TIDMFAN
RNS Number : 0638V
Volution Group plc
23 October 2014
Thursday 23 October 2014
VOLUTION GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JULY 2014
STRONG GROWTH IN LINE WITH EXPECTATIONS
Volution Group plc ("Volution" or "the Group" or "the Company",
LSE: FAN), a leading supplier of ventilation products to the
residential construction market, today announces its audited
financial results for the 12 months to 31 July 2014.
Highlights 2014 2013 Change
---------------------------- ------- ------ ------------
Revenue (GBPm) 120.7 102.3 18.0%
---------------------------- ------- ------ ------------
Adjusted EBITDA (1) (GBPm) 28.5 23.8 19.8%
---------------------------- ------- ------ ------------
Adjusted operating profit
(1) (GBPm) 26.5 22.2 19.4%
---------------------------- ------- ------ ------------
Adjusted profit before
tax (1) (GBPm) 14.0 9.2 51.9%
---------------------------- ------- ------ ------------
Reported loss before tax
(GBPm) (15.5) (4.2) -
---------------------------- ------- ------ ------------
Basic and diluted EPS (2)
(p) (14.0) (2.3) -
---------------------------- ------- ------ ------------
Adjusted operating cash
flow (3) (GBPm) 22.8 20.9 9.1%
---------------------------- ------- ------ ------------
Net debt (4) (GBPm) 42.9 172.7 GBP(129.8)m
---------------------------- ------- ------ ------------
The Group uses some alternative performance measures to track
and assess the underlying performance of the business. These
measures include adjusted EBITDA, adjusted operating profit,
adjusted profit before tax and adjusted operating cash flow.
Notes:
1. Details of adjusted EBITDA, adjusted operating profit and
adjusted profit before tax can be found in note 8.
2. Details of earnings per share can be found in note 10.
3. Adjusted operating cash flow is defined as adjusted EBITDA
plus or minus movements in operating working capital, less net
investments in property plant and equipment and intangible assets
(including cash held in escrow).
4. Net debt is defined as bank borrowings less cash and cash equivalents.
Overview
Financial highlights
-- Strong growth. Results in line with expectations.
-- Revenue in the year was GBP120.7 million, an 18.0% increase compared with the prior year.
-- Revenue growth comprised of 3.2% organic revenue growth (5.2%
on a like-for-like currency basis), with inorganic revenue growth
of 14.8% as a result of acquisitions.
-- Adjusted EBITDA increased by 19.8% to GBP28.5 million
representing 23.6% of revenues (2013: 23.3%).
-- The Group's reported pre-tax loss of GBP15.5 million (2013:
loss of GBP4.2 million), was impacted by:
Ø Exceptional items totaling GBP7.8 million (2013: GBP2.8
million). These related primarily to acquisition costs and IPO
costs incurred during the period.
Ø Amortisation and impairment of intangible fixed assets
(customer base and trademarks) recognised at fair value on
acquisition of the Group and of our subsidiaries of GBP13.1 million
(2013: GBP10.1 million).
Ø The write off of unamortised cost from three refinancing
exercises of GBP8.3 million (2013: GBP0.6 million).
Ø Finance expenses relating to the previous, higher level of
gearing in the eleven months prior to listing.
-- Net debt reduced by GBP129.8 million mainly as a result of
the conversion of investor debt to equity and the repayment of some
bank debt from the proceeds of the new shares issued.
Strategic highlights
-- Acquisition of PAX in Sweden in August 2013, giving the
Company a leading position in Swedish residential ventilation
refurbishment market.
-- Acquisition of inVENTer in Germany in April 2014; its
integration is progressing in line with the anticipated
timetable.
-- Organic revenue growth was helped by an increase in new build
residential systems sales in the UK, where the Group enjoyed an
11.2% growth.
-- Strong demand for products, especially newer, higher value added ventilation systems.
-- Major new project wins including the contract for Vent-Axia
to supply Sentinel Kinetic Plus ventilation system units for the
414 apartments in the Saffron Square development in Croydon,
London.
-- The current financial year has started in line with our expectations.
Dividend policy
-- The Board initially intends to target a dividend of
approximately 30% of the Company's adjusted net income for each
financial year. It is expected that the first dividend will be
payable following publication of the Company's results for the six
months ending 31 January 2015.
Commenting on the Group's results, Ronnie George, Chief
Executive Officer, said:
"The financial year saw the Company listed on the London Stock
Exchange, as well as make important strategic acquisitions in
Sweden and Germany. Our results for 2014 were strong, reflecting
growth both organically and through acquisitions. Revenue was up
year-on-year by 18.0% at GBP120.7 million and adjusted EBITDA grew
strongly to GBP28.5 million or 23.6% of revenue, up 19.8% compared
with 2013. Building on this platform, we will continue to
strengthen our position as one of the leading players in the
European market for ventilation products, including heat recovery
systems."
-Ends-
Enquiries:
Volution Group plc
Ronnie George, Chief Executive Officer +44 (0) 1293 441501
Ian Dew, Chief Financial Officer +44 (0) 1293 441536
Brunswick +44 (0) 20 7404 5959
volution@brunswickgroup.com
Craig Breheny, Simone Selzer, Chris Buscombe
Notes to Editors
Volution Group plc is a leading supplier of ventilation products
to the residential construction market in the UK, Sweden and
Germany.
The Group sold approximately 20 million ventilation products and
accessories in the financial year ended 31 July 2014. It consists
of five key brands, focused primarily on the UK, Swedish and German
ventilation markets - Vent-Axia, Manrose, Fresh, PAX and inVENTer -
and operates through two divisions: the Ventilation Group, which
principally supplies ventilation products for residential
construction applications in the UK, Sweden and Germany and
ventilation products for commercial construction applications in
the UK; and OEM (Torin-Sifan), which supplies motors, fans and
blowers to OEMs of heating and ventilation products for both
residential and commercial construction applications in Europe.
For more information, please go to:
http://www.volutiongroupplc.com/
Cautionary statement regarding forward-looking statements
This document may contain forward-looking statements which are
made in good faith and are based on current expectations or
beliefs, as well as assumptions about future events. You can
sometimes, but not always, identify these statements by the use of
a date in the future or such words as "will", "anticipate",
"estimate", "expect", "project", "intend", "plan", "should", "may",
"assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. You should not place
undue reliance on these forward-looking statements, which are not a
guarantee of future performance and are subject to factors that
could cause our actual results to differ materially from those
expressed or implied by these statements. The Company undertakes no
obligation to update any forward-looking statements contained in
this document, whether as a result of new information, future
events or otherwise.
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
I am delighted that Volution Group plc is now a fully listed
public company after having had several successful years of private
equity ownership. With our listing, I believe we will have an even
greater opportunity to implement the strategic plan, particularly
in the area of continuing international growth through
acquisitions. I am also highly appreciative of the support that we
have had from our principal shareholder and our new investors, and
their understanding and backing of our long-term vision.
Our results for 2014 were strong, reflecting growth both
organically and through acquisitions. Revenue was up year-on-year
by 18.0% at GBP120.7 million. Adjusted EBITDA grew strongly to
GBP28.5 million or 23.6% of revenue, up 19.8% compared with
2013.
Two acquisitions were completed during the year, significant
investment was made in new products, and a new production facility
acquired (and equipped) at Torin-Sifan. We also saw good organic
growth, especially in the important area of higher value
ventilation systems used in new residential dwellings.
Ventilation Group: UK
In the UK market, the Ventilation Group achieved sales growth in
all market sectors. The UK RMI (Repair, Maintenance and
Improvement) market that we split into both public and private
areas of focus, continued to show recovery. Our focus on the quiet,
energy efficient solutions in demand in the private market did very
well for us as did our initiatives to deliver improved ventilation
with greater controls and functionality for public sector social
housing. This was despite a backdrop of an overall general market
decline.
In the new build residential market, we are starting to benefit
from the positive effects of additional house completions. The
house building industry and the social housing RMI market are
driven by regulation and consumer preference to construct homes
that are more carbon and energy efficient. This has seen a move
towards the use of centralised heating and ventilation systems that
are designed to meet the required carbon emission reductions
without loss of the benefits of air-tight construction. Sales
growth in this area was up 11.2% in the financial year ended 2014
and we would expect this trend to continue in the coming years. As
IAQ (Indoor Air Quality) becomes even more of a concern in the
future, the Group with our wide range of brands and in depth
industry knowledge, is well placed to bring new ventilation
solutions to the market to meet these growing requirements.
Ventilation Group: International growth through acquisitions
In August 2013, we acquired PAX in Sweden for a total cash
consideration of GBP11.5 million. We now have a leading position in
the Swedish market for ventilation refurbishment in residential
dwellings. The integration of PAX has been successful and we have
in place a very strong combined management team under the
leadership of the country manager for the Nordic region.
The synergies provided by this acquisition have allowed us to
develop a stronger sales approach to the Swedish market in trade
and retail accounts across both the Fresh and PAX brands. We are
actively pursuing further growth opportunities in the Nordic region
with investments made in our sales teams to focus their attentions
in the Norwegian, Danish and Finnish markets.
In April 2014, we acquired the assets and intellectual property
of inVENTer for a cash consideration of GBP19.1 million. This was
the culmination of our strategy to find the right acquisition in
Germany. inVENTer has a leading position in the lucrative and fast
growing heat recovery ventilation refurbishment market. The
inVENTer brand has been trading for over 15 years and provides us
with the ideal platform for further growth into other areas of the
residential ventilation market in Germany. The integration of
inVENTer is proceeding well.
At the time of the acquisition of inVENTer we were aware of a
decline in sales to a small number of its larger customers. The
purchase consideration was reduced accordingly. After acquisition,
sales to these customers continued to decline, necessitating an
impairment of our intangible asset, customer base (recognised at
fair value at the time of acquisition). We have had growth in sales
to other customers that were not included in the valuation of our
customer base. Recovery of sales in the affected regions, the
appointment of new sales agents, and the roll out of a new range of
centralised heat recovery systems is an area of focus for us during
the current financial year.
OEM (Torin-Sifan)
Torin-Sifan had a more challenging year due to the mild winter
with our sales of gas boiler combustion motors declining from the
prior year. This area of the business will continue to be important
to us.
Over the last two years, we have made a significant investment
in developing a new range of high performing air movement products
that meet the energy efficiency demands placed on this industry.
With these new EC (Electronically Commutated) products and the
Group's investment in a modern production site close to the
well-established Torin-Sifan Swindon headquarters, we believe we
are in a good position to ensure our long-term future growth.
Three Strategic Pillars
Our strategy continues to focus on three key pillars:
-- Organic growth in our core markets;
-- Growth through a disciplined and value-adding acquisition strategy; and
-- To further develop Torin-Sifan's range and build customer preference and loyalty.
In our core markets, we expect to continue to benefit from a
favourable regulatory backdrop that focuses on reducing carbon
emissions from buildings; the need for improving energy efficiency
and the emerging understanding of the importance of indoor air
quality in the developed world. The Group will continue to gain
from these market developments with our specialised approach to
each market area. By building on our internal resources and
focusing on product management and product development, this will
enable us to deliver product and system solutions to meet
customers' needs.
The ventilation market in Europe remains highly fragmented and
we intend to continue to explore selective acquisition
opportunities to increase our international footprint. Our track
record over the last two years of making acquisitions and
successfully integrating them into our Group shows our ability to
add new competencies and to expand into new markets and this serves
us well for future acquisitions in the coming years.
I would like to acknowledge the dedication and hard work
demonstrated by our employees along with our management teams from
across our Group companies. Our people are key to the success of
the Group. I would like to thank them all for their support during
this historic year and for their continued contribution to our
success.
Outlook
While we are mindful of the mixed economic backdrop in some of
the economies in which we operate, the current year has started in
line with our expectations. We remain focused on delivering
profitable growth and to making further progress during this
financial year.
Ronnie George
Chief Executive Officer
23 October 2014
FINANCIAL REVIEW
Trading Performance
Group Revenue in the year was GBP120.7 million an 18.0% increase
compared with the prior year. This comprised 3.2% organic growth
(5.2% on a like for like currency basis), with 14.8% the result of
acquisitions.
Our Ventilation segment's revenue was GBP101.3 million in the
year, a 23.1% increase on prior year (25.7% on a like-for-like
currency basis). Inorganic growth came substantially from the
acquisition of PAX in Sweden which was completed in August 2013 and
was supported by the full year effect of the Fresh acquisition in
October 2012, and the more recent acquisition of inVENTer in
Germany, in April 2014.
The Group is enjoying strong demand for our ventilation
products, especially newer, higher value added ventilation systems.
Organic growth was helped by an increase in new build residential
systems sales in the UK with an 11.2% growth in new build
residential applications. Growth in the UK residential
refurbishment sector was 2.8%, in the UK commercial sector growth
was 5.2% and exports from the UK grew by 2.0%.
Our OEM (Torin-Sifan) segment revenue was GBP19.4 million in the
year and has declined by 2.9% mainly as a consequence of lower
sales of spare parts for non-condensing boilers during the recent
mild winter. There is a correlation between mild winters and lower
sales of these replacement parts.
Our underlying result, as measured by adjusted EBITDA, was
GBP28.5 million, 23.6% of revenues, a GBP4.7 million improvement
compared to the prior year, as the Group benefited from the recent
acquisitions in the Ventilation segment. The new acquisitions all
contributed to profit. In addition, cost reductions and other
synergy benefits were secured in our newly acquired Swedish
businesses.
The Group's reported loss before tax in the year was GBP15.5
million compared to a loss of GBP4.2 million in the prior year. The
reported result for the year has been significantly impacted
by:
Exceptional items:
-- Costs directly related to the IPO process, GBP5.5 million (2013: nil);
-- Expenses incurred as a consequence of the two acquisitions in
2014, GBP1.1 million (2013: GBP1.9 million);
-- Restructuring, integration of acquisitions and other
exceptional costs, GBP1.2 million (2013: GBP0.9 million); and
Other significant costs:
-- Amortisation of intangible fixed assets (customer base,
trademarks and patents) recognised at fair value on acquisition of
the Group and of our subsidiaries, GBP11.1 million (2013: GBP10.1
million);
-- The impairment, in inVENTer, of the value of our intangible
asset customer base, GBP1.9 million;
-- The cost of two refinancing exercises in 2014 and the write
off of unamortised costs from refinancing in December 2013, GBP8.3
million (2013: GBP0.6 million); and
-- Finance expenses relating to the higher level of gearing in
the eleven months prior to listing which will substantially reduce
in the coming financial year.
The reconciliation of the Group's reported loss before tax to
adjusted measures of performance is summarised in the table below
and in detail in note 8.
Explanation of adjusted measures of profitability
2014 2013
GBPm GBPm
-------------------------------------------- ------- ------
Reported loss before tax (15.5) (4.2)
Exceptional items 7.8 2.8
Amortisation of financing costs and other
finance costs 8.6 0.5
Amortisation and impairment of intangibles
(customer base, trademarks and patents) 13.1 10.1
-------------------------------------------- ------- ------
Adjusted profit before tax 14.0 9.2
-------------------------------------------- ------- ------
Net interest payable 12.5 13.0
-------------------------------------------- ------- ------
Adjusted operating profit 26.5 22.2
-------------------------------------------- ------- ------
Depreciation and other amortisation 2.0 1.6
-------------------------------------------- ------- ------
Adjusted EBITDA 28.5 23.8
-------------------------------------------- ------- ------
Acquisitions
The Group's trading benefitted in the year from the full year
effect of the acquisition of Fresh in Sweden, acquired in October
2012, and from the acquisitions in the year of PAX in Sweden and
inVENTer in Germany. The effect of the acquisitions was additional
gross sales of GBP16.4 million (before rebates and settlement
discounts), representing 14.8% inorganic growth in revenue.
In October 2012, Fresh was acquired for a total cash
consideration of GBP7.5 million. Fresh is one of Sweden's leading
suppliers of residential ventilation products, including fans,
systems, wall vents, ducting systems and fittings. Fresh products
are distributed primarily through Swedish retail DIY outlets.
During the financial year ended 2013, Fresh was consolidated into
the Group result for ten months.
In August 2013, PAX was acquired for a total cash consideration
of GBP11.5 million. PAX is a leading supplier of ventilation
products, towel rails and oil filled radiators in the Swedish
market primarily through the trade wholesale channel. In the
financial year ended 2014 PAX was consolidated into the Group
result for eleven months.
In April 2014, inVENTer was acquired for a cash consideration of
GBP19.1 million. inVENTer is a leading supplier of decentralised
heat recovery ventilation systems for new build and refurbishment
applications in residential dwellings in Germany. In 2014, inVENTer
was consolidated into the Group result for three months.
During the year, continuing integration of the Swedish
businesses and associated operational and organisational synergies
have enhanced revenue, profitability and margins.
Exceptional Items
Exceptional items, by virtue of their size, incidence or nature,
are disclosed separately in order to allow a better understanding
of the underlying trading performance of the Group. These items,
which totalled GBP7.8 million in 2014 (2013: GBP2.8 million)
include costs incurred as a consequence of the IPO, costs
associated with the acquisitions of Fresh, PAX and inVENTer, costs
associated with inventory fair value adjustments at the time of
acquisitions and costs associated with the reorganisation of
businesses following acquisition. Details of these and other
exceptional items can be found in note 6.
The Board believes that the performance measures adjusted
EBITDA, adjusted operating profit and adjusted profit before tax,
stated before deduction of exceptional items, give a clearer
indication of the underlying performance of the business. A
reconciliation of these measures of performance to profit before
tax is summarised in the adjacent table and detailed in note 8.
In addition to exceptional items, four other categories of
expense are highlighted in order to clarify the underlying
performance of the Group:
-- On acquisition of a business, we obtain an independent
valuation of identifiable acquired intangible fixed assets such as
trademarks and customer base and recognise these assets in our
consolidated statement of financial position; we then amortise them
over their useful lives. In the year the amortisation charge of
these intangible assets was GBP11.1 million;
-- As a consequence of a decline in sales to our larger
customers in inVENTer, the value of our intangible asset customer
base, was reassessed to be GBP5.4 million as at 31 July 2014; an
impairment of GBP1.9 million. Actions are in place to recover sales
in affected areas and sales growth in our smaller customers is
partly offsetting the decline in our larger customers;
-- As a consequence of the refinancing at the time of listing we
expensed, as part of finance cost, GBP8.3 million (2013: GBP0.6
million) of third party bank refinancing costs incurred in relation
to capital restructurings in February 2012, December 2013 and June
2014. Details can be found in note 7; and
-- At each reporting period date we re-measure the fair value of
financial derivatives and recognise any gains or losses immediately
in Finance Cost. In the year we recognised a cost of GBP0.2 million
(2013: GBP0.4 million). Details can be found in note 7.
Finance Revenue and Cost
Finance costs of GBP21.2 million in the year (2013: GBP14.1
million) largely reflect the interest cost of the pre-listing
financial structure prior to June 2014. Prior to listing the
business was under private equity ownership and was predominantly
financed by bank borrowings and senior unsecured debt (investor
loan notes). On listing we undertook an extensive capital
restructuring: all investor loan notes totalling GBP91.7 million
were converted to equity and GBP61.9 million of the proceeds from
the issue of new shares was used to repay bank debt, thus reducing
the interest cost significantly for the last six weeks of the year
and for future periods.
Finance costs include the write off of accumulated third party
bank financing costs, mentioned above, of GBP8.3 million.
Taxation
The net income tax credit of GBP1.3 million (2013: GBP2.1
million credit) consists of current income tax expense arising from
the standard rate of corporation tax in each country where our
businesses are incorporated and tax resident, as adjusted for
permanent and temporary timing differences and the effect of
changes in tax rate.
As a consequence of establishing, at the time of acquisition,
the fair value of our identifiable intangible assets (trademarks
and customer base) we also recognised a corresponding deferred tax
credit which is credited against income tax expense in line with
the corresponding amortisation of the intangible assets to which it
relates.
Operating Cash Flow
The Group continued to be cash generative in the year with
adjusted operating cash inflow of GBP22.8 million (2013: GBP20.9
million). This represents a cash conversion, after capital
expenditure of 86% (2013: 94%). The decrease in cash conversion is
largely explained by an increase in capital expenditure on an ERP
system upgrade of GBP0.8 million (2013: GBP0.5 million) which is
currently underway and significant new product development
projects. The Group continues to manage its working capital
efficiently with operating working capital representing 15.3% of
revenue (2013: 13.9%). The increase in working capital percentage
of revenue can be largely explained by the additional working
capital of inVENTer with only three months of corresponding
revenue.
Net Debt and Refinancing
Net debt as at 31 July 2014 was GBP42.9 million (2013: GBP172.7
million) made up of bank borrowings of GBP53.9 million (2013: bank
borrowings GBP71.6 million, investor loan notes GBP117.0 million)
offset by cash and cash equivalents of GBP11.0 million (2013:
GBP15.9 million).
During the year there was a considerable amount of capital
restructuring.
In December 2013, the debt facilities were extended by GBP41.1
million, which we drew down to repay a portion of the loan notes
held by the principal shareholder (Windmill Holdings B.V.) and
certain of our other shareholders and directors on a pro rata basis
(GBP40.0 million was repaid, using a combination of these new
borrowings (net of fees) and GBP2.8 million of cash on balance
sheet).
In April 2014, GBP10.6 million of our bank acquisition facility
was drawn upon and GBP8.0 million of additional investor loan was
secured in order to partly finance the acquisition of inVENTer.
On listing in June 2014, the Group converted all of its GBP91.7
million investor debt into share capital and premium. Also on
listing, the proceeds of the primary offer of GBP72.0 million were
used to pay fees associated with the listing (GBP7.5 million paid
in the year, of which GBP5.1 million was disclosed as part of
exceptional items and GBP2.4 million treated as a deduction from
share premium) and repay GBP61.9 million of bank borrowings,
leaving an additional GBP2.6 million of cash on the balance sheet
to provide additional finance headroom. Following the capital
restructuring at listing, Group debt is exclusively third party
bank borrowings and our closing net debt to adjusted EBITDA ratio
is 1.5x.
Movements in Net Debt position
GBPm
--------------------------------------------- ----------------
Opening net debt (172.7)
--------------------------------------------- ----------------
Movements from normal business operations
adjusted operating cash flow 22.8
interest paid/accrued (12.6)
income tax paid (3.2)
exceptional items (0.8)
other (1.9)
Movements from acquisitions
acquisition consideration (29.8)
acquisition costs (0.9)
Movements from the IPO
conversion of investor debt to equity 91.7
share issue proceeds 72.0
IPO costs (7.5)
--------------------------------------------- ----------------
Closing net debt (42.9)
--------------------------------------------- ----------------
Bank Facilities and Liquidity
The Group's bank facilities, post listing, consist of fully
drawn term loans of GBP53.9 million, a revolving credit facility
(RCF) of GBP13.0 million (of which GBP1.5 million is allocated to
cover bank guarantees, letters of credit and foreign exchange) and
an unutilised approved acquisition facility of GBP20.0 million. The
RCF must be cleared down to GBP9.0 million for five days once every
twelve months. The term loans are repayable in full in February
2019. As at 31 July 2014 we had GBP11.5 million of undrawn,
committed bank facilities and a GBP20.0 million acquisition
facility in addition to GBP11.0 million cash and cash equivalents
on the balance sheet.
Foreign Exchange
The Group is exposed to the impact of changes in the foreign
currency exchange rates on transactions denominated in currencies
other than the functional currency of our operating businesses. We
have significant Euro income in the UK which is largely balanced by
Euro expenditure. For US Dollars we have little income but
significant expenditure. Our policy is to limit our transactional
foreign exchange risk by purchasing the majority of our forecast US
Dollar requirements for, and in advance of, the ensuing financial
year.
We are also exposed to translational currency risk as the Group
consolidates foreign currency denominated assets, liabilities,
income and expenditure into Group reporting denominated in
Sterling. We have hedged against the translation risk for Fresh and
PAX by redenominating GBP20.5 million of our bank borrowings to SEK
(value at 31 July 2014 was GBP17.8 million). We have partially
hedged our translational risk for inVENTer by having Euro
denominated bank borrowings in the amount of GBP10.0 million as at
31 July 2014. We do not hedge the results of overseas
subsidiaries.
During the year the exchange rate between GBP and Swedish Krone
moved adversely compared to 2013, from 10.23 to 10.76. This had a
negative effect on the reported Revenue and profitability of our
Swedish operating companies when translated to GBP for
consolidation. If we had translated the 2014 performance of our
Swedish businesses at the 2013 exchange rate our reported Group
revenues would have been GBP1.9 million higher.
Equity Structure
Immediately prior to listing, the Group implemented a capital
reorganisation. The existing shareholdings of the Group were
converted to one class of share in Volution Group plc. Investor
loan notes, and associated accrued interest, were converted to
shares in Volution Group plc and a further 48 million new shares
were issued for sale to new investors. The proceeds of the primary
issue of 48 million shares at GBP1.50 each was GBP72.0 million.
This was used primarily to pay down our bank borrowings and pay for
the costs of the listing.
Immediately upon listing, the equity structure consisted of 200
million ordinary shares with a nominal value of GBP0.01 each.
Following listing, Volution Group plc underwent a court approved
capital reduction to cancel GBP57.6 million of share premium and
create a corresponding amount of distributable reserves. This was
completed before the end of the financial year.
Earnings per Share
The basic and diluted loss per share for the year was 14.0
pence. This reflects the capital structure under previous
ownership, which was highly indebted for the majority of the year,
and the substantial exceptional cost in the year, incurred largely
as a result of the listing of the Company on the London Stock
Exchange.
Ian Dew
Chief Financial Officer
23 October 2014
Consolidated statement of comprehensive income
For the year ended 31 July 2014
2014 2013
Notes GBP000 GBP000
Revenue 4 120,709 102,262
Cost of sales (63,748) (56,245)
-------- --------
Gross profit 5 56,961 46,017
Distribution costs (16,657) (12,380)
Administrative expenses (26,857) (21,593)
-------- --------
Operating profit before exceptional
items 13,447 12,044
Exceptional items 6 (7,783) (2,778)
-------- --------
Operating profit 5,664 9,266
Finance revenue 7 630
Finance costs 7 (21,183) (14,099)
-------- --------
Loss before tax (15,512) (4,203)
Income tax 9 1,254 2,139
-------- --------
Loss for the year (14,258) (2,064)
Other comprehensive (expense)/income:
Items that may subsequently be reclassified
to profit or loss:
Exchange differences arising
on translation of foreign
operations (497) 138
Gain on hedge of net investment
in foreign operation 172 444
-------- --------
Other comprehensive (expense)/income
for the year (325) 582
-------- --------
Total comprehensive expense
for the year (14,583) (1,482)
======== ========
Loss per share
Basic and diluted, pence
per share 10 (14.0)p (2.3)p
Consolidated statement of financial position
at 31 July 2014
As at
1 August
2014 2013 2012
Notes GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 15,915 10,793 10,192
Intangible assets - goodwill 11 50,127 46,488 45,668
Intangible assets - other 12 113,651 108,392 111,340
Deferred tax assets 9 732 99 464
--------- --------- ----------
180,425 165,772 167,664
--------- --------- ----------
Current assets
Inventories 15,922 12,751 12,597
Trade and other receivables 25,422 21,326 19,192
Income tax 1,093 - -
Other current financial assets 422 68 -
Cash and short term deposits 10,987 15,943 14,957
--------- --------- ----------
53,846 50,088 46,746
--------- --------- ----------
Total assets 234,271 215,860 214,410
========= ========= ==========
Current liabilities
Trade and other payables (22,821) (19,888) (18,097)
Other current financial liabilities (467) - (104)
Income tax - (934) (1,173)
Interest bearing loans and borrowings 15 - (3,540) (2,746)
Provisions (1,018) (719) (793)
--------- --------- ----------
(24,306) (25,081) (22,913)
--------- --------- ----------
Non-current liabilities
Interest bearing loans and borrowings 15 (53,903) (181,482) (176,512)
Other non-current financial liabilities (122) (494) (913)
Provisions (600) (550) (550)
Deferred tax liabilities 9 (22,090) (21,801) (25,588)
--------- --------- ----------
(76,715) (204,327) (203,563)
--------- --------- ----------
Total liabilities (101,021) (229,408) (226,476)
========= ========= ==========
Net assets /(liabilities) 133,250 (13,548) (12,066)
========= ========= ==========
Capital and reserves
Share capital 2,000 3 3
Share premium 11,527 2,098 2,098
Capital reserve 92,325 - -
Foreign currency translation reserve 257 582 -
Retained earnings 27,141 (16,231) (14,167)
------- -------- --------
Total equity 133,250 (13,548) (12,066)
======= ======== ========
The consolidated financial statements of Volution Group plc
(registered number 09041571) were approved by the Board of
Directors and authorised for issue on 23 October 2014.
On behalf of the board
Ronnie George Ian Dew
Chief Executive Officer Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 31 July 2014
Capital Foreign
reserve currency
Share Share translation Retained
capital premium reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 August 2012 3 2,098 - - (14,167) (12,066)
Loss for the year - - - - (2,064) (2,064)
Other comprehensive income - - - 582 - 582
-------- -------- --------- ------------ --------- --------
Total comprehensive income/(expense) - - - 582 (2,064) (1,482)
-------- -------- --------- ------------ --------- --------
At 31 July 2013 3 2,098 - 582 (16,231) (13,548)
-------- -------- --------- ------------ --------- --------
Loss for the year - - - - (14,258) (14,258)
Other comprehensive expense - - - (325) - (325)
-------- -------- --------- ------------ --------- --------
Total comprehensive expense - - - (325) (14,258) (14,583)
-------- -------- --------- ------------ --------- --------
Net adjustment to reserves
arising from group re-organisation (3) (2,098) - - - (2,101)
Share for share exchange as
part of the group reorganisation 1,520 - 92,325 - - 93,845
Issue of new ordinary shares
on stock market listing 480 71,520 - - - 72,000
Share issue costs - (2,363) - - - (2,363)
Capital reduction - (57,630) - - 57,630 -
-------- -------- --------- ------------ --------- --------
At 31 July 2014 2,000 11,527 92,325 257 27,141 133,250
======== ======== ========= ============ ========= ========
Capital reserve
The capital reserve is the difference in share capital and
reserves arising from the use of the pooling of interest method for
preparation of the financial statements.
Foreign currency translation reserve
Exchange differences arising on translation of the Group's
foreign subsidiaries into GBP are included in the foreign currency
translation reserve. The Group hedges some of its exposure to its
net investment in foreign operations, foreign exchange gains and
losses relating to the effective portion of the net investment
hedge are accounted for by entries made directly to the foreign
currency translation reserve. No ineffectiveness has been
recognised in the statement of comprehensive income for any of the
periods presented.
These two items are the only items in other comprehensive
income.
Consolidated statement of cash flows
For the year ended 31 July 2014
2014 2013
Notes GBP'000 GBP'000
Operating activities
Loss for the year after
tax (14,258) (2,064)
Adjustments to reconcile
loss for the year to
net cash flow from operating
activities:
Income tax for the year (1,254) (2,139)
Gain on disposal of property,
plant and equipment (15) (48)
Exceptional items 6 7,783 2,778
Cash flows relating to
exceptional costs (6,847) (1,354)
Finance revenue (7) (630)
Finance costs 7 21,183 14,099
Depreciation of property,
plant and equipment 1,932 1,588
Amortisation of intangible
assets 12 11,201 10,186
Impairment of intangible
assets 12 1,949 -
Working capital adjustments:
Increase in trade receivables
and other assets (1,803) (1,415)
Movement in inventories (1,370) 1,097
Exceptional costs: fair
value of inventories (201) (845)
Increase in trade payables
and other payables 1,450 18
Movement in provisions 299 (74)
Withholding tax paid
on loan note interest (34) -
UK income tax paid (2,650) (2,883)
Overseas income tax paid (475) (276)
Net cash flow from operating
activities 16,883 18,038
========== ==========
Investing activities
Payments to acquire intangible
assets 12 (1,664) (850)
Purchase of property,
plant and equipment (2,930) (1,758)
Proceeds from disposal
of property, plant and
equipment 62 109
Acquisition of subsidiaries,
net of cash acquired (29,795) (7,955)
Interest received 7 40
Net cash flow used in
investing activities (34,320) (10,414)
========== ==========
Financing activities
Repayment of interest
bearing loans and borrowings (106,106) (3,375)
Proceeds from new borrowings 59,479 -
Receipt of compensation
from bondholders - 1,653
Issue costs of new borrowings (4,652) (182)
Interest paid (5,900) (4,736)
Costs on issue of new
shares (2,363) -
Proceeds from issue of
new shares 72,000 -
Net cash flow generated
from/(used in) financing
activities 12,458 (6,640)
========== =========
Net (decrease)/increase
in cash and cash equivalents (4,979) 984
Cash and cash equivalents
at the start of the period 15,943 14,957
Effect of exchange rates
on cash and cash equivalents 23 2
Cash and cash equivalents
at the end of the year 10,987 15,943
========== =========
1. Publication of non-statutory accounts
The preliminary results were authorised for issue by the Board
of Directors on 23 October 2014. The financial information set out
herein does not constitute the Group's statutory accounts for the
years ended 31 July 2014 or 2013, but is derived from those
accounts. Statutory accounts for 2014 will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The auditors have reported on those accounts; their report
was unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 2006.
2. Accounting policies
The Company is a public limited company and is incorporated and
domiciled in the UK (registered number: 09041571). The share
capital of the Company is listed on the London Stock Exchange. The
address of its registered office is Fleming Way, Crawley, West
Sussex RH10 9YX.
The principal accounting policies applied in the preparation of
the consolidated financial statements are set out below. These
policies have been consistently applied to the years presented,
unless otherwise stated.
Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) adopted by the European Union and the Companies
Act 2006. The consolidated financial statements have been prepared
under the historical cost convention, except as disclosed in the
group accounting policies below.
The preparation of the consolidated financial information in
conformity with IFRS requires the use of certain critical
accounting estimates and requires management to exercise judgement
in the process of applying the Group's accounting policies. The
areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the
consolidated financial statements are set out in note 3.
The financial information is presented in GBP and all values are
rounded to the nearest thousand (GBP000), except as otherwise
indicated.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. In the years presented, the Group generated
a loss mainly due to the high levels of interest payable under the
private equity capital structure that existed for the majority of
the reporting period until the stock market listing in June 2014.
Following the listing, these loans were repaid, new bank loans
raised and funds raised from the issue of shares, resulting in the
group having GBP133.3m of net assets at 31 July 2014.
Group cash flow forecasts have been produced for the period to
31 January 2016 and demonstrate that the Group will be able to meet
its liabilities as and when they fall due for the foreseeable
future. The group is also forecast to remain in compliance with its
banking agreement covenants at each quarter-end during the forecast
period.
The Directors confirm that, after making appropriate enquiries,
they have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason, the Directors continue to adopt the going
concern basis in preparing the financial statements.
Capital reorganisation during 2014
Windmill Newco plc was incorporated on 15 May 2014 and
subsequently changed its name to Volution Group plc on 4 June 2014.
With effect from 23 June 2014, Volution Group plc became the legal
parent of Windmill Topco Limited, the previous holding company of
the group, and its subsidiary undertakings through a Group
reorganisation, which was accounted for as a common control
transaction. The consolidated financial statements have therefore
been prepared as a continuation of the existing Group using the
pooling of interest method. For all periods up to and including the
year ended 31 July 2013, Windmill Topco Limited prepared its
consolidated financial statements in accordance with UK Generally
accepted accounting principles (UK GAAP). As the consolidated
financial statements of Volution Group plc have been prepared as a
continuation of the existing group, these financial statements have
been prepared as through the group is a first time adopter of IFRS.
Refer to note 17 for information on how the group adopted IFRS. The
difference in share capital and reserves arising from the use of
the pooling of interest method was recorded in a capital
reserve.
Basis of consolidation
The financial information includes all subsidiaries. The results
of subsidiaries are included from the date on which effective
control is acquired up to the date control ceases to exist.
Subsidiaries are controlled by the parent (in each relevant
period) regardless of the amount of shares owned. Control exists
when the parent has the power, either directly or indirectly, to
govern the financial and operating policies of an enterprise so as
to obtain benefits from its activities. Subsidiaries are
consolidated from the date on which control is transferred and
cease to be consolidated from the date on which control no longer
exists.
The financial statements of subsidiaries are prepared for the
same reporting periods using consistent accounting policies. All
intercompany transactions and balances, including unrealised
profits arising from intra-group transactions, have been eliminated
on consolidation.
Business combinations
Business combinations are accounted for using the acquisition
method. The cost of any acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date fair
value. There have been no non-controlling interests in the business
combinations to date. Acquisition costs incurred are expensed and
included in administrative expenses.
When the Group acquires a business it assesses the financial
assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic
circumstances and pertinent conditions at the acquisition date.
Contingent consideration resulting from business combinations is
valued at fair value at the acquisition date as part of the
business combination. When the contingent consideration meets the
definition of a financial liability, it is subsequently re-measured
to fair value at each reporting date, with changes in fair value
recognised either in profit or loss or as a change in other
comprehensive income ('OCI'). The determination of fair value is
based on discounted cash flows. The key assumptions take into
consideration the probability of meeting each performance target
and the discount factor.
Goodwill is initially recognised at cost, being the excess of
the aggregate of the consideration transferred over the net
identifiable assets acquired and liabilities assumed.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group's cash generating
units ('CGU') that are expected to benefit from the combination,
irrespective of whether assets or liabilities of the acquisition
are assigned to those units.
Business combinations are set out in note 14.
Intangible assets
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are
identified and recognised separately from goodwill where they
satisfy the definition of an intangible asset and their fair values
can be measured reliably. The cost of such intangible assets is
their fair value at the acquisition date.
The fair value of patents, trademarks, and customer base
acquired and recognised as part of a business combination are
determined using either the relief-from-royalty method or
multi-period excess earnings method.
Subsequent to initial recognition, intangible assets acquired in
a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses.
Research and development costs
Research costs are expensed as incurred. Development expenditure
on an individual project is recognised as an intangible asset when
the Company can demonstrate the technical feasibility of completing
the intangible asset so that it will be available for use or sale,
its intention to complete and its ability to use or sell the asset,
how the asset will generate future economic benefits, the
availability of resources to complete the asset and the ability to
reliably measure the expenditure during development.
Development costs
In the first set of financial statements prepared applying IFRS,
the Group had been unable to capitalise development costs in full
for historical periods. Retrospective application of IFRS does not
permit the use of hindsight to conclude whether the development
costs recognition and measurement criteria were met in historical
periods. In order to retrospectively apply IFRS and capitalise
development costs prior to periods presented, the Group would have
had to revisit the research and development costs incurred, and
reconstruct a development cost that would be compliant with IFRS
criteria, as the current records do not separate research and
development costs based on the IFRS criteria. For example, staff
costs were not divided between specific projects. The Group has
therefore determined that most of the development costs for the
historical periods could not be capitalised without the use of
hindsight, and therefore all development costs relating to staff
costs have been expensed as incurred for the respective periods.
The Group has now put a procedure in place to monitor all future
development spending and staff costs to assess whether the criteria
are met.
Subsequent measurement of intangible assets
Intangible assets with a definite life are amortised on a
straight-line basis over their estimated useful lives as
follows:
Development costs - 10 years
Software costs - 5 years
Customer base - 7 - 11 years
Trademarks - 20 - 25 years
Patents - 20 - 25 years
The estimated useful life and amortisation methods are reviewed
at the end of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.
Impairment of tangible and intangible assets excluding
goodwill
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets with definite lives to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they
are allocated to the smallest Group of cash-generating units for
which a reasonable and consistent allocation basis can be
identified.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. Impairment losses are immediately recognised in
the statement of comprehensive income.
Impairment of tangible and intangible assets excluding goodwill
(continued)
The Group has identified the following cash generating units.
These are used in the impairment review of tangible and intangible
assets.
Residential repair, maintenance and improvement (RMI)
Residential New Build
Commercial
UK Export
Nordics Residential
Germany Residential
Original Equipment Manufacturer (OEM (Torin Sifan))
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies,
management is 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 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.
Judgments
The following are the critical judgments (apart from those
involving estimations), that management has made in the process of
applying the entity's accounting policies and that have the most
significant effect on the amounts recognised in financial
statements:
Exceptional items
The Group discloses exceptional items by virtue of their nature,
size or incidence to allow a better understanding of the underlying
trading performance of the Group mainly relating to the IPO,
acquisition cost and restructuring costs following acquisitions.
The Group identifies an item of expense of income as exceptional,
when in managements judgment, the underlying event giving rise to
the exceptional item is deemed to be non-recurring in its nature,
size or incidence such that group results would be distorted
without specific reference to the event in question. To enable the
full impact of an exceptional item to be understood, the tax impact
is disclosed and they are presented separately in the statement of
cash flows.
Development costs
Development costs that are directly attributable to the
development of a product are capitalised using management's
assessment of the likelihood of a successful outcome for each
product being released to market, this is based on management's
judgement that the product is technologically, commercially and
economically feasible in accordance with IAS 38 'Intangible
assets'.
Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of the assets and liabilities within the next financial
year, are described below. The Group based its assumptions and
estimates on parameters available when these financial statements
were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or
circumstances arising beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Fair value of assets acquired during business combinations
Judgements and estimates are required in assessment of fair
value of the consideration and net assets acquired, including the
identification and valuation of intangible assets.
Impairment of goodwill and other intangible assets
The Group's impairment test for goodwill is based on a value in
use calculation using a discounted cash flow model. The cash flows
are derived from the budget for the following five years. The
recoverable amount is most sensitive to the discount rate used for
the discounted cash flow model as well as the expected future
cash-inflows and the growth rate used for extrapolation
purposes.
The Group records all assets and liabilities acquired in
business acquisitions, at fair value. Intangible assets are
reviewed for impairment annually if events or changes in
circumstances indicate that the carrying amount may not be
recoverable.
Taxation
The Group establishes provisions, based on reasonable estimates,
for possible consequences of audits by tax authorities of the
respective countries in which it operates. The amount of such
provisions are based on various factors, such as experience with
previous tax audits and differing interpretations of tax
regulations by the taxable entity and the responsible
authority.
Management judgement is required to determine the amount of
deferred tax assets that can be recognised, based on the likely
timing and level of future taxable profits together with an
assessment of the effect of future tax planning strategies. A
breakdown of the deferred tax asset is included in note 9.
Uncertainties exist with respect to the interpretation of complex
tax regulations, changes in tax laws, and the amount and timing of
future taxable income. Given the wide range of international
business relationships and the long-term nature and complexity of
existing contractual agreements, differences arising between the
actual results and the assumptions made, or future changes to such
assumptions, could necessitate future adjustments to tax income and
expense already recorded.
Rebates payable and receivable
The Group has a number of customer and supplier rebate
agreements, with the amounts payable and receivable often being
subject to negotiation after the reporting date. At the reporting
date, the Directors make estimates of the amount of rebate that
will become both payable and due to the Group under these
agreements based upon prices, volumes and product mix. The total
rebate charge for the year is GBP8,461,000 (2013:
GBP7,607,000).
4. Revenue
Revenue recognised in the statement of comprehensive income is
analysed below:
2014 2013
GBP000 GBP000
Sale of goods 117,924 99,284
Rendering of services 2,785 2,978
-------- --------
Total revenue 120,709 102,262
======== ========
2014 2013
GBP000 GBP000
Market Sectors
Ventilation Group
UK Residential RMI 43,437 42,254
UK Residential New Build 15,745 14,157
UK Commercial 17,897 17,017
UK Export 7,282 7,140
Nordics 23,705 10,839
Germany 3,493 -
Rebates and settlement discount (10,255) (9,136)
-------- --------
Total Ventilation Group 101,304 82,271
-------- --------
Original Equipment Manufacturer (OEM (Torin-Sifan))
OEM (Torin-Sifan) 19,248 20,027
Rebates and settlement discount 157 (36)
-------- --------
Total OEM (Torin-Sifan) 19,405 19,991
-------- --------
Total revenue 120,709 102,262
======== ========
5. Segmental analysis
In identifying its operating segments, management follows the
Group's product markets. The Group is considered to have two
reportable segments: Ventilation Group and OEM. Each reportable
segment is managed separately as they require different marketing
approaches.
Certain operating segments have been aggregated into a single
operating segment where these operating segments have similar
economic characteristics, and the operating segments are similar in
relation to the nature of products, services, production processes,
type of customer, method for distribution and regulatory
environment.
The measure of revenue reported to the chief operating decision
maker to assess performance is total revenue for each operating
segment. The measure of profit reported to the chief operating
decision maker to assess performance is adjusted EBITDA (see note 8
for definition) and exceptional items for each operating segment.
Gross profit and the analysis below segment profit is additional
voluntary information and not 'segment information' prepared in
accordance with IFRS 8.
Finance revenue and costs are not allocated to individual
operating segments as the underlying instruments are managed on a
group basis.
Total assets and liabilities are not disclosed as this
information is not provided by operating segment to the chief
operating decision maker on a regular basis.
Transfer prices between operating segments are on an arm's
length basis on terms similar to transactions with third
parties.
Unallocated Rebates and settlement
discount and
Year ended 31 July 2014 Ventilation Group OEM Total eliminations Consolidated
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
External customers 111,559 19,248 - 130,807 (10,098) 120,709
Inter-segment 6,775 1,185 - 7,960 (7,960) -
Total revenue 118,334 20,433 - 138,767 (18,058) 120,709
================= ======= ============ ======== ====================== ============
Gross profit 52,044 5,984 - 58,028 (1,067) 56,961
================= ======= ============ ======== ====================== ============
Results
Segment profit/(loss) 28,540 3,057 (3,773) 27,824 705 28,529
================= ======= ============ ======== ====================== ============
Depreciation,
amortisation and
impairment (13,394) (1,729) - (15,123) 41 (15,082)
Exceptional items (686) (133) (6,964) (7,783) - (7,783)
----------------- ------- ------------ -------- ---------------------- ------------
Operating profit/(loss) 14,460 1,195 (10,737) 4,918 746 5,664
Unallocated expenses:
Net finance cost - - (21,176) (21,176) - (21,176)
----------------- ------- ------------ -------- ---------------------- ------------
Profit/(loss) before tax 14,460 1,195 (31,913) (16,258) 746 (15,512)
================= ======= ============ ======== ====================== ============
The Group overhead costs of GBP3,773,000 are not allocated to
individual operating segments. Likewise, exceptional costs which
include the re-organisation costs and IPO costs have not been
allocated to individual operating segments.
Unallocated Rebates and
Settlement
Year ended 31 July discount and
2013 Ventilation Group OEM Total eliminations Consolidated
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
External customers 91,407 20,027 - 111,434 (9,172) 102,262
Inter-segment 4,910 915 - 5,825 (5,825) -
Total revenue 96,317 20,942 - 117,259 (14,997) 102,262
================= ======= ============ ======== ================== ============
Gross profit 40,433 6,142 - 46,575 (558) 46,017
================= ======= ============ ======== ================== ============
Results
Segment
profit/(loss) 26,129 3,328 (4,066) 25,391 (1,573) 23,818
================= ======= ============ ======== ================== ============
Depreciation and
amortisation (10,753) (1,527) - (12,280) 506 (11,774)
Exceptional items (1,292) - (641) (1,933) (845) (2,778)
----------------- ------- ------------ -------- ------------------ ------------
Operating
profit/(loss) 14,084 1,801 (4,707) 11,178 (1,912) 9,266
Unallocated
expenses:
Net finance cost - - (13,469) (13,469) - (13,469)
----------------- ------- ------------ -------- ------------------ ------------
Profit/(loss) before
tax 14,084 1,801 (18,176) (2,291) (1,912) (4,203)
================= ======= ============ ======== ================== ============
Included in total revenue for the year ended 31 July 2014 of the
Ventilation Group is GBP14,538,000 (2013: GBP10,907,000) in respect
of Fresh AB and its subsidiaries and GBP9,197,000 relating to Pax
AB & Pax Norge AS (2013: GBPnil)
Rebates and Settlement discount (reconciliation of management
reporting to IFRS)
The Group recently converted to IFRS for financial reporting
purposes, however, the Board continued to use alternative
management reporting information for making operational and
resource allocation decisions.
The information above requires adjustment to IFRS as part of the
reconciliation to the statement of comprehensive income. Principle
IFRS adjustments include the fair value of derivatives, the
identification of intangible assets, fair value of inventory and
recognition of deferred tax balances on acquisitions, and the
reclassification of customer rebates and settlement discount to
revenue, which are reflected in the IFRS adjustments column.
Inter-segment revenues are eliminated on consolidation.
Geographic information
2014 2013
GBP000 GBP000
Revenue from external customers:
United Kingdom 76,623 75,066
Europe (excluding United Kingdom and Nordics) 21,877 15,112
Nordics 19,813 9,831
Rest of the world 2,396 2,253
Total revenue 120,709 102,262
========= =======
As at
1 August
2014 2013 2012
GBP000 GBP000 GBP000
Non-current assets:
United Kingdom 150,801 156,641 167,200
Europe (excluding United Kingdom & Nordics) 13,850 - -
Nordics 15,042 9,032 -
Total 179,693 165,673 167,200
======= ======= =========
Non-current assets exclude deferred tax.
Information about major customers:
Annual revenue from one customer in the Ventilation Group
segment accounts for more than 10% of Group revenue. In the year
ended 31 July 2014, revenue from this customer was GBP14,340,000
(2013: GBP10,246,000).
6. Exceptional items
The Group discloses exceptional items by virtue of their nature,
size or incidence to allow a better understanding of the underlying
trading performance of the Group. Exceptional costs are summarised
below:
2014 2013
GBP000 GBP000
Inventory fair value adjustment
arising on business combinations 201 845
Acquisition costs 850 1,071
Restructuring and acquisition
integration 1,198 369
Other - 493
Costs associated with the
stock market listing of the
group 5,534 -
7,783 2,778
Total tax credit relating
to the items above (224) (204)
------ ------
7,559 2,574
====== ======
7. Finance costs
2014 2013
GBP000 GBP000
Finance costs:
Interest payable on bank overdrafts and bank loans (5,947) (4,764)
Interest on loan notes (6,720) (8,267)
Amortisation of finance costs (8,338) (641)
Other interest (17) -
--------- ---------
Total interest expense (21,022) (13,672)
Net loss on financial instruments at fair value (161) (427)
Total finance costs (21,183) (14,099)
========= =========
The charge for amortisation of finance costs in 2014 includes
GBP7,005,000 of unamortised finance costs written off upon
refinancing of debt in December 2013. In addition, GBP821,000 of
financing fees, relating to the new bank facility were written off
during June 2014. Included in the interest payable on bank
overdrafts and bank loans is GBP144,000 relating to breakage costs
of the interest rate swap on 31 July 2014.
8. Adjusted earnings
2014 2013
GBP000 GBP000
Loss before tax (15,512) (4,203)
Add back:
Exceptional items 7,783 2,778
Amortisation of financing costs 8,338 641
Breakage costs of interest rate swaps 144 -
Net gain or loss financial instruments at fair
value 161 (163)
Amortisation and impairment of other intangibles
(customer base, trademarks and patents) 13,056 10,145
-------- -------
Adjusted profit before tax 13,970 9,198
Add back:
Interest payable on bank overdraft and bank loans 5,803 4,764
Interest on loan notes 6,720 8,267
Finance costs 10 (40)
-------- -------
Adjusted operating profit 26,503 22,189
Add back:
Depreciation of property, plant and equipment 1,932 1,588
Amortisation of development costs, software and
patents 94 41
-------- -------
Adjusted EBITDA 28,529 23,818
======== =======
Adjusted profit before tax is defined as earnings before tax,
exceptional items, amortisation of financing costs, breakage costs
on interest rate swaps, net gains or losses on financial
instruments at fair value and amortisation and impairment of
intangible assets associated with the customer base, trademarks and
patents.
Adjusted operating profit is defined as earnings before tax,
exceptional items, amortisation and impairment of intangible assets
associated with the customer base, trademarks and patents and net
finance costs.
Adjusted EBITDA is defined as earnings before exceptional costs,
net finance costs, taxation, depreciation, amortisation and
impairment.
9. Income taxes
(a) Income tax recognised in loss for the year:
2014 2013
GBP000 GBP000
Current income tax:
Current income tax expense 957 2,889
Foreign income taxes 471 80
Tax credit relating to the prior year (330) (201)
Total current tax 1,098 2,768
-------- --------
Deferred tax:
Origination and reversal of temporary differences (2,524) (2,020)
Effect of changes in the tax rate 211 (2,963)
Tax expense relating to prior years (39) 76
Total deferred tax (2,352) (4,907)
-------- --------
Net tax credit (1,254) (2,139)
======== ========
(b) Reconciliation of total tax
2014 2013
GBP000 GBP000
Loss before tax (15,512) (4,203)
========== =======
Loss before tax multiplied by the standard rate
of corporation tax in the UK of 22.33% (2013 -
23.67%) (3,463) (995)
Adjustment in respect of previous years (369) (125)
Expenses not deductible for tax purposes 2,725 1,954
Effect of difference in tax rates 211 (2,963)
Utilisation of previously unrecognised tax losses (77) (22)
Unrelieved tax losses 1 88
Additional relief for research and development (150) (76)
Higher overseas tax rate (132) -
Net tax credit reported in the consolidated statement
of comprehensive income (1,254) (2,139)
========== =======
(c) Unrecognised deferred tax assets
At 31 July 2014, the Group had an unrecognised deferred asset of
GBP41,000 arising in overseas entities.
(d) Deferred tax balances
Deferred tax assets and liabilities arise from the
following:
(Charged)/ On Acquisition
1 August credited Translation 31 July
2013 to income difference 2014
2014 GBP000 GBP000 GBP000 GBP000 GBP000
Temporary differences:
Depreciation in advance of capital
allowances (76) 18 - - (58)
Fair value movements of derivative
financial instruments 73 49 - - 122
Customer base, trademark and patent (21,449) 2,168 - (1,769) (21,050)
Temporary differences (250) 117 101 (340) (372)
--------- ---------- ----------- --------------- --------
(21,702) 2,352 101 (2,109) (21,358)
========= ========== =========== =============== ========
Deferred tax asset 99 633 - 732
Deferred tax liability (21,801) 1,719 101 (2,109) (22,090)
--------- ---------- ----------- --------------- --------
(21,702) 2,352 101 (2,109) (21,358)
========= ========== =========== =============== ========
(Charged)/ On Acquisition
1 August credited Translation 31 July
2012 to income difference 2013
2013 GBP000 GBP000 GBP000 GBP000 GBP000
Temporary differences:
Depreciation in advance of capital
allowances 189 (265) - - (76)
Fair value movements of derivative
financial instruments 221 (148) - - 73
Customer base, trademark and patent (25,553) 5,358 - (1,254) (21,449)
Temporary differences 19 (38) (16) (215) (250)
--------- ---------- ----------- --------------- --------
(25,124) 4,907 (16) (1,469) (21,702)
========= ========== =========== =============== ========
Deferred tax asset 464 (365) - - 99
Deferred tax liability (25,588) 5,272 (16) (1,469) (21,801)
--------- ---------- ----------- --------------- --------
(25,124) 4,907 (16) (1,469) (21,702)
========= ========== =========== =============== ========
10. Earnings per share (EPS)
Basic earnings per share is calculated by dividing the loss for
the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on conversion of any dilutive
potential ordinary shares into ordinary shares. There are no
dilutive potential ordinary shares for the years ended 31 July 2014
and 2013.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Year ended 31 July
2014 2013
GBP000 GBP000
Loss attributable to ordinary equity holders (14,258) (2,064)
No. No.
Weighted average number of ordinary shares for basic earnings per share and diluted earnings
per share* 102,205,228 90,840,698
Earnings per share
Basic and diluted (14.0)p (2.3)p
*The weighted average number of ordinary shares identified above
used for the calculation of earnings per share relate to the
following deemed parent entity for each of the periods
presented:
-- Year ended 31 July 2014 - Volution Group plc
-- Year ended 31 July 2013 - Windmill Topco Limited
The weighted number of shares has been calculated assuming the
share for share exchange took place as from 1 August 2012. The
share for share exchange, gives effect to the sales of the entire
share capital (after the reorganisation) of the Windmill Topco
Limited shares in exchange for new Ordinary shares of Volution
Group plc.
11. Intangible assets - goodwill
GBP000
Cost and net book value
At 1 August 2012 45,668
On acquisition of Fresh AB 765
Net foreign currency exchange differences 55
As 31 July 2013 46,488
=======
At 1 August 2013 46,488
Adjustment to goodwill relating to Fresh AB 15
On acquisition of PAX AB and PAX AS 2,211
On acquisition of inVENTer 2,138
Net foreign currency exchange differences (725)
At 31 July 2014 50,127
=======
12. Intangible assets - other
Development Software Customer Trademark Total
2014 costs costs base Patents
GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000
Cost:
At 1 August 2013 446 2,133 88,314 33,961 - 124,854
Additions 583 840 - - 241 1,664
On acquisition - - 13,120 4,798 730 18,648
Net foreign currency
exchange differences - - (1,368) (577) (44) (1,989)
At 31 July 2014 1,029 2,973 100,066 38,182 927 143,177
------------ --------- --------- ---------- -------- ---------
Amortisation:
At 1 August 2013 9 1,520 12,912 2,021 - 16,462
Charge for the year 31 56 9,424 1,683 7 11,201
Impairment - - 1,949 - - 1,949
Net foreign currency
exchange differences - - (73) (13) - (86)
At 31 July 2014 40 1,576 24,212 3,691 7 29,526
------------ --------- --------- ---------- -------- ---------
Net book value:
At 31 July 2014 989 1,397 75,854 34,491 920 113,651
============ ========= ========= ========== ======== =========
At 31 July 2013 437 613 75,402 31,940 - 108,392
============ ========= ========= ========== ======== =========
The impairment loss of GBP1,949,000 represents the write-down of
the customer base relating to the Residential German CGU, within
the Ventilation segment, as the value in use was deemed to be below
the book value at which it was valued on acquisition. This arose as
a result of reduced levels of revenues of existing customers since
the acquisition. The impairment charge is recorded within
administrative expenses in the statement of comprehensive
income.
13. Impairment assessment of goodwill
Goodwill acquired through business combinations has been
allocated for impairment testing purposes to cash-generating units.
These represent the lowest level within the Group at which goodwill
is monitored for internal management purposes.
Residential Residential OEM (Torin Nordics Germany
31 July 2014 RMI New Build Commercial UK Export Sifan) Residential Residential Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Carrying
value of
goodwill 20,759 6,377 8,562 3,506 4,996 4,197 1,730 50,127
CGU value in
use
headroom* 51,031 17,198 21,054 8,643 11,971 33,564 6,406 149,867
Residential New Nordics
31 July 2013 Residential RMI Build Commercial UK Export OEM (Torin Sifan Residential Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Carrying value
of goodwill 20,759 6,377 8,562 3,506 4,996 2,288 46,488
CGU value in use
headroom* 1,784 600 726 291 3,772 385 7,558
-- Includes the net book value of Fixed assets (tangible and
intangible), goodwill and operating working capital (current assets
and liabilities)
Impairment review
Under IAS 36 'Impairment of assets', the Group is required to
complete a full impairment review of goodwill, which has been
achieved using a value-in-use calculation. A discounted cash flow
('DCF') model was used, taking a period of 5 years, which has been
established using pre-tax discount rates of 13% to 17% over that
period. In all periods it was concluded that the carrying amount
was in excess of the value in use and all CGU's had positive
headroom.
14. Business combinations
Acquisitions in the year ended 31 July 2014
InVENTer
The group completed its purchase of the assets of InVENTer GmbH
on 17 April 2014; prior to this, Volution Holdings Germany was
incorporated as a holding company on 5 December 2013. Two further
companies were incorporated as subsidiaries of Volution Holdings
Germany, being Volution Ventilation Germany, the trading company,
and Volution Ventilation Property Germany, the property investment
company. The Group acquired inVENTer because it significantly
enlarges the range of decentralised heat recovery ventilation
systems in the ventilation segment, it also offers a channel to
sell existing ventilation products in a new region. The transaction
was funded by bank debt.
Total consideration for the transaction was split as
follows:
-- Up-front cash consideration of EUR21,510,000 (GBP17,705,000), and
-- Deferred consideration of EUR2,000,000 (GBP1,646,000), this was paid on 31 July 2014;
Transaction costs associated with the transaction were
GBP702,000. The provisional fair value of the net assets acquired
is set out below:
Book Fair value Provisional
value adjustments fair value
GBP000 GBP000 GBP000
Assets
Intangible assets 154 10,454 10,608
Property, plant and equipment 3,672 - 3,672
Inventory 2,031 99 2,130
Trade and other receivables 627 - 627
Trade and other payables (29) - (29)
-------- ------------ -----------
Total identifiable net assets 6,455 10,553 17,008
-------- ------------
Goodwill on acquisition 2,138
19,146
===========
Discharged by:
Consideration satisfied in cash 19,146
Total consideration 19,146
===========
The fair value of the acquired trademarks and customer base was
identified and included in intangible assets.
Goodwill of GBP2,138,000 reflects certain intangible assets that
cannot be individually separated and reliably measured due to their
nature. These items include the value of expected synergies and the
experience and skill of the workforce arising from the
acquisition.
The gross amount of trade receivables is GBP627,000. It is
expected that the full contractual amounts for trade and other
receivables can be collected.
InVENTer generated revenue of GBP3,408,000 and generated a loss
after tax of GBP99,000 in the period from acquisition to 31 July
2014 that is included in the consolidated statement of
comprehensive income for this reporting period.
If the combination had taken place as at 1 August 2013, the
Groups revenue from continuing operations would have been
GBP129,997,000 and the loss before tax from continuing operations
would have been GBP14,939,000.
Acquisitions in the year ended 31 July 2014
Pax AB and Pax Norge AS
On 22 August 2013, Volution Holdings Sweden AB acquired the
entire issued share capital of Pax AB and Pax AS. The transaction
was funded by surplus cash in hand. The Group acquired Pax AB and
Pax AS because it significantly enlarges our presence in Swedish
and Norwegian markets. It also offers a channel to sell existing
ventilation products in a new region.
Total consideration for the transaction was split as
follows:
-- Up-front cash consideration of SEK115,536,000 (GBP11,384,000), and
-- Contingent consideration of SEK828,000 (GBP78,000). The
performance criteria for payment of the contingent consideration
were met and payment was made in January 2014.
Transaction costs of GBP499,000 were expensed during the year
ended 31 July 2013 and an additional GBP39,000 in the year ended 31
July 2014. The fair value of the net assets acquired was finalised
in the year and is set out below:
Fair
Book value Fair
value adjustments value
GBP000 GBP000 GBP000
Assets
Intangible assets - 8,040 8,040
Property, plant and equipment 789 - 789
Inventory 1,086 102 1,188
Trade and other receivables 1,797 - 1,797
Cash and cash equivalents 1,037 - 1,037
-------- ------------ -------
4,709 8,142 12,851
-------- ------------ -------
Liabilities
Trade and other payables (1,378) - (1,378)
Provisions (113) - (113)
Deferred tax (340) (1,769) (2,109)
-------- ------------ -------
(1,831) (1,769) (3,600)
-------- ------------ -------
Total identifiable net assets 2,878 6,373 9,251
-------- ------------
Goodwill on acquisition 2,211
-------
11,462
=======
Discharged by:
Consideration satisfied in cash 11,462
Total consideration 11,462
=======
The fair value adjustments arose in aligning PAX accounting
policies to those of the Group and in the recognition of intangible
assets, net of the associated deferred tax liability. Goodwill
reflects certain intangible assets that cannot be individually
separated and reliably measured due to their nature. These items
include the value of expected synergies and the experience and
skill of the workforce arising from the acquisition. The fair value
of the acquired trademarks and customer base was identified and
included in intangible assets.
The gross amount of trade and other receivables is GBP1,797,000.
It is expected that the full contractual amounts for trade and
other receivables can be collected.
PAX generated revenue of GBP9,159,000 and generated a profit
after tax of GBP1,094,000 in the period from acquisition to 31 July
2014 that is included in the consolidated statement of
comprehensive income for this reporting period.
If the combination had taken place as at 1 August 2013, the
Groups revenue from continuing operations would have been
GBP121,404,000 and the loss before tax from continuing operations
would have been GBP15,814,000.
15. Interest bearing loans and borrowings
Current Non-current Current Non-current Current Non-current
2014 2014 2013 2013 As at 1 August 2012 As at 1 August 2012
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Unsecured - at amortised cost
Loans from related parties - - - 117,048 - 108,354
Secured - at amortised cost
GE Corporate Finance bank loan - 53,903 4,200 67,411 3,375 71,625
Cost of arranging bank loan - - (660) (2,977) (629) (3,467)
- 53,903 3,540 181,482 2,746 176,512
======= =========== ======= =========== =================== ===================
GE Corporate Finance bank loan - year ended 31 July 2014
Element Principal Amount outstand-ing Repay-ment dates Repay-ment frequency rate
GBP000 GBP000 %
LIBOR
Term B 26,100 26,100 February 2019 One payment + 3%
SEK
LIBOR
Term B1 20,500 17,818 February 2019 One payment + 3.75%
EURO LIBOR
Term B2 10,600 9,985 February 2019 One payment + 3%
At the year end the Group had two credit facilities: the
acquisition facility (GBP20,000,000), which matures in February
2018, and a revolving facility (GBP13,000,000), which matures in
February 2018. Part of the revolving facility relates to
ancillaries (GBP1,500,000), which was used at the 31 July 2014 for
an amount of GBP502,000.
GE Corporate Finance bank loan - year ended 31 July 2013
Element Principal Amount outstand-ing Repay-ment dates Repay-ment frequency Rate
GBP000 GBP000 %
LIBOR
Term A 30,000 26,625 2012-2018 Twice yearly + 4.75%
LIBOR
Term B 45,000 36,000 February 2019 One payment + 5.25%
SEK LIBOR
Term B1 9,000 8,986 February 2019 One payment + 6%
The facilities agreement gives GE Corporate Finance Bank SAS,
London Branch, as security agent, for itself and any other bank
which participates in the facilities, a fixed and floating charge
over the assets of the Company and its subsidiaries.
16. Related party transactions
Transactions between Volution Group Plc and its subsidiaries and
transactions between subsidiaries, are eliminated on consolidation
and are not disclosed in this note. A breakdown of transactions
between the Group and its related parties are disclosed below.
No related party balances exist at 31 July 2014. In December
2013, the group repaid GBP40,006,000 of the loan notes back to the
holders principle GBP34,628,000 and interest of GBP5,378,000.
Immediately prior to admission to the London Stock Exchange in June
2014 the remaining Loan notes issued by Windmill Midco Limited were
novated to Windmill Topco Limited and then subsequently converted
into shares in Windmill Topco Limited. The Deposits held by
Windmill Holdings BV and Windmill Holdings Cooperatief UA were
repaid in July 2014.
There were no material transactions or balances between the
Company and its key management personnel or members of their close
family. At the end of the period, key management personnel did not
owe the Company any amounts.
31 July 2013 Amounts owed by related Amounts owed to related
Related parties Loan Deposit Interest parties parties
GBP000 GBP000 GBP000 GBP000 GBP000
Windmill Holdings BV 103,354 - 12,673 - 116,027
A Barden 73 - 10 - 83
M Klepfisch 49 - 6 - 55
C Lebeer 492 - 60 - 552
R George 295 - 36 - 331
Windmill Holdings BV - 10 - 10 -
Windmill Holdings Cooperatief
U A - 10 - 10 -
Total 104,263 20 12,785 20 117,048
======== ======= ======== ============================ ============================
The amounts disclosed above represent the historic carrying
value of loan amounts owed to related parties. The Deposits are
held by Windmill Holdings BV and Windmill Holdings Cooperatief UA
and do not carry any repayment terms.
Other transactions with related parties include the
following:
-- The Group incurred costs of GBP168,000 (2013: GBP114,000)
from Windmill Holdings BV (the direct controlling party) and
Windmill Cooperatief U A (an intermediate parent undertaking) for
management services;
-- The Group incurred costs of GBP246,000 from 1 Aug 2013 to 22
Jun 2014 (2013: GBP294,000) from M Klepfisch, A Barden and C Lebeer
for their services as non-executive directors. Following the
reorganisation and the listing on the London Stock Exchange the
Group board of directors changed, the Group incurred a further cost
from 23 Jun 2014 to 31 Jul 2014 of GBP36,000 from P Hill, A
Reading, P Hollingworth and A Barden for their services as
non-executive directors.
Non-executive director Paul Hollingworth is also a non-executive
director of Electrocomponents plc. During the year, the group sold
goods to Electrocomponents plc amounting to GBP194,000 (2013:
GBP170,000). At the year end, amounts owing by Electrocomponents
plc were GBP35,000 (2013: GBP2,000). During the year the group
purchased goods from Electrocomponents plc amounting to GBP99,000
(2013: GBP87,000). At the year end, amounts owed to
Electrocomponents plc were GBP13,000 (2013: GBP12,000).
1 August 2012
Amounts owed by related Amounts owed to related
Parties Loan Deposit Interest parties parties
GBP000 GBP000 GBP000 GBP000 GBP000
Windmill Holding BV 103,846 - 4,074 - 107,920
Windmill Holdings BV - 10 - 10 -
Windmill Holdings Cooperatief
U A - 10 - 10 -
A Barden 73 - 4 - 77
M Klepfisch 49 - 2 - 51
R George 295 - 11 - 306
Total 104,263 20 4,091 20 108,354
======== ======= ======== ============================ ============================
Compensation of key management personnel
2014 2013
GBP000 GBP000
Short term employee benefits 2,697 709
Termination benefits 203 -
2,900 709
====== ========
Key management personnel is defined as the CEO, CFO and the
individuals that report directly to the CEO.
17. Transition to IFRS
The year ended 31 July 2014 is the first set of financial
information the Group has prepared under IFRS as adopted in the
European Union. Accordingly, the Group's opening balance sheet at 1
August 2012 and the last set of financial statements filed for the
year ended 31 July 2013 were restated. Key changes arising from the
adoption of IFRS as adopted by the European Union arose as
follows:
A Presentation of capitalised software
B Amortisation of goodwill and accounting for acquisition costs
C Recognition of intangible assets on business combinations
D Accounting for goods in transit
E Revenue recognition
F Use of FX spot rates
G Accounting for derivatives
H Accounting for long-term contracts
I Presentation for rebates and discounts
J Presentation of exceptional items
K Deferred tax
This information is provided by RNS
The company news service from the London Stock Exchange
END
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