorate and
conducted without a presentation or a question and answer session.
Shareholders are invited to submit written questions for the Board
to consider, questions can be pre-submitted in advance of the AGM
via e-mail to the Company Secretary,
claire.banks@aquilaservicesgrp.co.uk , up to 9:00am on 27 July
2021, being the working day before the AGM. The Board requests that
no Shareholders attend the meeting in person and any Shareholders
that do attend (other than to form a quorum) will be refused entry.
Accordingly, Shareholders are encouraged to vote on the resolutions
by proxy and the votes on each resolution will be taken on a poll.
You can vote by completing and returning the proxy form which
accompanies this Report and Accounts.
The Board will continue to keep Government guidance under review
and may, if necessary, make further changes to the arrangements for
the AGM. Further announcements and information will be provided as
required and Shareholders should continue to monitor the Company's
website at https://aquilaservicesgroup.co.uk/ for any up-dates.
The financial information set out below does not constitute the
Company's statutory accounts for the period ending 31 March 2021.
The financial information for 2020 is derived from the statutory
accounts for that year. The auditors, Crowe U.K. LLP, have reported
on the 2021 accounts. Their report was unqualified and did not
include a reference to any matters to which the auditors draw
attention by way of emphasis without qualifying their report.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018.
For further information please visit
www.aquilaservicesgroup.co.uk or contact:
Aquila Services Group plc
Claire Banks, Group Finance Director
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Roland Cornish
Tel: 020 7628 3396
Extracts from the Company's annual report and financial
statements for the year ended 31 March 2021
Chair's Statement
Dear Shareholder,
I am pleased to present the annual report and the financial
statements for the year to 31 March 2021. The report is designed to
provide both an overview of the Group's business and achievements,
as well as a summary of the results for the year. I hope
shareholders will find it both helpful and informative. If you
would like further information or wish to discuss the work of the
Group, please do not hesitate to contact one of the directors;
details are given on page 4.
My letters to shareholders included in last year's final report
and the interim report for this year concentrated on the actions we
took to counter the impact of the pandemic and increase the
financial resilience of the Group. Looking back, I am pleased to
report that because we took timely and appropriate decisions, the
Group has emerged with a stronger, more resilient and agile
business model and increased reserves.
In global terms, the impact of the pandemic is still ongoing.
The pace of economic recovery in the UK, the third wave in Europe
and the disastrous effects being seen for some of our international
partners in Africa and Asia mean we remain cautious.
At the interim stage, trading profits were lower than the
previous comparable period, both from lower turnover and the costs
of restructuring. I am pleased to report the second half of the
year had no further disruptive events and trading continued to
improve. Turnover was only slightly below previous years and
reported profits are higher after restructuring costs and the
impairment of our investment in AssetCore. Cash balances have
significantly increased and with a continuation of the uplift in
trading for the first few months of this year, we are optimistic.
The Group is pleased to return to the dividend list and its
confidence has enabled the proposed final dividend to be
recommended at a level reflecting pre-pandemic trading.
Elsewhere in this report there is a summary of trading for each
of the three businesses of the Group, so here I want to concentrate
on the opportunities to grow the existing businesses, both
organically and by acquisitions.
Altair Consultancy and Advisory Services Ltd (Altair) has four
major business streams: Property, Governance and Financial Support,
Transformation and Change and Altair International. Predominantly
the first three activities work for a wide range of local
authorities, housing associations and charities but with an
increasing number of commercial organisations, mainly operating in
the UK housing sector. Altair International's major clients are
through multi-national agencies such as the World Bank or specific
government agencies wanting to support affordable housing
programmes and infrastructure development in Africa and Asia.
For all activities the contracts generated, mainly from existing
clients, have kept our team of consultants working at full stretch.
With the impact of the pandemic on travel, conferences and
marketing, the opportunity to grow the client base has been
restricted. We are now actively looking to expand our team of
consultants and in particular our range of expertise by identifying
disciplines that we do not currently offer. We will do this by
recruitment and by acquisition, neither of which will be easy and
will take time.
The well-publicised demand for specialists in fire safety and
achieving targets for decarbonisation of residential accommodation
has meant these skills are in short supply. To expand our team we
will need to both recruit and continue to train our own. As the
regulations governing the organisations with which we work get more
complex, the skills that we need are in higher demand. To make the
Group more attractive to new recruits and to retain our existing
specialists, we have restructured our remuneration packages to
offer better rewards and increased opportunities.
For Altair International, the restrictions on travel which meant
having to manage projects either virtually or through locally based
contractors have restricted being preferred bidders for larger new
opportunities. As, hopefully, these restrictions begin to lift then
we will expand the team and the product range.
During the year, we reviewed a limited number of acquisition
opportunities none of which met our minimum criteria. Often the
expectations of the acquisition price were well beyond our
valuation yet private equity companies, who from our perception had
little experience of the businesses, were willing to pay
significantly higher sums. There are identified businesses in which
we would be interested and for which we could provide opportunities
for both the owners and their consultants. We expect that these
opportunities will become more available when expectations of
anticipated values are more realistic.
Oaks Consultancy Limited (Oaks) is a consultancy that works
mainly in the education and sports sector but is increasingly
working with Altair consultants to develop the offering in both the
health and housing sectors. Clients include, some of England's
largest multi academy trusts, many of the UK's national governing
bodies of sport, community development work for Premier League
football clubs and international strategic planning an
implementation for UEFA and its 55 member associations. The year
under review was the first full year within the Group and probably
suffered the most from the effects of the pandemic with many of the
sports organisations significantly reducing their activities or
closing, similarly for many in the education field. Despite this,
performance exceeded our expectations and we are now looking
forward to a year of expansion.
Oaks is working on a number of new products including providing
ongoing digital support for many of its clients and ongoing
assistance as organisations strive to rebuild their impact and
finances following a period of shutdown. For some clients this may
mean merging with other organisations and we are now developing
templates and processes to help these organisations manage
effectively in a more challenging environment. This expansion will
be supported by a programme of recruitment and we have started
looking for acquisitions that would complement the range of skills
and client base.
Aquila Treasury and Finance Solutions Ltd (ATFS) is our treasury
consultancy registered with the FCA. Previously concentrating only
on the affordable housing sector, with our latest acquisition we
now provide treasury and banking support within the education
sector. The education sector was heavily impacted by the pandemic
and the temporary closure of many educational establishments
resulted in a more challenging year for ATFS.
The current financial year will focus on our planned succession
within the company and the development of further products specific
to the education sector. The programme of recruitment and
restructuring has already started, with the aim of completing the
first phase by the half year and the second phase by the end of
this financial year.
At the beginning of the Chairman's Statement last year, I
invoked the old Chinese greeting of 'may you live in interesting
times'. Looking forward, we see that we are well placed to grow the
business and its profitability. This should benefit the support we
provide to our clients, the opportunities and rewards for our
employees and the financial returns to our shareholders. We are an
incremental business and these benefits are for the medium term
rather than a short term strategy.
We want our stakeholders to be pleased to be involved with a
group that is striving for a better world, whether this be from our
business in helping households have access to better quality,
affordable homes, the ability to participate in sports, receive a
better education or have improved access to health services. We
want this to be reflected in how we operate so we are currently
working on programmes to reduce our carbon footprint and ensure
that the diversity and opportunities for those we employ and
recruit reflect both the need for an equal society and address
inequalities. On Page 11 we introduce our staff groups, Green and
EDI, reviewing ways we can improve our methods of working to
minimise our carbon footprint and for recruitment, management and
employment procedures to encourage equality, diversity and
inclusion.
As a result of the restructuring, I accepted, on a temporary
basis, the role of Executive Chair. Fiona Underwood as the Chief
Executive of Altair worked with me to coordinate activities at
Group level. I am pleased to formally announce that Fiona has
accepted the role of Group Managing Director and I will relinquish
much of my executive responsibilities.
To concentrate efforts on managing the operational
responsibilities of the Group, the subsidiary boards' membership
were restructured to be executive-led. This puts more
responsibility on Group board to provide wider experience and
strategic guidance. We are currently reviewing options to add
relevant skills and experience and also with an eye on our
succession requirements.
Typically the Group Chair ends the report by singling out
individuals who have made important contributions during the year.
For the year under review, this is an impossible task. All have
contributed over and above the call of duty and turned what could
have been a year of challenge to a year of success.
What I will do is personally thank my fellow Group board members
who work with me. They also put in untiring efforts and were always
able to provide an air of optimism which I appreciated.
Let's now look forward with confidence to keeping the growth of
the business on track and for everybody involved, whether clients,
employees or investors, to be proud and supportive of the Group's
achievements.
Derek Joseph - Chair
23 June 2021
Extract from the Strategic Report
Strategy and objectives
Aquila Services Group (Aquila) has a bold purpose to 'make a
better, more sustainable and socially responsible world'. We
achieve this by being a consultancy group which provides
professional support services to socially focused sectors in the UK
and internationally.
Our purpose is core to what we want to be across the group:
-- We want our subsidiaries to have a direct beneficial impact
on communities and lives in the UK and beyond.
-- We want to offer staff the opportunity to inspire positive
change in an environment with a strong social focus.
-- And we want to provide investors the opportunity of
supporting an organisation that combines strong performance with a
positive social outcome.
Our work helps our clients to develop a response to a changing
world and make a positive difference to the communities in which
they operate. At present we work with clients across housing and
regeneration, sport and education, charity and government sectors.
We work across the UK and increasingly internationally.
Our business as at 31 March 2021
Aquila delivers work to clients through key subsidiaries, each
of which has a core market and service focus:
-- Altair provides support for affordable housing and government
bodies through the development, growth, management, governance, and
operation of organisations, and the improvement of services to
housing customers.
-- ATFS is registered with the Financial Conduct Authority and
provides advice to the affordable housing and education sectors on
treasury and funding solutions.
-- Oaks works with clients in the sport and education sectors
focused on strategy, business planning and income generation
activities.
Within the year of reporting the Group has set up two employee
led groups with representation across the Aquila Group. The aim is
to focus activities on the environment and sustainability,
equality, diversity and inclusion and promoting these initiatives
amongst colleagues, making Aquila an attractive employer to work
for.
Green Group
The objective of the Green Group is to reduce the Group's
environmental impact, to maintain Carbon Neutral Plus status and
develop further initiatives to mitigate the Group's impact on the
environment.
EDI Group
The purpose of the Equality Diversity and Inclusion (EDI) Group
is to drive the EDI agenda across subsidiaries including developing
frameworks and raising awareness for the implementation of a range
of initiatives to foster a culture of equality, diversity and
inclusion at Aquila.
Further information about, and activities within the groups, is
available on the website.
Principal risks and uncertainties
The principal risks currently faced by the Group are:
Financial risk
The main financial risks arising from the Group's activities are
credit risk, foreign currency risk, interest rate risk and
liquidity, details of which can be found in note 24 to the
Financial Statements.
Unfavourable economic conditions and/or changes to government
policy
The impact of COVID-19 will affect the macro-economic
environment for some time, although the stimulus provided by the
government has helped businesses during the last year. The sectors
that the Group operates within may see a reduction in business as
clients spending on consultancy is curtailed. Local authorities
continue to see significant pressure on budgets and may stop all
consultancy contracts or commissioning work.
The Group mitigates these risks by ensuring that each subsidiary
has diversity across its client base, not relying on any one client
or group of clients.
Changes to government policy may adversely affect the Group. The
Group ensures that it is aware of the impact of these changes and
adapts its products and services to proactively respond to this
risk.
The implementation of IR35 within the interim market was
implemented on 1 April 2021. The Group has changed the way it works
with clients although IR35 will continue to affect this part of the
business.
COVID-19
The return to normal business may take longer than anticipated
and the possibility of continued disruption and/or further waves
could mean that procurement and commissioning of projects is
delayed or cancelled.
Competition
Increased competition in the market continues to pose a risk to
all companies within the Group.
Staff skills, retention, recruitment and succession
As the Group is a people-based business, a significant risk is
the recruitment and retention of talent. The Group has implemented
succession plans within the year to mitigate this risk.
Data governance
The increase of cyber-attacks and the loss of data is a serious
risk that is monitored closely. The Group complies with all
relevant legislation and has invested in updated systems, security
and training during the year and will commit to having Cyber
Essential Plus status within the coming year.
Mitigations of risk
The Group seeks to mitigate all these risks through ensuring
that it monitors changes in statutory, regulatory and financial
requirements and maintains good relationships with its clients,
principal contacts within government, regulators and other key
influencers within the sector.
The Group is well placed to provide the full range of services
needed by its clients as the external environment changes and the
UK unlocks further from the pandemic. Our international work will
continue to be impacted due to international travel restrictions.
It is hoped these will ease during the year.
Environment
As part of the Group's overall purpose of 'Making a better, more
sustainable, socially responsible world' the need to tackle the
wider climate emergency has been a focus and as a result Aquila has
achieved Carbon Neutral Plus status within the year.
Further information is on the website.
Statement of Directors' Responsibilities in respect of the
Annual Report and the Financial Statements
The directors (being Derek Joseph, Executive Chair, Fiona
Underwood, Executive Director, Claire Banks, Group Finance Director
and Company Secretary and Richard Wollenberg, Non-Executive
Director) are responsible for preparing this report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the Company and Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union and applicable law. Under company law, the
directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and the Group and the profit or loss of the
Company and the Group for that period.
In preparing the Company and Group financial statements, the
directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- state whether IFRSs as adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union have been followed,
subject to any material departures disclosed and explained in the
financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and Group
will continue in business; and
-- provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company and
Group's transactions and disclose with reasonable accuracy at any
time the financial position of the Company and Group and enable
them to ensure that the financial statements comply with the
Companies Act 2006 and Article 4 of the IAS Regulation. They are
also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
We confirm that to the best of our knowledge:
-- the Company and Group financial statements, prepared in
accordance with IFRS as adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union, give a true and fair
view of the assets, liabilities, financial position and profit of
the Company and the Group; and
-- these strategic and directors' reports include a fair review
of the development and performance of the business and the position
of the Company and the Group together with a description of the
principal risks and uncertainties that they face.
Claire Banks - Group Finance Director
On behalf of the Board
23 June 2021
Consolidated statement of comprehensive income
For the year ended 31 March 2021
Notes 2021 2020
GBP'000 GBP'000
Revenue 4 7,642 7,963
Cost of sales 5 (6,002) (6,211)
-------- ---------
Gross profit 1,640 1,752
Administrative expenses 5 (1,339) (1,626)
Operating profit 301 126
Finance income 4 - 1
Release of contingent consideration 10 - 555
Impairment of goodwill 10 - (555)
Share of profits from associate 13 - 51
Loss on disposal of associate 13 (25) -
Profit before taxation 6 276 178
Income tax expense 8 (89) (52)
-------- ---------
Profit for the year 187 126
Other comprehensive income - -
-------- ---------
Total comprehensive income for
the year 187 126
======== =========
Earnings per share attributable
to owners of the parent
Basic 9 0.48p 0.35p
Diluted 9 0.45p 0.32p
The income statement has been prepared on the basis that all
operations are continuing operations.
Consolidated statement of financial position
As at 31 March 2021
Group Group
2021 2020
Notes GBP'000 GBP'000
Non-current assets
Goodwill 10 3,317 3,317
Property, plant and equipment 11 394 518
Investment in associates 13 - 278
Investments 14 71 121
--------
3,782 4,234
Current assets
Trade and other receivables 15 2,273 2,387
Cash and bank balances 2,127 828
--------
4,400 3,215
-------- ---------
Current liabilities
Trade and other payables 16 1,929 1,683
Lease liabilities 16 85 79
Corporation tax 89 76
--------
2,103 1,838
-------- ---------
Net current assets 2,297 1,377
-------- ---------
Non-current lease liabilities 17 284 369
Net assets 5,795 5,242
======== =========
Equity
Share capital 18 1,998 1,897
Share premium account 18 1,712 1,475
Merger reserve 18 3,042 3,042
Share-based payment reserve 21 580 769
Retained losses (1,537) (1,941)
-------- ---------
Equity attributable to the
owners of the parent 5,795 5,242
======== =========
The financial statements were approved by the board and
authorised for issue on 23 June 2021 .
Claire Banks - Group Finance Director
Company statement of financial position
As at 31 March 2021
Company Company
2021 2020
Notes GBP'000 GBP'000
Non-current assets
Property, plant and equipment 11 - 16
Investment in subsidiaries 12 4,170 4,082
Investment in associates 13 - 227
Investments 14 71 121
--------
4,241 4,446
Current assets
Trade and other receivables 15 1,304 708
Cash and bank balances 415 13
--------
1,719 721
-------- --------
Current liabilities
Trade and other payables 16 393 505
393 505
-------- --------
Net current assets 1,326 216
Net assets 5,567 4,662
======== ========
Equity
Share capital 18 1,998 1,897
Share premium account 18 2,341 2,104
Share-based payment reserve 21 580 769
Retained earnings/(losses) 648 (108)
-------- --------
Equity attributable to the
owners of the parent 5,567 4,662
======== ========
As permitted by S408 Companies Act 2006, the company has not
presented its own profit and loss account. The company's profit for
the year was GBP539k (2020: GBP200k).
The financial statements were approved by the board and
authorised for issue on 23 June 2021.
Claire Banks - Group Finance Director
Company Registration No. 08988813
Consolidated statement of changes in equity
For the year ended 31 March 2021
Share Share based
Share premium Merger payment Retained Total
capital account reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April 2019 1,765 1,487 2,413 668 (1,730) 4,603
Issue of shares 132 (12) 629 - - 749
Transfer on
reserves - - - (4) 4 -
Total comprehensive
income - - - - 126 126
Share based
payment charge - - - 105 - 105
Dividend - - - - (341) (341)
Balance at 31
March 2020 1,897 1,475 3,042 769 (1,941) 5,242
======== ======== ======== ============ ========= ========
Balance at 1
April 2020 1,897 1,475 3,042 769 (1,941) 5,242
Issue of shares 101 237 - - - 338
Transfer on
reserves - - - (277) 277 -
Total comprehensive
income - - - - 187 187
Share based
payment charge - - - 88 - 88
Dividend - - - - (60) (60)
-------- -------- -------- ------------ --------- --------
Balance at 31
March 2021 1,998 1,712 3,042 580 (1,537) 5,795
======== ======== ======== ============ ========= ========
Company statement of changes in equity
For the year ended 31 March 2021
Share Share based
Share premium payment Retained Total
capital account reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April 2019 1,765 1,487 668 29 3,949
Issue of shares 132 617 - - 749
Total comprehensive
income - - - 200 200
Transfer on reserves - - (4) 4 -
Share based payment
charge - - 105 - 105
Dividend - - - (341) (341)
Balance at 31
March 2020 1,897 2,104 769 (108) 4,662
======== ======== ============ ========= ========
Balance at 1
April 2020 1,897 2,104 769 (108) 4,662
Issue of shares 101 237 - - 338
Total comprehensive
income - - - 539 539
Transfer on reserves - - (277) 277 -
Share based payment
charge - - 88 - 88
Dividend - - - (60) (60)
-------- -------- ------------ --------- --------
Balance at 31
March 2021 1,998 2,341 580 648 5,567
======== ======== ============ ========= ========
Consolidated statement of cash flow
For the year ended 31 March 2021
2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 187 126
Interest received - (1)
Income tax expense 89 52
Share based payment charge 88 105
Profit from associate - (51)
Release of contingent consideration - (555)
Impairment of goodwill - 555
Loss on disposal of associate 25 -
Change in fair value of investments 50 -
Depreciation 131 134
-------- --------
Operating cash flows before movement in working
capital 570 365
Decrease in trade and other receivables 114 122
Increase/(Decrease) in trade and other payables 246 (257)
-------- --------
Cash generated by operations 930 230
Income taxes paid (75) (139)
-------- --------
Net cash inflow from operating activities 855 91
-------- --------
Cash flows from investing activities
Interest received - 1
Purchase of property, plant and equipment (7) (32)
Purchase of subsidiary - (544)
Proceeds from sale of associate 252 -
-------- --------
Net cash inflow/(outflow) from investing activities 245 (575)
-------- --------
Cash flows from financing activities
Lease liability payments (79) (66)
Proceeds of share issue 338 -
Dividends paid (60) (341)
-------- --------
Net cash inflow/(outflow) from financing activities 199 (407)
Net increase/(decrease) in cash and cash equivalents 1,299 (891)
Cash and cash equivalents at beginning of
the year 828 1,719
-------- --------
Cash and cash equivalents at end of the year 2,127 828
======== ========
Company statement of cash flow
For the year ended 31 March 2021
2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 539 200
Dividends received (1,122) (461)
Interest received - (1)
Profit on disposal of associate (26) -
Change in fair value of investment 50 -
Depreciation 16 21
Operating cash flows before movement in working
capital (543) (241)
(Increase) / Decrease in trade and other receivables (597) 379
(Decrease) in trade and other payables (110) (37)
Cash (outflow)/inflow generated by operations (1,250) 101
Net cash (outflow)/inflow from operating activities (1,250) 101
-------- --------
Cash flows from investing activities
Interest received - 1
Dividends received 1,122 461
Acquisition of subsidiaries - (544)
Proceeds from sale of associate 252 -
Net cash (outflow)/inflow from investing activities 1,374 (82)
-------- --------
Cash flows from financing activities
Proceeds of share issue 338 -
Dividends paid (60) (341)
Net cash outflow from financing activities 278 (341)
Net decrease in cash and cash equivalents 402 (322)
Cash and cash equivalents at beginning of
the year 13 335
Cash and cash equivalents at end of the year 415 13
======== ========
Notes to the financial statements
For the year ended 31 March 2021
1 General information
Aquila Services Group plc ('the Company') and its subsidiaries
(together, 'the Group') provide specialist housing, sport,
education and treasury management consultancy services. The
principal activity of the Company is that of a holding company for
the Group as well as providing all the strategic and governance
functions of the Group.
The Company is a public limited company which is listed on the
London Stock Exchange, domiciled in the United Kingdom and
incorporated and registered in England and Wales. The Company's
registered office is Tempus Wharf, 29a Bermondsey Wall West,
London, SE16 4SA.
2 Accounting policies
The principal accounting policies applied in preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied unless otherwise
stated.
Basis of preparation
The financial statements have been prepared in accordance with
International Accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial
Reporting Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union, including
interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC), and the Companies Act 2006
applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical
cost basis except for certain assets which are carried at fair
value.
The financial statements are presented in Pounds Sterling which
is the functional and presentational currency of all companies
within the group.
The preparation of the financial statements in conformity with
IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process
of applying the Group's accounting policies. The areas of critical
accounting estimates and judgements are set out in note 3.
Going concern
When COVID-19 struck before the beginning of the financial year
under review the Directors took immediate action and as a result a
number of staff were made redundant, and some put on furlough. Cash
balances were increased through the issue of new equity. The Group
took advantage of the VAT deferral scheme which is being paid back
over 10 months. The Group has no borrowings.
The budgets and cashflow forecasts that have been produced and
reviewed demonstrate that the Group is forecast to generate profits
and cash in the year ended 31 March 2022 and beyond and that the
Group has sufficient cash reserves to enable the Group to meet its
obligations as they fall due for a period of at least 12 months
from the date of signing the financial statements.
Government Furlough scheme
The Company took advantage of the Governments furlough scheme
and furloughed seven employees, all of whom have now returned to
work. The monies received have been offset against the employee
costs.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of subsidiary entities. A subsidiary is defined as an
entity over which the Company has control. Control is achieved when
the Company has power over an entity, is exposed to, or has rights
to, variable returns from its involvement with the entity, and
could use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains
control and ceases when control is lost. The Company reassesses
whether it controls an entity if facts and circumstances indicate
that there are changes to one or more of the three control elements
listed above.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the
Group are eliminated on consolidation.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring accounting policies used into
line with the Group's accounting policies.
Business combinations
Acquisitions of subsidiaries are accounted for using the
acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the
sum of the acquisition date fair values of assets transferred by
the Group, liabilities incurred by the Group to the former owners
of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree.
Any excess of the consideration over the fair value of the
identifiable assets and liabilities acquired is recognised as
goodwill. Goodwill is not amortised but is reviewed for impairment
at least annually. If the consideration is less than the fair value
of the identifiable assets and liabilities acquired, the difference
is recognised in the statement of comprehensive income.
Revenue recognition
The group earns income from the following principal
services:
-- Revenue from consultancy services
-- Revenue from treasury management.
For all these principal services, revenue represents amounts
recoverable from clients for professional services provided during
the year. Revenue is measured based on the consideration to which
the Group expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties.
Revenue is recognised when control of a product or service is
transferred to a customer .
Revenue from fixed fee assignments is recognised over a period
of time by reference to the stage of completion of the actual
services provided at the reporting date, as a proportion of the
total services to be provided because the customer receives and
uses the benefits simultaneously. This is determined based on the
actual labour hours spent relative to the total expected labour
hours.
Time and materials assignments are recognised as services are
provided at the fee rate agreed with the client. Unbilled revenue
on individual client assignments is classified as contract assets
for client work within trade and other receivables. Where
individual on-account billings exceed recognised revenue on a
client assignment, the excess is classified as contract liabilities
for client work within trade and other payables.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss. The
cost of an item of property, plant and equipment initially
recognised includes its purchase price and any cost that is
directly attributable to bringing the asset to the location and
condition necessary for use. Depreciation is recognised to
write-off the cost of assets less their residual values over their
estimated useful lives, using the straight-line method, on the
following bases:
Leasehold improvement Over unexpired term of lease
Right of use assets Over unexpired term of lease
Leasehold improvements 5 years
Fixtures, fittings and equipment 3-4 years
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective
basis.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected to arise
from the continued use of the asset. The gain or loss arising on
the disposal of an asset is determined as the difference between
the sales proceeds and the carrying amount of the asset and is
recognised in the statement of comprehensive income.
Investment in subsidiaries
In the Company's financial statements, investments in
subsidiaries are carried at cost less any accumulated
impairment.
The cost of an investment in a subsidiary is the aggregate of
the fair value, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by
the Company, plus any costs directly attributable to the purchase
of the subsidiary.
Investment in associates
An associate is an entity over which the Group has significant
influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is
not control over those policies.
The results and assets and liabilities of associates are
incorporated in these financial statements using the equity method
of accounting. Under the equity method, an investment in an
associate is initially recognised in the consolidated statement of
financial position at cost and adjusted thereafter to recognise the
Group's share of profit or loss and other comprehensive income of
the associate.
An investment in an associate is accounted for using the equity
method from the date on which the investee becomes an associate. On
acquisition of the investment in an associate, any excess of cost
over the Group's share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as goodwill,
which is included in the carrying amount of the investment.
Investments
Investments are held at cost and reviewed annually for
impairment.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's Statement of Financial Position when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets
Financial assets are classified into the following specified
categories: financial assets 'at fair value through profit or loss'
(FVTPL) and 'amortised cost'. The classification depends on the
financial asset's contractual cash flow characteristics and the
Group's business model for managing them and is determined at the
time of initial recognition. Financial assets with cash flows that
are not solely payments of principal and interest are classified
and measured at fair value through profit or loss, irrespective of
the business model.
Amortised cost
Financial assets at amortised cost
These assets are held within a business model whose objective is
to collect contractual cash flows which are solely payments of
principals and interest and therefore classified as subsequently
measured at amortised cost. With the exception of trade receivables
which are initially measured at transaction price determined in
accordance with IFRS 15, financial assets at amortised cost are
initially recognised at fair value plus transaction costs that are
directly attributable to their acquisition and are subsequently
carried at amortised cost using the effective interest rate method,
less provision for impairment. The Group's financial assets
measured at amortised cost comprise trade and other receivables and
cash and cash equivalents. Cash comprises cash in hand and deposits
repayable on demand, less overdrafts payable on demand which have a
right of offset against cash balances. These instruments are
readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
Financial assets at fair value through profit or loss
Assets that do not meet the criteria for amortised cost are
measured at FVTPL. A gain or loss on a debt investment that is
subsequently measured at FVTPL is recognised in profit or loss and
presented net within other gains/(losses) in the period in which it
arises. The Group's financial assets measured at FVTPL comprise
unquoted equity investments.
Impairment of financial assets
Impairment provisions for current trade receivables are
recognised based on the simplified approach within IFRS 9 using a
provision matrix in the determination of credit losses. During this
process the probability of the non-payment of the trade receivable
is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the expected
credit loss for the trade receivables. Provisions are recorded net
in a separate provision account with the loss being recognised in
the consolidated income statement. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision. Impairment
provisions for receivables from related parties and loans to
related parties are recognised based on a forward-looking expected
credit loss model. The methodology used to determine the amount of
provision is based on whether there has been a significant increase
in credit risk since the initial recognition of the asset.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are classified as either financial
liabilities 'at FVTPL' or 'amortised cost'. The Group does not
currently hold any financial liabilities 'at FVTPL'.
Pensions
The Group contributes to defined contribution schemes for the
benefit of its directors and employees. Contributions payable are
charged to the statement of comprehensive income in the year they
are payable.
Current and deferred income tax
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
profit or loss, because it excludes items of income or expense that
are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Company's liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial information and the corresponding tax bases used
in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to
apply to the year when the asset is realised, or the liability is
settled. Deferred tax is charged or credited in the profit or loss,
except when it relates to items credited or charged in other
comprehensive income directly to equity, in which case the deferred
tax is also dealt with in other comprehensive income.
Deferred tax assets
Management regularly assesses the likelihood that deferred tax
assets will be recovered from future taxable income. No deferred
tax asset is recognised when management believe that it is more
likely than not that a deferred asset will not be realised.
Impairment of assets
The Group assesses at each statement of financial position date
if there is any indication that an asset may be impaired. If any
such indication exists, the Group estimates the recoverable amount
of the asset.
If there is any indication that an asset may be impaired, the
recoverable amount is estimated for the individual asset. If it is
not possible to estimate the recoverable amount of the individual
asset, the recoverable amount of the cash-generating unit to which
the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is
the higher of its fair value less costs to sell and its value in
use.
If the recoverable amount of an asset is less than its carrying
amount, the carrying amount of the asset is reduced to its
recoverable amount. That reduction is an impairment loss.
An impairment loss of assets carried at cost less any
accumulated depreciation or amortisation is recognised immediately
in profit or loss.
An entity assesses at each reporting date whether there is any
indication that an impairment loss recognised in prior periods for
assets other than goodwill may no longer exist or may have
decreased. If any such indication exists, the recoverable amounts
of those assets are estimated.
The increased carrying amount of an asset other than goodwill
attributable to a reversal of an impairment loss does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss of assets carried at cost less
accumulated depreciation or amortisation other than goodwill is
recognised immediately in profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation and a reliable estimate of the amount can be made. If
the effect is material, provisions are determined by discounting
the expected future cash flows at an appropriate pre-tax discount
rate.
Leases
The Group accounts for leases under IFRS 16. Leases are
accounted for on a 'right-of-use model' reflecting that, at the
commencement date, the Company as a lessee has a financial
obligation to make lease payments to the lessor for its right to
use the underlying asset during the lease term. The financial
obligation is recognised as a lease liability, and the right to use
the underlying asset is recognised as a right-of-use asset. The
right-of-use assets are recognised within property, plant and
equipment on the face of the financial position and are presented
separately in note 9.
The lease liability is initially measured at the present value
of the lease payments using the rate implicit in the lease or,
where that cannot be readily determined, the incremental borrowing
rate. Subsequently the lease liability is measured at amortised
cost, with interest increasing the carrying amount and lease
payments reducing the carrying amount. The carrying amount is
re-measured to reflect any reassessment or lease modifications, or
to reflect revised in-substance fixed lease payments.
Right-of-use assets are measured at cost comprising the
following:
-- the amount of the initial measurement of lease liability;
-- any lease payments made at or before the commencement date
less any lease incentives received;
-- any initial direct costs; and
-- restoration costs.
Subsequently the right-of-use asset is measured at cost less
accumulated depreciation and impairment losses. Depreciation is
calculated to write off the cost on a straight line-basis over the
lease term.
The Group does not have any short-term leases of equipment or
vehicles.
Share capital/equity instruments
Ordinary shares are classified as equity. Equity instruments
issued by the Company are recorded at the proceeds received, net of
direct issue costs. The Company has one class Ordinary share which
carries no right to fixed income. Each share carries the right to
one vote at general meetings of the Company.
Share-based payments
Equity-settled share-based payments to employees and directors
are measured at the fair value of the equity instruments at grant
date. The fair value excludes the effect of non-market-based
vesting conditions.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
equity instruments that will eventually vest. At each reporting
date, the Group revises the estimate of the number of equity
instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity reserves.
The fair value of the options is measured using the Black
Scholes options valuation model. The inputs into that model are the
share price at the date of the grant, the exercise price, the
expected life of the option, the risk-free rate based on the yield
of a 10-year government bond and the expected share price
volatility based on the Company's share price.
Prior year adjustment
In the parent company balance sheet an adjustment has been made
to transfer the amount of GBP130k from investments in subsidiaries
to amounts due from group undertakings, this adjustment is to
correct the accounting treatment of the hive up of the trade and
assets of the acquisition in the previous year.
Adoption of new and revised standards
No new standards were adopted in the year.
Standards issued but not yet effective
There are no other standards that are not yet effective and that
would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
3 Critical accounting estimates and judgements
In application of the Group's accounting policies, which are
described in note 2, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements in applying the Group's accounting
policies
The following are the critical judgements, apart from those
involving estimations, that the directors have made in the process
of applying the Group's accounting policies and that have a
significant effect on the amounts recognised in the financial
statements.
Work in progress within revenue recognition
Work in progress is calculated on a project by project basis
using the fair value of chargeable time that is un-invoiced at the
period end. Historic analysis shows that recovery rates of work in
progress are very high; the Group does not expect any work in
progress to be irrecoverable. Work in progress is reviewed on a
monthly basis to ensure it is recognised appropriately, it is
probable that economic benefits will flow to the Group and that the
fair value can be reliably measured (note 4). Work in progress is
accounted for under contract assets.
Share based payments
The Company has granted share options to certain employees and
directors of the Group. The share options granted become
exercisable at varying future dates. If certain conditions are met
the employee will be eligible to exercise their option at an
exercise price determined on the date the share options are
granted.
The share-based payment charge is recognised in the statement of
comprehensive income and is calculated based on the Company's
estimate of the number of share options that will eventually
vest.
Assumptions regarding the fair value of the Company's shares are
considered when measuring the value of share-based payments for
employees, which are required to be accounted for as equity-settled
share-based payment transactions pursuant to IFRS 2. The resulting
staff costs are recognised pro rata in the statement of
comprehensive income to reflect the services rendered as
consideration during the vesting period (note 21).
Intangible assets
On acquisition the following items are reviewed to assess if
there is any value in acquiring the intangibles separately:
-- Trademarks or trade names
-- Technology based intangibles, including any IT systems
-- Artistic-related intangibles
-- Intellectual property
-- Customer-related intangibles
-- Employment contracts
The Group does not have any intangible assets from
acquisitions.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the reporting date, that may have a
significant risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Impairment of goodwill
The carrying amounts of the Group's assets value are reviewed at
each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the
asset's recoverable amount is estimated, and an impairment loss is
recognised where the recoverable amount is less than the carrying
value of the asset. Any impairment losses are recognised in the
income statement.
The recoverable amount of the goodwill is determined from value
in use calculations. The key assumptions for the value in use
calculations are those regarding the discount rates, growth rates
and expected changes to income and direct costs during the
period.
Management estimates discount rates using pre-tax rates that
reflect current market assessments of the time value of money and
the risks specific to each acquisition of goodwill. Discount rates
of 11% and a terminal value of 1% has been used.
Growth rates of 0-15% have been applied, these are based on
industry rates, management's knowledge of the different businesses
and the markets and the ability for the businesses to expand. The
maximum period over which the cashflows are reviewed is 5
years.
Sensitivities have been applied to all assumptions.
Valuation of unquoted investments
The Group determines the fair value of these financial
instruments using recent transactions or valuation models if
information about recent transactions is not available. The values
derived from applying these models are significantly impacted by
the choice of the valuation model used and the underlying
assumptions made, such as the amounts and timing of future cash
flows, discount rates, volatility and credit risk.
Management reviewed all information available at 31 March 2021
taking into account all additional information relating to market
participant assumptions that is reasonably available and concluded
that there is an impairment of the unquoted investment and has
restated its fair value.
4 Revenue and Finance income
An analysis of the Group's revenue is as
follows:
2021 2020
GBP'000 GBP'000
Continuing operations - rendering of services
Specialist housing consultancy income 5,961 6,729
Treasury management income 657 528
Specialist sports and education consultancy
income 1,024 706
-------- --------
7,642 7,963
======== ========
5 Operating segments
The Group has two reportable segments; consultancy and treasury
management services, the results of which are included within the
financial information. In accordance with IFRS8 'Operating
Segments', information on segment assets is not shown, as this is
not provided to the chief operating decision-maker.
The principal activities of the Group are as follows:
Consultancy - a range of services to support the business needs
of a diverse range of organisations (including housing
associations, local authorities, multi academy trusts and sporting
businesses) across the housing, education and sports sectors. Most
consultancy projects run over one to two months and on-going
business development is required to ensure a full pipeline of
consultancy work for the employed team.
Within this segment of the business several client organisations
enter fixed period retainers to ensure immediate call-off of the
required services.
In previous years the Group had three main reporting segments
the third being that of interim management. The introduction of
IR35 had an impact on the interim business, with clients changing
the way that they resourced executive vacancies, choosing to source
in-house rather than through professional service firms. The Group
took a strategic decision not to actively pursue this revenue
stream and concentrate on the main operating segment of consulting
and treasury management, as a result, the turnover for interim
management is no longer considered by management to be a
significant segment of the business.
The accounting policies of the reportable segments are the same
as the Group's accounting policies described in note 2. Segment
profit represents the profit earned by each segment, without
allocation of central administration costs, including directors'
salaries, finance costs and income tax expense. This is the measure
reported to the Group's executive directors for the purpose of
resource allocation and assessment of segment performance.
2021 2020
GBP'000 GBP'000
Revenue from Consultancy 6,985 6,640
Revenue from Interim management - 795
Revenue from Treasury management 657 528
7,642 7,963
Cost of sales from Consultancy 5,436 5,315
Cost of sales from Interim management - 574
Cost of sales from Treasury management 566 322
-------- --------
6,002 6,211
Gross profit from Consultancy 1,549 1,325
Gross profit from Interim management - 221
Gross profit from Treasury management 91 206
-------- --------
1,640 1,752
Administrative expenses (1,339) (1,626)
Operating profit 301 126
======== ========
Within consultancy revenues, approximately 8% (2020: 7%) has
arisen from the segment's largest customer; within treasury
management 26% (2020: 26%).
Geographical information
Revenues from external customers, based on location of the
customer, are shown below:
2021 2020
GBP'000 GBP'000
UK 7,057 7,368
Europe 401 279
Rest of World 184 316
-------- --------
7,642 7,963
======== ========
6 Profit before taxation
2021 2020
GBP'000 GBP'000
Profit before taxation is arrived at after
charging:
Auditors' remuneration (see below) 49 42
Depreciation of property, plant and equipment
(see note 11) 38 63
Depreciation of leasehold property (see
note 11) 93 71
Staff costs (see note 7) 5,067 5,351
Significant reorganisation costs * 175 186
Acquisition related costs - 51
* Significant restructuring costs include staff related costs of
GBP175k (2020: GBP186k) arising from the redundancy costs relating
to COVID-19 are provided for.
Breakdown of auditors' remuneration
2021 2020
GBP'000 GBP'000
Auditors' remuneration
Fees payable to the Company's auditors
for the audit of the parent Company 30 23
Fees payable to the Company's auditors
for the audit of the Company's subsidiaries 19 19
-------- --------
49 42
======== ========
7 Staff costs
2021 2020
The average monthly number of employees
(including directors) employed by the
Group was: 76 74
-------- --------
2021 2020
GBP'000 GBP'000
Aggregate remuneration (including directors)
Wages and salaries 4,250 4,542
Share-based payments 88 105
Pension contributions 203 215
Social security costs 526 489
-------- --------
5,067 5,351
======== ========
The above amounts are net of GBP60k relating to income received
from the Government's furlough scheme.
2021 2020
GBP'000 GBP'000
Directors' remuneration
Salary (including taxable benefits) 435 396
Share-based payments 8 20
Pension contributions 19 22
---------- ---------
462 438
========== =========
Two directors are members of the company's defined contribution
pension scheme.
The amounts set out above include remuneration to the highest
paid director as follows:
2021 2020
GBP'000 GBP'000
Salary (including taxable benefits) 169 146
Share-based payments 5 8
Pension contributions 9 9
---------- ---------
183 163
========== =========
Remuneration of key management personnel
The remuneration of the key management personnel of the Group,
including all directors, is set out below in aggregate for each of
the categories specified in IAS 24 Related Party Disclosures.
2021 2020
GBP'000 GBP'000
Wages and salaries 1,197 664
Share-based payments 23 29
Post-retirement benefits 44 22
----------- -----------
1,264 715
=========== ===========
8 Taxation
2021 2020
GBP'000 GBP'000
Corporation tax:
Current year 89 52
========= ========
The tax charge for the year can be reconciled to the profit
in the income statement as follows:
2021 2020
GBP'000 GBP'000
Profit before taxation 276 178
Tax at the UK corporation tax rate of
19% (2020: 19%) 52 34
Post tax income from associate - (9)
Expenses not deductible 37 27
Tax expense for the year 89 52
========= ========
9 Earnings per share
Basic earnings per share is calculated by dividing the profit
after tax attributable to the equity holders of the Group by the
weighted average number of shares in issue during the year. Diluted
earnings per share is calculated by adjusting the weighted average
number of shares outstanding to assume conversion of all potential
dilutive shares, namely share options. Details of which are set out
in note 21.
2021 2020
GBP'000 GBP'000
Profit after tax attributable to owners
of the parent 187 126
-------- --------
Weighted average number of shares '000 '000
* Basic 39,282 36,285
* Diluted 41,602 41,665
Basic earnings per share 0.48p 0.35p
Diluted earnings per share 0.45p 0.32p
10 Goodwill
Group Goodwill
GBP'000
Cost
At 1 April 2019 2,028
Additions 1,844
---------
At 31 March 2020 3,872
Additions -
---------
At 31 March 2021 3,872
---------
Accumulated impairment losses
At 1 April 2019 -
Impairment loss for the year (555)
---------
At 31 March 2020 (555)
Impairment losses for the year -
---------
At 31 March 2021 (555)
---------
Net book value
At 1 April 2019 2,028
=========
At 1 April 2020 3,317
=========
At 31 March 2021 3,317
=========
Goodwill acquired in a business combination is allocated, at
acquisition, to the cash generating units that are expected to
benefit from that business combination. Each Subsidiary is
considered to be the cash generating unit for the purpose of
impairment review.
The Group tests goodwill annually for impairment, or more
frequently if there are any indications that goodwill might be
impaired.
The recoverable amount of goodwill is determined from value in
use calculations. The key assumptions for the value in use
calculations are those regarding growth rate of client base and
project fees. Management's approach to determining the values to
each key assumption is based on experience and project work already
secured for future periods. Management have projected cash flows
over a period of five years, based on growth rates of between 0%
and 15% per annum; this is based on past performance and expected
future activity. A discount rate of 11% and a terminal value of
1.0% has been used.
Sensitivity analysis has been performed on the value in use
calculations, holding all other variables constant to:
-- Apply a 2-6% reduction to the forecasted turnover
-- Apply an increase in the discount rate to 25%.
The sensitivities applied do not provide reasonable possible
changes and therefore no impairment has been made.
11 Property, plant and equipment
Group Right of Leasehold Fixtures Computer Total
use assets improvement and fittings equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 - - 34 138 172
Additions 514 27 11 28 580
------------ ------------- -------------- ----------- --------
At 31 March 2020 514 27 45 166 752
Additions - - - 7 7
------------ ------------- -------------- ----------- --------
At 31 March 2021 514 27 45 173 759
------------ ------------- -------------- ----------- --------
At 1 April 2019 - - 24 76 100
Charge for the
year 65 6 14 49 134
------------ ------------- -------------- ----------- --------
At 31 March 2020 65 6 38 125 234
Charge for the
year 88 5 3 35 131
------------ ------------- -------------- ----------- --------
At 31 March 2021 153 11 41 160 365
------------ ------------- -------------- ----------- --------
Net book value
At 1 April 2019 - - 10 62 72
============ ============= ============== =========== ========
At 31 March 2020 449 21 7 41 518
============ ============= ============== =========== ========
At 31 March 2021 361 16 4 13 394
============ ============= ============== =========== ========
Computer
Company equipment
GBP'000
Cost
At 1 April 2019 64
Additions -
-----------
At 31 March 2020 64
Additions -
-----------
At 31 March 2021 64
-----------
Accumulated depreciation
At 1 April 2019 27
Charge for the year 21
-----------
At 31 March 2020 48
Charge for the year 16
-----------
At 31 March 2021 64
-----------
Net book value
At 1 April 2019 37
===========
At 31 March 2020 16
===========
At 31 March 2021 -
===========
12 Investment in subsidiaries
Company Investments
in subsidiaries
GBP'000
Cost
At 1 April 2019 2,818
Additions 1,819
-----------------
At 31 March 2020 4,637
Addition 88
-----------------
At 31 March 2021 4,725
-----------------
Accumulated impairment losses
At 1 April 2019 -
Impairment losses for the year 555
-----------------
At 31 March 2020 555
Impairment losses for the year -
-----------------
At 31 March 2021 555
-----------------
Net book value
At 1 April 2019 2,818
=================
At 31 March 2020 4,082
=================
At 31 March 2021 4,170
=================
Details of the Company's subsidiaries at 31 March 2021 are as
follows:
Proportion of
ownership and
Place of incorporation voting rights
and operation Principal activity held
Altair Consultancy
and Advisory Services England and Specialist housing
Limited Wales consultancy 100%
Aquila Treasury and
Finance Solutions England and Treasury management
Limited Wales consultancy 100%
Specialist sports
England and and education
Oaks Consultancy Limited Wales consultancy 100%
The accounting reference date of each of the subsidiaries is
co-terminus with that of the Company. The registered office of each
subsidiary is Tempus Wharf, 29a Bermondsey Wall West, London, SE16
4SA.
The following companies are all dormant, the registered office
of each is Tempus Wharf, 29a Bermondsey Wall West, London, SE16
4SA.
Proportion of ownership Accounting
Place of incorporation and voting rights reference
and operation held date
Altair International England and Wales 100% held by Aquila 31 August
Consultancy Limited Services Group
plc
Murja Limited England and Wales 100% held by ATFS 30 May
Limited
Finalysis UK Limited England and Wales 100% held by Aquila 31 March
Services Group
plc
13 Investment in Associates
During the year the Group sold its 25% shareholding in 3C
Consultants Limited under a share buyback arrangement. The Group
sold the shares for a consideration of GBP252k. This resulted in a
loss on investment of GBP25k.
14 Investments
Fair Value Hierarchy 2021 2020
GBP'000 GBP'000
Unquoted equity investments Level 3 71 121
-------- --------
The Group has a 5.3% equity shareholding in AssetCore Limited an
unquoted company. AssetCore's principal activity is a cloud-based
platform used to manage loan security within the affordable housing
sector. As explained in Note 3, based on the information available
at the reporting date the directors consider cost to be an
appropriate estimate of fair value. As a result of the impairment
review and a review of the inputs of assets and liabilities of the
investment the Group consider that the carrying value requires
impairment.
Financial instruments measured at fair value subsequent to
initial recognition are grouped into levels 1 to 3 based on the
degree to which the fair value is observable, i.e.:
Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs
other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or
indirectly.
Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
15 Trade and other receivables
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 1,862 2,063 - -
Group undertakings - - 1,281 685
Other receivables 20 23 13 14
Prepayments 107 79 10 9
Contract assets 284 222 - -
--------- ----------- ----------- ---------
2,273 2,387 1,304 708
========= =========== =========== =========
Total <30 days 30-60 days 66-90 days >90 days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2021 1,862 1,704 - 26 132
31 March 2020 2,063 1,500 209 147 207
No expected credit loss is recognised in the accounts. The Group
does not expect any debts not to be paid. The directors have
reviewed the provision for expected credit loss and have not
identified any which need to be provided for.
16 Trade and other payables
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 273 154 19 9
Other payables 50 101 - 50
Lease liabilities 85 79 - -
Amounts owed to Group
undertakings - - 270 390
Taxes and social security
costs 825 613 - -
Accruals 484 634 104 56
Contract liabilities 297 181 - -
-------- -------- -------- --------
2,014 1,762 393 505
======== ======== ======== ========
Of the contract liability brought forward at the start of the
year GBP181k (2020: GBP227k) was recognised in revenue in the
year.
17 Long term liabilities
The Statement of Financial Position shows the following amounts
relating to lease liabilities.
2021
GBP'000
At 31 March 2020 448
Decrease in lease liabilities (79)
--------
Closing amounts as at 31 March 2021 369
--------
Current 85
Non-current 284
========
18 Share capital
2021 2020
GBP'000 GBP'000
Allotted, called up and fully paid
39,961,955 (2020: 37,947,905) Ordinary shares
of 5p each 1,998 1,897
======== ========
The Company has one class Ordinary share which carries no right
to fixed income. Each share carries the right to one vote at
general meetings of the Company.
A reconciliation of share capital, share premium account and
merger reserve is set out below:
Amount
Number called
of Ordinary up and Merger
shares fully paid Share premium reserve
'000 GBP'000 GBP'000 GBP'000
At 31 March 2019 35,307 1,765 1,487 2,413
Issued at 28.7p per share
on 14 Nov 2019 2,544 128 - 603
Cost of share issue on acquisition - - (12) -
Issued at 35p per share on
31 Jan 2020 86 4 - 26
Issued at 5p per share on 10 - - -
21 Feb 2020
At 31 March 2020 37,947 1,897 1,475 3,042
Issued at 10p per share on
20 Jul 2020 824 41 41 -
Issued at 23p per share on
20 Jul 2020 1,087 55 196 -
Issued at 5p per share on
15 Mar 2021 103 5 - -
At 31 March 2021 39,961 1,998 1,712 3,042
============= ============ ============== =========
19 Reserves
The share premium account represents the amount received on the
issue of Ordinary shares by the Company in excess of their nominal
value and is non-distributable.
The merger relief reserve arose on the Company's acquisition of
Altair. There is no legal share premium on the shares issued as
consideration as section 612 of the Companies Act 2006, which deals
with merger relief, applies in respect of the acquisition. Since
the shareholders of Altair became the majority shareholders of the
enlarged group, the acquisition is accounted for as though the
legal acquiree is the accounting acquirer.
20 Dividends
2021 2020
Amounts recognised as distributions to equity GBP'000 GBP'000
holders
Final dividend for the year ended 31 March
2020 of Nil per share (2019: 0.6p) - 227
Interim dividend for the year ended 31 March
2021 of 0.15p per share (2020: 0.3p) 60 114
60 341
======== ========
Proposed final dividend for the year ended
31 March 2021 of 0.4p per share (2020: Nil) 160 -
======== ========
21 Share-based payment transactions
The Company operates an Unapproved Scheme and an Enterprise
Management Incentives Scheme. The total amount recognised in the
year to 31 March 2021 arising from share-based payment transactions
is GBP88k (2020 expense: GBP105k).
Weighted average
Unapproved scheme Number '000 exercise price
Number of options outstanding at 1 April
2020 2,758 GBP0.25
Lapsed during period (1,660) GBP0.29
Exercised during period (927) GBP0.09
------------
Number of options outstanding as at
31 March 2021 171 GBP0.35
============
Number of options exercisable as at
31 March 2021 -
============
The exercise price of the options outstanding at 31 March 2021
is 35p. The weighted average remaining contractual life of the
options outstanding at 31 March 2021 is 4 years (2020: 1 year).
Number Weighted average
EMI scheme '000 exercise price
Number of options outstanding at 1 April
2020 2,776 GBP0.05
Cancelled during the period (50) GBP0.05
Lapsed during period (406) GBP0.05
Number of options outstanding as at
31 March 2021 2,320
=======
Number of options exercisable as at
31 March 2021 1,598
======
The weighted average remaining contractual life of the options
outstanding at 31 March 2021 is 4 years (2020: 5 years).
22 Related party disclosures
Balances and transactions between the Group and other related
parties are disclosed below:
Dividends totalling GBP17k (2020: GBP149k) were paid in the year
in respect of Ordinary Shares held by the Company's directors.
At 31 March 2021, the balance owed to Richard Wollenberg for
services as a non-executive director was GBP4k (2020: GBP8k).
Amounts paid to Derek Joseph for consultancy services GBP51k
(2020: 24k).
23 Control
In the opinion of the Directors there is no single ultimate
controlling party.
24 Financial instruments
Financial risk management
The Group's activities are exposed to a variety of market risk
(including foreign currency risk and interest rate risk), credit
risk and liquidity risk.
Credit risk
Credit risk is the risk of financial loss to the Group resulting
from counterparties failing to discharge their obligations to the
Group. The Group's principal financial assets are trade and other
receivables and cash and cash equivalents.
The Group considers its credit risk to be low. Of the total
trade receivables at the 2021 year-end GBP180k (2020: GBP136k) is
due from one customer.
There are no other customers that represent more than 10% of the
total balance of trade receivables. The maximum exposure to credit
risk is equal to the carrying value of these instruments.
Liquidity risk
Liquidity risk is the risk of the Group being unable to meet its
liabilities as they fall due. The Group manages liquidity risk by
maintaining enough cash reserves and holding banking facilities,
and by continuously monitoring forecast and actual cash flows. In
addition, the Group is a cash generative business with income being
received regularly over the course of the year. The Group held cash
reserves of GBP2,127k (2020: GBP828k) at the year-end.
Foreign currency risk
Foreign exchange risk is the risk of loss due to adverse
movements in the exchange rates affecting the Group's profits and
cash flows. Only a very small number of clients are invoiced in
Euros and USD and the foreign exchange exposure is not considered a
significant risk. The Group's principal financial assets are cash
and cash equivalents and trade and other receivables, which are
almost exclusively denominated in Pounds Sterling.
Interest rate risk
The Group does not undertake any hedging activity in this area.
The main element in interest rate risk involves sterling
deposits.
Capital risk management
Internal working capital requirements are low and are regularly
monitored.
The Group's objective when managing capital is to safeguard the
Group's ability to continue as a going concern in order to provide
return for shareholders, benefits for other stakeholders and to
maintain optimal capital structure and to reduce the cost of
capital.
In order to ensure an appropriate return for shareholder capital
invested in the Group, management thoroughly evaluates all material
projects and potential acquisitions and has them approved by the
Board of Directors where applicable.
The Group monitors capital on a short- and medium-term view.
25 Post Balance Sheet event
There are no post balance sheet events.
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END
FR UOONRAAUNUAR
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June 24, 2021 02:00 ET (06:00 GMT)
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