TIDMDRV
RNS Number : 0030B
Driver Group plc
04 June 2019
4 June 2019
DRIVER GROUP PLC
("Driver" or "the Group")
Interim Report
For the six months ended 31 March 2019
Key Points (for the six months ended 31 March 2019
6 months 6 months
ended ended
31 March 31 March
2019 2018 Change
GBP000 GBP000 GBP000
Unaudited Unaudited
------------------------------------------ -------------- ------------- ---------------
Revenue 29,711 31,694 (1,983)
Gross Profit 6,695 8,887 (2,192)
Gross Profit % 23% 28% (5%)
------------------------------------------ -------------- ------------- ---------------
1,005 (721)
Profit before tax (243) 1,726 (622)
Add: Share-based payment (credit)/charge 762 379 (1,343)
Underlying* profit before tax 2,105
------------------------------------------ -------------- ------------- ---------------
Underlying* profit before tax % 3% 7% (4%)
Underlying* earnings per share 1.1p 3.4p (2.3p)
Net cash** 5,011 838 4,173
-- Revenue down by 6% to GBP29.7m (2018: GBP31.7m)
-- Gross profit at 23% a GBP2.2m decrease to GBP6.7m (2018: GBP8.9m)
-- Underlying* profit before tax at GBP0.8m (2018: GBP2.1m)
resulting in an underlying* profit before tax margin of 3% (2018:
7%)
-- Net cash increase year on year of GBP4.2m to GBP5.0m (2018: GBP0.8m)
-- Fee earner headcount decreased by 32 to 355 because of
reduced revenues in both APAC and Middle East.
-- Overall utilisation rates of 76.1% (2018: 81.6%)
-- Europe & Americas (EuAm) reported underlying* profit
before tax for the period of GBP2.0m (2018: GBP1.4m) with
utilisation rates at 70.3% (2018: 73.6%)
-- Middle East (ME) reported underlying* profit before tax for
the period of GBP0.4m (2018: GBP1.3m) with utilisation rates at
80.9% (2018: 83.5%)
-- Asia Pacific (APAC) reported underlying* loss before tax for
the period of GBP0.6m (GBP2018: profit GBP0.6m) with utilisation
rates at 76.1% (2018: 91.6%)
* Underlying figures are stated before the share-based payment costs.
** Net cash consists of cash and cash equivalents, bank loans and finance leases.
Steve Norris, Chairman of Driver Group, said:
"Although the first half of 2019 has seen lower activity than
expected in some markets we have reacted quickly to re-align the
cost base of underperforming businesses in the first half and with
enquiry rates at high levels the Group is well placed to record
good progress for the remainder of the current financial year."
Enquiries:
Driver Group plc
Gordon Wilkinson (CEO)
David Kilgour (CFO) +44 (0) 20 7377 0005
N+1 Singer - Nominated Adviser
Sandy Fraser +44 (0)20 7496 3000
Acuitas Communications- Financial +44 (0) 20 3687 0868
PR simon.nayyar@acuitascomms.com
Simon Nayyar fraser.schurer-lewis@acuitascomms.com
Fraser Schurer-Lewis
INTRODUCTION
The Group's core business is in claims and dispute management
and expert witness work. We are fortunate to count many
industry-leading proponents among our firm's complement which gives
us strong client relationships and a competitive edge whilst having
a reputation for delivering a world class service. These services
are offered in all three of the Group's regions being Europe &
Americas (EuAm), Middle East (ME) and Asia Pacific (APAC). The
Group also has a highly respected project services business in the
UK.
The six months to 31 March 2019 has been a mixed period for the
Group following the significant progress in the year to 30
September 2018. The EuAm region has remained strong and has
performed well during the first six months of the year. I am
pleased to report that revenue and profit have all increased in the
period to March 2019 which is a testament to the strong management
team we have in place within the region. However, for our
businesses in ME and APAC it has been a time when a number of
larger commissions have concluded coinciding with the delayed start
of new commissions. The consequence has been that activity levels
in both these regions has been lower than expected which has
impacted the overall Group performance for the period. I have
frequently pointed out that our visibility of new business extends
to no more than six to eight weeks and we are clear that this lower
than expected revenue is not a reflection of any systemic failure
in our business and is more a matter of timing. That said, we have
taken steps to reduce the Group's cost base in these regions to
ensure that our breakeven point is lower than before and the
benefit of this will be felt in the second half of the financial
year.
FINANCIAL RESULTS
Group revenue for the first half of the financial year was
GBP29.7m, a decrease of 6% on the first half of 2018 (GBP31.7m).
Revenue in EuAm increased by 4% to GBP14.9m (2018: GBP14.3m),
offsetting this was a reduction in revenue for both ME and APAC. ME
reported a decrease of 14% to GBP10.3m (2018: GBP12.0m) with APAC
decreasing by 17% to GBP4.5m (2018: GBP5.4m). As a result of the
reduction in revenue, gross profit has reduced by GBP2.2m to
GBP6.7m (2018: GBP8.9m). Administrative expenses decreased by
GBP1.4m to GBP5.7m (2018: GBP7.1m). GBP0.6m of the reduction
relates to the movement in the share based payment charge.
The Group reported an underlying* profit before tax of GBP0.8m
(2018: GBP2.1m). The operating profit amounted to GBP1.1m (2018:
GBP1.8m) and the pre-tax profit for the period was GBP1.0m (2018:
GBP1.7m).
The Group's effective tax rate is 17% reflecting the geographic
make-up of the Group, with UK profits utilising brought forward
losses from prior years and with profits in the current period in
overseas operations at local tax rates where there are no brought
forward tax losses. Underlying* profit per share was 1.1p (2018:
3.4p). After share-based payment charges the profit per share was
1.5p (2018: 2.7p).
The Group was in a net cash** position of GBP5.0m at 31 March
2019 compared to GBP6.9m at 30 September 2018 and GBP0.8m at 31
March 2018.
Net cash outflow from operations was GBP0.8m (2018: GBP1.3m cash
inflow) during the first six months, including a net inflow from a
decrease in trade and other receivables of GBP0.5m (2018: GBP2.1m
cash outflow) and a net cash outflow from a decrease in trade and
other payables of GBP2.4m (2018: GBP0.9m inflow). Tax paid totalled
GBP0.5m (2018: GBP0.1m) and the acquisition of fixed assets
absorbed GBP0.1m (2018: GBP0.2m). A further cash outflow during the
period was the purchase of treasury shares at GBP0.5m (2018:
GBPnil).
DIVID
The Board was pleased to announce the reinstatement of a
dividend payment in the 30 September 2018 results of 0.5p per share
which was paid to shareholders in April 2019. Reflecting our
confidence in the medium term prospects for the Group and the
inherently cash generative nature of our business, the Board
recommends the payment of an interim dividend of 0.5p per share for
2019 (2018: GBPnil).
TRADING PERFORMANCE
During the six-month period to 31 March 2019 the overall
headcount reduced by 5% to 435. The decrease was attributable to
both a reduction in administrative staff and a reduction of
underperforming fee earning staff in both the ME and APAC regions
to ensure our cost base is aligned with the lower activity levels
in those markets. Overall staff utilisation*** levels reduced
during the period to 76.1% (2018: 81.6%).
The EuAm region delivered revenue growth of 4% to GBP14.9m and
profit growth of 44.8% to GBP2.0m. Within this the Driver Trett UK
business has continued its strong performance from 2018 and
mainland Europe performance was excellent with revenue growth of
GBP0.7m to GBP3.6m resulting in an increase in profit to GBP0.5m
(2018: GBP0.1m). The UK Driver Project Services business revenue
decreased by 9% to GBP3.0m following the conclusion of a major
contract but managed to generate a profit of GBP0.3m.
Revenue for the ME region decreased by GBP1.7m to GBP10.3m. A
significant proportion of this decrease (GBP1.4m) related to Kuwait
where a number of significant commissions reached completion and
the general manager decided to retire during the period. ME
regional profit decreased by GBP0.9m to GBP0.4m due to overall
lower revenues. Underperformance in UAE and Kuwait during the first
half year has been addressed by actions taken to reduce the cost
base and this should improve the business contribution in the
second half of the year. There has been a good performance in Oman
during the first half year with revenue increasing by GBP0.2m and
Qatar continues to perform well.
In the APAC region revenues decreased by GBP0.9m to GBP4.5m with
the decrease relating to Singapore and Malaysia. Revenue in
Singapore has been impacted due to the completion of a number of
significant commissions and delays in new commissions. The result
for the region was a disappointing loss of GBP0.6m (2018: profit
GBP0.6m). Action has been taken to significantly reduce the cost
base within the region, the benefit of which should be seen in the
second half. This resulted in non-recurring costs of GBP0.2m being
expensed in the period up to the half year.
OUTLOOK
Although the first half of 2019 has seen lower activity than
expected in some markets we have reacted quickly to re-align the
cost base of underperforming businesses in the first half and with
enquiry rates at high levels the Group is well placed to record
good progress for the remainder of the current financial year. As a
result, whilst activity levels during the fourth quarter will be
critical to the outcome for the year as a whole, we currently
expect to deliver underlying* profit before taxation for the year
broadly in line with the guidance set out in our March trading
update. The growth of the Diales expert witness and advisory brand
continues to be a key objective for the Group across all
regions.
On behalf of our senior leadership team of Gordon Wilkinson,
Mark Wheeler and David Kilgour, I would particularly like to thank
every one of our staff wherever they are in the world for their
continued hard work and support for the Group. I should also like
to thank all our shareholders, established and new, for their
continuing support. The Group will continue to do its utmost to
repay the confidence you have shown in the business.
Steven Norris
Non-Executive Chairman
3 June 2019
* Underlying figures are stated before the share-based payment costs.
** Net cash consists of cash and cash equivalents, bank loans and finance leases.
*** Utilisation % is calculated by dividing the total hours
billed by the total working hours available for chargeable
staff
Consolidated Income Statement
Interim report for the six months ended 31 March 2019
Year
6 months 6 months ended
ended ended 30
31 March 31 March September
2019 2018 2018
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
---------------------------------------------------------- ----------------- ------------------ -------------------
REVENUE 29,711 31,694 62,615
Cost of sales (23,016) (22,807) (46,338)
---------------------------------------------------------- ----------------- ------------------ -------------------
6,695 8,887 16,277
GROSS PROFIT (5,722) (7,146) (13,546)
Administrative expenses 82 69 139
Other operating income
---------------------------------------------------------- ----------------- ------------------ -------------------
Underlying* operating profit 812 2,189 3,970
Share-based payment credit/(charge) and associated
costs 243 (379) (1,100)
---------------------------------------------------------- ----------------- ------------------ -------------------
OPERATING PROFIT 1,055 1,810 2,870
Finance income 20 (70) 2 (86) 17 (148)
Finance costs
========================================================== ================= ================== ===================
PROFIT BEFORE TAXATION 1,005 1,726 2,739
Tax expense (note 2) (170) (297) (567)
========================================================== ================= ================== ===================
PROFIT FOR THE PERIOD 835 1,429 2,172
Profit attributable to non-controlling interests 3 - 3
Profit attributable to equity shareholders of the parent 832 1,429 2,169
========================================================== ================= ================== ===================
835 1,429 2,172
========================================================== ================= ================== ===================
Basic earnings per share attributable to equity 1.5p 2.7p 4.0p
shareholders 1.5p 2.6p 3.8p
of the parent (pence)
Diluted earnings per share attributable to equity
shareholders
of the parent (pence)
========================================================== ================= ================== ===================
* Underlying figures are stated before the share-based payment
costs.
Consolidated Statement of Comprehensive Income
Interim report for the six months ended 31 March 2019
Year
6 months 6 months ended
ended ended 30
31 March 31 March September
2019 2018 2018
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
-------------------------------------------------------- ------------- ------------- --------------
PROFIT FOR THE PERIOD 835 1,429 2,172
-------------------------------------------------------- ------------- ------------- --------------
Other comprehensive income:
Items that could subsequently be reclassified to the
Income Statement:
Exchange differences on translating foreign operations 29 12 59
======================================================== ============= ============= ==============
Other comprehensive income for the year net of tax 29 12 59
-------------------------------------------------------- ------------- ------------- --------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 864 1,441 2,231
-------------------------------------------------------- ------------- ------------- --------------
Total comprehensive income attributable to: Owners
of the parent
Non-controlling interest
861 1,441 2,228
3 - 3
======================================================== ============= ============= ==============
864 1,441 2,231
-------------------------------------------------------- ------------- ------------- --------------
Consolidated Statement of Financial Position
Interim report for the six months ended 31 March 2019
Year
6 months 6 months ended
ended ended 30
31 March 31 March September
2019 2018 2018
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
--------------------------------------------------------- -------------------- ---------------- ----------------
NON-CURRENT ASSETS
Goodwill 2,969 2,969 2,969
Property, plant and equipment 636 810 765
Deferred tax asset 98 64 69
========================================================= ==================== ================ ================
3,703 3,843 3,803
========================================================= ==================== ================ ================
CURRENT ASSETS
Trade and other receivables Derivative financial asset
Cash and cash equivalents Asset held for sale 18,956 20,976 20,445
29 390 42
7,394 5,814 10,007
- 1,614 -
========================================================= ==================== ================ ================
26,379 28,794 30,494
========================================================= ==================== ================ ================
TOTAL ASSETS 30,082 32,637 34,297
========================================================= ==================== ================ ================
CURRENT LIABLITIES (2,382) (662) (646)
Borrowings (9,076) (9,223) (10,623)
Trade and other payables Derivative financial liability (101) - (639)
Current tax payable (116) (354) (456)
========================================================= ==================== ================ ================
(11,675) (10,239) (12,364)
========================================================= ==================== ================ ================
NON-CURRENT LIABILITIES
Borrowings - (4,314) (2,460)
Deferred tax liabilities - (127) -
========================================================= ==================== ================ ================
- (4,441) (2,460)
========================================================= ==================== ================ ================
TOTAL LIABILITIES (11,675) (14,680) (14,824)
========================================================= ==================== ================ ================
NET ASSETS 18,407 17,957 19,473
========================================================= ==================== ================ ================
SHAREHOLDERS' EQUITY
Share capital Share premium Merger reserve Currency
reserve 215 215 215
Capital redemption reserve 11,497 11,475 11,475
1,055 1,055 1,055
Treasury shares Retained earnings Own shares (371) (447) (400)
18 (486) 18 18
6,473 - -
5,745 7,107
(3) (107) (3)
========================================================= ==================== ================ ================
TOTAL SHAREHOLDERS' EQUITY 18,398 17,954 19,467
NON-CONTROLLING INTEREST 9 3 6
========================================================= ==================== ================ ================
TOTAL EQUITY 18,407 17,957 19,473
========================================================= ==================== ================ ================
Consolidated Cashflow Statement
Interim report for the six months ended 31 March 2019
Year
6 months 6 months ended
ended ended 30
31 March 31 March September
2019 2018 2018
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
------------------------------------------------------------------- -------------------- ------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 835 1,429 2,172
=================================================================== ==================== ================== ==================
Adjustments for:
551 (46)
(52)
Depreciation 227 296 (17)
Exchange adjustments 27 33 148
Profit on disposal of property, plant & equipment - (20) - (2) 567
Finance income Finance expense Tax expense 70 86 1,100
Equity settled share-based payment charge 170 (243) 297
379
=================================================================== ==================== ================== ==================
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL 2,518 4,423
AND PROVISIONS 1,066 (2,051) (1,291)
Decrease/(increase) in trade and other receivables 549 (2,415) 862 2,939
(Decrease)/increase in trade and other payables
=================================================================== ==================== ================== ==================
CASH (USED)/GENERATED IN OPERATIONS (800) 1,329 6,071
Tax paid (450) (115) (385)
=================================================================== ==================== ================== ==================
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (1,250) 1,214 5,686
=================================================================== ==================== ================== ==================
CASH FLOWS FROM INVESTING ACTIVITIES
=================================================================== ==================== ================== ==================
Interest received 20 (98) 2 (156) 17 (350)
Acquisition of property, plant and equipment - - 1,650
Proceeds on sale and operating leaseback of property,
plant and equipment - 75 195
Disposal of subsidiary net of cash acquired
=================================================================== ==================== ================== ==================
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES (78) (79) 1,512
=================================================================== ==================== ================== ==================
CASH FLOWS FROM FINANCING ACTIVITIES (86) (148)
Interest paid (70) (134) (2,004)
Repayment of borrowings Repurchase of share options (724) - (17)
Proceeds from issue of new shares Purchase of Treasury - - -
shares 22 (486) - -
=================================================================== ==================== ================== ==================
NET CASH OUTFLOW FROM FINANCING ACTIVITIES Net (decrease)/increase (1,258)
in cash and cash equivalents Effect of foreign exchange (2,586)
on cash and cash equivalents (27) (220) (2,169)
Cash and cash equivalents at start of period 10,007 915 (33) 5,029
4,932 46
4,932
=================================================================== ==================== ================== ==================
CASH AND CASH EQUIVALENTS AT OF PERIOD 7,394 5,814 10,007
=================================================================== ==================== ================== ==================
Consolidated Statement of Changes of Equity
Interim Report for the six months ended 31 March 2019
For the six months ended 31 March 2019 (Unaudited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- ------------ ------------- -------------- ------------ ----------------- -------------- ----------- ------------- ----------------- -----------
CLOSING
BALANCE AT
30 SEPTEMBER
2018 215 11,475 - 1,055 (382) 7,107 (3) 19,467 6 19,473
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Accounting
policy change
- IFRS 9 - - - - - (953) - (953) - (953)
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
OPENING
BALANCE AT
1 OCTOBER
2018 215 11,475 - 1,055 (382) 6,154 (3) 18,514 6 18,520
-------------- ------------ ------------- -------------- ------------ ----------------- -------------- ----------- ------------- ----------------- -----------
Profit for the
period - - - - - 832 - 832 3 835
Other
comprehensive
income for
the period - - - - 29 - - 29 - 29
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Total
comprehensive
income for
the period - - - - 29 832 - 861 3 864
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Contributions
by and
distributions
to owners
Dividend - - - - - (270) - (270) - (270)
Share-based
payment
credit and
associated
costs - - - - - (243) - (243) - (243)
Issue of new
shares - 22 - - - - - 22 - 22
Purchase of
Treasury
shares - - (486) - - - - (486) - (486)
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Total
contributions
by and
distributions
to owners - 22 (486) - - 513 - (977) 3 (977)
-------------- ------------ ------------- -------------- ------------ ----------------- -------------- ----------- ------------- ----------------- -----------
CLOSING
BALANCE AT
31 MARCH 2019 215 11,497 (486) 1,055 (353) 6,473 (3) 18,398 9 18,407
-------------- ------------ ------------- -------------- ------------ ----------------- -------------- ----------- ------------- ----------------- -----------
For the six months ended 31 March 2018 (Unaudited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
OPENING
BALANCE AT
1 OCTOBER
2017 215 11,475 - 1,055 (441) 3,937 (107) 16,134 3 16,137
-------------- ------------ ------------- -------------- ------------ ----------------- -------------- ----------- ------------- ----------------- ----------
Profit for the
period - - - - - 1,429 - 1,429 - 1,429
Other
comprehensive
income for
the period - - - - 12 - - 12 - 12
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
Total
comprehensive
income for
the period - - - - 12 1,429 - 1,441 - 1,441
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
Contributions
by and
distributions
to owners
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
Share-based
payment
charge and
associated
costs - - - - - 379 - 379 - 379
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
Total
contributions
by and
distributions
to owners - - - - - 379 - 379 - 379
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
CLOSING
BALANCE AT
31 MARCH 2018 215 11,475 - 1,055 (429) 5,745 (107) 17,954 3 17,957
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ==========
Consolidated Statement of Changes of Equity (continued)
Interim Report for the six months ended 31 March 2019
For the year ended 30 September 2018 (Audited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
OPENING
BALANCE AT
1 OCTOBER
2017 215 11,475 - 1,055 (441) 3,937 (107) 16,134 3 16,137
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Profit for the
year - - - - - 2,169 - 2,169 3 2,172
Other
comprehensive
income for
the year - - - - 59 - - 59 - 59
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Total
comprehensive
income for
the year - - - - 59 2,169 - 2,228 3 2,231
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Contributions
by and
distributions
to owners
Share-based
payment
charge and
associated
costs - - - - - 1,100 - 1,100 - 1,100
Transfer of
reserves(3) - - - - - (82) 82 - - -
Proceeds from
sale
of own shares - - - - - - 22 22 - 22
Repurchase of
share
options - - - - - (17) - (17) - (17)
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
Total
contributions
by and
distributions
to owners - - - - - 1,001 104 1,105 - 1,105
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
CLOSING
BALANCE AT
30 SEPTEMBER
2018 215 11,475 - 1,055 (382) 7,107 (3) 19,467 6 19,473
============== ============ ============= ============== ============ ================= ============== =========== ============= ================= ===========
(1) Total equity attributable to the equity holders of the Parent
(2) 'Other reserves' combines the currency reserve and capital
redemption reserve. The movement in the current and prior year
relates to the translation of foreign currency equity balances and
foreign currency non-monetary items.
(3) The shortfall in the market value of the shares held by the
EBT and the outstanding loan is transferred from own shares to
retained earnings.
1 BASIS OF PREPARATION
The consolidated interim financial information has been prepared
in accordance with the accounting policies that are expected to be
adopted in the Group's full financial statements for the year
ending 30 September 2019. The Group has adopted the new IFRS 9 and
IFRS 15 accounting standards from 1 October 2018.
NEW STANDARDS ADOPTED
IFRS 15 Revenue from Contracts with Customers: replaces IAS 18
Revenue and IAS 11 Construction contracts. The standard establishes
principles for reporting useful information to users of financial
statements about the nature, amount, timing and uncertainty of
revenue and cash flows arising from an entity's contracts with
customers. Revenue is recognised when a customer obtains control of
a service and thus, has the ability, to direct the use and obtain
the benefits from the goods or service. While this represents
significant new guidance, the implementation of this new guidance
has not impacted the timing or amount of revenue recognised by the
Group. Much of the Group's revenue is based upon defined hourly or
daily charge out rates and the work carried out is specific to the
customer and project in question. There is a continual flow of
benefits to the customer from the services performed and the Group
does not operate on a stage payment or key milestone basis. For
fixed fee projects, the fee is determined by an estimated amount of
hours x the standard rate for the required level of staff for the
project. Any expected under recovery from a project's original
costing are recognised over the life of the project. The principle
of the continual transfer of benefit to the customer remains
whether a project is a fixed or variable fee. Revenue recognition
is based on a contract by contract basis and the new standard has
not significantly affected business practice and management
judgements in respect of revenue recognition.
IFRS 9 Financial Instruments: replaces IAS 39 Financial
Instruments and covers 3 different areas of potential impact. Part
1 contains new requirements for the classification and measurement
of financial assets and liabilities. Part 2 relates to the
impairment of financial assets and requires the calculation of
impairment on an expected loss basis rather than the current
incurred loss basis. Part 3 relates to less stringent requirements
for general hedge accounting. Management have conducted a review of
the new standard and part 1 and 3 have not impacted the Group on
Transition. In part 2, under the "expected credit loss", the Group
has adopted a simplified model of recognising lifetime expected
credit losses to trade receivables. Due to the forward-looking
nature of this new standard, which contrasts with that of IAS 39
where provisions are based on an incurred loss basis, there has
been an increase in the provision for trade receivables of
GBP0.95m. This new provision matrix has been calculated based on
geographical location of the Group's entities using historical
default rates and projecting this forward considering any specific
forecasts relating to local economies. When adopting IFRS 9, the
Group has applied transitional relief and opted not to restate
prior periods with the difference on transition being recognised in
retained earnings.
The financial information in this interim report is in
compliance with the recognition and measurement principles of IFRS
as adopted by the European Union (EU) but does not include all
disclosures that would be required under IFRSs. The accounting
policies have been applied consistently throughout the Group for
the purposes of preparation of this financial information. The
financial information for the half years ended 31 March 2019 and 31
March 2018 does not constitute statutory accounts within the
meaning of Section 434(3) of the Companies Act 2006 and is
unaudited but has been reviewed by our auditors.
The comparative financial information for the year ended 30
September 2018 included within this report does not constitute the
full statutory accounts for that period. The statutory Annual
Report and Financial Statements for 2018 have been filed with the
Registrar of Companies. The Independent Auditor's Report on that
Annual Report and Financial Statements for 2018 was unqualified,
did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act
2006.
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the interim consolidated financial statements.
GBP000
------------------------------------------------- -------
IAS 39: incurred loss provision at 30 September
2018 2,046
------------------------------------------------- -------
Lifetime expected credit loss adjustment 953
------------------------------------------------- -------
IFRS 9: expected credit loss provision at
1 October 2018 2,999
------------------------------------------------- -------
2 TAXATION
The tax charge on the profit for the half-year ended 31 March
2019 is based on the estimated tax rates in the jurisdictions in
which the Group operates, for the year ending 30 September
2019.
3 DIVID
In view of the current trading position, the board recommends
the payment of an interim dividend of 0.5p per share for 2019
(2018: GBPnil).
4 SUMMARY SEGMENTAL ANALYSIS
REPORTABLE SEGMENTS
For management purposes, the Group is organised into three
operating divisions: Europe & Americas (EuAm), Middle East (ME)
and Asia Pacific (APAC). These divisions are the basis on which the
Group is structured and managed, based on its geographic structure.
The following key service provisions are provided across all three
operating divisions: quantity surveying, planning / programming,
quantum and planning experts, dispute avoidance / resolution,
litigation support, contract administration and commercial advice /
management. Segment information about these reportable segments is
presented
below.
Europe &
SIX MONTHS Americas Middle Asia Eliminations Unallocated ConsolidatedED 31 GBP000 East Pacific GBP000 GBP000 GBP000
MARCH 2019 GBP000 GBP000
(UNAUDITED)
============== ===================== =============== ================ ===================== ==================== ======================
Total external
revenue 14,851 10,321 4,539 - - 29,711
Total
inter-segment
revenue 11 2 15 (28) - -
============== ===================== =============== ================ ===================== ==================== ======================
Total revenue 14,862 10,323 4,554 (28) - 29,711
============== ===================== =============== ================ ===================== ==================== ======================
Segmental
profit/(loss) 1,984 363 (576) - - 1,771
Unallocated
corporate
expenses(1) - - - - (959) (959)
Share-based
payment
charge - - - - 243 243
-------------- --------------------- --------------- ---------------- --------------------- -------------------- ----------------------
Operating
profit/(loss) 1,984 363 (576) - (716) 1,055
Finance income - - - - 20 20
Finance
expense - - - - (70) (70)
============== ===================== =============== ================ ===================== ==================== ======================
Profit/(loss)
before
taxation 1,984 363 (576) - (766) 1,005
Taxation - - - - (170) (170)
============== ===================== =============== ================ ===================== ==================== ======================
Profit/(loss)
for the
period 1,984 363 (576) - (936) 835
============== ===================== =============== ================ ===================== ==================== ======================
Europe &
SIX MONTHS Americas Middle Asia Eliminations Unallocated ConsolidatedED 31 GBP000 East Pacific GBP000 GBP000 GBP000
MARCH 2018 GBP000 GBP000
(UNAUDITED)
-------------- --------------------- --------------- ---------------- --------------------- -------------------- ----------------------
Total external
revenue 14,258 11,994 5,442 - - 31,694
Total
inter-segment
revenue 53 26 2 (81) - -
============== ===================== =============== ================ ===================== ==================== ======================
Total revenue 14,311 12,020 5,444 (81) - 31,694
============== ===================== =============== ================ ===================== ==================== ======================
Segmental
profit 1,370 1,289 635 - - 3,294
Unallocated
corporate
expenses(1) - - - - (1,105) (1,105)
Share-based
payment
charge - - - - (379) (379)
============== ===================== =============== ================ ===================== ==================== ======================
Operating
profit/(loss) 1,370 1,289 635 - (1,484) 1,810
Finance income - - - - 2 2
Finance
expense - - - - (86) (86)
============== ===================== =============== ================ ===================== ==================== ======================
Profit/(loss)
before
taxation 1,370 1,289 635 - (1,568) 1,726
Taxation - - - - (297) (297)
============== ===================== =============== ================ ===================== ==================== ======================
Profit/(loss)
for the
period 1,370 1,289 635 - (1,865) 1,429
============== ===================== =============== ================ ===================== ==================== ======================
Europe &
YEARED 30 Americas Middle Asia Eliminations Unallocated Consolidated
SEPTEMBER GBP000 East Pacific GBP000 GBP000 GBP000
2018 GBP000 GBP000
(AUDITED)
-------------- ----------------------- --------------- ---------------- --------------------- -------------------- ----------------------
Total external
revenue 28,749 22,910 10,956 - - 62,615
Total
inter-segment
revenue 55 26 2 (83) - -
============== ======================= =============== ================ ===================== ==================== ======================
Total revenue 28,804 22,936 10,958 (83) - 62,615
============== ======================= =============== ================ ===================== ==================== ======================
Segmental
profit 2,968 2,139 952 - - 6,059
Unallocated
corporate
expenses(1) - - - - (2,089) (2,089)
Share-based
payment
charge 13 - - - (1,113) (1,100)
============== ======================= =============== ================ ===================== ==================== ======================
Operating
profit/(loss) 2,981 2,139 952 - (3,202) 2,870
Finance income - - - - 17 17
Finance
expense - - - - (148) (148)
============== ======================= =============== ================ ===================== ==================== ======================
Profit/(loss)
before
taxation 2,981 2,139 952 - (3,333) 2,739
Taxation - - - - (567) (567)
============== ======================= =============== ================ ===================== ==================== ======================
Profit/(loss)
for the
period 2,981 2,139 952 - (3,900) 2,172
============== ======================= =============== ================ ===================== ==================== ======================
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs and expenses
associated with AIM.
5 EARNINGS PER SHARE
Year
6 months 6 months ended
ended ended 30
31 March 31 March September
2019 2018 2018
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
--------------------------------------------------------------- ----------------- ------------- --------------
Profit for the financial period attributable to equity
shareholders 832 (243) 1,429 2,169
Share-based payments cost and associated costs 589 379 1,100
Adjusted profit from continuing operations for the
financial period before share-based payments costs 1,808 3,269
--------------------------------------------------------------- ----------------- ------------- --------------
Weighted average number of shares:
- Ordinary shares in issue
53,921,201 53,862,868 53,862,868
- Shares held by EBT (3,677) (155,552) (108,052)
=============================================================== ================= ============= ==============
Basic weighted average number of shares 53,917,524 53,707,316 53,754,816
Effect of employee share options 3,297,421 2,104,818 2,762,696
Diluted weighted average number of shares 57,214,945 55,812,134 56,517,512
--------------------------------------------------------------- ----------------- ------------- --------------
Basic earnings per share attributable to equity shareholders 1.5p 2.7p 4.0p
of the Parent (pence) Diluted earnings per share attributable 1.5p 2.6p 3.8p
to equity shareholders of the Parent (pence) 1.1p 3.4p 6.1p
Adjusted basic earnings per share before share-based
payment cost
=============================================================== ================= ============= ==============
6 POST BALANCE SHEET EVENT
There has been no significant event requiring disclosure since
31 March 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FJMPTMBMMBLL
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